HomeMy WebLinkAboutContracts & Agreements_180-2012_CCv0001.pdf FISCAL SERVICES AND DEPOSIT ACCOUNT CONTROL AGREEMENT
This FISCAL SERVICES AND DEPOSIT ACCOUNT CONTROL AGREEMENT (this
"Agreement")is entered into as of June 28, 2011, among City of Redlands ("D�g�sitor"),
California Bank-&Trust, a State of California Chartered Commercial Banking Institution
("Fiscal Agent")and the State of California Department of Public Health ("Secured Party"), who
each hereby agrees as follows.
RECITALS
A. Secured Party has issued or will issue a Funding Agreement to Depositor under
the Safe Drinking Water State Revolving Fund Law of 1997 (the "Funding Ajueement"),
whereby Secured Party has made or will make a loan to Depositor in a principal amount of up to
$13,663,033.00 (the"Loan").
B. The Funding Agreement requires or will require, among other things, that
Depositor engage the services of a fiscal agent to assist in accumulating funds sufficient to repay
the Loan to Secured Party. Z:1
C. For valuable consideration, receipt of which is hereby acknowledged by
Depositor, and in order to secure the Loan, Depositor has granted Secured Party a security
interest in deposit account number(s) 1030319159, 1030319319 maintained by Depositor with
Fiscal Agent at the office indicated on the signature page below, any subaccount(s)or related
account(s) into and from which balances from such account(s) are swept by Fiscal Agent from
time to time for reserve related or other purposes, all funds now or hereafter deposited into such
account(s), and any proceeds thereof, including without limitation any interest earned thereon
(collectively, the"Account").
D. All capitalized terms defined in the UCC (as hereinafter defined) and not
otherwise defined in this Agreement shall have the same meaning in this Agreement as in the
UCC, and the rules of interpretation in Article I of the UCC shall apply to the interpretation of
this Agreement.
E. In connection with the foregoing, Depositor is requesting that Fiscal Agent enter
foregoing, Z:1
into this Agreement in order to perform services as Depositor's fiscal agent and perfect Secured
Party's security interest in the Account,
AGREEMENT
I Definitions.
a. "Business Day"means a day, other than a Saturday, Sunday or holiday on which
the applicable party is open for business at the location to which the communication is sent.
b. "Disposition instruction" means an instruction to Fiscal Agent directing the
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disposition of the funds in the Account.
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C. "Invoice" means each semiannual invoice prepared by Secured Party,which
includes, without limitation, all accrued interest and the principal and/or interest amount due and
payable by Depositor for such preceding semiannual period of the Loan.
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d. "Notice of Exclusive Control"means the first instruction to Fiscal Agent
originated by Secured Party directing that Fiscal Agent no longer comply with Depositor's
Disposition Instructions. The Notice of Exclusive Control may also contain a Disposition
Instruction originated by Secured Party.
e. "Outside Time"means the opening of business on the first Business Day
following the Business Day on which the Notice of Exclusive Control is received at the address
for Fiscal Agent specified herein. If the Notice of Exclusive Control is received at such address
after 2:00 p.m., local time, then in determining the Outside Time, the Notice of Exclusive
Control will be considered to have been actually received on the following Business Day.
f, "UCC"means the Uniform Commercial Code of the Jurisdiction whose law
governs this Agreement or, if relevant to any matter other than the meaning of a defined term,
the Uniform Commercial Code of the jurisdiction whose law applies to the matter under the
choice of law rules of the jurisdiction whose law 'governs this Agreement.
2. Fiscal Agent's Responsibility.
a. Fiscal Agent shall perform the following services:
(i) Receive Invoices from Secured Party on behalf of Depositor and transmit
payments to Secured Party when instructed; and
(ii) Promptly give written notice to Secured Party of any failure by Depositor
to satisfy the deposit requirements set forth in Section 3 hereof, including but not limited to
Depositor's delinquency in making such deposits.
