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Resolution No. 8301I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 8301 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A REQUEST FOR FULL RECONVEYANCE FOR PAYOFF OF THE PROMISSORY NOTE WITH PRINCESS PAPER, INC. WHEREAS, on November 17, 1998, the City Council of the City of Vernon adopted Resolution No. 7234 approving the loan application of Princess Paper, Inc. ("Princess Paper") for funding of on -site improvements pursuant to the 95-EDBG-390 Vernon Infrastructure Loan Program ("CDBG Loan"); and WHEREAS, on March 2, 1999, Raheleh Ayenehchi and Abraham Hakimi signed a Short Form Deed of Trust and Assignment of Rents Individual ("Deed") together with a Note Secured by Deed of Trust ("Note") in the sum of $200,000.00 with interest payable at the rate of 6% per annum payable at the rate of $3,866.57 per month for a period of 60 months at which time the balance was due and payable in full; and WHEREAS, to complete the funding of the CDBG Loan, Princess Paper executed a Loan Agreement, Personal Guaranty on Commercial Loan ("Guaranty") and TIG Benefit Non -Financial Employment Plan Agreement as well as a Uniform Commercial Code Financial Statement UCC-1 Form as security interest on the equipment to be purchased; and WHEREAS, the CDBG Loan, as secured by the Deed is due and payable by May 25, 2004; and WHEREAS, payments have been made in accordance with the terms of the Loan Agreement and Note; and WHEREAS, Chicago Title Company ("Chicago"), an escrow company, demanded a payoff statement from the City pursuant to Civil 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Eli 16 17 18 19 20 21 22 23 24 25 26 27 28 Code §§ 2943, et seq., on behalf of Princess Paper; and WHEREAS, by letter dated October 14, 2003, the City Administrator/City Clerk submitted to Chicago the City's payoff demand statement and on October 20, 2003, Fidelity National Title Company paid by check the total principal and interest owing on the Note as of October 22, 2003; and WHEREAS, by letter dated October 30, 2003, Bruce V. Malkenhorst, City Administrator/City Clerk, recommended that the execution of the Request for Full Reconveyance be approved and that the City Administrator be authorized to execute any documentation regarding this matter. 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. SECTION 2: The City Council of the City of Vernon hereby approves the Request for Full Reconveyance, a copy of which is attached hereto as Exhibit "A" and made a part hereof. SECTION 3: The City Council of the City of Vernon hereby authorizes the City Administrator to execute the Request for Full Reconveyance for, and on behalf of, the City of Vernon. SECTION 4: The City Council of the City of Vernon hereby approves releasing the security interest evidenced by UCC-1 by the filing of a termination form with the Secretary of State and notifying the Guarantors of their option to revoke under Section 4 of the Guaranty and authorizing the City Administrator to execute any documents to implement said release or cancellation. - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 5: The City Council of the City of Vernon hereby directs the City Clerk, or his designee, to send the signed and notarized Request for Full Reconveyance; the original Note endorsed "Paid in Full" and the original recorded Deed for subsequent recordation of a Reconveyance deed to: Chicago Title Company Attn. Maura Beland, Escrow Officer 7434 Jackson Drive San Diego, CA 92119 SECTION 6: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 5th day of November, 2003. ATTEST: BRUCE V. MALKENHORST, City Clerk r EONIS C. MALB RG, May r - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8301, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Wednesday, November 5, 2003, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, City Clerk - 4 - EXHIBIT REQUEST FOR FULL RECONVEYANCE A Full Reconveyance will be issued only when original note or notes, together with the Deed of Trust securing payment thereof, are surrendered to the Trustee for cancellation, accompanied by this Request signed by all owners of the note or notes. NORTH AMERICAN TITLE COMPANY, Trustee Date: November 5, 2003 The undersigned Beneficiary is the legal owner and holder of the certain promissory note for the total sum of $200,000.00 and all other indebtedness secured by the Deed of Trust dated March 2, 1999, executed by RAHELEH AYENEHCHI, a Widow and ABRAHAM HAKIMI, a Married Man, as his sole and separate property as Joint Tenants, herein called Trustors, to NORTH AMERICAN TITLE COMPANY, Trustee, and recorded May 25, 1999 as instrument No. 1999-0358688 of Official Records in the office of the Recorder of San Diego County, State of California. You are notified hereby that said notes and all other indebtedness secured by said Deed of Trust have been fully paid, and said note or notes and the said Deed of Trust is herewith surrendered to you for cancellation. You are therefore requested, upon payment to you of all sums owing to you under the terms of said Deed of Trust, to reconvey, without warranty to the "person or persons legally entitled thereto," the estate now held by you and acquired through said Deed of Trust. MAIL RECORDED RECONVEYANCE TO: Chicago Title Company 7434 Jackson Drive San Diego CA 92119 The City of Vernon, a municipal corporation BRUCE V. MALKENHORST, City Administrator STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On November _, 2003, before me, , personally appeared BRUCE V. MALKENHORST, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (SEAL) SUPPORTING DOCUMENTS CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 November 10, 2003 Via Facsimile and U.S. Mail Ms. Maura Beland Escrow Officer Chicago Title Company 7434 Jackson Drive San Diego, CA 92119 Facsimile No. (619) 667-4259 Re: Request for Full Reconveyance Escrow # 38065591-N20 Borrower: Princess Paper, Inc. Guarantor: Abraham Hakimi Trustee: North American Title Company Dear Ms. Beland: EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Light & Power FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 The City is in receipt of the pay-off funds pursuant to its payoff demand statement. Enclosed please find the following documents for recordation of the reconveyance: 1. Original Note Secured by Deed of Trust (endorsed `Paid in Full"). 2. Original Short Form Deed of Trust and Assignment of Rents Individual. 3. Signed and notarized Request for Full Reconveyance. 1 04 Ms. Beland Page 2 November 10, 2003 Please return a copy of the recorded reconveyance to complete our files. CC: Ms. Sharon Johnson City Attorney's Office Very truly yours, Bruce V. Malkenhorst City Administrator REQUEST FOR FULL RECONVEYANCE A Full Reconveyance will be issued only when original note or notes, together with the Deed of Trust securing payment thereof, are surrendered to the Trustee for cancellation, accompanied by this Request signed by all owners of the note or notes. NORTH AMERICAN TITLE COMPANY, Trustee Date: November 5. 2003 The undersigned Beneficiary is the legal owner and holder of the certain promissory note for the total sum of $200,000.00 and all other indebtedness secured by the Deed of Trust dated March 2, 1999, executed by RAHELEH AYENEHCHI, a Widow and ABRAHAM HAKIMI, a Married Man, as his sole and separate property as Joint Tenants, herein called Trustors, to NORTH AMERICAN TITLE COMPANY, Trustee, and recorded May 25, 1999 as instrument No. 1999-0358688 of Official Records in the office of the Recorder of San Diego County, State of California. You are notified hereby that said notes and all other indebtedness secured by said Deed of -Trust have been fully paid, and said note or notes and the said Deed of..Trust is herewith surrendered to you for cancellation. You are therefore requested, upon payment to you of all sums owing to you under the terms of said Deed of Trust, to reconvey, without warranty to the "person or persons legally entitled thereto," the estate now held by you and acquired through said Deed of Trust. MAIL RECORDED RECONVEYANCE TO: Chicago Title Company 7434 Jackson Drive San Diego, CA 92119 The City of Vernon, a municipal corporation By. X4--------� BRUCE V. MALKENHORST, City Administrator STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES T On November ,03, before me, Cs10 'ram ✓• 9"'ersonally appeared BRUCE V. MALKENHORST, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (SEAL) 0GLORIA J. OROSCO N Comm. 11370778 'n NOTARY PUBLIC -CALIFORNIA ur ` Los Angeles County ,J My Comm. Expires Aug. 27, 2006 '� SUPPORTING DOCUMENTS a�J I `RT"tIWf !vAI TITLECOMPANr v (y/_�` RECORDING REQUE DOC 7JL'T �.999--Oj58 8 North American � a11.►jlltt��..!!{{ +-+�'.�t fl.�-.{i AND WHEN RECORDED MAY 25, 1999 4:46 PM V. City of Vernon 4305 Santa Fe Ave. 00 0\0 F �, OFFICIAL REM Vernon, CA 90058 A`� � SA+! DIEM ffY RECORDER'S OFFICE A. Illilllllllll� GREGORY J. SMITH, COWTY RECORDER FEES: 25.00 WAY: DR RECORDER'S USE ONLY: ESCROW NO. 050328-LB 199g 0:➢58689 TITLE ORDER NO. 3084890-98 SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS INDIVIDUAL THIS DEED OF TRUST, maae March 2, 1999, between A.P. # RAHEL EH AYENEHCHI, a Widow and ABRAHAM HAKIMI, a Married Man, as his sole and separate property as Joint Tenants, herein called TRUSTOR, whose address is 3351 E. Slausori Avenue, Vernon, CA 90058 and North American Title Company, a California Corporatign, herein called TRUSTEE, AND City of Verno7, herein called BENEFICIARY, A MUNICIPAL CORPORATION 111,'ITNESSETH: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE that Property in San Diego County, California, described as: LEGAL DESCRIPTION ATTACHED HERETO AND MADE A PART HEREOF. "Should the trustor or his successors in interest, without the consent in writing of the beneficiary, sell, transfer or convey or permit to be sold, transferred or conveyed, his interest in the property, or any part thereof, then the beneficiary may, at his option, declare all sums secured hereby immediately due and payable." TOGETHER WITH the rents. issues and profits the. SUBJECT, HOWEVER, to the right, power and authority given to and conferred upon Beneficiary by paragraph (10) of the provisions incorporated herein by reference to collect and apply such rents, issues and profits. For the Purpose of Securing: 1. Performance of each agreement of Trustor ;ncorporated by reference or contained herein.. 2. Payment of the indebtedness evidenced by one promissory note of even date nerewith, and any extension of renewal thereof, in the principal sum of a 200,000.00 executed by Trustor and Princess Paper, Inc., in favor of Beneficiary or order. 3. Performance of the personal guaranty of even date executed by Abraham Hakimi and Nasser Etebar in favor of Beneficiary, said guaranty being incorporated herein by reference. 4. Payment of such further sums as the then record owner of said property may borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured. DATED March 2, 1999 STATE OF CALIFORNIA COUNTY OF . 0= On / l 1WI before me, �) ry a Not Pub pe is in and f r *aid State, personally apared personally known me (or to be the person(s) whose name(s) Wow subscribed to the within instrument and acknowledged to me that heislast:h y executed the same in his/heir authorized capacity(ies), and that by his/her signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seai. Signature�I Name ;Typed or Printed) SIGNATURE OF TRUSTOR: Brenda M. Wickenk Comm. #1161647 NOTARY PUBLIC - NIA ORAN(a'£ COUNTYUNTY n Comm. Esp. Nov.15. 2001 + (This area for official notarial seal) To Protect the Security of This Deed of Trust, Trustor Agrees: By the execution and delivery of this Deed of Trust and the note secured hereby, that provisions (1) to (14), inclusive, of the fictitious deed of trust recorded in Santa Barbara County and Sonoma County October 18, 1961, and in all other counties October 23, 1961, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, viz.: County Book Page County Book Page County Book Page County Book Page Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335 Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181 Amador 104 34 Lassen 171 471 Riverside 3005 523 Solano 1105 182 Butte 1145 1 Los Angeles T2055 899 Sacramento 4331 62 Sono me 1851 689 Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456 Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297 Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289 Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366 Eldorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275 Fresno 4626 _572. Modoc - 184 85'1 San Mateo 4078 420 Tuolumne 135 47 Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386 Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245 Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486 Inyo 147 598 Nevada 305 320 Shasta 684 528 Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961 Page183887 ,which provisions, identical in all counties, are printed on the reverse hereof) hereby are adopted and incorporated herein and made a part hereof as fully as though set forth herein at length; that he will observe and perform said provisions; and that the references to property, obligations, and parties in said provisions shall be construed to refer to the property, obligations, and parties set forth in this Deed of Trust. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to him at DO NOT RECORD REQUEST FOR FULL RECONVEYANCE To be used only when note has been paid To North American Title Company, Trustee: Dated The undersigned is the legal owner and holder of all indebtedness secured by the within Deed of Trust. All sums secured by said Deed of Trust have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said Deed of Trust, delivered to you herewith together with said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, the estate now held by you under the same. MAIL RECONVEYANCE TO: Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both roust be delivered to the Trustee for cancellation before reconveyance will be made. 3 EXHIBIT A LEGAL DESCRIPTION Lot 223 of Lake View Country Club Village in the City of San Diego Unit No. 4, in the City of SAN DIEGO, •County of San Diego, State of California, according to Map thereof No. 5354, filed in the Office of the County Recorder of San Diego, February 28, 1964. DO NOT RECORD The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust, recorded in each county in California, as stated in the for'agoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. To Protect the Security of This Deed of Trust, Trustor Agrees: 1. To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroved thereon and to pay when due all claims for ldobr performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2. To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4. To pay; at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purpose; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any incumbrance, charge or lien which in the judgement of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded_ by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. 