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CFDA 14.218 1 LOAN AGREEMENT This Loan Agreement is made and entered into this_____ day of , 20__, by and between Partnership Health Center (PHC) , hereinafter referred to as "Borrower" and the City of Missoula, hereinafter referred to as the "City." RECITALS WHEREAS the City has been awarded entitlement funds under the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Program; and WHEREAS one of the purposes of the CDBG Program is to furnish health services for those who cannot afford care; and WHEREAS the Borrower wishes to borrow CDBG funds from the City to purchase the Creamery Building and create larger medical and dental clinics to meet the growing demand for affordable healthcare services for Missoula’s low- and moderate-income populations; NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the parties agree as follows: 1. AMOUNT OF LOAN The City agrees under the terms and conditions of this Agreement, to make a loan for real property acquisition to the Borrower in the principal amount of Two Hundred Seventy Five Thousand and no/100 Dollars ($275,000). This loan is evidenced by a promissory note executed by the Borrower. A copy of this note is attached hereto as Exhibit BB and by this reference is made a part hereof. 2. INTEREST RATE AND REPAYMENT OF LOAN a. Repayment of the loan is to be deferred until such time that the Borrower’s current facility, located at 323 West Alder Street, Missoula, MT: Higgins CP Addition, CP Higgins Exempt-C P Higgins-Lots 7 to 10 Block 8, is sold. At that time, the City and the Borrower will negotiate loan repayment terms. b. At such time of the sale of the current facility or any time requested by Partnership Health Center, the City Council will review Partnership Health Center’s financial situation and may, at that time or any time subsequent, forgive all or part of the repayment obiligation. Formatted: Not Highlight ---PAGE BREAK--- CFDA 14.218 2 3. REQUESTS FOR FUNDS The Borrower will submit to the City a written request for funds for the purposes of the loan specified herein. With each of these requests the Borrower will provide evidence sufficient for the City to determine the propriety of the proposed use of the funds requested. See Budget and Program Schedule as Exhibit A. 4. CONDITIONS OF LOAN a. The City's obligation to make the loan provided for hereby is contingent on the City's receipt of CDBG funds for this purpose. b. During the entire term of indebtedness the Borrower will deliver to the City annual balance sheets, profit and loss statements, and other financial records as the City may reasonably request from time to time. The Borrower will also submit annual financial statements with full disclosure notes which must at a minimum be reviewed by a certified public accountant. In this regard, at any time a certified public accountant audits any of these statements the Borrower will furnish the City with a copy of all summary sheets and written opinions and reports of the certified public accountant. Further, the Borrower will make its records relating to this Agreement available for inspection during normal business hours to the City. c. The Borrower will submit status reports on project performance at the request of, and in the format prescribed by, the City. See Budget and Project Schedule as Exhibit A. d. Upon receipt of reasonable advance notice the Borrower will permit representatives of the City to inspect the Borrower's facilities and records which are the subject of this loan. e. This Agreement is non-assignable except upon the written consent of the City. A request for consent to assignment must include a statement justifying the request and the certified financial statement of the proposed assignee. This statement must be current to within 90 days of the request. The City 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. f. It is expressly understood that the proceeds of this loan are designated solely for the purpose of building acquisition. g. The Borrower waives any and all claims and recourse against the City, 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 City against any and all claims, demands, Formatted: Not Highlight Formatted: Not Highlight ---PAGE BREAK--- CFDA 14.218 3 damages, costs, expenses or liability arising out of the performance of the Borrower. 