HomeMy WebLinkAbout22-Community Development
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CiTf'OF SAN BIERNARDI,Q - REQUEQ FOR COUNCIL AClGN
Dept: ChmlIltnity DevelClp'lellt
Subjact: ~ OF' SMAIL IIlSINESS lOAN
TO MA'IlGARET ANN'S ARl', FRAMING
AND GIFT GAUERY IN '!HE
OF $50,000.00
From: Ke1U'1eth J. ~, Director
Date: JUly 18, 1988
Synopsis of Previous Council action:
None
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Recommended motion:
1\I:kpt Resolution
Contact person:
Ken Herrlersan/Val Mahabir
Phone:
5065
Supporting data attached:
staff Report
Ward:
7
FUNDING REQUIREMENTS:
Amount: $50,000.00
Source: (Acct. No.)
(Acct. DescriPtion) Small Business !Dan FIlIXi
Finance: (~~
Council Notes:
AM_"" I+ft~ "'~ (
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~ITY OF SAN BERNARDlio - REQUEiT FOR COUNCIL AC~ON
STAFF REPORT
On JI.Ine 16, 1988, the Econanic Develqment Program Camnittee (EDPC) met
am :recaII1IeOOed to the Mayor am c.....wJ.J!1 coorx:il a~ of the follcr.r.ri.n;J
loan request for the tenn am date stated:
CaIpany:
owners:
Location:
loan Am:lunt:
Term:
Rate:
MaJ:garet Arm's Art, FraJnin;J am Gift Gallery
Limen am MaJ:garet Arm Riddle
1996 Del Rosa
$50,000.00
Fifteen (15) Years
Eight Peroent (8%)
Descriotion of ~1lV
'lhis bJsiness provides art classes (44% of total sales), custanized
frames for art (36%), gifts, art, am S1Wlies (20%). 'nle principals am
sole owners of this bJsiness are MaJ:garet am Limen Riddle (wife am
husban:i) .
MaJ:garet Riddle has been a professional artist am teacher for the past
fifteen (15) years, am holds a Ryan Designated SUbject ~
Credential fran UCR. She has taught adult education at San Bemardino
Valley College am UCR for various len;Jths of tiIne totalin;J seven (7)
years.
Limen Riddle is now the branch manager for A.M. rewis in Pc.mJna am has
been with that cxrrpany for twenty-two (22) years. His current eamirgs
fran A.M. Iewis are awroxiJnately $30,000 per year. Mr. Riddle
contril::utes management skills am the ability to make custan ftQllleS to
the cxrrpany.
Am:lunt am PurPose of loan
'nle Riddles are requestin;J a loan of $50,000 fran the Camm.mity
Develqment Deparbnent. 'nle funds will be used for the addition of a
bat.hrocan to CXIl'ply with the city buildi.rg codes, erection of a street
sign, a frame "choppin;J" machine, parkin:.J lot lightin;J, resurfacin;J of
parkin:.J lot, inventory am operatin;J funds.
Collateral
'!he cxrrpany lists the follcr.r.ri.n;J on their application:
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Oriqinal Cost
Present
Market
Value
Present
Mortgage
Balance
r.am;B.1iJ.di.rg
7/18/88
$219,892
$350,00
$214,383
Inventory
Total
0 0 0
Present Present
Market ~rtgaqe
Oriainal Cost ~ ~, ance
$ 65,678 $ 57,782 $ -0-
S31. 561 S31.561 S -0-
$317,131 $439,343 $214,383
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Furniture, Fixtures
Autaoobile
Job creation
1988 = 0
1989 = 1 (Full tiDe art instnIc:tor.)
1990 = 2 (part time (1/2) store help.)
Affect on ~nv
A loan fran the ('rIrmunity Develcpnent Deparbnent will i.npact Margaret
Arm's Art, FraIni.n:J am Gift Gallery in the foll~ ways:
a) With the addition of a bathroan, city codes will be met, 'Itlich will
allOW' her to oonvene bio (2) children's art cl~~S'es consi.stin:J of
thirteen (13) pIPils each. Tuition will be $45.00 per mnth per
pIPil, am does not in=lude suwlies, She pnsmtly has a wai~
list of one hun:ired, three (103) children whose parents wish to
enroll them in the art clas,:9S'.
b) By erec:ti.rY;J an outdoor street sign, the b.lsiness will be able to
attract a potential clientele fran the 22,000+ north am south
ocmmltin;J vehicles on an average day. Specific m:metary annmt
would be hard to calculate, b.tt inpact should be significant.
c) By acquirin;J a "frane choppin;J" _chine, they will be able to do
"in house" custan framin;J, rather than "jabbin;J azt" 1IiOrk as is
currently the proc",nlrEl. In house ability should inmediately
increase gross sales by $13,257 per year am double the gross
margin on those particular items. 'lhe framin;J portion of the
b.lsiness currently =tributes thirty-four percent (34%) of the
b.lsiness, am twelve percent (12%) of the total gross profit, with
the new capacity am the ability to use cheaper raw _terials, the
"custcm framin;J" will then constitute an estiInated fifty-four
percent (54%) of the b.lsiness am thirty-seven point eight percent
(37.8%) of the gross profit.
d) 'lhe installation of adequate parJdrg lot lightin;J will provide a
sense of security for those who atterrl ~CPlSed night classes.
Specific inpact is $45.00 per student per mnth, with the capacity
of beirq able to add four (4) night classes of thirteen (13) people
per class.
e) Resurfacin;J of parJdrg lot to prevent any further problems of
parJdrg facility denigration.
7/18/88
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f) Increase inventorY by $15,000, ldUcil. will :increase c:::ust.c:IIIBr'.
~tun1ty for plrCIlase.
9) Increase cub reserve 80 they are able to reedi1y met: daily
bJsiness activitiAB, or act upcn _~.I.ate """'isir-\.
'lhe net eMlrall iDpact of the lOlln will be in the pt'OIfisi.cn of the
capital to finish the .t:...........,in;, capital im_t.-L, _ inYwnt:aty
:increase libicb the CJWI'IES beli8Y& will cx.nt:ril:lUt.e to the ~1lI'l".atia'l
of their sales potent.ial. ani profit.