6. That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 7. That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 8. That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. 9. That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be describe as "the person or persons legally entitled thereto." Five years after issuance of such full reconveyance, Trustee may destroy said note and this Deed (unless directed in such request to retain them). 10. That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due ano payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 11. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shalt deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of; all sums expended under the terms hereof not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 12. Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 13. That this Deed applies to inures, to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby whether, or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 14. That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 'CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of C is L., County of La hnsatA On mr ct, t0, tom before me, H ' Stagy DotA " i , Date Name and Title of Officer ( ., 'Jane Doe, Notary Public") personally appeared R&a %eiel, Arvtntal.C-b, hersonally Name(s) of Signer(s) known to me — OR — ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), idmrrWaet# 0 or the entity upon behalf of which the person(s) acted, safty^02-c000ft executed the instrument. US1 �8rjlttwii WITNESS my hand and official seal. Signatu ary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document n� t Title or Type of Document: SW lyl, pet' � � oi- ►VA - Document Date: _ _ rw1, Z, I'M Number of Pages: Signer(s) Other Than Named Above: ABM tom• 6V_!rA Capacity(ies) Claimed by Signer(s) Signer's Name: M+s• Q��c1tb, �hC►u1.c�►► Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney-in=Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINTi OF SIGNER Signer's Name: e Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attomey-in-Fact Trustee Guardian or Conservator Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER of thumb here 01994 National Notary Association • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder: Call Toli-Free 1-800-876-6827 SUPPORTING DOCUMENTS DO NOT DESTROY THIS NOTE: When paid, this note with Deed of Trust securing same, ESCROW NO., 050328-LB must be surrendered to Trustee for cancellation before reconveyance will be made NOTE SECURED BY DEED OF TRUST (INSTALLMENT - INTEREST INCLUDED) $200,000.00 PC, Id lki FUl ( March 2, 1999 Valencia, California. In installments and at the times hereinafter stated, for value received, the undersigned promise to pay to City of Vernon, a Municipal Corporation, or order, at place designated by Beneficiary the principal sum of TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00), with interest from May 25, 1999 on amounts of principal remaining from time to time unpaid until said principal sum is paid, at rate of 6.0000 per cent per annum. Principal and interest due in monthly installments of THREE THOUSAND EIGHT HUNDRED SIXTY-SIX AND 57/100 DOLLARS ($3,866.57, or more,) on the same day of each month,_ beginning on the 25th day of June "1999 and continuing until the 25th day of ` May , 2004, at which time any unpaid principal balance and accrued interest shall be all due and payable. "Should the trustor or his successors in interest, without the consent in writing of the beneficiary, sell, transfer or convey or permit to be sold, transferred or conveyed, his interest in the property, or any part thereof, then the beneficiary may, at his option, declare all sums secured hereby immediately due and payable." "A late charge of 5.0000 percent of the monthly payment shall be, due on each installment not received within 10 days of the due date." Each payment shall be.credited first to interest then due and the remainder on principal; and interest shall thereupon cease upon the principal so credited. Should default be made in payment of any of installment when due the whole sum of principal and interest shall become immediately due at the option of the holder of this note. Principal and interest payable in lawful money of the United States. If action be instituted on this note I/we promise to pay such sum as the Court may fix as attorney's fees. This note is secured by a Deed of Trust to North American Title Company, a California corporation, as TRUSTEE. PROPERTY: 6264 LAKE LOMOND DRIVE SAN DIEGO, CA 92119 ess Paper, Inpj, ABRAHAM ABRAHAM HAK1M1, This form furnished by North American Title Company CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro -Tern WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 Mr. Abraham Hakimi Mr. Nasser Etebar Princess Paper, Inc. 3351 E. Slauson Vernon, CA 90058 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 November 12, 2003 EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 PE17 Re: Termination Statement and Notice of Option to Revoke Guaranty Dear Messrs. Hakimi and Etebar: As you know, in 1999, Princess Paper, Inc. obtained a CDBG Loan from the City of Vernon. The Loan was secured by a UCC-1 filing on the equipment purchased as well as a Personal Guaranty on Commercial Loan (the "Guaranty"). The Loan was recently repaid. Enclosed please find an original and one acknowledgement copy of a UCC Financing Statement Amendment (UCC-3) terminating the equipment security interest of the City for filing with the California Secretary of State. Also enclosed is information pertaining to filing procedures. Furthermore, in accordance with Paragraph 4 of the Guaranty, the City of Vernon is hereby notifying you of your option to revoke the Guaranty. Very truly yours, CITY OF VERNON Bruce V. Malkenh rst City Administrator/City Clerk BVM: j l Enclosures Certified Mail, Receipt No. Z190140747 cc: Eric T. Fresch, Acting City Attorney Eduardo Olivo, Esq., Legal Counsel I Z 190 140 747 US Postal Service Receipt for Certified Mail No Insurance Coverage Provided. Do not use for International Mail See reverse sent to Abraham Hakimi Nasser Etebar Street & Number 3351 E. Slauson Post Office, State, & ZIP Code Vernon CA 9.0058 Postage $ 37 Certified Fee a, 30 Special Delivery Fee Restricted Delivery Fee LO rn Return Receipt Showing to (J� Whom & Date Delivered a Return Receipt Showing to Whom, Q Date, & Addressee's Address O TOTAL Postage & Fees $ Z e0 EPostmark or Date 11 / 12 / 0 3 8 tL U) a Z 190 140 747 DDAACKNOWLEDGMENT TO: (Name and Address) I Bruce V. Malkenhorst City Administrator/City Clerk City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY Ia. INITIAL FINANCING STATEMENT FILE # 1b. This FINANCING STATEMENT AMENDMENT is 9915460270 n to be filed [for record] (or recorded) in the RFAI GCTATC D—n- 2. 3. to security, interest(s) of the Secured Party authorizing this Termination Statement. JA I IUN: Effectiveness of the Financing Statement identified above with respect to security interest(s) of the Secured Party authorizing this Continuation Statement is for the additional period provided by applicable law. Effectiveness of the Financing Statement identified above is terminated with resr 4, UASSIGNMENT (full or partial): Give name of assignee in item 7a or 7b and address of assignee in item 7c; and also give name of assignor in item 9. 5. AMENDMENT (PARTY INFORMATION): This Amendment affects Debtor Pr HSecured Party of record. Check only one of these two boxes. Also check one of the following three boxes afid provide appropriate informaLl tion in items 6 and/or 7. CHANGE name and/or address: Give current record name in item 6a or 6b; also give new DELETE name: Give record name ADD name: Complete item 7a or 7b, and also name (if name change) in item 7a or 7b and/or new address (if address change) in item 7c to be deleted in item 6a or 6b item 7c also complete items 7d 7g (if applicable) 6. CURRENT RECORD INFORMATION. Princess Paper, Inc. OR FIRST NAME 7. CHANGED (NEW) OR ADDED INFORMATION - 7a. ORGANIZATION'S NAME OR 7b. INDIVIDUAL'S LAST NAME - FIRST NAME MIDDLE NAME SUFFIX 7c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 7d. TAX ID #: SSN OR EIN 17e. TYPE OF ORGANIZATION 7f. JURISDICTION OF ORGANIZATION 7g. ORGANIZATIONAL ID #, if any JADD'LINFORE ORGANIZATION DEBTOR A er.nr=Ainncr Air rrni i Arr — n NONE Describe collateral []deleted or❑added, or give entireE]restaled collateral description, or describe collateral ❑assigned. 9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT (name of assignor, if this is an Assignment). If this is an Amendment authorized by a Debtor which adds collateral or adds the authorizing Debtor, or if this is a Termination authorized by a Debtor, check here nand -enter name of DEBTOR authorizing this Amendment. ._ City of Vernon OR 9b. INDIVIDUAL'S LAST NAME 10.OPTIONAL FILER REFERENCE DATA CDBG Loan Payoff -Princess Paper FIRST NAME FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT AMENDMENT (FORM UCC3) (REV. 07/29198) SUFFIX UCC FINANCING STATEMENTAMENDMENT FOLLOW INSTRUCTIONS (front and back) CAREFULLYAC"OWLIDGMJM COPY A. NAME & PHONEOF CONTACT AT FILER tootionall ACKNOWLEDGMENT TO: (Name and Address) I Bruce V. Malkenhorst City Administrator/City Clerk City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 L THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY la. INITIAL FINANCING STATEMENT FILE 9 1b. This FINANCING STATEMENT AMENDMENT is 9915460270 ❑ to be filed [for record] (or recorded) in the REAL ESTATE RECORDS. 2. 3. Effectiveness of the Financing. Statement identified above is terminated with respect to security interest(s) of the Secured Party authorizing this Termination Statement. NUATION: Effectiveness of the Financing Statement identified above with respect to security interest(s) of the Secured Party authorizing this Continuation Statement is id for the additional period provided by applicable law. 4. uASSIGNMENT (full or partial): Give name of assignee in item 7a or 7b and address of assignee in item 7c; and also give name of assignor in item 9. 5. AMENDMENT (PARTY INFORMATION): This Amendment affects ❑Debtor gS ❑Secured Party of record. Check only one of these two boxes. Also check .im.Q of the following three boxes and provide appropriate information in items 6 and/or 7. _.❑CHANGE name and/or address: Give current record name in item 6a or 6b; also give new DELETE name: Give record name ADD name: Complete item 7a or 7b, and also name (if name change) in item 7a or 7b and/or new address (if address change) in item 7c. to be deleted in item 6a or 6b � item 7c• also complete items 7d-7q (if applicable) 6. CURRENT RECORD INFORMATION: Princess Paper, Inc. OR 6b. INDIVIDUAL'SLAST NAME 7. CHANGED (NEW) OR ADDED INFORMATION: MI 7a. ORGANIZATION'S NAME OR 7b. INDIVIDUAUS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 7c. MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY 7d. TAX ID #: SSN OR EIN ADD'L INFO RE 17e. TYPE OF ORGANIZATION ORGANIZATION 7f. JURISDICTION OF ORGANIZATION 7g. ORGANIZATIONAL ID If, if any DEBTOR NONE 0. —VICIY VIV[CIN I tt..ULLA I r"L LAIAINW:): check only one box. Describe collateral®deleted orE]added, or give entir4:1reslated collateral description, or describe collateral ®assigned. 9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT (name of assi'�gnor, if this is an Assignment). If this is an Amendment authorized by a Debtor which adds collateral or adds the authorizing Debtor, or if this is a Termination authorized by a Debtor, check here IrI and enter name of DEBTOR authorizing this Amendment. City of Vernon OR 9b. INDIVIDUAL'S LAST NAME 10.OPTIONAL FILER REFERENCE DATA CDBG Loan Payoff -Princess Paper FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT AMENDMENT (FORM UCC3) (REV. 07/29/98) California Business Portal - Uniform Commercial Code - Contact Information Page 1 of 1 y1t I ft[t] 3 �1i'(fif:.iilsi it I3ililli .T ��Tw ` (A BUSINESS PORTAL ,t�ii�til�"I� �£�7�I�i>lC:�� ' I t', k, { •f l , � Business Portal Uniform Commercial Code California Business Pane Contact Information Portal Home LININ id Uniform Commercial lk ... UCC Main Paae Office hours are Monday through Friday 8:00am to 5:00pm Revised Article 9 Location: Secretary of State Overview Uniform Commercial Code Revised Article 9 Forum 1500 11tit Street • Filing Information Sacramento, CA 95814 • Related Links newt Mailing Address: Secretary of State Customer Publications Uniform Commercial Code Forms >i< Fees P.O. Box 942835 FA -Ts- Sacramento, CA 94235- 0001 California Codes Private Service Phone Number: (916) 653-3516 Companies Technical Assistance Contact Us Copyright ;�)2001 California Secretary of State. Privacy Statement. http://www.ss.ca.gov/business/uce/ucc--contacts.htm 11/5/2003 California Business Portal - Uniform Commercial Code - Forms and Fees Pagel of 3 y3 1;}1 i:. I. tf[E7 i4`ilt�l'.i:l'i it llii�Y41i#'E 1 (ABUSINESS PORTAt •i1tF1i1'� *St1�J I M.lLtlii l 1 t;l„t!' Business Portal IJ .f C I California Business Portal Home Page Starting a Business Secretary of State Home Page Site Search 31 Commercialid Uniform ..