HomeMy WebLinkAbout2000-129
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RESOLUTION NO. ..2.Q..Q..Q..-129
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AUTHORIZING EXECUTION OF A
FLOAT LOAN AGREEMENT WITH OCELOT ENGINEERING, INC.,
A CALIFORNIA CORPORATION, D.B.A., CHAPARRAL MOTOR
SPORTS (BORROWER)
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WHEREAS, the City has entered into an agreement with the United States of America
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through its Department of Housing and Urban Development ("HUD") to execute a Community
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Development Block Grant ("CDBG") pursuant to the Housing and Community Development
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Act of 1974, as amended (the "Act");
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WHEREAS, the Borrower desires to borrow up to the maximum principal amount of One
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Million Dollars ($1,000,000) (the "Loan") from the City for the purpose of financing an
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expansion of the warehouse and automotive parts distribution business of the Borrower in the
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City, including the related expansion of the Borrower's work force of hourly employees who are
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based in the City (the "Project"). The Project shall be located at the existing business facility of
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the Borrower situated at 555 South "H" Street, San Bernardino, California 92416 (the "Site");
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WHEREAS, the City desires to make the Loan to the Borrower, on the terms and
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conditions set forth herein;
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WHEREAS, the City has made a determination that the Project, to which the proceeds of
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the Loan are to be applied pursuant to this Agreement, is a CDBG eligible special economic
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development activity benefiting low and moderate income persons;
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WHEREAS, the City has made a determination that the Loan is appropriate to carry out a
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special economic development project; and
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WHEREAS, the Borrower has agreed to obtain the Letter of Credit, described below, to
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secure repayment of the Loan by the Borrower, as provided herein,
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WHEREAS, the float loan is categorically exempt pursuant to Section 24 CFR Part 58.35
(b)4;
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06105100
Reso-Chaparr.1
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2000-129
WHEREAS, the Project is located in the Central City South Redevelopment Project Area
2 and in conformance with the Redevelopment Plan Environmental Impact Report;
3 WHEREAS, pursuant to CEQA Regulations 15180, no further review of the potential
4 impact of this operating capital financing on the environment is necessary at this time.
5 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN
6 BERNARDINO, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
7 Section 1. The Mayor is hereby authorized to execute the attached Float
8 Loan Agreement with Ocelot Engineering, Inc.
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06/05100
Resa-Chaparral
2000-129
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AUTHORIZING EXECUTION OF A
FLOAT LOAN AGREEMENT WITH OCELOT ENGINEERING, INC., A
CALIFORNIA CORPORATION, D.B.A., CHAPARRAL MOTOR SPORTS
(BORROWER)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Joint
Common Council of the City of San Bernardino at a Regular meeting thereof, held on the
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~,~y~
The foregoing resolution is hereby approved this 7:tJ.., d June
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,2000.
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Approved as to form and Legal Content;
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James F. Penman
City Attorney
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Reso-Chaparral
FLOAT LOAN AGREEMENT
(OCELOT ENGINEERING, INC.)
~ FrAT LOAN AGREEMENT (OCELOT ENGINEERING, INC.) is dated
as of I, 2000, (the "Agreement") by and between the CITY OF
SAN B RNARDINO, a municipal corporation (the "City") and OCELOT
ENGINEERING, INC., a California corporation, doing business as
Chaparral Motor Sports (the "Borrower"). The City and the Borrower
are sometimes hereinafter referred to as a "Party" and collectively
as the "Parties".
R E C I TAL S
A. WHEREAS, the City has entered into an agreement with the
United States of America through its Department of Housing and
Urban Development ("HUD") to execute a Community Development Block
Grant ("CDBG") pursuant to the Housing and Community Development
Act of 1974, as amended (the "Act");
B. WHEREAS, The Borrower desires to borrow up to the maximum
principal amount of One Million Dollars ($1, ODD, 000) (the "Loan")
from the City for the purpose of financing an expansion of the
warehouse and automotive parts distribution business of the
Borrower in the City, including the related expansion of the
Borrower's work force of hourly employees who are based in the City
(the "Project"). The Project shall be located at the existing
business facility of the Borrower situated at 555 South "H" Street,
San Bernardino, California 92416 (the "Site");
C.
Borrower,
WHEREAS, the City desires to make the Loan
on the terms and conditions set forth herein;
to
the
D. WHEREAS, the City has made a determination that the
Project, to which the proceeds of the Loan are to be applied
pursuant to this Agreement, is a CDBG eligible special economic
development activity benefitting low and moderate income persons;
E. WHEREAS, the City has made a determination that the Loan
is appropriate to carry out a special economic development project;
and
F. WHEREAS, the Borrower has agreed to obtain the Letter of
Credit, described below, to secure repayment of the Loan by the
Borrower, as provided herein.
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NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES SET
FORTH HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. LOAN BY THE CITY.
The City agrees, subject to the terms and conditions of this
Agreement and in consideration of the representations, covenants
and obligations of the Borrower contained in this Agreement, to
loan to the Borrower, in one or more disbursements, up to the
maximum sum of One Million Dollars ($1,000,000) to be used solely
for the purposes described below and so long as such purposes
constitute CDBG eligible special economic development activities.
2. NOTE AND TERMS.
Prior to any disbursement of any Loan proceeds to the Borrower
hereunder, the Borrower shall execute and deliver to the City a
Promissory Note (the "Note") in the form of Exhibit "A" attached
hereto. The Note sets forth the terms and conditions of the Loan.
The Note shall be dated by the Borrower as of the date of its
execution and, upon receipt of the Note, the City shall insert the
Initial Maturity Date (as defined in the Note) therein. Provided
that no default has occurred, no interest shall accrue on the
outstanding principal balance of the Note prior to its Maturity
Date. The Note may be renewed by the City at its option in two (2)
year intervals for a total term of the Note not to exceed six (6)
years. The option of the City to renew the Note shall be exercised
by and in the sole discretion of the Executive Director of the
Redevelopment Agency of the City (the "Executive Director") and
only upon a determination by the Executive Director that (i)
sufficient CDBG funds are available to the City to fund
disbursements under the Note in addition to the other CDBG eligible
activities of the City during any such optional renewal period; and
(ii) the Sales Tax Revenue (as defined below) generated by the
acti vi ties of the Borrower on the Site wi thin the Ci ty are a
minimum of Three Hundred Twenty Eight Thousand Five Hundred Dollars
($328,500.00) annually, in accordance with Section 10.P. of this
Agreement. "Sales Tax Revenue" means the amount of local sales and
use taxes paid to the City under Revenue and Taxation Code Section
7200 et ~. on the gross receipts of the Borrower from the sale
and/or lease of all tangible personal property arising from the
activities of the Borrower on the Site. Such determinations shall
be made by the Executive Director at least ninety (90) days prior
to the Applicable Maturity Date (as defined in the Note). On the
Applicable Maturity Date, the entire unpaid principal balance of
the Loan, and any other amounts payable by the Borrower under the
terms of this Agreement and the Note shall be due and payable. All
payments, including any prepayments or funds received upon
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acceleration pursuant to Section 3 below, shall be applied first
toward costs of collection and default interest charges, if any,
then toward the unpaid principal balance under the Note. As used
herein, the word "Term" shall mean the period of time corrunencing
with the date of the Note and terminating on the date when the
Borrower has repaid the entire outstanding principal balance and
accrued interest on the Loan.
3. ACCELERATION.
The entire principal balance of the Loan shall be due and
payable on the Applicable Maturity Date; provided, however, that
the entire principal balance of the Loan, at the election of the
City and upon notice to the Borrower thereof (except with respect
to Non-Curable Defaults as defined in Section 16 (A) (1) below),
shall become irrunediately due and payable upon the occurrence of any
Event of Default as set forth in Section 16 of this Agreement,
without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
4 . LOAN
PREPAYMENT.
