Resolution No. 73241
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RESOLUTION NO. 7324
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF VERNON APPROVING THE LOAN APPLICATION
SUBMITTED BY RRR REAL ESTATE LLC AND APPROVING
AND AUTHORIZING THE EXECUTION OF A CDBG
INFRASTRUCTURE LOAN AGREEMENT BY AND BETWEEN
THE CITY OF VERNON AND RRR REAL ESTATE LLC
PURSUANT TO THE 96-EDBG-471 VERNON
INFRASTRUCTURE LOAN PROGRAM
WHEREAS, RRR Real Estate LLC submitted an application
for funding of on -site improvements in the amount of One Hundred
Eighty-seven Thousand Three Hundred Sixty-two Dollars and No Cents
($187,362.00); and
WHEREAS, said applicant and project are eligible to
participate in the 96-EDBG-471 Vernon Infrastructure Loan Program
("the Program") in accordance with the Grant Guidelines as
submitted to and approved by the State; and
WHEREAS, the City Council has reviewed the Credit Memo
and Loan Recommendations thereto; and
WHEREAS, the Director of Community Services has advised
the City Council that no further documentation is required under
the California Environmental Quality Act in light of the negative
declaration certified by the Council on March 3, 1998, for the
subdivision of the subject property; and
WHEREAS, an Environmental Assessment and a Finding of No
Significant Impact were posted at the site and made available for
public review as required by the National Environmental Policy Act
("NEPA"); and
WHEREAS, the Grant Guidelines provide for use of City
matching funds to cover a portion of the cost of installing City -
owned water, power utility and traffic signal facilities, and in
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this instance the City's matching share will not exceed $16,190;
and
WHEREAS, the City Administrator, acting on the advice of
the City's Loan Advisory Committee, has recommended approval of
the application.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon
hereby finds and determines that the recitals contained
hereinabove are true and correct, and incorporates the same as its
findings in this matter.
SECTION 2: The City Council certifies that it has
considered the information in the Environmental Assessment and the
Finding of No Significant Impact prepared pursuant to NEPA,
together with any comments or responses to comments relative
thereto, copies of which have been made available to the Council.
concurrently with this Resolution, and the Council hereby approves
the Finding of No Significant Impact and orders that the aforesaid
documents be received and filed by the City Clerk.
SECTION 3: The loan application submitted by RRR Real
Estate LLC, a copy of which has been presented to the City Council
concurrently with this resolution, is hereby approved contingent
upon adherence to the following conditions:
1. A promissory note duly executed by RRR Real
Estate LLC.
2. RRR Real Estate LLC shall obtain and submit to
the City an executed personal guaranty from Irwin Miller
guaranteeing repayment of the loan, secured by a deed of trust on
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real property in an amount not less than the total amount of the
Loan.
SECTION 4: The City Clerk shall send a copy of the
application and a certified copy of this resolution to the State
of California, Department of Housing and Community Development,
addressed as follows: James Bishop, Economic Development
Representative, State of California, Department of Housing &
Community Development, State Community Block Grant Program, Room
390-2, P. O. Box 952054, Sacramento CA 94252-2054. Funding of th
loan is subject to prior approval by the Department of Housing and
Community Development.
SECTION 5: The City Council of the City of Vernon
hereby approves the CDBG Infrastructure Loan Agreement, a copy of
which has been presented to the City Council concurrently with
this resolution, and the City Council hereby orders said Agreement
to be received and filed by the City Clerk.
SECTION 6: The City Council of the City of Vernon
hereby authorizes the Mayor and the City Clerk to execute the Loar.
Agreement and further authorizes the Mayor and/or the City Clerk
to execute any and all other documents necessary to complete the
funding of this loan.
SECTION 7: The City Administrator is authorized to draw
and expend up to $16,190 from the appropriate City funds as and
for the City's matching share for this project.
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1 SECTION 8: The City Clerk of the City of Vernon shall
2 certify to the passage of this resolution, and thereupon, and
3 thereafter the same shall be in full force and effect.
4 APPROVED AND ADOPTED this 4th day of May, 1999.
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7 EONIS C. BURG, Wayor
8 ATTEST•
9 BRUCE V. MALKENHORST, City Clerk
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1 STATE OF CALIFORNIA )
2 )ss
COUNTY OF LOS ANGELES )
3 I, BRUCE V. MALKENHORST, City Clerk of the City of
4 Vernon, do hereby certify that the foregoing Resolution, being
5 Resolution No. 7324, was duly adopted by the City Council of the
6 City of Vernon at a regular meeting of the City Council duly held
7 on Tuesday, May 4, 1999, and thereafter was duly signed by the
8 Mayor of the City of Vernon.
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10 BRUCE V. MALKENHORST, City Clerk
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SUPPORTING
DOCUMENTS
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EXECUTION COPY
CDBG INFRASTRUCTURE LOAN AGREEMENT
THIS CDBG INFRASTRUCTURE LOAN AGREEMENT (hereinafter
"Agreement") is made, entered into and executed in duplicate
originals, either copy of which may be considered and used as the
original hereof for all purposes, as of this 4th day of May, 1999,
in the City of Vernon, County of Los Angeles, California
BY AND BETWEEN THE CITY OF VERNON (hereinafter
referred to as the "City")
4305 Santa Fe Avenue
Vernon, California 90058-0805
AND RRR REAL ESTATE LLC
(hereinafter referred to as the
"Borrower")
1617 East 25th Street
Los Angeles, California 90011
RECITALS
WHEREAS, the Borrower has applied to the City for a
Community Development Block Grant ("CDBG") loan for the purpose of.
helping to finance public infrastructure improvements for the
development known as the Alcoa Project ("the Project"); and
WHEREAS, the City is willing to make such a loan to the
Borrower on the terms and conditions herein set forth.
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS
SET FORTH HEREIN:
1. THE LOAN.
a. LoanJNote: Subject to the terms and conditions
of this Agreement, the City hereby agrees to lend the Borrower the
amount of One Hundred Eighty-seven Thousand Three Hundred Sixty-
two.Dollars and No Cents ($187,362.00) (hereinafter called "Loan")
by depositing said funds in an escrow account as set forth hereinafter
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b. Loan Repayment. The obligation of the Borrower
to repay the City shall be evidenced by a promissory note
(hereafter the "Note") of the Borrower substantially in the form
of Attachment "A." Such Note shall be subject to a personal
guaranty by Irwin Martin Miller. Said personal guaranty shall be
secured by a first deed of trust with power of sale with the City
of Vernon designated as the beneficiary, on real property owned by
the Miller Family Trust in Tulare County, California (A.P.N. Nos.
321-110-018, 321-080-039). Borrower acknowledges that City's
security interest in said real property is a material term of this
Agreement, and Borrower represents and warrants that the value of
the property is sufficient to provide the City with a first
encumbrance to cover the full amount of the Loan. Borrower
further represents and warrants that said Miller Family Trust has
the legal capacity to execute the deed of trust and that said
Trust and its beneficiaries will derive a benefit from the making
of the Loan. Except as otherwise provided herein and in the Note,
interest shall accrue on the unpaid principal during the deferral
period, compounded monthly. The interest rate on the Loan shall
be seven percent (7%) per annum.
c. Deferral of Payments. The repayment of the Loan
shall be deferred to December 1, 2001.
d. Forgiveness of Loan. If the infrastructure
improvements are located on public property and if the terms and
conditions of this Agreement are fully met, repayment of all or
part of the Loan (including interest) will be forgiven.
Forgiveness shall be determined by the number of jobs created and
retained for a minimum of twenty-four (24) months. The percentage
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of the Loan forgiven shall correspond to the percentage of
required jobs so created and retained. If the terms and
conditions of this Agreement are not fully met, repayment shall be
made as set forth hereinafter.
e. Repayment of Loan. The term of the Loan shall be
from the date of this Agreement until December 1, 2001. The
entire principal amount due, with accrued interest, shall be
repaid on December 1, 2001, at the address specified by the City,
except to the extent all or part of the Loan has been forgiven.
Prepayment of the Loan is allowable with no prepayment penalty.
f. Purpose. The purpose of the Loan is to help
finance installation of infrastructure on public property
consisting of street, storm drain, water system and utility
improvements.
g. Employment. As a condition of the Loan, the
Borrower agrees, for its own account or through Rite -Way Meat
Packers, Inc. and/or Rose & Shore, Inc., and/or R.B.R. Meat
Company, to create at a minimum ten (10) full time jobs, allowing
for some full-time equivalents, not later than December 1, 1999,
and to retain such jobs for a minimum of twenty-four (24) months.
At least fifty-one percent (51%) of all jobs created as a result
of this loan must be filled by members of the Targeted Income
Group._ The Targeted Income Group guidelines, adopted by the State
and dependent on family size, are attached to and made a part of
this Agreement as Attachment "B."
h. Disbursement of Funds. Funds shall be disbursed
by the escrow agent as two-party checks payable to the Borrower
and a contractor only upon presentation of invoices from said
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contractor, evidencing materials, services or labor provided in
connection with the Project approved by the City.
i. Escrow. The escrow agent shall be Commerce
Escrow, 1545 Wilshire Boulevard, Suite 600, Los Angeles,
California 90017, attention: Marleny Martin, or another firm
mutually acceptable to City and Borrower. Borrower shall be
responsible for all charges and fees for services of the escrow
agent and for the premium for title insurance. Escrow shall close
when all loan funds have been disbursed or when the Project is
otherwise completed and no outstanding expenses payable with the
loan proceeds remain to be paid, at which time the escrow agent
shall provide an accounting to the parties of the amounts
disbursed and any unused balance. The unused balance, if any, may
be used to pay the charges and fees of the escrow agent, and the
remaining sum, if any, shall be refunded to City and credited to
Borrower as a payment of principal on the Note.
2. REPRESENTATIONS TERMS AND CONDITIONS.
The Borrower represents, warrants, and covenants as set
forth in Attachments "C," "D," and "E." The Borrower agrees with
each of the terms, conditions, covenants and commitments contained
herein and in Attachments "A" through "H" which are attached
hereto and made a part hereof by reference.
3. CONDITIONS PRECEDENT TO LOAN.
The obligation of the City to deposit the Loan amount in
escrow shall be subject to the fulfillment of each of the
following conditions precedent:
a. Loan Agreement. The Borrower shall have executed
and deposited in escrow this Loan Agreement and the Note. The
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Note shall be dated as of the date of the Agreement.
b. Security. The Borrower shall have deposited in
escrow the deed of trust, duly executed by all owners of the
affected real property and notarized, and the personal guarantee.
