Resolution No. 098522
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RESOLUTION NO. 9852
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF A
FIRST AMENDMENT TO LOAN AGREEMENT BY AND BETWEEN
THE CITY OF VERNON AND EAST WEST BANK AND RELATED
DOCUMENTS
WHEREAS, on September 25, 2007, the City Council of the City
of Vernon adopted Resolution No. 9421 approving a Loan Agreement dated
as of September 27, 2007 and an Environmental Indemnity Agreement
(collectively, the "Agreement") with East West Bank (the "Bank") to
establish a revolving line of credit for various real estate
transactions from time 'to time as evidenced by a Promissory Note dated
October 1, 2007 in the amount of $50,000,000.00; and
WHEREAS, the City of Vernon desired to change the terms of
the Agreement as to the Promissory Note dated December 13, 2007 for
the first loan for property located at 2200 E. 55th Street to primarily
extend the maturity date from January 1, 2009 to September 26, 2009
and decrease the principal amount of $12,843,750.00 by $1,871,750.00
for a total of $10,972,000.00; and
WHEREAS, the City of Vernon also desired to amend the
Agreement to modify the interest rate and amount of loan provisions;
and
WHEREAS, in order to meet the urgent need for the changes to
the Agreement, Mayor Malburg executed on or about January 6, 2009, a
First Amendment to the Loan Agreement, Disclosure of Right to Receive
a Copy of an Appraisal, Change in Terms Agreement and Disbursement
Request and Authorization (collectively, the "First Amended Loan
Documents"); and
1 WHEREAS, the City Council of the City of Vernon desires to
2 approve and ratify the actions taken by the Mayor in executing the
3 First Amended Loan Documents dated on or about January 6, 2009.
4 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
5 CITY OF VERNON AS FOLLOWS:
6 SECTION 1: The City Council of the City of Vernon hereby
7 finds and determines that the recitals contained hereinabove are true
i
8 and correct.
9 SECTION 2: The City Council of the City of Vernon hereby
10 approves and ratifies the Mayor's execution of the First Amendment to
11 the Loan Agreement, Disclosure of Right to Receive a Copy of an
12 Appraisal,, Change in Terms Agreement and Disbursement Request and
13 Authorization dated on or about January 6, 2009, a copy of which are
14 attached hereto as -Exhibit A and incorporated by reference.
15 SECTION 3: The City Clerk of the City of Vernon shall
16 certify to the passage of this resolution, and thereupon and
17 thereafter the same shall be in full force and effect.
18 APPROVED AND ADOPTED this 2nd day of February, 2009.
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Name: Leonis Malburg
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Title: Mayor / .P4a�Ze-Tee
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23 ATTE)LA
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25 MANU GIRON, Ca y Jerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9852, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, February 2, 2009, and
thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of
Vernon.
(SEAL)
MAnUETTA MR,"'Ety Clerk
- 3 -
1
DISCLOSURE OF RIGHT TO RECEIVE A COPY OF AN APPRAISAL
Principal
Loan Date
Maturity
Loan No
Call / Con
Account
Officer
Initials
$10,972,000.00
12-23-2008
I 09-26-2009
29218-3
1
1
1 8170
I
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
Applicant: City of. Vernon, a municipal corporation Lender: East West Bank
4305 Santa Fe Avenue Loan Servicing Department
Vernon, CA 90058 9300 Flair Drive
El Monte, CA 91731
Disclosure of Right to Receive a Copy of an Appraisal
Application Number: 29218-3
Loan Number: 29218-3
You have the right to a copy of the appraisal report used in connection with your application for credit. If you wish to have a copy, please write
to us at the following mailing address East West Bank Appraisal Department 9300 Flair Drive, 6th Floor El Monte, CA 91731. We must hear
from you no later than ninety (90) days after we notify you about the action taken on your credit application or no later than ninety (90) days
after you withdraw your application.
In your letter, give us the following information:
Borrower's name, property address and loan number
Upon your request, the appraisal report will be sent to:
4305 Santa Fe Avenue
Vernon, CA 90058
Costs of Providing the Appraisal Copy: You are required to pay the cost of the appraisal.
/_1UUitLyGll 0INil" IL1
I acknowledge that I have received a copy of this Disclosure of Right to Receive a Copy of an Appraisal.