5. SECURITY a. The Borrower will also provide the City with security interest as referenced in the Trust Endenture (Exhibit CE). b. Should the Borrower default in repayment of the loan, the City may resort to the property described in subparagraphs a. above, and engage in any remedies provided by the laws of Montana, including foreclosure, always holding the Borrower responsible for any deficiency after sale of the property securing the loan. 6. ACCEPTANCE OF CDBG PROGRAM REQUIREMENTS The Borrower will comply with all applicable parts of Title I of the Housing and Community Development Act of 1974, as amended; the applicable Department of Housing and Urban Development (HUD) regulations in 24 CFR Part 570, as now in effect or as they may be amended during the term of this contract; all requirements established by the City; applicable State and federal laws, regulations, administrative directives and procedures; and local ordinances and resolutions. The Borrower agrees that all contracts entered into by it for the completion of the activities described in the Recitals of this Agreement will contain special provisions requiring contractors to comply with all applicable state and federal requirements. The Borrower expressly agrees to repay to the City any funds advanced to the Borrower under this Agreement which the Borrower, its subcontractors or subrecipient entities, or any public or private agent or agency to which it delegates authority to carry out portions of this Agreement, expends in violation of the terms of this Agreement or the federal statutes and regulations governing the CDBG Program. 7. EVENTS OF DEFAULT If any of the following events occur, the City may, in its sole discretion, declare such event a default under this Agreement: a. Any representation or warranty made by the Borrower in this Agreement or in any request or certificate or other information furnished to the City hereunder proves to have been incorrect in any material respect; b. The Borrower fails in any material respect to carry out its obligations under its proposal to the City for the loan provided hereunder. Formatted: Not Highlight ---PAGE BREAK--- CFDA 14.218 4 c. The Borrower defaults in the payment of any indebtedness for any money borrowed, for which the Borrower is liable as principal obligor or becomes liable as guarantor; d. 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; e. The Borrower fails to provide adequate collateral for the subject loan in accordance with Section 5, above; f. The Borrower fails to execute any documents necessary to make the City secure in its financial position as stated in this Agreement; g. The Borrower violates any term, assurance, or conditions of this Agreement. 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 City 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 30 days in which to correct the default. If the Borrower fails to correct the default within 30 days of receipt of this notice, the City may notify the Borrower in writing that the full balance due upon this Agreement is then due and payable in full within 60 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 inactions of default. Any waiver by the City 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. 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 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. ---PAGE BREAK--- CFDA 14.218 5 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. SECTION 3 The borrower will ensure that to the greatest extent feasible, opportunities for training and employment arising in connection with this CDBG-assisted project will be extended to lower income project residents. Further, the borrower will, to the greatest extent feasible, utilize business concerns located in or substantially owned by residents of the project area, in the award of contracts and purchase of services and supplies. 10. 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 City 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 City, the State of Montana, and the United States Government and with all lawful requirements of the City so as to insure that this Agreement is carried out in accordance with the obligations and responsibility of the City to the United States Department of Housing and Urban Development. 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. INSURANCE The Borrower agrees that upon receipt of CDBG funds from the City it will keep the improvements upon said premises insured against loss by fire in the sum of at least 80 percent of the cost of replacing the improvements payable to the City for the monetary amount of Borrower's obligation to the City. However, the Borrower may, upon written approval of the City, in the event of loss by fire, apply insurance proceeds received by the City towards the payment of the loan or use the ---PAGE BREAK--- CFDA 14.218 6 proceeds to rebuild the improvements destroyed by fire. If the Borrower chooses this latter option, the City will hold the insurance proceeds and pay them to materialmen, contractors, and laborers for services rendered and materials furnished and delivered in the rebuilding of the improvements. It is understood that it is the Borrower's duty to see that no liens are filed upon the premises by reason of any rebuilding. The Borrower will place copies of the insurance policy or policies with the City within 30 days of the date of completion of the manufacturing facilities Borrower intends to erect. During the 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 City so as to keep the City advised at all times that the property is insured. Failure to so notify the City is an event of default of this loan Agreement for purposes of the default provisions of Section 6 above. 