REPAYMENT;
VOLUNTARY
PREPAYMENT;
MANDATORY
At any time after the disbursement of the Loan proceeds, the
Borrower may, subject to its compliance with the following
procedure, prepay all or a portion of the unpaid principal balance
of the Loan and any or all accrued interest thereon without
penalty. In the event the Borrower wishes to prepay all or any
portion of the unpaid principal amount of the Loan and accrued
interest thereon (a "Voluntary Prepayment"), the Borrower shall
deliver written notice to the City of such election (the
"Prepayment Notice") which Prepayment Notice shall identify (i) the
date such prepayment is to occur (the "Prepayment Date") and (ii)
the total principal balance to be paid. The Prepayment Notice
shall be delivered to the City at least ten (10) days prior to the
Prepayment Date.
It is acknowledged by the Parties that the City may require
prepayment (a "Mandatory Prepayment") (either in whole or in part)
of the Loan at any time by delivery of written notice (the "Notice
of Mandatory Prepayment") to the Borrower. The Notice of Mandatory
Prepayment shall set forth (i) the date such prepayment is to occur
(the "Mandatory Prepayment Date"), and (ii) the total principal to
be paid. The Notice of Mandatory Prepayment shall be delivered to
the Borrower at least ten (10) days prior to the Mandatory
Prepayment Date.
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The amount of principal set forth in either the Notice of
Mandatory Prepayment or the Prepayment Notice as the amount to be
prepaid shall constitute an amount owing by the Borrower to the
City, under this Agreement as of the Mandatory Prepayment Date or
the Prepayment Date, as applicable.
Upon: (i) the Applicable Maturity Date of the Loan, and/or
(ii) the occurrence of any Event of Default as set forth in
Section 16, herein, and the Borrower's failure to timely cure such
Default after delivery of notice to the Borrower, as specified
therein (except with respect to Non-Curable Defaults as defined in
Sections 16 (A) (l) through (9) below in which case no notice is
required), the City is authorized to draw on the Letter of Credit
(as defined below) the total outstanding principal balance and
other amounts owing under the Loan, as of the date of such draw,
plus, at the City's option, any interest, principal or other
payments received directly from the Borrower during the period
commencing ninety (90) days prior to the earlier of the (i) date of
such draw, or (ii) the date of any Act of Bankruptcy (as defined
hereinbelow) occurring with respect to the Borrower. As used
herein, the term "Act of Bankruptcy" means the filing of a
voluntary petition in bankruptcy under the United States Bankruptcy
Code or an adjudication pursuant to an involuntary proceeding under
the United States Bankruptcy Code.
The City shall be permitted, upon (i) any Prepayment Date,
and/or (ii) any Mandatory Prepayment Date, to draw on the Letter of
Credit the amount of any Voluntary Prepayment and/or any Mandatory
Prepayment. In the event that any such draw is for the entire
outstanding principal balance of the Loan as of the date of such
draw, whether pursuant to a Voluntary Prepayment or a Mandatory
Prepayment, the City shall be permitted to draw on the Letter of
Credit the total outstanding principal balance and other amounts
owing under the Loan, as of the date of such draw, plus, at the
City's option, any interest, principal or other payments received
directly from the Borrower during the period commencing ninety (90)
days prior to the earlier of the (i) date of such draw, or (ii) the
date of any Act of Bankruptcy occurring with respect to the
Borrower.
Provided that there are no other amounts owing the City after
its draw on the Letter of Credit of the total outstanding
principal, interest and other amounts owing under the Loan (and, if
the City elects, any interest, principal or other payments received
directly from the Borrower during the period commencing ninety (90)
days prior to the earlier of the (i) date of such draw, or (ii) the
date of any Act of Bankruptcy occurring with respect to the
Borrower), the City shall return the Letter of Credit to the Bank
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(as defined below) after its receipt of all funds in accordance
with such draw.
The Borrower hereby agrees and understands that the prepayment
of the Note shall not relieve the Borrower of the duty to comply
wi th the terms and condi tions set forth in the CDBG or the
covenants described in Sections 10 and 11 herein, and such
obligations and covenants shall remain in full force and effect
pursuant to their terms.
5. SECURITY AND SOURCE OF PAYMENT.
Payment of principal and other amounts owing to the City under
the Loan shall, at all times during the Term, be secured by a
direct pay, irrevocable, unconditional and callable upon demand
letter of credit (the "Letter of Credit") provided by Bank of
America, or another acceptable bank legally undertaking business in
California that is rated AA or better for short term debt by
Moody's or Standard & Poor's (collectively the "Bank"), for the
account of the Borrower. The Letter of Credit shall be in such
form and substance as to allow draws on any date in order to
fulfill the City's obligation to fund CDBG projects, and at the end
of each Letter of Credit renewal term, in the event the Letter of
Credit is not renewed. The Letter of Credit shall at all times be
in an amount no less than (i) the then outstanding principal amount
of the Loan (hereinafter, the "Required Amount"), (ii) in favor of
the City, (iii) in the form attached hereto as Exhibit "B", and
(iv) having an expiration date which is at least one hundred twenty
(120) days after the Applicable Maturity Date of the Note;
provided, however, that the Borrower shall be permitted to obtain
a Letter of Credit with an earlier maturity provided that, no later
than one hundred twenty (120) days prior to the expiration of such
Letter of Credit, (i) such Letter of Credit is renewed to provide
an expiration date which is at least one hundred twenty (120) days
after the Applicable Maturity Date of the Note, or (ii) a
replacement Letter of Credit, in conformance with the requirements
hereunder and having an expiration date which is at least one
hundred twenty (120) days after the Applicable Maturity Date of the
Note, is issued in favor of the City. The City shall pay the costs
of obtaining the Letter of Credit described herein, up to a maximum
cost of Fifteen Thousand Dollars ($15,000.00).
Notwithstanding the satisfaction of all other conditions
applicable to a distribution of Loan proceeds to the Borrower under
this Agreement, the Borrower shall not be entitled to receive Loan
proceeds to the extent that such receipt would cause the amount of
the then issued Letter of Credit to be less than the Required
Amount. To the extent the Borrower wishes to receive such Loan
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proceeds, the Borrower must have the then issued Letter of Credit
amended to equal or exceed the required
replacement Letter of Credit issued (otherwise
the requirements hereunder) in an amount which
Required Amount.
amount or have a
in conformance with
is no less than the
Draws on the Letter of Credit shall be conditioned upon the
presentation to the Bank at its office designated in the Letter of
Credi t of a sight draft and certificate in accordance with the
terms of the Letter of Credit. Neither the acceptance of, the
transfer of, nor receipt of monies by the City under the Letter of
Credit shall in any manner relieve the Borrower of any obligation
hereunder, under the Note or under the terms of any other documents
executed or given herewith, except to the extent of payment
actually received by the City under the Letter of Credit and, to
the extent the City receives actual payment under the Letter of
Credi t specifically with respect to an amount (the "Previously Paid
Amount") previously received directly from the Borrower, then the
City shall immediately reimburse to the Borrower or, if required by
applicable law, to the trustee in any bankruptcy proceeding
involving the Borrower, the Previously Paid Amount.
6. CONDITIONS TO THE CITY FUNDING THE LOAN.
The obligation of the City to make any disbursement of Loan
proceeds under this Agreement shall be expressly subject to the
following conditions:
A. The execution of this Agreement by the authorized
officers of the City and the Borrower.
B. The availability to the City of allocated, but
undrawn CDBG funds in an amount sufficient to fund the
respective disbursements of the Loan.
C. Receipt by the City of the Letter of Credit in form
and substance as provided in Exhibit "B" hereto or otherwise
satisfactory to the City, in its sole discretion, and from a
bank reasonably acceptable to the City.
D. Receipt by the City of the executed Note.
E. Receipt by the City from the Borrower of such
documents, certifications and opinions of legal counsel to the
Borrower as are reasonably required by the City, in form and
substance satisfactory to the city, evidencing (i) that this
Agreement, the Note and all other documents given or executed
by the Borrower in connection herewith are duly and validly
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executed by and on behalf of and constitute the valid and
enforceable obligation of the Borrower thereunder, pursuant to
the respective terms of each of such documents, and (ii) that
the execution and delivery of this Agreement, the Note and all
other documents executed, or given hereunder or in connection
herewith and the performance by the Borrower thereunder will
not breach or violate any agreement to which the Borrower is
a party, or breach or violate any articles of incorporation,
by-law or restriction, or violate any law or governmental
regulation nor, to the best of the Borrower's knowledge,
constitute a breach of or default under any instrument or
agreement to which the Borrower or any of its principal
shareholders may be a party, and (iii) such other matters as
are reasonably required by the City.
F. If necessary, receipt of environmental clearance for
the Project.
G. No uncured Event of Default shall have occurred.
H. [Reserved]
I. The Borrower shall have provided to the City, in
form satisfactory to the City, copies of good standing
certificates from the California Secretary of State,
certifying that the Borrower is a duly formed and active
corporation in good standing.
J. The Borrower shall have provided to the City, in a
form satisfactory to the City, certified copies of (i) the by-
laws of the Borrower, (ii) a resolution of the board of
directors of the Borrower approving, on behalf of the
Borrower, this Agreement and the other documents executed by
the Borrower in connection herewith, and (iii) a certificate
of the Secretary or an Assistant Secretary of the Borrower
certifying the names and true signatures of the officers
authorized to sign this Agreement on behalf of the Borrower,
and the other documents to be delivered by it hereunder.
K. The Borrower, and not a subsidiary corporation or a
limited or general partnership or any other related entity or
business, shall retain ownership of the Project at the Site
during the term that the Loan is outstanding.
L.
Borrower
proceeds.
Receipt by the City of a written request from the
for disbursement of a specified amount of Loan
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7. OBLIGATION OF BORROWER UNCONDITIONAL.
The obligation of the Borrower to repay the Loan and all
accrued, interest thereon shall be absolute and unconditional, and
until such time as all of the outstanding principal of and interest
on the Note shall have been fully paid, the Borrower agrees that
it:
A. Will use the funds solely for the purposes set forth
in this Agreement; and
B. Will not terminate or suspend any payment or
obligations under this Agreement, the Note, or the Letter of
Credit or any other document executed hereunder or in
connection herewith for any cause, including without
limi tation, any acts or circumstances that may constitute
failure of consideration, commercial frustration of purpose,
or any duty, liability or obligation arising out of or in
connection with this Agreement or any document executed
hereunder or in connection herewith.
8. PURPOSES OF LOAN.
The Borrower covenants to use the proceeds of the Loan solely
for purposes of financing CDBG eligible activities and paying CDBG
eligible costs incurred in connection with the Project. The Loan
proceeds may not be used for, and the Borrower hereby covenants
that it shall not use such proceeds for, any ineligible purchases
and expenditures, as set forth in 24 CFR 570.207. In no event
shall the Borrower use or otherwise invest the proceeds of the
Loan, except as expressly authorized in this Agreement.
Notwithstanding anything to the contrary herein, provided that the
Borrower uses the Loan proceeds in accordance with this Agreement,
nothing herein shall restrict the Borrower from borrowing other
funds necessary for the completion of the Project.
9. OPERATING COVENANT.
(a) The Borrower hereby covenants that all of its current and
future operations, including, but not limited to, sales,
distribution, manufacturing, administration, or any other services,
will be conducted and maintained within the City, during the Term
of this Agreement and for a period of five (5) years following the
expiration of the Term of this Agreement, subject only to casualty
losses that result in the inability to continue operations at the
Site ("Casualty Losses").
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(b) In the event the Borrower ceases substantial business
operations (other than from Casualty Losses), or changes the
character of its present business, or relocates its present
operations to another site without the City's prior written
consent, the Loan shall be immediately due and payable, shall be
subject to Default Interest (as set forth in the Note) from the
original date of the Note and a draw shall be made by the City on
the Letter of Credit in the amount of all outstanding principal and
interest.
10. ADDITIONAL COVENANTS OF BORROWER.
As additional consideration for the making of the Loan by the
City, the Borrower covenants as follows:
A. Compliance with Laws. The Borrower shall, during
the Term, comply with all applicable federal, state, and local
laws, ordinances, regulations and directives as they pertain
to the performance 0 f this Agreement. This Agreement is
subject to and incorporates the terms of the Act and 24 Code
of Federal Regulations, Chapter V, Part 570, and all
amendments or successor laws, regulations or guidelines
thereto (collecti vely, the "Laws, Regulations and
Guidelines"). The Borrower understands that the Project, or
that portion thereof funded by the Loan (in the event the
entire Project is not funded by the Loan), must comply at all
times during the Term with one or more of the three broad
national objectives set forth in 24 CFR 570.208 and the
Borrower covenants that it will cooperate with the City and
HUD, as reasonably necessary, to maintain compliance
therewith.
B. New Jobs.
(1) Subject to the terms of this Agreement, the Borrower
hereby covenants and agrees to create and, thereafter, maintain the
New Jobs (as defined herein) on the Site, as follows:
(a) within twelve (12) months following the commencement
of the Term of this Agreement, an aggregate of at least ten
(10) New Job positions shall be created on the Site; and
(b) within twenty four (24) months
commencement of the Term of this Agreement, an
least twenty (20) New Job positions shall be
Site; and
following the
aggregate of at
created on the
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(c) within thirty six (36) months following the
conunencement of the Term of this Agreement, an aggregate of at
least thirty (30) New Job positions shall be created on the Site;
and
(d) on each of the fourth (4th) and fifth (5th)
anniversary dates following the conunencement of the Term of this
Agreement, there shall be an aggregate of at least thirty (30) New
Job positions on the Site.
(e) For the purposes of this Section 10(B), the
following terms shall be defined as follows:
(i) the words "New Jobs" refer to an aggregate number of
not less than thirty (30) new employment positions to be
created by the Borrower on the Site within three (3) years of
the conunencement of the Term of this Agreement and thereafter
maintained for the remainder of the Term of this Agreement.
(ii) the words "New Job" refer to the hourly wage
employment position work description of each of the employees
of the Borrower whose work position at the Site is eligible to
be included among the New Jobs for the purpose of satisfying
the New Jobs covenant of the Borrower set forth in this
Section 10(B) of this Agreement. An employee is eligible to
be included as holding a New Job provided that each of the
following conditions are satisfied:
1. the employee is paid an hourly wage of at least
Ten Dollars ($10.00) per hour;
2. the employee is assigned to work (or is
eligible to work) at least One Thousand Seven Hundred and
Fifty (1,750) hours per year;
3. the employee is based at the Site;
4. the employee initially begins to work for the
Borrower on or after July 1, 2000; and
5. the total number of other hourly employees of
the Borrower employed in California on each July 1 of the
Term of this Agreement (excluding employees who hold New
Jobs on each July 1), is not less than one hundred ninety
five (195).
Term
of
(2)
this
On or before September 1 of each year during the
Agreement, the Borrower shall file a written
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verification with the Executive Director of the Agency in which the
Borrower reports its compliance or non-compliance with the New Jobs
creation and/or maintenance covenant set forth in this Section
10 (B) . Such report shall include a certification that each
employee who is claimed by the Borrower as holding a New Job
position during the preceding year meets the requirements set forth
in Section 10 (B) (e) (ii) of this Agreement which shall be
accompanied by payroll accounting information relating to the total
hourly wage compensation amounts paid to such persons, the total
number of hours worked by such persons and the total number of
persons who were recruited, hired or released from employment for
a New Job position. The annual verification report described
herein need not identify any particular employee by name or by
specific job description, nor by new hire date, and the payroll
accounting information may aggregate the hours worked and wages
paid to all persons claimed by the Property Owner to hold New Jobs.
(3) In the event that on any date set forth in this
Section 10 (B) (2) the verification of the Borrower indicates that
there are fewer than the number of New Jobs on the Site required in
Section 10(B) (1) of this Agreement for any given time period, then
an Event of Default, as set forth in Section 16 of this Agreement
shall be deemed to have occurred; provided, however, that, in the
event of future action by an independent regulatory agency, or
other change in circumstance, which materially and adversely
affects the Borrower's business, the City may, in its sole and
absolute discretion, extend the term of the New Jobs covenant of
the Borrower under this Agreement for one (1) or more years or
provide any other relief to the Borrower regarding the New Jobs
covenant of the Borrower under this Agreement, as the City deems
necessary and appropriate, in its sole and absolute discretion.
(4) The Borrower agrees to allow the Agency or its
agents access, at reasonable times upon prior notice, to inspect
the payroll accounting records of the Borrower as they relate to
the New Jobs and the confirmation by the Agency of the information
included in each annual verification report from the Borrower. The
Agency shall reimburse the Borrower the reasonable hourly cost of
making a payroll clerk or accountant employed by the Borrower
available to assist the Agency in inspecting such payroll
accounting records of the Borrower.
(5) The Borrower further covenants and agrees that at
least fifty-one percent (51%) of all New Jobs (exclusive of
development and construction jobs) created by that portion of the
Project funded by the Loan will be held by, or will be available
to, low and moderate income persons and will provide training for
any jobs requiring special skills or education. "Low and moderate
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income person" is defined by 24 CFR 570.3 (r) as a member of a
family having a family income equal to or less than the Section 8
lower income limit established by HUD and furnished to the Borrower
by the city at the request of the Borrower. Jobs will be
considered to be available to low and moderate income persons for
purposes of this Section 10(B) only if (i) special skills that can
only be acquired with substantial training or work experience or
education beyond high school are not a prerequisite to fill such
jobs, or the Borrower agrees to hire unqualified persons and
provide training; and (ii) the Borrower takes actions to ensure
that low and moderate income persons receive first consideration
for filling such jobs. In connection with and in furtherance of
the foregoing, the Borrower will prepare promptly after execution
hereof and file with the City (i) a listing by job title of the
permanent jobs anticipated to be created, indicating which jobs
will be available to low and moderate income persons, which jobs
require special skills or education, and which jobs are part-time,
if any, and (ii) a description of actions to be taken by the
Borrower to ensure that low and moderate income persons receive
first consideration for such jobs.
(6) In satisfying the requirements of this
Section 10(B), the Borrower shall require that each prospective low
and moderate income employee complete a Prospective Employee
Questionnaire in the form attached hereto as Exhibit "C",
certifying that his or her family income does not exceed the income
limits applicable to such prospective employee at the time of such
prospective employee's application, as such limits may hereafter be
established from time to time in accordance with 24 CFR 570.3 and
set forth on such Questionnaire, which Questionnaires shall be
submitted by the Borrower to the City accompanied by an Annual
Facility Employment Survey in the form attached hereto as
Exhibit "D" (incorporating the data compiled by the Borrower), upon
the earlier of (i) sixty (60) days after the expiration of twelve
(12) months from the date first written above (and sixty (60) days
after the expiration of each subsequent l2-month period until the
filling of all jobs created by the Project funded by the Loan), or
(ii) sixty (60) days following the filling of all jobs created by
the Project funded by the Loan, and a certification by the Borrower
as to those jobs filled by low and moderate income persons and
which applicants were hired. Notwi thstanding anything to the
contrary hereinabove, once the Borrower has completed its initial
hiring of permanent employees, Prospective Employee Questionnaires
are not required to thereafter be submitted on behalf of the
Borrower and the hiring data (except for the data compiled as of
the completion of its initial hiring of permanent employees) for
the Borrower need not thereafter be included in any Annual Facility
Employment Survey submitted to the City. The data compiled as of
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the completion of the initial hiring by the Borrower will be
analyzed in order to determine compliance with the 51% hiring
requirement specified hereinabove.
(7) In addition to the Questionnaires and Survey
delivered to the city as provided above, the Borrower shall
establish and maintain, for a five (5) year period after
satisfaction of the reporting requirements set forth in this
Section 10(B), such records as necessary to enable the City to
determine whether the Borrower has met the requirements of this
Section 10 (Bl, including, without limitation, (i) a listing by job
title of the permanent jobs filled, and which jobs of those were
available to low and moderate income persons, and (ii) a
description of how first consideration was given to such persons
for those jobs, including what hiring process was used, which low
and moderate income persons were interviewed for a particular job,
and which low and moderate income persons were hired.
C. Affirmative Action. During the Term, the Borrower
shall take affirmative action to ensure that the Project shall
provide equal employment and career advancement opportunities
for minorities and women and, to the greatest extent feasible,
to provide opportunities for training and employment of lower
income persons residing within the area of the Project. In
furtherance of the foregoing the Borrower shall, prior to the
commencement of operations, deliver to the City a list, as
soon as practicable after execution of this Agreement, setting
forth affirmative steps taken by the Borrower, or to be taken
by the Borrower, to assure that minority business and women's
business enterprises are offered an equal opportunity to
obtain or compete for contracts and subcontracts as sources of
supplies, equipment, construction and services. Such
affirmative steps may include, but are not limited to,
technical assistance open to all businesses but designed to
enhance opportunities for these enterprises and special
outreach efforts to inform them of contract opportunities.
Such steps shall not include preferring any business in the
award of any contract or subcontract solely or in part on the
basis of race or gender.
The Borrower shall deliver to the City semiannually,
prior to April 30 and October 31 of each fiscal year, a report
summarizing the nature of the businesses with which the
Borrower has entered into contracts and subcontracts in
connection with the Project during the preceding six (6) month
period ending March 31 or September 30, as applicable. The
obligation of the Borrower to deliver the report specified in
this Section 10(C) shall expire upon delivery of the report
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summarizing the last contracts and subcontracts entered into
by the Borrower in connection with the Project and to be paid
in whole or in part with Loan proceeds.
D. Covenant to Perform Services. The Borrower shall,
during the Term, perform services consistent with the goals
and obj ecti ves set forth in the City of San Bernardino
Community Development Block Grant Statement of Objectives and
Projected Use of Funds, as adopted during the Term by the
Mayor and Common Council of the City of San Bernardino, which
Statement is incorporated herein by this reference.
E. Financial Statement. The Borrower shall provide
annual review financial statements to the City within thirty
(30) days after such financial statements have been presented
to the Borrower in final form.
F. Other Reports. Upon seventy-two (72) hours' written
notice, at any reasonable time until all jobs for the portion
of the Project funded by the Loan have been filled, the
Borrower shall prepare and submit to the city, in addition to
the books and records described above, all additional reports
and any financial, program progress, monitoring, evaluation or
other reports required by HUD or the City or its
representatives as they relate to the Project or this
Agreement. The Borrower shall ensure that its employees,
agents, officers, and board members furnish such information,
which in the reasonable judgment of City representatives, may
be relevant to a question of compliance with this Agreement or
HUD directives, or with the effectiveness, legality and
achievements of the CDBG Program as they relate to the Project
or this Agreement. The Borrower shall retain all existing
records and data relating to the Project for a five (5) year
period after the expiration of the Term. In the event any
litigation, claims or audit is started before the expiration
of said 5-year period, said books and records shall be
retained until all litigation, claims or audit findings
involving said books and records have been resolved.
G. Indemnification. From and after the date that the
city disburses any Loan proceeds to the Borrower, the Borrower
agrees to and does hereby indemnify, defend and save harmless
the city and its respective agents, officers and employees
from and against any and all liability, expense, including
defense costs and legal fees of counsel acceptable to the
City, and claims (collectively, "Claims") for damages of any
nature whatsoever, including, but not limited to, bodily
injury, death, personal injury or property damage, arising
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from or connected with the Project (except to the extent
caused by the gross negligence or wilful misconduct of the
City or its agents or employees), and including any workers'
compensation suits, liability or expense arising from or in
connection with services performed on behalf of the Borrower
by any person pursuant to this Agreement.
H. Audit bv state and Federal Aaencies. The Borrower
agrees that in the event this Agreement or the Loan is
subjected to audit, monitoring or other inspections by
appropriate state and federal agencies, it shall be
responsible for complying wi th such inspections and paying, on
behalf of itself and the City, the full amount of the
liabili ty to the funding agency resulting from such
inspections in the event such liability results from a failure
by the Borrower to satisfy applicable law or its obligations
under this Agreement.