APPLICANT:
CITY OF VERNON, A MUNICIPAL CORPORATION
By: 2;-/
// 6q
Leonis 01 1 alburg, Mayor bf City r6f Date
Vernon municipal co oration
By: � Q
Jeff A. !son, J11poration
Attorney of City of Date
Vernon, Tflunicipal
bn.ela".1ron Clerk of City of Date
Vernon, a municipal corporation
LASER PRO Undin0. V— 6.43.00.003 Copr, Harlem Fln4 6W Solutions, Inc. 1997, 2008. All Ri8h1, R.,erva0. - CA GAAPPS\EW8CFI\CFI\LPL\B14.FC TB-8802 PR-23
CHANGE IN TERMS AGREEMENT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
$10,972,000.00 12-23-2008 109-26-2009 1 29218-3 1 1 1 8170
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " * * * " has been omitted due to text length limitations.
Borrower: City of Vernon, a municipal corporation Lender: East West Bank
4305 Santa Fe Avenue Loan Servicing Department
Vernon, CA 90058 9300 Flair Drive
El Monte, CA 91731
Principal Amount: $10,972,000.00 Date of Agreement: December 23, 2008
DESCRIPTION OF EXISTING INDEBTEDNESS. The Promissory Note dated December 13, 2007, along with any and all subsequent Change in
Terms Agreement.
DESCRIPTION OF CHANGE IN TERMS. The Maturity date of the Note is hereby extended from January 1, 2009 to September 26, 2009.
The Principal Amount of the Note is hereby decreased to Ten Million Nine Hundred Seventy Two Thousand and 00/100 Dollars
($10,972,000.00)
The section entitled "Late Charge" is hereby amended and restated as follows:
LATE CHARGE. If a payment is 11 days or more late, Borrower will be charged 6.000% of the unpaid portion of the regularly scheduled
payment or $5.00, whichever is greater.
Effective December 1, 2008, the sections entitled "PAYMENT" and "VARIABLE INTEREST RATE" are hereby amended and restated as
follows%
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 26, 2009. In
addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning January 1, 2009,
with all subsequent interest payments to be due on the same day of each month after that.
VARIABLE INTEREST RATE. The interest rate on this loan is subject to change from time to time based on changes in an independent index
which is the one (1) month Wall Street Journal London Interbank offered rate, as quoted in the "Money Rates" column of The Wall Street
Journal on the date of determination (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower
the current Index rate upon Borrower's request. The interest rate change will not occur more often than each month. Borrower understands
that Lender may make loans based on other rates as well. The Index currently is 1.901 % per annum. The interest rate to be applied to the
unpaid principal balance of this loan will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate of 2.000
percentage points over the Index, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial
rate of 4.000%. NOTICE: Under no circumstances will the interest rate on this loan be less than 4.000% per annum or more than the
maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this loan is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this loan is computed using this method.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all
agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does
not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing
in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and
endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation
does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the
representation to Lender that the non -signing party consents to the changes and provisions of this Agreement or otherwise will not be released
by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:
CITY OF VERNON, A MUNICIPAL CORPORATION
Leonis C. Iburg, Mayor -of City' of Vernon, a
municipal corpora�t;Iion
By: (� lff/1"lC��
Jeff A ison, ( Attorney of City of Vernon, a
munici orporati
c
By:
anuela Giron, 'ty Ierk of City of Vernon, a
municipal corporation
LASER PRO L—mg, Ve 6.43.00.003 Cop,. Harland Financial Solutions, Inc. 1007. 2008. All Rights Reao,v d. - CA EAAPPS\EW8CFACFI\LPL\O20C.FC TR.8802 PR.23
- DISBURSEMENT REQUEST AND AUTHORIZATION
Principal
Loan Date
Maturity
Loan No
Call / Coll
Account
Officer
Initials
$10,972,000.00
12-23-2008
I 09-26-2009
29218-3
1
1
1 8170
I
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
Borrower: City of Vernon, a municipal corporation Lender: East West Bank
4305 Santa Fe Avenue Loan Servicing Department
Vernon, CA 90058 9300 Flair Drive
El Monte, CA 91731
LOAN TYPE. This is a Variable Rate Nondisclosable Draw Down Line of Credit Loan to a Corporation for $10,972,000.00 due on September
26, 2009. This is a secured renewal loan.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
❑ Personal, Family, or Household Purposes or Personal Investment.
® Business (Including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: Extend maturity date, reduce loan amount and amend interest rate.