The deed of trust and the personal guaranty shall be dated as of
the date of this Agreement.
c. Form of Documents. The documents mentioned in
subparagraphs 3(a) and (b) shall be in a form satisfactory to the
City Administrator and the City Attorney. The escrow agent shall
have authority to complete such documents before closing by dating
them and inserting the amount of the loan, if necessary.
d. Other Loans /Funds. If the Borrower obtains
supplemental funds for off -site improvements as shown below, it
shall provide written evidence satisfactory to the City that the
Borrower has executed loan documents for such loans/funds and/or
that the Borrower has the cash equity shown.
i. Cash Equity by Borrower: $30,651.00
ii. Commercial Bank: None .
iii. City Matching Funds: $16,190.00
e. Government Approval. The Borrower or its
contractor shall have secured all necessary permits, approvals, or
consents, if required, of governmental bodies having jurisdiction
with respect to any construction contemplated in accordance with
the use of the proceeds of the Loan. The Borrower shall comply
with the Zoning Ordinance of the Vernon City Code for the
development and use of the property described herein.
f. Approval of Others. The Borrower shall have
secured all necessary approvals or consents required with respect
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1 to this transaction by any mortgagor, creditor, or other party
2 having any financial interest in the property or in the Borrower.
3 4. EVENTS OF DEFAULT.
4 The entire unpaid principal of the Note, and the interest
5 then accrued thereon, shall become immediately due and payable
6 upon the written demand of the City, without any additional notice
7 or demand of any kind or any presentment or protest, if any one of
8 the following events (hereafter an "Event of Default") shall occur
9 and be continuing at the time of such demand, whether voluntary or
10 involuntary or, without limitation, occurring or brought about by
11 operation of law or pursuant to or in compliance with any
12 judgment, decree or order of any court or any order, rules, or
13 regulations of any administrative or governmental body.
14 a. Non -Payment of Loan. If Borrower shall fail to
15 make payment when due of principal or interest on the Note, and if
16 the default shall remain unremedied for ten (10) days after notice
17 from the City.
18 b. Non -Payment of Other Indebtedness. If Borrower
19 shall fail to make payment when due of any installment of
20 principal or interest on any of the Borrower's other indebtedness
21 for the public infrastructure improvements, if such default shall
22 remain unremedied for thirty (30) days.
23 c. Incorrect Representation or Warranty. If any
24 representation or warranty contained in or made in connection with
25 the execution and delivery of this Agreement, or in any
26 documentation or certificate furnished pursuant hereto, shall
27 prove to have been incorrect or invalid when made in any material
28 respect.
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d. Default in Covenants. If the Borrower shall
materially default in the performance of any other term, covenant,
or condition contained in this Agreement; and such default shall
continue unremedied for thirty (30) days after either: (1) it
becomes known to an executive officer of the Borrower; or (2)
written notice thereof shall have been given to the Borrower by
the City.
e. Employment Plan. If the Borrower snail =aii -co
comply with the provisions of the TIG Employment Plan.
f. Voluntary Insolvency. If the Borrower shall
become insolvent; shall substantially cease to pay its debts as
they mature; shall voluntarily file a petition seeking
reorganization or liquidation of the Borrower, or the appointment
of a receiver or trustee for all or a substantial portion of its
assets, or to effect a plan or other arrangement with creditors;
shall be adjudicated bankrupt; or shall make a voluntary
assignment for the benefit of creditors.
g. Involuntary Insolvency. If an insolvency
petition shall be filed against the Borrower under any bankruptcy,
insolvency, or similar law or seeking the reorganization or
liquidation of the Borrower or the appointment of a receiver or
trustee for all or a substantial portion of the assets of the
Borrower, or if a writ or warrant of attachment or similar process
shall be issued against a substantial part of the property of the
Borrower and such petition shall not be dismissed, or if such writ
or warrant of attachment or similar process shall not be released
or bonded, within sixty (60) days after filing of levy.
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1 h. Judgments. If any final judgment for the payment
2 of money in excess of $100,000 that is not fully covered by
3 liability insurance shall be rendered against the Borrower, and
4 shall not be discharged or bonded within sixty (60) days of such
5 decision, or if execution thereon, effectively stayed pending an
6 appeal from the date such judgment, is affirmed on such appeal.
7 i. Sale/Refinancingf Change of Ownership. Upon the
8 sale of the business of the Borrower, upon sale or refinancing of
9 any real property financed with this Loan or as part of the
10 Project in which funds from this Loan were used (except for
11 financing obtained by.Borrower from Wells Fargo Bank in an amount
12 not to exceed $6,000,000.00), upon sale or refinancing of any real
13 Property used as collateral for this Loan, upon change in
14 ownership of the business involving any guarantees of this Loan,
15 or upon cessation of the Borrower to be a majority owner of the
16 business. This Loan shall be non -assumable.
17 5. RIGHTS UPON DEFAULT.
18 Upon an event of default by the Borrower, the City shall
19 have all remedies available to it under State law in enforcing
20 this Agreement and for enforcing City's rights to the collateral
21 mentioned herein including, but not limited to, the following:
22 a. To accelerate and declare the full balance
23 immediately due and payable on the Note and to commence a lawsuit
24 for collection thereof.
25 b. To take possession of any collateral securing the
26 loan or render it unusable, without notice, except as required by
27 law, provided that said self-help shall be done without breach of
28 peace.
