This Investment Agreement (the “Agreement”) is entered into as of January 1,
2009, by and between [FULL NAME OF ORGANIZATION], a [STATE] state non-
profit corporation (hereafter referred to as “[HOUSING LOAN FUND]”) and [FULL
NAME OF INVESTOR] (“Investor Bank”).
WHEREAS, [HOUSING LOAN FUND] is a [STATE] non-profit community
development financial institution established to promote community and economic
development by increasing access to capital for small businesses and community
development organizations engaged in economic and community development and
affordable housing throughout [STATE] (the “Program”).
WHEREAS, [HOUSING LOAN FUND] is not able to issue stock to raise capital
to fund the Program.
WHEREAS, Investor Bank wishes to make investments which promote the public
welfare in [STATE] and is willing to assist [HOUSING LOAN FUND] in the funding of
WHEREAS, in order to invest in [HOUSING LOAN FUND], Investor Bank is
prepared to make an equity-equivalent investment in [HOUSING LOAN FUND],
structured as an investment on the terms and conditions specified in this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. The Investment Terms. Investor Bank agrees to invest the principal sum
of fifty thousand and 00/100 ($50,000) at a fixed interest rate of 3% per annum (the
Investment). Interest shall be calculated on a 360-day year consisting of twelve 30-day
months and shall be payable quarterly commencing on the last day of the next calendar
quarter following the initial disbursement. The principal balance of the Investment shall
be due and payable ten years from the date of the initial disbursement. At the end of the
ten years, the Investor Bank is obligated to extend the Investment’s maturity annually for
successive periods of one year not to exceed five years. Annually thereafter, Investor
Bank has the option of extending the Investment’s maturity for an additional year, but is
not obligated to do so. [HOUSING LOAN FUND] may pre-pay the Investment, in whole
or in part, at any time without penalty.
2. Repayment Terms. Notwithstanding Section 1 above with respect to
[HOUSING LOAN FUND]’s obligation to make quarterly interest payments, [HOUSING
LOAN FUND] shall not be required to make any payment of interest with respect to this
Investment when such payment is due if: (a) as a result of such payment, [HOUSING
LOAN FUND] would be unable to make full payment of the interest which is then due
with respect to any outstanding obligations that are senior debt of [HOUSING LOAN
FUND]; (b) as a result of such payment, [HOUSING LOAN FUND] would be unable to
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