IFA Loan for 1126 White StreetTHE CITY OF
DUB E
Masterpiece on the Mississippi
MEMORANDUM
September 10, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: IFA Loan for 1126 White Street
Housing and Community Development Department Director David Harris recommends
City Council approval of a loan agreement and promissory note fora $500,000
OurHome Program rehabilitation loan from the Iowa Finance Authority for the property
at 1126 White Street.
City Attorney Lindahl has completed review of the documents furnished by IFA. He has
raised the issue of the indemnity provisions in Section 5.04 of the loan agreement,
stating that these require the City to indemnify IFA for conditions which might not be the
fault of or within the control of the City. This was referred to IFA's attorney, with the
request that these provisions be modified.
The Authority's response was that this is standard language, used in all their OurHome
loans. It was also noted that the requirements were not excessive, " ...especially in
light of the loan terms: not secured, interest rate is 3% for 10 years, etc. Therefore, IFA
prefers to leave the indemnity agreement as is."
I concur with the recommendation and respectfully request Mayor and City Council
approval.
~j; ~
,,~~1.l, ~Lti '~X.~ "'_
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
THE CTTY OF
DUB E
Masterpiece on the Mississippi
6 September 07
To: Michael an Milligan,
,~
MEMORANDUM
City Manager
From: David is, Housing and Community Development Department
Re: IFA loan for 1126 White Street
Introduction
The purpose of this memorandum is to request the City Council's approval of a
$500 000 loan from the Iowa Finance Authority to assist with the townhouse
project at 1126 White Street.
Background
The City closed on this property on 6 June. Arequest-for-proposals had
previously been issued, in April, and responses from two firms were received on
8 June. An RFP review committee was convened and interviewed the competing
firms. At the request of one, an extension of time for selection was granted to the
end of August, in order to undertake a market study. The firm subsequently
requested a second extension, for an additional 60-days, to complete this study
and modify the concept design and pricing. This request was also granted.
In the interim, Housing staff have removed all lead paint-bearing components
from the building, making it `lead-safe' for work by students from the HEART
Program.
Discussion
To assist the selected construction firm with financing for this project, the
Housing Department submitted an application to the Iowa Finance Authority (IFA)
fora $500 000 OurHome Program rehabilitation loan, in March; this was
approved by their board of directors in June. A loan agreement and promissory
note have now been received, for City Council approval and the Mayor's
signature.
Our proposal to IFA was for the City to borrow these funds and in tum loan them
to the purchaser/developer of the White Street building. IFA has offered this as a
10-year, 3°r6 annual interest, unsecured loan, under the "single family' category,
as the White Street units will be sold as owner-occupied town homes. The
developer will return 80% of IFA funds borrowed, prorated per-unit, to the City
upon the sale of each completed townhouse, within 30 days of sale. The balance
of funds will be due when the last unit is sold. The City returns these funds to
IFA, to a 10-year revolving loan fund. We can continue to access these funds,
on the same terms, for the balance of the term, for use in assistance to other
homeowner projects. The funds may be used for purchase, rehabilitation or any
combination of the two. In this fashion, we will be able to offer a substantial low-
interest loan fund for use in the Washington Neighborhood, to complement our
existing lending programs assisting lower-income homeowners.
Buyer incomes for the town homes may not exceed 115% of area median
income. Fora 1-2 person household, this is $71 400.
Legal review
City Attorney Lindahl has completed review of the documents furnished by IFA.
He has raised the issue of the indemnity provisions in Section 5.04 of the loan
agreement, stating that these require the City to indemnify IFA for conditions
which might not be the fault of or within the control of the City. This was referred
to IFA's attorney, with the request that these provisions be modified.
The Authority's response was that this is standard language, used in all their
OurHome loans. It was also noted that the requirements were not excessive,
" ...especially in light of the loan terms: not secured, interest rate is 3°~ for 10
years, etc. Therefore, IFA prefers to leave the indemnity agreement as is."
Action Step
The action requested of the City Council is to authorize the Mayor's signature on
the note, certificate and loan agreement with the Iowa Finance Authority, to
borrow up to $500 000 OurHome Program funds for financing for the project at
1126 White Street.
cc:
Barry Lindahl, City Attorney
Single Family OurHome Rehab Loan No. SF-2007-004
CLOSING CERTIFICATE OF BORROWER
The undersigned, City of Dubuque, on behalf of the Housing and Community Development
Department (the "Borrower"), in connection with a loan to the Borrower in the amount of $500,000 (the
"Loan") by the Iowa Finance Authority (the "Authority") under the Authority's Single Family
Rehabilitation Revolving Loan Program (the "Program") -hereby certifies as follows-
1. All defined terms used herein shall have the respective meanings contained in the Loan
Agreement dated as of September _tb, ?007 (the "Loan Agreement"), between the Borrower and the
Authority pursuant to which the Loan to the Borrower is to be made.
2. The Borrower is duly organized, legally existing and in good standing under the laws of the
State of Iowa; is duly licensed or qualified in the State of Iowa and in all other states and jurisdictions
wherein the nature of the business transacted by the Borrower or the nature of the property owned or
leased by it makes such licensing or qualification necessary; and has full right, power and authority to
conduct the business in which. it is now engaged and to enter into the Loan Agreement, the Loan made
pursuant thereto, and to execute such other documents and take such other action necessarv for the
consummation of the transactions contemplated thereby.
3. All of the proceeds of the Loan will be used for the purpose of financing a portion of the costs
of the Project as set forth in Exhibit A to the Loan Agreement.