• UCC Main Paae Revised Article 9 Overview Revised Article 9 Forum • Filing Information • Related Links "Cwt Customer Publications Forms & Fees FAA's es California Cod Private Service Companies Technical Assistance Contact Us n� orm ollnllnerca Code California Forms and Fees These forms and fees are effective on or after July 1, 2001. In accordance with the revisions to the California Uniform Commercial Code and filing office practices and procedures, the California Secretary of State's Office has adopted the following forms to be used exclusively starting July 1, 2001. All other forms, including the National Transitional UCC forms, are obsolete and will be rejected by the filing office after June 30, 2001. Effective July 1, 2001, filing fees are determined by the number of pages of the filing submittal. New forms are available in PDF file format and can be viewed and printed from your computer using Adobe's Acrobat Reader 5.0.5 or higher. The current version of Acrobat is available free from Adobe's website. TWO THREE FILING FORMS PAGES OR PAGES LESS OR MORE National Financing Statement (UCC- 1) & Addendum (Rev.07/1998) (Fill-in) • Dairy Cattle Lien $10.00 $20.00 •. Poultry/Fish Supply Lien • Chemical/Seed Lien • Equipment Repurchase Lien • Livestock Lien National Financing Statement Amendment (UCC-3) & Addendum $10.00 $20.00 (Rev.07/1998) (Fill in) California UCC Addendum (for use with UCC-1 or UCC-3) (Rev.06/2001) (Fill-in) -- -- National Correction Statement $10.00 $20.00 UCC-5 (Rev.05/2001) (Fill-in) http://www.ss.ca.gov/business/ucc/ra-9—ucc—formsfees.htm 11/5/2003 California Business Portal - Uniform Commercial Code - Forms and Fees Page 2 of 3 Notice of Judgment Lien (JL-1) & $10.00 $20.00 Addendum (Rev.06/2001) (Fill-in). Notice of Judgment Lien- Release/Subordination $10.00 $20.00 7 L-3 (Rev.06/2001) (Fill-in) Judgment Lien - Full Satisfaction of Judgment (Court Issued) $10.00 $20.00 Attachment Lien/Termination or $10.00 $20.00 Amendment (AT-1 & 31 (Rev.06/2001) (Fill-in) Notice'of Federal Tax Lien (FTL-1) (IRS issued) $10.00 $20.00 Change to Federal Tax Lien Notice (FTL- 3) $10.00 $2 ..00 (IRS issued) State Tax Lien Release (Termination) (STL-3) $2.00 REPRODUCTION/CERTIFICATION FEES Request for Information Certification and/or Copies Form (UCC-11) (Rev.06/2001) (Fill-in) (for use when ordering any of the items listed below) Debtor Search Response $ 10.00 Copy of first page of any document on file Copy of each additional attachment page Comparing a copy of any document with the original on file $ 50 $ 3.00 Affixing Certificate and Seal of State SPECIAL HANDLING FEES (over the counter and expedited processing) Additional charge for each document/request 11 $6.00 http://www.ss.ca.gov/business/ucc/ra_9_ucc_formsfees.htm 11 /5/2003 California Business Portal - Uniform Commercial Code - Forms and Fees Page 3 of 3 II submitted at our public counter ILeach I Copyright @2001 California Secretary of State. Privacy Statement. 14 http://www.ss.ca.gov/business/uce/ra_9_ucc_formsfees.htm 11/5/2003 California Business Portal - Uniform Commercial Code - UCC2 Change Form Page 1 of I fJuaw , . suctir7'3a`3e�'Pfallaif<i it � �Fi�9�,kt ��y�;t;,`1 (ARUSINMPGRTAt id Business Portal uniform commercial lk Code Uniform Commercial Code National Financing Statement Amendment (UCC-3) Rev. 7/29/98 & Addendum A National Financing Statement Amendment (Form UCC3) is used to change or add to information that was previously filed on the UCC1 form. This amendment form includes continuations, assignments, terminations, and amendments. At this time, only one type of change will be accepted per form. Effective July 1, 2001, California statute provides for the exclusive use of the National Financing Statement Amendment (Form UCC3) and Addendum (Form UCC3Ad) Rev. 7/29/98. This form contains a special barcode patch located in the upper left corner of the Filing Officer's Copy. For microfilming purposes, this barcode patch should be clearly printed using a quality laser printer, and kept free of damage. If the barcode patch is altered (i.e., stapled or photocopied), it causes delays in our microfilm processing time. This National Financing Statement Amendment (Form UCC3) must be reproduced in a format prescribed by the Uniform Commercial Code, including printing on 8 1/2" x 11" white paper. Submittals that do not conform to the specifications will be rejected. If you would like an acknowledgement copy, send one copy with the original and mark it "Acknowledgement Copy." Note: To retain the effectiveness of the barcode patch, we suggest that you frequently check your printer ink quality, and we do not recommend dot matrix printing for any forms. Download UCC-3 National Financing Statement Amendment & Addendum Forms Copyright Q2001 California Secretary of State. Privacy Statement. http://www.ss.ca.govibusiness/ucc/ra-9—ucc-3page.htm 11/4/2003 CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro—Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICI< Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 Mr. Bruce V. Malkenhorst City Administrator 4305 Santa Fe Avenue Vernon, California 90058 Dear Bruce: November 10, 2003 EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 ATTORNEY -CLIENT COMMUNICATION Re: Princess Paper, Inc. CDBG Loan Termination The City has now received full payment of its CDBG Loan to Princess Paper, Inc. ("Princess Paper") and is in the process of reconveying the property secured by the deed of trust. At this time, the City should take the following actions to close the loan file: 1. Provide Princess Paper with a termination statement concerning Vernon's security interest in the equipment purchased through the CDBG Loan. 2. Notify Abraham Hakimi and Nasser Etebar, guarantors of that certain Personal Guaranty on Commercial Loan executed in 1999, of their option to revoke the Guaranty under Paragraph 4 of the Guaranty. Attached is a draft letter to Princess Paper transmitting the City's termination statement and providing notice of the option to revoke the Guaranty. If you have any questions or comments, please advise me. Sincerely, Eduardo Olivo Enclosure cc: Kevin Wilson (w/o Enclosure) CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro—Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 Via Facsimile and U.S. Mail Dana Shocaroff Escrow Officer Pickford Realty Inc. 7924 Ivanhoe Avenue, Suite 2 La Jolla, CA 92037 Facsimile No. (858) 551-4085 Re: EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. D.eDARIO Director of Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 August 27, 2003 (OPE aim a Request for Payoff Escrow # 11654-DS Borrower: Princess Paper, Inc. Guarantor: Abraham Hakimi Trustee: North American Title Company Dear Ms. Shocaroff: The following is the payoff demand statement pursuant to California Civil Code Section 2943. This demand is made in response to your letter of August 25, 2003. The amount set forth herein reflects the amount required as of the date of preparation of this demand, to fully satisfy all obligations secured by the loan that is the subject of this demand. This payoff demand statement includes the information reasonably necessary for you to calculate the payoff amount on a per diem basis for a time period not to_ exceed 30 days. During this'30- day time period, the per diem amount is not changed by the terms of the note. Ms. Shocaroff Page 2 August 27, 2003 The amount owed on the Promissory Note as of August 18th is the sum of $33,944.28 plus interest, and the per diem interest amount is $32.88. The daily interest accrual of $32.88 would begin August 19, 2003 and accrue through the date the demand is paid in full. ,Consistent with the requirements of California Civil Code Section 2943(e)(6), please remit to the City of Vernon a draft in the sum of $30 for the preparation and furnishing of the payoff demand statement. If you have any questions or comments concerning the above - referenced matter, please do not hesitate to contact my office. Very truly yours, Bruce V. Malkenhorst City Administrator cc: Ms. Sharon Johnson 8/28/2003 07:31 FAX 323 826 1d39 IPIA Y hcnm IVDIVArr TRANSMISSION OK TX/RX NO CONNECTION TEL SUBADDRESS CONNECTION ID, ST. TIME USAGE T PGS.. SENT RESULT 4305 Santa Fe Avenue Vernon, CA 90058 Phone: 323/58U811 x 266 Fax: 3231826-1438 --- - - .. cW UUI * TX REPORT�cx� 1585 718585514085 08/28 07:30 00'40 3 OK City of Vernon, City Administrator Dept. Fm To. Dana Shocaroff From: Bruce V. Malkenhorst Escrow Officer company: Pickford Realty Inc. City Administrator/City Clerk Fam 858-551-4085 Date: August 28, 2003 ';.:.,.;`.:...,:>:ti+i:,.....<.•;...n.......•�: Sit:?.: j...:::•r::::.>:. r. �. ??i:i:i Pages: 3, including cover page 'sCrow #11654-DS Request for Re: Payoff ' CC: City Attorney Borrower. Princess Paper, Inc Guarantor Abraham Hakimi Trustee: North American Title Company ❑ Urgent .r For Review 0 Please Comment 13 Please Reply 13 Please Recycle CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro—Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 August 27, 2003 Mr. Bruce V. Malkenhorst City Administrator 4305 Santa Fe Avenue Vernon, CA 90058-0805 Re: Princess Paper, Inc. Request for Payoff Dear Bruce: EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 On May 25, 1999, Princess Paper, Inc. entered a Loan Agreement with the City in which it borrowed $200,000.00 in CDBG funds to purchase equipment for its business located at 3351 E. Slauson Avenue. In return, Princess Paper, Inc. was to create a minimum of 9.5 full time jobs. The loan was secured with a UCC-1 Statement, a Personal Guaranty agreement (signed by Abraham Hakimi and Nasser Etebar), and a promissory note secured by a Deed of Trust. Pursuant to the Loan Agreement, Abraham Hakimi and Raheleh Ayenehchi signed the Deed of Trust, on or about March 2, 1999, together with a promissory note in the sum of $200,000.00. The interest rate was 6% per annum. The monthly payment was $3,866.57 for a period of 60 months at which time the balance was due and payable in full (approximately May 25, 2004). The property identified in the Deed of Trust was Mr. Hakimi's home in San Diego; 6264 Lake Lomond Drive, San Diego, 92119. On August 25, 2003, Dana Shocaroff with Pickford Realty, Inc., who is serving as the Escrow Officer in the sale of Mr. Hakimi's home in San Diego, faxed a payoff demand. This demand Mr. Bruce V. Malkenhorst Page 2 August 27, 2003 is being made prior to the due date of the promissory note but is consistent with the terms of the Loan Agreement that permits a prepayment of the loan with no prepayment penalty. According to the Finance Department, as of August 18, 2003, the balance due is $33,944.28. The daily interest is $32.88. In addition, Chris Romero has informed our office that Princess Paper, Inc. has complied with Section l.d of the Loan Agreement that requires it to create a minimum of 9.5 jobs. The jobs are to remain in place continually throughout the term of the loan. Should Princess Paper, Inc. fail to provide the jobs, they would be required to repay the loan upon demand at the rate of $20,000 per job not created in full. Pursuant to Civil Code § 2943(c), the City has 21 days from receipt of the written demand t.o deliver a payoff demand statement to Pickford Realty, Inc. In addition, Civil Code § 2943(e)(6) allows the City to charge a sum not to exceed $30 for the preparation and furnishing of the payoff demand statement. Normally, the demand for full payment of the promissory note would be submitted to Pickford Realty, Inc. on or before September 15, 2003. However, Pickford-has informed us that the escrow was supposed to close on August 26th. We have told them that we would make every effort to try to get them a payoff demand statement as soon as possible. Attached is a draft payoff demand statement in letter form. We will be forwarding to you the following documents: 1. The original Promissory Note. 2. A copy of the certified copy of Deed of Trust with Assignment of Rents Individual. 3'. Request for Full Reconveyance that needs to be signed by the City Administrator (signature needs to be notarized). The payoff demand Shocaroff, the Escrow and 3 referenced above when the loan has been if any, steps the City Statement. letter should be forwarded to Ms. Officer, as soon as possible. Items 1, 2 should be sent to Pickford Realty, Inc. paid off. We are also looking into what, needs to take regarding the UCC-1 My office is preparing the appropriate documents for your , signature, as the City Administrator, subject to the ratification of the City Council. Nevertheless, in order to enable,the Pickford Realty, Inc, the escrow company, to start the note payoff process, the payoff demand statement should be faxed to Mr. Bruce V. Malkenhorst Page 3 August 27, 2003 the Escrow Officer. If you have any questions, pleas,e do not hesitate to call me. Very truly yours Eduardo Olivo City Attorney Enclosure LOAN AGREEMENT This Agreement is made and entered into this day of , 199 by and between the City of Vernon, a municipal corporation (hereafter the "Lender") and Princess Paper, Inc. hereafter the 'Borrower"). WHEREAS, The Borrower has applied to the Lender for a loan for the purpose of helping to finance, the purchase of equipment for a business in the City of Vernon which will result in the creation of jobs; and WHEREAS, The Borrower has read and agrees to comply with all restrictions and requirements of the loan contained in this Agreement and attached Exhibits, which are incorporated herein by reference; and WHEREAS, The Lender is willing to make such a loan to the Borrower on the terms and conditions hereafter set forth. NOW, THEREFORE, In consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: THE LOAN a. Loan/Note: Subject to the terms and conditions of this Agreement, the Lender hereby agrees to lend the Borrower, and the Borrower hereby agrees to borrow from the Lender and repay the Lender, the amount of $200,000.00 (hereinafter called "Loan"). The obligation of the Borrower to repay the Lender shall be evidenced by the promissory note (hereafter the "Note") of the Borrower in a form satisfactory to the Lender dated the date on which the Loan is funded (hereafter known as the "Closing Date") payable to the order of the Lender for the amount of the Loan with interest on the unpaid principal in the amount of $200,000.00, and secured by a UCC-1 filing on the equipment purchased and a personal guarantee to the City of Vernon. b. Terms and Repayment: The term of the Loan shall be for five (5) years from the date the funds are scheduled for disbursement. The Note shall be repayable in equal monthly installments. The first monthly installment shall be due and payable on the first day of the month after the date of document execution. All payments shall be applied first to interest and then to principal. All payments will be made promptly to the Lender at the address specified by the lender. Prepayment of the loan is allowable with no prepayment penalty. The interest rate on the principal amount of the loan shall be six percent (6%) per annum. C. Purpose: The purpose of the Loan is to help finance equipment purchase that will result in the creation of at least 10 full time equivalent jobs. d. Employment: As a condition of the Loan, the Borrower agrees to create at a minimum the equivalent 9.5 full time jobs, allowing for the equivalent positions to be created on or by December 1, 1998. At least 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 are adopted by the State and are dependent on family size. The jobs shall be created and shall remain in place continually throughout the term of the Loan. Failure by the Borrower to create the 51 % full time target income jobs