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Home My WebLink AboutC-2719DOWNTOWN 2000 - COMMERCIAL FACADE REHABILITATION PROGRAM PROMISSORY NOTE AND LOAN AGREEMENT between THE SUCCESSOR AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic and THE DERBY RESTAURANT 233 East Huntington Drive Arcadia, CA 91006 1. PARTIES AND DATE OF AGREEMENT This Promissory Note and Loan Agreement ( "Agreement ") is made this,S+h day of , 20 V;# , between (1) The Successor Agency to the Arcadia Redevelopment Agency ("Agency"), a public body, corporate and politic, and (ii) Dustin Nicolarsen and Michael Thomas ( "Business Owners ") of the Derby Restuarant. 2. RECITALS 2.1 On March 19, 1996, the Agency's governing board adopted a Minute Order approving the Agency's "Commercial Facade Rehabilitation Program" ( "Program "). At the same time, the Agency's governing board approved the "Downtown 2000 - Commercial Facade Rehabilitation Program Guidelines" ( "Guidelines "). The Guidelines set forth specific requirements and conditions relative to the Program. The Guidelines are hereby incorporated into this Agreement by this reference. In the event of any conflict or inconsistency between this Agreement and the Guidelines, this Agreement shall supersede and control, but only to the extent of such conflict or inconsistency. 2.2 The Business Owners represent and warrant to the Agency that they are the owners of that certain commercial establishment located at 233 East Huntington Drive, known as The Derby Restaurant ( "Business "), which is a sit -down restaurant. 2.3 The Business is located within the former Central Redevelopment Project Area ( "Project Area "). The former Project Area was subject to the terms and conditions of the Central Redevelopment Project Area redevelopment plan ( "Redevelopment Plan "), as amended. 2.4 The Business Owners desire to participate in the Program and the Agency desires to allow such participation, subject to the terms and conditions of this Agreement and the Guidelines. 3. TERMS 3.1 Program Rebates Subject to this Agreement. The Business Owners shall execute this Agreement (hereinafter defined) at or before the time that the Business Owners first receives any funds from the Agency pursuant to the Program. The Agency and the Business Owners acknowledge that all amounts paid to the Business Owners pursuant to the Program shall be subject to the terms and conditions of this Agreement. All amounts rebated to the Business Owners pursuant to the Program shall be hereinafter collectively referred to as the "Loan ". The Loan shall not bear interest unless any portion of the Loan which may become due under this Agreement is not paid when due. At that time, the unpaid amount shall accrue interest at the rate of 10 percent per annum or the maximum rate allowed by law, whichever is less. No payments shall be due on the Loan until an Event of Default (defined in Section 3.2.1 occurs). 3.2 Loan Repayment or Forgiveness. The Loan shall be repaid, in full or in part, or forgiven as provided in Sections 3.2.1 through 3.2.3 below. 3.2.1 Event of Default. For purposes of Sections 3.2.2 and 3.2.3, an "Event of Default" shall mean the occurrence of any of the following: (i) The Business Owners failing to maintain the Business noted in Section 2.2 in a commercially reasonable fashion or ceasing operation of said Business. An Event of Default will not be deemed to have occurred if a cessation of operation is "temporary," defined as a period of less than 14 days once every three years, and is for the purposes of refurbishment or repair of the Business; and (ii) The sale, transfer, or voluntary or involuntary conveyance of the Business; provided, however, that in its sole and absolute discretion, the Agency may allow the transferee or assignee to assume the Business Owners' obligations hereunder, subject to such requirements and additional agreements as the Agency may reasonably require; and (iii) The Business Owners' uncured material breach of any term or either this Agreement or the Guidelines. 3.2.2 Forgiveness of Loan. If no Event of Default occurs within a period of 12 months ( "Operating Term ") following the latest date on which the Business Owners receive any rebates pursuant to the Program, then the Loan shall be forgiven and discharged. 