4. The execution and delivery by the Borrower of the Loan Agreement and the Borrower's
Promissory Note described therein (the "Note" and, together with the Loan Agreement, the "Loan
Documents") will not result in any breach of any of the teams, conditions, or provisions of, or constitute a
default under, or result. in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Borrower pw-suant to any indenture, loan agreement, or other instrument to
which the Borrower is a party or by which the Borrower may be bound, nor will such action result in any
violation of the provisions of the partnership agreement of the Borrower.
5. The Borrower is not in default in the payment of the principal of or interest on any of its
indebtedness for borrowed money, and to the best knowledge of the undersigned, is not in default under
any instrument or agreement under and subject to which any indebtedness for borrowed money has been
issued, and, to the best knowledge of the undersigned, no event has occurred and is continuing under the
provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or
both, would constitute an event of default thereunder.
6. All financial statements of the Boi7ower heretofore presented to the Authority, if any, are
correct and complete and fairly present the financial condition of the Borrower as of the dates indicated
and the results of the operations of the Boizower for the periods specked. There has.been no material
change in the condition of the Borrower, financial or otherwise, from that set forth in the aforesaid
financial statements since the dates thereof
7. There are no actions, suits or proceedings pending or to the knowledge of the Boizower
threatened against or affecting the Borrower at law or in equity or before any federal, state or local
governmental authority or agency challenging the validity of any of the Loan Documents, seeking to
enjoin the performance of the obligations of the Borrower thereunder or challenging the acquisition,
construction, improving and equipping or operation of the Project, or which, if adversely determined,
would result in any material adverse change in the business, properties or assets or in the condition,
financial or otherwise, of the. Borrower that have not been disclosed to the Authority.
8. No event has occurred and is continuing, or would result from the transaction contemplated by
the Loan Documents, which constitutes an-Event of Default under the Loan Agreement or which would
constitute such an Event of Default but for the requirement that notice be given or time elapse or both.
9. The representations, certifications and warranties on the part of the Borrower appearing on the
Application were correct on the date of the Application's submission to the Authority and the description
of the Project .set forth in the Application, the Loan Agreement and exhibits to the Loan Agreement,
including the listing of all components and equipment which comprise the Project and their costs and
purposes, and the representations, cert~cations, warranties and covenants on the part of the Borrower
contained in the Loan Agreement are coi~ect on and as of the date hereof as though made on this date.
10. The Borrower has satisfied all conditions precedent.to the Loan as set forth in Section 2.01 of
the Loan Agreement.
11. The undersigned, on behalf of the Borrower, have examined executed counterparts of the Loan
Agreement and ali other Loan Documents, and the Borrower agrees to pay all sums owing under the Note
and the Loan Agreement in accordance with the provisions of the Note and the Loan Agreement.
12. The Mayor and City Clerk of the City of Dubuque, whose signatures appear below were on the
date or dates of the execution of the Loan Documents, and are on the date hereof, the duly qualified
1~layor and City Clerk of Dubuque, and the signatures appearing below and on the Loan Documents are
the genuine signature of such Mayor and City Clerk.
The Nlayor and City Clerk of the City of Dubuque, whose signatures appear below have heretofore
been empowered to act on behalf of the Boil ower in the execution of the Loan Agreement and the Note or
to execute any other instrument or take any other action necessary for the consummation of the
transaction contemplated in the Loan Agreement.
LN WITNESS WHEREOF, the undersigned has hereunto affixed his official signature this th day
of September, ?007.
(Seal, if any) CITY OF DUBUQUE, ON BEHALF OF THE HOUSING AND
COMNIUNITY DEVELOPPr'IENT DEPARTMENT
By:
Name
Title:
Attest:
By:
Name: Jeanne Schneider
Title: City Clerk
2
Roy D. Buol
Mayor, City of Dubuque
Single Family Loan No. SF-2007-004
Dated: September _ th, 2007
Fixed Interest Rate: 3.00%
Maturity Date: October 1, 2017
Principal Amount: $ 500,000
PROMISSORY NOTE
_ _ __EOR VALITE_RECEIVED the__undeisigned, City_of_Dubuque, on behalf _of the Housing and Community
Development Department, whose address is 1805 Central Avenue, Dubuque, Iowa, 52001 (the "Borrower")
unconditionally promises to pay to the order of the Iowa Finance Authority (the "Authority"), or its assigns, at its
principal place of business, located at 2015 Grand Avenue, Des Moines, Iowa 50312, or at such other place as
may be designated in writing from time to time by the holder of this Note, the principal sum of Five Hundred
Thousand and 00/100 Dollars ($ 500,000.00), or so much thereof as has been advanced to the Borrower, together
with interest to maturity at the rate of three percent (3%} per annum on the balance remaining from time to time
unpaid; and, after either maturity or default, and beyond any applicable notice and cure periods set forth herein or
in the Loan Agreement (described below) at the rate of ten percent (IO%) per annum (the "Default Rate"}; said
principal and interest to be paid as follows:
No payments of principal shall be due until the earlier o£ (a) thirty (30) days following. the
date(s) on which each property or any unit(s) thereof located in the historic Washington
neighborhood of downtown Dubuque, Iowa, the purchase and rehabilitation of which is financed
by this Note is sold, refinanced, leased pursuant to a lease purchase agreement, or otherwise
disposed of by Borrower, of which eighty percent (80%) of the proceeds of the sale of any unit
shall be due as a principal repayment, however, one hundred percent (100%) of the principal
financed shall be due upon the conveyance of each property/last unit; or (b) October 1, 2017, at
which tune all outstanding principal and interest for the Project shall be repaid..
months
Interest payments on the funds used to finance the Project shall be payable one year from the
date of the first draw of funds and continuing each year thereafter, including all outstanding
interest on this Note, with one final payment including all remaining principal and interest, due
October 1, 2017.
Interest on this Note shall be calculated on the basis of a 360-day year with twelve 30-day
This Promissory Note is the Note referred to in, and is entitled to the benefits and subject to the
provisions of, and is evidence of the obligation of the Borrower to make payments under the Loan Agreement
dated September th, 2007 (the "Loan Agreement"), between the Borrower and the Authority. The Loan
Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of
certain stated Events of Default and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower shall have the right to prepay the debt evidenced by this Note without penalty and without
the prior written approval of IFA.
If default be made in the payment of any sums clue under this Note or (ii) Borrower is dissolved
or there is a transfer of any ownership interest in the Borrower without first obtaining the written
consent of .the holder, then holder may, at its option, without. further notice -or demand, except _as may
otherwise be specifically provided for in the Loan Agreement or by .the Laws of the State of Iowa,
declare the unpaid principal and accrued interest on this Note at once due and payable, foreclose all liens
securing .payment of this Note, pursue any and all other rights, remedies,. and recourses .available to -
holder -under -this Note, the Loan Agreement- or pursue any -combination of the foregoing, -all such
remedies under this Note and under the Loan Agreement being cumulative. Holder shall have the right,
if holder so elects, to rescind any acceleration in payment of this Note for default, in which event this
Note shall be construed, interpreted and enforced in the same manner as if holder had never elected to
declare the unpaid principal balance and accrued interest of this Note at once due and payable.
The Borrower shall pay all costs of collection and the expense(s) of holder for having to invoke
such remedial action(s) as may be necessary to enforce the tei7ns of this Note, including a reasonable
attorney's fee, whether or not any action shall be instituted to collect or enforce this Note. Time is of the
essence of this Note.
Failure to exercise any of the foregoing options upon the happening of ane or more of the events
of default provided in this Note or in the Loan Agreement shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in respect to the same or any other event,
and no single or partial exercise of any right or remedy shall preclude other or further exercise of the
same or any other right or remedy. The holder of this Note shall have no duty to exercise any or all of
the rights and remedies provided for, or contemplated in, this Note. The acceptance by holder of any
payment under this Note that is less than payment in full of all amounts due and payable at the time of
such payment shall not constitute a waiver of the right to exercise any of the foregoing options at that
time or at any subsequent time, or nullify any prior exercise of any such option without the express
written consent of the holder.
Borrower and any endorsers or guarantors of this Note, severally waive presentment and demand
for payment,. notice of intent to accelerate maturity, notice of acceleration of matuuty, protest or notice
of protest, and non-payment, bringing to suit and diligence in taking any action to collect any sums
owing under this Note or in proceeding against any of the right and properties securing payment of this
Note, and consent to any and all renewals, extensions or modifications which might be made by the
holder hereof as to the time of payment of this Note from tune to time, and further agree that the security
for this Note or any portion hereof inay from time to time be modified or released in whole or in part
without affecting the liability of any party liable for the payment of this Note.
This l~Tote is to be construed according to the laws of the State of Iowa.
Should any pro~~ision or term hereof be or become in violation of any law, rule or regulation,
whether local, state or federal, such provision shall be deemed automatically amended to conform, to the
extent possible without total waiver of such provision, to such law, and all other provisions hereof shall
remain in full force and effect. As used herein, the terms Borrower and Authority shall be deemed to
include their respective grantees, heirs, legal representative, successors and assigns, whether voluntary
by action of the parties or involuntary by operation of law, and the tern holder shall be deemed to
include the Authority as well as any future holder or holders of this Note.
2
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERtI~IS IN WRITING
ARE ENFORCEABLE. NO OTHER TERMS OR -ORAL P-ROMISES -NOT
CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER
WRITTEN AGREEMENT.
Signed as of the _ th day of September, 2007, pursuant to due authority.
CITY OF DUBUQUE, ON BEHALF OF THE HOUSING
AND COMMUNITY DEVELOPMENT DEPARTMENT
By:
Naive: Ray D. Buol
Title: Mayor, City of Dubuque
Attest:
By:
Naive: Jeanne Schneider
Title: City Clerk
3
Single Family OurHome Rehab Loan No. SF-007-004
IOWA FINANCE AUTHORITY
SINGLE FAMILY REHABILIATION REVOLVING
LOAN PROGRAM
LOAN AGREEMENT
between
IOWA FINANCE AUTHORITY
and
CITY OF DUBUQUE, ON BEHALF OF THE HOUSING AND CO~ 1 i ITY
DEVELOPMENT DEPARTMENT
Dated as of September _th, ?007
TABLE OF CONTENTS
This Table of Contents is not a part of this Loan Agreement and is only for convenience of
refer-ence. - -
ARTICLE I -AMOUNT AND TERMS OF THE LOAN
SECTION 1.01 The Loan ............................:............................................................. l
SECTION 1.02 Making the Loan .......................................................................... ...1
SECTION 1.03 Loan Repayment Installments ...................................................... ...2
SECTION 1.04 Prepayments ................................................................................. ...2
SECTION 1.05 Time and Place of Payments ........................................................ ...2
SECTION 1.06 Payment on Non-Business Days .................................................. ...2
SECTION 1.07 [Reserved] .................................................................................... ...2
SECTION 1.08 [Reserved] .......................................................................................2
SECTION 1.09 [Reserved] ................................................... ........... ..2
ARTICLE II -CONDITIONS OF LENDING
SECTION 2.01 Conditions Precedent to the Loan ...................................................2
SECTION 2.02 Further Conditions Precedent to the Loan .......................................3
ARTICLE III - REPRESENT_4TION5, COVENANTS AND WARRANTIES
SECTION 3.01 Representatives and Warranties of the Borrower ............................3
.........................................................
SECTION 3.02 [Reserved] :........................._...
SECTION 3.03 [Reserved] ...................................................................5
ARTICLE IV -EVENTS OF DEFAULT
SECTION 4.01 Events ofDefault .............................................................................5
SECTION 4.02 Remedies of the Authority ................................................6
ARTICLE V -MISCELLANEOUS
SECTION x.01
SECTION 5.02
SECTION 5.03
SECTION 5.04
SECTION 5.05
SECTION 5.06
SECTION 5.07
SECTION 5.08
SECTION 5.09
SECTION 5.10
SECTION 5.11
Waivers, Consents ........................................................................... 6
Notices, Etc ..............:...................................................................... 7
No Waiver; Remedies ..................................................................... 7
Indemnity; Fees and Expenses ........................................................ 7
Binding Effect; Governing Law ...................................................... 8
Assignments .................................................................................... 8
Counterparts .................................................................................... 8
S everab ility ...................................................................................... 8
Amendments, Changes and Modifications ...................................... 8
Term of the Agreement ...................:............................................... 9
[Reserved] ....................................................................................... 9
i
LIST OF EXHIBITS
EXHIBIT A Loan Data -
EXHIBIT B Promissory Note
EXHIBIT C Addresses for Notices and Demands
EXHIBIT D Payment Request Form
EXHIBIT E -Quai`terly Reporfirig Foi7n - - - -
ii
This LOAN AGREEMENT, dated as of the _a' day of September, 2007, between the IOWA
FINANCE AUTHORITY (the "Authority") and the CITY OF DUBUQUE, ON BEHALF OF
THE HOUSING AND CONIlVICTNITY DEVELOPMENT DEPARTMENT (the "Borrower").
WITNE5SETH:
VGTIiEREAS, the Authority is a public instl-uinentality and agency of the State of Iowa
authorized and empowered by the provisions of Chapter 16 of-the Code of Iowa, as amended (the
"Act") to assist in the financing and development of decent, safe, and affordable housing; and
WHEREAS, the Single Family Rehabilitation Revolving Loan Program (the "Program")
has been created by the Authority to provide a flexible program of financial assistance in the
form oflow-interest Loans for rehabilitation of existing single family homes; and
WHEREAS, the Borrower desires to borrow monies from the Authority in order to
finance a portion of the costs of the Project described in Exhibit A attached hereto (the
"Project"}; and
WHEREAS, the Borrower has applied for and, pursuant to a Resolution adopted by the
Board of the Authority on June 6, 2007, received approval from the Authority for funding of the
Project through the Program.
NOW THEREFORE, in consideration of the mutual covenants hereinafter contained, the
Borrower and the Authority hereby covenant and agree as follows.:
ARTICLE I
AMOUNT AND TER1ViS OF THE LOAN
SECTION 1.01. The Loan.
The Authority agrees, upon the terms and conditions hereinafter set forth, to make a Loan
to the Borrower under the Program in an amount not to exceed the Principal Amount shown in
Exhibit A hereto in order #o finance a portion of the costs of the Project (the "Loan"). The
obligation of the Borrower hereunder to repay the Loan shall be evidenced by a.promissory note
of the Borrower to the Authority, in the form attached hereto as Exhibit B (the "Note"), which
Note is by this reference incorporated herein as though set out in full.
SECTION 1.02. Making the Loan.
Upon fulfillment of the applicable conditions set forth in Article II, the Authority will
make the Loan available to the Borrower. Disbursements of loan proceeds may be made by the
Authority to the Borrower, upon the receipt and approval by the Authority, in its sole discretion,
of a written payiment request from the Borrower, in the form set out in Exhibit D attached hereto.
SECTION 1.03. Loan Repayment Installments.
(a} Until the principal of and interest on the Note shall have been fully paid the
Borrower .shall pay directly to the Authority, or to the Services, if a Services is designated in
Exhibit A hereto, as a repayment installment of the Loan, a sum equal to the principal (whether
at maturity or upon acceleration) and interest due on the Note, as provided in the Note.
(b) In the event -the Borrower should fail to make -any of the payments required
hereunder, beyond any applicable notice and cure periods, the item or installment so in default
shall continue as an obligation of the Borrower until the amount in default shall have been fully
paid, and such amount shall bear interest at the Default Rate (as defined in the Note).
.SECTION 1.04. Prepayments.
The outstanding principal of the Loan may be prepaid at any time without penalty. Any
prepayment shall be applied against the installments due under the Note, and, unless otherwise
provided for in the Note, in inverse order of principal maturity with no abatement or reduction in
the amount of installments otherwise required to be paid under the Note.
SECTION 1.05. Time and Place of Payments.
The Borrower shall malse each payment under this Agreement and the I~Tote not later than
the day when due in unmediately available funds consisting of lawfial money of the United States
of America to the Authority or, as applicable, to the Services, if any, at its address set forth in
Exhibit C hereto.
SECTION 1.06. Payment on Non-Business Days.
V~rhenever any payment to be made hereunder or under the Note shall be stated to be due
on a Saturday, Sunday or a public holiday or the equivalent for banks generally under the laws of
the State of Iowa (any other day being a "Business Day"), such payment may be made on the
next succeeding Business Day together with interest in respect of such extension.
SECTION 1.07. [Reserved]
SECTION 1.08. [Reserved]
SECTION 1.09. [Reserved]
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.01. Conditions Precedent to the Loan.
The obligation and agreement of the Authority to make the Loan is subject to the
following conditions precedent. The Authority shall have received on or before the date of the
Loan the following, in form and substance satisfactory to the Authority:
(a) The Note executed by the Borrower;
(b) Evidence that the Boi~ower has complied with any and all Special_Conditions set
-forth in Exhibit A-required to be satisfied -prior-to Loan closing; and - - - -
(c) Such other certificates, opinions, documents, and instruments which the Authority
inay reasonably request. .
SECTION 2.02. Further Conditions Precedent to the Loan.