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b. Fiscal Agent shall have no duty to inquire or determine whether Depositor's
obligations to Secured Party are in default or whether Secured Party is entitled, under any
separate agreement between Secured Party and Depositor, to give Disposition Instructions or any
other instructions or a Notice of Exclusive Control relating to the Account. Fiscal Agent shall
have no responsibility or liability to Secured Party for complying with any Disposition
Instruction, order or other instruction, whether oral or written, concerning the Account, except to
the extent such compliance would violate (i) Section 4(c) hereof, or(ii) written instructions or
orders previously received from Secured Party, but only to the extent Fiscal Agent had
reasonable opportunity to act thereon, Fiscal Agent shall not have any liability to Depositor or
Secured Party for losses or damages resulting from any failure to comply with Disposition
Instructions relating to the Account or delay in complying with any Disposition Instruction or
any other instruction if(i) compliance with any Disposition Instruction or any other instruction
would require Fiscal Agent to violate any then-existing injunction or order of any court of
competent jurisdiction, including without limitation in any bankruptcy case under Title I I of the
United States Code, or(ii) the failure or delay is due to circumstances beyond Fiscal Agent's
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reasonable control. Without limitinc,the foregoing, in no event shall Fiscal Agent have any
liability, directly or indirectly, for any special, indirect, punitive, exemplary or consequential
losses or damages, including without limitation lost profits, whether or not any claim for such
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losses or damages is based on tort or contract or Fiscal Agent knew or should have known the
likelihood of such losses or damages in any circumstances.
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C. Fiscal Agent may rely on notices and communications it believes in good faith to
be genuine and given by the appropriate party. Without limiting the foregoing,Fiscal Agent may
(but shall not be obligated to) require that Secured Party or Depositor from time to time deliver
to Fiscal Agent such documentation as Fiscal Agent may reasonably request to evidence the
authority of those entities or individuals purporting to give Disposition Instructions or any other
instructions on behalf of Secured Party or Depositor to Fiscal Agent hereunder.
3. Depositor's Responsibilities.
a. Reserve Fund. The Funding Agreement will require Depositor to deposit, and
maintain in the Account, at a minimum, a reserve in the amount equal to two (2) semiannual
principal payments (the "Reserve Funds") for the Loan. In order to accumulate Reserve Funds,
Depositor shall make deposits into the Account in an amount and as frequent as instructed by
Secured Party. Secured Party shall provide a copy of all such instructions to Fiscal Agent
substantially in the form attached hereto as Exhibit"A".
b. Interest Payments During Construction. During construction of the Project,
Depositor shall deposit into the Account an amount equal to all unpaid accrued interest, as more
particularly described on each Invoice. Depositor shall make all required deposits no later than
15 days after receipt of an Invoice from Secured Party. Secured Party shall provide a copy of
each Invoice to Fiscal Agent.
C. Principal and Interest Payments. After completion of construction on the Project,
Depositor will be required to deposit funds into the Account in an amount and as frequently as
instructed by Secured Party in order to sufficiently meet Depositor's semiannual principal plus
interest payment obligations, as required by each Invoice.
4. Control of Account.
a. Depositor's Right to Give Disposition Instructions. Until (i) Secured Party has
-given Fiscal Agent the Notice of Exclusive Control substantially in the form of Exhibit"B"
attached hereto, and (ii) the Outside Time has occurred, Depositor shall be entitled to initiate
Dis-rosition. instructions from the Account, provided such Disposition Listruct ons have becri
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authorized by Secured Party. Secured Party's authorization pursuant to this Section 4(a) shall be
limited to the payment of Invoices.
b. Secured Partv's Right to Give Disposition Instructions. Notwithstanding any
separate agreement Depositor may have with Fiscal Agent, Secured Party shall be entitled at any
time to give Disposition Instructions to Fiscal Agent, or instructions as to any other matters
relating to the Account, all without further consent of Depositor. Fiscal Agent shall comply
with, and is fully entitled to rely upon, any Disposition Instructions or any such instructions from
Secured Party as to any other matters relating to the Account, even if such instructions are
contrary to any instructions or demands that Depositor may give to Fiscal Agent.
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C, Effect of Instructions from Secured Party, Secured Party's rights under this
Agreement to give Fiscal Agent Disposition Instructions or instructions as to any v. other matters
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relating to the Account includes without limitation the power to give stop payment orders for any
items being presented to the Account for payment. Depositor confirms that Fiscal Agent should
follow all such instructions from Secured Party even if the result of following any such
instructions is that Fiscal Agent dishonors, items presented for payment from the Account.
Depositor further confirms that Fiscal Agent will have no liability to Depositor for the wrongful
dishonor of such items resulting from Fiscal Agent's compliance with any such instructions from
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Secured Party.
d. After the Outside Time. After the Outside Time, Fiscal Agent will no longer
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comply with Depositor's communications, including Depositor initiated Disposition Instructions.