13. DISPUTES In the event that either party incurs legal expenses 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. 14. AVOIDANCE OF CONFLICT OF INTEREST The Borrower covenants that no officer, member, agent, or employee of the City 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 shall incorporate, or cause to be incorporated, in all contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this section. 15. OPEN MEETINGS All meetings of the Grantee’s Board of Directors will be open to the public as per the applicable Montana Code Annotated provisions in 2-3-203, MCA. ---PAGE BREAK--- CFDA 14.218 7 16. 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 District Court of the Fourth Judicial District in and for the County of Missoula, State of Montana. LENDER: BORROWER: City of Missoula: John Engen, Mayor Date: Partnership Health Center: Tom Todd, Chair, Board of Directors Date: ATTEST: Martha L. Rehbein, City Clerk ---PAGE BREAK--- EXHIBIT AA 8 Project Schedule: 1.Complete all due diligence, contingencies, and environmental assessments associated with the Creamery Building. Accomplished 10/20/2008. 2.Issue Missoula County bonds for purchase of Creamery Building. Accomplished 11/03/2008. 3.Work with neighborhood associations, community leaders and other interested parties to gain acceptance for the new location of Missoula’s community health center. Accomplished by 12/31/2008 and on-going. 4.Obtain Board approval for completed architectural plans for the top floor of the Creamery Building. The top floor of the Creamery Building will house the dental clinic, mental health services, administration, and billing functions. Accomplish by 06/12/2009. 5.Complete partial remodel of top floor of the Creamery Building to allow for provision of oral health services. Accomplish by 8/31/2009. 6.Continue partial remodel of top floor of the Creamery Building to allow for the delivery of mental health services from two counseling rooms. Accomplish by 10/15/2009. 7.Complete remodel on top floor to allow for administrative and billing functions to be conducted from the Creamery Building. Accomplish by 12/31/2009. 8.Secure grants and other funding for purchase of Creamery Building. Accomplish by 12/31/2009. 9.Obtain Board and community partners approval for architectural plans, design, and implementation of future location of Partnership Health Center’s medical clinic. Accomplish by 6/30/2010. Formatted: Section start: New page Formatted: Bullets and Numbering ---PAGE BREAK--- EXHIBIT AA Project Budget Expenditures and Revenue Sources Source: CDBG Source: Bonds Source: PHC Reserves Source: Foundations/ Grants/ Reserves Total Project Budget $3,625,000 PROJECT COSTS Salaries & Wages Employee Benefits Contracted Services Insurance, Legal & Financial Services Direct Client Assistance Travel/Training Office Expenses Construction Costs (complete and attach separate construction budget; place totals here—do not duplicate line items) $275,000 $2,000,000 $490,000 $860,000 $3,625,000 SUBTOTAL: Project Costs $275,000 $2,000,000 $490,000 $860,000 $3,625,000 OTHER COSTS (include other costs needed to implement this service or project) Other Costs (Building Acquisition): SUBTOTAL: Other Costs GRAND TOTAL $275,000 $2,000,000 $490,000 $860,000 $3,625,000 GRAND TOTAL PROJECT COSTS $275,000 $2,000,000 $490,000 $860,000 $3,625,000 ---PAGE BREAK--- EXHIBIT A 16 Formatted: Font: (Default) Arial, 12 pt, Bold Formatted: Right CONSTRUCTION BUDGET- Partnership Health Center SOURCE SOURCE SOURCE SOURCE SOURCE SOURCE TOTAL PROJECT CDBG Bonds PHC Reserves Foundations/ Grants/Reserves BUDGET $3,625,000 ADMINISTRATION TOTAL ADMINISTRATION LAND/ BLDG./ACQUISITION Land Existing Structure $275,000 $2,000,000 $490,000 $860,000 $3,625,000 Demolition Homebuyer's Assistance TOTAL LAND/BLDG./ACQ. $275,000 $2,000,000 $490,000 $860,000 $3,625,000 Other TOTAL SITE WORK CONSTRUCTION AND REHAB Other TOTAL CONST. & REHAB PROFESSIONAL WORK & FEES Other TOTAL PROF. WORK & FEES GRAND TOTAL CONSTRUCTION COSTS $275,000 $2,000,000 $490,000 $860,000 $3,625,000 ---PAGE BREAK--- EXHIBIT BB 17 Missoula, Montana PROMISSORY NOTE As hereinafter provided, for value received, Partnership Health Center, as Borrower, promises to pay to the City of Missoula, Montana, its successors or assigns, as Lender, the sum of TWO HUNDRED SEVENTY FIVE THOUSAND and NO/100 DOLLARS ($275,000.00). Repayment of the loan is to be deferred until such time that Partnerhip Health Center sells its current facility, located at 323 West Alder Street, Missoula, MT: Higgins CP Addition, CP Higgins Exempt-C P Higgins-Lots 7 to 10 Block 8. At that time, the City and Partnership Health Center will negotiate repayment terms. Events of Default 1. If the Borrower shall fail to make any loan repayment when due and such failure shall continue for five business days after written notice thereof given to Borrower by the City; or, 2. Any one or more of the events listed in the Loan Agreement as Events of Default will be considered an event of default under this Note. Lender's Remedies Whenever the