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HomeMy WebLinkAbout1991-364 . . - . . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NUMBER 91-364 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF A SMALL BUSINESS LOAN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND CUSTOM WINDOW TINTING. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor of the City of San Bernardino is hereby authorized to execute, on behalf of the City of San Bernardino, a loan agreement with CUSTOM WINDOW TINTING, which loan agreement is attached hereto as Exhibit "1" and is incorporated herein by reference as though fully set forth at length. The Agreement provides for the loaning of funds from the Small Business Loan program in the amount of $50.000.00. SECTION 2. The authorizations to execute the above referenced Agreement are rescinded if the parties to the agreement fail to execute same within sixty (60) days of the passage of this Resolution. IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII lab:0063E 08/05/1991 .. . RESOLUTION AU1110RIZING MAYOR TO EXECUTE A SMALL BUSINESS LOAN AGREEMENT WITH CUSTOM WINDOW TINTING. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a Regular meeting thereof, held on the fifth day of August, 1991, by the following vote to wit: ABSTAIN ABSENT COUNCIL MEMBERS AYES NAYES ESTRADA x REILLY x HERNANDEZ x MAUDSLEY x MINOR x POPE-LUDLAM x MILLER x (J,<<.LL .7h:-<~.t - City Clerk Ii The foregoing Resolution is hereby approved this 8th day of August, 1991. City Approved as to form and legal content: JAMES F. PENMAN, City Attorney BY:~~ lab:0063E 08/05/1991 . Res. 91-364 , EXHIBIT "1" . CITY OP SAN BERNARDINO COMMUNITY DEVELOPMENT DEPARTMENT "Economic Development proqram" (XDB-Pinance4) BORROWER: Custom Window Tinting PROJECT TITLE: Land/Building Improvements and Working Capital PROJECT ADDRESS: 198 West Baseline Street San Bernardino, California 92410 LOAN IS NUMBER ~ DEPARTMENT CONTRACTS. OF COMMUNITY DEVELOPMENT KJH/lab/0256 Section WlII11'her SBCTION I S101. S102. S103. S104. S105. SBCTION II ;, S201. S202. S203. S204. SECTION III S301. S302. S303. SBCTION IV S40l. S402. S403. S404. TABLE OF ~QB%&B%. (IDB-Financed) Title PARTIES, TBRMS, CONDITIONS PRECEDENT UJ) INDEPBNDENT STATUS Parties to the Agreement Representatives of the Parties and Service of Notices Term of this Agreement Conditions Precedent Independent Contractor Status of the Borrower PURPOSE OF AGREEMENT UJ) LOAN, LOAN TBRMS, UJ) PROMISSORY NOTE Purpose of the Agreement Purpose of the Loan Terms of the Loan Promissory Note REPRESENTATIONS UJ) COVENANTS OF BORROWER, UJ) DEFAUI.T Representations of the Borrower Covenants of the Borrower Default REPORTS, RECORDS AND AUDITS Reporting Requirements Maintenance of Records Audits and Inspections Validity of Financial Documentation Submissions i , EAa 2 2 3 3 3 4 4 4 5 6 7 9 10 11 11 12 s.ction VI1'1ft'her 8405. 8406. SEC!rION V 8501. 8502. 8.503. 8504. 8505. 8506. " 8507. 8508. 8509. 8510. 8511. 8512. 8513. 8514. 8515. 8516. S517. < !rULE 01' CON1'EN1'S (Cont...) (IDB-l'inallc.4 Agr....nt) !-i1:1. Ba Release of Funds from Escrow 12 Reconveyance Fee 12 GENERAL TERMS AND CONDITIONS Indemnification and Insurance Requirements Prohibition Against Assignment Limitation of Corporate Acts 12 14 14 Amendments and Waivers 14 14 Compliance with Statutes and Regulations Conflict of Interest 15 Political Activity Prohibited l~ Lobbying Prohibited 16 Installation of Financial Assistance 17 8ign Press Releases 17 Discrimination Prohibited 17 Nondiscrimination, Equal Employment 17 Practices, and Affirmative Action Plan Employment Opportunities for Business 17 and Lower Income Persons Participation of Minorities, Women and 19 Small Businesses Captions 19 Effect of Legal Judgment 19 Choice of Law Governing this Agreement 19 ii S.ction B,nnher S518. S519. SECTION VI S601. S602. lC'H/lab/0257 ;, TABLE 01" CONTENTS (Continu.d...) (IDB-pinaDc.d Aqr....nt) Titl. Prohibition of Legal Proceedings Rights and Remedies ZNTIRE AGREEMENT Complete Agreement Number of Pages and Attachments Execution (Signature) Page ATTACJDIENTS Attachment I -- Employment Action Plan Attachment II -- Insurance Requirements iii ~ 19 19 19 20 21 I '- . -' AGREEMENT HUMBER (:!:DB-FiDaDCed) BETWEEN THE CITY OF SAN BERNARDINO AND THE Custom Window Tinting Land/Buildin~ Improvements and Working Capital (RELATING TO) THE PROJECT ------------------------------------------------------------------ THIS AGREEMENT is made and entered into by and between the City of San Bernardino, a municipal corporation, hereinafter call "city,", and r.nt::tnm Window Tintin2 , hereinafter called the "Borrower". 1:.:.....:11 WHEREAS, the City has entered into a Grant Agreement with the United States Department of Housing and Urban Development, 'hereinafter called the Grantor, pursuant to Title I of the Housing and Community Development Act of 1974, as amended, hereinafter referred to as HCDA, to address the community development needs of the City: and WHEREAS, the Community Development Department, hereinafter called the "COD", has been designated by the City to provide for proper planning, coordination and administration of the City's pro- grams as described in the City'S Grant Agreement with the Grantor, and of certain projects funded by the City: and WHEREAS, the COD cooperates with private individuals and organizations, other agencies of the City and agencies of other governmental jurisdictions in carrying out certain functions and programs which are its responsibility: and WHEREAS, the Small Business Revolving Loan Fund program has been established by the City as part of a City of San Bernardino Economic Development Program ("EDP"), and has been approved by the San Bernardino Mayor and Common Council: and WHEREAS, the project which is the subject of this agreement meets the requirements of the above described program: and WHEREAS, Borrower has applied to the City for a loan to help finance the project: and WHEREAS, the City is willing to lend monies to the Borrower on the terms and conditions set forth herein: NOW, THEREFORE, in consideration of and in reliance upon the foregoing and upon the covenants, agreements, representations and warranties herein contained, the City and the Borrower agree as follows: SMALL JlUS:INESS UlAN ~..REEHENT IDB-FiDaDOe4 paqe -2- SECTION I. PART:IES. TERM. COND:IT:IONS PRECEDENT. AND :INDEPENDENT STATUS 8101. Par~i.. ~o ~h. aar..m.D~. The parties to this Aqreement are: 1) The City of San Bernardino, a municipal corporation, having its principal office at 300 North "0" Street, San Bernardino, California 92418. 