AGREEMENT
This Agreement (“Agreement”) made and entered into this _____ day of ____________, 2013, by and between the City of Lawrence, Kansas, a municipal corporation (“City”), and Lawrence Community Shelter, Inc., a Kansas not-for-profit corporation (“Shelter”).
WHEREAS, Shelter is a community organization created and operated for the purpose of providing food, shelter, counseling, job opportunity training, and other basic and essential services for the homeless;
WHEREAS, Shelter has purchased, and now occupies, a facility designed to assist the homeless, located at 3701 Franklin Circle, Lawrence, Kansas (“Facility”):
WHEREAS, to acquire Facility, Shelter obtained a construction loan from Peoples Bank, upon which there remains an unpaid principal balance of $627,098.82, together with interest thereon at the rate of 5% per annum from the 4th day of December, 2013;
WHEREAS, there is an immediate need to make repairs to the roof of the main Facility building; and
WHEREAS, Shelter has requested the City to make it a loan in the principal amount of $725,000.00, the proceeds of which shall be used exclusively for the City’s purchase of the Mortgage and Promissory Note made by Shelter now held and owned by Peoples Bank, Exhibits A and B hereto. The balance of city’s loan of $725,000.00 will be used by Shelter to acquire roof repairs to its main building, which amount shall not exceed $97,901.18.
NOW THEREFORE, the parties agree, each with the other, that City will loan to Shelter an amount not to exceed $725,000.00, in consideration of and subject to the following terms and conditions:
1. The recitals stated above are by reference incorporated herein and made a part of the Agreement.
2. The loan shall be made in two separate checks to be issued by City, to-wit: One check made payable to Commerce Title as closing agent in the amount of $627,098.82 for payment to Peoples Banks; a second check made payable jointly to the order of Shelter and the company which shall be the lowest responsible bidder for the making of the roof repairs to Shelter’s main building, said amount not to exceed $97,901.18.
3. IT IS EXPRESSLY UNDERSTOOD AND AGREED by the parties hereto that City will purchase and acquire from Peoples Bank, by a written and recordable assignment of mortgage, all of Peoples Bank’s right, title, interest, and ownership in and to said Mortgage and the Promissory Note of even date, Exhibits A and B hereto, for an amount not to exceed $627,098.82.
Upon receipt of the assignment of said mortgage, City shall have all of the same rights, privileges, and powers under said Mortgage and Promissory Note as granted to Peoples Bank by Shelter.
4. IT IS FURTHER UNDERSTOOD AND AGREED by and between the parties that the amount and schedule of repayment of the loan by City to Shelter are different from those set forth in the Promissory Note, Exhibit “B” hereto, and are hereby agreed to by the parties, as follows:
a. Shelter shall pay to City the sum of $225,000.00 on or before October 31, 2014, which said amount shall have been interest free if fully and timely paid. Should Shelter fail to timely re-pay the full amount of $225,000.00, said sum shall bear and draw interest at the rate of 2% per annum from the original loan date until principal and interest are fully paid, all of which shall be in addition to the regular monthly payments of principal and interest set forth in numbered paragraph 4(b) hereof.
b. Other than the $225,000.00 to be paid by Shelter by October 31, 2014, Shelter shall pay to City the principal amount of $500,000.00, together with interest thereon at the rate of 2% per annum on the unpaid principal amount existing from time to time, in 180 equal monthly payments of $1,848.00 each, commencing January 10, 2014, and continuing on the same day of each month thereafter, until December 10, 2028, at which time the entire unpaid balance of principal and interest on the original principal loan amount of $725,000.00, shall be paid in a lump sum to City. It is expressly understood and agreed that the $1,848.00 monthly payments are based on a payment over 30 years, rather than 15 years.
c. Notwithstanding the change in the amount and the schedule of repayment of the loan by City to Shelter, all other terms, conditions, obligations, and rights set forth in the Promissory Note, Exhibit B hereto, shall remain in full force and effect until the loan by City to Shelter has been fully repaid or otherwise satisfied, unless amended, altered, changed, modified or removed by the terms and conditions of that certain Amended Promissory Note, “Amended Note”, made and executed by the Shelter, as Borrower, in favor of the City, as Lender, dated December 4, 2013, a copy of which is attached hereto as Exhibit C.
5. As an express condition to the making of the loan by City to Shelter, Shelter understands and agrees that, until the full amount of principal and interest due under the Agreement is paid in full, Shelter shall not sell or lease, encumber, or seek to encumber, by way of a mortgage or any other method, that certain real estate or improvements thereto or appurtenances thereon, situated in Douglas County, Kansas, commonly known and referred to as 3701 Franklin Park Circle, Lawrence, Kansas, to-wit:
LOT 1, FRANKLIN PARK ADDITION NO. 2, AN ADDITION TO THE CITY OF LAWRENCE, DOUGLAS COUNTY, KANSAS,
without having first obtained approval therefor from City in a writing duly made, executed, and acknowledged by the appropriate City official(s).
6. In the event Shelter shall fail to fully and timely make any payment of principal or interest when due by the terms hereof, City shall have the right to withhold said amount of any allocations of public funding money made or to be made by City for the benefit of Shelter. The amount of such withholding(s) shall first be applied to accrued and unpaid interest with the balance remaining, if any, to be applied to the existing principal balance.
7. Shelter shall have the right, without penalty, to accelerate full and final payment of principal and interest due City hereunder.
8. The District Court of Douglas County, Kansas, Lawrence, Kansas, shall be the sole court of jurisdiction to hear unresolved legal disputes which may arise between the parties; and that arbitration is not a means by which disputes can or will be resolved, notwithstanding language in the Promissory Note, Exhibit “B”, to the contrary.
9. It is expressly understood and agreed by the parties that the making of the loan by City to Shelter does not in any manner, create a relationship, legal or otherwise, between the parties other than that of creditor and debtor.
10. The parties represent, each to the other, that the Agreement is being entered into and executed with the express authority of their respective governing bodies, and will be filed of record in the office of the register of deeds, Douglas County, Kansas.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be signed on its behalf on the date(s) shown, with the last date to be the effective date of the Agreement.
City of Lawrence, Kansas
a Municipal Corporation
____________________________________
Michael Dever, Mayor
ATTEST:
By:___________________________
Diane Trybom, Acting City Clerk
ACKNOWLEDGMENT
STATE OF KANSAS )
) ss:
COUNTY OF DOUGLAS )
The foregoing Agreement was acknowledged before me this ______ day of _______________, 2013, by Michael Dever, Mayor, on behalf of City of Lawrence, a Kansas, a municipal corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal on the day and year last above written.
_____________________________________
Notary Public
My commission expires:
Lawrence Community Shelter, Inc.,
a Kansas Not-for-Profit Corporation
_____________________________________
John Tacha, Board President of the Lawrence Community Shelter, Inc.
ATTEST:
By:___________________________
Anne M. Bracker, Secretary
ACKNOWLEDGMENT
STATE OF KANSAS )
) ss:
COUNTY OF DOUGLAS )
The foregoing Agreement was acknowledged before me this ____ day of ________________, 2013, by John Tacha, Board President of the Lawrence Community Shelter, on behalf of Lawrence Community Shelter, Inc., a Kansas Not-for-Profit Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal on the day and year last above written.
_____________________________________
Notary Public
My commission expires: