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HomeMy WebLinkAboutContracts & Agreements_44-2024LOAN AGREEMENT This Loan Agreement ("Agreement") is made and entered into this 5`1' day of March, 2024 ("Effective Date"), by and between the CITY OF REDLANDS, a California municipal corporation and general law city ("City"), and the REDLANDS HISTORICAL MUSEUM ASSOCIATION, a California nonprofit public benefit corporation ("Borrower"). City and Borrower are sometimes individually referred to herein as a "Party" and, together, as the "Parties." RECITALS WHEREAS, Borrower has requested that the City make a loan to the Borrower in the amount of One Million Dollars ($1,000,000) to provide funding for the completion of certain improvements associated with the construction of the proposed "Museum of Redlands;" WFIEREAS, City has found and determined that the loaning of funds to Borrower for the improvements to the "Museum of Redlands" serves a public purpose for the reason that the funds will facilitate the opening of a historical museum that will provide cultural enrichment to the Redlands community and contribute to the City's goals of enhancing tourism and economic development; and NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows: AGREEMENT Section 1. Loan. City hereby loans to Borrower the sum of One Million Dollars ($1,000,000) (the "Loan"). The Loan shall be evidenced by that certain Promissory Note dated as of the date hereof, in the form attached hereto as Exhibit "A" and incorporated herein by this reference (the "Note"). The terms of the Loan, including the interest rate, the terms of repayment, and the maturity date, shall be as set forth in the Note. Section 2. Restrictions on Use of Loan Funds. Borrower warrants and represents that the Loan shall not be used for any activity that would violate city, state, or federal statutory or decisional law, and shall be expended solely for improvements Borrower proposes to make to the "Museum of Redlands," as more particularly described in Exhibit "B" (the "Improvement Work"). Section 3. Representations and Warranties. As an inducement to City to execute this Agreement and to disburse the proceeds of the Loan, Borrower represents and warrants to City that the following statements set forth in this Section 3 are true, correct, and complete in all material respects as of the date hereof and will be true, correct, and complete in all material respects until the Loan is paid in full: a) Borrower is a nonprofit public benefit corporation, duly organized and validly existing under the laws of the State of California, and is qualified to transact business in the State of California and in each jurisdiction where it is required to conduct its operations, and is in good standing in the State of California; b) Borrower is an organization exemption from taxation under Section 501(c)(3) of the Internal Revenue Code; 1 I:\emo\Agreements\Museum of Redlands Loan Agreement FY23-0048.docx-ms c) The execution, delivery and performance of this Agreement, the Note and any other documents entered into in connection with the Loan (collectively, the "Loan Documents") by Borrower are within the Borrower's powers and have been duly authorized by all necessary action by Borrower; d) The Loan Documents have been duly executed by Borrower, and are legally valid and binding obligations of Borrower, enforceable against Borrower in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity; and e) The execution, delivery and performance of the Loan Documents by Borrower will not violate (i) Borrower's articles of incorporation or bylaws; (ii) any legal requirement affecting Borrower or any of' its properties; or (iii) any agreement to which Borrower is bound or to which it is a party and will not result in or require the creation (except as provided in or contemplated by any of the Loan Documents) of any lien upon any of such properties. Section 4. Compliance with California Labor Code. In performing the Improvement Work, Borrower shall comply with all applicable federal, state, and local laws, including, but not limited to, any applicable provisions of the California Labor Code. City makes no representation to Borrower as to whether the Improvement Work constitutes a "Public Work" as that term is defined by California Labor Code section 1720, and Borrower acknowledges and agrees that Borrower shallbe solely responsible and liable for the determination of whether such Improvement Work constitutes a "Public Work." Borrower further acknowledges and agrees that City's sole obligation under this Agreement is to provide Borrower with the Loan, and that City is not an awarding authority for any contract entered into by Borrower for the improvement Work, nor is City otherwise undertaking any "Public Work" for purposes of California Labor Code section 1781. Borrower shall defend, indemnify, and hold harmless City and its elected and appointed officials, officers, and employees from and against any and all losses, damages, costs, claims, causes of action and liability based upon the assertion that City or Borrower has failed to comply with any applicable provision of the California Labor Code inconnection with Borrower's undertaking of the Improvement Work. Section 5. Reporting and Accounting Requirements. a) Borrower shall maintain true, proper, and complete books, records, and accounts (collectively, "Books and Records") in which shall be entered fully and accurately all transactions taken with respect to the Improvement Work and the expenditure of the Loan. Borrower shall maintain the Books and Records in accordance with Generally Accepted Accounting Principles. b) City reserves the right to designate its employee representatives, or its contracted representatives with a Certified Public Accounting firm, who shall have the right to audit Borrower's Books and Records as they relate to the Loan, and to examine any cost, revenue, payment, claim or other records or supporting documentation relating to Borrower's use and expenditure of the Loan. Any such audit shall be undertaken by City or its representatives at mutually agreed upon reasonable times, and in conformance with generally accepted auditing standards. Borrower agrees to fully cooperate with any such audit. 2 I:\emo\Agrcemcnts\Museum of Redlands Loan Agreement FY23-0048.docx-ms c) City's right to audit shall extend for a period of three (3) years following the date of City's provision of the Loan to Borrower. Borrower agrees to retain all records and documentation relating to the Borrower's expenditure of the Loan for such period. Section 6. Event of Default. The occurrence of any of the following shall be deemed to be a default hereunder (each an "Event of Default"): a) failure by Borrower to pay any monetary amount when due under the Note or any other Loan Document; b) any other default or breach of any of the terms, provisions, and obligations of the Borrower or any guarantor pursuant to any Loan Document, and such default or breach is not cured by Borrower and/or any guarantor within thirty (30) days from the receipt of written notice thereof from Lender. Section 7. Remedies. Notwithstanding any provision to the contrary herein or any of the other Loan Documents, during a continuance of any Event of Default under this Agreement or any of the other Loan Documents, then Lender shall, at its option, have the remedies provided in the Loan Document breached by Borrower, including, without limitation, the option to declare all outstanding indebtedness to be immediately due and payable without presentment, demand, protest or notice of any kind, and Lender may exercise all rights and remedies available to it under any or all of the Loan Documents or under applicable law. Section 8. Indemnification. To the fullest extent permitted by law, Borrower shall indemnify, defend, and hold harmless City, and its elected and appointed officials, officers, employees and agents, (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgements, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a "Claim;" collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to this Agreement and Borrower's undertaking of the Improvement Work (including the negligent and/or willful acts, error and/or omission of Borrower, i.ts principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable for any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Borrower to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. This indemnity shall. apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amotmt of indemnification to be provided by Borrower. Section 9. Borrower Independence. In the performance of this Agreement, Borrower, and the employees and agents of Borrower, shall act in an independent capacity and are not officers, employees, or agents of City. The manner and means of performing the Improvement Work are under the control of Borrower, except to the extent they are limited by statute, rule, or regulation. Nothing in this Agreement shall be deemed to constitute approval for Borrower, or any of Borrower's employees or agents, to be the employees or agents of City. City shall not be liable to any contractor, subcontractor, supplier, laborer, architect, engineer, or any other party for 3 I:\emo\Agreements\Museum of Redlands Loan Agreement FY23-0048.docx-ms services performed or materials supplied in connection with the Improvement Work. City shall not be liable for any