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c. To request and demand that Borrower assemble any
collateral securing the loan at an acceptable location for
delivery to City.
d. To sell or dispose of any collateral by sale
pursuant to the law.
e. To specifically enforce the terms of the Note and
related agreements.
f. To foreclose on any real property or appropriate
personal property by strict foreclosure in equity.
g. To pursue any and all other remedies available
under law to enforce the terms of this Agreement and City's rights
to any real and personal property identified herein, and in
collateral security documents.
6. OTHER DOCUMENTS.
City may require and Borrower agrees to execute such
other documents as may be required by the City in its sole
discretion in order to comply with State and Federal regulations
governing (a) the loan proceeds and (b) prudent lending practices.
7. COLLECTION AGENT.
Borrower hereby authorizes the City to appoint a loan
collection entity to provide loan servicing in accordance with
this Agreement and other loan documents. City may appoint, remove
or replace the loan servicing agent at its sole discretion. City
shall provide or cause to be provided notice to Borrower of the
loan collection agent or any change thereof.
8. WAIVER.
No failure or delay on the part of the City in exercising
any right, power or remedy hereunder shall operate as a waiver
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thereof.
9. ATTORNEY FEES.
If any party to this Agreement breaches any provision of
this Agreement, or becomes party to litigation concerning this
Loan or the security for this Loan, then the other party may
institute legal action against such party for specific
performance, injunction, declaratory relief, damages, or any other
remedy provided by law. In addition to the recovery of any such
sum or sums expended on behalf of the prevailing party, the
prevailing party shall be entitled to recover from the losing
party such amount as the. court may adjudge to be reasonable
attorney's fees for the services rendered to the prevailing party
in such action.
10. NOTICES.
Notices to the parties unless otherwise requested in
writing shall be sent to:
City: THE CITY OF VERNON
ATTN: BRUCE V. MALKENHORST
CITY ADMINISTRATOR
4305 SANTA FE AVENUE
VERNON, CA 90058-0805
TELEPHONE NO.: (213) 583-8811
Borrower: RRR REAL ESTATE LLC
ATTN: IRWIN MILLER
1617 EAST 25TH STREET
LOS ANGELES, CA 90011
11. GENERAL TERMS AND CONDITIONS.
The general terms and conditions of this Agreement are
set forth in Attachment "F."
12. PROJECT ASSURANCES AND TIG EMPLOYMENT PLAN.
The Borrower will comply with the Project Assurances set
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forth in Attachment "G," and shall achieve the objectives of the
TIG Employment Plan set forth in Attachment "H."
13. SEVERABILITY.
If any section, paragraph, sentence or requirement of
this Agreement is held to be invalid by a court of competent
jurisdiction-, the remaining portions, sections, and requirements
of this Agreement which are not affected by the action of the
court shall remain in full force and effect.
IN WITNESS WHEREOF, the City and the Borrower have
executed this Loan Agreement as of the date first written above.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
i
ID B. BREARL Y, City A Itorney
THE CITY OF VERNON
BY:
LEONIS C. MALBURG, Mayor
RRR REAL ESTATE LLC, a Limited
Liabili y Compan
By:
(Signature)
(Name),
Title: aV1 Q o l
By:
(Signature)
Title:
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(Name)
CDBG INFRASTRUCTURE LOAN AGREEMENT
LIST OF ATTACHMENTS
Attachment A. PROMISSORY NOTE.
Attachment B. TARGETED INCOME GROUP GUIDELINES.
Attachment C. REPRESENTATIONS AND WARRANTIES.
Attachment D. AFFIRMATIVE COVENANTS OF THE BORROWER.
Attachment E. NEGATIVE COVENANTS OF THE BORROWER.
Attachment F. GENERAL TERMS AND CONDITIONS.
Attachment G. PROJECT ASSURANCES.
Attachment H. TIG BENEFIT EMPLOYMENT PLAN.
ATTACHMENT A
PROMISSORY NOTE
Principal amount: $187,362.00 Date: _ _ _ _ _ _
On or before December 1, 2001, for value received,
the undersigned ("Maker") promise(s) to pay to City of Vernon
("Payee"), or to order, at 4305 Santa Fe Avenue, Vernon, CA
90058-0805, or such other place as the holder of this Note
("Holder") may from time to time designate in writing, the
principal sum of One Hundred Eighty-seven Thousand Three Hundred
Sixty-two Dollars and No Cents ($187,362.00), with interest on
the unpaid principal balance of this Note, from the date of this
Note until this Note is paid in full, at the rate of seven
percent (7%) per year.
Accrued interest shall be computed on the basis of a
365-day year, based on the actual number of days elapsed.
Maker may prepay this Note, without premium or penalty.
No prepayment shall extend or postpone the due date or change the
amount of any subsequent payment.
This Note shall become immediately due and payable, at
Holder's option, without notice, demand, or presentment, and
regardless of any prior forbearance, on the occurrence of any of
the following events:
(a) the filing of a petition in bankruptcy by, or the
initiation of any proceeding under any bankruptcy or insolvency
laws against, the Maker;
(b) the making of a general assignment for the benefit
of creditors by Maker;
(c) Maker's or any guarantor's default under any
agreement or instrument executed in connection with this Note;
(d) Maker's default under any other promissory note
executed by Maker in favor of Holder; or
(e) revocation of any guaranty of this Note by any
guarantor.