FLOOD INSURANCE. As reflected on Flood Map No. 060166NA dated for the community of Vernon City, the property that
will secure the loan is not located in an area that has been identified by the Director of the Federal Emergency Management Agency as an area
having special flood hazards. Therefore, although flood insurance may be available for the property, no special flood hazard insurance protecting
property not located in an area having special flood hazards is required by law for this loan at this time.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be disbursed until all of Lender's conditions for making the
loan have been satisfied. Please disburse the loan proceeds of $10,972,000.00 as follows:
Other Disbursements: $10,972,000.00
$10,972,000.00 (Reduced Principal Amount after paydown of
$1,871,750.00)
Note Principal:
$10,972,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the following charges:
Prepaid Finance Charges Paid in Cash: $54,860.00
$54,860.00 Loan Fee
Other Charges Paid in Cash: $1,878,900.00
$400.00 Documentation Fee
$500.00 Outside Documentation Fee (payable to Nevers,
Palazzo, Maddux & Packard for master note modification)
$6,250.00 Appraisal Fee
$1,871,750.00 Principal pay -down (to reduce the Principal
Balance to $10,972,000.00)
Total Charges Paid in Cash: $1,933,760.00
EXPIRATION OF LOAN DOCUMENTS.. The offer represented by these Loan Documents expires if Borrower does not sign and return all Loan
Documents to Lender within 30 days from the date of Loan Documents..
REIMBURSEMENT OF DEMOLITION AND REMEDIATION COSTS. Lender hereby approves to release cash collateral under Money Market
Account #80358187 to reimburse the Borrower for demolition and remediation costs on subject site.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE
INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S
FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS
DATED DECEMBER 23, 2008.
DISBURSEMENT REQUEST AND AUTHORIZATION
Loan No: 29218-3 (Continued) Page 2
BORROWER:
CITY OF VERNON, A MUNICIPAL CORPORATION
By
By:
l
By:
anuela Giron, City Cle k of City of Vernon, a
municipal corporation
LASER PRO L-din0. V- 6.43.00.003 Cop,. Ha,lentl Financial Solalions, Ino. 1907. 2008. All Right, R...... d. - CA G:\APPS\EWBCFI\CFI\LPL\I2O.FC TR-8802 PR-23
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT is entered into as of December
2008 by CITY OF VERNON, a California municipal corporation ("Borrower"), and EAST
WEST BANK, a California banking corporation ("Lender").
RECITALS
A. Borrower and Lender entered into the Loan Agreement dated as of September 27,
2007 (the "Loan Agreement") pursuant to which Lender has agreed to make "Loans" to Borrower
for the purpose of purchasing property. The Loans are evidenced by the Promissory Note dated
October 1, 2007 in the amount of $50,000,000 made by Borrower and payable to the order of
Lender (the "Note").
B. The parties wish to enter into this Agreement to modify some of the terms of the
Loan Agreement.
AGREEMENT
Amendments to Loan Agreement.
(a) The second sentence of Section 2.3 of the Loan Agreement is deleted and
replaced with the following two sentences: "Except as provided in the next sentence, for Loans
made before December 29, 2008, the 'Interest Rate' means the sum of the 'Libor Rate' (as defined
below) and 2.00% per annum. For Loans made on or after December 29, 2008 and the Loan
evidenced by the promissory note dated December 13, 2007, the 'Interest Rate' means the greater
of (i) four percent per annum or (ii) the sum of the Libor Rate and 2.00% per annum."
(b) Both references in Section 3.4 of the Loan Agreement to "75%" are
deleted and replaced with "65%".
2. Representations and Warranties.
(a) Borrower remakes to Lender as of the date of this Agreement all of the
representations and warranties contained in any the Loan Agreement. This Agreement has been
duly authorized, executed and delivered and is the valid and binding obligation of Borrower,
enforceable in accordance with its terms.
(b) No "Event of Default" or "Potential Event of Default" (as both are defined
in the Loan Agreement) has occurred or is continuing.
4. Other Amendments. All of the "Loan Documents" (as defined in the Loan
Agreement) are modified as necessary to reflect the modifications referred to in this Agreement.
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All references in any of the Loan Documents to the "Loan Agreement" shall be to the Loan
Agreement, as modified hereby.
5. Full Force and Effect. Borrower represents that it, has no rights of setoff relating
to or defenses against payment of its obligations under any of the Loan Documents and, except as
provided in or contemplated by this Agreement, the Loan Documents remain unmodified and in
full force and effect.
6. Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the parties with respect to the subject matter of such amendments and
supersedes all prior agreements and understandings with respect to such subject matter, whether
oral or written.
7. Fees and Expenses. Borrower shall pay to Lender on demand all costs and
expenses incurred by Lender in connection with this Agreement, including, without limitation,
the fees and related costs of Lender's legal counsel.
8. Counterparts, Execution by Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of said counterparts shall
constitute but one and the same instrument. Facsimile signatures shall be accepted as if original.
(Signatures appear on following page.)
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Borrower: CITY OF VERNON, a municipal corporation
Name: L onis C. 'Malburg
Title: Mayor
ATTEST:
1
BY:
Name: Manuela Giron
Title: City Clerk
APPROVED AS TO FORM:
BY:
NamjJlarrison
Titlerney
Lender: EAST WEST BANK,
a California banking corporation
By:
Name: Flora Ling
Title: Senior Vice President
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WAWorking\05905\02\W0045016.DOC v4
CI-TY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: September 22, 2009
TO: Rory Burnett, Finance Director/City Treasurer
Masami Higa, Internal Control Manager/Controller
Joaquin Leon, Assistant Finance Director/Deputy City Treasurer
FRO Nelly Giron, City Clerk
RE: Resolution No. 9852 — A Resolution of the City of Vernon Approving and Ratifying the
Execution of a First Amendment to Loan Agreement By and Between the City of Vernon
and East West Bank and Related Documents
Transmitted herewith are copies of the fully executed amendment and of Resolution No. 9852 referenced
above, which was approved by City Council on February 2, 2009.
Thank you.
NG:dj
c: Resolution No. 9852
Agreement No. 09-024
CITY ATTORNEY'S OFFICE
INTER -DEPARTMENT MEMORANDUM
DATE: September 21, 2009
TO: Nelly Giron, City Clerk
FROM: Judy Lehr, Legal Services Administrative Secretary
RE: East West Bank
2200 E. 55th Street
Attached please find for your retention the originally signed First
Amendment to Loan Agreement regarding the above -referenced matter.
JH:em
Enclosure
(Resolution No 9852)
FIRST AMENDMENT TO LOAN
THIS FIRST AMENDMENT TO LOAN AGREEMENT is entered into as of December
2008 by CITY OF VERNON, a California municipal corporation ("Borrower"), and EAST
WEST BANK, a California banking corporation ("Lender").,
RECITALS
A. Borrower and Lender entered into the Loan Agreement dated as of September 27,
2007 (the "Loan Agreement") pursuant to which Lender has agreed to make "Loans" to Borrower
for the purpose of purchasing property. The Loans are evidenced by the Promissory Note dated
October 1, 2007 in the amount of $50,000,000 made by Borrower and payable to the order of
Lender (the "Note").
B. The parties wish to enter into this Agreement to modify some of the terms of the
Loan Agreement.
AGREEMENT
Amendments to Loan Agreement.
(a) The second sentence of Section 2.3 of the Loan Agreement is deleted and
replaced with the following two sentences: "Except as provided in the next sentence, for Loans
made before December 29, 2008, the 'Interest Rate' means the sum of the 'Libor Rate' (as defined
below) and 2.00% per annum. For Loans made on or after December 29, 2008 and the Loan
evidenced by the promissory note dated December 13, 2007, the 'Interest Rate' means the greater
of (i) four percent per annum or (ii) the sum of the Libor Rate and 2.00% per annum."
(b) Both references in Section 3.4 of the Loan Agreement to "75%" are
deleted and replaced with "65%".
2. Representations and Warranties.
(a) Borrower remakes to Lender as of the date of this Agreement all of the
representations and warranties contained in any the Loan Agreement. This Agreement has been
duly authorized, executed and delivered and is the valid and binding obligation of Borrower,
enforceable in accordance with its terms.
(b) No "Event of Default" or "Potential Event of Default" (as both are defined
in the Loan Agreement) has occurred or is continuing.
4. Other Amendments. All of the "Loan Documents" (as defined in the Loan
Agreement) are modified as necessary to reflect the modifications referred to in this Agreement.
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All references in any of the Loan Documents to the "Loan Agreement" shall be to the Loan
Agreement, as modified hereby.
5. Full Force and Effect. Borrower represents that it has no rights of setoff relating
to or defenses against payment of its obligations under any of the Loan Documents and, except as
provided in or contemplated by this Agreement, the Loan Documents remain unmodified and in
full force and effect.
6. Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the parties with respect to the subject matter of such amendments and
supersedes all prior agreements and understandings with respect to such subject matter, whether
oral or written.
7. Fees and Expenses. Borrower shall pay to Lender on demand all costs and
expenses incurred by Lender in connection with this Agreement, including, without limitation,
the fees and related costs of Lender's legal counsel.
8. Counterparts, Execution by Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of said counterparts shall
constitute but one and the same instrument. Facsimile signatures shall be accepted as if original.
(Signatures appear on following page)
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Borrower: CITY OF VERNON, a municipal corporation
Name: L nis C. * Malburg
Title: Mayor
ATTEST:
By: 1/" 4��lv�
Name:`Manuela Giron
Title: City Clerk
APPROVED A O FORM:
BY:
Name: Wt
.arrison
Title:Arney
Lender: EAST WEST BANK,
a California banking corporation
By:
Name: Flora Li
Title: Senior Vice President
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