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HomeMy Public PortalAbout05a grant & loan agreementTOWN OF FRASER COMMERCIAL ENHANCEMENT GRANT AND LOAN AGREEMENT THIS COMMERCIAL ENHANCEMENT GRANT AND LOAN AGREEMENT (the "Agreement") is made and entered into effective ________________, by and between the Town of Fraser, a Colorado statutory municipality with an address of 153 Fraser Avenue, PO Box 370, Fraser, CO 80442 (the "Town"); and Mountain Spirit, LLC, a Colorado limited liability company (the "Property Owner"), whose address is PO Box 3490, Winter Park, CO 80482; and Tru Tone LLC, a Colorado limited liability company, doing business as Crooked Creek Saloon (“Business Owner”), whose address is PO Box 2215, Fraser, CO 80442; and Toni Marie Hallgren, an individual whose address is Box 3490, Winter Park, CO 80482,(“Guarantor”), (collectively the "Parties"). WHEREAS, the Town has made certain funds available for the purpose of beautifying the property of local organizations and businesses within the Town to encourage pedestrian and business activity in commercial areas, in accordance with the Business Enhancement Grant Program and Town guidelines and design standards; and WHEREAS, the Property Owner is the owner of real property or a structure thereupon located at 401 Zerex Street, Fraser, Colorado, and as legally described on Exhibit A attached hereto and incorporated herein by the reference (the "Property"), and Business Owner is operating a business on said Property known as the Crooked Creek Saloon; and WHEREAS, Property Owner and Business Owner (collectively, “Owner”) submitted an application under the Business Enhancement Grant Program, and WHEREAS, Guarantor is a principal owner and agent of Property Owner and Business Owner and will guarantee their obligations under this Agreement, as provided hereinbelow. NOW THEREFORE, for the consideration hereinafter set forth, the receipt and sufficiency of which are hereby acknowledges, the Parties agree as follows: I. IMPROVEMENTS A. The Owner shall complete the improvements set forth in Exhibit B, attached hereto and incorporated herein by this reference (the "Project"), in compliance with all applicable local, state and federal standards and regulations. The estimated total cost of the Project is $194,043, and Owner has commitments for private equity and private loans for balance of such costs in excess of the Grant and Loan to be provided by the Town pursuant to Section III below. B. A substantial change in the Project shall not be effective unless authorized as an amendment to this Agreement. If the Owner proceeds without such written authorization, the Owner shall be deemed to have waived reimbursement under this Agreement. C. The Owner, at its own cost, shall obtain all necessary approvals, including building permits, associated with the Project. D. The Project shall be completed on or before December 31, 2018. II. TERM AND TERMINATION A. The term of this Agreement shall commence on the Effective Date and terminate ten (10) years later, unless otherwise terminated as provided herein. B. The Owner may terminate this Agreement upon thirty (30) days prior written notice to the Town, but the Owner thereby waives any right to reimbursement under this Agreement for any portion of the Project and shall repay to the Town any funds disbursed pursuant hereto. III. GRANT AND LOAN A. For the completion of the Project in compliance with this Agreement, the Town hereby agrees to reimburse the Owner up to $40,000 (the "Grant"), and an additional $45,000 as a no-interest loan on the terms provided below (the “Loan”). This maximum amount shall include all fees, costs, and expenses incurred by the Owner, and no additional amounts shall be paid by the Town for such fees, costs, and expenses. B. The Grant and Loan are intended to be utilized as matching funds, with Owner applying private funds equal to or greater than the amounts disbursed pursuant to the Grant and Loan to pay for the Project improvements. C. Matching funds from the Grant and Loan shall be disbursed to the Owner on a reimbursement basis. Owner shall provide the Town with documentation of paid invoices for Project costs incurred. Each invoice shall contain sufficient detail regarding work performed. After verification of invoices, and if the Town determines that the Project complies with this Agreement, the Town shall disburse the matching reimbursement funds to the Owner. Such reimbursement shall not exceed one-half (1/2) of the amount of the invoices submitted. Grant funds shall be utilized first and upon fulfillment of the Grant, loan funds will be utilized. The Owner is solely responsible for the payment of any contractors or subcontractors. D. The Loan shall be repaid to the Town, without interest, not later than five (5) years after the date the project is completed, as determined by the Town building official. The Town will give notice to Owner of such date of completion, and Owner shall begin making monthly payments to the Town in the amount of $750 per month, with the first payment due one (1) month after the completion date and with subsequent monthly payments due on or before the same day of each month thereafter until the entire loan balance has been paid in full. If the Project is abandoned prior to completion, or if it is not completed by the date specified in Section I.D, then the date of completion for purposes of this Section shall be deemed to be the date specified in Section I.D. In order to document and secure the Loan and to secure repayment of the Grant if required under the terms of this Agreement, Property Owner, Business Owner and Guarantor shall, concurrently with the execution of this Agreement, execute deliver to the Town the Promissory Note, a copy of which is attached hereto as Exhibit C, and Property Owner shall execute and deliver to the Town the Deed of Trust, a copy of which is attached hereto as Exhibit D. In addition, Owner shall pay for a Lender’s Policy of Title Insurance, in accordance with the commitment attached hereto as Exhibit E. IV. MUTUAL UNDERSTANDINGS A. The Project is anticipated to have a minimum lifespan of five (5) years. The Parties agree that the Project improvements shall remain on the Property for a minimum period of five (5) years. B. If any of the Project improvements are removed from the Property prior to the expiration of the minimum lifespan set forth herein, without prior written authorization from the Town, the Owner shall repay the entire Grant and Loan to the Town within thirty (30) days of receipt of a written demand. This does not include any removal necessary for the safety of the occupants, natural disasters, changes in code, or any other change necessitated by factors outside the control of the Property Owner. C. The Owner may seek written approval from the Town prior to removing any Project improvements from the Property. Approval of the removal of any Project improvements shall be in the Town’s sole discretion. If the Town approves the removal of any Project improvements, the Owner shall repay a portion of the Grant to the Town, as reasonably determined by the Town in the written approval. The portion of the Grant to be repaid to the Town shall be fully repaid prior to the removal of any Project improvements. D. Business Owner agrees to remain open for business a minimum of five days per week year round. Acts of nature, normal closures for cleaning and maintenance, or other events outside the Business Owner’s control are excluded. V. DEFAULT AND REMEDIES A. Time is of the essence with respect to the performance of each Party’s obligations hereunder. However, neither Party shall be liable for delays or failures to perform due to acts of God, strikes, civil commotions, epidemics, quarantines, freight embargoes, or other cause of similar nature not reasonably within such Party’s control. EXCEPT AS OTHERWISE PROVIDED IN THE PROMISSORY NOTE (EXHIBIT C) AND THE DEED OF TRUST (EXHIBIT D), WHICH PROVIDE ADDITIONAL REMEDIES TO THE TOWN, there shall be the following remedies for any default hereunder: 1. If Owner alleges the Town is in default under this Agreement and the Town does not cure this default within twenty (20) days following written notice from Owner, the Owner shall have the right to pursue enforcement of this Agreement by an action for injunctive relief and/or specific performance. The Owner expressly waives the right to recover damages for any default by the Town, and any remedies available to Owner shall be limited by the then existing governmental immunity act. Owner shall extend the cure period if the nature of the default is such that it cannot reasonably be remedied within twenty (20) days, provided the Town commences corrective action within thirty (30) days and diligently pursues such correction thereafter. 2. If the Town alleges that Owner is in default under this Agreement and Owner does not cure that default within twenty (20) days following written notice from the Town, the Town shall have the right to pursue enforcement of this Agreement by an action for injunctive relief and/or specific performance. The Town expressly waives the right to recover damages for any default by Owner. The Town shall extend the cure period if the nature of the default is such that it cannot reasonably be remedied within twenty (20) days, provided Owner commences the corrective action within twenty (20) days and diligently pursues such correction thereafter. 3. If Owner defaults in the repayment of the Loan in accordance with the terms of this Agreement and the Promissory Note and Deed of Trust referred to in Section III.D, then Owner shall repay the all or a portion of the Grant advanced hereunder in accordance with the following: a. If the default occurs prior to the end of the first year following completion of the Project, 100% of the Grant shall be repaid; b. If the default occurs prior to the end of the second year following completion of the Project, 80% of the Grant shall be repaid; c. If the default occurs prior to the end of the third year following completion of the Project, 60% of the Grant shall be repaid; d. If the default occurs prior to the end of the fourth year following completion of the Project, 40% of the Grant shall be repaid; e. If the default occurs prior to the end of the fifth year following completion of the Project, 20% of the Grant shall be repaid. VI. INDEMNIFICATION The Owner agrees to indemnify and hold harmless the Town and its officers, insurers, volunteers, representatives, agents, employees and assigns from and against all claims, liability, damages, losses, expenses and demands, including attorney fees, on account of injury, loss, or damage, including without limitation claims arising from bodily injury, personal injury, sickness, disease, death, property loss or damage, or any other loss of any kind whatsoever, which arise out of or are in any manner connected with this Agreement if such injury, loss, or damage is caused in whole or in part by, the act, omission, error, professional error, mistake, negligence, or other fault of the Owner, any contractor or subcontractor of the Owner, or any officer, employee, representative, or agent of the Owner, or which arise out of a worker's compensation claim of any employee of the Owner or of any employee of any contractor or subcontractor of the Owner. VII. MISCELLANEOUS A. Governing Law and Venue. This Agreement shall be governed by the laws of the State of Colorado, and any legal action concerning the provisions hereof shall be brought in Grand County, Colorado. B. Notice. Any notice under this Agreement shall be in writing, and shall be deemed sufficient when directly presented or sent pre-paid, first class United States Mail to the party at the address set forth on the first page of this Agreement. C. No Waiver. Delays in enforcement or the waiver of any one or more defaults or breaches of this Agreement by the Town shall not constitute a waiver of any of the other terms or obligations of this Agreement. D. Integration. This Agreement constitutes the entire agreement between the Parties, superseding all prior oral or written communications. E. Third Parties. There are no intended third-party beneficiaries to this Agreement. F. Severability. If any provision of this Agreement is found by a court of competent jurisdiction to be unlawful or unenforceable for any reason, the remaining provisions hereof shall remain in full force and effect. G. Modification. This Agreement may only be modified upon written agreement of the Parties. No agent, employee, or representative of the Town is authorized to modify any term of this Agreement, either directly or implied by a course of action. H. Assignment. Neither this Agreement nor any of the rights or obligations or the Parties hereto, shall be assigned by either Party without the written consent of the other. I. Governmental Immunity. The Town and its officers, attorneys and employees, are relying on, and do not waive or intend to waive by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, C.R.S. §24-10-101, et seq., as amended, or otherwise available to the Town and its officers, attorneys and employees. J. Rights and Remedies. The rights and remedies of the Town under this Agreement are in addition to any rights and remedies provided by law. The expiration of this Agreement shall in no way limit the Town’s legal or equitable remedies or the period in which such remedies may be asserted. K. Subject to Annual Appropriation. Consistent with Article X, § 20 of the Colorado Constitution, any financial obligation of the Town not performed during the current fiscal year is subject to annual appropriation, shall extend only to monies currently appropriated, and shall not constitute a mandatory charge, requirement, debt or liability beyond the current fiscal year. L. Recordation. This Agreement shall run with the land and shall be binding on subsequent purchasers of the Property, who shall assume the obligations of the Property Owner herein upon purchase. As such, this Agreement shall be recorded with the Grand County Clerk and Recorder, so that all subsequent purchasers of the Property are on notice of the obligations created by this Agreement. TOWN OF FRASER, COLORADO ____________________________ Mayor ATTEST: _____________________________ Town Clerk PROPERTY OWNER Mountain Spirit, LLC, a Colorado limited liability company BY: ___________________________________ TITLE: ________________________________ BUSINESS OWNER Tru Tone LLC, a Colorado limited liability company, doing business as Crooked Creek Saloon BY: ___________________________________ TITLE: ________________________________ GUARANTOR ________________________________ Toni Marie Hallgren STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2017, by ____________________________ as _________________ of Mountain Spirit, LLC, a Colorado limited liability company. My commission expires: (S E A L) ____________________________________ Notary Public STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2017, by ____________________________ as _________________ Tru Tone LLC, a Colorado limited liability company, doing business as Crooked Creek Saloon. My commission expires: (S E A L) ____________________________________ Notary Public STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2017, by Toni Marie Hallgren. My commission expires: (S E A L) ____________________________________ Notary Public STATE OF COLORADO ) ) ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ___ day of ________________, 2017, by Philip Vandernail, as Mayor, and Antoinette McVeigh, as Town Clerk, of the Town of Fraser, Colorado, a Colorado statutory municipality. My commission expires: (S E A L) ____________________________________ Notary Public PROMISSORY NOTE EIGHTY-FIVE THOUSAND AND 00/100 DOLLARS _________, 2017 $85,000.00 Fraser, Colorado FOR VALUE RECEIVED, the undersigned, Mountain Spirit, LLC, a Colorado limited liability company, and Tru Tone LLC, a Colorado limited liability company, doing business as Crooked Creek Saloon, whose address is PO Box 3490, Winter Park, CO 80482 (hereinafter sometimes referred to as the "Borrower", whether singular or plural), hereby promises to pay to the order of the Town of Fraser, Colorado, a municipal corporation of the State of Colorado (the “Town”), at 153 Fraser Avenue, PO Box 370, Fraser, CO 80442, or at such other place as may from time to time be designated in writing by the holder of this Note, the principal sum of Eighty-Five Thousand and 00/100 Dollars ($85,000.00), or so much thereof as may be advanced by the Town pursuant to the Commercial Enhancement Grant and Loan Agreement of even date herewith between the Borrower and the Town or any modification thereof (the "Grant and Loan Agreement") and all additions to said principal as provided herein or therein, with interest at the rate of zero percent (0%) per annum on the unpaid principal balance. 1. Payments. Payments of principal and interest, if any, due hereunder shall be due and payable as follows: a. Grant Funds. The Grant and Loan Agreement provides that the Town may advance up to $40,000 to Borrower as a grant towards payment of the costs of certain property improvements included in the Project described in said Agreement. Such Grant advancements need not be repaid to the Town unless a default or other circumstances occur that require repayment of all or a portion of the Grant advancements pursuant to the terms of the Grant and Loan Agreement. In that event, repayment of such sums shall be due immediately upon notice from the Town to Borrower. b. Loan Funds. The Grant and Loan Agreement further provides that the Town may advance up to an additional $45,000 to Borrower as a no-interest loan, to be applied to payment of the costs of the improvements included in the Project described in said Agreement. Amounts advanced for such Loan shall be repaid to the Town, without interest, in monthly installments of $750.00 per month, commencing one (1) month after completion of the Project as provided in the Grant and Loan Agreement and continuing on the same day of each month thereafter. Such monthly payments shall continue until the Loan is paid in full; provided, however, that if not sooner paid, the entire principal amount outstanding shall be due and payable in full on the date which is five (5) years after the date of completion of the Project. 2. Related Documents. This Note is secured by a Deed of Trust of even date herewith (the "Deed of Trust") executed by the Borrower conveying certain property located in Grand County, Colorado. Said Deed of Trust and the Grant and Loan Agreement provide additional rights of the Town. Such rights may cause acceleration of the indebtedness evidenced by this Note. 3. Default. If Borrower fails to make any payment due hereunder when due, or if there shall occur any event of default under the Grant and Loan Agreement or the Deed of Trust, then (a) the entire principal balance outstanding hereunder shall, at the Town’s option and without notice to the Borrower, become immediately due and payable (acceleration); and (b) the Town shall be entitled to exercise any rights or remedies that it may have under the Deed of Trust or the Grant and Loan Agreement, or such other rights or remedies as may be provided by law or equity. The Town may exercise the option to accelerate at any time during any such uncured default, regardless of any prior forbearance, and the acceptance of one or more installments from any person thereafter shall not constitute a waiver of the Town’s option. 4. Default Rate. In the event of default and acceleration, as above provided, the entire principal amount due as a result of such default shall bear interest at the default rate of eighteen percent (18%) per annum from the date of acceleration until paid, compounded monthly. 5. Costs and Expenses. In the event of any default resulting in acceleration hereunder, the Town shall be entitled to collect all reasonable costs and expenses of collection and/or suit, including but not limited to reasonable attorney fees, which sums shall be deemed additional indebtedness due hereunder and shall bear interest at the default rate provided herein from the date incurred until paid. 6. Waiver. Failure to exercise, in the case of the occurrence of one or more defaults or default events, any rights or remedies given to the Town in this Note, shall not preclude the Town from exercising any such right or remedy given herein or therein at any time subsequent to any such occurrence or in the case of any one or more subsequent defaults. Borrower and any and all sureties, guarantors and endorsers of this Note hereby waive presentment, notice of dishonor and protest, and all other notice of any kind, and they hereby agree to any extensions of time for payment and partial prepayments before, at or after maturity. This Note shall be the obligation of the undersigned Borrower(s) and all other makers, sureties, guarantors and endorsers hereof, and successors and assigns. 7. Notice. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (a) delivery to Borrower or (b) by mailing such notice by certified mail, return receipt requested, addressed to Borrower at Borrower’s address stated above, or to such other address as Borrower may designate by notice to the Town. Any notice to the Town shall be in writing and shall be given and be effective upon (a) delivery to the Town or (b) by mailing such notice by certified mail, return receipt requested, to the Town at the address stated in the first paragraph of this Note, or to such other address as the Town may designate by notice to Borrower. 8. Governing Law. This Note is to be construed and enforced in accordance with the laws of the State of Colorado, the courts of which shall constitute the sole and exclusive jurisdiction for the determination of any controversies which may arise with respect thereto. 9. Miscellaneous. This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. Borrower represents and agrees that the indebtedness represented by this Note was incurred primarily for a business, investment or commercial purpose, and not for a personal, family or household purpose. Time is of the essence with regard to this Note. The undersigned hereby acknowledges receipt of a copy of this Note. BORROWER: Mountain Spirit, LLC, a Colorado limited liability company BY: ___________________________________ TITLE: ________________________________ Tru Tone LLC, a Colorado limited liability company, doing business as Crooked Creek Saloon BY: ___________________________________ TITLE: ________________________________ GUARANTY For value received, the undersigned hereby guarantees the performance of all obligations of the Borrower under the above Note and under the Grant and Loan Agreement and Deed of Trust referred to herein, including the obligation to make prompt payment of said Note and each installment thereof when due, in accordance with the terms and conditions of said Note. GUARANTOR: ________________________________ Toni Marie Hallgren