2) The Borrower, Custom Window Tinting having its principal address at 198 West Baseline Street, San Bernardino, California 92410 The Borrower is ( a )~H;OWi nfm1 enternrise (fictitious name enterprise, 1nd1V dual, California Corporation/general partnership/limited partnership.) , 8102. R.Dr..eft~a~iv.. or ~h. Partie. ana service of Rotic... The representatives of the respective parties who are authorized to administer this Agreement and to whom formal notices, demands and communications shall be given are as follows: " 1) The representative of the City shall be, unless other- wise stated in the Aqreement: Hr. KeDDeth J. .eD4eraoD, Director CommuDity Deve10pmeDt DepartmeDt 300 North "D" street, I'ifth I'loor SaD BerDar4iDo, CA .2418-0001 2) The representative of the Borrower shall be: Mr. Chi Hwan Cho Mr. Charles HunR S. Cho 3) Formal notices, demands and communications to be given hereunder by either party shall be made in writing and may be effected by personal delivery or by registered or certified mail, postage prepaid, return receipt reques- ted and shall be deemed communicated as of the date of mailing. 4) If the name of the person designated to receive the notices, demands or communications or the address of such person is changed, written notice shall be given, in accord with this section, within five (5) working days of said change. , SMALL BUSINESS LOAN ~~aEEHEHT IDB-J"in&nced page -3- 8103. ~.rm of ~hi. Aar..m.D~. This Agreement shall remain in full force and effect from the date of execution by Borrower of the Promissory Note, until such time as said Promissory Note is paid according to its terms, subject to the provisions of S303 herein. 8104. COD4i~ioft. Pr.c.4.D~. A. Prior to the execution of this Aqreement, the Borrower shall submit to the city for approval in writing an Affirmative Action Program Plan in accordance with Section 512 herein. B. In the event that Borrower is a corporation, then prior to the execution of this Agreement, the Borrower shall provide the City with copies of the following documents: 1) Borrower's Articles of Incorporation, and all amendments thereto, as filed with the Secretary of State. ~ 2) Borrower's By-Laws, and all amendments thereto, as adop- ted by the Borrower and properly attested. 3) Resolutions or other corporate actions of the Borrower's Board of Directors, properly attested or certified, which specify the name(s) of the person(s) authorized to obligate the Borrower and execute contractual documents. 4) Certificate of Good Standing from California Secretary of State. C. In the event that Borrower is a partnership, then prior to the execution of this Agreement, the Borrower shall provide the City with copies of the Borrower's Partnership Agree- ment, and evidence of filing thereof with appropriate filing official. D. In the event the Borrower is an individual doing business under fictitious name, a copy of the Fictitious Name State- ment and evidence of the proper filing thereof. 8105. In~.~en~en~ Con~r.c~or B~.~u. or ~h. Borrower. The parties agree that the Borrower is an independent con- tractor and that no employees of the Borrower have been, are, or shall be employees of the City by virtue of this Agreement, and the Borrower shall so inform each employee organization and each employee who is hired or retained by it. SHALl. BUS:INESS LOAN A..UEMENT :IDB-J'inanced Page -4- SEC'l':ION :I:I. PURPOSE OF AGREEMENT AND LOAN. LOAN '!'ERMS. AND PROMISSORY NO'!'E 8201. Purao.e of 'the Aar..lIleD't:. The purpose of this Agreement is to provide Fifty Thousand -------------------------------------------------------------- DO~ ($ 50,000.00 ) of BDP funds to be loaned by the City to the Borrower, hereinafter called the "Loan", for the purpose and under the terms and conditions set forth herein. 8202. Pur1:)OS8 of 'the LoaD. The purpose of the Loan is to provide financial assistance to enable the Borrower to: Land/Building Improvements and Working Capital ;. 8203. '!I.rIIlS of 'the Loan. A. The City agrees to lend the Borrower, and the Borrower agrees to borrow from the City an amount not to exceed Fifty Thousand and --------------OlTJioo DOLLARS, ($50,000.00 ), such transaction hereinafter referred to as the "Loan". The Loan is to be evidenced by, and made against delivery of a Promissory Note executed by the Borrower, hereinafter called the "Note" and by this reference incorporated herein. B. The Note shall (i) be dated as of the closing, (ii) bear interest on the unpaid principal at the rate of Eifht Percent ( 8% ) per annum, (iii) be for a term of Six (6 ) years, and (d) provide for payment of the principal amount thereof and the interest thereon in Seventy - Two . SMALL BDSZNES8 LOAN lo..UEMEN'l' IDB-FiDlU1ced Page -5- ( 72 ) equal monthly installments of $876.66 Ei2ht Hundred Seventy Six and 66/XX DOLtJURS ($ 876.66 ), each including principal and interest, and continuing until said principal and interest are paid in full. C. Each monthly installment shall be applied first to the payment of interest then accrued to the date the payment is received, and the balance, if any, to the reduction of the principal. 8204. promissorv Note. A. The obligation of the city to make the Loan is subject to receipt by the City of the Note and, at the City's sole discretion, to the following additional conditions prece- dent: .. 1) The representations and warranties made herein by the Borrower shall be true and correct at the time of consideration by the Mayor and Common Council of the City of San Bernardino with the same effect as though made at the closing. 2) Receipt by the City from the Borrower of all executed documents in connection with this Agreement; satisfac- tory in form and substance to the City. 3) If matching funds constitute a part of this Agreement, then Borrower shall obtain matching funds in an amount equal to the amount of this loan and, as required by the City, deposit said matching funds into an account with RIA . Escrow Agency. 4) The City and the Borrower have mutually agreed to the terms and conditions as set forth in the Employment Action Plan, which is attached hereto as Attachment I and by this reference is incorporated herein. B. The Note is to be secured as follows: Business real estate property currently valued at one hundred thirty eight thousand ($138,000.00>. C. Borrower shall have the right, without penalty, to prepay the Note together with the accrued interest thereon as of the date of such prepayment. . SHALL BUSINESS LOAN ....REEKENT lOB-Financed P&qe -6- D. The Borrower acknowledqes and aqrees that the amount beinq provided under this loan shall be for a total of Fifty Thousand and 00/100 [K)~, ($ 50,000.00 ), and that no additional funds to cover addi- tional projects costs, anticipated or unanticipated, incur- red as a result of cost overruns or expenses in financing this project, are available under this Aqreement. SECTION %%1. REPRESENTATl:ONS AND COVENANTS OF BORROWER. AND DEFAULT 8301. R.