No delay or omission by Holder in exercising any right
or remedy under this Note, or any other agreement executed in
connection with this Note, shall operate as a waiver of the
future exercise of that right or remedy or of any other rights or
remedies under this Note or any other agreement executed in
connection with this Note. To the extent permitted by law, Maker
waives the right, in any action on this Note, to assert that the
Page 1 of 2
ATTACHMENT A
action was not commenced within the time required by law for
commencement of the action. All rights of Holder stated in this
Note are cumulative and in addition to all other rights provided
by law, in equity, or in any agreement executed in connection
with this Note.
RRR REAL ESTATE LLC
By:
(Signature)
rc.v I er
(Name)
Title: won q C r
By:
(Signature)
Title:
Page 2 of 2
(Name)
ATTACHMENT A
ATTACHMENT B
TARGETED INCOME GROUP BUIDELINES
COUNTY STANDARD 1 2 3 4 5 6 7 8
LOS ANGELES Lowest Targeted 17950 20500 23100 25850
Area median: Targeted 28750 32850 36950 41050
$51,300
Page 1 of 1
27700 29750 31800 33850
44300 47600 50900 54150
ATTACHMENT B
ATTACHMENT C
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants the following:
A. Duly Organized:
The Borrower is a limited liability company duly organized, validly existing, and in good
standing under the laws of the State of California and has the power to enter into this
Agreement and to borrow hereunder.
The making and performance by the Borrower of this Agreement and the execution and
delivery of the Note, and any Security Agreements and Instruments have been duly authorized
by all necessary company actions and will not violate any law, rule, regulation, order, writ,
judgment, decree, determination, or award presently in effect or result in a breach of or
constitute a default under any bank loan or any other agreement or instrument to which the
Borrower is a party or by which it or its property may be bound or affected.
C. Legally Binding Instruments:
This Agreement shall be binding upon the Borrower and shall inure to the benefits of the
parties hereto and their respective successors. Any further documents and instruments
necessary to carry out the terms of this Agreement and executed by the Borrower shall likewise
be binding upon the Borrower and shall inure to the benefit of the parties thereto and.their
successors.
D. No Legal Suits:
There are no legal actions, suits, or proceedings pending, or to the knowledge of the Borrower,
threatened, against the Borrower before any court or administrative agency, which if
determined adversely to the Borrower would have a material adverse effect on the financial
condition of the business of the Borrower.
E. Not in Default:
The Borrower is not in default of any obligation, covenant, or condition contained in any bond,
debenture, note, or other evidence of indebtedness or any mortgage or collateral instrument
securing the same.
F. Taxes are Paid:
Borrower has paid in full all taxes and assessments levied by any taxing agency, federal, state,
or local, against Borrower or its personal or real property, except to the extent that any such
tax or assessment is being challenged by due legal process.
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ATTACHMENT C
G. No Adverse Change:
The Borrower certifies that there has been no adverse change since the date of the loan
application in the financial conditions, organization, operation, business prospects, fixed
properties, or personnel of the Borrower.
H. Evidence of Project Funding:
The Borrower has submitted to the City acceptable evidence (e.g., bank commitment letter) of
financing or liquidity for the balance of the project cost.
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ATTACHMENT C
ATTACHMENT D
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower agrees to comply with the following covenants from the date hereof until the City has
been fully repaid with interest or until such Loan (including interest) is forgiven, unless the City shall
otherwise consent in writing:
A. Payment of The Loan:
To pay punctually the principal and interest on the Note according to its terms and conditions
and to pay punctually any other costs that may become due and payable to the City pursuant to
the terms of this Agreement or Note.
B. Payment of Other Indebtedness:
To pay punctually the principal and interest due on any other indebtedness now or hereafter
owed by the Borrower to the City.
C. Insurance:
To obtain at its sole cost and keep in full force and effect during the term of this Agreement,
broad form property damage, hazard insurance covering fire and extended coverage in amounts
at least equal to the unpaid balance of the Note and any senior encumbrances on the real
property subject to the Deed of Trust in this transaction. Evidence of such coverage shall be
submitted to the City within 15 days of the execution of this Agreement showing the City as a
loss payee under such policy. Such evidence shall be acceptable to City in its sole discretion.
A title policy, acceptable to the City, in its sole discretion, with endorsements required by City
shall be provided by Borrower.
D. Certificates of Insurance:
To furnish certificates of insurance and endorsements each of which shall provide that no
cancellation, major change in coverage, or expiration will be made during the term of this
Agreement without 30 days written notice to the City prior to the effective date of such
cancellation, or change in coverage.
E. Taxes:
To pay and discharge all personal property taxes, assessments, and governmental charges upon
it or against its properties prior to the date on which the penalties attached thereto apply, except
that the Borrower shall not be required to pay any such tax, assessment, or governmental
charge which is being contested in good faith and by appropriate proceedings. If so requested
by the City, Borrower will provide a bond guaranteeing payment of such taxes or assessments
in any case in which Borrower contests any tax and refuses to pay under this section.
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ATTACHMENT D
F. Additional Funding:
To provide additional equity funds to cover project costs incurred as a result of overruns or
unanticipated expenses or changes in work orders in the project as specified in the Loan
Agreement.
G. Existence:
To maintain its existence, rights, privilege, and franchises within the State of California and
qualify and remain qualified in each jurisdiction in which its present or future operations or its
ownership of property requires such qualifications.