The obligation of the Authority to make the Loan shall be subject to the further .
conditions precedent that on the date of the Loan the following statements shall be true and the
Authority shall have received a certificate signed by the Borrower, dated the date of the Loan,
stating, among other things, that:
(a) The representations and warranties contained in Section 3.01 of this Agreement,
the covenants contained in Section 3.02 of this Agreement, and all representations and
certifications contained in the Application are correct on and as of the date of the Loan as though
made on and as of such date; and
(b) No event has occurred and is continuing, or would result from the Loan, which
constitutes an Event of Default but for the requirement that notice be given or time elapse, or
both.
ARTICLE III
REPRESENTATIONS, COVENANTS AND W~!-RRANTIES
SECTION 3.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for the due execution, delivery and
perforn7ance by the Borrower of this Agreement and the Note and other documents and
agreements required to be delivered by the Borrower pursuant to this Agreement;
(b) This Agreement and the Note (which evidences the obligation of the Borrower
hereunder) -and other documents and agreements required by this Agreement when delivered
hereunder are and will be legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective-terms, subject to applicable bankruptcy,
3
insolvency, fraudulent conveyance laws or other laws affecting the rights of creditors generally,
and to general principles of equity;
(c) Neither the execution, delivery or_pei-formance_of this Agreement or the.Note, the
consummation of the transactions contemplated hereby, nor the. fulfillment of or compliance with
the terms and conditions of this Agreement conflicts with or results in a breach of any of the
terms, conditions or provisions of any restriction in any organizational document or any
agreement or iristnument to which the Borrower-is now a party or by -which tfie -Borrower is
bound; or constitutes a default under any of the foregoing, or results in the creation or imposition
of any lien, charge or encumbrance whatsoever upon any of the property or assets of the
Borrower under the terms of any instrument or agreement, other than as may be created or
imposed to secure the Borrower's repayment of the Loan as provided in this Agreement;
(d) [Reserved];
(e) There is no litigation or proceeding pending or, to the knowledge of the Borrower,
threatened against the Borrower affecting in any manner whatsoever the right of the Borrower to
execute this Agreement or the other agreements required to be executed by the Borrower under
this Agreement, or the ability of the Borrower to make the payments required hereunder and
under the Note or to otherwise comply with Borrower's obligations contained herein or therein;
(f) The Borrower agrees that the Authority shall have no responsibility nor incur any
expense for maintenance or preservation of the Project or for the payment of any taxes,
assessments or other governmental charges assessed or levied with respect to the Project prior to
the date (if at all) on which the Authority acquires ownership of the Froject;
{g) The certifications and representations of the Borrower and other information
contained in the Application were true and correct as of the date made and are true and correct on
the date hereof, except as information in the Application inay have been amended with the
written approval of the Authority;
(h) There has been no adverse change since the date of the Application in the
financial condition, organization, operation, business prospects, fixed assets, or key personnel of
the Borrower;
(i) No portion of the Loan proceeds shall be used for any political activity or to
further the election or defeat of any candidate for public office;
(j) No payment of any bonus or commission has been made by the Boi~ower for the
purpose of obtaining approval of the Application, or has or will be made for the purpose of
obtaining approval of applications for additional assistance, or any other approval or concurrence
of the Authority required under this Agreement; and
(1:) No officer, member, or eimployee of the Authority and no members of its board,
and no other public official of the governing body of the locality or localities in which the
Project is situated who exercises any functions or responsibilities in the review or approval of the
4
undertaking or carrying out of this Project, has participated in any decisions relating to this
Agreement which affect his or her personal interest or the interest of any corporation,
partnership, or association in which he or she is directly or indirectly interested or has any
personal or financial interest, direct or-indirect, in-.this Agreement or the proceeds of the Loan.
SECTION 3.02. [Reserved]
SECTION 3.03. [Reserved] - - - "
ARTICLE IV
EVENTS OF DEFAULT
SECTION 4.01. Events of Default.
Any of the following events shall constitute an "Event of Default" hereunder:
(a) Any representation or warranty made by the Borrower under or in cannection
with this Agreement shall prove to have been incorrect in any material respect when made; or
(b) The Borrower shall fail to pay any installment of principal of the Loan under this
Agreement and the Note within thirty (~4) days after it is due; or
(c) The Borrower shall fail to pay any installment of interest on the Loan under this
Agreement and the Note within thirty (30) days after it is due; or
(d) The Borrower shall fail to perform or observe any other terra, covenant, or
agreement contained in this Agreement and any such failure shall remain uruemedied for thirty
(30) days after written izotice thereof shall have been given to the Borrower by the Authority, or,
if applicable, the Servicer, or such longer period of time specified in such written notice as the
Authority reasonably determines necessary to correct such default; or
(e) [Reserved]
(f) The Borrower shall (i) apply for or consent to the appointment of, or the~takirrg of
possession by, a receiver, custodian, trustee or liquidator of all or a substantial part of the
Borrower's. property, (ii) admit in writing the Borrower's inability, or be generally unable, to pay
the Borrower's debts as they become due, (iii) make a general assignment for the benefit of the
Borrower's creditors, (iv) commence a voluntary case under the Federal Bankruptcy Laws (as
now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts,
(vi) acquiesce in writing to, or fail to controvert in a timely or appropriate manner, any petition
filed against the Borrower in an involuntary case under such bankruptcy laws, or (vii) take any
action for the purpose of effecting any of the foregoing; or
(g) A case or other proceeding shall be commenced, without the application or
consent of the Borrower, in any court of competent jurisdiction, seeking the liquidation,
reorganization, dissolution, winding up, or composition or readjustment of debts, of the
Borrower,-the appointment-of a trustee, receiver, custodian, liquidator or_the. like of the_B-orrower
or of all or any substantial part of its assets, or-any similar action with respect to the Borrower
under any laws relating to bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and -such -ease or proceeding (other -thane-an involuntary case under the
Federal Bankruptcy Lam=s) shall continue undisrnssed; or unstayed-and hi effect, for a-period of
sixty (60) days, or in an involuntary case under the Federal Bankruptcy Laws (as now or
hereinafter in effect) an order for relief against the Borrower shall be entered.