~r..8nta~ioft. or ~h. Borrower. of '1'0 induce City to enter into this Aqreement, Borrower cove- nants and represents to city that: 1) The execution, delivery and performance of the Note and this Aqreement by Borrower have been duly authorized by Borrower. This Aqreement constitutes a leqal, valid and binding obliqation of Borrower, enforceable in accord- ance with its terms. The execution and delivery of this Aqreement and the note, and consummation of the transac- . tions herein contemplated, will not conflict with, or result in a breach of, any of the terms, provisions or conditions of any indenture, contract, instrument or aqreement, including any partnership aqreement, to which Borrower or any of its officers is a party. No appro- val, consent or authorization of any qovernmental authority is necessary for the execution, delivery or performance by the Borrower of this Aqreement or of any of the terms and conditions. 2) Borrower has qood and marketable title to the real pro- perty identified in S204B of this Aqreement, located at 98 West Baseline Street San Bernardino, California 924l~ San Bernard no, eal forn a, and t s free and clear from all liens except as set forth herein: None 3) Borrower is in compliance with all applicable statutes, laws, regulations, and executive orders of the United States of America and all states, foreiqn countries, other qovernmental bodies and aqencies havinq jurisdic- tion over its business or properties, includinq (without limitation) all tax laws and Borrower has not received notice of any violation of such statutes, laws, regula- tions or orders which have not been remedied prior to the date of this Agreement. Borrower possesses all licenses, tradenames, trademarks, and permits as are required for conduct of its business without conflict with the rights of others. SHALL BUSINESS LOU AGREEKENT IDB-Financed Page -7- D. There is not pending or threatened against Borrower, or any of its officers, any actions, suits, proceedings or investi- gations at law or in equity or before or by any federal, state, municipal or governmental department, commission, board, bureau, agency or instrumentality which, if deter- mined adversely, would be likely to have a materially ad- verse effect on the business or properties of Borrower. E. Each and every financial statement, document and record delivered by Borrower to the City in connection with this Agreement and the proposed transaction hereunder is a true and complete copy of said financial statement, document or record, and fairly and accurately reflects the information it purports to portray. 'l'here has been no change in the condition, financial or otherwise, of Borrower as shown in - the financial statements dated March 31, 1991 , except changes in the ordinary course of business, none of which, individually or in the aggregate, has been materially adverse. S302. A44i~ioft.l Cov.DaD~. of ~h. Borrower. ;, Borrower covenants and agrees that, from the date hereof, until payment in full on the Note and the interest thereon, that it will: ~) Pay the principal and interest on the Note according to its terms. 2) Pay any other amounts that may be due or become due and owing to the City under or pursuant to the terms of this Agreement or the Note. 3) Execute and deliver all instruments, and perform such acts, as the City may reasonably deem necessary or de- sireable to confirm and secure to the City all rights and remedies conferred upon the City by the terms of this Agreement and Note. 4) In the event that Borrower shall grant the City a se- curity interest in Real Property as collateral under S204(B) herein, then Borrower agrees to maintain at Borrower's sole expense a policy of title insurance coverage equal to the amount of the loan. 5) Give notice to the City of any event that constitutes an Event of Default as set forth in Section 303 of this Agreement or that would, with notice, or lapse of time or both, constitute an Event of Default under this Agreement. Notice shall specify the nature of such Event of Default. . SHALL BUSINESS LOAN ....IU!:EKEN'l' IDB-Financed page -8- .. Not enter into any agreement or other commitment the performance of which would constitute a breach of any of the covenants contained in this Agreement. Use the Loan proceeds only for the purposes stated in this Agreement and for no other purpose or pUrposes. Observe all applicable federal, state and local statutes and regulations as well as City of San Bernardino Ordi- nances as further defined and set forth in Section 505 of this Agreement. In the event that Borrower is a corporation, then Bor- rower shall do or cause to be done all things necessary to preserve and keep in full force and effect its corpo- rate existence, rights and franchises. ~O) Not violate any laws, ordinances, governmental rules or regulations to which it is subject and not fail to ob- tain any licenses, permits, franchises or other govern- mental authorization necessary to conduct its business, which violation or failure to obtain might have a mate- rial adverse effect on the business, prospects, profits or condition (financial or otherwise) of Borrower. 6) 7) 8) 9) ~1) Submit an Annual Employment Report on or before the fif- teenth (15th) day of June for the year(s) 1991 . The Annual Employment Report shall de- tail Borrower's compliance with the Employment Action Plan, Attachment I attached hereto and by this reference incorporated herein, for the preceding twelve (12) month periOd. ~2) Maintain adequate insurance with respect to the col- lateral and the (proprietorship, partnerShip or cor- porate) business which is the subject of this Agreement, with reputable insurance companies. The Borrower shall maintain insurance in such amounts and against such risks as is customary with companies in the same or similar business; in addition, said insurance cover- ages(s) shall be in accordance with the general insur- ance provisions of this Agreement as specified in S501(B) (5), including fire, hazard and general compre- hensive liability insurance, worker's compensation, con- struction/rehabilitation liability, to protect such bus iness and all property securing the City'S loan. Said insurance shall be maintained throughout the term of this loan. The City shall be named as an additional insured, and the policy or policies shall not be subject to cancellation, reduction or nonrenewal without thirty (30) days prior written notification to the city Attor- ney by certified mail. , , SMALL BUSINESS LOAN ..REEKENT IDB-FinanoecS Page -51- 1.3) Pay all indebteness and obligations promptly in accord- ance with normal terms and promptly pay and discharge or cause to paid and discharged all taxes, ass.ssments and governmental charges or levies imposed upon it or upon its income and profits or upon any of its property, real, personal or mixed, or upon any part thereof, re- spectively, before the same shall become in default. 