shall result in the Borrower being required to repay the loan upon demand at the rate of $20,000 per job not created in full. Other Loans/Funds: The Loan is made in combination with other loans/funds described as follows: 1. Cash Equity by Owner: $65,850 2. CDBG Loan: $200,000.00 3. Other: $233,000.00 (Integrated Waste Management Board) Prior to disbursement of any funds, Borrower shall provide to Lender evidence satisfactory to Lender that Borrower has executed loan documents for the other funding/loan(s) 2. CONDITIONS OF LENDING The obligation of the Lender to make the Loan shall be subject to the fulfillment at the time of closing of each of the following conditions: Note and Loan Agreement: The Borrower shall have executed and delivered to the Lender this Loan Agreement and the Note in a form satisfactory to the Lender and its Counsel. b. Security Agreement: The Borrower shall have executed and delivered to the Lender a Security Agreement for a UCC-1 filing on the equipment purchased along with a personal guarantee to the City of Vernon. The personal guarantee shall be in a form acceptable to the City of Vernon and performance of said guarantee and repayment of the loan by Borrower shall be secured by a deed of trust with power of sale, which also should be in a form acceptable to said City. C. Adequacy of Security The liens granted to the Lender pursuant to the terms of the Security Agreement, the Promissory Note, the UCC-1 filing and deed of trust are or will be, when executed, liens on the respective property described therein, including the proceeds and products thereof. d. Guarantees: The Lender shall have received duly executed personal guarantee agreements acceptable to the Lender, secured by a deed of trust with power of sale, as aforesaid. Non -Financial Employment Plan Agreement: The Borrower shall have executed and delivered to the Lender a Non -Financial Employment Plan Agreement. Governmental Approval: The Borrower 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 proceeds of the Loan. The Borrower shall comply with the Zoning Ordinance of the Vernon Municipal Code throughout the development and use of the property described herein. Approval of Others: The Borrower shall have secured all necessary approvals or consents required with respect to this transaction by any mortgagor, creditor, or other party having any financial interest in the Borrower. EVENTS OF DEFAULT The entire unpaid principal of the Note, and the interest then accrued thereon, shall become immediately due and payable upon the written demand of the Lender, without any other notice or demand of any kind or any presentment or protest, if any one of the following events (hereafter an "Event of Default") shall occur and be continuing at the time of such demand, whether voluntary or involuntary 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 or any order, rules, or regulations of any administrative or governmental body provided, however, that such sum shall not be then payable if Borrower's payments have been waived, or the time for making the Borrower's payments has been extended by the Lender. a. Non -Payment of Loan: If Borrower shall fail to make payment when due of any installment of principal on the Note, or interest accrued thereon, and if the default shall remain unremedied for twenty (20) days. b. Non -Payment of Other Indebtedness: If Borrower shall be in default of payment when due of any installment of principal or of interest on any of the Borrower's other indebtedness, if such default shall remain unremedied for thirty (30) days. C. Incorrect Representation or Warranty: If any representation or warranty contained in or made in connection with the execution and delivery of this loan agreement, or in any certificate furnished pursuant hereto, shall prove to have been incorrect or invalid when made in any material respect. d. Default in Covenants: If the Borrower shall materially default in the performance of any other term, covenant, or agreement contained in this Loan 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 Lender. e. Employment: If the Borrower shall fail to comply with the provisions of the Non -Financial Employment Plan Agreement. Voluntary Insolvency If the Borrower shall become insolvent or shall cease to pay its debts as they mature or shall voluntarily file a petition seeking reorganization of, or the appointment of a receiver, trustee, or liquidation for it or a substantial portion of its assets, or to effect a plan or other arrangement with creditors, or 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 of the Borrower or the appointment of a receiver, trustee, or liquidation for the Borrower, or for a substantial part of the property of the Borrower, or 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 such writ or warrant of attachment or similar process shall not be released or bonded, within sixty (60) days after filing of levy. h. Judgments: If any final judgment for the payment of money that is not fully covered by liability insurance shall be rendered against the Borrower, and within sixty (60) days shall not be discharged, or an appeal therefrom taken and execution thereon effectively stayed pending such appeal and if such judgment be affirmed on such appeal, the same shall not be discharged within thirty (30) days. Rights Upon Default: Upon default by Borrower, Lender has all remedies available to it under State law in enforcing this Agreement and Lender rights to the collateral mentioned herein including, but not limited to, the following: Accelerate and declare the full balance immediately due and payable on the Note and commence lawsuit for collection thereof; 2. Take possession of the collateral or render it unusable, without notice, except as required by law, provided that said self-help shall be done without breach of peace; 3. Request and demand that Borrower assemble the collateral at an acceptable location for delivery to Lender; 4. Sell or dispose of collateral by sale pursuant to the law; 5. Specifically enforce the terms of the Note and related agreements; 6. Foreclose on any real property or appropriate personal property by strict foreclosure in equity; 7. Pursue any and all other remedies available under law to enforce the terms of this Agreement and Lender's rights to the real and personal property identified herein, and in collateral security documents of the Lender. j. Sale/Refinancing/Change of Ownership: The Loan shall be due and payable upon the sale of the business, sale or refinance of any real property financed with this Loan or as part of the project in which funds from this loan where used, sale or refinancing, of any real property used as collateral for this loan, change in ownership of the business involving any guarantees of this loan, or wherein Borrower ceases to be a majority owner of the business. This loan shall be non -assumable. 4. OTHER DOCUMENTS Lender may require and Borrower agrees to execute such other documents as may be required by the Lender in its sole discretion in order to comply with State and federal regulations governing (a) the loan proceeds and (b) prudent lending practices. 5. COLLECTION AGENT Borrower hereby appoints the Lender as its agent to appoint a loan collection entity to provide loan servicing in accordance with this agreement and other loan documents. Lender may remove or replace the loan servicing agent at its sole discretion. Lender shall provide or cause to be provided notice to Borrower of change in the loan collection agent. 10. WAIVER No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall operate as a waiver thereof. ATTORNEY FEES If any of the Parties 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 the defaulting Party for specific performance, injunction, declamatory 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 defaulting Party, the prevailing Party shall be entitled to recover from the losing Party such amount as the court may adjudge to be reasonable attorneys fees for the services rendered to the prevailing Party in such action. The Parties each waive the applicability of Davis -Stirling Common Interest Development Act, Civil Code Section 1350. NOTICES: Notices shall be sent to Borrower: Abraham Hakimi Nasser Etebar Princess Paper, Inc. 3351 E. Slauson Avenue Vernon, CA. 90058 HEIRS, SUCCESSORS AND ASSIGNS Lender: Bruce Malkenhorst City Administrator's Office 4305 S. Santa Fe Avenue Vernon, CA 90058 With Copies to: Kevin Wilson Director of Community Services 4305 Santa Fe Vernon, CA 90058 This Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties to this Agreement. 11. AMENDMENT Any amendments or modifications to this Agreement must be in writing and signed by both parties. 12. SEVERABILITY If any section 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 were not affected by the action of the court shall remain in full force and affect. Acceptance IN WITNESS THEREOF, the parties hereto have each caused this Loan Agreement to be duly executed as of the date first written above. BOR For rincess a er, Inc.: By Title:%'L/��1 By: Title: LENDER: For City of Vernon: or Title: Leonis C. Malburg, Mayor Title: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: By: 17,.E , Title: David B. Brearley, City Attorney CERTIFICATE STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) ss CITY OF VERNON ) I, Gloria J. Orosco, Chief Deputy City Clerk of the City of Vernon, County of Los Angeles, State of California, do hereby certify that the attached is a true and correct copy of: RESOLUTION NO. 7234 - A Resolution of the City Council of the City of Vernon Approving the Loan Application Submitted by Princess Paper, Inc. and Approving and Authorizing the Execution of: (i) A Loan Agreement By and Between the City of Vernon and Princess Paper, Inc. for Infrastructure Improvements at 3351 East Slauson Avenue; (ii) A Personal Loan Guaranty on Commercial Loan with Respect to Said Loan; and (iii) A TIG Benefit Non - Financial Employment Plan Agreement By and Between the City of Vernon and Princess Paper, Inc., All Pursuant to the 95-EDBG-390 Vernon Infrastructure Loan Program The original of same has been retained in the office of the City Clerk of the City of Vernon, said offices being in the City of Vernon, County of Los Angeles, State of California. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Vernon, County of Los Angeles, State of California, on this 24th day of November, 1998. Gloria J. osco Chief Deputy City Clerk November 17, 1998 TO: Bruce V. Malkenhorst, City Administrator ' FROM: Kevin Wilson, Director of Community Services & Water Z 3 y SUBJECT: PRINCESS PAPER/CDBG LOAN After further review of the documents, City consultants have recommended that Vernon City Council approve the CDBG loan to Princess Paper in the amount of $200,000.00 based on the completion of the following conditions: 1)Execute a Personal guarantee from all principals guaranteeing repayment must be obtained 2) A UCC-1 filing on the Equipment to be purchased in favor of the City of Vernon. An executed Note and Deed of Trust in the amount of the total CDBG funds be recorded on behalf of the City of Vernon as a lien, in no less than second position on real-estate and first position on above mentioned equipment. 3)Ensure that all liens on subject property (City Loan included) are not greater than the present appraised value of the property; 50% of appraised value for said equipment and 80% of appraised value of real property. 4)Applicant shall provide an executed loan agreement and employment agreement. 5) City staff should ensure and document that funds are disbursed only after the applicants match/equity has been expended (10% of total project cost at minimum). The company would be meeting the overall State objective of providing employment opportunities to the Target Income Group. The City will request an extension from the job creation requirements of December 1, 1998 to December 31, 1998 as is estimated, which must be approved by the State. SKW/cmr cAcdb&PaperApproveConditions 11/24/1998 14:17 7603375997 THE HOLT GROUP PAGE 03 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM CASH REQUEST Grantee: orftdanon Chxi;3 Rojnero aro^t -95-EDBG-390 Address: aria �eR Title: dn,��s tr• hit ,fie Request Oslo: rT L,� 19 98 Grne CA, do 8 Phone No. 3,23 3- BS arant Explratlon Data: Dec. 01 98 Phone No. 1 83- 81 Orgwtiatlon; C of VerA*A ,19 Requestt. 4 ADVANCE: X LUMP SUM: REIMBURSEMENT: A. CASH REQUEST 1. Total CDBG cash received as of r uest date $161 0 0 0 2. Program Income received and available for this grant activ as of request date $15 5 2 3 8 3. C013G cash disbursed as of request date , 4. Program Income disbursed for this grant activilty as of request date 6. CDBG cash on hand as of request date 1+2-3400 ODD explain) $ 5,762 $161 0 0 0 8. Total CDBG funds previously requested not including line 7 , $ 2 8 6 6 81 7, Amount of this CDBG Cash Request , 8. Cash Request by contract activity must equal amount on line 7 1.8uslness Assistance $ 273,018 3. General Administration $ 10,655 _ 2. Activity Delivery 3,008 9. If Escrow Account - Current Balance S Will balance be expended within 22 working days of deposlt7 Yes No. If no explain 10, Comments: Two Outstanding invoices to the consultants for a B. CIRTIPICATION I certlfy that to the best of my ktwMcdge this report is true In all respects and that all disbursements have been made for the purpose and condltlons of this grant. /11 Chris Romero Administrative e� 11 24 98 NAME TITLE SIGNATURE DATE STATE USE ONLY IS-day'environmental review comment period applloeble Yes No_ CDBG Fiscal Representative Date CDBG Program Representative Date CDBG Manager Date Index PCA Amount Index PCA Amount Grant Salanoe R&Ased: Sep, 11,1997 EXHIBIT 3 CITY OF VERNON INFRASTRUCTURE LOAN PROGRAM LOAN APPLICATION I. Company Information Name: Princess Paper. Tnc Address: 3351 E. Slauson Ave. Telephone No.: (323)588-4777 Contact Person: Abraham Hakimi Project Address: 3351 E. Slauson Ave. -Type of Business: _niter Converting - Mfg, Project Assessor Parcel Number(s): Current Number of Employees: 4 Projected Number of Employees After Completion of Project. 