I. Proaram Evaluation and Review. The Borrower shall,
during regular business hours, allow city authorized personnel
to inspect and monitor its facilities and operations as they
relate to the Project or this Agreement, including the
interview of the Borrower's staff, as reasonably required by
the city during the Term.
J. Hazardous Materials. The Borrower covenants and
agrees that, during its ownership and/or occupancy of the
Site, it shall not (i) deposit "Hazardous Materials" (as
defined below) in, on or upon the Site, or (ii) knowingly
permit the deposit of Hazardous Materials in, on or upon the
Site, and the Borrower hereby assumes any and all liability
arising in connection with any such deposit of Hazardous
Materials; provided, that this sentence shall not be construed
or understood to prohibit the Borrower from allowing Hazardous
Materials to be brought upon the site so long as they are
materials which are customary and common to the normal course
of business in the operation of the Borrower's business so
long as such materials are used, stored and disposed of in
accordance wi th all applicable governmental restrictions. The
Borrower agrees to indemnify, defend and hold the city
harmless from and against any Claims respecting the presence
of Hazardous Materials in, on or upon the site to the extent
such Hazardous Materials are brought thereon by or on behalf
of the Borrower, its employees, agents or contractors.
For purposes of this Agreement, the term
Materials" means, without limitation, gasoline,
products , explosives , radioactive materials,
"Hazardous
petroleum
hazardous
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materials, hazardous wastes, hazardous or toxic substances,
polychlorinated biphenyls or related or similar materials,
asbestos or any other substance or material as may now or
hereafter be defined as a hazardous or toxic substance by any
federal, state or local environmental law, ordinance, rule or
regulation, including, wi thout limi tation, (i) the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act (42 D.S.C. Section 6901, et ~.),
(ii) the Federal Water Pollution Control Act (33 D.S.C.
Section 1251, et ~.), (iii) the Clean Air Act (42 D.S.C.
Section 7401, et ~.), (iv) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984 (42 D.S.C. Section 6902, et ~.), (v) the
Toxic Substances Control Act (15 D.S.C. Section 2601-2629),
(vi) the Hazardous Materials Transportation Act (49 D.S.C.
Section 1801, et ~.), (vii) the Carpenter-Presley Tanner
Hazardous Substance Account Act (CA Health & Safety Code
Section 25300, et ~.), (viii) the Hazardous Waste Control
Law (CA Health & Safety Code Section 25100, et ~.), (ix) the
Porter Cologne Water Quality Control Act (CA Water Code
Section 13000, et ~.), (xl the Safe Drinking Water and Toxic
Enforcement Act of 1986, (xi) the Hazardous Materials Release
Response Plans and Inventory (CA Health & Safety Code
Section 25500, et ~.), (xii) the Air Resources Law (CA
Health & Safety Code section 39000, et ~.), or (xiii) in any
of the regulations adopted and publications; promulgated
pursuant to the foregoing.
K. Insurance. The Borrower shall procure and maintain
at the Borrower's expense and until such time as the Borrower
has repaid the entire outstanding principal balance and
accrued interest on the Loan, the following insurance against
claims for injuries to persons or damages to property which
may arise from or in connection wi th the development and
operation of the Project by the Borrower, and its agents,
representatives, employees or subcontractors.
(1) COMPREHENSIVE GENERAL LIABILITY: $1,000,000
combined single limit for each occurrence ($2,000,000 General
Aggregate) for bodily injury, personal injury and property
damage, including products and completed operations coverage.
The City, its officials and employees are to be covered
as additional insureds as respects: liability arising out of
activities performed by or on behalf of the Borrower; premises
owned or used by the Borrower; and products and completed
operations of the Borrower.
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Any self-insurance program by the Borrower and any self-
insured retention must be separately approved by the City.
Each insurance policy shall be endorsed to state that
coverage shall not be canceled by either Party, reduced in
coverage or in limits except after (30) days prior written
notice has been given to the City.
Acceptable insurance coverage shall be placed with
carriers admitted to write insurance in California and with a
rating of or equivalent to A-(viii) by A.M. Best & Company.
Any deviations from this rule shall require specific approval
in writing from the City.
The Borrower shall furnish the City with certificates of
insurance and with original endorsements effecting coverage as
required above, naming the City as an additional insured. The
certificates and endorsements for each insurance policy are to
be signed by a person authorized by that insurer to bind
coverage on its behalf. The Borrower shall be permitted to
satisfy the insurance requirements set forth in this
Section 10 (K) pursuant to a blanket policy of insurance
maintained by the Borrower so long as the coverage under such
blanket policy satisfies the coverage requirements specified
hereinabove and names the City as an additional insured.
Failure on the part of the Borrower to procure or
maintain the insurance coverage required above shall
constitute a material breach of this Agreement by the Borrower
pursuant to which the City shall be entitled to all rights and
remedies under this Agreement as specified in Sections 16(B)
and (C) below. No modification or waiver of the insurance
requirements set forth herein shall be made without the prior
written approval of the Mayor of the City or any other officer
or agent of the City designated in writing by the Mayor.
L. Taxes. The Borrower shall pay all taxes when due,
including, but not limited to property taxes, income taxes,
sales taxes, payroll taxes and any other federal, state,
county, city or local taxes applicable to the Borrower.
M. Federal Lobbvist Reouirements. The Borrower is
prohibited by the Department of Interior and Related Agencies
Appropriations Act, known as the Byrd Amendments and BUD's 24
Code of Federal Regulations (CFR) 87 (the "Federal Lobbyist
Requirements"), from using federally appropriated funds for
the purpose of influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an
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officer or employee of Congress, or an employee of a Member of
Congress in connection with the awarding of any Federal
contract, the making of any Federal grant, loan or cooperative
agreement, and any extension, continuation, renewal, amendment
or modification of said documents.
The Borrower must certify in writing that it is familiar
with the Federal Lobbyist Requirements and that all persons
and/or subcontractors acting on behalf of the Borrower will
comply with the Federal Lobbyist Requirements,
Failure on the part of the Borrower or
persons/subcontractors acting on behalf of the Borrower to
fully comply with the Federal Lobbyist Requirements shall
constitute a material breach of this Agreement by the Borrower
upon which the City may declare immediately due and payable
all outstanding principal and all accrued and unpaid interest
on the Loan. In addition, the Borrower may be subj ect to
civil action.
N. Other Requirements. The Borrower shall, during the
Term, comply with all other applicable requirements of a
subrecipient of CDBG funds including without limitation
compliance with the Lead Based Paint Poisoning Prevention Act
(42 U.S.C. 483l(b)}, and any other applicable laws including
any laws respecting relocation, displacement and federal labor
standards requirements.
O. Previous Covenants of Borrower. The previous
covenants of the Borrower contained in that certain Owner
Participation Agreement dated September 18, 1995, by and
between 555 South "H" Street Partners, the Borrower and the
Redevelopment Agency of the City shall remain in full force
and effect during the Term of this Agreement.
P. Sales Tax. The Borrower shall generate a minimum of
Three Hundred Twenty Eight Thousand Five Hundred Dollars
($328,500.00) in annual Sales Tax Revenue (as defined below)
from its activities on the Site within the City as of ninety
(90) days prior to the second yearly anniversary of the
commencement of the Term of this Agreement and in each
following year during the remainder of such Term. "Sales Tax
Revenue" means the amount of local sales and use taxes paid to
the City under Revenue and Taxation Code Section 7200 et ~.
on the gross receipts of the Borrower from the sale and/or
lease of all tangible personal property arising from the
activities of the Borrower on the Site.
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11. [RESERVED1.