8303. Default. A. The entire unpaid principal of the Note, and interest then accrued thereon, shall become and be forthwith due and pay- able upon written demand by the City or the City's assiqns, without any other notice or demand of any kind or any pre- sentment or protest, if anyone of the following events (herein called an "Event of Default") shall occur and be continuing at the time of such demand, whether voluntarily or involuntarily, or, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judqment, decree or order of any court of any order, rule or requlation or any governmental body, provided however that such sum shall not be payable if . . Borrower's payments have been expressly extended by the City ~ or the City's assiqns. "Events of Default" shall include: 1.) Payment of any installment of principal or interest on the Note is not paid when due and such payment remains unpaid for thirty (30) days. 2) Borrower fails to pay when due, or declared due, the obligations secured under this Agreement. 3) Borrower fails to perform or comply with any terms, conditions, or covenants as provided in this Agreement or in any instruments securing or related to this Agree- ment. 4) If any representation or warranty made by the Borrower in this Agreement shall prove to be untrue in any mate- rial respect, or if any report, financial statement or financial schedule or other instrument delivered under or pursuant to this Agreement or the transactions con- templated herein, to the city or to any other holder of the Note shall prove to be untrue in any material re- spect as of the date as of which made. 5) A court enters a decree or order for relief in respect of the Borrower in an involuntary case under any appli- cable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Borrower or for any substantial part of l>MALL BUSINESS LOAN < AEEJlENT IDB-Financed Page -10- its property, or orders the winding up or liquidation of its affairs and such decree or order remains unstayed and in effect for a period of sixty (60) consecutive. days. 6) The occurrence (i) of Borrower's becoming insolvent or bankrupt, or ceasing, being unable, or admitting in writing its inability to pay its debts as they mature, or making a general assignment for the benefit of, or entering into any composition or arrangement with credi- tors; (ii) of proceedings for the appointment of a re- ceiver, trustee or liquidator of Debtor, or of a sub- stantial part of its assets, being authorized or insti- tuted by or against it; or (iii) of proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction being authorized or instituted by or against the Borrower. 7) A cessation or substantial reduction of operations in the business which is the subject of this Agreement under circumstances indicative to the City of a lack of intention or ability to provide continuing employment and economic benefits for the area in which the business is located. " 8) Failure to submit the Annual Employment Report referred to in 8302(12) within ninty (90) days of the scheduled due date for said Report. 9. The loss, theft, substantial damage, destruction, aban- donment, sale or encumbrance to or of any of the colla- teral securing payment of the Note, in any manner not fully covered by insurance, or the making of any levy, seizure or attachment thereof or thereon. B. If Borrower shall at any time default in making any payment of principal or interest on the Note, Borrower shall to the full extent permitted by law, pay to the City or other holder of the Note, in addition to any other amounts that may be due from Borrower to such holder, an amount equal to the reasonable costs and expenses incurred by such holder, in its efforts to protect its collateral, secure payment, or otherwise defend its interests hereunder in any judicial or administrative proceeding. SECTION IV. REPORTS. RECORDS AND AUDITS 8401. ReDortina Reauirements. A. At such times and in such ~orms as the City may require, there shall be furnished to the City such statements, SMALL BUSINESS LOAN ...UEMER'l' . iDB-l'inanc.d pa;. -11- records, reports, data and information as the City may request pertaininq to matters covered by this Aqreement. B. Borrower will provide its financial and accountinq state- ments to the city for the period endinq Di""mb"T :31. 1991 and annually thereafter durinq term of th s Aqre_ent, but not later than three (3) months followinq the expiration of any such period, and at each other time and in such form as the city may prescribe. 8402. Maift~.n.Dc. of ..coras. A. Records, in their oriqinal form, shall be maintained in accordance with the requir_ents prescribed by the Grantor and the City with respect to all matters covered by this Aqre_ent. Such records shall be retained for a period of six (6) years after termination of this Aqre_ent and after - all other pendinq matters are closed. "Pendinq Matters" in- clude, but are not limited to, an audit, litiqation, or other actions involvinq records. The City may, at its dis- cretion, take possession of and retain said records. B. Records in their oriqinal form pertaininq to matters covered. by this Aqreement shall at all times be retained within the ~ City of San Bernardino, or some other location specifically authorizinq in writinq by the Director of Community Develop- ment, unless authorization to r_ove them is qranted in writinq by the city. 8403. Au!i~. an! rD.