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HomeMy WebLinkAboutS03-Community Development - CiT"( OF SAN BERNrOINO - REQUEST Fe1 COUNCIL ACTION ~- ~. From: Kenneth J. Henderson, Director Community Development February 2, 1989 SubllC~"y.\~asiOVAL or SMALL BUSINESS R;.C":l.-' w LO~2~ STAGECOACH AIRPORTU ..:1~ n.n -'2 ($N.:1f1lE AMOUNT or $50'OOO.~ Dept: Dlt.: Synopsis of Previous CouncillCtion: None. 'lecommended motion: Adopt Resolution Conlact parson: Supporting dala It:E~hed: Ken Henderson Phone: 5065 staff Report Ward: 1-7 FUNDING REQUIREMENTS: Amount: $50,000.00 Source: (ACCT. NO.) (ACCT. DESCRIPTION) 121-547-57964 Small Business Loan Fund . /,/J Finance: P lJ-u:/' :ouncll Noles: Agenda Item No. 5~3 CITY OF SAN BERNOlDINO - REQUEST FeR COUNCIL ACTION STAFF REPORT Companv STAGECOACH AIRPORTER ,.Description of Companv The Stagecoach Airporter Limousine Service, Inc., provides transportation services primarily to travelers using either the Los Angeles or Ontario airports. The company was established in 1980 under a sole proprietorship and was later incorporated under California Law in 1986. In June, 1988, the company was purchased by Mr. John Bradshaw and Associates. This, in effect, has alleviated the financial and other constraints under which the company was operating. The new owner and president of the company, Mr. Bradshaw, has provided the Community Development Department with specific responses to problem areas identified by staff. These areas related to problems with cash flow, taxes, fixed assets, overall financial statements, personnel policies, etc. The corrective actions initiated by the new owners appear more than adequate in addressing the problem areas. The new owners have liquidated certain debts that forced bankruptcy and overall poor performance. These included vehicle insurance, worker's compensation, transportation fees, taxes and airport fees. In addition, the new owners have purchased two (2) new fifteen (15) passenger vans and made overall improvements to the state of the current vehicles. The company currently owns five (5) vehicles which are in good operating condition. Amount and Purpose of Loan The company is requesting a total of $50,000 for the purpose of updating and expanding its services. This will be accomplished through the addition of two (2) new vehicles. Included in this loan sum will be the cost of advertising, loan consolidation and working capital. Collateral The loan will be collaterlized by Title to the new vehicles, personal guarantee, accounts receivable and company's furniture and fixtures. February 2, 1989 75-0264 ~', ....-'". - -....I Job Creation The company expects to create a total of six (6) new jobs comprising of three (3) full time jobs and three (3) part- time jobs. Affect on Comoany As a result of this loan, the company will be in a much better position to compete effectively with other limousine services operating out of the various airports. Their financial position will increase tremendously because of the increased gross generation of income plus the reduction in vehicle down time due to repair and maintenance. Scheduling of trips should also improve because of the reliability of the new vehicles. The company will also be able to provide a more comfortable and aesthetically appealing environment for its customers. The reason this item was olaced on the suoolemental aqenda is that the loan aoolicant requires a decision by the Mayor and Common Council bY no later than February 20. 1989. Althouqh this item was submitted in time for the reqular aqenda. the internal review orocess was not comoleted orior to the reqular aqenda qoinq to orint. Recommendation I recommend adoption of the resolution. Ke~~~ Director of Community Development KJH/lab/3031 #""",, ""'~ VRESOWTION NUMBER 'wi 1 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND 2 DIRECTING THE EXECUTION OF A SMALL BUSINESS WAN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND STAGECOACH AIRPORTER IJI 3 THE AMOUNT OF $50,000.00. 4 6 6 7 8 9 10 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLWWS: SECTION 1. The Mayor of the City of San Bernardino is hereby authorized to execute, on behalf of the City of San Bernardino, a small business loan agreement with Stagecoach Airporter, a copy of which loan agreement is annexed hereto as Exhibit "1" and is incorporated herein by reference as though 11 12 13 14 15 16 17 18 19 20 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. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereot, held on the , 1988, by the following vote ___ day of to wit: AYES: Councilpersons 21 NAYES: ABSENT: 22 23 24 25 26 27 28 KJH/lab/0680 February 2, 1989 City Clerk 1 The foregoinq r~lution i. hereby approved~i. 1 2 3 " 6 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 , 1988. day of Mayor, city of San Bernardino Approved as to form and legal content: - .j city Attorney 22 23 24 25 26 27 28 I<JHjlabj0680 February 2, 1989 2 '\. ~ ffl "', , y '"'. , "'"'" j . CITY OF SAN BERNARDINO COMMUNITY DEVEU>PMENT DEPARTMEM'l' -Economic Development proqraa- (IDS Fee-Financed) . . , . .. BORROWER: ~TAGECOACH AIRPORTER PROJECT TITLE: BUSINE~S EXPANSION PROJECT ADDRESS: 265 E. MILL STREET. UNIT ''M'' SAN BERNARDINO, CA 92408 LOAN IS NUMBER CONTRACTS. 1989-002 OF COMMUNITY DEVEU>PMENT J(J}{/lab/0256 EXHIBIT "I" .' Section Rumber SBCTION I S101. 8102. 5103. 5104. 