The URL can be used to link to this page

Home My WebLink About04- Loan Agreement, BLC Associates LOAN AGREEMENT THIS LOAN AGREEMENT IS made and entered into this ~day of I it! lZ:,{/l , 2rtd by and between BLC Associates, LLC, a Montana Limited Liability Corporation, hereinafter referred to as "Borrower", and the City of Bozeman, hereinafter referred to as the "Lender". Borrower agrees to pay to Lender the sum of One Hundred Fifty Thousand Dollars ($150,000.00), plus interest in accordance with the tenns of this agreement. RECITALS WHEREAS, the Lender has established an Affordable Housing Revolving Loan Fund for the purpose of furthering development of affordable housing in the Bozeman jurisdictional area; and WHEREAS, the Borrower wishes to borrow funds from the Lender to develop certain properties and provide more affordable housing to the residents of the City of Bozeman; and WHEREAS, the Borrower has agreed to develop property within the City of Bozeman meeting the City's guidelines for affordable housing and to provide housing for Bozeman's senior citizens; and WHERAS, this development project fits within the City's Affordable Housing Strategies. NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the parties agree as follows: 1. Amount of Loan The Lender agrees under the tenns and conditions of this Agreement, to make a loan for equipment and working capital to the Borrower in the principal amount of $150,000, to be repaid over a term of not more than one year. This loan is evidenced by a promissory note and secured by a mortgage. LOAN AGREEMENT Page 2 of 11 2. Interest Rate and Reoavment of Loan The loan shall bear interest at four percent (4%) per annum. The term of the loan is one (1) year being payable in full not later than March 10,2005. The loan shall commence accruing interest from the date the funds are disbursed and shall be owed in full upon payment. Interest upon payment shall be calculated according to standard accounting practices. While there will be no penalty for prepayment of the loan, Borrower acknowledges his obligation to pay the interest accrued. All pre-payments shall first be applied to interest owed and then to principal, according to standard accounting practices. 3. Disbursement of Funds Lender shall distribute the full amount of the loan to the Borrower immediately upon receiving all signed documents from the Borrower. 4. Conditions of Loan A. The Borrower will deliver to the Lender a fully executed and recordable Mortgage granting to the Lender an interest in two lots located within Gallatin County as security for the Loan. B. Upon receipt of reasonable advance notice, the Borrower will permit representatives of the Lender to inspect the Borrower's facilities and records, which are the subject of this loan. C. This Agreement is non-assignable except upon the written consent of the Lender. A request for consent to assignment must include a statement justifying the request and the financial statement of the proposed assignee. This statement must be current to within 90 days of the request. The Lender reserves the right to deny requests for assignment and to modify rates and terms of the Loan Agreement and its exhibits as conditions of an assignment. D. It is expressly understood that the proceeds of this loan are designated solely for the purpose of the legitimate business establishment described on Page I of this Agreement. LOAN AGREEMENT Page 3 of 11 E. The Borrower waives any and all claims and recourse against the Lender, including the right of contribution for loss and damage to persons or property arising from, growing out of, or in any way connected with or incident to this Agreement. Further, the Borrower will indemnify, hold harmless, and defend the Lender against any and all claims, demands, damages, costs, expenses or liability arising out of the performance of the Borrower. F. In the event that BLC Associates, LLC., is sold or transferred during the term of this loan, the loan will become immediately due and payable. G. The Borrower shall not remove the business activities or facilities for which the loan is intended from the city limits of the City of Bozeman. 