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'lhis loan will be collateralized by Deed of Trust with Ass~.......jL of
RentS ani Fixtures ani. owners guarantee. OWnerS pea,8a'lal financial.
statement reflects sufficient assets to be able to guarantee lclln.
Real Estate: $377,000
other: $ 25,000
Persa1al Guarantee: $ 50,000
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I r~ ........ d adcpt:icn of the attadled resolution.
:Kenneth ;J.
Director of nWlIl'I'1ity
KJIVlab/1069
7/18/88
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RESOLUTION NUMBER
1
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND
2 DIRECTING THE EXECUTION OF A SMALL BUSINESS LOAN AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO AND MARGARET ANN'S ART,
3 FRAMING AND GIFT GALLERY IN THE AMOUNT OF $50,000.00.
4
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
5
SECTION 1. The Mayor of the city of San Bernardino is
6 hereby authorized to execute, on behalf of the City of San
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Bernardino, a small business loan agreement with Margaret Ann's
Art, Framing and Gift Gallery, a copy of which loan agreement is
9 annexed hereto as Exhibit "1" and is incorporated herein by
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reference as though fully set forth at length.
The agreement
provides for the loaning of funds from the small business loan
12 program in the amount of $50.000.00.
13 I HEREBY CERTIFY that the foregoing resolution was duly
14 adopted by the Mayor and Common Council of the City of San
15 Bernardino at a meeting thereof, held on the
16 day of , 1988, by the following vote
17 to wit:
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7/18/88
AYES:
councilpersons
NAYES:
ABSENT:
City Clerk
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RESOLUTION BETWEEN CIT~ SAN BERNARDIN~D MARGARET ANN'S ART. c:>
FRAMING AND GIFT GALLE~
The foregoing resolution is hereby approved this day of
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, 1988.
Mayor, City of San Bernardino
5 Approved as to form and
6 legal content:
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7/111/811 ?
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CITY OF SAN BERNARDINO
COMMUNITY DEVELOPMENT DEPARTMENT
"Economic Development Program"
BORROWER:
MARGARET ANN AND LINDEN RIDDLE
PROJECT TITLE:
MARGARET ANN' S ART, FRAMING AND GIFT GALLERY
PROJECT ADDRESS:
1996 DEL ROSA AVENUE
SAN BERNARDINO, CA 92404
LOAN IS NUMBER
CONTRACTS.
OF COMMUNITY DEVELOPMENT
88-005
KJHjlabj0256
7/18/88
Exhibit "1"
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section
Number
SECTION I
S101.
S102.
S103.
S104.
S105.
SECTION II
S201.
S202.
S203.
S204.
L
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OTABLE OF
~QH1:EH1:a
Of?:
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"
Title
PARTIES, TERM, CONDITIONS PRECEDENT
AND INDEPENDENT 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 AND LOAN, LOAN
TERMS, AND PROMISSORY NOTE
Purpose of the Agreement
Purpose of the Loan
Terms of the Loan
Promissory Note
SECTION III REPRESENTATIONS AND COVENANTS OF
BORROWER, AND DEFAULT
S301.
5302.
5303.
SECTION IV
S401.
S402.
S403.
S404.
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
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2
3
3
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4
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5
6
7
8
10
10
11
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section
Number
S405.
S406.
SECTION V
S501.
S502.
S503.
S504.
S505.
S506.
S507.
S508.
S509.
S510.
S511.
S512.
5513.
S514.
5515.
5516.
S517.
S518.
S519.
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TABLE OF CONTENTS (Cont...)
Title
~
Release of Funds from Escrow
11
Reconveyance Fee
12
GENERAL TERMS AND CONDITIONS
Indemnification and Insurance
Requirements
Prohibition Against Assignment
Limitation of Corporate Acts
12
13
13
Amendments and Waivers
14
Compliance with Statutes and
Regulations
Conflict of Interest
14
14
Political Activity Prohibited
Lobbying Prohibited
Installation of Financial Assistance
Sign
16
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
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Section
Number
SECTION VI
S601.
S602.
XJH/lab/0257
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TABW OF CONTENTS (Cont...)
Title
ENTIRE AGREEMENT
Complete Agreement
Number of Pages and Attachments
Execution (Signature) Page
ATTACHMENTS
Attachment I
Employment Action Plan
Attachment II -- Insurance Requirements
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AGREEMENT NUMBER
88-00SC
BETWEEN THE CITY OF SAN BERNARDINO AND THE
MARGARET ANN'S ART,
FRAMING AND GIFT GALLERY
(RELATING TO) THE
PROJECT
COMMERCIAL REHABILITATION (leasehold improvement)
-------------------------------------------------------------------
THIS
City of San
"City", and
hereinafter
AGREEMENT is made and entered into by and between the
Bernardino, a municipal corporation, hereinafter call
Mar2aret Ann and Linden Riddle
called the "Borrower".
,
JiI1:HEaaE1:H
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 "CDD", has been designated 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 CDD 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:
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A~BEEHEH1:
SECTION I.
PARTIES. TERM. CONDITIONS PRECEDENT. AND INDEPENDENT STATUS
S101. Parties to the Aareement.
The parties to this Agreement are:
1.
The City of San Bernardino, a municipal corporation,
having its principal office at 300 North "D" Street,
Be~nardino, California 92418.
San
2.
The Borrower, Margaret Ann and Linden Riddle
having its principal address at 1996 Del Rosa Avenue
San Bernardino, CA 92407
,
.
The Borrower is ( a) sole proprietorship
(fictitious name enterprise, individual, California
Corporation/general partnership/limited partnership.)
S102. 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:
Xenneth.J. Henderson, Director
Community Development Department
300 North liD" Street, Fifth Floor
San Bernardino, CA 92418
2. The representative of the Borrower shall be:
Margaret and Linden Riddle
S628 Acacia
San Bernardino, CA 92407
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
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days of said change.
S103. Term of this Aareement.
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.
S104. Conditions Precedent.
A. Prior to the execution of this Agreement, 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
adopted 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.
5105. IndeDendent 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
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S201. Purcose of the Aareement.
The purpose of this Agreement is to provide FIFTY THOUSAND
AND 00/100---------------------------------------------------- Dollars
($ SO,ooo.oo ) of EDP 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.
S202. Purcose of the Loan.