5105. ~'-) ~ TABU or -- "'-' ~gHfl.f. Titl, PARTIES, TERM, CONDITIONS PRECEDENT AND INDEPENDENT STATUS Partie. to the Agreement " Representative. of the Partie. and Service of Notice. Term of this Agreement Conditions Precedent Independent Contractor Status of the Borrower 5ECTION II PURPOSE OF AGREEMENT AND LOAN, LOAN TERMS, AND PROMISSORY NOTE 5201. 5202. 5203. 5204. 5ECTION III 5301. 5302. 5303. 5ECTION IV 5401. 5402. 5403. 5404. Purpose of the Agreement Purpose of the Loan Terms of the Loan Promissory Note REPRESENTATIONS AND COVENANTS OF BORROWER, AND DEFAULT Representations of the Borrower Covenants of the Borrower Default REPORTS, RECORDS AND AUDITS .--..... -- ba 2 ( 2 -.' 3 3 3 4 4 4 5 6 7 8 Reporting Requirements 10 Maintenance of Records 10 Audits and Inspections 11 Validity of Financial Documentation 11 Submissions i section Humber S405. S406. SECTION V .8501. S502. S503. S504. 5505. 5506. 5507. 5508. S509. 5510. 5511. 5512. S513. 5514. 5515. 5516. 5517. 5518. 5519. v .. TABLI cOCOHTEM'1'8 (Cont...) :) Tith lAU Release of Funds froll Escrow 11 12 Reconveyance Fe. GENERAL TERMS AND CONDITIONS Indeanification and Insurance Requirements 12 ,,, Prohibition Against Assignment 13 13 14 Limitation of Corporate Acts Amendments and Waivers Compliance with statutes and Regulations Conflict of Interest 14 14 16 Political Activity Prohibited Lobbying Prohibited Installation of Financial Assistance Sign 16 16 Press Releases 16 Discrimination Prohibited 16 Nondiscrimination, Equal Employment 17 Practices, and Affirmative Action Plan Employment Opportunities for Business 17 and Lower Income Persons Participation of Minorities, Women and 18 Small Businesses Captions 18 Effect of Legal Judgment 18 Choice of Law Governing this Agreement 19 Prohibition of Legal Proceedings 19 Rights and Remedies 19 ii Section Humber TAB~O' CONTENTS (Cont...) {t ,....., ~ TUh SECTION VI ENTIRE AGREEMENT S601. 5602. JOH/lab/0257 Complete Agreement Number of Pages and Attachments Execution (Signature) Page ATTACHMENTS Attachment I -- ~~loyaent Action Plan Attachment II -- Insurance Require_ents Hi ba 19 19 19 .'9 AG~ NUMBER t~ ...."". 1'lA9-002 v BE'lWEEN THE CITY or SAN BERNARDINO AND THB STAGECOACH AIRPORTllR BUSINESS EXPANSION (RELATING TO) THB PROJBCT ------------------------------------------------------------------- THIS City of San "City", and hereinafter AGREEMENT is made and entered into by and between the Bernardino, a municipal corporation, hereinafter call STAGECOACH AIRPORTER called the "Borrower". , Jf~tHE:2.:2.EtH 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 HCDBG, to address the community development needs of the City; and WHEREAS, the Community Development Department, hereinafter called the "COD", has been desiqnated by the City to provide for proper planning, coordination and administration of the City'S programs 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 gove~ental 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 ("EOP"), 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 terns 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: 1 ~.. @ ,...... .-. \.411111111% ......,I SECTION I. PARTIES. TERM. CONDITIONS PRECEDENT. AND INDEPENDENT STATUS S101. Parties to the Aareement. The parties to this Agreement are: 1. The Cit! of San Bernardino, a municipal corporation, having ts principal office at 300 North aDa Street, San Bernardino, California 92418. . 2. The Borrower, STAGECOACH AIRPORTER having its principal address at 265 E. Mill Str.. Unit M San Bernardino, CA 92405 The Borrower is (a ) Corporation (fictitious name enterprise, individual, California Corporation/general partnership/limited partnership.) , . 8102. ReDresentatives of the Parties and Service of Notices. 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 Agreement: Kenneth J. Henderson, Director Community Development Department 300 North "D" Street, Fifth Floor San Bernardino, CA 92418 2. The representative of the Borrower shall be: .Tnhn RT;Il'~h.qw 265 E. Mill Street. Unit M San Bernardino. CA 92408 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 re- quested 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 2 tv r.'" ",;, days of saicOhange. 8103. Ten of this Agreement:. This Agreement shall remain in full force and eftect: troa 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. """ ~ S104. Conditions Precedent. B. Prior to the execution of thie Agreement, the Borrower shall submit to the City for approval in writing an Affiraative Action Program Plan in accordance with Section 512 herein. In the event that Borrower is a corporation, then prior to the execution ot this Agreement, the Borrower shall provide the City with copies ot the following documents: A. 1. Borrower's Articles ot Incorporation, and all amendments thereto, as tiled with the Secretary ot state. 2. Borrower's By-Laws, and all amendments thereto, as adopted by the Borrower and properly attested. 3. Resolutions or other corporate actions ot 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 ot Good Standing from California Secretary ot 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 ot 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. S105. Indeoendent Contractor status of the Borrower. The parties agree that the Borrower is an independent contractor 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. SECTION II. PURPOSE OF AGREEMENT AND LOAN, LOAN TERMS, AND PROMISSORY NOTE 3 WI ~ :) .