Common use of City Loans; City Loan Documents Clause in Contracts

City Loans; City Loan Documents. (a) Upon the due performance by Developer of all its prior obligations with respect to an Approved Phase, as set forth herein, Developer and/or the Owner Partnership, as appropriate, and the City will execute at Closing for such Phase such documents as shall be necessary and appropriate to make the City Loans and otherwise implement the Revitalization Plan relative to such Phase, which shall collectively be known as “City Loan Documents” for such Phase. City Loan Documents expressly refers to the promissory notes, deeds of trust and all other documents, approvals, waivers, opinions, policies, surveys and agreements required by the City as a term of agreeing to make a City Loan. (b) Subject to the terms and conditions provided in this Agreement and all applicable laws and regulations, the City will make loans to the Rental Phase I Owner Partnership: a “Cash Flow Loan” of approximately $4,686,468.00 and a “Deferred Payment Loan” of approximately $800,000.00. Each City Loan will be made at zero percent (0%) interest, with a term of 45 years and on terms required by NCHFA. Beginning with the first year after achievement of stabilization (which will be defined more particularly in the Rental Phase I Owner Partnership’s limited partnership agreement to reflect approximately 3 months of breakeven operations at a specified debt service coverage ratio), payments in the amount of 60% of Net Cash Flow shall be made to the City in repayment of the Cash Flow Loan. The City Loans may be documented through multiple promissory notes – e.g., three notes corresponding to three sources of funds. Beginning with the thirty-first (31st) year after achievement of stabilization, payments will also begin on the Deferred Payment Loan, at which point 60% of Net Cash Flow will be paid toward each of the two loan balances in equal amounts based upon the respective balances of each loan at that point in time. The outstanding balance of principal, and interest and fees, if any, shall be due at the end of the term. “Net Cash Flow” will be defined as follows: surplus cash (as established under HUD reporting requirements for multifamily projects subject to HUD’s Uniform Financial Reporting Standards for HUD Housing Programs, except that references in such requirements to HUD-insured loans and to HUD approvals shall be disregarded) remaining after payments of debt service, fees, tax credit adjuster payments, partner loans, reserve replenishment and other conditions as may be required by the Investor and by third-party lenders subject to reasonable approval by the City. If NCHFA or other lenders require repayment from Net Cash Flow or otherwise from cash flow of the Owner Partnership, then such lenders’ payments will be included within and credited against the 60% share described above and the City will therefore be required to divide such amounts with such other lenders, and payments will be made among all lenders (including the City) pari passu or as may otherwise be negotiated between the City and such other lenders. Should a financing “gap” not projected at the date of this Agreement or the date on which a Development Budget or Phase Budget is established be created by changed debt or equity market conditions, or by material increases in construction costs in the market area which Developer had no reasonable means of anticipating, the City and Developer agree that for Rental Phase 1, the parties will share equally in the financial responsibility to close said gap up to an amount not to exceed $675,000. (The City’s portion of such responsibility may be satisfied through an increase to the amount of the City Loans.) (c) The City Loan Documents shall more generally conform to the requirements normally imposed by public entities in undertaking participation in projects similar to the Development and shall be in form and content satisfactory to Developer, the City, the Developer’s counsel, the City’s counsel, the Investor, the Investor’s counsel, other lenders’ counsel, bond counsel, the purchasers and the underwriters of any bonds, and/or any other interested parties. (d) Once Closing has occurred for any Phase, City Loan Documents will govern the rights and remedies of the parties in regard to the subject Phase. This Agreement shall terminate and be of no further relevance to such Phase, nor shall it bind any Owner Partnership. This Agreement shall remain applicable to elements of the Revitalization Plan other than the Phase that has achieved Closing.

City Loans; City Loan Documents. (a) Upon the due performance by Developer of all its prior obligations with respect to an Approved Phase, as set forth herein, Developer and/or the Owner Partnership, as appropriate, and the City will execute at Closing for such Phase such documents as shall be necessary and appropriate to make the City Loans and otherwise implement the Revitalization Plan relative to such Phase, which shall collectively be known as “City Loan Documents” for such Phase. City Loan Documents expressly refers to the promissory notes, deeds of trust and all other documents, approvals, waivers, opinions, policies, surveys and agreements required by the City as a term of agreeing to make a City Loan. (b) Subject to the terms and conditions provided in this Agreement and all applicable laws and regulations, the City will make loans to the Rental Phase I Owner Partnership: a “Cash Flow Loan” of approximately $4,686,468.00 with a 2% interest rate, with a term of 45 years and a “Deferred Payment Loan” of approximately $800,000.00. Each City Loan will be made at zero percent (800,000.00 with a 0%) interest% interest rate, with a term of 45 years and on terms required by NCHFA. Beginning with the first year after achievement of stabilization (which will be defined more particularly in the Rental Phase I Owner Partnership’s limited partnership agreement to reflect approximately 3 months of breakeven operations at a specified debt service coverage ratio), payments in the amount of 60% of Net Cash Flow shall be made to the City in repayment of the Cash Flow Loan. The City Loans may be documented through multiple promissory notes – e.g., three notes corresponding to three sources of funds. Beginning with the thirty-first (31st) year after achievement of stabilization, payments will also begin on the Deferred Payment Loan, at which point 60% of Net Cash Flow will be paid toward each of the two loan balances in equal amounts based upon the respective balances of each loan at that point in time. The outstanding balance of principal, and interest and fees, if any, shall be due at the end of the term. “Net Cash Flow” will be defined as follows: surplus cash (as established under HUD reporting requirements for multifamily projects subject to HUD’s Uniform Financial Reporting Standards for HUD Housing Programs, except that references in such requirements to HUD-insured loans and to HUD approvals shall be disregarded) remaining after payments of debt service, fees, tax credit adjuster payments, partner loans, reserve replenishment and other conditions as may be required by the Investor and by third-party lenders subject to reasonable approval by the City. If NCHFA or other lenders require repayment from Net Cash Flow or otherwise from cash flow of the Owner Partnership, then such lenders’ payments will be included within and credited against the 60% share described above and the City will therefore be required to divide such amounts with such other lenders, and payments will be made among all lenders (including the City) pari passu or as may otherwise be negotiated between the City and such other lenders. Should a financing “gap” not projected at the date of this Agreement or the date on which a Development Budget or Phase Budget is established be created by changed debt or equity market conditions, or by material increases in construction costs in the market area which Developer had no reasonable means of anticipating, the City and Developer agree that for Rental Phase 1, the parties will share equally in the financial responsibility to close said gap up to an amount not to exceed $675,000. (The City’s portion of such responsibility may be satisfied through an increase to the amount of the City Loans.) (c) The City Loan Documents shall more generally conform to the requirements normally imposed by public entities in undertaking participation in projects similar to the Development and shall be in form and content satisfactory to Developer, the City, the Developer’s counsel, the City’s counsel, the Investor, the Investor’s counsel, other lenders’ counsel, bond counsel, the purchasers and the underwriters of any bonds, and/or any other interested parties. (d) Once Closing has occurred for any Phase, City Loan Documents will govern the rights and remedies of the parties in regard to the subject Phase. This Agreement shall terminate and be of no further relevance to such Phase, nor shall it bind any Owner Partnership. This Agreement shall remain applicable to elements of the Revitalization Plan other than the Phase that has achieved Closing.