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HomeMy WebLinkAboutFirst Amendment to Promissory NoteFIRST AMENDMENT TO PROMISSORY NOTE Initial Principal Amount: $18.881.750.00 Tustin, California , ../ Js 2014 FOR VALUE RECEIVED, the undersigned City of Tustin, a municipal corporation and public body corporate and politic of the State of California ( "City") and the Successor Agency to the Tustin Community Redevelopment Agency, a public body corporate and politic ("Successor Agency ") by this FIRST AMENDMENT TO PROMISSORY NOTE hereby amend that certain Promissory Note dated as of December 31, 2008 between the City and the former Tustin Community Redevelopment Agency in the amount of Eighteen Million Eight Hundred Eighty -One Thousand Seven Hundred Fifty Dollars and No /100 Dollars ($18,881,750.00) ( "Original Note "). A. Modification to the Original Note. The following sections of the Original Note shall be amended as follows: a. The introductory paragraph is hereby deleted and replaced as follows: The City of Tustin (together with any and all of its successors, the "City ") hereby promises to pay to the Successor Agency to the Tustin Community Redevelopment Agency (together with any and all of its successors and assigns, the "Successor Agency ") in accordance with the payment schedule outlined below ( "Maturity Date "), in lawful money of the United States of America, at 300 Centennial Way, Tustin, California, or at such other address as may be specified by the Agency, the principal amount of $18.881.7$0.00, together with interest accrued thereon from December 30, 2008 to the Maturity Date at the rate corresponding with the interest rate earned by funds deposited into the Local Agency Investment Fund ( "LAIF "). The Original Note, as amended by this First Amendment to Promissory Note, and any subsequent renewals or extensions hereof and as the same may be amended, restated or'supplemented from time to time, is referred to herein as this "Note." In recognition the parties entered into the Original Note with the payoff being tied to the sale of the purchased parcels, the payment schedule is dependent upon whichever occurs first: 1) the reinstatement of the Affordable Housing Reimbursement Agreement, Public Works Agreement, and South Central Project Area Working Capital Loan Agreement (together, "Agreements "), or 2) the sale of the remaining parcels for which the Original Note was issued. 1) Should the reinstatement of the Agreements occur first, the payment schedule will comply with HSC Section 34191.4(b)(2)(A) as follows: i. In recognition that the City has sold 7.53 acres for $8,710,000, the City will make a payment of $2,438,800 against the Note, reflecting the Note's contribution as a percentage (28 %) towards the original purchase. Payment will be made upon State of California Department of Finance issuing a Finding of Completion ( "Finding ") and will leave a balance of $16,442,950 plus interest accrued from the Original Note date of December 31, 2008. ii. A five -year payment schedule will be established with the first payment commencing six months from receiving a Finding. The annual payments will be $3,288,590 per year plus accrued interest. In the event Redevelopment Property Tax Trust Funds ("Trust Funds') pursuant to the ROPS process and received as a result of the Reimbursement Agreements do not equal $3,288,590 plus accrued interest, the City will only pay the actual amount received in Trust Funds. iii. Corresponding to the payment schedule once it is initiated, the Successor Agency will provide Semi- Annual Reports to the Oversight Board detailing the payments made against the Note. iv. If parcels are also sold during this time, the City will make a payment against the Note that reflects the Note's contribution as a percentage (28 %) towards the original purchase. V. The City will pay off the balance of the Note in the fifth (5a') year, regardless of whether or not Trust Funds have amounted to $3,288,590 plus accrued interest in each of the previous four years. 2) If the Agreements are not reinstated, the payment schedule and due date will correspond with the sale of the remaining parcels as follows: In recognition that the City has sold 7.53 acres for $8,710,000, the City will make a payment of $2,438,800 against the Note that reflects the Note's contribution as a percentage (28 %) towards the original purchase. Payment will be made on December 1, 2014. ii. As each parcel is sold, the City will make a payment against the Note that reflects the Note's contribution as a percentage (28 %) towards the original purchase. iii. Upon the sale of the final parcel, the City will pay off the balance owed on the Note, notwithstanding whether the payment is less than or greater than 28% of the sale. iv. As parcels are sold, the Successor Agency will provide Reports to the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency detailing the payments made against the Note. b. Section 3. Is hereby deleted and replaced as follows: Section 3. Events of Default and Remedies. The failure of the City to pay the Accreted Value hereof, as and when due, shall constitute an event of default under this Note (an "Event of Default"). If an Event of Default shall occur and be continuing, the Agency may, at its option, without prior notice or demand, and is hereby authorized and empowered by the City to, at any time and from time to time, exercise all or any one or more of the rights, powers or other remedies available to the Agency against the City under applicable law. Upon the occurrence and during the continuance of an Event of 2 Default, interest shall accrue on the Accreted Value hereof at the rate corresponding with the interest rate earned by funds deposited into the Local Agency Investment Fund. C. Section 7. Is hereby deleted and replaced as follows: Section 7. Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the City: City of Tustin 300 Centennial Way Tustin, California 92680 Attention: City Manager If to the Agency: Successor Agency to the Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California 92680 Attention: Executive Director Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecwpier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section. Except as amended hereby, all other terms and conditions of the Original Note shall remain in full force and effect. IN WITNESS WHEREOF, the parties have duly executed this Note as of the date first above written. SUCCESSOR AGENCY: SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body gorpgrate and politic Date: By: _ Jeffrey; C. Parker Executive Director APPROVED AS TO FORM: By: Celest Bra Special Counse to the Su c ssor Agency CITY: CITY OF TUS By: JefBey 1 Parker City �, 4er ill i APPROVED AS TO FORM: 2,&,& By: David E. Kendig City Attorney