5. Security A. As security for the payment of all loans now or in the future made under this Agreement; prompt, full, and faithful performance by Borrower of all of the provisions to be kept, preserved, or performed by the Borrower under this Agreement; and all other indebtedness of the Borrower to the Lender, now existing or subsequently incurred, Borrower grants to Lender a Mortgage in certain real property located in Gallatin County Montana more particularly described as follows: Lots 2 and 3 of Bridger Peaks Village Subdivision in Gallatin County, Montana according to the official plat thereof on file and of record in the office of the County Clerk and Recorder, Gallatin County, Montana. Plat Reference: J-3068. {Ref Document Number 2132298, November 18, 2003}. B. Mortgage referenced in paragraph 5A above is further secured by a promissory note attached hereto as Exhibit "A", and guarantee attached hereto as Exhibit "B". C. Should the Borrower default in repayment of the loan, the Lender may resort to the property described in paragraph 5A above and/or engage in any remedies provided by the LOAN AGREEMENT Page 4 of 11 laws of Montana, including foreclosure, always holding the Borrower responsible for any deficiency after sale of the property securing the loan. E. The Borrower will advise the Lender of any sale of the property described in paragraph SA above or any action upon said property which in any way may make the collateral pledged under this Agreement worth less than its present value or to the extent the Lender could not recover the outstanding principal balance of the loan from the existing assets pledged. 6. Living Wage The Borrower agrees to pay all workers employed by the Borrower in the performance of this loan, a living wage as provided by Chapter 2.96 of the Bozeman Municipal Code. The Borrower agrees to make available for City inspection its payroll records relating to employees providing services under this loan. If any payroll records of the Borrower contain any false, misleading or fraudulent information, or if the Borrower fails to comply with any of the provisions of Bozeman Municipal Code Chapter 2.96, the Borrower will be in default and the City may withhold payments on the agreement, terminate, cancel or suspend the agreement in whole, or in part in addition to any remedies contained herein or at law. 7. Default A. The occurrence of anyone or more of the following events shall constitute a default ("event of default") by Borrower under this Agreement: 1. Any representation or warranty made by the Borrower in this Agreement or in any request or certificate or other information furnished to the Lender hereunder proves to have been incorrect in any material respect. 2. The Borrower fails in any material respect to carry out its obligations under its proposal to the Lender for the loan provided hereunder. LOAN AGREEMENT Page 5 of 11 3. The Borrower fails to pay, when due, any indebtedness for any money borrowed, for which Borrower is liable as principal obligor or becomes liable as guarantor. 4. The Borrower applies for or consents to the appointment of a receiver, trustee or liquidator, admits in writing to its inability to pay its debts as they become due, makes a general assignment for the benefit of creditors, or invokes any relief under any chapter of the United States Bankruptcy Code. 5. The Borrower fails to provide a recordable mortgage for the subject loan in accordance with Section 5, above. 6. The Borrower fails to pay all local real estate and personal property taxes specified to the project funded by the proceeds of this loan, as applicable. 7. The Borrower removes the business activities for which the loan is intended from the Lender's jurisdictional area during the term of the loan. 8. The Borrower fails to execute any documents reasonably necessary to make the Lender secure in its financial position as stated in this Agreement. 9. The Borrower sells, transfers, pledges or hypothecates its stock so as to render the Lender insecure in its position of having the loan repaid. 10. The Borrower sells any asset described in paragraph 5A above and fails to use the proceeds of the sale of the asset to retire part of the outstanding principal balance of the loan. 11. The Borrower violates any term, assurance, or conditions of this Agreement. 12. The Borrower fails to provide to the Lender documented proof of the existence of insurance as required under Section 10 of this Agreement. 13. Borrower fails to obtain all applicable City business licenses. LOAN AGREEMENT Page 6 of 11 B. In the event the Borrower fails to make timely payments under this Agreement or perform any of the covenants on its part or any event of default occurs as stated above, the Lender at any time thereafter may declare the Borrower to be in default and thereafter give the Borrower written notice setting forth the action or inaction which constitutes the default and giving the Borrower thirty (30) days in which to correct the default. If the Borrower fails to correct the default within thirty (30) days of receipt of this notice, the Lender may notify the Borrower in writing that the full balance due upon this Agreement is then due and payable in full within thirty (30) days. It is agreed by the parties hereto that the provisions of this Agreement provide for reasonable and sufficient notice to be given to the Borrower in case of the Borrower's failure to perform any of its covenants and that this notice is sufficient for the Borrower to rectify its actions or inaction of default. Any waiver by the Lender of any default by the Borrower does not constitute a waiver of a continuing breach or a waiver of a subsequent breach. Any agreement contrary to this Agreement is not binding upon either party hereto unless it is in writing and signed by both parties. On an event of default, Lender, in its own absolute discretion, may exercise anyone or more of the rights and remedies accruing to a secured party under the Uniform Commercial Code of the State of Montana and any other applicable law and default by the debtor. All of the Lender's rights and remedies under this Agreement and the other agreements are cumulative and nonexclusive. 8. Non-Discrimination A. Civil Rights Act of 1964. The Borrower will abide by the provisions of Title VI of the Civil Rights Act of 1964 which states that no person may, on the grounds of race, color, or LOAN AGREEMENT Page 7 of 11 national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. B. Section 109 of the Housing and Community Development Act of 1974. In the performance of this contract the Borrower will obey this provision which states that: "No person in the United States may, on the grounds of race, color, national origin, or sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with the funds made available under this title. Any prohibition against discrimination on the basis of age under the Age Discrimination Act of 1974 or with respect to an otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973 will also apply to any such program or activity." 9. Additional Assurances The Borrower will remain fully obligated under the provisions of this Agreement notwithstanding its designation of any third party or parties with written approval of the Lender for the undertaking of all or any part of the program with respect to which assistance is being provided under this Agreement. The Borrower will comply with all applicable laws, rules and regulations of the Lender, the State of Montana, and the United States Government and with all lawful requirements of the Lender so as to insure that this Agreement is carried out in accordance with the obligations and responsibility of the Lender of the State of Montana. 10. Insurance The Borrower agrees to provide fire and extended coverage insurance protection on property serving as collateral for this loan in the sum of at least the value of loan and the amount of Lender's interest in said property. However, the Borrower may, upon written approval of the Lender, in the event of loss, apply insurance proceeds received towards the payment of the loan or use the proceeds to replace the property destroyed. The Borrower will provide copies of all insurance policies to the Lender within one (I) week of the signing of this agreement. During the LOAN AGREEMENT Page 8 of 11 term of this Loan Agreement, when the Borrower renews the insurance policy by payment of an additional year's premium, the Borrower will provide proof of payment of the premium to the Lender so as to keep the Lender advised at all times that the machinery, equipment, furniture and fixtures are insured. Failure to so notify the Lender is an event of default of this Loan Agreement for purposes of the default provisions of Section 6 above. 11. Litigation The Borrower states that to the best of its knowledge and belief there are no suits or proceedings pending or threatened against or affecting it which, if adversely determined, would have a material adverse effect on its financial condition. In addition, to the knowledge of the Borrower, there are no proceedings by or before any governmental commission, board, bureau or other administrative agency pending, or threatened against the Borrower. 12. Attorney's Fees In the event that either party incurs legal expenses, including the costs, expenses, salary and fees of the in-house counsel, to include City Attorney, to enforce the terms and conditions of this Agreement, the prevailing party is entitled to recover reasonable attorney's fees and other costs and expenses, whether the same are incurred with or without suit, including fees on appeal. 