H. Financial and Job Information:
To maintain adequate records and books of account, in which all of its business and financial
transactions will be entered in accordance with generally accepted accounting principles.
The Borrower will comply with all record keeping requirements. All records concerning the
construction, including invoices, receipts and contracts will be kept for a period of not less than
three years from the completion of construction. All relevant records pertaining to the project,
upon reasonable request, shall be accessible and available for inspection or audit by the City for
the same time period. If so directed by the City, Borrower shall deliver to the City all records,
accounts, documentation and other relevant materials relating to the receipt and disbursement of
loan funds.
I. Job Information:
To provide job information semi-annually to the City for the period of the Loan or five (5)
years, which is less. This job information will include, but not be limited to, the number of
new hires, wages, title, starting date or jobs retained that directly relate to this loan, and the
number of new or retained employees who are within the Target Income Group.
J. Right to Inspection:
To grant the City, until the Note has been fully repaid with interest or such amounts are
forgiven, the right at all reasonable hours to inspect any chattel, personal property, and/or real
estate used to secure the Loan, and to provide the City free access to the Borrower's premises
for the purpose of such inspection. The Borrower will give the City through any authorized
representative the access and the right to examine all records, books, papers, or documents
relating to the Loan.
K. Notice of Default:
To give written notice to the City of any event within 15 days of the event that constitutes an
Event of Default under this Loan Agreement as described in Section 4 of the Agreement or that
would, with notice or lapse of time or both, constitute an Event of Default under this Loan.
Page 2 of 3
L. Indemnify and Hold Harmless:
To indemnify and hold harmless the City, its elected officials, agents and employees from all
claims, suits, or actions of every name, kind and description, brought forth on account of
injuries to or death of any person or damage to property arising from or connected with the
willful misconduct, negligent acts, errors or omissions or activities giving rise to strict liability,
or defects in design by the Borrower or any person directly or indirectly employed by or acting
as agent for Borrower, in the performance of this Agreement, except to the extent caused by
the sole negligence or willful misconduct of the City, its officers, agents or employees.
It is understood that the duty of Borrower to indemnify and hold harmless includes the duty to
defend as set forth in Section 2778 of the California Civil Code.
M. LQhi
To create or maintain the number of jobs including the TIG jobs, as described in the TIG
Employment Plan (Attachment H).
N. Collateral:
To provide and maintain any collateral property or equipment in good condition and at the
original site identified in the loan application. All property and equipment shall remain free of
any additional encumbrances, liens or claims after loan closing.
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ATTACHMENT E
NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, from the date hereof until payment in full or forgiveness of
the Note, unless the City shall otherwise consent in writing, the Borrower will not enter into any
agreement or other commitment, the performance of which would constitute a breach of any of the
covenants contained in this Loan Agreement including, but not limited to, the following covenants.
Any breach of these covenants will constitute an Event of Default, and the rights of default by the
City may be executed.
A. Sell the Borrower's Assets:
The Borrower will not sell or transfer all or a substantial part of its assets except those usually
sold in the ordinary course of the business.
B. Lease or Sublease Property:
The Borrower will not lease or sublease all or any portion of the property to be acquired,
constructed or rehabilitated with the proceeds of this Loan without the written consent of the
City, provided, that City's consent shall not be required for a lease or sublease of the property
to Rite Way Meat Packers, Inc., Rose & Shore, Inc., or R.B.R. Meat Company.
C. Change of Ownership:
The principals of the Borrower will not permit, without the written consent of the City, any
material change in the ownership structure, control or operation of the Borrower including, but
not limited. to: (1) merger into or consolidation with any other person, firm, or corporation;
(2) changing the nature of its business; (3) substantial distribution, liquidation, or other transfer
of the Borrower's assets to the stockholders or any other party.
D. Change the Project:
The Borrower will not permit any material change in the project's plans and/or specifications
submitted to the City as set forth in the Loan Application. Material change will include any
significant variance in the accepted plans and specifications, increases in contract prices, and/or
additional financial obligations with respect to the construction and acquisition or assets.
Page 1 of 1
ATTACHMENT E
ATTACHMENT F
GENERAL TERMS AND CONDITIONS
A. Waiver:
No failure or delay on the part of the City in exercising any right, power, or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise of any other
right, power, or remedy hereunder. No modification or waiver of any provision of this
Agreement or the Note, nor any consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for which given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice of demand in similar or other circumstances.
B. Amendments - Writing Required:
The City hereby expressly reserves all rights and provisions of this Agreement to amend or
consent to departure from the provisions of the Note, and to release or otherwise deal with any
collateral security for payment of the Note; provided however, that all such amendments shall
be in writing and executed by the City and the Borrower.
C. Notices:
All notices; consents, requests, demands, and other communications hereafter shall be in
writing and shall be deemed to have been duly given to a party hereto if mailed by certified
mail, prepaid, to the City or Borrower, at its address as set forth at the beginning of this
Agreement, or at such other addresses as any party may have designated in writing to any other
party hereto. This section does not limit other means of delivering written notice if said notices
are actually received.
D. PUments:
The Borrower will make payments to the City in accordance with the terms and conditions and
instructions contained in this Agreement and the Promissory Note.