- '-" 8201. Purpose of the Aareement. The purpose ot th18 Agreement 18 to provide FIFTY THOUSAND AND 00/100----.------------------------------------- Dollars ($50,000.00 ) of IDP fund. to be loaned by the city to the Borrower, hereinatter called the "Loan", for the purpose and under the terms and conditions set torth herein. 8202. PurDose ot the Loan. The purpose ot the Loan i. to provide financial assistance to enable the Borrower to: 1. PurchaAe new vehicle. 2. Consolidate Loan. 3. Advertise. 4. Working Capital. 8203. Terms of the Loan. A. The city agrees to lend the Borrower, and the Borrower agrees to borrow from the City, an amount not to exceed FIFTY THOUSAND AND 00/100------------------- DO~, ($ 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 (a) be dated as of the closing, (b) bear interest on the unpaid principal at the rate of six percent ( 6% ) per annum, (c) be for a term of ei~ht ( II ) years, and (d) provide for payment of the principal amount thereof and the interest thereon in nintv-six (96 ) equal monthly installments of SIX HUNDRED. FIFTY SEVEN AND 07/100------------------------------------------------------- DOLlJURS ($ 657.07 ), 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 4 fB ef payment ot interO then accrued to the da~e payment 18 received, and the balance, it any, to the reduction ot the principal. 8204. PromissorY t{ote. A. The obligation of the City to make the Loan 18 eubject to receipt by the City of the Note and, at the City'. sole discretion, to the following additional condition. precedent: 1. The representations and warranties .ads herein by the Borrower shall be true and correct at the tiae of consideration by the Kayor 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: 1. Title to new vehicles. 2. Personal Guarantee. 3. Accounts Receivable. 4. Company's furniture and fixtures. 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. D. The Borrower acknowledges and agrees that the amount being provided under this loan shall be for a total of FIFTY THon~ANn Ann 00/100---------_ DOLIARS, ($ 50,000.00 ), and that no additional funds to cover additional projects costs, anticipated or unanticipated, incurred as a result of cost overruns or expenses in financing this project, are available under this Agreement. 5 \9 @t - '"'" ...." SECI'ION III. '-' REPRESENTATIONS AND COVENANTS OF BORROWER. AND DEFAU~ S301. ReDresentations of the Borrower. To induce city to enter into this Agreement, Borrower covenants and represents to city thatr 1. The execution, delivery and performance of the Note and this Agreement by Borrower have been duly authorized by Borrower. This Agreement constitute. . legal, valid and binding obligation of Borrower, enforceable in accordance with its term.. The execution and delivery of this Agreement and the note, and consummation of the transactions herein contemplated, will not conflict with, or result in a breach of, any of the teras, provisions or conditions of any indenture, contract, instrument or agreement, including any partnership agreement, to which Borrower or any of its officers is a party. No approval, consent or authorization of any governmental authority is necessary for the execution, delivery or performance by the Borrower of this Agreement or of any of the terms and conditions. 2. Borrower has good and marketable title to the real property identified in S204B of this Agreement, located at MIA , San Bernardino, California, and it is free and clear from all liens except as set forth herein: N/A . 3. Borrower is in compliance with all applicable statutes, laws, regulations, and executive orders of the United States of America and all states, foreign countries, other governmental bodies and agencies having juriSdiction over its business or properties, including (without limitation) all tax laws and Borrower has not received notice of any violation of such statutes, laws, regulations 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. 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 adverse effect on the business or properties of Borrower. 6 ~- ~ - B. Each and every _ ~nancial stateaent, docUHJl.. and record delivered by Borrower to the City in connection with this Agreement and the proposed transaction hereunder is . true and complete copy of said financial state.ant, docuaent or record, and fairly and accurately reflecta the information it purporh to portray. There haa been no chal1ge in the condition, financial or otherwise, of Borrower as ahown in the financial statements dated Septemher, 1988 , except changes in the ordinary course of business, none ot which, individually or in the aggregate, baa been aaterially adverse. S302. Additional Covenant. of'the Borrower. Borrower covenants and agrees that, from the date hereof, until payment in full on the Note and the interest thereon, that it will: 1. 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 desireable 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 S204B herein, then Borrower agrees to .aintain at Borrower's sole expense a policy of title insurance coverage equal to the amount of the loan. S. 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. 6. 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. 7. Use the Loan proceeds only for the purposes stated in this Agreement and for no other purpose or purposes. 8. Observe all applicable federal, state and local statutes and regulations as well as city of San Bernardino ordinances as further defined and set forth in Section 505 of this Agreement. 7 f8 11 o 0 In the event "'t'hat Borrower 18 a corporation, th.n Borrower 8hall do or cau.. to be don. all thlft9. n.ce.- sary to pres.rv. and keep In tull torca and .ttect It. corporate exlstenc., right. and tranchl.... 10. Not violate any law., ordlnanc.., governaenta1 rule. or requlations to which It 18 subject ancl not taU to obtain any license., p8l'11lt., tranchise. or oth.r governmental authorization neces.ary to conduct It. bU8ine.., which violation or tallur. to obtain alght ~ave a aaterla1 adver.. eff.ct on the baa1ne.., pro- . .pect., protita or condition (tlnanclal o~' otherwl.e) ot Borrower. t. 11. Submit an Annual Employment Report on or before the fifteenth (15th) day of June for the year(.) 1989 . The Annual Employment Report shall detail Borrower's compliance with the Employment Action Plan, Attachment I attached hereto ancl by th18 reterence incorporated herein, for the preceding twelve (12) month period. 12. 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 salle or similar business, in addition, said insurance coverage(s) shall be in accordance with th. general insuranc. provisions of thi. Agreement a8 8pecified in S5018.5, including fire, hazard and general comprehensive liability insurance, worker'. compensation, construction/rehabilitation liability, to protect such business and all property securing the City's loan. Said insurance shall be .aintained 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 Attorney by certified mail. 13. 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, assessments 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, respectively, before the same shall become in default. 5303. Default. A. The entire unpaid principal of the Note, and interest then accrued thereon, shall become and be forthwith due and 8 {I ~ payable upon wriGn de.and by the City or J'I city's a8sign., without any other notice or de.and of any kind or any presentment or protest, If anyone of the followlft9 event. (herein called an -Event of Default-) shall occur and be continuing at the ti.e of such de.and, whether volun- tarUy or involuntarUy, or, without llaitatlon, occurrlft9 or brought about by operation of law or pursuant to or in compliance with any jUdgment, decree or order of any court of any order, rule or regulation or any governmental body, providecl however that such sua shall not be payable if Borrower's payments have bean expre.sly extended by the City o~ the City'. assigns. -Evants of Default- shall Include, . 1. Payment of any installment of principal or interest on the Note is not pald 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 perfora or comply with any terms, condition8, or covenants as provided in this Agreement or in any instruments securing or related to this Agreement. 4. If any representation or warranty made by the Borrower in this Agreement shall prove to be untrue in any material respect, or if any report, financial statement or financial schedule or other instrument delivered under or pursuant to this Agreement or the transactions contemplated herein, to the City or to any other holder of the Note shall prove to be untrue in any material respect 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 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 creditors; (ii) of proceedings for the appointment of a receiver, trustee or liquidator of Debtor, or of a substantial part of its assets, being authorized or instituted by or against it; or (iii) of proceedings under any bankruptcy, reorganization, readjustment of t - - \'P ~ c1ebt, in.ol~, dissolution, liquidat~ or oth.r 8imilar lav-~.ny jurisdiction b.ing authoriz.d or instituted by or against the Borrow.r. A cessation or substantial reduction ot operations in the business which 1a the subject of this A9r...ent und.r circum.tances indicative to the City of a lack of intention or ability to provide continuing ..ploym.nt and economic b.nefit. for the area in which the busine.s is located. Failur. to submit the Annual EIIploYJIent "port r.ferred to in 8302 (12) w1t:hin ninety (to) day. of the scheduled due date ,,for sald Report. The loss, theft, substantial damage, destruction, abandonment, sale or encumbrance to or of any of the collateral securing payment of the Not., in any manner not fully covered by insurance, or the lIaking 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. 7. 8. 9. REPORTS. RECORDS AND AUDITS 5401. ReDortina Reauirements. A. At such times and in such forms as the City may require, there shall be furnished to the City such 8tatements, records, reports, data and information as the City may request pertaining to matters covered by this Agreement. B. Borrower will provide its financial and accounting statements to the City for the period ending Decemher, 1989 and annually thereafter during term of this Agreement, but not later than three (3) months following the expiration of any such period, and at each other time and in such form as the City may prescribe. S4 02. Ma intenance of Records. A. Records, in their original form, shall be maintained in accordance with the requirements prescribed by the Grantor and the City with respect to all matters covered by this Agreement. Such records shall be retained for a period of 10 e t,;~ dx (6) year. an.. teraination ot tbls ACJQ..nt and after all other pendin;lmatters are closed. wPendlng Natters- in- clude, but are not ll.ited to, an audit, litl9atlon, or other action. involviftCl record.. The City aay, at it. discretion, tat. possession ot and retain 8ald records. B. Records in their original fora pertainin9 to matters covered by tbi8 Agreement sball at all tilles be retained within the City of San Bernardino, or so.e other location specifically authorizing in writin9 by the Director of Co_unity Development, unless authorization to reJllove the. is granted in writing by the City. 8403. Audit:s and InsDecl:ions. A. At any time during normal business hours and as often as the Grantor, the U.8. Comptroller General, AUditor General of the state of California or the City may deem necessary, the Borrower shall make available to tbe City for examination, all of its records with respect to all matters covered by this Agreement. 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, includinCJ all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all matters covered by this Agreement. B. The City shall have the authority to make physical inspec- tions and to require such pbysical safeguarding devices as locks, alarms, safes, fire extinguiShers, sprinkler system, etc., to 8afequard property and/or equipment funded or secured by this Agreement. Notwithstanding such inspection authority, Borrower is soley responsible for the provision of security and for the safe guarding of the business and its property. S404. Val1ditv of Financial Documentation Submissions. Financial reports required to be prepared and submitted by the Borrower to the City shall be accurate and correct in all respect8. S405. Release of Funds from Escrow. 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 8202 "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, 11 . ~ credit report8 (~), Title Reports, or oth~slmil.r C08ts shall be delineated in th. .scrow instructions and disbursecl from the loan proceed. upon openiftCl ot the ..crow account. 5406. Reconvevance Fe. In the event that real property is used to secure this Loan, then Borrower agree. to pay any costs incident to title reconveyance, including, it applicable, trust.e'. fees, attorney tees, document preparation tees, recording fees or any other related expenses. SIC'l'IOH V" ~ .~ ' . GENERAL TERMS AND CONDITIONS 5501. Indemnification and Insurance Reauirements. A. Indemnification: The Borrower undertakes and agrees to defend, indemnify and hold harmless the City and any and all of the City'S officers, 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 whatsoever, for death or injury to any person, including Borrower'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 sub borrower of any tier whether or not contributed to by any act or omission, active or passive, negligent or otherwise, except tor the sole negligence of the City, or the sole negligence of any of the City'S officers, agents or employees. City approval of the Borrower's performance, or failure to object, shall be no defense to Borrower concerning its undertaking herein to defend and indemnify City and others. 8. Insurance: 1. The Borrower shall provide and maintain at its own expense throughout the term of this agreement the insurance requirements specified herein. Evidence of insurance 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 containing the appropriate cancellation notice language and additional insured/loss payee language as specified. 2. 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 bonding requirements 12 5. e ~ 3. under this ~ement. The City'. Addit~al In.ured Endorsement tOl'll, or a fora approved by the City, stating that the Borrower Is so insured, must accompany any de.and for funds unle.s said form bas been pre ViOU81y subaitted and approved by the City. (Certitica tion of insurance shall be procured, filed and approved in 8trict compliance with City rules and regulations.) With respect to the interests of the Citr' sueIl in surance 8hall not be cancelled, reduced n coverage or limited or non-renewed, except after thirty (30) days written notice by receipted delivery baa bean given to the Office of the City Attorney, City Ball, 300 North ' "D" Street, San Bernardino, CA '2418. Policies ot insurance and fidelity bonds, except for poliCies covering Worker's Compensation and Employees' and Volunteer's OWned and/or Leased Vehicles, shall name the City as an Additional Insured and said endorsements or other evidence of insurance shall so indicate. Fidelity bonds shall nalle the City as loss payee or additional insured. In the event of any cancellation, non-renewal, reduction or limitation of coverage, or notice that such will be effected, City lIay, but is not required to, obtain insurance to protect its interest., in which event the cost thereof shall be reimbursed by Borrower forthwith. Any failure to forthwith reimburse such expense shall constitute an Event of Default. The City reserves the right at any time during the term of this Agreement to change the amounts and tyPes of insurance required hereunder by giving Borrower ninety (90) days written notice. 4. The Borrower shall maintain minimum insurance coverages prescribed in Attachment II of this Agreement, which by this reference is incorporated herein. 