The purpose of the Loan is to provide financial assistance
to enable the Borrower to:
Rehabilitate property located at 1996 Del Rosa Avenue, San Bernardino,
California, 92404, in accordance with the scope of work signed and
dated May 10, 1988.
S203. 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------------------- DOLLARS, ($ SO,OOO.oo ),
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 II Note II 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 eight percent
(8% ) per annum, (c) be for a term of fifteen ( IS )
years, and (d) provide for payment of the principal amount
thereof and the interest thereon in one-hundred. eighty
(180) equal monthly installments of FOUR HUNDRED. SEVENTY-
~FVFN ANn 80/100--------------------------------------------- DOLLARS
($477.80 ), each including principal and interest, and
continuing until said principal and interest are paid in
full.
C. Each monthly installment shall be applied first to the
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payment of interest then accrued to the date the payment is
received, and the balance, if any, to the reduction of the
principal.
5204. promissorv Note.
A. The obligation of the city to make the Loan is subject to
receipt by the City of the Note and, at the City's sole
discretion, to the following additional conditions
precedent:
1. The representations and warranties made herein by the
Borrower shall be true and correct at the time of
consideration by the Mayor and Common Council of the
city of San Bernardino with the same effect as though
made at the closing.
2. Receipt by the City from the Borrower of all executed
documents in connection with this Agreement; satisfac-
tory in form and substance to the City.
3. If matching funds constitute a part of this Agreement,
then Borrower shall obtain matching funds in an amount
equal to the amount of this loan and, as required by the
city, deposit said matching funds into an account with
N/A Escrow Agency.
4. The City and the Borrower have mutually agreed to the
terms and conditions as set forth in the Employment
Action Plan, which is attached hereto as Attachment I
and by this reference is incorporated herein.
B. The Note is to be secured as follows:
-Personal Guarantee.
-Deed of Trust with Assignment of Rents.
-Security Agreement for Fixtures.
C. Borrower shall have the right, without penalty, to prepay
the Note together with the accrued interest thereon as of
the date of such prepayment.
D. The Borrower acknowledges and agrees that the amount being
provided under this loan shall be for a total of
FIFTY THOUSAND AND 00/100--------- DOLLARS, ($ SO,ooo.oo ), 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.
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SECTION III.
REPRESENTATIONS AND COVENANTS OF BORROWER. AND DEFAULT
S301. ReDresentations of the Borrower.
To induce City to enter into this Agreement, Borrower
covenants and represents to City that:
1. The execution, delivery and performance of the Note and
this Agreement by Borrower have been duly authorized by
Borrower. This Agreement constitutes a legal, valid and
binding obligation of Borrower, enforceable in
accordance with its terms. 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 terms,
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 1996 Del Rosa. Avenue ,
San Bernardino, California, and it is free and clear
from all liens except as set forth
herein: John Collings and Ntina Coulis, Husband and Wife as
community property ($21S.000.00 (estimated value of property is
S3S0.000.00)
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.
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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. There has been no change in the
condition, financial or otherwise, of Borrower as showncin
the financial statements dated December, 1987 . ,
except changes in the ordinary course of business, none of
which, individually or in the aggregate, has been materially
adverse.
S302. Additional Covenants 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 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.
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.
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9. In the event that Borrower is a corpora~ion, then
Borrower shall do or cause to be done all things neces-
sary to preserve and keep in full force and effect its
corporate existence, rights and franchises.
10. Not violate any laws, ordinances, governmental rules or
regulations to which it is subject and not fail to
obtain any licenses, permits, franchises or other
governmental authorization necessary to conduct its
business, which violation or failure to obtain might
have a material adverse effect on the business, pro-
spects, profits or condition (financial or_otherwise) of
Borrower.
11. Submit an Annual Employment Report on or before the
fifteenth (15th) day of June for the year(s) 1988
throuyrh term . The Annual Employment Report shall
detai 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.
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 same or
similar business; in addition, said insurance
coverage(s) shall be in accordance with the general
insurance provisions of this Agreement as specified in
S501B.5, including fire, hazard and general
comprehensive liability insurance, worker's
compensation, construction/rehabilitation liability, to
protect such business 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 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.
S303. Default.
A. The entire unpaid principal of the Note, and interest then
accrued thereon, shall become and be forthwith due and
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payable upon written demand by the City or the city's
assigns, without any other notice or demand of any kind or
any presentment 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 volun-
tarily or involuntarily, or, without limitation, occurring
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,
provided however that such sum shall not be payable if
Borrower's payments have been expressly extended by the city
or the City's assigns. "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
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
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debt, insolvency, dissolution, liquidation or other
similar law of any jurisdiction being a'1thorized 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 ~eport referred
to in S302(12) within_ninety (90) days ot the scheduled
due date for said Report.
9. The loss, theft, substantial damage, destruction,
abandonment, sale or encumbrance to or of any of the
collateral 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
S401. ReDortina Reauirements.
A. At such times and in such forms as the city may require,
there shall be furnished to the city such statements,
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
December, 1988 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.
S402. Maintenance 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
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six (6) years after termination of this Agreement and after
all other pending matters are closed. "Pending Matters" in-
clude, but are not limited to, an audit, litigation, or
other actions involving records. The City may, at its
discretion, take possession of and retain said records.
B. Records in their original form pertaining to matters covered
by this Agreement shall at all times be retained within the
City of San Bernardino, or some other location specifically
authorizing in writing by the Director of Community
Development, unless authorization to remove them is granted
in writing by the City.
S403. Audits and InsDections.
A. At any time during 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 deem necessary, the
Borrower shall make available to the 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, including 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 physical safeguarding devices as
locks, alarms, safes, fire extinguishers, sprinkler system,
etc., to safeguard 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.
5404. Validity 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 respects.
5405. 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 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,
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credit reports (TRW), Title Reports, or other similar costs
shall be delineated in the escrow instructi~ns and disbursed
from the loan proceeds upon opening of the escrow account.
S406. Reconvevance Fee
In the event that real property is used to secure this Loan,
then Borrower agrees to pay any costs incident to title
reconveyance, including, if applicable, trustee's fees,
attorney fees, document preparation fees, recording fees or
any other related expenses.
SECTION V.
GENERAL TERMS AND CONDITIONS
5501. Indemnification and Insurance Reqpirements.
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, damaqe 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 for 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.