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e. Notice of Exclusive Control. Fiscal Agent will comply with the Notice of
Exclusive Control, and with any Disposition Instructions originated by Secured Party either
before any Notice of Exclusive Control, together with the Notice of Exclusive Control or
following Secured Party's Notice of Exclusive Control, in each case (i) without Depositor's
further consent, and(i]) even if following, the instruction results in Fiscal Agent otherwise not
complying with Depositor's communications. The Notice of Exclusive Control may be
rescinded or otherwise modified by Secured Party, but such rescission or modification shall not
be effective against Fiscal Agent unless and until written notice of such rescission or
modification shall be delivered to and acknowledged by Fiscal Agent.
5. Priority of Secured Party's Security Interest, Rights Reserved by Fiscal Agent. Fiscal
Agent agrees that all of its present and future rights against the Account are subordinate to
Secured Party's security interest therein; provided, however, that Secured Party agrees that
nothing herein subordinates or waives any of, and that Fiscal Agent expressly reserves all of,
Fiscal Agent's present and future rights (whether described as rights of setoff, banker's lien,
charls,eback or otherwise, and whether available to Fiscal Agent under the law or under any other
agreement between Fiscal Agent and Depositor concerning the Account, or otherwise)with
respect to: (a) items deposited to the Account and returned unpaid, whether for insufficient funds
or for any other reason, and without regard to the timeliness of return of any such item or the
occurrence or timeliness of any drawee's notice of non-payment of such items; (b) claims of
breach of the applicable Uniform Commercial Code's transfer or presentment warranties made
against Fiscal Agent in connection with items deposited to the Account; (c) any automated
clearing house (also known as "ACH") entry credited to the Account and returned unpaid or
subject to an adjustment entry under applicable clearing house rules, whether for insufficient
funds or for any other reason, and without regard to the timeliness of such return or adjustment;
(d) any credit to the Account from a merchant card transaction, against which a contractual
demand for charoeback has been made; (e) any credit to the Account made in error; and (f)
Fiscal Agent's usual and customary charges for services rendered in connection with the
Account, to the extent that, in each case, Depositor has not separately paid or reimbursed Fiscal
Agent therefor. Items, entries, and transactions described in clauses (a) through (e) of this
Section are collectively referred to as "Returned Items,"
6. Statements. In addition to the original deposit account statement for the Account which
is provided to Depositor, Fiscal Agent will send a duplicate statement to Secured Party.
Depositor hereby authorizes Fiscal Agent to provide any additional information relating to the
Account to Secured Party upon Secured Party's request without Depositor's further consent.
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7, Notice of Adverse Claims; Record of Security Interest.
a. Fiscal Agent represents and warrants to Secured Party that Fiscal Agent has not
received notice of any currently effective lien or encumbrance on or other claim to the Account
from any other person or entity and has not entered into, and covenants with Secured Party that it
will not enter into, any agreement with any other person or entity by which Fiscal Agent is
obligated to comply with instructions from such other person or entity as to the disposition of
funds from the Account or other dealings with the Account. Fiscal Agent will use commercially
reasonable efforts, subject to applicable law, to notify Secured Party promptly if any other person
or entity claims a property interest in the Account. To the extent that it gives notice to Depositor,
Fiscal Agent will promptly notify Secured Party if any other person or entity claims that it has a
property interest in the Account.
b. Fiscal Agent further represents and warrants to Secured Party that Fiscal Agent
has marked its books and records to indicate that Secured Party has the right to control the
Account as set forth herein.
S. Returned Items. Depositor and Secured Party understand and agree that Fiscal Agent will
collect the amount of each Returned Item by debiting the Account. Depositor agrees to pay the
amount of any Returned Item immediately upon demand to the extent that there are not sufficient
funds in the Account to cover such amount on the day of the debit. Secured Party agrees to pay
any such amount that is not paid in full by Depositor within 10 days after demand on Depositor
by Fiscal Agent up to the amount of the proceeds received by Secured Party from the
corresponding Returned Item, Fiscal Agent agrees that any demand upon Secured Party for such
amount shall be made within 90 days after Secured Party's receipt of such proceeds. To the
extent that Fiscal Agent is precluded from making demand or giving notice hereunder by reason
of the commencement of a bankruptcy or similar proceeding, then such demand or notice shall
be deemed to have been made or given at the commencement of such proceeding.
9. Costs; Indemnity.
a. Depositor will be responsible for Fiscal Agent's customary charges for services
rendered in connection with the Account.
b. Depositor will indemnify Fiscal Agent and its officers, directors, employees and
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against any and all loS!scs, sliabilities and Cxpeils�-s arjsu�4 out ofthis A' greernent
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(including without limitation all fees and costs incurred by Fiscal Agent in complying with
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Disposition Instructions or any other instructions or requests given by Depositor hereunder and
reasonable attorneys' fees and disbursements and the reasonable estimate of the allocated costs
and expenses of in-house legal counsel and staff), except to the extent the losses, claims,
liabilities or expenses are determined by a court of competent Jurisdiction to be caused by Fiscal
Agent's gross negligence or willful misconduct.