13. Avoidance of Conflict of Interest The Borrower covenants that no officer, member, agent, or employee of the Lender who participates in the administration of this Agreement in other than a purely ministerial capacity will have any personal interest, real or apparent, in the proceeds of the loan provided hereby. For purposes of this covenant, an impermissible conflict of interest exists if the officer, member, agent or employee; any member of his or her immediate family; his or her partner; or an organization which employs, or is about to employ, any of the foregoing has a financial or other interest in the proceeds hereof during his or her tenure or for one year thereafter. The Borrower LOAN AGREEMENT Page 9 of 11 shall incorporate, or cause to be incorporated, in all contracts or subcontracts a provision prohibiting such interest pursuant to the purposes ofthis section. 14. Construction and Venue This Agreement will be construed under and governed by the laws of the State of Montana. In the event of litigation concerning it, venue is in the 18th Judicial District in and for the County of Gallatin, State of Montana. 15. Modifications Any amendments or modifications of this agreement, or any provisions herein shall be made in writing and executed in the same manner as an original document and shall after execution become part of this agreement. 16. Demand: Any demand upon or notice to either party shall be by personal service or addressed and mailed to the following addresses: LENDER: BORROWER: City Manager Tim Howard P.O. Box 1230 300 West Broadway, Suite #1 Bozeman, MT 59771 Missoula, Montana 59802 Mailing shall be by certified mail, return receipt requested, and shall be effective when served or three (3) days after deposit in the United States Mail, whichever occurs first. 17. Waiver No waiver of any default shall constitute a waiver of any other default, nor shall such waiver constitute a continuing waiver. No waiver of any term or condition of this Agreement shall constitute a waiver of any other term or condition, whether or not similar, nor shall such waiver constitute a continuing waiver. LOAN AGREEMENT Page 10 of 11 18. Headings The headings used in this Agreement are for reference purposes only. 19. Binder This Agreement shall be binding upon the heirs, personal representatives, successors and assigns of the Parties. 20. Authority The undersigned Borrower affinns that he has the authority to enter into this agreement on behalf of himself and the corporation, and to bind the undersigned Borrower and corporation to this Agreement. ~ I~ ,2Oi?1 DATED THIS lJ) day of , BLC:::-t~~_ =-_____: .~ ........._""'.,~,r_"'_ ._"._.~..........._~ STATE OF MONTANA ) :ss County of Gallatin ) On the 1.t1f!aay of ---!vfp/dC ' 2f'{fj before me, a Notary Public for the State of Montana, personally appeared Tim Howard, known to me to be the person described in and who executed the foregoing Loan Agreement as the Managing Member of BLC Associates, LLC, whose name is subscribed to the within instrument and acknowledged to me that he executed the same for and on behalf of said Corporation. LOAN AGREEMENT Page II of 11 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and year first written ab ve. - an L. or Notary ub' for State of Montana Residing at: My Commission Expires: August 3,2006. LENDER: CITY OF BOZEMAN cz: oJ~ Robin L. Sullivan Clerk of the Commission STATE OF MONTANA ) :ss County of Gallatin ) On the lcft1day of Ith/tA, 2dbefore me, a Notary Public for the State of Montana, personally appcared Ron Brey and Robin Sullivan, known to me to be the pcrsons described in and who executed the foregoing Loan Agreement as City Manager and Clerk of the Commission of the City of Bozeman, whose nanles arc subscribed to the within instrument, and acknowledged to me that they executed the same for and on behalf of said City. IN WITNESS WHEREOF, I have hereunto set hand and affi ed my seal on the day and year first written above. -- "- , - L. rdal "-' Nota ublic for State of Montana "- -- - " Printed Name -~ - Residing at Bozeman, Montana My Commission Expires: August 3, 2006. PROMISSORY NOTE $150.000.00 March J.Q. 2004 FOR V ALUE RECEIVED, BLC Associates, LLC promises to pay to the order of the City of Bozeman, 411 East Main, Bozeman Montana 59715. (or other address notified in writing) the sum of One Hundred Fifty Thousand Dollars ($150,000.00) with interest at the rate of four percent (4%) per annum, payable in full no later than March 10.2005. All payments made hereunder shall be credited first to interest and the balance, if any, to principal. BLC Associates. LLC may make prepayments on account toward the unpaid principal balance, together with interest accrued to date, due to the City of Bozeman, and may pay the whole of the unpaid principal balance, together with interest accrued to