~.e~ion.. A. At any time durinq normal business hours and as often as the Grantor, the U.S. Comptroller General, Auditor General of the State of California or the City may de_ necessary, the Borrower shall make available to the City for examination, all of its records with respect to all matters covered by this Aqre_ent. The City, AUditor General of the State of California, Grantor, and the U.S. Comptroller General shall have the authority to audit, examine and make excerpts or transcripts from records, includinq all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relatinq to all matters covered by this Aqreement. B. The City shall have the authority to make physical inspec- tions and to require such physical safequardinq devices as locks, alarms, safes, fire extinquishers, sprinkler system, etc., to safequard property and/or equipment funded or secu- red by this Aqreement. Notwithstandinq such inspection authority, Borrower is soley responsible for the provision of security and for the safe quardinq.of the business and its property. SMALL BUSINESS LOAH ....REEKENT IDB-FiDlUlced page -12- 8404. V.lidi~v or Pin_nolal Docum.D~a~ioD Submi..ioDS. Financial reports required to be prepared and submitted by the Borrower to the city shall be accurate and correct in all respects. 8405. Re1.... of Pun4s from .scrov. A. All loan proceeds shall be deposited into an escrow account with an escrow company designated by the City. Disbursement of funds shall be jointly authorized by the Borrower and the City. Each disbursement shall be in accordance with S202 "Purpose of the Loan" and shall be properly supported by invoices, vouchers, executed payrolls, time records or other documentation evidencing an expenditure and/or encumbrance of funds. B. The costs associated with the loan such as escrow fees, credit reports (TRW), title reports, or other similar costs shall be delineated in the escrow instructions and disbursed from the loan proceeds upon opening of the escrow account. 8e06. .eCODv.vanee P.. ;, In the event that real property is used to secure this Loan, then Borrower agrees to pay any costs incident to title re- conveyance, inClUding, if applicable, trustee's fees, attor- ney fees, document preparation fees, recording fees or any other related expenses. SECTION V. GENERAL '1'ERMS ANn CONDI'1':rONS 8501. xD~.mftirica~ioD an4 %nBurance R.auir.m.D~.. A. Indemnification: The Borrower undertakes and agrees to defend, indemnify and hold harmless the City and any and all of the City'S offi- cers, agents, employees, assigns, and successors in interest from and against all suits and causes of action, claims, cost of litigation, damage or liability of any nature what- soever, for death or injury to any person, including Bor- rower's employees and agents, or damage or destruction to any property of either party hereto or third persons in any manner arising by reason of or incident to the performance of this Agreement on the part of the Borrower or subborrower any tier whether or not contributed to by any act or ommis- sion, active or passive, negligent or otherwise, except for the sole negligence of the City, or the sole negligence of any of the City's officers, agents or employees. City ap- SHALL BUSINESS LOAN h..UEMEN'l' IDB-Financed Page -13- proval of the Borrower's performance, or failure to object, shall be no defense to Borrower concerninq its undertakinq herein to defend and indemnify City and others. B. Insurance: .. 1) The Borrower shall provide and maintain at its own ex- pense throuqhout the term of this Aqreement the insur- ance requirements specified herein. Evidence of insur- ance shall be submitted for approval by the City. The city special endorsement forms, referenced hereto and incorporated by reference, are the preferred form of evidence of insurance. Alternatively, Borrower may submit two (2) certified copies of the full policy con- taininq the appropriate cancellation notice languaqe and additional insured/loss payee languaqe as specified. No release of funds from the Escrow Account shall be made to the Borrower until such time as the Borrower has complied with all insurance and bondinq requirements under this Aqreement. The City's Additional Insured Endorsement form, or a form approved by the City, stat- inq that the Borrower is so insured, must accompany any demand for funds unless said form has been previously submitted and approved by the City. (Certification of insurance shall be procured, filed and approved in strict compliance with City rules and regulations.) 3) With respect to the interests of the City, such insur- ance shall not be cancelled, reduced in coveraqe or limited or non-renewed, except after thirty (30) days written notice by receipted delivery has been qiven to the Office of the city Attorney, City Hall, 300 North "D" Street, San Bernardino, CA 92418-0001. Policies of insurance and fidelity bonds, except for policies cover- inq Worker's Compensation and Employe.s' and Volunteer's Owned and/or Leased Vehicles, shall name the City as an Additional Insured and said endorsements or other evi- dence of insurance shall so indicate. Fidelity bonds shall name the City as loss payee or additional insured. In the event of any cancellation, non-renewal, reduction or limitation of coveraqe, or notice that such will be effected, City may, but is not required to, obtain insu- rance to protect its interests, in which event the cost thereof shall be reimbursed by Borrower forthwith. Any failure to forthwith reimburse such expense shall con- stitute an Event of Default. 2) 4) The City reserves the riqht at any time durinq the term of this Aqreement to chanqe the amounts and types of insurance required hereunder by qiyinq Borrower ninty (90) days written notice. SHALL BUSZIlESS LOU _REEKENT IDB-FinaneelS pac;re -14- S502. 8503. ~ 8504. 5. The Borrower shall maintain minimum insurance coverages prescribed in Attachment II of this Agreement, which by this reference is incorporated herein. Prohibi~icD AaaiB8t a..ianment. A. The Borrower shall not assign this Agreement, nor assign or transfer any interest or obligation in this Agreement (whe- ther by assignment or novation) without prior written con- sent of the City. No part of the property securing this Agreement shall be assigned or transferred (except sales of inventory in the ordinary course of business), nor shall such property be pledged, without the prior written consent of city. The Borrower shall not enter into any agreement with any other party under which such other party shall become the recipient of claims due or to become due to the Borrower from the City without prior written consent of the City. B.o_ Li.i~.tioD of COrDorat. ~et.. In the event that Borrower is a corporation then the Bor- rower shall not amend its Articles of Incorporation or By- Laws, move to dissolve, transfer any assets derived from funds provided under this Agreement, or take any other steps which may materially affect its operations within the per- formance of this Agreement without first notifying the City in writing. The Borrower shall notify the City immediately in writing of any change in the Borrower's corporate name. amendment. an4 Waiver.. This Agreement may not be changed or amended orally, and no waiver hereunder may be oral, but any change or amendment hereto or any waiver hereunder must be in writing and signed by the party or parties against whom such change, amendment, or waiver is sought to be enforced. 