E. Survival of Representations and Warranties:
All agreements, representations, and warranties made by the Borrowers herein or any other
document or certificate delivered to the City in this transaction shall survive the delivery of this
Agreement, the Note and any security instrument hereunder, and shall continue in full force
and effect so long as the Note is outstanding.
F. Successors and Assigns:
This Agreement shall be binding upon the Borrower, its successors, and assigns, except that the
Borrower may not assign or transfer its rights without prior written consent of the City. This
Page 1 of 2
ATTACHMENT F
Agreement shall inure to the benefit of the City and, except as otherwise expressly provided for
in particular provisions hereof, any subsequent holders of the Note.
G. Counterparts:
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
H. Governing Law:
This Agreement and the Note and Security Agreements, Financing Statements, and Deed of
Trust shall be deemed contracts made under the laws of the State of California and for all
purposes shall be construed in accordance with the laws of said State.
Page 2 of 2
ATTACHMENT F
ATTACHMENT G
PROJECT ASSURANCES
The Borrower hereby assures and certifies that it will comply with all regulations, policies,
guidelines, and requirements as they relate to the Loan. The Borrower also assures and certifies to
the City of Vernon that the Borrower:
A. Will comply with Title VI of the Civil Rights Act of 1964 (P.L 88-352) whereby no person in
the United States shall on the grounds of race, color, or national origin, be excluded from
participation in, be denied the benefits of, or otherwise be subjected to discrimination by the
Borrower under which the Borrower receives Federal financial assistance, and Borrower will
immediately take any measures necessary to effectuate this agreement. The phrase "Federal
financial assistance" includes any form of loan, grant, or any other form of direct or indirect
Federal assistance.
B. Will comply with Title VI of the Civil Rights Act of 1964 (42-USC 2000d) prohibiting
employment discrimination where: 1) the primary purpose of the financial assistance is to
provide employment, or 2) discriminatory employment practices will result in unequal treatment
of persons who are or should be benefiting from the CDBG loan -aided activities.
C. Will comply with Section 112 of the Public Law 92-65 and Title III of Public Law 94-135
whereby the Borrower assures that no person in the United States shall, on the grounds of sex
or of age, be excluded from participating in, be denied the benefits of, or otherwise be subject
to discrimination in connection with CDBG loan -aided activities.
D. Will comply with the flood insurance purchase requirements of Section 102(a) of the Flood
Disaster Protection Act of 1973, Public Law 93-234, 87 Stat. 975, approved December 31,
1976. Section 102(a) requires, on and after March 2, 1975, the purchase of flood insurance
in communities where such insurance is available as a condition for the receipt of any federal
funds in any area that has been identified by the Secretary of the Department of Housing and
Urban Development as an area having special flood hazards.
E. Will comply with Section 106 of the National Historic Preservation Act of 1966 as amended
(16 USC 47 0), Executive Order 11593, and the Archeological and Historic Preservation Act
of 1966 916 USC 469a-1 et. seq.) by: a) consulting with the State's Historic Preservation
Officer on the conduct of investigation, as necessary to identify properties listed on or eligible
for inclusion in the National Historic Register (see 36 CFR Part 880.8) by the activity, and
noticing of existence of any such properties; and b) complying with all requirements established
by the State to avoid or mitigate adverse effects on historic structures.
F. Will comply with Section 2 of the Public Works and Economic Development Act which states
that under the provisions of this Act, new employment opportunities should be created by
developing and expanding new and existing facilities and resources rather than by merely
transferring jobs from one labor area to another.
Page 1 of 2
ATTACHMENT G
G. Will assure that any building or facility financed in whole or in part by any funds provided
under the Loan will be designed, constructed or altered so as to assure ready access to and use
of such building or facility by the physically handicapped. This provision applies only to firms
which deal directly with the general public in the normal and usual course of their business, and
to facilities in which business is customarily transacted by and with members of the general
public.
H. Will ensure that the facilities under its ownership, lease or supervision which shall be utilized in
the accomplishment of the project are not listed on the Environmental Protection Agency's
(EPA) list of Violating Facilities and that it will notify the City of Vernon Department of
Community Services of the receipt of any communication from the Director of the EPA Office
of Federal Activities indicating that a facility to be used in the project is under consideration for
listing by the EPA as a violating facility.
I. Will comply with all requirements imposed by the Federal sponsoring agency concerning
special requirements of law, program and other administrative requirements.
J. Will comply with the Davis Bacon Act, as amended (40 USC 276a-5), as this Act may apply
to the project of the Borrower.
K. The Borrower certifies, to the best of its knowledge or belief, that:
(a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to
any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the entering into of any
cooperative agreement, and the extension, continuation, renewal, amendment, or
modification of any Federal contract, grant, loan, or cooperative agreement;
(b) If any funds other than Federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence anofficer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with this Federal contract, grant, loan, or cooperative
agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report
Lobbying," in accordance with its instructions.
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ATTACHMENT G
ATTACHMENT H
TIG EMPLOYMENT PLAN
RRR Real Estate LLC (and Rite -Way Meat Packers, Inc.,
Rose & Shore, Inc., and R.B.R. Meat Company)
This TIG Benefit Employment Plan ("Plan") will be used by RRR Real Estate LLC and/or Rite -Way
Meat Packers, Inc.. and/or Rose & Shore, Inc., and/or R.B.R. Meat Company ("Employer") to assure
continuing employment opportunities to economically disadvantaged and unemployed persons.