C. Secured Party will indemnify Fiscal Agent and its officers, directors, employees
and agents against losses, claims, liabilities and expenses arising out of Fiscal Agent's
compliance with Disposition Instructions or any other instructions or requests from Secured
Party in connection with this Agreement (including without limitation reasonable attorneys' fees
and disbursements and the reasonable estimate of the allocated costs and expenses of in-house
legal counsel and staff), except to the extent the losses, claims, liabilities or expenses are
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determined by a court of competent-jurisdiction to be caused by Fiscal Agent's gross negligence
or willful misconduct.
d. To the extent that a given claim, liability or expense shall arise out of Fiscal
Agent's following of a Disposition Instruction or any instruction or request from Secured Party
in connection with this Agreement, Depositor's and Secured Party's indemnity obligations under
this Section 9 with respect to such claim, liability or expense shall be joint and several. The
obligations of Depositor and Secured Party under this Section 9 shall survive the termination of
this Agreement and the resignation or removal of Fiscal Agent.
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10. Termination; Survival.
a. Secured Party may terminate this Agreement by written notice to Fiscal Agent
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and Depositor. Depositor may not terminate this Agreement except with written consent of
Secured Party and on 30 days' prior written notice to Secured Party and Fiscal Agent.
b. This Agreement may be terminated by Fiscal Agent only as follows: (i)
immediately upon notice to the other parties if Fiscal Agent becomes obligated to terminate this
Agreement or to close the Account under any statute, rule or regulation or any order,judgment,
decree or injunction, or a garnishment, restraining notice or other legal process, directing, or
prohibiting or otherwise ng restricting, the disposition of the funds in the Account,binding upon
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Fiscal Agent; (ii)without limiting the ng
foregoi , with written consent of Secured Party which
foregoing,
may not be unreasonably withheld but may be conditioned on Secured Party's ability to transfer
the Account to a financial institution that agrees to substantially undertake Fiscal Agent's
obligations under this Agreement.
C. This Agreement will terminate upon Fiscal Agent's receipt of written notice from
Secured Party expressly stating that Secured Party's security interest in the Account has
terminated.
d. Sections 2 ("Fiscal Agent's Responsibility"), 8 ("Returned Items") and 9 ("Costs;
Indemnity")will survive tennination of this Agreement and the resignation or removal of Fiscal
Agent.
11. Governing Law.
a. Fiscal Agent represents and warrants to Secured Party that any account
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agreement(s)between Fiscal Agent and Depositor relating to the establishment and general
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operation of the Account will expressly provide that such account agreement(s) are governed by
the law of the State of California. Fiscal Agent covenants that it will not, without Secured
Party's prior written consent, amend those account agreement(s) to change their governing law or
to provide that secured transactions relating to the Account are governed by the law of another
jurisdiction.
b. This Agreement will be governed by the internal laws of California.
11 Entire Agreement. This Agreement is the entire agreement among the parties regarding
the subject matter hereof and supersedes any prior agreements and contemporaneous oral
agreements of the parties concerning its subject matter. To the extent that any provision in this
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Agreement conflicts with any provision in any other agreement between Fiscal Agent and
Depositor,the provision in this Agreement shall control,
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13. Amendments. No amendment of this Agreement will be binding unless it is in writing
and signed by Depositor, Secured Party and Fiscal Agent, and no waiver of any night under this
Agreement will be binding unless it is in writing and signed by the party to be charged.
14. Severability. To the extent a provision of this Agreement is unenforceable, this
Agreement will be construed as if the unenforceable provision were omitted.
15. Successors and Assigns. The provisions of this Agreement shall be binding
_upon and
inure to the benefit of Fiscal Agent, Secured Party and Depositor and their respective successors
and assigns. Notwithstanding the foregoing, neither Depositor nor Fiscal Agent shall assign,
transfer or delegate any of its rights or obligations under this Agreement without prior written
consent of Secured Party, which may be withheld at its sole discretion. Any banking association
or corporation into which Fiscal Agent may be merged, converted or with which Fiscal Agent
may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which Fiscal Agent shall be a party, or any banking association or corporation to which all or
substantially all of the corporate trust business of Fiscal Agent shall be sold or otherwise
transferred, shall succeed to all Fiscal Agent's rights, obligations and immunities hereunder
without the execution or filing of any instrument or any further act, deed or conveyance on the
part of any of the parties hereto, anything herein to the contrary notwithstanding
16. Notices. All notices, instructions or other communications to a party under this
Agreement shall be in writing and shall be sent to the party's address for notices set forth below
or to such other address as shall be designated by such party by notice given to the other parties,
and, except as otherwise expressly provided for herein, will be effective on receipt.