17 Number of Employees to be Hired During Year One: 13 (Also indicate which month(s) jobs begin) December 1998 Number of Employees to be Hired During Year Two: 0 (Also indicate which month(s) jobs begin) February 1999 Total Number Of New Employees: 13 (both years) Total Number of Employees Two Years From Completion of Project: 0- 0 3-1 II. Principal(s) Information Name: Abraham Hakimi-President; Nasser Etebar - Vice President Position: % of Ownership: A iHaki mi (757.) N. Etebar� Years of Business Experience: 15 years Ill. Existing Facility Size: 12,000 + S.F. Owned or Leased? Leased IfOwned: Purchase Price $ n/a Existing Mortgage $ Recent Appraised Value $ Annual Mortgage Payments $ If Leased: Monthly Rent $ 4,600 Annual Rent $ 55,200 Expiration Date of Lease Feb. 2002 IV. New Expansion Information (if applicable) Size 25,000 S.F. lease Will new facility replace existing facility? no If replaced, will rent be saved or will existing facility be sold? Current Market Value of Existing Facility $ Purchase Price of New Facility $ Appraised Value $ 3-2 V Will purchaser occupy entire space? If No: Explain other uses: n/a % to be Occupied by Purchaser: n/ a Rental Income Generated: $ Principal Bank Information Name of Bank: Hanmi Bank Contact Person: Dr. A. Etesami Telephone Number: (213)387-6066 Available Line of Credit: 30,000 ( Chase Bank) Applicable Account Number(s): Costs 003-464911. Project Project Soft Costs $ (Architectural/Engineering, Appraisal, Permits, etc.) Construction $ Rehabilitation $ Off -Site Improvements $ On -site Improvements $ Land Acquisition $ Machinery and'Equipment $ 450,000 Inventory $ Other $ TOTAL $ 450,000 3-3 VI. Project Funding CDBG (City) $ 200,000.00 Bank $ Company (Equity) $ 65,850.00 Other $ 233,000.00 ( Integrated Waste Mgmnt . Bd. -) TOTAL $ 498,85b.00 VII. Project Descril2tion The purchase of two pieces of equipment. Perini compact rewinder 716B, Cassoli PAC/110R.2 wrapper VIII. Additional Information Project Completion Schedule: - Proiect t o hin noMp 3 P t Pdby TiP C PM'hP r 1 1 y 1 99R TIG Hiring Schedule: Thirteen _jobs to begin hiring by December 15 and to complete hiring by December 31, 1998 Business Development/Marketing Strategy/Market Area IX. X Business income statements (Revenue projections for start-ups) (Current and Last Three (3) Years) (Future 5 Years for Start-ups) X Business Balance Sheets (Current and Last Three (3) Years) X Personal Financial Statements Income Tax Returns (Last Three (3) Years) X Debt Schedule Resume(s) of Owner(s) and Business History X Itemized Third Party Cost Estimate Preliminary Plans including Facade Rendering (Front Elevation) Signed Purchase Agreement (if acquiring land) I/We hereby acknowledge that the City's Loan Committee does not and cannot guarantee that I/We will receive financin fr BG Program, or public or private lenders. In addition, CDBG financing ' of a provided ithout a to documentation regarding funding of the balance of proj t costs and evidence Owner equity ner cash injection. Applicant Signature: i Date: Co -Applicant Signature: Date: " -S Notice of CEQA Categorical Exemption To: County Clerk From: City of Vernon County of Los Angeles 4305 Santa Fe Avenue 12400 East Imperial Highway Vernon, CA. 90058 Norwalk, CA 90650 Project Title: Princess Paper, Inc., Installation of Equipment Project Location -Specific: Project Location -City: City of Vernon Project Location -County: Los Angeles C Description of Project: Name of public Agency Approving Project: city of Vernon Name of Person or Agency Carrying Out Project: City of Vernon Exempt Status: Categorical Exemption Type and Section: Section 15303, Class 3, Installation of Small New Equipment Reasons why project is exempt: The installation of the equipment is for an existing Processing facility for recycled paper. There will be no cumulative impact as the site is located in a developed industrial area and no undeveloped land will be converted as a result of the installation. Lead Agency Contact Person: 96xin Wilson Telephone No. (323) 583-8811 Signature: Date: 1-2 5g "9 in Wilson, City ministrator Signed by Lead Agency FINDING OF NEPA EXEMPTION It is the finding of the City of Vernon that the following activity proposed in its Sta Community Development Block Grant #95-EDBG-390 is exempt from environmen review requirements under NEPA because they are defined as exempt activities i n 2 CFR Part 58.34 consisting solely of: List of Activities Citation 1. Equipment Loan 24 CFR Part 58.35 (b):(4) The activities judged exempt consist of: 1. Low interest loan for the purchase of equipment. In accordance with 24 CFR Part 58.35, these activities are deemed to be exempt. Statutory Worksheet was required but is not subject to Section 58.5. Date //-2 5-J ilson, $ Administrator City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 November 5, 1998 lJ' TO: Kevin Wilson, Director of Community Services & Water FROM: Chris Romero, Administrative Aide SUBJECT: AMENDMENT TO CDBG GUIDELINES Princess Paper Company located at 3351 E. Slauson Avenue, intends to purchase $450,000 in machinery to be used for their manufacturing operations. The company is applying for a CDBG loan. Under our current guidelines (95-EDBG-390), the purchase of private equipment and machinery is not eligible for CDBG funds. I have contacted our state CDBG representative Mr. Bill Andrews who has given us approval to allow CDBG funds to be used for private equipment and machinery. Our current guidelines would need to be revised to accommodate this new request. We would need. your approval to have a Resolution amending the program guidelines for the Infrastructure Loan Program to include the purchase of private equipment and machinery. According to Bill Andrews we can submit the loan application and the resolution at the next City Council meeting on November 17, 1998. If approved, Princess Paper would request the remaining CDBG funds for the 1995 grant, which totals approximately $179,000. Please let me know if you have any questions. cc: G.Orosco CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro -Tern Wm. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 DAVID B. BREARLEY City Attorney FAX: (626) 330-5818 KEVIN WILSON C Erector of Community Services & Water // 111�(323) 588-2761 ' 4 E TH J. DeDARIO tor of Municipal Utilities FAX: (323) 583-1983 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 June 30, 1999 Laura Bina, Senior Escrow Officer North American Title Agency 25129 The Old Road, Suite 305 Stevenson Ranch, California 91381 Re: Princess Paper Loan Escrow No. 050328-LB Dear Ms. Bina: DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 As you know, this loan recently closed. Upon review of the, closing statement, we were surprised to see a third trust deed securing a $375,000 loan from the State and settlement charges totalling $6,999.90. It is our understanding that what had occurred in this matter was that two separate loans were processed in the same escrow. We are also informed that although the settlement charges total $6,999.90, the charge is broken down as follows: $5,625.00 to the California Integrated Waste Management Board loan and $1,374.90 to the Community Development Block Grant loan. The City of Vernon, itself, did not incur a charge. While it appears that your combining the two loans into one escrow is permissible, we would have preferred being informed of this prior to receipt of the closing statement. We look forward to working with you in the future. Very truly yours, DAVID B. BREARLEY DBB:AA:jm City Attorney cc: Bruce V. Malkenhor Kevin Wilson June 22, 1999 TO: David B. Brearley, City Attorney FROM: Chris Romero, Administrative Aide G/Im te- SUBJECT: PRINCESS PAPER/CLOSING STATEMENT I am writing as a follow-up to a phone conversation I had last week with Rick Morillo regarding the closing statement for Princess Paper. Upon further review of the closing statement by North American Title Company, the settlement charges totaled $6,999.90. The settlement charges on the closing statement reflect costs to complete a loan with the California Integrated Waste Management Board (RMDZ) in addition to the City's Community Development Block Grant program. The breakdown of the charges for each loan are as follows: California Integrated Waste Management Board $5,625.00 Community Development Block Grant $1,374.90 Asper Rick Morillo, the $1,374.90 charged for city loan is acceptable. Please let me know if you have any questions or need additional information. cc: Bruce V. Malkenhorst c:\MyPiles\PrincessPaperClosingStatement 0 TIG BENEFIT NON -FINANCIAL EMPLOYMENT PLAN AGREEMENT PRINCESS PAPER, INC. This Agreement, between the City of Vernon ("Lender") and Princess Paper, inc. ("Borrower") will be used to assure continuing employment opportunities to economically disadvantaged (Target Income Group) and unemployed residents of the City. Under this Non -Financial Employment Plan Agreement, the Employer will use the Job Training Agency ("The Private Industry Council") as its initial resource for recruitment, referral and placement in positions covered herein, but is not restricted to PIC resources. This Agreement is not a loan agreement. General Terms: a) The Lender will provide a low interest Community Development Block Grant (CDBG) loan for infrastructure improvements. By virtue of this loan, the Lender expects to retain and realize additional employment opportunities for lower income and unemployed persons. The Lender has negotiated a loan with the Employer as follows and as additionally described in the Loan Agreement (attached): i. Loan Amount $200,000.00 ii. Interest Rate 6% iii. Term 5 years iv. Job Requirement 10 full time equivalent jobs created @ 51 % TIG b) In consideration for the loan described above, the Employer agrees to enter into this Agreement and agrees to use the PIC as its initial resource for recruitment, referral and placement services, but understands he/she is not restricted to PIC resources. c) The Employer agrees to hire or retain at least one permanent full-time employee (minimum of 1,750 work hours per year) per $20,000 in CDBG loan funds received. The jobs shall be provided by December 1, 1998. 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 Targeted Income Group. d) It is the Employer's declaration that the business loan described in Section 1.a) above and in the Loan Agreement will result in additional employment opportunities: 2 Number Anticipated Expected of Jobs Positions (type) Hiring Date 1 Lead Operator 12/15/98 1 Asst. Operator 12/15/98 1 Line Monitor 12/15/98 2 Packers 12/20/98 1 Warehouse Clerk 12/20/98 1 Lead Operator 12/20/98 1 Asst. Operator 12/20/98 1 Line Operator 12/20/98 2 Packers 12/20/98 1 Warehouse 12/20/98 1 Driver 12/20/98 13 TOTAL e) The PIC will provide employment, recruitment, referral, and placement services to the Employer subject to the limitations set out in this Agreement, upon Employer request. f) The Lender's employment and training responsibilities under this Agreement, unless otherwise assigned, will be carried out by the Job Training Agency. g) This Agreement shall take effect when signed by the parties below. Fulfillment of all specified job requirements shall be by December 1, 1998 month after funding. Employment/Recruitment a) The Employer agrees "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, termination's, and expansion of Employer's work force, within the positions listed under Section I (d). b) At least ten working days prior to anticipated hiring dates, the Employer will notify the PIC of its needs for new employees in the covered positions; or, if Employer is hiring on his own behalf, he must provide proof of TIG benefit to the City. (Proof of employee's household income per self -certification forms.) Notification shall be by Job Order Form provided by the PIC, and shall include, but not necessarily be limited to: i 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 PIC 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 I (D). The PIC will maintain the documentation of applicant/employee household income required by the CDBG program, and provide such information to the City of Vernon. b) The PIC will screen applicants according to the qualifications agreed upon with the Employer. If Employer is hiring on his own behalf, he must provide TIG eligibility documentation to the City. c) The PIC will notify the Employer of the number of applicants it will refer and begin making referrals no later than -five working days prior to the anticipated hiring date. The PIC will make every reasonable effort to refer at least one qualified person(s) for each job opening. d) In the event that the PIC is unable to refer any or all of the qualified personnel requested, the Employer will be notified by the PIC. 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 County residents through additional recruitment techniques in conformance with the terms of the loan and approved by the Lender. Employer in conjunction with the City's CDBG Consultant will then be responsible for verifying Targeted Income Group status. 4. Placement a) If Employer is using PIC 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 PIC. If the Employer does not find any of the persons so referred to qualify for the opening(s), the PIC and City will be notified. b) The PIC 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 Lender 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 PIC, the Council will not be responsible for the employee's actions and the Employer hereby releases the PIC of liability. Training a) The PIC 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 PIC and covered under a separate training agreement(s). 6. Controlling Regulations and Laws a) If this Agreement conflicts with any labor laws or other governmental regulations, those laws or regulations shall prevail. b) If this Agreement conflicts with a collective bargaining agreement to which the Employer is a party, the bargaining agreement shall prevail. e) The Employer shall not discriminate against any applicant for employment due to race, religion, age, color, sex, gender, national origin, physical handicap, sexual preference, or political affiliation. 7. Indemnification, Assignment. Modification and Renewal a) The Employer and Lender shall defend and indemnify the PIC and its officers, agents and employees against and hold the same free and harmless from any and all claims demands, damages, losses, costs, and/or expenses of liability due to or arising out of, either in whole or in part, whether directly or indirectly, the organization, development, construction, operation, or maintenance of the Employer's project except for liability arising out of the concurrent or sole negligence of the PIC, its officers, agents or employees. b) If, during the term of this Agreement, the Employer should transfer possession of all or a portion of its business concerns to any other party by lease, sale, assignment or otherwise, the Employer as a condition of transfer shall require the party taking possession to agree, in writing, to the terms of this Agreement and to obtain approval of the Lender. A new, Non -Financial Employment Plan Agreement shall be executed with the new party prior to the effective date of the transaction. c) This Agreement may, upon mutual agreement, be modified in order to improve the working relationship described herein. d) The Lender may terminate this Agreement at any time by written notification if federal, state or local grants are suspended or terminated before or during the contract period. 