Employer will use the local Job Training Program Agency Program [the Private Industry Council
(PIC) and the Office of Employment Training (OET)] as its initial resource for recruitment, referral
and placement in positions covered herein, but is not restricted to JTPA resources.
a) The City of Vernon ("City") provides Community Development Block Grant ("CDBG")
funded low interest loans for business start-up and expansion. By virtue of this loan, the
City expects to realize additional employment opportunities for lower income and
unemployed persons (the "Target Income Group," or TIG). The City has negotiated a loan
with the Employer as follows and as additionally described in the Loan Agreement:
i. Loan Amount $187,362.00
I Interest Rate 7 %
iii. Term Until December 1, 2001
N. Job Requirement 10 jobs created (minimum)
b) Employer shall hire and retain at least one permanent full-time employee (minimum of
1,750 work hours per year) per $20,000 in CDBG loan funds received. At least 10
jobs/positions will be provided by December 1, 1999. The Employer also agrees that at
least 51 % of all jobs created as a result of the CDBG loan will be filled by members of the
Target Income Group.
c) The loan described in the preceding Section 1(a) and in the Loan Agreement will result in
the following additional employment opportunities:
Number Anticipated
of Jobs Positions (tune)
8 Meat Cutter/Food Handlers
Supervisor
Office Administration
Page 1 of 3
Expected
Hiring_Date
12/1/99
12/1/99
12/1/99
ATTACHMENT H
2. Employment/Recruitment
a) "Covered positions" for the purposes of this Agreement shall include all Employer's job
openings in the City of Vernon created as a result of internal promotions, terminations, and
expansion of Employer's work force, within the positions listed under Section l(d).
b) At least three weeks prior to anticipated. hiring dates, the Employer will notify the JTPA
Program of its needs for new employees in the covered positions; or, if Employer is hiring
on its own behalf, it must provide proof of TIG benefit to the City on self -certification
forms obtained from City. Notification shall be by Job Order Form provided to the JTPA
Program, and shall include, but not necessarily be limited to:
L Number of employees requested by job title.
ii. Job description, including minimum qualifications stated in quantifiable and objective
terms.
iii. Work to be performed.
iv. Hiring dates.
v. Rates of pay.
vi. Hours of work.
vii. Anticipated duration of employment.
3. Referral
a) The JTPA Program will refer job applicants eligible,pursuant to the Job Training
Partnership Act (JTPA) and the Community Development Block Grant (CDBG) regulations
to the Employer in response to the notification of need for new employees described in
Section 1 (d). The JTPA Program will maintain the documentation of applicant/employee
household income required by the CDBG program, and provide such information to the
City of Vernon c/o The Holt Group, Inc., upon hiring of any applicant.
b) The JTPA Program will notify the Employer of the number of applicants it will refer and
begin making referrals no later than one week prior to the anticipated hiring date. The
JTPA will make every reasonable effort to refer at least one qualified person(s) for each
job opening.
c) In the event that the JTPA Program is unable to refer any or all of the qualified personnel
requested, the Employer will be notified by the JTPA Program on a timely manner. The
Employer will then be free to directly fill remaining positions. In this event, the Employer
will make a good faith effort to hire economically disadvantaged persons through additional
recruitment techniques in conformance with the terms of the loan and approved by the
City. Employer in conjunction with the City's CDBG Consultant, The Holt Group, will
then be responsible for verifying Targeted Income Group status.
4. Placement
a) If Employer's using the JTPA Program for job placement, all decisions on hiring new
employees will be made by the Employer. The Employer agrees to provide priority
consideration to prospective employees for covered positions from the qualified persons
referred by the JTPA Program. If the Employer does not find any of the persons so
Page 2 of 3
referred to qualify for the opening(s), the JTPA Program and City will be notified.
b) The MA Program and the City's CDBG Consultant will monitor job retention and
employment performance of employees placed under the Agreement. The Employer agrees
to cooperate fully in these follow-up efforts, and to provide two times annually hiring
summaries for five years after funding, in a form acceptable to the City and the State.
This may include, but not be limited to, copies of employee rosters and payroll and tax
information submitted to the State of California and to the federal government.
c) If the Employer has selected employees from referrals by the JTPA Program, the City will
not be responsible for the employee's actions and the Employer hereby releases the City
from liability.
5. Tl'gjplpS
a) The JTPA Program and the Employer may agree to develop additional job training
programs. The training specifications and the cost for such training will be mutually
agreed upon by the Employer and the JTPA Program and covered under a separate training
agreement(s).
6. Controlling Regulations and Laws
a) If this Plan conflicts with'any labor laws or other goyernmental regulations, those laws or
regulations shall prevail.
b) If this Plan conflicts with a collective, bargaining agreement to which the Employer is a
party, the bargaining agreement shall prevail.
c) The Employer shall not discriminate against any applicant for employment due to race,
religion, age, color, sex, national origin, physical handicap, sexual preference, or political
affiliation.
7. Assignment. Modification and Renewal
a) If employer should transfer possession of all or a portion of its business concerns to any
other party by lease, sale, assignment or otherwise, this Plan will be binding on
Employer's successors and assigns. Employer, as a condition of transfer, shall require the
party taking possession to agree, in writing, to the terms of this Plan and provide proof to
the City.
c) This Plan may; upon mutual agreement, be modified in order to improve the working
relationship described herein.
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