8505. CO~Dliafte. with statute. an4 .eaulations. A. The Borrower warrants and certifies that in the performance of this Agreement, it shall comply with all applicable staa- tutes, rules, regulations and orders of the United States, the state of California, the County and City of San Bernar- dino, including laws and regulations pertaining to labor, wages, hours and other conditions of employment and the City'S anti-discrimination provisions and Affirmative Action Plan which by this reference is incorporated herein. Bor- rower further warrants and certifies that it shall comply with new, amended, or revised laws, regulations, and/or procedures that apply to the performance of this Agreement, upon being provided notice thereof. SHALL BUSINESS LOAN ....1U!:EKEBT lOB-Financed Page -15- Borrower covenants that the Davis-Bacon Act as amended, the Contract Work Hours and Safety Standards Act, and the Cope- land "Anti-Kickback Act" shall be a part ot all construction contracts awarded by the Borrower pursuant to this Agreement and all subcontracts thereto. 8501. C::on~lict: or %!l't.r..t:.. A. The Borrower covenants that none of.its directors, officers, employees, or agents shall participate in selecting subcon- tractors, or administering subcontracts supported (in Whole or in part) by federal funds where such person is a direc- tor, officer, employee or agent of the subcontractor, or where such person knows.or should have known that: 1) A member of such person I s immediate family, or partner, or organization has a financial interest in the subcon- tract; 2) The subcontractor is someone with whom such person has negotiated or is negotiating any prospective employment, or; 3) The participation of such persons would be prohibited by ~ the California Political Reform Act, California Govern- ment Code Section 87100 et seq., if such person were a public officer, because such person would have a "finan- cial or other interest" in the subcontract. B. Definitions: 1) The term "immediate family" includes, but is not limited to, those persons related by blood or marriage, such as husband, wife, father, mother, brother, sister, son, daughter, father-in-law, motherin-law, brother-in-law, son-in-law and daughter-in-law. 2) The term "financial or other interest" includes, but is not limited to: (a) Any direct or indirect financial interest in the specific contract, including a commission or fee, a share of the proceeds, prospect of a promotion or future employment, a profit, or any other form of financial reward. (b) Any of the following interests in the subcontracting entity: partnership interest or other beneficial interest of five percent (5\) or more of the stock; employment in a managerial capacity; or membership on the board of directors or governing body. This provision shall not apply to serving on the board or governing body of a non-profit corporation for which no salary is paid or other compensation. . SHALL BUSINESS IDB-FiJ1&Dced page -115- , LOAN .....REEMENT C. The Borrower further covenants that no 'officer, director, employee or agent shall solicit or accept gratuities, fa- vors, or anything of monetary value, from an actual or po- tential subcontractor, supplier, a party to a subagreement, (or persons who are otherwise in a position to benefit from the actions of any officer, employee or agent). D. The Borrower shall not subcontract with a former director, officer, or employee within a one (1) year period following the termination of the relationship between said person and the Borrower. E. Prior to obtaining the City's approval of any subcontract, the Borrower shall disclose to the City any relationship, financial or otherwise, direct or indirect, of the Borrower or any of its officers, directors or employees of their im- mediate family with the proposed subcontractor and its offi- .' cers, directors or employees. F. For further clarification of the meaning of any of the terms used herein, the parties agree that references shall be made to the guidelines, rules and laws of the City of San Bernar- dino, State of California, and federal regulations regarding conflict of interest. .. G. The Borrower warrants that it has not paid or given and will not payor give to any third person any money or other con- sideration for obtaining this Agreement. H. The Borrower covenants that no member, officer, employee of Borrower shall have any interest, direct or indirect, in any contract or subcontract of the proceeds thereof for work to be performed in connection with this project during hiS/her tenure as such employee, member or officer or for one (1) year thereafter. I. The Borrower shall incorporate the foregoing subsections of this section into every agreement that it enters into in connection with this project and shall substitute the term "Subcontractor" for the term "Borrower" and "Sub-contractor" for "Subcontractor". 8507. Political Activitv Prohibited. None of the funds, materials, property or services provided directly or indirectly under this Agreement shall be used for any partisan political activity, or to further the elec- tion or defeat of any candidate for public office. S508. Lobbvina Prohibited. None of the funds provided under this Agreement shall be used for any purpose designed to support or defeat any pend- ing legislation or administrative regulation. . , SHALL BUSXnSS LOAN ....REEHE!f'1' XDB-Financed paqa -17- 850.. %D.~al1a~ion of Pin_Deial ~..i.~.DC. Plan. The Borrower shall install, or cause to be installed, for public display upon the.project premises a sign, with design approved by City, identifying the Borrower as receiving financial assistance from the City,' if such a sign is re- quested by the Director of Community Development Department. 8510. Pre.. ..1...... Xn all communications with the press, television, radio or any other means of communicating with the general community, the Borrower shall make specific reference to the city of San Bernardino community Development Department as the spon- soring agency of the project. . 