8. Acceptance The Undersigned hereby agrees to terms and conditions listed herein. EMPLOYER/BORROWER Title: LENDER For City of Vernon: By: y Title: Leo -HA C. Malburg, Mayor By: /� // y Title: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORMS A By: Title: David B. Brearley, City Attorney TIG BENEFIT NON -FINANCIAL EMPLOYMENT PLAN AGREEMENT PRINCESS PAPER, INC. This Agreement, between the City of Vernon ("Lender") and Princess Paper, Inc. ('Borrower") will be used to assure continuing employment opportunities to economically disadvantaged, (Target Income Group) and unemployed residents of the City. Under this Non -Financial Employment Plan Agreement, the Employer will use the Job Training Agency ("The Private Industry Council") as its initial resource for recruitment, referral and placement in positions covered herein, but is not restricted to PIC resources. This Agreement is not a loan agreement. General Terms: a) The Lender will provide a low interest Community Development Block Grant (CDBG) loan for infrastructure improvements. By virtue of this loan, the Lender expects to retain and realize additional employment opportunities for lower income and unemployed persons. The Lender has negotiated a loan with the Employer as follows and as additionally described in the Loan Agreement (attached): I. Loan Amount $200,000.00 ii. Interest Rate 6% iii. Term 5 years iv. Job Requirement 10 full time equivalent jobs created @ 51% TIG b) In consideration for the loan described above, the Employer agrees to enter into this Agreement and agrees to use the PIC as its initial resource for recruitment, referral and placement services, but understands he/she is not restricted to PIC resources. c) The Employer agrees to hire or retain at least one permanent full-time employee (minimum of 1,750 work hours per year) per $20,000 in CDBG loan funds received. The jobs shall be provided by December 1, 1998. 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 Targeted Income Group. d) It is the Employer's declaration that the business loan described in Section 1.a) above and in the Loan Agreement will result in additional employment opportunities: E Number Anticipated Expected of Jobs Positions (type) Hiring Date 1 Lead Operator 12/15/98 1 Asst. Operator 12/15/98 1 Line Monitor 12/15/98 2 Packers 12/20/98 1 Warehouse Clerk 12/20/98 1 Lead Operator 12/20/98 1 Asst. Operator 12/20/98 1 Line Operator 12/20/98 2 Packers 12/20/98 1 Warehouse 12/20/98 1 Driver 12/20/98 13 TOTAL e) The PIC will provide employment, recruitment, referral, and placement services to the Employer subject to the limitations set out in this Agreement, upon Employer request. f) The Lender's employment and training responsibilities under this Agreement, unless otherwise assigned, will be carried out by the Job Training Agency. g) This Agreement shall take effect when signed by the parties below. Fulfillment of all specified job requirements shall be by December 1, 1998 month after funding. Employment/Recruitment a) The Employer agrees "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, termination's, and expansion of Employer's work force, within the positions listed under Section I (d). b) At least ten working days prior to anticipated hiring dates, the Employer will notify the PIC of its needs for new employees in the covered positions; or, if Employer is hiring on his own behalf, he must provide proof of TIG benefit to the City. (Proof of employee's household income per self -certification forms.) Notification shall be by Job Order Form provided by the PIC, and shall include, but not necessarily be limited to: i 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 PIC 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 I (D). The PIC will maintain the documentation of applicant/employee household income required by the CDBG program, and provide such information to the City of Vernon. b) The PIC will screen applicants according to the qualifications agreed upon with the Employer. If Employer is hiring on his own behalf, he must provide TIG eligibility documentation to the City. c) The PIC will notify the Employer of the number of applicants it will refer and begin making referrals no later than five working days prior to the anticipated hiring date. The PIC will make every reasonable effort to refer at least one qualified person(s) for each job opening. d) In the event that the PIC is unable to refer any or all of the qualified personnel requested, the Employer will be notified by the PIC. 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 County residents through additional recruitment techniques in conformance with the terms of the loan and approved by the Lender. Employer in conjunction with the City's CDBG Consultant will then be responsible for verifying Targeted Income Group status. 4. Placement a) If Employer is using PIC 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 PIC. If the Employer does not find any of the persons so referred to qualify for the opening(s), the PIC and City will be notified. b) The PIC 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 Lender 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 PIC, the Council will not be responsible for the employee's actions and the Employer hereby releases the PIC of liability. 5. Trainin a) The PIC 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 PIC and covered under a separate training agreement(s). 6. Controlling Regulations and Laws a) If this Agreement conflicts with any labor laws or other governmental regulations, those laws or regulations shall prevail. b) If this Agreement 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, gender, national origin, physical handicap, sexual preference, or political affiliation. 7. Indemnification, Assignment. Modification and Renewal a) The Employer and Lender shall defend and indemnify the PIC and its officers, agents and employees against and hold the same free and harmless from any and all claims demands, damages, losses, costs, and/or expenses of liability due to or arising out of, either in whole or in part, whether directly or indirectly, the organization, development, construction, operation, or maintenance of the Employer's project except for liability arising out of the concurrent or sole negligence of the PIC, its officers, agents or employees. b) If, during the term of this Agreement, the Employer should transfer possession of all or a portion of its business concerns to any other party by lease, sale, assignment or otherwise, the Employer as a condition of transfer shall require the party taking possession to agree, in writing, to the terms of this Agreement and to obtain approval of the Lender. A new, Non -Financial Employment Plan Agreement shall be executed with the new party prior to the effective date of the transaction. c) This Agreement may, upon mutual agreement, be modified in order to improve the working relationship described herein. d) The Lender may terminate this Agreement at any time by written notification if federal, state or local grants are suspended or terminated before or during the contract period. Acceptance The Undersigned hereby agrees to terms and conditions listed herein. EMPLOYER/BORROWER •-'"F®r Princes Paper In By: LENDER For City of Vernon: By: Title: Leonis C. Malburg, Mayor Title: Bruce V. Malkenhorst, City Clerk APPROVED AS air--�Y TO^ d2 FORM: By: F L:> . 4-a,99-4 Title: David B. Brearley, City Attorney PERSONAL GUARANTY ON COMMERCIAL LOAN Borrower: Princess Paper, Inc. Lender: City of Vernon 3351 E. Slauson Avenue 4305 Santa Fe Ave Vernon, CA. 90058 Vernon, CA. 90058 Guarantor(s): Abraham Hakimi Nasser Etebar (hereinafter collectively referred to as "Guarantor") The Principal Amount of this Guaranty is Two Hundred Thousand and 00/100's Dollars ($200,000.00) For valuable consideration Guarantor jointly and severally and unconditionally guarantees and promises to pay to Lender, its successors or assigns, on demand in lawful money of the United States of America, any and all Indebtedness of Borrower to Lender, as follows: 1. "Indebtedness" Defined. The word "Indebtedness" is used in this Guaranty in its most comprehensive sense and includes, but is not limited to, any and all advances, debts, obligations, and liabilities of Borrower, or any of them, including judgements against Borrower, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor, 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; and whether such indebtedness arises from transactions which may be voidable on account of infancy, insanity, ultra vires, or otherwise. 2. Maximum Liability. The Liability of Guarantor under this Guaranty shall not exceed at any one time the sum of the Principal Amount set forth above, plus interest (at rate specified in loan agreement) thereon and plus all of Lender's costs, expenses, and attorney fees, including any on appeals, in connection with the enforcement of this Guaranty, the collection of the Indebtedness of Borrower, or with the collection or sale of any collateral, whether or not there is a lawsuit. The above limitation on liability is not a restriction on the amount of the Indebtedness of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties or hereafter receives additional guaranties from Guarantor of the Indebtedness of Borrower, the rights of Lender under all guaranties shall be cumulative. This Guaranty shall not, unless herein provided, affect or invalidate any such other guaranties. The liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Guaranty and any such other unterminated guaranties. 3. Nature of Guaranty. The liability of Guarantor shall be open and continuous for so long as this Guaranty is in force. Guarantor intends to guarantee at all times the performance of obligations of Borrower to Lender within the limits of Section 2. Thus, no payments made upon Borrower's Indebtedness will discharge or diminish the liability of Guarantor for any and all remaining and succeeding Indebtedness of Borrower to Lender. The liability of Guarantor will be enforceable against both the separate and community property of Guarantor whether now owned or hereafter acquired. 4. Duration of Guaranty. This Guaranty will take effect when executed by Guarantor and received by Lender, without the necessity of any acceptance by Lender, and will continue in full force for the first five years of the loan term or until such time as Lender notifies Guarantor in writing of Guarantor's option to revoke this Guaranty, but at no time will it be sooner than the five year term. After the five year period, Guarantor must provide a written notice of revocation which must be delivered to Lender at the Vernon City Hall, 4305 Santa Fe Avenue. Written revocation of this Guaranty shall apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation including any extension, renewal, or modification thereof. Renewals, extensions, and modifications of Borrower's Indebtedness, granted after Guarantor's revocation, are contemplated hereunder and will specifically not be considered new Indebtedness. This Guaranty, shall bind the estate of Guarantor as to Indebtedness created both before and after the death or incapacity of the Guarantor. The Guarantor's administrator, or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Termination of this Guaranty by one of the undersigned shall not affect the liability hereunder of the remaining of the undersigned. It is anticipated that fluctuations may occur in the aggregate amount of Indebtedness covered by this Guaranty and it is specifically acknowledged and agreed by Guarantor that reductions in the amount of Indebtedness, even to zero (0) dollars, prior to written revocation of this Guaranty by guarantor shall not constitute a termination of this Guaranty. 5. Security. This Guaranty is secured by a deed of trust with power of sale executed this date. 6. Guarantor's Authorization to Lender. Guarantor authorizes Lender, either before or after revocation hereof, without notice or demand and without affecting Guarantor's liability hereunder, from time to time to (a) make additional secured or unsecured loans to Borrower; (b) alter, compromise, renew, extend, accelerate, or otherwise change the time for payment of, or otherwise change the terms of the Indebtedness or any part thereof, including an increase or decrease of the rate of interest thereon; (c) take and hold security for the payment of this Guaranty or the Indebtedness guaranteed, and exchange, enforce, waive, and release any such security, with or without the substitution of new collateral; (d) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors (including Guarantors under this Guaranty) on any terms or manners Lender chooses; (e) apply such security and direct the order or manner of sale thereof, including, without limitation, a nonjudicial sale permitted by the terms of the controlling security agreement or dead of trust, as Lender in its discretion may determine; and (f) assign this Guaranty in whole or in part without notice. 7. Guarantor's Warranties. Guarantor warrants that: (a) this Guaranty is executed at Lenders request and not at the request of the Guarantor; (b) Guarantor has not, and will not, without prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (c) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition; and (d) Lender has made no representation to Guarantor as to the creditworthiness of Borrower. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks hereunder, and Guarantor further agrees that absent a request for information Lender shall have no obligation to disclose to Guarantor information or material acquired in the course of Lender's relationship with Borrower. 