B. 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
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under this Agreement. The City's Additional Insured
Endorsement form, or a form approved by the City,
stating that the Borrower is so insured, must accompany
any demand for funds unless said form has been pre
viously submitted and approved by the city. (certifica
tion 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 in
surance shall not be cancelled, reduced in coverage or
limited or non-renewed, except after thirty (30) days
written notice by receipted delivery has been given to
the Office of the city Attorney, City Hall, 300 North
"D" street, San Bernardino, CA 92418. policies of
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 name 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 may, but is not required to,
obtain insurance to protect its interests, 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.
4. 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.
5. The Borrower shall maintain minimum insurance coverages
prescribed in Attachment II of this Agreement, which by
this reference is incorporated herein.
S502. Prohibition Aaainst Assianment.
A. The Borrower shall not assign this Agreement, nor assign or
transfer any interest or obligation in this Agreement
(whether by assignment or novation) without prior written
consent 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.
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.
S503. Limitation of CorDorate Acts.
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In the event that Borrower is a corporation then the
Borrower shall not amend its Articles of In~orporation or
Bylaws, 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
performance 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.
S504. Amendments and Waivers.
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.
S505. ComDliance with statutes and Reaulations.
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 "Anti-Xickback Act" shall be a part of all con
struction contracts awarded by the Borrower pursuant to this
Agreement and all sub contracts thereto.
S506. 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
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3. The participation of such persons would be prohibited by
the California Political Reform Act, California
Government Code section 87100 et seq., if such person
were a public officer, because such person would have a
"financial 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.
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
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dino, state of California, and Federal regulation 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
consideration 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".
S507. 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
election 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
pending legislation or administrative regulation.
S509. 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 is
requested by the Director of Community Development Depart
ment.
S510. 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.
S511. 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
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be subjected to discrimination under this program jproject.
For purposes of this Section, title 24, Cod~. of Federal
Regulations Section 570.601(b) defines specific
discriminatory actions which are prohibited and correction
action which shall be taken in situations as defined
therein.
S512. Nondiscrimination. Eaual EmDlovment Practices and Affirma
tive 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 dis
criminate 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 relating to this Agreement, to the extent allowed
hereunder, shall be subject to the provisions of this
paragraph.
5513. EmDlovment ODDortunities for Business and Lower Income
Persons.
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
direct Federal financing assistance from 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.
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
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.
3. The Borrower will send to each labor organization or
representative of workers with which he has a collective
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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
subcontractor 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
subcontractor 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 regu
lations set forth in Title 24 CFR, Part 135, and all
applicable rules and order of the Department 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 assistance, its
successors, and assigns. Failure to fulfill these
requirements shall subject the applicant or recipient,
its Contractors and subcontractors, its successors and
assigns to those sanctions specified by the grant or
loan agreement or contract through which Federal ass is
tance is provided, and to such sanctions as are spec
ified by Title 24 CFR, Part 135.
S514. ParticiDation 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. CaDtions.
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.
S516. Effect of Leaal Judament.
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,
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condition or provision shall not in any way affect any other
covenant, condition or provision herein contained.
S517. Choice of Law Governina this Aareement.
This Agreement shall be governed by and construed in accor
dance with the laws of the state of California.
S518. Prohibition of Leaal Proceedinas.
The Borrower is prohibited from using Grant funds received
under this Agreement, or funds realized as a result of this
Agreement, for the purpose of ins~ituting legal proceedings
against the City or its official representative.
S519. Riahts and Remedies.
In the event any party fails to perform, in whole or in
part, any promise, covenant, or agreement heren, or should
any representation made by it be untrue, any aqgrieved 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.
SECTION VI.
ENTIRE AGREEMENT.
S601. ComDlete Aareement.
This Agreement contains the full and complete Agreement
between the two parties. No verbal agreement or conversa
tion with any officer or employee of either party shall
effect or modify any of the terms and conditions of this
Agreement.
S602. 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, twentv two (-1L) pages and
three L.L) attachments which
constitute the entire understanding and agreement of the
parties.
///1
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IN WITNESS WHEREOF, the City
Borrower have caused this Agreement
authorized representatives on this
,19_.
ATTEST:
City Clerk
Approved as to form
and legal content:
(1\
I
BY ~
0(.'
of San Bernardino
to be executed hy
day of
and thee
their duly
CITY OF SAN BERNARDINO
Mayor
( CORPORATION)
BY
Corporate President
ATTEST:
BY
corporate Secretary
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ATTACHMENT I
"EMPLOYMENT ACTION PLAN"
Economic Development Program
Employment Action Plan
statement of Borrower
Borrower does hereby state that the funds resulting from
the Loan Agreement entered into on behalf of the city of San
Bernardino (hereinafter "City") and Borrower shall be used
solely for furthering the purpose of the Economic Development
Program (EDP).
The purpose of EDP 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 EDP 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.
XJH/lab/0254
Economic Development Program
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A'l"l'ACHMENT II
INSURANCE REQUIREMENTS
(Instructions for completing, executing and submitting EVidence of
!nsurance to the City of San Bernardino.)
Insured:
(Contractor, Lessee, Permittee, Borrower, Etc.)
Agreement/Reference No.
Date:
. A. INSURED
1. To expedite completion of the insurance requirements, please
give your insurance agent or broker a copy of the Insurance
Requirement. 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 BROXER
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 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.
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4. Underwriter -- The name and address of the insurance company
underwriting the coverage must be noted on the endorsement
form. In the case of syndicates 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.
Insurance Requirements:
6. 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.
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 insurance 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.
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Fire Legal Liability
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( ) Debris Removal
( ) Sprinkler Leakage
( ) Windstorm
( ) Other
Aircraft Liability (bodily injury and
property damage.)
( ) Passenger Liability (per seat) $
Ocean Marine
Ocean Marine Liability
( ) Prote9tion and Indemnity
( ) Running Down Clause
( ) Pollution
( ) Jones Act
( ) Wharfingers Liability
( ) Cargo
( ) Inchmaree Clause
( ) Charter's Legal Liability
( )
Fidelity Bond
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90% of cost
of reDlace-
ment.