the date of full prepayment, without penalty; provided, however, that no partial prepayment on account toward the unpaid principal balance shall relieve him from the obligation of paying the whole of the principal sum, plus accrued interest, until fully paid. In case of default in the payment of the entire principal sum and accrued interest, the balance shall at once become due and payable without notice at the option of the holder of this note. Failure to exercise the option with relation to any default in payment shall not constitute a waiver of the right to exercise the same subsequently. BLC Associates, LLC hereby waives any presentment. demand. protest, and notice of nonpayment, and any and all homestead or exemption rights and the benefit of any moratorium, valuation and appraisement laws of any state or the federal government, and agrees to pay reasonable attorney fees and any costs of collection of amounts due on this note or to foreclose the mortgage securing the payment ofthis note. DATED this 1&.. t:\tay of March 2004, at Bozeman, Gallatin County, Montana.' /..--.' ~---.. ._.,....._.._. "",,,,,'-C,~.o=,,~.,,,,.,,.. .-. ,~""""--::c,,:C::,"-~~~:-;,-! Tim Howard --- --.-.-' STATE OF MONTANA ) ) ss. County of Gallatin ) On this J.iL....-f!!tray of March 2004, before me, the undersigned, a Notary Public for the State of Montana, personally appeared Tim Howard, known to me to be the person described herein and who executed the foregoing Promissory Note as the Managing Member of BLC Associates, LLC, whose name is subscribed to the within instrument and acknowledged to me that he executed the same for and on behalf of said Corporation. IN WITNESS WHEREOF, lhav I the day and year in this certificate first above written - nL. - Notary c for the State of Montana .- - - Residing at Bozeman, Montana (NOTARIAL SEAL) My Commission expires: August 3, 2006 CORPORATE GUARANTEE OF BLC ASSOCIATES, LLC, AND TIM HOWARD, MANAGING MEMBER THIS IS AN AGREEMENT OF GUARANTEE by BLC Associates, LLC, and Tim Howard, Managing Member ("Guarantors"), to the City of Bozeman, Municipal Corporation ("Obligor"), of payment of any and all funds loaned to BLC Associates, LLC, from the City of Bozeman through its revolving loan fund pursuant to a certain Loan Agreement with Obligee by BLC Associates, LLC, ("Obligor"). For value received, Guarantors guarantee to Obligee payments in full for any funds loaned to BLC Associates, LLC, from Obligee pursuant to that certain contract of Obligor with Obligee, described as Loan Agreement dated March 10, 2004, along with any and all promissory notes and amendments, addenda, and modifications to the Loan Agreement. Guarantors consent to any extension of time of performance and/or payment ofthe whole or any part of the Loan Agreement or any addition or change ofthe Loan Agreement and waive notice ofthat consent. This guarantee and every part of it shall bind Guarantors' heirs, executors, administrators and aSSIgns. DATED this~~ay of March, 2004. GUARANTORS: BLC Associat ,LLC ----,~--- ,,'//:".--~- -""- "'''.. /---- .j., . ----------=---_-:-//) er Guarantee BLC Associates p. 1 of 2 STATE OF MONTANA ) ) ss. County of Gallatin ) On this JIi!;Jay of March 2004, before me, the undersigned, a Notary Public for the State of Montana, personally appeared Tim Howard, known to me to be the person described herein and who executed the foregoing Promissory Note as the Managing Member of BLC Associates, LLC, whose name is subscribed to the within instrument and acknowledged to me that he executed the same for and on behalf of said Corporation. IN WITNESS WHEREOF, I have in this certificate first above written - -- nL. ord . ~ .-' -" Notary P bl' or the State of Montana ---- - - Residing at Bozeman, Montana - -{NOTARIAL SE.AL) My Commission expires: August 3, 2006 -- Guarantee BLC Associates p. 2 of 2 MORTGAGE This Mort~ge, made~tered into this ID-jj;J-day of March 2004, by and between BLe Associates, LLC, im How . anaging Membep, located at 300 West Broadway, Suite #1, Missoula, Montana 59802, MORTGAGOR, and the City of Bozeman, with offices at 411 East Main, Bozeman, Montana 59715, (or other address notified in writing), MORTGAGEE. The obligation secured by this mortgage is a promissory note to secure payment of a loan made by the City of Bozeman to BLC Associates, LLC. WITNESSETH: That the Mortgagor, for and in consideration of the sum of One Hundred Fifty Thousand Dollars ($150,000.00) plus 4% interest, the amount of a loan provided this date to BLC Associates, LLC by City of Bozeman, the receipt of which is hereby acknowledged, does hereby mortgage and confirm unto the Mortgagee, its heirs, executors, administrators and assigns forever its interests in the hereinafter described Real Estate, particularly described as follows: Lots 2 and 3 of Bridger Peaks Village Subdivision in Gallatin County, Montana according to the official plat thereof on file and of record in the office of the County Clerk and Recorder, Gallatin County, Montana. Plat Reference: J-3068. {Ref" Document Number 2132298, November 18, 2003}. Together with all and singular the tenements, hereditaments and appurtenances, thereto, and all reversions and remainders and all rents, issues and profits thereof, and all right, title and interests of the Mortgagor therein, including easements and rights of way for access and all other rights pertaining to its interest thereto, unto the Mortgagee and his heirs, executors, administrators and assigns. The Mortgagor represents to and covenants with the Mortgagee and its heirs, executors, administrators and assigns that it will W ARRANT and defend the premises against the lawful claims of all persons whomsoever, and the Mortgagor hereby relinquishes all right of dower and all right of homestead, accruing or to accrue, in and to all of the premises, and the Mortgagor hereby covenants with the Mortgagee that it is lawfully "seized" and in possession of its interest in the premises and the same is free from all encumbrances. Provided that these presents are upon the express condition that if the Mortgagor, its heirs, executors, administrators and assigns, shall payor cause to be paid to the Mortgagees and their heirs, executors, administrators and assigns, the full sum to be agreed upon by the parties according to the tenure and effect of that promissory note described above, information about which is available at the City of Bozeman, P.O. Box 1230, Bozeman, Montana, 59771-1230, then these presents to be void, otherwise to be and remain in full force and effect. It is hereby agreed that ifthe Mortgagor or maker of the obligation secured by this indenture shall -1- fail to pay the principal or any interest as the same becomes due, or any taxes or assessments or insurance as required or otherwise fail to comply with any or all ofthe conditions of this mortgage, then all of the debt secured hereby shall become due and collectible, and all rents and profits from its interest in the property shall then immediately accrue to the benefit of the Mortgagee; and this mortgage may be foreclosed for the full amount, together with costs, taxes, insurance, cost of abstract title, attorney fees, and any and all other sums advanced or expense incurred on account of the Mortgagor; for whatever purpose, and any and all advances shall draw interest at the rate of ten percent per annum, and be liens under this indenture. A release of this mortgage is to be made at the expense of Mortgagor, on full payment of indebtedness secured thereby. IN WITNESS WHEREOF, the Mortgagor has hereunto set his hand and seal the day and year first above written. tl DATED this \.A) day of March 2004, at Gallatin Count):', Montana. MORTGAG R, BLC .,.....".. C ------"---.----------- --------------_.-"'-------- -- -.. -~ .~._,~..~_. Tim Howard, Managi STATE OF MONTANA ) ) ss. County of Gallatin ) On this I~ay of March 2004, before me, the undersigned, a Notary Public for the State of Montana, personally appeared Tim Howard, known to me to be the person described herein and who executed the foregoing Mortgage as the Managing Member of BLC Associates, LLC, whose name is subscribed to the within instrument and acknowledged to me that he executed the same for and on behalf of said Corporation. IN WITNESS WHEREOF, I have here and year in this certificate first above writt L. Notary lic for the State of Montana . '" Residing at Bozeman, Montana {NOT ARlAL $AL) My Commission expires: August 3, 2006 -~ --~ - '-'-~ - - -2- MORTGAGEE, CITY OF BOZEMAN By: ATTEST: ~/~ Robin L. Sullivan, Clerk of the Commission STATE OF MONTANA ) ) ss. County of Gallatin ) On this ~y of March 2004, before me, the undersigned, a Notary Public for the State of Montana, personally appeared Ron Brey and Robin Sullivan, known to me to be the persons described herein and who executed the foregoing Mortgage as the Acting City Manager and Clerk ofthe Commission, respectively, of the City of Bozeman, whose names are subscribed to the within instrument and acknowledged to me that they executed the same for and on behalf of said City. IN WITNESS WHEREOF, I have hereunto set my hand and and year in this certificate first above written -- I - - 0 _/- Not ic for the State of Montana -- ./ -', Residing at Bozeman, Montana - (NOT-~f SJfAL) My Commission expires: August 3, 2006 - -- - -3-