8502. Prohibition Aaainst Assianment. A. The Borrower shall not assign this Aqreement, nor assign or transfer any interest or obligation in thi8 Agreement (whether by assignment or novation) without prior written consent of the City. No part of the property securing this Agreement shall be assiqned 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. B. 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. 5503. Limitation of Coroorate Acts. 13 <<J ~ In the event thD Borrow.r i. a corporatiOD~en th. Borrower shall not amend It. Articles of IncorPOration or Bylaws, mOVe to dissolve, transfer any assets d.rived from funds provicled under this Agr....nt, or take anI oth.r steps which may materially affect its operations with n th. p.rformanc. of this Agreement without first notitrlng the City in writing. The Borrow.r shall notify the C ty immediately in writing of any change in the Borrower's corporat. n.... S504. Amendments and Waivers. This Agr.ement..y not be chaftCled or allended orally,. and no waiver h.r.und.r .ay be oral, but any change or am.ndment hereto or any waiver her.under lIust be in writing and sign.d by the party or parties against whom such Change, amendment, or waiver is sought to be entorced. 5505. ComoHance with statutes and Regulations. A. The Borrower warrants and certifies that in the performance of this Agreement, it shall comply with all applicable statutes, rules, regulations and orders of the United states, the state of California, the County and City of San Bernardino 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. Borrower 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. Borrower covenants that the Davis-Bacon Act as amended, the Contract Work Hours and Safety standards Act, and the Copeland RAnti-Xickback Act- shall be a part of all con struction contracts awarded by the Borrower pursuant to this Agreement and all sub contracts thereto. 5506. Conflict of Interest. A. The Borrower covenants that none of its directors, officers, employees, or agents shall participate in selecting sub contractors, or administering subcontracts supported (in whole or in part) by Federal funds where such person is a director, officer, employee or agent of the subcontractor, or where such person knows or should have known that: 1. A member of such person's immediate family, or partner, or organization has a financial interest in the sub contract; 2. The subcontractor is someone with whom such person has negotiated or is negotiating any prospective employment; or 14 f& ~ o 0 3. The participation ot such persons would be prohibited by the California Political Reform Act, CAlltornia Government Code Section .7100 et seq., if such per80n were a pUblic Officer, because such person would have a "financial or other interest- in the subcontract. B. Definition., 1. The term "iuediate famUy. inClUdes, but is not U.ited to, those persons related by blood or marriage, such a. husbancl, wife, father, mother., brothe~, sistar, 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. C. The Borrower further covenants that no officer, director, employee or agent shall solicit or accept gratuities, favors, or anything of monetary value, from an actual or potential subcontractor, supplier, a party to a sUb agreement, (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 immediate family with the proposed subcontractor and its officers, 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 15 :t. G. ~ dino, state ot 4:lltornia, conflict of intere.t. The Borrower warrant. that it has not paid or given and will not payor give to any third person any money or other consideration for obtaining this Agreellent. ~~ and Federal regu~ion regarding B. The Borrower covenants that no lIelllber, Officer, employee of Borrower shall have any interest, direct or indirect, in any contract or subcontract of the proceeds thereot for work to be perforaed in connection with this project c1urlng his/her tenure as such employee, meabaI: or officer or tor OM (1) year thereafter. ..: . The Borrower shall incorporate the foregoing 8ubsections of this section into every agreement that it enters into in connection with this project and shall sub8titute the tera "SUbcontractor" for the term "Borrower" and "Sub-contractor" for "Subcontractor". Political Activitv Prohibited. None of the funds, materialS, property or services provided directly or indirectly under this Agreement 8hall be used for any partisan political activity, or to further the election or defeat of any candidate for public office. S508. LobbvinG Prohibited. 8507. None of the funds provided under this Agreement shall be used for any purpose designed to support or defeat any pending legislation or administrative regulation. 8509. Installation of Financial Assistance 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 i8 requested by the Director of Community Development Depart mente 8510. Press Releases. In 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 sponsoring agency of the project. 5511. Discrimination Prohibited. 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 16 e it be subjected toGsCrlmination under this ,Qraa /projeot. For purpose8 of this Section, title 24, cocSe of Federal Regulation. Section 570.601(b) defines specitlo discriminatory actions which are prohibited and correction action which shall be taken In situations as defined therein. 