8511. Di.erimina~ioD Prohihi~.4. ~ No person shall on the grounds of race, religion, ancestry, color, national origin, sex, age, or physical handicap, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under this program/project. For purposes of this Section, Title 24, Code of Federal Re- gulations Section 570.601(b) defines specific discriminatory actions which are prohibited and correction action which shall be taken in situations as defined therein. S512. .oD4i.erimiDa~ioD. Baual Zm~lqvm.D~ .r.e~ia.. and Aff!rma- ~iv. Action Proaram. The Borrower shall comply with the nondiscrimination and affirmative action provisions of the laws of the United States of America, the state of California, and the city. In performing this Agreement, the Borrower shall not discri- minate in its employment practices against any employee, or applicant for employment because of person's race, religion, ancestry, color, national origin, sex, age or physical handicap. Any subcontract entered into by the Borrower re- lating to this Agreement, to the extent allowed hereunder, shall be subject to the provisions of this paragraph. 8513. 2mDlovment QDDortunitie. for Busin... ana Lover Yncome PersoDs. Any project/program funded in part or in whole with Com- munity Development funds shall comply with the following provisions (referred to as a Section 3 clause:) 1) The work to be performed under this contract (Agreement) is on a project assisted under a program providing di- rect Federal financing assistance from the Department of Housing and Urban Development and is subject to the re- quirements of Section 3 of the Housing and Urban Deve- SMALL BUSINESS LOAN AGREEHENT . .. SMALL BUSINESS LOAN _llEEMEH'l' IDB-Financed page -18- .. lopment Act of 1968, as amended, 12 USC 1701u. Section 3 requires that, to the greatest extent feasible, oppor- tunities for training and employment be given to lower income residents of the project area and contracts (agreements) for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in the area of the project. 2) The parties to this contract (Agreement) will comply with the provisions of said Section 3 and the regula- tions issued pursuant thereto by the Secretary of Hous- ing and Urban Development set forth in Title 24 CFR, Part 135, and all applicable rules and orders of the Department issued thereunder prior to the execution of this contract (Agreement) certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements. 3) The Borrower will send to each labor organization or representative of workers with which he/she has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or worker's representative of its commitments under this Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment and training. 4) The Borrower will include this Section 3 clause in every subcontract for work in connection with the project and will, at the direction of the applicant for or recipient of Federal financial assistance, take appropriate action pursuant to the subcontract upon a finding that the sub- contractor is in violation of regulations issued by the Secretary of Housing and Urban Development, 24 CFR, Part 135. The Borrower will not subcontract with any subcon- tractor where it has notice of knowledge that the latter has been found in violation of regulations under Title 24, CFR 135 and will not let any subcontract unless the subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations. 5) Compliance with the provisions of Section 3, the regula- tions set forth in Title 24 CFR, Part 135, and all ap- plicable rules and order of the Department issued there- under prior to the execution of the contract (Agreement) shall be a condition of the federal financial assistance provided to the project, binding upon the applicant or recipient for such assistance,. its successors, and as- signs. Failure to fulfill these requirements shall subject the applicant or recipient, its contractors and subcontractors, its successors and assigns to those . I SMALL BUSINESS LOAN .....REEKEH'1' IDB-!'iDaDCle4 paqe -1'- sanctions specified by the grant or loan agreement or contract throuqh which federal assistance is provided, and to such sanctions as are specifie4by Title 24 CPR, Part 135. 851C. Par~ieiDa~ioD af Miftori~i... Wa.8D an4 Small Bu.iD...... To the fullest extent possible in the administration of this Aqreement, Borrower aqrees to provide opportunities for minorities, women and small businesses to participate in procurements Under. this Agreement. . 8515. c.D~ioD.. The section headings appearing herein shall not be deemed to govern, limit, modify or in any way affect the scope, mean- ing or intent of these conditions. . S51fi. Bff.e~ of Laa.l 3u4am.D~. Should any covenant, condition or provision herein contained be held to be invalid by final judqment in any court of com- petent jurisdiction, the invalidity of such covenant, condi- tion or provision shall not in any way affect any other co- venant, condition or provision herein contained. .. S517. Choice of Law GoverninG ~hi. .ar..m.D~. This Agreement shall be governed by and construed in accord- ance with the laws of the State of California. 8518. Prohibi~ioD of Leaal Proc.edlnGs. The Borrower is prohibited from using Grant funds received under this Agreement, or funds realized as a result of this Aqreement, for the purpose of institutinq leqal proceedinqs aqainst the City or its official representatives. 8511. Riah~. an4 Re.e4ie.. In the event any party fails to perform, in whole or in part, any promise, covenant, or agreement herein, or should any representation made by it be untrue, any aggrieved party may avail itself to all riqhts and remedies, at ~aw or equity, in the courts of law. Said rights and remedies are in addition to those provided for herein. SECTION VI. EH'1'IRE AGREEMEH'1'. 8601. Comnl.~. ~ar.ement. This Agreement contains the full and complete Aqreement bet- .. . SHALL BUSINESS LOAH .....REEMEH'l' IDB-FizIlUlce4 page -20- ween the two parties. No verbal aqreementor conversation with any officer or employee of either party shall effect or modify any of-the terms and conditions of this Aqreement. .602. "'IIII"'_r or Paa.. .Iit! Ai:t:achm.eD't8. IIII IIII IIII IIII 1111-- IIII IIII IIII IIII IIII IIII I1II IIII IIII IIII 1III IIII IIII IIII 1III IIII IIII 1III IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII This Aqreement is executed in three (3) duplicate oriqinals, .ach of which is deemed to be an oriqinal. This Aqreement includes, Twenty -one U!J paqes and Two ( 2 ) attachments which constitute the entire understandinq and aqreement of the parties. . . SMALL BUSINESS LOAN ....DEMENT . IDB-FinaDced page -21- IN WITNESS WHEREOF, the City of San Bernardino and thee Borrower have caused this Agreement to be executed by their duly authorized representatives on this L day of S / {~h.e r- , 199/. I (]~~ '-- city lerlt ATTESTs (CORPOD'l'IOII) BY ~~I//~- Corporate Pre. dent. ; ATTEST s BY Corporate Secretary