debts or claims accruing in favor of any such parties against Borrower or others or against the Improvement Work or the premises where any such Improvement Work is performed. Borrower is not and shall not be an agent of City for any purpose. City is not a joint venture partner with Borrower or with any person having an ownership or other interest in Borrower in any manner whatsoever. Section 10. Assignment. Borrower shall not assign or transfer this Agreement, directly or indirectly, by operation of law or otherwise, without the prior written consent of City. Any attempt to do so without such written consent of City shall be null and void. Section 1.1. Notices. Any notice or other communication required, or which may be given, pursuant to this Agreement, shall be in writing. Any such notice shall be deemed delivered (i) on the date of delivery in person; (ii) five (5) days after deposit in first class registered mail, with return receipt requested; (iii) on the actual delivery date if deposited with an overnight courier; or (iv) on the date sent by facsimile, if confirmed with a copy sent contemporaneously by first class, certified, registered or express mail; in each case properly posted and fully prepaid to the appropriate address set forth below, or such other address as a Party may provide notice in accordance with this section: CITY OF REDLANDS City Manager City of Redlands 300 East State Street, Suite 690 P.O. Box 3005 (mailing) Redlands, CA 92373 Section 12. General Considerations. REDLANDS HISTORICAL MUSEUM ASSOCIATION c/o Mundell, Odlum & Haws, LLP 650 E. Hospitality Lane, Suite 470 San Bernardino, California 92408 a) Waiver. A waiver by either Party of any breach, or of any term, covenant, or condition contained herein, shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. b) Entire Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties with respect to its subject matter, and all preliminary negotiations and agreements of whatsoever kind or nature relating to the same are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. c) Interpretation.. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of the Agreement or any other rule of improvements which might otherwise apply. 4 I:\cmo\Agreements\ Museum of Redlands Loam Agrcemeot FY23-0048.docx-ms d) Amendment. This Agreement may be modified or amended only by a written document executed by both Borrower and City. e) Severability. If any term or provision of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. f) Controlling Law and Venue. The Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflicts of law provisions. The Parties agree that all actions or proceedings arising in connection with this Agreement shall be tried and litigated only in the state courts located in San Bernardino County, California, and the federal courts located in Riverside County, California. g) Equal Opportunity Employment. Borrower represents that it is an equal opportunity employer, and it shall not discriminate against any contractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, age or on any other basis prohibited by law. h) Attornev's Fees. In the event any action is commenced to enforce or interpret any term or provision of this Agreement, the prevailing Party in such action, in addition to costs and any other relief, shall be entitled to the recovery of its reasonable attorneys' fees, including fees for a Party's use of in-house counsel. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of its Effective Date. CITY OF REDLANDS REDLANDS HISTORICAL MUSEUM ASSOCIATION By: By: Eddie Tejeda, Mayo ATTEST eanne Donaldson, City Clerk By: 5 I:lcmo\AgreementslMuseum of Redlands Loan Agreement FY23-0048.docx-ms p� zt.0 President j; z.., (L i a -I Secretary EXHIBIT A FORM OF PROMISSORY NOTE [Attached] 6 I:\cmo\Agreements\Museum of Redlands Loan Agreement FY23-0048.docx-ms PROMISSORY NOTE $1,000,000.00 March 5, 2024 FOR VALUE RECEIVED, REDLANDS HISTORICAL MUSEUM ASSOCIATION, a California nonprofit public benefit corporation (the "Borrower") promises to pay to the order of the CITY OF REDLANDS, a California municipal corporation and general law city (the "Lender") in lawful money of the United States of America at its offices located at 300 East State Street, Suite 690, P.O. Box 3005 (mailing), Redlands, CA 92373, or at such other location as the Lender may designate from time to time, the principal sum of One Million Dollars ($1,000,000.00) (the "Loan"), together with interest accruing on the unpaid principal balance at a rate of four percent (4%) per annum from the date hereof, all as provided below. 