SECTION 4.02. Remedies of the Authority.
If any Event of Default referred to above has occurred, the Authority or its agent inay:
(a) By notice to the Harrower declare the Loan, all interest thereon and all other
amounts payable under the Note and this Agreement to be forthwith due and payable, whereupon
the Loan, all such interest and all such. amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower;
(b} 1~1ake no further Advances under this Agreement and the Note; and
(c) Take whatever action necessary to collect the payments and other amounts then
due and thereafter to become due or to enforce performance and observance of any obligation,
ab eernent or covenant of the Borrower under this Agreement.
No remedy herein conferred upon or reserved to the Authority is intended to be exclusive
of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall
be in addition to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Upon the occurrence of an Event of Default and at any time thereafter, the
Authority or its agent may, at its option, exercise any and all of the rights and remedies available
to it.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Waivers, Consen#s.
No waiver by the Authority of any default hereunder, nor consent to any departure by the
Borrower from the provisions of this Agreement, shall in any event be effective unless the same
shall be in writing and signed by tl~ie Authority and then such waiver ar consent shall be effective
only in the specific instance and for the specific purpose far which given, and shall not operate as
6
a waiver or consent with respect to any other default or departure or the same default or
departure on a future occasion.
SECTION 5.02, Notices, Etc.
All notices and. other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed-_or_delivered to the persons and addresses set
forth in Exhibit C hereto, or, as to -each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and communications shall,
when mailed, be effective when deposited in the mails, addressed as aforesaid.
SECTION 5.03. No Waiver; Remedies.
No failure on the part of the Authority to exercise, and no delay in exercising, any right
under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of
any right under this Agreement preclude any other or fiu-ther exercise thereof or the exercise of
any other right. T'ne remedies provided in this Agreement are cumulative and not exclusive of
any remedies provided at equity or by law.
SECTION 5.04. Indemnity; fees and Expenses.
(a} The Borrower will indemnify and save harmless the Authority and its officers and
employees from and against any and all losses; by it or them while it or they are acting in good
faith to carry out the transactions contemplated by this Agreement or to safeguard its or their
interests or ascertain, determine or carry out its or their obligations under this Agreement, or any
law or contract applicable to said transaction.
(b) The Borrower will upon deiiland pay to the Authority the amount of any and all
reasonable expenses, including the reasonable fees and expenses of the Autho?~ity's attorneys and
of any experts and agents, which the Authority may incur in connection with (i) the exercise or
enforcement of any of the rights of the Authority hereunder or under the Note, (ii) the failure by
the Borrower to perform or obseitire any of the provisions hereof, (iii) the collection of payments
due under this Agreement and the Note, and (iv) any other reasonable expenses of the Authority
related to the Project or this financing (including reasonable attorneys' fees) which are not
otherwise expressly required to be paid by the Borrower under the tei7ns of this Agreement.
(c) The Borrower agrees to pay all appraisal fees, survey fees, recording fees; license
and permit fees, insurance premiums, taxes, charges, and assessments in connection with the
Project.
It is the intention of the pasties that the Authority shall not incur pecuniary liability by
reason of (i) the terms of this Agreement, (ii) the undertakings required of the Authority
hereunder, (iii) the performance of any act required of it by this Ab Bement or (iv) the
performance of any act requested of it by the Borrower. Accordingly, if the Authority (including
any person at any time employed by or serving as an officer or a member of the Authority, such
persons hereinafter included in all references to the Authority in this Section) should incur any
7
such pecuniary liability, then in such event the Borrower shall. indemnify and hold harmless the
Authority against all claims by or on behalf of any person, fine or corporation, arising out of the
same, and all costs and expenses incurred in connection with any such claim or in connection
with any action or proceeding brought thereon. The Borrower releases the Authority from, agrees
that the Authority shall not be liable for, and agrees to indemnify and hold the Authority
harmless from, (i) any liability for any loss or damage to property or any injury to, or .death of,
any person that may be occasioned by any cause whatsoever pertaining to the Project, or-(ii) any
liabilities, losses or damages, or claims-therefore arising out of the failure, or claimed failure of
the Borrower to comply with its covenants contained in this Agreement, including, in each such
case, any attoi~-eys' fees. The BoiTOwer agrees to indemnify and hold the Authority harmless to
the fullest extent permitted by law from any losses, costs, charges, expenses (including attorneys'
fees), judgments and liabilities incurred by it or them, as the case maybe, in connection with any
action, suit or proceeding instituted or threatened, in connection with the transaction
contemplated by this Agreement. The obligation of the Borrower under this Section shall
sui~ive the termination of this Agreement.
SECTION 5.05. Binding Effect; Governing Law.
Tlis Agreement shall be binding upon and inure to the benefit of the BoiYOwer and the
Authority a11d their respective successors and assigns, except that the Borrower shall not have the
right to assign its. rights hereunder or any interest herein without the prior written consent of the
Authority. This Agreemment shall be governed by, and construed in accordance with, the laws of
the State of Iowa.
SECTION 5.06. Assignments.
This Agreement inay not be assigned by the Borrower without the pi~or written consent
of the Authority.
SECTION 5.07. Counterparts.
This Agreement maybe executed in any number of counterparts, each of which, when so
executed and delivered, shall be an original, and such counterparts shall together constitute one
and the same instrument.
SECTION 5.08. Severability.
If any provision of this Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to any extent
whatever.
SECTION 5.09. Amendments, Changes and Modifications.
This Agreement may not be effectively amended, changed, modified, altered or
terminated without the written consent of the authorized representatives of the parties hereto. The
Executive Director of the Authority, or his designee, is the authorized representative of the
Authority. The Authorized Representative of the BorrowTer is as specified in Exhibit A.
SECTION 5.10. Term of the Agreement.
This Agreement shall be in full force and effect from the date hereof and shall continue in
effect so long as the Note is outstanding and unpaid.
SECTION x.11. [Reserved.
IMPORTANT: READ BEFORE SIGNL1tG. THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE
TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ElV`FORCED. YOU NL~Y CHANGE THE TERMS OF THIS
AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the date fast above written.
CITY OF DUBUQUE, ON BEHALF OF THE HOUSING
AND COMMUNITY DEVELOPMENT DEPARTMENT
Bv:
Name: Roy D. Buol
Title: Mayor
Attest:
By:
Name: Jeanne Schneider
Title: City Clerk
IOWA FINANCE AUTHORITY
By
Bret L. Mills, Executive Director
(SEAL)
10
EXHIBIT A
LOAN DATA
Project Number and Narne: Loan No. SF-2007-004; City of Dubuque, on behalf of the Housing
and Community Development Department
Name of Boi7ower: City of Dubuque, on behalf of the Housing and Conununity Development
Department
Date of Authority's Approval of Application: June 6, 2007
Date of Loan Agreement: September th, 2007
Interest Rate: 3.00%
Loan Tenn: expiriri~ October 1, 2017
Principal Amount of Note and Loan: $00,000
Authorized Representative of Boi~ower: Roy D. Buol, Mavor, City of Dubuque
Servicer (if applicable): None
-Al-
Special Conditions:
Required to be satisfied prior to closing: - -
Other documentation as required by the Authority:
I. Before an advance can be made under the Loan for a project other than the 1126 White
Street Project, the Borrower must submit an IFA OurHorne Rehabilitation Program
Application for the new project to be approved at the discretion of IFA. The Application
maybe found at:
w`~v iowafiiianceautl~orit<T Gov%'en,~forcommunities housing orb/ourhome rehabilitation t~ro~raln/
2. Quarterly reports completed by the Borrower as shown ul Exhibit E are. mandatory during
the life of the Loan.
- A.2-
DESCRIPTION OF PROJECT
.Loan funds, in the form of anunsecured-line of credit, will be used by the Borrower to purchase
and rehabilitate along-vacant and historic apartment building located at 1126 White Street and
other buildings to be purchased and rehabilitated for residential use in the downtown Washington
neighborhood, Dubuque, Iowa. Funds maybe drawn down as needed and as the properties are
sold, the amount owing would be returned to IFA. The Borrower expects that the completed
units will be sold to targeted income groups with no more than 1 i ~% of the area median income.
-r`~J -
EXHIBIT B
Single Family OurHome Rehab Loan No. SF-2007-004
Dated: September _ th, 2007
Fixed Interest Rate: 3.00%
Maturity Date: October 1, 2017
Principal Amount: $ 500,000
PROMISSORY NOTE
FOR VALUE RECEIVED the undersigned, City of Dubuque, on behalf of the Housing
and Community Development Department, whose address is 1805 Central Avenue, Dubuque,
Iowa, 52001 (the. "Borrower") unconditionally promises to pay to the order of the Iowa Finance
Authority (the "Authority"), or its assigns, at its principal place of business, located at 2015
Grand Avenue, Des Moines, Iowa 50312, or at such other place as may be designated in writing
from time to time by the holder of this Note, the principal sum of Five Hundred Thousand and
00/100 Dollars ($ 500,000.00), or so much thereof as has been advanced to the Borrower,
together with interest to maturity at the rate of three percent (3°io) per annum on the balance
remaining from time to time unpaid; and, after either maturity or default, and beyond any
applicable notice and cure periods set forth herein or in the Loan Agreement (described below} at
the rate of ten percent (10%) per annum (the "Default Rate"); said principal and interest to be
paid as follows:
No payments of principal shall be due until the earlier of: (a) thirty (30) days
following the date(s) on which each property or any unit(s) thereof located in the
historic tiVashington neighborhood of downtown Dubuque, Iowa, the purchase
and rehabilitation of which is financed by this Note is sold; refinanced, leased
pursuant to a lease purchase agreement, or otherwise disposed of by Borrower, of
which eighty percent (80%) of the proceeds of the sale of any unit shall be due as
a principal repayment, however, one hundred percent (100%) of the principal
financed shall be due upon the con~~eyance of each property(last unit; or (b)
October 1, 2017, at which time all outstanding principal and interest for the
Project shall be repaid.
Interest payments on the fiends used to finance the Project shall be payable one
year from the date of the first draw of funds and continuing each year thereafter,
including all outstanding interest on this Note, with one final payment including
all remaining principal and interest, due October 1, 2017.
Interest on this Note shall be calculated on the basis of a 350-day year with twelve
30-day months.
This Promissory Note is the Note referred to in, and is entitled to the benefits and subject
to the provisions of, and is evidence of the obligation of the Borrower to make payments under
the Loan Agreement dated September th, 2007 (the "Loan Agreement"), between the
Borrower and the Authority. The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated Events of Default and
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also for prepayments on account of principal hereof prior to the maturity hereof upon the terms
and conditions therein specified.
The Borrower shall have the right to prepay the debt evidenced by this Note without
penalty and without the prior written approval of IFA.