S 25.000
minimum
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CITY OF SAN BERNARDINO
COMMUNITY DEVELOPMENT DEPARTMENT
"Security Agreement"
pr nc pal
$SO,OOO
Loan Date Matur ty Call
OS/20/88 06/01/03
Collateral
(References n the above area are for Lender's use only and do not
limit the applicability of this document to any particular loan or
items. )
Borrower:
Margaret
dha Margaret
and Gift
Lender:
& Linilen Ridale
Ann's Art, Framing
Gallery
City of San Bernardino
Community Development Department
------------------------------------------------------------------
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor
jointly and severally grants to Lender a security interest in the
Collateral to secure the indebtedness and agrees that Lender shall
have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender. may have
by law.
DEFINITIONS. The following words shall have the following meanings
when used in this Agreement:
(a) Borrower. The word "Borrower" means each and every person or
entity signing the Note, including all Borrowers named above.
The words "Borrower" and "Grantor" are used interchangeably in
this Agreement.
(b) Collateral. The word "Collateral" means the following
described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever
located:
See Attachment (Exhibit "I") (List of fixtures
or personal property)
In addition, the word "Collateral".includes all of the
following whether now owned or hereafter acquired, whether now
existing or hereafter arising and wherever located:
1. All attachments, accessions, parts, and additions to and
replacements of and substitutions for any property described.
above.
2. All products of any of the property described in this Col-
lateral section.
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3. All accounts, contract rights, general intanryibles, and
monies, whether arising out of a sale, lease, or other
disposition of any of the property described in this
Collateral section.
4. All proceeds (including insurance proceeds) from the sale or
other disposition of the property described in this
Collateral section.
5. All records relating to any of the property described in
this Collateral section, whether in the form of a writing,
microfilm, microfiche, or electronic media.
6. All of Grantor's accounts with Lender (whether chec~in9,
savings, or some other account), including accounts Grantor
opens later and including accounts Grantor holds jointly
with other person(s).
(c) Grantor. The word "Grantor" means each and every Borrower. The
words "Grantor and "Borrower" are used interchangeably in this
Agreement.
(d) Indebtedness. The word "Indebtedness" means the Note, together
with all interest thereon as provided in the Note, and together
with all costs and expenses incurred by Lender under this
Agreement. In addition, the word "Indebtedness" includes all
obligations, debts and liabilities of Borrower, or anyone or
more of them, to Lender, and all claims by Lender against
Borrower or anyone or more of them, whether existing now or
later, whether voluntary or otherwise, whether due or not due,
absolute or contingent, liquidated or unliquidated and whether
Borrower may be liable individually or jointly with several
others, whether obligated as guarantor or otherwise, and
whether recovery upon such Indebtedness may be or hereafter may
become barred by any statute of limitations, and whether such
Indebtedness may be or hereafter may become otherwise
unenforceable.
(e) Note. The word "Note" means the promissory note or credit
agreement dated May 20, 1988 in the principal
amount of $ SO,OOO.oo from Borrower to Lender, together
with all renewals, extensions, modifications, refinancings, and
substitutions for the Note or Agreement.
(f) Related Documents. The words "Related Documents" mean and
include any promissory notes, loan agreements, guarantees,
trust deeds, mortgages, other security agreements, and all
other documents executed in connection with this Agreement or
the Indebtedness, whether now or hereafter existing.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual
security interest in, and hereby assigns, conveys, delivers,
pledges, and transfers all of Grantor's right, title and interest
in and to, Grantor's accounts with Lender (whether checking,
savings, or some other account), including all accounts held
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jointly with someone else and all accounts Grantor may open in the
future, excluding however all IRA, Keogh and trust ~ccounts.
Grantor authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all Indebtedness against any and all such
accounts.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender
as follows:
(a) Perfection of Securitv Interest. Grantor agrees to execute
financing statements and to take whatever other actions are
requested by Lender to perfect and continue Lender's security
interest in the Collateral. Upon request of Lender, Grantor
will deliver to Lender any and all of the documents evidencing
or constituting the Collateral, and Grantor will note Lender's
interest upon any and all chattel paper. Grantor hereby
appoints Lender as its irrevocable attorney-in-fact .for the
purpose of executing any documents necessary to perfect or to
continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from
Grantor, file a copy of this Agreement as a financing state-
ment. Grantor will reimburse Lender for all expenses for the
perfection and the continuation of the perfection of Lender's
security interest in the Collateral.
(b) R~moval of Collateral. Grantor will keep the Collateral (or to
the extent the Collateral consists of intangible property such
as accounts, the records concerning the Collateral) at
Grantor's address shown above. Except in the ordinary course
of its business, Grantor shall not remove the Collateral from
its existing locations without the prior written consent of
Lender. To the extent the Collateral consists of vehicles, or
other titled property, and except for sales of inventory in the
ordinary course of its business, Grantor shall not take or
permit any action which would require registration of the
vehicles outside the State of california, without the prior
written consent of Lender.
(c) Transactions Involvina Collateral. Except for inventory sold
or accounts collected in the ordinary course of Grantor's
business, Grantor shall not sell, offer to sell, or otherwise
transfer or dispose of the Collateral. Grantor shall not
pledge, mortgage, encumber or otherwise permit the Collateral
to be subject to any lien, security interest, encumbrance, or
charge, other than the security interest provided for in this
Agreement, without the prior written consent of Lender. This
includes security interests even if junior in right to the
security interests granted under this Agreement. Unless waived
by Lender, all proceeds from any disposition of the Collateral
(for whatever reason) shall be held in trust for Lender, and
shall not be co-mingled with any other funds, provided, how-
ever, that this requirement shall not constitute consent by
Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver such proceeds to Lender.
(d) Title. Grantor warrants that it holds good and marketable
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(e)
title to the Collateral, free and clear of all liens and
encumbrances except the lien of this Agreement. Grantor shall
defend Lender's rights in the Collateral against the claims and
demands of all other persons.
ReDairs. Grantor shall keep the Collateral in first class
condition and repair. Grantor will not commit or permit damage
to or destruction of the Collateral or any part thereof. Lender
and its designated representatives and agents shall have the
right at all reasonable times to examine and inspect the
Collateral wherever located.
(f)
Taxes. Assessments. and Liens. Grantor will pay when due all
taxes, assessments and liens upon the Collateral, its use or
operation, upon this Agreement, upon any promissory note or
notes evidencing the Indebtedness or upon any of the other
Related Documents. Grantor may withhold any such payment or
may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation
to pay and so long as Lender's interest in the Collateral is
not jeopardized. If the Collateral is subjected to a lien
which is not discharged within fifteen (15) days, Grantor shall
deposit with Lender cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate to
provide for the discharge of the lien plus any interest, costs,
attorney's fees or other charges that could accrue as a result
of foreclosure or sale of the Collateral. In any contest
Grantor shall defend itself and Lender and shall satisfy any
final adverse judgement before enforcement against the Col-
lateral. Grantor shall name Lender as an additional obligee
under any surety bond furnished in. the contest proceedings.
(g)
ComDliance with Governmental Reauirements. Grantor shall
comply promptly with all laws, ordinances and regulations of
governmental authorities applicable to the use of the Col-
lateral. Grantor may contest in good faith any such law,
ordinance or regulation and withhold compliance during any
processing, including appropriate appeals, so long as Lender's
interest in the Collateral, in Lender's opinion, is not
jeopardized.
(h)
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this
Agreement remains in effect, used for the generation,
manufacture, storage, treatment, disposal, release or
threatened release of any hazardous substances, as those terms
are defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C
Section 9601, et seq. ("CERCLA"). Grantor agrees to indemnify
and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of the Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and
maintain fire, casualty, theft and liability insurance on a
replacement basis together with such other insurance as Lender
may require with respect to the Collateral, in form, amounts,
(i)
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coverages, and with insurance companies reasonably acceptable
to Lender. Grantor upon request of Lender wil~ deliver to
Lender certificates of coverage from each insurer containing a
loss payable endorsement to Lender and a stipulation that
coverage will not be cancelled or diminished without a minimum
of ten (10) days prior written notice to Lender. In no event
shall the insurance be in an amount less than $
.
(j)
ADDlication of Insurance Proceeds. Grantor shall promptly
notify Lender of any loss or damage to the Collateral in excess
of $ . Lender may make proof of loss of Grantor
fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued
proceeds thereon, shall be held by Lender as part of the
Collateral. If Lenders consents to repair or replacement of
the damaged or destroyed Collateral, Lender shall, upon satis-
factory proof of expenditure, payor reimburse Grantor from the
proceeds for the reasonable cost of repair or restoration. If
Lender does not consent to repair or replacement of the Col-
lateral, Lender shall retain a sufficient amount of the pro-
ceeds to pay all of the Indebtedness, and shall pay the balance
to Grantor. Any proceeds which have not been disbursed within
one hundred, eighty (180) days after their receipt and which
Grantor has not committed to the repair or restoration of the
Collateral shall be used to prepay the Indebtedness.
(k)
Insurance Reserves. Lender may require Grantor to maintain
with Lender reserves for payment of insurance premiums, which
reserves shall be created by monthly payments from Grantor of a
sum estimated by Lender to be sufficient to produce, at least
fifteen (15) days before the premium due date, amounts at least
equal to the insurance premiums to be paid. If fifteen (15)
days payment is due, the reserve funds are insufficient,
Grantor shall upon demand pay any deficiency to Lender. The
reserve funds shall be held by Lender as a general deposit and
shall constitute a non-interest bearing account which Lender
may satisfy by payment of the insurance premiums required to be
paid by Grantor as they become due. Lender does not hold the
reserve funds in trust for Grantor, and Lender is not the agent
of Grantor for payment of the insurance premiums required to be
paid by Grantor. The responsibility for the payment of pre-
miums shall remain Grantor's sole responsibility.
(1)
Insurance ReDorts. Grantor, upon request of Lender, shall
furnish to Lender reports on each existing policy of insurance
showing such information as Lender may reasonably request
including the following: 1) the name of the insurer; 2) the
risks insured; 3) the amount of the policy, 4) the property
insured; 5) the then current value on the basis of which
insurance has been obtained and the manner of determining that
value; and 6) the expiration date of the policy. In addition,
Grantor shall upon request (however not more often than
annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of
the Collateral.
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G~OR'S RIGHT TO POSSESSION. Until default, Grantor may have
possession of the tangible personal property and beneficial use of
all the Collateral and may use it in any lawful manner not incon-
sistent with this Agreement or the Related Documents.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender
may discharge taxes, liens security interests, or other encum-
brances at any time levied or placed on the Collateral, may pay for
insurance on the Collateral, and may pay for maintenance and
preservation of the Collateral. All such payments shall become a
part of the Indebtedness secured by this Agreement, and shall be
payable on demand, with interest at the Note rate from date of
expenditure until repaid. Such right shall be in addition to any
other rights or remedies to which Lender may be entitled on account
of default.
EVl3rrS OF DEFAULT. The following are events of default under this
Agreement:
(a) Default on Indebtedness. Borrower fails to make any payment
when due on the Indebtedness.
(b) Other Breaches. Failure to comply with or perform any other
term, obligation, covenant or condition contained in this
Agreement, or in any of the Related Documents or in any other
agreement between Lender and Grantor. If such a failure is
curable and if Grantor has not been given a prior notice of a
breach of the same provision of this Agreement, it may be cured
(and no event of default will have occurred) if Grantor, after
receiving written notice from Lender demanding cure of such
failure: 1) cures the failure within fifteen (15) days; or 2)
if the cure requires more than fifteen (15) days, immediately
initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably
practical.
(c) False Statements. Any warranty, representation or statement
made or furnished to Lender by or on behalf of Grantor under
this Agreement is, or at the time made or furnished was, false
in any material respect.
(d) Defective Collateralization. This Agreement or the security
interest granted herein at any time and for any reason shall
cease to be in full force and effect or shall at any time not
be perfected, or cease to be perfected.
(e) Insolvencv. Dissolution or termination of Grantor's existence
as a going business, insolvency, appointment of a receiver for
any part of Grantor's property, any assignment for the benefit
of creditors, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor.
(f) Creditor Proceedinas. Commencement of foreclosure, whether by
judicial proceeding, self-help, repossession or any other
method, by any creditor of Grantor against any of the Col-
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lateral. However, this subsection shall not apply in the event
of a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the fore-
closure suit, provided that Grantor gives Lender written notice
of such claim and furnishs adequate reserves for the claim.