12. DISCRIMINATION.
The Borrower and the City agree that no person shall, on the
grounds of race, sex, creed, color, religion, national origin, or
age be excluded from participation in, be refused the benefits of,
or otherwise be subj ected to discrimination in any acti vi ties,
programs, or employment supported by this Agreement. The Borrower
shall comply with all applicable regulations set forth in 24 CFR
570.600-602, including without limitation, the requirement that the
Borrower comply with Title VI of the Civil Rights Act of 1964
(Public Law 88-352) and regulations at 24 CFR Part 1; Section 109
of the Act and the Age Discrimination Act of 1975 (42 D.S.C. 6101-
07) and Executive Order 11246 and the regulations issued pursuant
thereto (41 CFR Chapter 60), if applicable; and the requirements of
the Americans With Disabilities Act (42 D.S.C. 12101-12213).
13. INDEPENDENCE OF PARTIES.
In their performance of this Agreement, the Parties will be
acting in an independent capacity and not as agents, employees,
partners, joint venturers, or associates of one another. The
employees or agents of one Party shall not be deemed or construed
to be the agents or employees of the other Party for any purpose
whatsoever, including workers' compensation liability. The
Borrower shall bear the sole responsibility and liability for
furnishing workers' compensation benefits to any person for
injuries arising from or connected with services performed on
behalf of the Borrower pursuant to this Agreement.
14. ASSIGNMENT; ACCELERATION.
Notwithstanding anything which may be or appear to be herein
to the contrary, no purported assignment of this Agreement shall be
effective if such assignment would violate the terms, conditions
and restrictions of the CDBG or any other Laws, Regulations and
Guidelines applicable to this Agreement or such assignment.
The Borrower shall not assign this Agreement or any
performance or benefit under the terms of this Agreement, without
the prior written consent of the City, and any purported assignment
hereof shall be null and void and shall constitute a material
breach of this Agreement. In the event of a sale or transfer of
the Project (other than an encumbrance of the Project for security
purposes) without an assignment of this Agreement approved in
writing by the City, the City may, at its option, declare the
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entire principal balance of the Loan and all accrued and unpaid
interest thereon immediately due and payable.
15. FISCAL LIMITATIONS.
The United States of America through HUD, may in the future
place programmatic or fiscal limitations on CDBG funds not
presently anticipated. Accordingly, the City reserves the right to
revise this Agreement in order to take account of federal
government actions affecting HUD program funding. In the event of
funding reduction in CDBG funds to such a level that materially
affects the ongoing CDBG acti vi ties of the City, the City may
reduce or eliminate, as necessary, the Loan in whole or in part.
16. EVENTS OF DEFAULT AND REMEDIES.
A. Events of Default. The occurrence of any of the
following shall, after the giving of any notice described therein,
constitute an event of default ("Event of Default") hereunder:
(1) The failure of the Borrower to payor perform any
covenant or obligation hereunder or under the terms of this
Agreement and/or the Note, without curing such failure within
ten (10) days after receipt of written notice of such default
from the City (or from any party authorized by the City to
deliver such notice as identified by the City in writing to
the Borrower), or the failure of the Bank to honor any
attempted draw on the Letter of Credit by the City in
accordance with this Agreement. Further provided, that the
herein described notice requirements and cure periods shall
not apply to the following (hereinafter, "Non-Curable
Defaults"): (i) a failure by the Bank, to honor any attempted
draw on the Letter of Credit by the City made in accordance
with the terms of this Agreement, or (ii) any Event of Default
described in Sections 16 (A) (2) through 16 (A) (9) below:
(2) Failure of the Borrower to pay the outstanding
principal balance of the Note on any Applicable Maturity Date
(as defined in the Note);
(3) Any attempted assignment or transfer by the Borrower
not in compliance with Section 14 above;
(4) The falsity of any material representation or breach
of any material warranty made by the Borrower under the terms
of this Agreement, the Note or any other document executed in
connection herewith;
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(5) A determination by the City or HUD that use of the
Loan proceeds by the Borrower does not constitute an eligible
activity under the Act, 24 CFR 570.200 et ~., or other
applicable regulations;
(6) Unless a replacement Letter of Credit is issued
within 24 hours of notification to the Borrower, any material
provision of the Letter of Credit shall at any time for any
reason cease to be valid and binding on the Bank, or the
validity or enforceability thereof shall be contested by the
Bank or any governmental agency or authority, or the Bank
shall deny it has any further liability or obligation
thereunder, or the then issued Letter of Credit is not renewed
or a replacement Letter of Credit acceptable to the City is
not issued at least thirty (30) days prior to expiration of
the then issued Letter of Credit if such; originally issued
Letter of Credit has an expiration date which is prior to one
hundred (100) days after the Maturity Date of the Note;
(7) A defaul t by the Borrower under its Letter of Credit
reimbursement agreement with the Bank which remains uncured
after the expiration of the time period authorized for cure of
such a default under said reimbursement agreement;
(8) The Borrower shall either (a) apply for or consent
to the appointment of a receiver, trustee, liquidator or
custodian or the like of its property, (b) fail to payor
admit in writing its inability to pay its debts generally as
they become due, (c) make a general assignment for the benefit
of creditors, (d) be adjudicated a bankrupt or insolvent or
(e) commence a voluntary case under the Federal bankruptcy
laws of the United states of America or file a voluntary
petition or answer seeking an arrangement with creditors or an
order for relief or seeking to take advantage of any
insol vency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy
or insolvency proceeding; or
(9) If without the application, approval or consent of
the Borrower, a proceeding shall be instituted in any court of
competent jurisdiction, under any law relating to bankruptcy,
in respect of the Borrower, for an order for relief or an
adjudication in bankruptcy, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the
Borrower or of all or any substantial part of the Borrower's
assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being
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___I
contested by the Borrower, in good faith, the; same shall (a)
result in the entry of an order for relief or any such
adjudication or appointment, or (b) continue undismissed, or
pending and unstayed, for any period of ninety (90)
consecutive days.
B. Remedies. Upon the occurrence of an Event of Default
hereunder, the city may, in its sole discretion, take anyone or
more of the following actions:
(I) By notice to the Borrower (unless an Event of
Default is a Non-Curable Default as defined in Sections 16(A)
(1) through (9) above in which case no notice shall be
required), declare the entire principal balance of the Loan
then unpaid together with interest accrued thereon immediately
due and payable, and the same shall become due and payable
without further demand, protest or further notice of any kind,
all of which are expressly waived. Upon such declaration and
in the event of a failure by the Bank to honor any attempted
draw on the Letter of Credit by the City made in accordance
wi th the terms of this Agreement in connection with such
declaration, outstanding principal and (to the extent
permitted by law) interest shall thereafter bear interest
("Default Interest") at the annual rate of interest equal to
the lesser of (i) four percent (4%) above the rate of interest
announced from time to time by Bank of America, Downtown San
Bernardino Branch (or, in the event that said bank is acquired
or ceases operations, then, if there is no successor bank,
another established and financially secure institutional
lender selected by the City), as its prime or reference rate,
or; (ii) the maximum rate of interest permitted to be paid to
the City pursuant to any applicable usury law, payable from
the date of such declaration until paid in full;
(2) Take action at law or in equity as may appear
necessary or desirable, in the sole discretion of the City, in
order to collect the amounts then due and thereafter to become
due hereunder and under the Note, and to enforce performance
and observance of any obligation, agreement or covenant of the
Borrower under this Agreement or under any other document
executed in connection herewith;
(3) Take any and all actions and do any and all things
which are allowed, permitted or provided by law, in equity or
by statute to enforce and collect upon the Note, including
without limitation suing on the Note or foreclosing legally or
judicially on the Note;
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(4) Upon the occurrence of an Event of Default which is
occasioned by the Borrower's failure to pay money under this
Agreement, the city may, but shall not be obligated to, make
such payment from Loan proceeds or other funds of the city.
If such payment is made from proceeds of the Loan or other
funds of the city, the Borrower shall deposit with the City,
upon written demand therefor, such sum plus interest at the
Default Rate. In either case, the Event of Default with
respect to which any such payment has been made by the City
shall not be deemed cured until such repayment (as the case
may be) has been made by the Borrower. until repaid, such
amounts shall have the security afforded disbursements under
the Note; and/or
(5) Upon the occurrence of an Event of Default described
in Section 16 (A) (6) or 16 (A) (7) hereof, the City shall be
entitled and empowered by intervention in such proceedings or
otherwise to file and prove a claim for the whole amount owing
and unpaid on the Loan and, in the case of commencement of any
judicial proceedings, to file such proof of claim and other
papers or documents as may be necessary or advisable in the
judgment of the City and its counsel to protect the interests
of the City and to collect and receive any monies or other
property in satisfaction of its claim.