17. No Agency, Etc. Nothing contained in this Agreement shall create any agency, fiduciary,
joint venture or partnership relationship between Depositor, Secured Party and Fiscal Agent.
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18. Counterparts. This Agreement may be executed in counterparts, each of which shall be
an original, and all of which shall constitute but one and the same instrument.
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The foregoing is hereby acknowledged and agreed to, effective as of the date first set
forth above.
DEPOSITOR:
City of Redlands,
a
By: w -
Name: i
Title:
Address for notices:
35 Cajon St., Suite 15A
Redlands CA 92373
Attention: Ross Wittman
Telephone: 909-798-7585
Facsimile:
[Signatures continue on following page.]
Attest:
Sam Irwi , i Clerk
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SECURED PARTY:
State of California
Department Qf Public Health
By
Name:
e:
Title:
Address for notices:
State of California
Department of Public Health,
Division of Drinking Water and Environmental Management
P.O. Box 997377, MS 7418
Sacramento, California 95899-7377
Telephone: 916-449-5600
Facsimile: 916-449-5656
[Signatures continue on following page.]
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FISCAL AGENT:
California Bank & Trust
a State of California Chartered
Commercial Banking Institution (Corporation_
By:
Name: Doris Mannin
g
Title: Vice President N
Address for notices:
1331 Broadway
Sacramento, CA 95818-2217
Attention: Sacramento Business Department
Telephone: 916-341-3780
Facsimile: 916-441-3619
Office of Fiscal Agent where the Account is maintained:
California Bank&Trust
1331 Broadway, Sacramento, CA 95818-2217
Attention: Sacramento Business Department
Telephone: 916-.3.41-3780
Facsimile: 916-441-3619-.
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EXHIBIT "A"
FORM INSTRUCTIONS FOR DEPOSITS
California Bank&Trust
A State of California Chartered
Commercial Banking Institution(Corporation)
1331 Broadway
Sacramento, CA 95818-2217
Attn: Doris Manning, Vice President
[Name of Depositor]
[Address]
Attn:
Re: Instruction for Deposits
Ladies and Gentlemen:
Pursuant to Section 3(a) of that certain Fiscal Services and Deposit Account Control
Agreement dated as of-, by and among [CALIFORNIA BANK& TRUST] and us (the
"Control Agreement")and in order to satisfy the Reserve Fund, Depositor is instructed to deposit
into account no. ("the Account")-,beginning on_, and on every
thereafter. Depositor shall continue to make all required deposits until the Account has
accumulated an amount equal to two (2) semiannual principal payments for the Loan.
Capitalized terms used in these instructions shall have the meanings ascribed to them in the
Control Agreement.
Pursuant to Section 3(c) of the Control Agreement and in order to satisfy Depositor's
principal and interest payments under the Loan, Depositor shall deposit into the Account
beginning-, and every_ thereafter. Depositor shall continue to make all required
deposits until the Account has accumulated an amount equal to tow (2) semiannual principal
payments for the Loan.
Very truly yours,
State of California
Department of Public Health
By:_
Name:
Title:
Exhibit"A"
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EXHIBIT 4413"
FORM NOTICE OF EXCLUSIVE CONTROL
California Bank &Trust
A State of California Chartered
Commercial Banking Institution (Corporation)
1331 Broadway
Sacramento, CA 95818-2217
Attn: Doris Manning,Vice President
[Name of Depositor]
[Address]
Attn:
Re: Notice of Exclusive Control
Ladies and Gentlemen:
This is the Notice of Exclusive Control as defined in that certain Fiscal Services and
Deposit Account Control Agreement dated , among you, us and-(the"Depositor")
(as currently in effect , the "Control Agreement"). A copy of the Control Agreement as fully
executed is attached. Capitalized terms used in this Notice of Exclusive Control have the
meanings given them in the Control Agreement.
This Notice of Exclusive Control directs Fiscal Agent to no longer to comply with
Depositor's Disposition Instructions.
Very truly yours,
State of California
Department of Public Health
By:
Name:
Title:
Exhibit"B"
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