City has cause to send written notice as specified under Events of Default, the City shall assess the Borrower a charge of two percent of the scheduled payment (minimum Forty Dollars [$40.00]) per month, for each delinquent loan payment. Whenever any Event of Default shall have happened and be subsisting, the City may declare all Loan Repayments payable pursuant to this Promissory Note to be immediately due and payable by the Borrower. In addition the City, with or without declaring all such Loan Repayments immediately due and payable, may take whatever action to collect the Loan Repayment then due, or to enforce the performance and observation of any obligation of the Borrower under this Agreement. Costs of such enforcement, including attorneys' fees, shall be paid by the party found to be breaching this Promissory Note. ---PAGE BREAK--- EXHIBIT BB 18 Waiver The signers hereof, whether as principal or endorser, hereby waive all benefit or advantage to which he may be entitled to by virtue of any homestead or other exemption law now or hereafter in force in the State of Montana. Dated the day of , . BORROWER: PARTNERSHIP HEALTH CENTER 323 W. Alder Missoula, Montana 59802 BY: (SEAL) State of ) S.S. County ) On this day of , personally appeared known to me to be the person whose name is subscribed to this instrument, and acknowledged that he executed the same. Notary Public Residing My commission ---PAGE BREAK--- EXHIBIT C D 19 MONTANA TRUST INDENTURE THIS TRUST INDENTURE, made this day of between Partnerhip Health Center and its successors and assigns whose mailing address is 323 W. Alder, Missoula, MT 59802, as GRANTORS; U.S. Bank, NA, of Missoula, Montana, a bank and trust company as authorized under the laws of the State of Montana, whose mailing address is Post Office Box 4787, Missoula, MT 59806, as TRUSTEE; and the CITY OF MISSOULA, a Municipal Corporation, organized under the laws of the State of Montana, whose mailing address is 435 Ryman, Missoula, MT 59802, as BENEFICIARY. WITNESSETH: That Grantor hereby irrevocably GRANTS, BARGAINS, SELLS, CONVEYS AND WARRANTS TO TRUSTEE IN TRUST, nevertheless, WITH POWER OF SALE, that certain real property, situated in the County of Missoula, State of Montana, particularly described as follows, to wit: Lots 1-12 in CP Higgins Addition Block 4 located in Township 13 Range 19 West, Missoula County Montana. TOGETHER WITH: All buildings, fixtures and improvements thereon, and all water rights, right-of-ways, tenements, hereditaments, privileges and appurtenances thereunto belonging, now owned or hereafter acquired, however evidenced, used or enjoyed with said premises or belonging to the same; All right, title and interest hereinafter acquired in or to any of said premises, hereby also releasing, relinquishing and waving all exemptions, rights of dower and homestead, in or to said premises, vested or inchoate; All heating, air conditioning, plumbing and lighting facilities, equipment and fixtures now or hereafter installed upon or within said premises, used or proper or necessary to constitute the said premises a habitable, usable or operating unit; all of said property being designated and deemed for the purposes of this instrument a part of the realty; and All of the rents, issues and profits of said premises, SUBJECT, HOWEVER, to the right, power and authority hereinafter conferred upon Beneficiary to collect and apply such rents, issues and profits. TO SECURE TO BENEFICIARY: Payment of the principal sum: Two Hundred Seventy Five Thousand & 00/100 Dollars ($275,000.00) according to the terms of the Community Development Block Grant program loan dated 20___ (and any extensions and/or renewals or modifications thereof) by GRANTOR payable to the order of BENEFICIARY if the terms of said Contract are violated. ---PAGE BREAK--- EXHIBIT C D 20 The Beneficiary agrees to subordinate the lien of this Trust Indenture to the lien of any real property acquisition financing, construction financing, or mortgage financing obtained by Grantor with regard to the real property described herein. At Grantor’s request, Beneficiary may consent to subordinate the lien of this Trust Indenture to other financing obtained by Grantor subject to Beneficiary’s prior written consent which may be withheld for any reason. IN WITNESS WHEREOF, the Grantor has hereunto set his hand and seal the day and year first above written. Tom Todd, President, Board of Directors Partnership Health Center STATE OF MONTANA ) ) ss County of Missoula ) On this day of before me, a Notary Public for the State of Montana, personally appeared Tom Todd, [as President of the Partnership Health Center Board of Directors], known to me to be the person described in and who executed the foregoing instrument and acknowledged that he executed the same as his free act and deed. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year first above written. Notary Public for the State of Montana Residing at My Commission Expires City of Missoula By: John Engen, Mayor ATTEST: Martha L. Rehbein, City Clerk