8512. Nondiscrimination. Eaual hll)lovment Practice. and Attirma tive Action Program. The Borrower shall comply with the nondiscrt.ination and affirmative action provision. of the laws of the united States of luriea, tJie state of CaUtorn1a, and the City. In perforaing this Agreement, the Borrower shill not dis criminate in its employment practices against any employee, or applicant for employment because of per8on's race, religion, ancestry, color, national origin, sex, age or physical handicap. Any subcontract enterecl into by the Borrower relating to this Agreement, to the extent allowed hereunder, shall be subject to the provisions of this paragraph. 5513. EmDlovment 01>Dortunities for Business and Lower Income Persons. Any project/program funded in part or in whole with COII- 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 direct Federal financing assistance fro. the Department of Housing and Urban Development and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 use 1701u. Section 3 requires that to the greatest extent feasible opportunities 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. 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 Housing 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. The Borrower will send to each labor organization or representative of workers with which he has a collective 2. 3. 17 o t1 barqainin9 Qre...nt or oth.r contract ~ understandift9, if any, a notice advidl'lf the sald labor oX'9anbation or worker'. representative of its coaaitaents und.r thl. section 3 clause and .hall post copies of the notice in conspicuous places available to e.ploy... and applicants for employment and tralnift9. 4. The Borrower will includ. this Section J olause In .very subcontract tor work in cOMection with the proj.ct and will, at the direction of the applicant for or r.oipient of Federal financial assi.tance, tak~ ~()propriate action pursul!nt to the subcontract upon a f1.nd1Dg that the subcontractor i. in vlolatii'\ of regulations issued by the Secretary of Rousing and Urban Developaent, 24 cn, Part 135. The Borrower will not subcontraot with any subcontractor where it has notice of knowledge that the latter has been found in violation of regulations under Title 24, en 135 and will not let any .ubcontract 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 regu lations set forth in Title 24 en, Part 135, and all applicable rules and order of the Departaent issued thereunder prior to the execution of the contract (Agreement), shall be a condition of the Federal finan cial assistance provided to the project, binding upon the applicant or recipient for such aS8iatance, its successors, and assigns. Failure to fulfill these requirements shall subject the applicant or recipient, its Contractors and subcontractor., its successors and assigns to those sanctions specified by the grant or loan agreement or contract through which Federal assis tance is provided, and to such sanctions as are spec Hied by Title 24 CFR, Part 135. S514. Participation of Minorities. Women and Small Businesses. To the fullest extent possible in the administration of this Agreement, Borrower agrees to provide opportunities for minorities, women and small businesses to participate in procurements under this Agreement. S515. Captions. The section headings appearing herein shall not be deemed to govern, limit, modify or in any way affect the scope, meaning or intent of these conditions. 5516. Effect of Legal Judgment. Should any covenant, condition or provision herein contained be held to be invalid by final judgment in any court of competent juriSdiction, the invalidity of such covenant, 18 e 8 condition or pr~sion shall not in any WaY~feot any other cov.nant, condition or provision herein contained. 8517. Choic. of Law Governina this Aar....n~.. This Agre.m.nt shall be 9ov.rn.cS by and construed in accor dance with the laws of the .tata of CaUfornla. 8518. Prohibition of Leaal Proceedina.. Th. Borrower i8 prohibited troa using Grant lunda rec.ived under this Agr....nt, or fUl'lda realbed .. a result of this 'Agreeunt, for the pUrPOse of in,stitutiftCl legal proceecSlll9. against the City or ft.s otficlal repr.sentative. 8519. Riahts and Remedies. In the event any party fails to perfor., in whole or in part, any promise, covenant, or agreement heren, or should any representation made by it be untrue, any aggrieved party may avail itself to all rights and remedies, at law or equity, in the courts of law. Said rights and remedies are in addition to those provided for herein. 5ECTJ:ON VI. ENTIRE AGREEMENT. 5601. ComDlete Aareement. This Agreement contains the full and complete Agree.ent between the two parties. No verbal agreement or eonversa tion with any officer or employee of either party shall effect or modify any of the terms and conditions of this Agreement. 5602. Number of Paaes and Attachments. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes, Twenty (~,J pages and Two (-1-) attachments which constitute the entire understanding and agreement of the parties. //// IIII It , ~ ~ . IN WITNlS8 WHERJeQ the city of 'an Bernardl~ and thee Borrow.r have caus.d this A9r....nt to be .x.cuted by their duly authorizecl repre8entative. on th1. day ot , 1'_. A'l'TES'1': CITY OF SAN BERNARDINO City Cl.rk Kayor . r ~ (CORPORATION) BY Corporate President ATTEST: BY Corporate Secretary Approved as to fora and legal content: BY City Attorney KJH/lab/0683 20 ~ o (~ o ATTACIIMEHT I -IMPLOYMEN'l' ACTION PIAN- Economic Development Program Z.ployment Action Plan statement of Borrower Borrower does hereby state that the funds ~esultinq troa ~... 