8. Guarantor's Waivers. Guarantor waives any right to require Lender to (a) make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of Borrower's Indebtedness or of any collateral thereto and notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor (including any Guarantor under this Guaranty) in connection with the Indebtedness guaranteed hereunder, or in connection with the creation of new or additional Indebtedness; (b) proceed directly or at once against any person, including Borrower; (c) proceed directly against or exhaust any collateral held from Borrower, any other Guarantor (including any Guarantor under this Guaranty), or any other person; (d) give notice of the terms, time, and place of any public or private sale of personal property security held from Borrower or comply with any other provisions of Section 9504 of the California Uniform Commercial Code; or (e) pursue any other remedy in Lender's power. Guarantor hereby waives Lenders restrictions under limitation Sections 580 and 726 of the California Code of Civil Procedures, (as from time to time amended) or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, whether judicial or by exercise of a power of sale; (b) any election of remedies by lender which destroys Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement including without limitation any loss of rights Guarantor may suffer by reason of any law limiting qualifying, or discharging Borrower's Indebtedness; (c) any disability or other defense of Borrower, of any other guarantor (including any Guarantor under this Guaranty) or of any other person, or by reason of this cessation of Borrower's liability from any cause. A defense based on Section 580 and 726 of the California Code of Civil procedure is d) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding an Indebtedness of Borrower to Lender which is not banned by any applicable statute of limitations. If payment is made by Borrower on Indebtedness guaranteed hereby and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or similar person under any federal or state bankruptcy law or law for the relief of debtors, Borrower's Indebtedness shall be considered unpaid for the purpose of enforcement of this Guaranty. 9. Guarantor's Understanding With Respect to Waivers. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of such waivers is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law. 10. Lender's Rights With Respect to Guarantor's Property in Possession of Lender. In addition to all liens upon, and rights of setoff against the moneys, securities, or other property of Guarantor given to Lender by law, Lender shall have a security interest in and a right of setoff against all moneys, securities, and other property of Guarantor now or hereafter in the possession of or on deposit with Lender, whether held in a general or special account or deposit, or for safekeeping or otherwise. Every such security interest and right of setoff may be exercised without demand upon or notice to Guarantor. No neglect to exercise such right of setoff or to enforce such security interest, or any delay in so doing she'll be deemed to be a waiver of Lender's security interest. Every right of setoff and security interest shall continue in full force and effect until such right of setoff or security interest is specifically waived or released by an instrument in writing executed by Lender. 11. Subordination of Borrower's Debts to Guarantor. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or any assignee or trustee in bankruptcy of Borrower; provided, that such assignment shall be effective only for the purpose of assuring to Lender full payment of all Indebtedness of Borrower to Lender. Any notes now or hereafter evidencing such Indebtedness of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and, if Lender so requests, shall be delivered to Lender. Guarantor will, and Lender is hereby authorized, in the name of Guarantor from time to time to execute and file financing statements and continuation statements and execute such other documents and take such other action Lender deems necessary or appropriate to perfect, preserve, and enforce its rights hereunder. 12. Waiver of Authentication of Validity of Acts of Corporation or Partnership. If any one or more of Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or 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. 13. Obligations of married Persons. Any married person who signs this Guaranty as the Guarantor hereby expressly agrees that recourse may be had against his or her separate property and his or her interest in community property for all his or her obligations under this Guaranty. 14. Application of Singular and Plural in Context and Construction. In all cases where there are more than one Borrower, Guarantor, then all words used herein in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named herein, or when this Guaranty is executed by more than one Guarantor, the word "Borrower" or the word "Guarantor" respectively shall mean all and any one or more of them. 15. California Laws Applicable. This Guaranty is governed by and construed in accordance with the laws of the state of California. THIS GUARANTY IS EFFECTIVE UNTIL TERMINATED IN THE MANNER SET FORTH IN PARAGRAPH 4. The undersigned Guarantor(s) has executed this Guaranty on this day of sx , 1991. Accepted for CITY OF VERNO GUARA TOR(S) Signature Signature eonis C. Malburg ��uidd NI h4dIIU4�i lJen1-�I�aU'�n, Print or Type Name Print or Type Name ^1.4 S S,"A e5reV, R Title Title ATTEST: 1Ieloo� Bruce V. Malkenhorst, City Clerk PERSONAL GUARANTY ON COMMERCIAL LOAN Borrower: Princess Paper, Inc. Lender: City of Vernon 3351 E. Slauson Avenue 4305 Santa Fe Ave Vernon, CA. 90058 Vernon, CA. 90058 Guarantor(s): Abraham Hakimi Nasser Etebar (hereinafter collectively referred to as "Guarantor") The Principal Amount of this Guaranty is Two Hundred Thousand and 00/100's Dollars ($200,000.00) For valuable consideration Guarantor jointly and severally and unconditionally guarantees and promises to pay to Lender, its successors or assigns, on demand in lawful money of the United States of America, any and all Indebtedness of Borrower to Lender, as follows: 1. "Indebtedness" Defined. The word "Indebtedness" is used in this Guaranty in its most comprehensive sense and includes, but is not limited to, any and all advances, debts, obligations, and liabilities of Borrower, or any of them, including judgements against Borrower, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor, 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, and whether such indebtedness arises from transactions which maybe voidable on account of infancy, insanity, ultra vires, or otherwise. 2. Maximum Liability. The Liability of Guarantor under this Guaranty shall not exceed at any one time the sum of the Principal Amount set forth above, plus interest (at rate specified in loan agreement) thereon and plus all of Lender's costs, expenses, and attorney fees, including any on appeals, in connection with the enforcement of this Guaranty, the collection of the Indebtedness of Borrower, or with the collection or sale of any collateral, whether or not there is a lawsuit. The above limitation on liability is not a restriction on the amount of the Indebtedness of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties or hereafter receives additional guaranties from Guarantor of the Indebtedness of Borrower, the rights of Lender under all guaranties shall be cumulative. This Guaranty shall not, unless herein provided, affect or invalidate any such other guaranties. The liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Guaranty and any such other unterminated guaranties. 3. Nature of Guaranty. The liability of Guarantor shall be open and continuous for so long as this Guaranty is in force. Guarantor intends to guarantee at all times the performance of obligations of Borrower to Lender within the limits of Section 2. Thus, no payments made upon Borrower's Indebtedness will discharge or diminish the liability of Guarantor for any and all remaining and succeeding Indebtedness of Borrower to Lender. The liability of Guarantor will be enforceable against both the separate and community property of Guarantor whether now owned or hereafter acquired. 4. Duration of Guaranty. This Guaranty will take effect when executed by Guarantor and received by Lender, without the necessity of any acceptance by Lender, and will continue in full force for the first five years of the loan term or until such time as Lender notifies Guarantor in writing of Guarantor's option to revoke this Guaranty, but at no time will it be sooner than the five year term. After the five year period, Guarantor must provide a written notice of revocation which must be delivered to Lender at the Vernon City Hall, 4305 Santa Fe Avenue. Written revocation of this Guaranty shall apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation including any extension, renewal, or modification thereof. Renewals, extensions, and modifications of Borrower's Indebtedness, granted after Guarantor's revocation, are contemplated hereunder and will specifically not be considered new Indebtedness. This Guaranty, shall bind the estate of Guarantor as to Indebtedness created both before and after the death or incapacity of the Guarantor. The Guarantor's administrator, or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Termination of this Guaranty by one of the undersigned shall not affect the liability hereunder of the remaining of the undersigned. It is anticipated that fluctuations may occur in the aggregate amount of Indebtedness covered by this Guaranty and it is specifically acknowledged and agreed by Guarantor that reductions in the amount of Indebtedness, even to zero (0) dollars, prior to written revocation of this Guaranty by guarantor shall not constitute a termination of this Guaranty. 5. Security. This Guaranty is secured by a deed of trust with power of sale executed this date. 6. Guarantor's Authorization to Lender. Guarantor authorizes Lender, either before or after revocation hereof, without notice or demand and without affecting Guarantor's liability hereunder, from time to time to (a) make additional secured or unsecured loans to Borrower; (b) alter, compromise, renew, extend, accelerate, or otherwise change the time for payment of, or otherwise change the terms of the Indebtedness or any part thereof, including an increase or decrease of the rate of interest thereon; (c) take and hold security for the payment of this Guaranty or the Indebtedness guaranteed, and exchange, enforce, waive, and release any such security, with or without the substitution of new collateral; (d) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors (including Guarantors under this Guaranty) on any terms or manners Lender chooses; (e) apply such security and direct the order or manner of sale thereof, including, without limitation, a nonjudicial sale permitted by the terms of the controlling security agreement or dead of trust, as Lender in its discretion may determine; and (f) assign this Guaranty in whole or in part without notice. 7. Guarantor's Warranties. Guarantor warrants that: (a) this Guaranty is executed at Lenders request and not/at the request of the Guarantor; (b) Guarantor has not, and will not, without prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (c) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition; and (d) Lender has made no representation to Guarantor as to the creditworthiness of Borrower. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks hereunder, and Guarantor further agrees that absent a request for information Lender shall have no obligation to disclose to Guarantor information or material acquired in the course of Lender's relationship with Borrower. 8. Guarantor's Waivers. Guarantor waives any right to require Lender to (a) make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of Borrower's Indebtedness or of any collateral thereto and notice of any action or nonaction on the part of Borrower,'Lender, any surety, endorser, or other guarantor (including any Guarantor under this Guaranty) in connection with the Indebtedness guaranteed hereunder, or in connection with the creation of new or additional Indebtedness; (b) proceed directly or at once against any person, including Borrower; (c) proceed directly against or exhaust any collateral held from Borrower, any other Guarantor (including any Guarantor under this Guaranty), or any other person; (d) give notice of the terms, time, and place of any public or private sale of personal property security held from Borrower or comply with any other provisions of Section 9504 of the California Uniform Commercial Code; or (e) pursue any other remedy in Lender's power. Guarantor hereby waives Lenders restrictions under limitation Sections 580 and 726 of the California Code of Civil Procedures, (as from time to time amended) or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, whether judicial or by exercise of a power of sale; (b) any election of remedies by lender which destroys Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement including without limitation any loss of rights Guarantor may suffer by reason of any law limiting qualifying, or discharging Borrower's Indebtedness; (c) any disability or other defense of Borrower, of any other guarantor (including any Guarantor under this Guaranty) or of any other person, or by reason of this cessation of Borrower's liability from any cause. A defense based on Section 580 and 726 of the California Code of Civil procedure is d) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding an Indebtedness of Borrower to Lender which is not banned by any applicable statute of limitations. If payment is made by Borrower on Indebtedness guaranteed hereby and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or similar person under any federal or state bankruptcy law or law for the relief of debtors, Borrower's Indebtedness shall be considered unpaid for the purpose of enforcement of this Guaranty. 9. Guarantor's Understanding With Respect to Waivers. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of such waivers is determined to be contrary to any applicable law or public policy, such waiver -shall be effective only to the extent permitted by law. 10. Lender's Rights With Respect to Guarantor's Property in Possession of Lender. In addition to all liens upon, and rights of setoff against the moneys, securities, or other property of Guarantor given to Lender by law, Lender shall have a security interest in and a right of setoff against all moneys, securities, and other property of Guarantor now or hereafter in the possession of or on deposit with Lender, whether held in a general or special account or deposit, or for safekeeping or otherwise. Every such security interest and right of setoff may be exercised without demand upon or notice to Guarantor. No neglect to exercise such right of setoff or to enforce such security interest, or any delay in so doing she'll be deemed to be a waiver of Lender's security interest. Every right of setoff and security interest shall continue in full force and effect until such right of setoff or security interest is specifically waived or released by an instrument in writing executed by Lender. 