Approved a. to form and legal contents A/~ff~~ . (W tn..) JAKES J'. PDIMAN City Attorney .. , A'1"1'ACJDIBRT I "ZKPLOYJlBRT ACTIO. PLaIr" ECODOmiC DeVelopmeD~ l'roqraa bplo1'll1eDt ActiOD Plu Stat..eD~ of Borrower Borrower does hereby state ~at ~e funds resulting from ~e Loan Agreement entered into on behalf of ~e City of San Bernardino (hereinafter "City") and Borrower shall be used solely for fu~ering ~e purpose of ~e Economic Development Program (EDP). The purpose of EDP assistance is to benefit ~e low and moderate income residents of ~e City of San Bernardino ~rough ~e creation and/or retention of jobs to said per- " sons. Pursuant to ~e purpose of ~e EDP ~e Borrower agrees to comply wi~ ~e following Employment Action Plan: Borrower understands and agrees ~at in order to deter- mine ~at said program purpose is being met, an Annual Employment Report shall be filed wi~ ~e city. Borrower understands ~at failure to meet ~. objective. .et fo~ in ~is Employment Action Plan or failure to comply wi~ ~e requirements of filing ~e Annual Employment Report may result in ~e entire outstanding balance of ~e loan plus interest, being due upon written demand by ~e City, pursuant to Section 302 of ~e Loan Agreement and ~is Statement. 1tJH/lab/0254 Economic Development Program . . ATTACBMDl'.l' n X.SORAHCB RBQUrV"VRNTS (Instructions for completing, executing and submitting Evidence of Insurance to the City of San Bernardino.) Insured: CHL !lWI7f1J e 110 DBfI; (Contractor, Lessee, Permittee, (id5!-""'" WI;,!"'''"' Borrower, Etc.) TlfTlln<7 Aqreement/Reference No. '9 J- 3Ci( Date: :; -? ~ 9/ A. X.SURED 1. To expedite completion of the insurance requirements, pleaBe give your inBurance agent or broker a copy of the Insurance Requirements Sheet along with these instructions and en- dorsement forms. 2. If your agreement requires Workers' Compensation coverage and you have been authorized by the State of California to Self-insure Workers' Compensation, then a copy of the certificate from the State consenting to self-insurance will meet the evidence requirements. ~ 3. All questionB relating to insurance should be directed to the person or office responsible for your contract, leaBe, permit, or other agreement. (See items 9 and 10 below.) B. Z.SORAHCB AGEHT OR BRODR 1. Acceptable Evidence -- The appropriate City Special Endorse- ments are the preferred form of evidence. No modifications to the form are permitted. Alternatively, certified copies of the full policy containing additional insured and thirty (30) day cancellation notice lanquage will be accepted subject to review by the City Attorney. Certificates, Verifications, Memoranda of Insurance and other non-binding documents submitted along are not acceptable as evidence of inBurance. Binders are acceptable aB interim evidence until policies are available. 2. Multiple Policies -- More than one (1) insurance policy may be required to comply with the insurance requirements. Endorsement forms appropriate to your insured's agreement, contract, leaBe or permit have been provided. 3. Signature -- PleaBe have an authorized representative of the insurance company manually sign completed endorsement forms. Signatures must be originals as the City Attorney will not accept facsimile (rubber stamp, photocopy, etc.) or ini- tialed signatures. 1 . . XNSURANCE REQUIUKEN_.~ Attachment II continued... Page -2- 4. Underwriter -- The name and address of the insurance company underwriting the coverage must be noted on the endorsement form. In the case of syndicate. or subscription policies, indicate lead underwriters or managing agent and attach a schedule of subscribers, including their percent participa- tion. 5. Document Reference -- Include reference to either the specific City agreement (bid, contract, lease, etc.) or indicate that all such agreements are covered. C. INSURANCE REQUIREMEII'1'S 1. Coverage and Limits -- The coverages and limits for each type of insurance are specified on the insurance requirement sheet. When coverage is on a scheduled basis, a separate sheet may be attached to the endorsement listing such scheduled locations, vehicles, etc., so covered. 2. Excess Insurance -- Endorsements to exces. policies will be required when primary insurance is insufficient to comply with the requirements. 3. Additional Pages -- If there is insufficient space on the reverse side of the form to note pertinent information, such as inclusions, exclusions or specific provisions, etc., attach separate sheets and note this on the endorsement form. ~ 4. Person to Contact -- Completed endorsements, correspondence and questions relating to the required insurance are to be directed to the fOllowing representatives: 5. ~echnical Assistance -- Improperly completed endorsements will be returned to your insured for correction. 6. Delay in submitting properly completed endorsement forms may delay your insured's intended occupancy or operation. 7. Renewals -- For extensions or renewals of insurance policies which have the City'S endorsement formes) attached, we will accept a renewal endorsement or a certificate (with an original signature) as evidence of continued coverage if it includes the statement that the insurance protection afforded the City of San Bernardino has been renewed under the same terms and conditions as previously approved. 2 , . . , . . . INSURANCE REQUlREHEN_~ Attachment II continued... page -3- DMJ!l OiL )J/,vt'lIV C He Df5A,f/Ac.{"'" j4,',.,j,,~. 7!n1,Y/\ DAD q '6 -7 ' AGREEKENT/REI'ERENCB WKBBR "1;- '3 r; ., The followinq coveraqes noted with an "X" are required with the Combined Sinqle Limits (CSL) as noted on the riqht. Unless written exception is allowed by Risk Manaqment. All coveraqes must add the City as additional insured. Limit:. Y Worker's Compensation statutory 'X Employers Liability ( ) S 100.000 Co_ercial > . General Liability ( ) Broad porm Property Damage ( ) Personal Injury ( ) Broad Porm Liability Endonement ( ,7) Pire Legal Liability ( ) Garagekeepers Legal Liability ( ) OWned Automobiles ( ) Nonowned Automobile. ~ () Hired Automobiles ( ) Sl.OOO.OOO Automobile Liability (if auto is u.ed for this contract.) Profe..ional Liability (if applicable) Property Insurance $ a1.0DD.OOO 90' value of buildina (Contents at 100' of value) ( ) Extended Coveraqe ( ) Vandalism and Malicious Mischief ( ) Business Interruption (90 days minimun) $ (All fixed costs plus payroll) ( ) Crime (inside and outside) ( ) Sprinkler Leakage ( ) Other $ 3 , . , . . ; INSURANCE UQUIUHDI.._ Attachment II continued... Paqe -4- Inland Marina: $ (total cost of goods in transit at anyone time) co_ants: flab 0255 .' ~ 4