'Loan Agr8elent entered into on behalf of the city of San Bernardino (hereinafter -CityW) and Borrower shall be used solely for furthering the purpose of the Economic Development Program (EOP). The purpose of BOP assistance is to benefit the low and moderate income residents of the City of San Bernardino through the creation and/or retention of jobs to said per- sons. Pursuant to the purpose of the EOP the Borrower agrees to comply with the following Employment Action Plan: Borrower understands and agrees that in order to deter- mine that said program purpose is being met, an Annual Employment Report shall be filed with the City. Borrower understands that failure to meet the objectives set forth in this Employment Action Plan or failure to comply with the requirements of filing the Annual Employment Report may result in the entire outstanding balance of the loan plus interest, being due upon written demand by the City, pursuant to Section 302 of the Loan Agreement and this statement. JCJH/lab/0254 Economic Development Program " o ATTACIDIEJft' II INSURANCI RlQUIRlMENTS til o (Inatructions tor completing, executing and submitting Evidence of Insurance to the City ot San Bernardino.) Insured: (Contractor, Lessee, Permittee, Borrower, Btc.) .. v:aent/Reference No. Date, ..... . A. DfSURED 1. To expedite completion of the insurance requirements, please give your insurance agent or broker a copy of the Insurance Requirements Sheet along with these instructions and endorsement 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 questions relating to insurance should be directed to the person or office responsible for your contract, lease, permit, or other agreement. (See items 9 and 10 below.) B. :INSURANCE AGENT OR BROKER 1. Acceptable Evidence -- The appropriate City Special Endorse- ments are the preferred form of evidence. No modifications to the fora are permitted. Alternatively, certified copies of the full policy containing additional insured and thirty (30) day cancellation notice language 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 insurance. Binders are acceptable as 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, lease or permit have been provided. 3. Signature -- Please 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 4. ~ - f.') Underwriter -- rCn..e and address of the fli!urance company underwriting the coverage must be noted on the endorsement tora. In the case of sYndicates or SubSCription POllcies, indicate lead underwriters or managing agent and attach a schedule of 8ubscdbers, includiftCl their percent participa- tion. 5. Document Reterence -- Include reterence to either the specitic City agreement (bid, contract, lease, etc.) or indicate that all such agreements are covered. Xnsurance Requirem~nts' s. Coverage and Lbits -- !'he coverage. and Umits tor each type of insurance are specified on the insurance requirement sheet. When coverage i. on a scheduled basis, a separate sheet may be attached to the endorsement listing such scheduled locations, vehicles, etc., so covered. 7. Excess Insurance -- Endorsements to excess policies will be required when primary insurance is inSUfficient to comply with the requirements. 8. 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. , . 9. Person to Contact -- Completed endorsements, correspondence and questions relating to the required in8urance are to be directed to the fOllowing representatives: 10. Technical Assistance -- Improperly completed endorsements will be returned to your insured for correction. 11. Delay in submitting properly completed endorsement forms may delay your insured's intended OCcupancy or operation. 12. 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 - ~!J . fi\.~ - - o INSURANCE REQUIREMENTS (Attachment II) o HAHB AGREEMENT/REFERENCE NUMBER DATI The rollowin9 coverages noted with an .X- are required with the COmbined Sin91e Limits (CSL) as noted on the right. " Llaitt statutory S 100.000 Worker'. Co-pensation Employers Liability ( ) Broad Fora All states Endorsement ( ) Voluntary Compensation Endorsement ( ) Longshoremen's and Harbor Workers' Compensation Act Endorsement ( ) General Liability ( ) Premises and Operations ( ) Contractual Liability ( ) Independent Contractor. ( ) Products/Completed Operations ( ) Broad Form Property Damage ( ) Personal Injury ( ) Broad Fora Liability Endorsement ( ) Fire Leqal Liability ( ) Watercraft Liability ( ) Incidental Medical Malpractice (if applicable) ( ) Explosion Hazard ( ) Collapse Hazard ( ) Underground Hazard ( ) Garagekeepers Legal Liability ( ) Hangar Keeps Legal Liability ( ) OWned Automobiles ( ) Nonowned Automobiles ( ) Hired Automobiles ( ) $1.000.000 Automobile Liability (if auto is used for this contract.) Professional Liability (if applicable) $1. 000.000 $ 500.000 Property Insurance 90' value of buildinq ( ) Extended Coverage ( ) Vandalims and Malicious Mischief ( ) Flood ( ) Earthquake $ 3 ~- t:~ . . ( ) Debri. ReIlOV~ 0 ( ) Srrlnkl.r Lea age ( ) W ndatora ( ) other Aircraft Liability (bodily injury and property damage.) ( ) Passenger Liability (per seat) $ Ocean Marin. Ocean Marine Liability ( ) Protection and Jnduni ty ( ) Running Down Claus. ( ) Pollution ( ) Jones Act ( ) Wharfingers Liability ( ) Cargo ( ) Inchmaree Clause ( ) Charter's Legal Liability ( ) Fire Legal Liability Fidelity Bond XJH/lab/0255 4 s s . ~. 90t of cost of reDlace- mente S 25.000 minimUlll