11. Subordination of Borrower's Debts to Guarantor. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or any assignee or trustee in bankruptcy of Borrower; provided, that such assignment shall be effective only for the purpose of assuring to Lender full payment of all Indebtedness of Borrower to Lender. Any notes now or hereafter evidencing such Indebtedness of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and, if Lender so requests, shall be delivered to Lender. Guarantor will, and Lender is hereby authorized, in the name of Guarantor from time to time to execute and file financing statements and continuation statements and execute such other documents and take such other action Lender deems necessary or appropriate to perfect, preserve, and enforce its rights hereunder. 12. Waiver of Authentication of Validity of Acts of Corporation or Partnership. If any one or more of Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or 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. 13. Obligations of married Persons. Any married person who signs this Guaranty as the Guarantor hereby expressly agrees that recourse may be had against his or her separate property and his or her interest in community property for all his or her obligations under this Guaranty. 14. Application of Singular and Plural in Context and Construction. In all cases where there are more than one Borrower, Guarantor, then all words used herein in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named herein, or when this Guaranty is executed by more than one Guarantor, the word "Borrower" or the word "Guarantor" respectively shall mean all and any one or more of them. 15. California Laws Applicable. This Guaranty is governed by and construed in accordance with the laws of the state of California. THIS GUARANTY IS EFFECTIVE UNTIL TERMINATED IN THE MANNER SET FORTH IN PARAGRAPH 4. The undersigned Guarantor(s) has executed this Guaranty on this day of 1998. Accepted for CITY OF VERNO111C GUARA TOR y Signature Signature Leonis c. Aalbuvg Print or Type Name Mayor WX1� � Title ABfzALJA6, 144k- M i' Print or Type Name I21?s en i Title ATTEST: / Bruce V. Malkenhorst, City Clerk i 0041 I✓A SS -0? E(T� e,4 R v k�,- LOAN AGREEMENT 01 This Agreement is made and entered into this aK day of �A , 199 9 by and between the City of Vernon, a municipal corporation (hereafter the "Lender") alid Princess Paper, Inc. hereafter the 'Borrower"). WHEREAS, The Borrower has applied to the Lender for a loan for the purpose of helping to finance the purchase of equipment for a business in the City of Vernon which will result in the creation of jobs; and WHEREAS; The Borrower has read and agrees to comply with all restrictions and requirements of the loan contained in this Agreement and attached Exhibits, which are incorporated herein by reference; and WHEREAS, The Lender is willing to make such a loan to the Borrower on the terms and conditions hereafter set forth. NOW, THEREFORE, In consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: THE LOAN a. Loan/Note: Subject to the terms and conditions of this Agreement, the Lender hereby agrees to lend the Borrower, and the Borrower hereby agrees to borrow from the Lender and repay the Lender, the amount of $200,000.00 (hereinafter called "Loan"). The obligation of the Borrower to repay the Lender shall be evidenced by the promissory note (hereafter the "Note") of the Borrower in a form satisfactory to the Lender dated the date on which the Loan is funded (hereafter known as the "Closing Date") payable to the order of the Lender for the amount of the Loan with interest on the unpaid principal in the amount of $200,000.00, and secured by a UCC-1 filing on the equipment purchased and a personal guarantee to the City of Vernon. b. Terms and Repayment: The term of the Loan shall be for five (5) years from the date the funds are scheduled for disbursement. The Note shall be repayable in equal monthly installments. The first monthly installment shall be due and payable on the first day of the month after the date of document execution. All payments shall be applied first to interest and then to principal. All payments will be made promptly to the Lender at the address specified by the lender. Prepayment of the loan is 2 allowable with no prepayment penalty. The interest rate on the principal amount of the loan shall be six percent (6%) per annum. C. Purpose: The purpose of the Loan is to help finance equipment purchase that will result in the creation of at least 10 full time equivalent jobs. d. Employment: As a condition of the Loan, the Borrower agrees to create at a minimum the equivalent 9.5 full time jobs, allowing for the equivalent positions to be created on or by December 1, 1998. At least 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 are adopted by the State and are dependent on family size. The jobs shall be created and shall remain in place continually throughout the term of the Loan. Failure by the Borrower to create the 51 % full time target income jobs shall result in the Borrower being required to repay the loan upon demand at the rate of $20,000 per job not created in full. e. Other Loans/Funds: The Loan is made in combination with other loans/funds described as follows: Cash Equity by Owner: $65,850 CDBG Loan: $200,000.00 Other: $233.000.00 (Integrated Waste Management Board) Prior to disbursement of any funds, Borrower shall provide to Lender evidence satisfactory to Lender that Borrower has executed loan documents for the other funding/loan(s) CONDITIONS OF LENDING The obligation of the Lender to make the Loan shall be subject to the fulfillment at the time of closing of each of the following conditions: a. Note and Loan Agreement: The Borrower shall have executed and delivered to the Lender this Loan Agreement and the Note in a form satisfactory to the Lender and its Counsel. b. Security Agreement: The Borrower shall have executed and delivered to the Lender a Security Agreement for a UCC-1 filing on the equipment purchased along with a personal guarantee to the City of Vernon. The personal guarantee shall be in a form acceptable to the City of Vernon and performance of said guarantee and repayment of the loan by Borrower shall be secured by a deed of trust with power of sale, which also should be in a form acceptable to said City. C. Adequacy of Security The liens granted to the Lender pursuant to the terms of the Security Agreement, the Promissory Note, the UCC-1 filing and deed of trust are or will be, when executed, liens on the respective property described therein, including the proceeds and products thereof. d. Guarantees: The Lender shall have received duly executed personal guarantee agreements acceptable to the Lender, secured by a deed of trust with power of sale, as aforesaid. e. Non -Financial Employment Plan Agreement: The Borrower shall have executed and delivered to the Lender a Non -Financial Employment Plan Agreement. f. Governmental Approval: The Borrower 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 proceeds of the Loan. The Borrower shall comply with the Zoning Ordinance of the Vernon Municipal Code throughout the development and use of the property described herein. g. Approval of Others: The Borrower shall have secured all necessary approvals or consents required with respect to this transaction by any mortgagor, creditor, or other party having any financial interest in the Borrower. EVENTS OF DEFAULT The entire unpaid principal of the Note, and the interest then accrued thereon, shall become immediately due and payable upon the written demand of the Lender, without any other notice or demand of any kind or any presentment or protest, if any one of the following events (hereafter an "Event of Default") shall occur and be continuing at the time of such demand, whether voluntary or involuntary 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 or any order, rules, or regulations of any administrative or governmental body provided, however, that such sum shall not be then payable if Borrower's payments have been waived, or the time for making the Borrower's payments has been extended by the Lender. a. Non-Pavment of Loan: If Borrower shall fail to make payment when due of any installment of principal on the Note, or interest accrued thereon, and if the default shall remain unremedied for twenty (20) days. Non -Payment of Other Indebtedness: If Borrower shall be in default of payment when due of any installment of principal or of interest on any of the Borrower's other indebtedness, if such default shall remain unremedied for thirty (30) days. C. Incorrect Representation or Warranty: If any representation or warranty contained in or made in connection with the execution and delivery of this loan agreement, or in any certificate furnished pursuant hereto, shall prove to have been incorrect or invalid when made in any material respect. Default in Covenants: If the Borrower shall materially default in the performance of any other term, covenant, or agreement contained in this Loan 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 Lender. e. Employment: If the Borrower shall fail to comply with the provisions of the Non -Financial Employment Plan Agreement. Voluntary Insolvency; If the Borrower shall become insolvent or shall cease to pay its debts as they mature or shall voluntarily file a petition seeking reorganization of, or the appointment of a receiver, trustee, or liquidation for it or a substantial portion of its assets, or to effect a plan or other arrangement with creditors, or shall be adjudicated bankrupt, or shall make a voluntary assignment for the benefit of creditors. Involuntary Insolvency: If an insolvency petition shall be filed against the Borrower under any bankruptcy, insolvency, or similar law or seeking the reorganization of the Borrower or the appointment of a receiver, trustee, or liquidation for the Borrower, or for a substantial part of the property of the Borrower, or 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 such writ or warrant of attachment or similar process shall not be released or bonded, within sixty (60) days after filing of levy. Judgments: If any final judgment for the payment of money that is not fully covered by liability insurance shall be rendered against the Borrower, and within sixty (60) days shall not be discharged, or an appeal therefrom taken and execution thereon effectively stayed pending such appeal and if such judgment be affirmed on such appeal, the same shall not be discharged within thirty (30) days. Rights Upon Default: Upon default by Borrower, Lender has all remedies available to it under State law in enforcing this Agreement and Lender rights to the collateral mentioned herein including, but not limited to, the following: Accelerate and declare the full balance immediately due and payable on the Note and commence lawsuit for collection thereof; 2. Take possession of the collateral or render it unusable, without notice, except as required by law, provided that said self-help shall be done without breach of peace; 3. Request and demand that Borrower assemble the collateral at an acceptable location for delivery to Lender; 4. Sell or dispose of collateral by sale pursuant to the law; 5. Specifically enforce the terms of the Note and related agreements; 6. Foreclose on any real property or appropriate personal property by strict foreclosure in equity; Pursue any and all other remedies available under law to enforce the terms of this Agreement and Lender's rights to the real and personal property identified herein, and in collateral security documents of the Lender. j. Sale/Refinancing/Change of Ownership: The Loan shall be due and payable upon the sale of the business, sale or refinance of any real property financed with this Loan or as part of the project in which funds from this loan where used, sale or refinancing, of any real property used as collateral for this loan, change in ownership of the business involving any guarantees of this loan, or wherein Borrower ceases to be a majority owner of the business. This loan shall be non -assumable. 4. OTHER DOCUMENTS Lender may require and Borrower agrees to execute such other documents as may be required by the Lender in its sole discretion in order to comply with State and federal regulations governing (a) the loan proceeds and (b) prudent lending practices. 5. COLLECTION AGENT Borrower hereby appoints the Lender as its agent to appoint a loan collection entity to provide loan servicing in accordance with this agreement and other loan documents. Lender may remove or replace the loan servicing agent at its sole discretion. Lender shall provide or cause to be provided notice to Borrower of change in the loan collection agent. C.1 7 10 WAIVER No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall operate as a waiver thereof. ATTORNEY FEES If any of the Parties 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 the defaulting Party for specific performance, injunction, declamatory 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 defaulting Party, the prevailing Party shall be entitled to recover from the losing Party such amount as the court may adjudge to be reasonable attorneys fees for the services rendered to the prevailing Party in such action. The Parties each waive the applicability of Davis -Stirling Common Interest Development Act, Civil Code Section 1350. NOTICES: Notices shall be sent to Borrower: Abraham Hakimi Nasser Etebar Princess Paper, Inc. 3351 E. Slauson Avenue Vernon, CA. 90058 HEIRS, SUCCESSORS AND ASSIGNS Lender: Bruce Malkenhorst City Administrator's Office 4305 S. Santa Fe Avenue Vernon, CA 90058 With Copies to: Kevin Wilson Director of Community Services 4305 Santa Fe Vernon, CA 90058 This Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties to this Agreement. 11. AMENDMENT Any amendments or modifications to this Agreement must be in writing and signed by both parties. 12. SEVERABILITY If any section 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 were not affected by the action of the court shall remain in full force and affect. Acceptance IN WITNESS THEREOF, the parties hereto have each caused this Loan Agreement to be duly executed as of the date first written above. Fot Princess Pja0er, Inc.: By:_ Title: LENDER: For City of Vernon: Title: Leonis C. Malburg, Mayor By:/ Title: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: By: aa,=1 \ �' r Title: David B. Brearley, City Attorney