Interest Rate:
Interest rates on the Loans are likely to be blended for tax opinion purposes.
The total interest generated by the Loans will be based on generating
sufficient cash flow to satisfy the debt service requirements of the Fund
Lender, as well as the annual management and audit and tax preparation fees
(to the extent that they are not paid directly to the CDE Lender).
Loan Term:
Likely to be 30 to 40 years.
Amortization:
Interest-only throughout NMTC compliance period, thereafter fully
amortized throughout the life of the loan.
Security:
The security instruments of the CDE Loans must be sufficient to satisfy the
requirements of the Fund Lender and the CDE Lender, and may include,
without limitation, a mortgage on the Project.
Timing:
While this document serves to describe some of the business terms of a
potential New Markets Tax Credit transaction with the CDE and does not
constitute a binding document, the proposed Borrower should remain aware
that timing is of the essence and the Project is expected to fully close no later
than December 15, 2020.
Reporting
QALICB will be required to enter into a Community Benefits Agreement
(“CBA”) with MCD that shall require the QALICB and Sponsor to report on
a semi-annual basis (at minimum) for NMTC program compliance. Such
information shall include, without limitation, QALICB business activities,
employment data, financial statements, and other community impact data
which may be required under the NMTC program, at close and quarterly
thereafter. Additionally, prior to the end of the seven year compliance period
a third party will be utilized to conduct a community impact analysis of the
Project to verify project and actual community benefits associated with the
Project.
Exclusivity:
Sponsor and Borrower grant MCD exclusive right to sub-allocate its
$9,750,000 of NMTC investment authority to the CDE Lender in support of
Project for 180 days from the execution of this letter or ending on such
earlier date after 12/15/2020 on which Investor determines not to proceed
(the “Exclusivity Period”). Borrower and Sponsor acknowledge that
exclusivity is a requirement of MCD’s willingness to expend time, effort,
funds and resources toward this endeavor. Further, Sponsor and Borrower
and its principals agree not to solicit, inquire, advertise market or otherwise
attempt to replace MCD with another CDE during the Exclusivity Period.
Marketing &
Press Releases:
Upon the closing of the QLICI Loans, the Sponsor hereby authorizes
Investor and CDE to use the name and logo of Sponsor and any information
regarding the New Markets Tax Credit, financing, and equity transactions
contemplated by this Term Sheet (including, without limitation, the names
MCD/NPAC Term Sheet 5