3.2.3 Partial Repayment of Loan. If an Event of Default occurs prior to the expiration of the Operating Term, then the Business Owners shall pay to the Agency, within 30 days following the Event of Default, a portion of the Loan ( "Repayment Amount "), calculated as follows: Repayment Amount = Loan times [Number of months remaining between the Event of Default and the expiration of Operating Term, divided by the total number of months of the Operating Term.] As an example, if the Operating Term is for a period of thirty -six (36) months, the Loan is in the amount of $20,000 and the Event of Default occurs during the 26th month of the Operating Term, then the Repayment a Amount shall be the sum of $5,555, computed as follows: $20,000 x (36 -26) _ $5,555 36 3.3 Non - Assignability. The Business Owners may not assign any of its rights or obligations under this Agreement without the express written consent of the Agency, which may be given or withheld in the Agency's sole and absolute discretion. No unpermitted successor or assign of the Business Owners' rights under this Agreement shall be deemed to possess or be entitled to exercise any such right; provide, however, that the obligations of this Agreement shall nonetheless be binding upon such unpermitted successor or assign. 3.4 Defaults. The Business Owners shall be in default of this Agreement if the Business Owner breaches any term of this Agreement or the Guidelines. Upon such default, the Agency shall send written notice to the Business Owners informing the Business Owner of the default. If the Business Owner fails to completely cure the default within ten (10) days after receipt of such notice, then the Agency may exercise all rights and remedies available to it at law, in equity, or under this Agreement, including the right to terminate the Business Owners' participation in the Program. 3.5 Notices. All notices required or allowed by this Agreement will be in writing and addressed as set forth below. Notices shall be deemed received upon (1) actual receipt by the intended recipient if the method of delivery is personal service, messenger service or facsimile transmission, (ii) actual receipt by the intended recipient if the method of delivery is overnight delivery service such as Federal Express or the like, or (iii) three business days after deposit in the United States mail, postage prepaid, return receipt requested. Notices shall be addressed as follows: If to Agency: The Successor Agency to the Arcadia Redevelopment Agency 240 West Huntington Drive Arcadia CA 91006 -3104 Attn: City Manager Telephone: (626) 574 -5415 Facsimile: (626) 447 -3309 With a copy to: Stephen P. Deitsch, Esq. Best Best & Krieger LLP 3500 Porsche Way Ontario CA 91764 Telephone: (909) 989 -8584 Facsimile: (909) 944 -1441 If to Business Owners: Dustin Nicolarsen and Michael Thomas The Derby Restaurant 233 East Huntington Drive Arcadia, CA 91006 Telephone: Facsimile: Any party's address for notices may be changed by written notice given as provided herein. 3.6 Attorney's Fees. If any action or proceeding is instituted by any party to this Agreement, which action or proceeding is in any way whatsoever related to the interpretation or enforcement of this Agreement or the Guidelines, the prevailing party in such action or proceeding shall be entitled to recover from the other, as an element of its costs of suit and not as damages, its actual litigation costs and reasonable attorney's fees, including costs and attorney's fees on appeal. 3.7 Modifications; Integration. This Agreement and the Guidelines constitute the entire agreement and understanding of the Agency and the Business Owners with respect to the matters herein discussed. It supersedes all previous oral or written agreements concerning the same. This Agreement may be modified only by a written document executed by the appropriate authorities of the Agency and the Business Owners. The Agency's City Manager is authorized to make minor amendments to this Agreement with the concurrence of the Arcadia City Attorney. 3.8 Indemnity. The Business Owners agrees to indemnify, defend and hold the Agency, the City of Arcadia, and all employees, officers and representatives of the Agency and /or the City, free and harmless from any and all liability arising from or related to the Business Owners' participation in the Program. The Business Owners agrees and acknowledges that the Agency and /or the City are not responsible for any of the work on the Business Owners' project, including but not limited to, the design work of the architect, the construction drawings, the course of construction, the quality of the construction work, and /or any claim or lien related to the construction by any third party, including but not limited to, the architect, the contractor or its subcontractors, or other third party lenders. Dated: v� 2 ATTES Yl Chief eputy City Clerk/ Record Manager Dated: Qo 12 APPROVED AS TO FORM: SVte4,n 0 /44"t/l Stephen P. Deitsch City Attorney City of Arcadia THE SUCCESSOR AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY By: Its: — I ity a BUSINESS OWNERS By: �-- By: