07-22-1998 Council Agenda - Laserfiche WebLink

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Attachment "B" Section 7.4. Guaranty of Tax Increment Shortfall. The parties reasonably expect that the annual Tax Increments to be derived from the Development Property in any calendar year after 1990 and prior to the Maturity Date will exceed the minimum amount needed to pay when due all principal and interest maturing in that year on that portion of the Tax Increment Bonds issued in connection with the Project. The Developer agrees that if for any reason such Tax Increments in any calendar year are less than $54,675 for each year prior to the Maturity Date, then the Developer shall pay, upon demand by the City, to the City the difference between the Tax Increment actually derived and $54,675. Prior to the issuance of the Bonds, the Developer shall deliver to the City a guaranty in the form attached hereto as Exhibit I fully executed by Loren E. Brueggemann, William T. Butler, and David Phillips, Sr., and guaranteeing performance of the Developer's obligation to pay any shortfall in Tax Increments as provided in this Section 7.4. As security for the guaranty under this Section 7.4 and as security for the performance of the obligations of the Developer contained in this Agreement, the Developer shall simultaneously with the execution of this Agreement deliver to the City an irrevocable letter of credit issued by a financial institution and in a form satisfactory to the City in the amount of $54,675. The letter of credit shall expire on January 2, 1991 and on January 2 of each year thereafter and the Developer must must replace or renew the letter of credit in a form satisfactory not less than 60 days prior to its expiration. At the discretion of the City Council the letter of credit may be reduced at a future date but the City Council is under no obligation to do this. 2619 Page 13