C. No Remedv Exclusive. No remedy herein conferred upon or
reserved to the City is intended to be exclusive of any other
available remedy or remedies, but each such remedy shall be
cumulative and shall be in addition to every other remedy given
under this Agreement or now existing at law or in equity or by
statute; and may be exercised in such number, at such times and in
such order as the City may determine in its sole discretion. No
delay or omission to exercise any right or power upon the
occurrence of any Event of Default hereunder shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as
often as may be deemed expedient by the City. In order to entitle
the City to exercise any right or remedy reserved to it under this
Agreement, no notice shall be required except as expressly provided
herein.
17. DISBURSEMENT OF LOAN PROCEEDS.
Loan proceeds shall be disbursed by wire transfer (pursuant to
wiring instructions to be provided by the Borrower) or check to the
Borrower or to an escrow company to fund the Project, and at such
time as the City receives the required CDBG funds from HUD, and
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provided that all the other conditions set forth in Section 6 above
have been satisfied.
18. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES.
The Borrower agrees to payor reimburse the city, upon demand
by the City, for all reasonable out-of-pocket costs incurred by the
City in connection with the enforcement of this Agreement, the
Note, including without limitation, reasonable attorneys' fees and
costs (i) if the City shall determine to utilize an attorney to
collect any sums due under this Agreement or any other documents
executed in connection wi th this Agreement following any defaul t by
the Borrower, or Iii) if the City becomes a party or otherwise
appears in any legal proceeding relating to this Agreement or any
documents issued hereunder or in connection herewith, or (iii) if
there shall be filed by or against the Borrower any proceedings
under any federal or state bankruptcy or insolvency laws, whether
the City is a creditor in such proceeding or otherwise. For the
purposes of this Agreement, the phrase "reasonable attorneys' fees"
shall include the salaries, overhead and benefits of the city
Attorney for the City of San Bernardino and the attorneys employed
in his office.
19. CONFLICT OF INTEREST; NO INDIVIDUAL LIABILITY.
No official or employee of the City shall have any personal
interest, direct or indirect, in this Agreement, nor shall any
official or employee of the City participate in any decision
relating to this Agreement which affects such official's or
employee's pecuniary interest in any corporation, Partnership or
association in which such official or employee is directly or
indirectly interested. No official or employee of the City shall
be personally liable in the event of a breach of this Agreement by
the City.
20. AMENDMENTS, CHANGES AND MODIFICATIONS.
This Agreement may not be amended, changed, modified, altered
or terminated without the prior written consent of the Parties.
21. EXECUTION OF COUNTERPARTS.
This Agreement may be executed in several counterparts each of
which shall be an original and all of which shall constitute one
and the same document.
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22. NOTICES.
All notices to be given under this Agreement shall be in
writing and shall be delivered personally, by Federal Express or
other like overnight courier or by certified or registered United
States Mail, return receipt requested. Any notice shall be
effective upon delivery or refusal to accept delivery, if delivered
personally, one (1) day after deposit with the Overnight courier,
if delivered by Federal Express or other like Overnight courier,
and two (2) days after mailing, if delivered by certified or
registered United States Mail. Notices to the Borrower shall be
sent to the following address:
Ocelot Engineering, Inc.
dba Chaparral Motor Sports
555 South "HH Street
San Bernardino, California 92410
Attn: David Damron
Notices, reports and statements to the City shall be delivered
or sent to the following address:
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
At tn: Mayor
With a copy to:
Sabo & Green, A Limited Liability Partnership
201 North "E" Street, Suite 300
San Bernardino, California 92401
Attn: Timothy J. Sabo, Esq.
Each Party shall promptly notify the other Party of any
change(s) of address to which notice shall be sent pursuant to this
Agreement.
23.
SEVERABILITY.
The
provisions
provision.
invalidity or unenforceability of anyone or more
of this Agreement will in no way affect any other
24.
INTERPRETATION.
Whenever the context requires, all words used in the singular
will be construed to have been used in the plural, and vice versa,
and each gender will include any other gender. The captions of the
paragraphs of this Agreement are for convenience only and do not
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25
define or limit any terms or prov~s~ons. Time is of the essence in
the performance of this Agreement.
25. NO WAIVER; CONSENTS.
Any waiver by the City must be in writing and will not be
construed as a continuing waiver. No waiver will be implied from
any delay or failure by the City to take action on account of any
defaul t of the Borrower. Consent by the City to any act or
omission by the Borrower will not be construed to be a consent to
any other or subsequent act or omission or to waive the requirement
for the City's consent to be obtained in any future or other
instance.
26. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
California.
27. AUTHORITY AND ENFORCEABILITY.
The Borrower warrants and represents that its execution hereof
has been duly authorized, that the individual (s) executing this
Agreement are authorized to do so, and this Agreement constitutes
a legal, valid and binding obligation of the Borrower. The
Borrower further agrees to provide such documentation and an
opinion of counsel, as requested by the City, with respect to such
authority and enforceability.
28. LITIGATION AND COMPLIANCE.
To the Borrower's actual knowledge, there are no suits, other
proceedings or investigations pending or threatened against, or
affecting the business or the properties of' the Borrower (other
than those as have been previously disclosed in writing to the
City) which could materially impair its ability to perform its
obligations under this Agreement, nor is the Borrower in violation
of any laws or ordinances which could materially impair the
Borrower's ability to perform its obligations under this Agreement.
29. DEFAULT.
To the Borrower's actual knowledge, there are no facts now in
existence which would, with the giving of notice of the lapse of
time, or both, constitute an "Event of Default" hereunder, as
described in section 16.
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IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date and year first above written.
BORROWER
:::~
Davi Damron
po rate Secretary
By:
Valles
ATTEST:
By: ~/J, ~
By:
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EXHIBIT A
PROMISSORY NOTE
For value received, the undersigned, Ocelot Engineering, Inc.,
whose address is 555 South "H" Street, San Bernardino, CA 92410
("Borrower"), promises to pay to the order of the City of San
Bernardino ("city"), a municipal corporation, c/o Economic
Development Agency at 201 North "E" Street, San Bernardino,
California 92401, Attention: Barbara Lindseth, Accounting Manager
(or at such other address as the City may direct), the principal
sum of One Million Dollars ($1,000,000), or so much thereof as may
be advanced hereunder from time to time, on or before ,
200 (the "Initial Maturity Date"). The outstanding principal
balance of this Promissory Note shall accrue no interest, except in
the case of a default hereunder, as set forth below. This
Promissory Note may be renewed by the City at its option in two (2)
year intervals for a total term of this Note not to exceed six (6)
years. The option of the City to renew this Note shall be
exercised by and in the sole discretion of the Executive Director
of the Redevelopment Agency of the City (the "Executive Director")
and only upon a determination by the Executive Director that
sufficient Community Development Block Grant ("CDBG") funds are
available to the City to fund disbursements under this Promissory
Note in addition to the other CDBG eligible activities of the City
during any such optional renewal period. Such determination shall
be made by the Executive Director at least ninety (90) days prior
to the Applicable Maturity Date (as defined hereinbelow). If the
City elects to renew this Promissory Note upon the expiration of
the Initial Maturity Date, this Promissory Note shall, then, mature
on , 200_ (the "First Optional Maturity Date"). If the
City elects to renew this Promissory Note upon the expiration of
the First Optional Maturity Date, this Promissory Note shall, then,
mature on , 200_ (the "Second Optional Maturity Date") .
The Initial Maturity Date, the First Optional Maturity Date and the
Second Optional Maturity Date are, collectively, referred to herein
as the "Applicable Maturity Date."