(g) Events Affectina Grantor. Any of the preceding events occur
with respect to any guarantor of any of the Indebtedness or
such guarantor dies or becomes incompetent, unless the obliga-
tions arising under the guaranty and related agreements have
been unconditionally assumed by the guarantor's estate in a
manner satisfactory to Lender.
RIGHTS OF LENDER. Upon default, or if Lender in good faith deems
itself insecure, Lender shall have all the rights of a secured
party under the California Uniform Commercial Code. In addition
and without limitation, Lender may exercise anyone or more of the
following rights and remedies:
(a) Accelerate Indebtedness. Lender may declare the entire
Indebtedness, including any prepayment penalty which Borrower
would be required to pay, immediately due and payable.
(b) Assemble Collateral. Lender may require Grantor to deliver to
Lender all or any portion of the Collateral and any and all
certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Col-
lateral and make it available to Lender at a place to be
designated by Lender which is reasonably convenient to both
parties. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the Col-
lateral. If the Collateral contains other goods not covered by
this Agreement at the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after reposses-
sion.
(c) Sell the Collateral. Lender shall have full power to sell,
lease, transfer, or otherwise deal with the Collateral or
proceeds thereof in its own name or that of Grantor. Lender
may sell the Collateral at public auction or private sale.
Unless the Collateral threatens to decline rapidly in value or
is of a type customarily sold on a recognized market, Lender
will give Grantor reasonable notice of the time after which any
private sale or any other intended disposition of the Col-
lateral is to be made. The requirements of reasonable notice
shall be met if such notice is given at least ten (10) days
before the time of the sale or disposition. All expenses
relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, preparing
for sale and selling the Collateral shall become a part of the
Indebtedness secured by this Agreement, and shall be payable on
demand, with interest at the Note rate from date of expenditure
until repaid.
(d) ADDointment of Receiver. Lender may have a receiver appointed
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as a matter of right. The receiver may be an employee of
Lender and may serve without bond. All fees of the receiver
and his/her attorney shall be secured by this Agreement.
(e) Collect Revenues. Lender may revoke Grantor's right to collect
the rents and revenues from the Collateral, and may, either
itself or through a receiver, collect the rents and revenues.
To facilitate collection, Lender may notify Grantor's account
debtors and obligors on any instrument to make payments
directly to Lender.
(f) Obtain Deficiencv. Lender may obtain a judgment for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the
rights provided in this Agreement. Borrower shall be liable
for a deficiency even if the underlying transaction is a sale
of accounts or chattel paper.
(g) Other Riahts and Remedies. In addition to Lender's rights and
remedies as a secured creditor under the provisions of the
California Uniform Commercial Code, Lender shall have and may
exercise any or all of the rights and remedies it may have
available at law, in equity or otherwise.
(h) ADDlv Accounts. Lender may hold all of Grantor's Collateral
consisting of accounts with Lender, and Lender may apply the
funds in these accounts to pay all or part of the Indebtedness.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be
cumulative and ~ay be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit
or any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Agree-
ment, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and to exercise its remedies.
WAIVER. Lender shall not be deemed to have waived any rights under
this Agreement (or under the Related Documents) unless such waiver
is in writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provi-
sion of this Agreement shall not constitute a waiver of or pre-
judice the party's right otherwise to demand strict compliance with
that provision or any other provision. No prior waiver, nor any
course of dealing between Lender and Grantor, shall constitute a
waiver of any of Lender's rights or Grantor's obligations as to any
future transactions. Whenever consent by Lender is required in
this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent
instances where such consent is required.
NOTICES. All notices required to be given by either party to the
other under this Agreement shall be in writing and shall be effec-
tive when actually delivered or when deposited in the United States
mail, first class postage prepaid, addressed to the other party at
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the address shown above or to such other addresses as either party
may designate to the other in writing. Grantor agrees not to
change its name without giving Lender at least ten (10) days prior
written notice of such change and agrees, for notice purposes, to
keep Lender informed at all times of Grantor's current address.
EXPENSES, COSTS AND ATTORNEY'S FEES. Lender may pay someone else
to help collect the Indebtedness and to enforce this Agreement and
Borrower will pay that amount. This includes, subject to any
limits under applicable law, Lender's attorney's fees and legal
expenses whether or not there is a lawsuit, including attorney's
fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any antici-
pated post-judgment collection services. Borrower also will pay
any court costs, in addition to all other sums provided by law. In
the event that Lender incurs any other expenses whatsoever to
protect or enforce its rights hereunder, Lender also shall be
entitled to recover all such sums and all incidental expenses. All
such sums shall be part of the Indebtedness secured by this Agree-
ment.
MULTIPLE PARTIES/CORPORATE AUTHORITY. If Grantor consists of more
than one (1) person or entity, all obligations of Grantor under
this Agreement shall be joint and several, and all references to
Grantor shall mean each and every Grantor. Where anyone or more
of Grantors are corporations or partnerships it is not necessary
for Lender to inquire into the powers of the Grantors or of the
officers, directors, partners, or agents acting or purporting to
act on their behalf, and any Indebtedness made or created in
reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
INTERPRETATION. Caption headings in this Agreement are for con-
venience purposes only and are not to be used to interpret or
define the provisions of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable by any
court for any reason, the remaining provisions of this Agreement
shall nevertheless be binding, and this Agreement shall be enforce-
able as if the void or unenforceable provision or provisions had
not been included in this Agreement.
APPLICABLE LAW. This Agreement is accepted in the State of Calif-
ornia. In addition, this Agreement shall be governed by and
construed in accordance with the laws of the state of California.
Grantor agrees that if there is a lawsuit, Grantor will submit to
the jurisdiction of the courts in SAN BERNARDINO COUNTY, State of
California, and at Lender's option, to the jurisdiction of the
courts in any county where any Collateral is located.
SUCCESSOR INTERESTS. This Agreement shall be binding upon and
inure to the benefit of the parties, their successors and assigns.