If default be made in the payment of any sums due under this Note or (ii)
Borrower is dissolved or_ther_e _is a_ hansfer of any_ ownershi~_ interest in the, Borrower
without first obtaining the written consent of the holder, then holder may, at its option,
without further notice or demand, except as may otherwise be specifically provided for in
the Loan Agreement or by the Laws of the State of Iowa, declare the unpaid principal and
accrued interest on this Note at once due and payable, foreclose all liens securing
payment of this Note, pursue any and all other rights, remedies, and recourses available
to holder under this Note, the Loan Agreement or pursue any combination of the
foregoing, all such remedies under this Note and under the Loan Agreement being
cumulative. Holder shall have the right, if holder so elects, to rescind any acceleration in
payment of this Note for default, in which event this Note shall be construed, interpreted
and enforced in the same manner as if holder had never elected to declare the unpaid
principal balance and accrued interest of this Note at once due and payable.
The Borrower shall pay all costs of collection and the expense(s) of liolder for
having to invoke such remedial action(s) as maybe necessary to enforce the terms of this
Note, includvzg a reasonable attorney's fee, whether or not any action shall be instituted
to collect or enforce this Note. Time is of the essence of this Note.
Failure to exercise any of the foregoing options upon the happening of one or
more of the events of default provided in this Note or in the Loan Agreement shall not
constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other event, and no single or partial exercise of any
right or remedy shall preclude other ar further exercise of the same or any other right or
remedy. The holder of this Note shall have no duty to exercise any or all of the rights and
remedies provided for, or contemplated in, this Note. The acceptance by holder of any
payment under this Note that is less thazi payment in full of all amounts due and payable
at the tune of such payment shall not constitute a waiver of the right to exercise any of
the foregoing options at that time or at any subsequent time, or nullify any prior exercise
of any such option without the express written consent of the holder.
Borrower and any endorsers or guarantors of this Note, severally waive
presentment and demand for payment, notice of intent to accelerate maturity, notice of
acceleration of maturity, protest or notice of protest, and non-payment, bringing to suit
and diligence in taking any action to collect any stuns awing under this Note ar in
proceeding against any of the right and properties securing payment of this Note, and
consent to any and all renewals, extensions or modifications which might be made by the
holder hereof as to the tune of payment of this Note from time to tune, and further agree
that the security for this Note or any portion hereof may from tune to tune be modified or
released in whole or in part without affecting the liability of any parry liable for the
payment of this Note.
This Note is to be construed according to the Laws of the State of Iowa.
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Should any provision or term hereof be or become in violation of any law, rule or
regulation, whether local, state or federal, such provision shall be deemed automatically
amended to conform, to the extent possible without total waiver_of such provision, to
sucb law, and all other provisions hereof shall remain in full force and effect. As used
herein, the terms Borrower and Authority shall be deemed to include their respective
grantees, heirs, legal representative, successors. and assigns, whether voluntary by action
of the parties-or -involuntary by operation of Iawa-and the term-holder shall-be deemed to
include the Authority as well as any future holder or holders of this. Note.
IMPORTANT: READ BEFORE SIGNING. THE TERIVIS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY
THOSE TERi'~~TS IN WRITING ARE ENFORCEABLE. NO OTHER
TERMS OR ORAL PROMISES NOT CONT_A.INED IN THIS WRITTEN
CONTRACT lYIAY BE LEG ALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT OYLY BY ANOTHER WRITTEN
AGREEMENT.
Signed as of the _ th day of September, 2007, pursuant to due authority.
CITY OF DUBUQUE, ON BEHALF OF THE HOUSING
AND COMMUNITY DEVELOPMENT DEPARTMENT
By:
NaLne: Ray D. Buol
Title: Mayor, City of Dubuque
Attest:
By:
Name: Jeanne Schneider
Title: City Clerk
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EXHIBIT C
ADDRESSES FOR NOTICES AND DEMANDS
Authority: Iowa Finance Authority
Attn.: Single Family Rehab Loan Program
2015 Grand Avenue
Des Moines, Iowa 50312
Borrower: City of Dubuque, on behalf of the Housing and Community
Development Deparhnent
Attn: David Han-is
1805 Central Avenue
Dubuque, IA 52001
-C-
EXHIBIT D
PAYMENT REQUEST FORM
B_ orrower Name and Address: City_ o_f Dubuque, on behalf of the Housing and
Community Development Department
Attn: David Han-is
1805 Central Avenue
- _ - -Dubuque; IA 52001 - -
For Property Address:
Pursuant to, and in accordance with, the provisions of the Loan Ab eement dated September -
th, 2007 (the "Agreement"), between the Iowa Finance Authority (the "Authority"), and City of
Dubuque, cn behalf of the Housing and Community Development Department, (the "Borrower"j,
the Authority is hereby requested to pay to the Borrower the sum of $ which amount
is to be used as set forth in Exhibit A hereto.
iT IS HEREBY CERTIFIED THAT:
(a) None of the items for which disbursement is requested has formed the basis for
any disbursement heretofore made under the Agreement;
(b} The obiigatian with respect to which this disbursement is being requested has
been properly ii-~curred in accordance with the Agreement with respect to the Project (as defined
in the Agreement) and is a proper charge under the Agreement;
(c) The Borrower has no notice of, and is not otherwise aware of, any mechanics',
materialmen's, laborers', suppliers', vendors' or other liens or rights in respeci thereof which
should, in accordance with the Agreement, be satisfied or discharged before this disbursement is
made;
(d) This disbursement does not include any amount which the Borrower is entitled to
retain pursuant to any contract or agreement providing for the retention by the Borrower of a
portion of the price paid thereunder;
(e) No Event of Default is continuing under the Agreement; and
(fj Attached hereto are, as applicable, copies of invoices, lien waivers, and other
necessary documents in connection with this Payment Request Form.
AUTHORIZED BORROWER REPRESENTATIVE
Date:
-D-