This Promissory Note is made pursuant to the terms of the Loan
Agreement dated as of , 2000 (the "Agreement"), entered
into between Borrower and the City, and is secured by a direct pay,
irrevocable, unconditional and callable upon demand letter of
credit (the "Letter of Credit") issued by Bank of America or
another acceptable bank legally undertaking business in California
that is rated AA or better for short term debt by Moody's or
Standard & Poor's for the account of Borrower in favor of the City.
Exh. A - Page 1
Borrower shall, upon demand by the city, pay to the city, Mandatory
Prepayments (as hereinafter defined) of principal and interest at
such times and in such amounts as the City may determine from time
to time in its sole discretion. As used herein, "Mandatory
Prepayment" means a demand for prepayment by the City for the
partial or total prepayment of the principal and/or interest due on
the Loan evidenced by this Promissory Note. In the event of any
Mandatory Prepayment, the City shall give Borrower ten (10) days
written notice prior to the date such prepayment is due.
Borrower shall also have the right to make Voluntary Prepayments,
at any time, without penalty, upon at least ten (10) days prior
written notice to the City.
Borrower agrees that it will still be liable for repayment of this
Promissory Note, even if the holder hereof does not follow the
procedures of presentment, protest, demand, diligence, notice of
dishonor and of nonpayment, which requirements are hereby waived by
the Borrower.
In the event of a default in the timely payment of principal on
this Promissory Note, and/or upon the occurrence of an Event of
Default (as defined in the Agreement), the City may, subject to any
applicable notice requirements set forth in the Agreement and among
other remedies, declare the unpaid balance hereof due and payable.
Upon such declaration, outstanding principal shall thereafter bear
interest at the annual rate of interest (the "Default Rate") equal
to the lesser of (i) the rate of interest announced from time to
time by Bank of America, Downtown San Bernardino Branch (or, in the
event that said bank is acquired or ceases Operations, then, if
there is no successor bank, another established and financially
secure institutional lender selected by the City), as its prime or
reference rate, or (ii) eight percent (8%), payable from the
original date of this Promissory Note until paid in full.
It is the intention of Borrower and City to conform strictly to the
usury laws that are applicable to this Promissory Note. This
Promissory Note and any other agreements between Borrower and the
City are hereby expressly limited so that in no contingency or
event whatsoever shall the amount paid or agreed to be paid to the
City or the holder hereof exceed the maximum amount permissible
under applicable usury laws. If under any circumstances
fulfillment of any provision of this Promissory Note, the Agreement
or any other agreement between Borrower and the City shall involve
exceeding the limit of validity prescribed by the law, then the
obligation to be fulfilled shall be reduced to the limit of such
validity. All sums paid or agreed to be paid to the City or the
holder, to the extent permitted by applicable law, and to the
Exh. A - Page 2
extent necessary to preclude exceeding the limit of validity
prescribed by law, shall be amortized, prorated, and allocated and
spread from the date of disbursement of the proceeds of this
Promissory Note until payment in full of this Promissory Note so
that the actual rate of interest on account of such indebtedness is
uniform throughout the term hereof.
Borrower is responsible for reimbursement to the city for all costs
incurred in connection with the enforcement of this Promissory
Note, including attorneys' fees and costs, whether or not suit is
filed, as is further provided in Section 16 of the Agreement.
This Promissory Note shall be construed in accordance with and
governed by the laws of the State of California. Borrower hereby
submits to personal jurisdiction in San Bernardino County,
California, for the enforcement of Borrower's obligations
hereunder, and waives any defense to such jurisdiction, including,
without limitation, any defense based on venue or inconvenient
forum. Failure of the City to exercise any right or remedies
hereunder shall not constitute a waiver of any future or other
default. Amendments to this Promissory Note shall be in writing
signed by the party against whom such amendment is sought to be
enforced.
DATED AS OF:
, 2000.
BORROWER
Ocelot Engineering, Inc.
By:
David Damron
Exh. A - Page 3
EXHIBIT B
IRREVOCABLE LETTER OF CREDIT
DATE OF ISSUE:
DATE AND PLACE OF EXPIRY
LETTER OF CREDIT NO.
BENEFICIARY:
Dear Sirs:
At the request and for the account of we
hereby establish in your favor our irrevocable letter of credit in
the amount of ($) United States
Dollars) available with ourselves by payment of your draft(s) drawn
on us at sight, each accompanied by your signed and dated statement
in the form of the Annex attached hereto.
Each draft must be marked "Drawn under
Bank, Letter of Credit No. dated
, 200_
Partial drawings under this letter of credit are permitted.
Each draft presented hereunder must also be accompanied by the
original of this letter of credit upon which we may endorse the
amount of our payment.
Each draft must be presented to us, on or before
2000 on which date this letter of credit expires, at our
above office.
We hereby engage with you that each draft drawn and presented
to us under and in compliance with the terms of this letter of
credi t will be duly honored by us at or before our close of
business on the same banking day of our receipt of such draft
provided such draft is presented at or prior to 12: 00 noon;
otherwise, any draft presented after 12:00 noon shall be honored at
or before our close of business on the first banking day following
Exh. B - Page 1
receipt of such draft. Each payment made by us hereunder shall be
made in immediately available United States Dollars.
This letter of credit is subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision) International
Chamber of Commerce Publication No. 500.
By:
Annex to
Letter of Credit No.
Bank
STATEMENT
an authorized officer of the City of San Bernardino
hereby certify that the City is making demand for payment
Bank, Letter of Credit No.
in respect of amounts (i) owed as of the date of this
Statement by Ocelot Engineering, Inc., (the "Borrower") under that
certain Loan Agreement dated as of , 2000 (the
"Agreement"), by and between the Borrower and the City and/or (ii)
otherwise permitted to be drawn from said Letter of Credit as
provided in the Agreement.
I,
("City") ,
under
(Insert Date)
By:
Its: Mayor
Exh. B - Page 2
EXHIBIT C
PROSPECTIVE EMPLOYEE OUESTIONNAIRE
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
DIRECT BENEFIT CERTIFICATION FOR ECONOMIC DEVELOPMENT
CERTIFICATION OF FAMILY SIZE AND INCOME
Familv Size
Familv Income
1
2
3
4
5
6
7
8
$27,950
31,900
35,900
39,000
43,100
46,300
49,500
52,650
My current yearly family income is less than the income level shown
above for my family size. I understand this information is subject
to verification by authorized government officials.
Name:
Address:
Date:
Signature:
QUESTIONS BELOW TO BE ANSWERED BY EMPLOYER OR INTERVIEWER:
The person signing the certification was interviewed for employment
and not hired:
The person signing the certification was hired for employment:
He/She works hours per week.
Signature of interviewer :
THIS CERTIFICATION FORM MAY BE USED TO DOCUMENT DIRECT BENEFIT TO
LOW AND MODERATE INCOME INDIVIDUALS FOR JOB CREATION OR RETENTION
ACTIVITIES.
Exh. C - Page 1
THE FAMILY INCOMES SHOWN ON THE ABOVE CERTIFICATION ARE APPLICABLE
FOR SAN BERNARDINO COUNTY AND ALL CITIES WITHIN THE COUNTY AS OF
, 2000.
Exh. C - Page 2
EXHIBIT D
CITY OF SAN BERNARDINO
ANNUAL FACILITY EMPLOYMENT SURVEY
Borrower Name:
Address:
Street
City
State
Zip
Telephone:
(area code)
Employment Survey for period commencing
and ending
Permanent* Temporarv*
Total number of employees
Total number of low and
moderate income employees
PLEASE ATTACH ALL PROSPECTIVE EMPLOYEE
QUESTIONNAIRES COMPLETED DURING THE PAST YEAR. THE
ANNUAL INCOME OF LOW AND MODERATE INCOME EMPLOYEES
SHOULD NOT EXCEED THE SECTION 8 LOWER INCOME LIMIT
AS DETERMINED BY HUD. REQUEST INCOME REQUIREMENT
DATA FROM THE COMMUNITY DEVELOPMENT COMMISSION.
Return to:
*
All part-time employees must be reflected on a full-time
equivalence based upon total hours worked.
Exh. D - Page 1