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Grantor acknowledges it has read all of the provisions of this
commercial Security Agreement and agrees to its terms. This
Commercial Security Agreement is dated
19
,
SECURITY AGREEMENT FOR:
MARGARET ANN'S ART, FRAMING AND
GIFT GALLERY
CITY OF SAN BERNARDINO
Xenneth J. Henderson
Director of Community Development
Date
BY: MARGARET ANN'S ART, FRAMING & GIFT
GALLERY
Date
Margaret Ann Riddle
Date
Linden Riddle
WITNESS
flab
0960
GENERAL ACXNOWLEDGEMENT (for Notary use only)
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INSURANCE REQUIREMENTS
(Attachment II)
. NAME Linden and Margaret Ann Riddle
AGREEMENT/REFERENCE NUMBER 88-005
DATE July 20, 1988
The following coverages noted with an "X" are required with the
Combined Single Limits (CSL) as noted on the right.
Limits
X Worker's Compensation
X Employers Liability
( ) Broad Form All states Endorsement
( ) Voluntary Compensation Endorsement
( ) Longshoremen's and Harbor Workers'
Compensation Act Endorsement
( )
statutory
$ 100.000
Commercial General
X JGIa~x~l~ Liabilitv $1.000.000
( ) Premises and Operations
( ) Contractual Liability
( ) Independent Contractors
(X ) Products/Completed Operations - Contractors / Manufacturing Products
(X ) Broad Form Property Damage
( ) Personal Injury
( ) Broad Form Liability Endorsement
( ) Fire Legal Liability
( ) Watercraft Liability
( ) Incidental Medical Malpractice
(if applicable)
( ) Explosion Hazard
( ) Collapse Hazard
( ) Underground Hazard
( ) Garagekeepers Legal Liability
( ) Hangar Xeeps Legal Liability
(X ) Owned Automobiles
(X ) Nonowned Automobiles
(X ) Hired Automobiles
( )
X
Automobile Liability (if auto is used for
this contract.)
Professional Liability (if applicable)
$1.000.000
$ 500.000
X
Property Insurance
90% value of
buildina
( ) Extended Coverage
( ) Vandalims and Malicious Mischief
( ) Flood
( ) Earthquake $
3
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( ) Debris Removal
( ) Sprinkler Leakage
( ) Windstorm
( ) Other
Aircraft Liability (bodily injury and
property damaqe.)
( ) passenqer Liability (per seat) $
$
Ocean Marine
$
$
Ocean Marine Liability
( ) Prote-ption and Indemnity
( ) Running Down Clause
( ) Pollution
( ) Jones Act
( ) Wharfingers Liability
( ) Cargo
( ) Inchmaree Clause
( ) Charter's Legal Liability
( )
Fire Legal Liability
90% of cost
of reDlace-
ment.
Fidelity Bond
S 25.000
minimum
XJH/lab/0255
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ATTACHMENT II
INSURANCE REQUIREMENTS
(Instructions for completing, executing and submitting Evidence of
Insurance to the City of San Bernardino.)
Insured: Linden and Marqaret Ann Riddle
(Contractor, Lessee, Permittee, Borrower, Etc.)
Agreement/Reference No.
88-005
Date: 7/2l/88
A. INSURED
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 BROXER
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 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.
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4. Underwriter -- The name and address of the insurance company
underwriting the coverage must be noted on tt.e endorsement
form. In the case of syndicates 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.
Insurance Requirements:
6. 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.
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 insurance 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 endorsementform(s) 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.
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CITY OF SAN BERNARDINO
COMMUNITY DEVELOPMENT DEPARTMENT
Secured Promissory Note
$
Borrower:
FOR VAWE RECEIVED,
doing business as
and
promisees) to pay the CITY OF SAN BERNARDINO, through its
Community Development Department (herein called "City"), or
its successors the sum of
DOLLARS
($ ), and pay the interest on the unpaid principal
amount of this note from (date) ,
at the rate of percent ( %) per annum until both
principal and interest are paid.
Payments to be made hereunder are due and payable on the
first day of each month for
( ) months.
payment shall be made on
Payments shall continue thereafter for a period of
( ) months, until
(date). Each monthly payment
The first such monthly
shall be in the amount of
DOLLARS ($ ) .
Each of the payments due to by the terms of this note
shall be paid in lawful money of the United States and shall
be delivered to the principal offices of the City of San
Bernardino Community Development Department, 300 North "D"
street, Fifth Floor, San Bernardino, California, or to such
other place as may from time to time be designated by the
Director of Community Development. There shall be a $15.00
penalty for any payment received on or after the fourth (4th)
day of the month in which such payment is due.
Borrower(s) reserve(s) the right to prepay at any time
all of part of the principal amount of this note without the
payment of penalties or premiums. All payments on this note
shall be applied first to the interest due on this note, then
to principal due on this note, and the remaining balance
shall be applied to late charges, if any. Except as provided
below, all monthly payments on this note shall be credited as
of the due date thereof without adjustment of interest
because paid either before or after such due date.
In the event that the Borrower(s) shall fail to make any
payment when due, and if such failure be subsisting on the
date the next installment all payments due under this note,
together with any accrued interest and late charges, shall
become due and payable at the option of the City without
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notice to the Borrower(s). Failure of the City to exercise
such option shall not constitute a waiver of such default. No
default shall exist by reason of non-payment of any required
installment of principal and interest so long as the amount
of optional prepayments already made pursuant to the
provisions of this note equals or exceeds the amount of the
requirement installments.
In no event shall the total interest and late charges
payable hereunder exceed the maximum amount of interest
permitted under the usury laws of the state of California.
This promissory note incorporates all the terms and
conditions of that certain Agreement executed by and between
these parties, dated .
Each provision of such Agreement is hereby made a covenant
and condition of this note, breach of which shall constitute
a default remediable as set forth herein for the remedy of a
default in payment of principal and interest.
This note is secured as follows:
a) Personal guarantees of
b) Security Agreement
c) Deed of Trust with Assignment of Rent
This note shall become immediately due and payable in
the amount of the unpaid principal and interest upon a
default under any of the terms or conditions of any security
listed above. Whether such default be voluntary, involun-
tary, by operation of law or as a result of the dissolution
of the business.
If suit is instituted by the City to recover on this
note, the Borrower(s) agree(s) to pay all costs of such
collection, including reasonable attorneys' fees and court
costs.
IN WITNESS WHEREOF, this note has been duly executed by
the undersigned.
DATE
WITNESS
flab
0962
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