1. PAYMENTS. The full balance of this Note, including all principal, accrued interest and late fees, is due and payable on the second anniversary of the date of this Note, hereinafter known as the "Maturity Date." The Loan shall be due and payable in one (1) lump sum to be made in full, principal and interest included, by the Maturity Date. 2. LATE FEE. If the Borrower fails to pay all principal, interest or other amounts coming due pursuant to the provisions of this Note on or before the Maturity Date, the Borrower also shall pay to Lender a late payment fee of $5,000.00, together with the default interest due as described in Section 3. 3. INTEREST DUE IN THE EVENT OF DEFAULT. In the event the Borrower fails to pay this Note in full on or before the Maturity Date, the unpaid principal shall accrue interest at the maximum rate allowed by law until this Note has been paid in full. 4. ALLOCATION OF PAYMENTS. Payments shall be first credited to any late fees due, then to interest due, and any remainder will be credited to principal. 5. PREPAYMENT. Borrower may prepay this Note, in whole or in part, without penalty. In no event shall Borrower be entitled to re -borrow any amounts prepaid. 6. EVENT OF DEFAULT. The occurrence of any of the following shall be deemed to be a default hereunder: (a) failure by Borrower to pay any monetary amount when due under this Note; (b) an Event of Default as such term is defined in that certain Loan Agreement dated as of the date hereof between Borrower and Lender. 7. ACCELERATION. If the Borrower is in default under this Note, then Lender may, at its option, declare all outstanding sums owed on this Note to be immediately due and payable. Page 1 of 3 I:\ono\Agreements\Museum of Redlands Promissory Note F'Y23-0049.docx-ms 8. ATTORNEYS' FEES AND COSTS. Borrower shall pay all costs incurred by Lender in collecting sums due under this Note after a default, including reasonable attorneys' fees. If Lender or Borrower sues to enforce this Note or obtains a declaration of its rights hereunder, the prevailing party in any such proceeding shall be entitled to recover its reasonable attorneys' fees and costs incurred in the proceeding (including those incurred in any bankruptcy proceeding or appeal) from the non -prevailing party. 9. WAIVERS. Borrower hereby waives diligence, demand for payment, presentment for payment, protest, notice of nonpayment, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, and all other notices or demands of any kind (except notices specifically provided for in this Note or the Loan Agreement, if any). Borrower waives to the full extent permitted by law, the right to plead any and all statutes of limitations and/or any defenses relating to marshaling of assets as a defense. 10. NON -WAIVER. No failure or delay by Lender in exercising Lender's rights under this Note shall be considered a waiver of such rights. 11. SEVERABILITY. In the event that any provision herein is determined to be void or unenforceable for any reason, such determination shall not affect the validity or enforceability of any other provision, all of which shall remain in full force and effect. 12. INTEGRATION. There are no verbal or other agreements which modify or affect the terms of this Note. This Note may not be modified or amended except by written agreement signed by Borrower and Lender. 13. CONFLICTING TERMS. The terms of this Note shall control over any conflicting terms in any referenced agreement or document. 14. TIME IS OF THE ESSENCE. Time is of the essence with regard to each provision of this Note as to which time is a factor. 15. NOTICE. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, or (c) by a commercial overnight courier that guarantees next day delivery and provides a receipt, and such notices shall be made to the parties at the following addresses: City of Redlands, Attn: City Manager 300 East State Street, Suite 690 P.O. Box 3005 (mailing) Redlands, California 92373 Redlands Historical Museum Association, c/o Mundell, Odium & Haws, LLP 650 E. Hospitality Lane, Suite 470 San Bernardino, California 92408 16. EXECUTION. The Borrower executes this Note as a principal and not as a surety. Page 2 of 3 I:\cmo\Agreements\Museum of Redlands Fronilssoty Note FY23-0049.docx-ms 17. GOVERNING LAW. This Note shall be governed under the laws in the State of California. REDLANDS HISTORICAL MUSEUM ASSOCIATION, a California nonprofit public benefit corporation By N.arsArter."•So Tit e: By: Name: 7t'r b„ct- k ti C: n Title: Secretary Page 3 of 3 I:\cmo\Agreements\Musetun of Redlands Promissory Note FY23-0049.docx-ms EXHIBIT B DESCRIPTION OF IMPROVEMENT WORK Remaining construction and related services needed to finalize completion of' the museum building and landscaping. 7 Memo \ Agreements \Museum of Redlands Loan Agreement FY23-0048.docx-ms