12-06-1995 Council Agenda - Laserfiche WebLink

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LOAN ORIGINATION FEE PAYMENT AND EXPENSE REIMBURSEMENT AGREEMENT 1. Parties. The parties to this Agreement are the CITY OF LI'1'1LE CANADA, a Minnesota municipal corporation (the "City ") and ROBERT GROOTWASSINK and MARK A. HOTZLER (collectively, the "Developer "). 2. Recitals. (a)The City and Developer are parties to a Statement of Understanding dated October 25, 1995 which sets forth the City's and the Developer's understanding regarding the terms of a loan from the City to the Developer to allow the Developer to purchase certain property in the City and to rehabilitate and enhance the property (the "Statement of Understanding "). (b) To obtain funds to make the loan contemplated in the Statement of Understanding, the City intends to sell General Obligation, Taxable Tax Increment Bonds, Series 1995B, in the amount of $1,970,000 (the "Bonds "). (c) The City intends to sell the Bonds on December 6, 1995. (d) The City will not sell the Bonds unless Developer agrees to pay the City the $150,000 Loan Original Fee described in the Statement of Understanding and agrees to reimburse the City for any amounts in excess of $150,000.00 by which the costs which the City incurs to issue the Bonds and any amount by which the amount necessary to prepay the Bonds at the earliest opportunity exceeds the proceeds of the Bonds plus the interest which the City actually earns on the proceeds of the Bonds by investing the proceeds of the Bonds between the date the City receives the proceeds of the Bonds and the date of prepayment. (e) The Developer is entering into this Agreement with the City to induce the City to issue the Bonds. 3. Acknowledgement of Receipt of Loan Original Fee. The City hereby acknowledges the Developer has paid the City the sum of $150,000 contemporaneously with the execution of this Agreement. 4. Reimbursement Agreement. The Developer hereby agrees that if the City sells the Bonds and the City (either directly or through its Economic Development Authority) and the Developer do not enter into a loan transaction as contemplated in the Statement of Understanding and substantially as described in that certain unsigned Construction Loan and Development Agreement, draft date November 28, 1995, on or before December 27, 1995, the City shall be entitled to retain the $150,000 which the Developer has paid to the City pursuant to this Agreement and the Developer shall further be liable to the City for an Page 33 307267.1