11-A
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to conduct a public hearing to adopt Resolution No. 22-61 – A Resolution authorizing the City Manager to execute Agreement File No. 616.4, in a form approved by the City Attorney, with Golden Flower, Inc. to lend funds for landscaping improvements at Golden Corral Restaurant (17308 Bellflower Boulevard), per the Economic Development Business Assistance Plan, Chapter 3.
DATE: October 10, 2022
EXECUTIVE SUMMARY
Adopting Resolution No. 22-61 will authorize the City Manager to execute Agreement File No. 616.4 with Golden Flower, Inc. (dba Golden Corral Restaurant). The owner will use the financing to perform landscaping improvements in the parkway around the restaurant at 17308 Bellflower Boulevard. Chapter 3 is a forgivable loan provided through the City’s Economic Development Business Assistance Plan (the Plan), which requires a matching contribution from the business owner and adherence to Plan guidelines.
RECOMMENDATION TO CITY COUNCIL
1) Open the public hearing; take testimonial and documentary evidence; and after considering the evidence, adopt Resolution No. 22-61; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The total forgivable loan amount payable under Agreement File No. 616.4 for landscaping design and improvements is $23,000 (100% forgivable over five years).
Sufficient funds for the Agreement are budgeted in Economic Development Account No. 510-44410-4002.
PUBLIC NOTICE
On September 29, 2022, a Public Hearing Notice was posted at City Hall, Bellflower Substation, Thompson Park, and Simms Park; and on September 29, 2022 and October 6, 2022, a Public Hearing Notice was published in the Herald American newspaper.
- Page 1 of 19 -
Staff Report – Resolution No. 22-61
October 10, 2022
DISCUSSION
On July 11, 2022, the City Council adopted Resolution No. 22-34 which set forth policies and procedures for the Economic Development Business Assistance Plan (the Plan). The Plan provides loans to business, restaurant and/or property owners to make various improvements that will help attract and retain businesses. Specifically, Chapter 3 of the Plan offers a 66% matching loan for building façade and/or landscaping improvements up to $20,000 and an additional $3,000 in loan funds to prepare plans for the improvements. Disbursement of the loan amount is contingent upon the Applicant matching the remaining portion and is on a cost reimbursement basis. Furthermore, Chapter 3 loans are amortized over five years and are 100% forgivable at the end of that term, provided the business remains in operation or has not been sold. In the event of a default, the Applicant must immediately repay the remaining balance of the amortized portion of the loan.
In September 2022, Ehsan Shakibaie, owner of Golden Flower, Inc. (Golden Corral Restaurant) completed an application under Chapter 3 for landscape improvements at 17308 Bellflower Boulevard. The application included the applicant’s lease, financial records, a certification of job creation, and a commitment to cross-promote the City of Bellflower in its marketing efforts. Following extensive review, staff determined that the application met the criteria for a Downtown Corridor Matching Loan under the Plan.
The property is located within the Downtown area as identified in the Plan and the proposed landscaping upgrades are improvements that would be visible from both Bellflower Boulevard and Artesia Boulevard. Under the Plan, the loan would provide a match of 66% of eligible projects costs, up to a maximum of $20,000. The applicant is also requesting an additional $3,000 for architectural design services as allowed by the Plan. The total not-to-exceed loan amount would be $23,000 to be used for parkway landscaping improvements, which may include design, irrigation, removal of the turf and dead plant material, and the installation of decomposed granite and drought tolerant vegetation.
All improvements must comply with applicable law including building codes and zoning regulations to be eligible for reimbursement payments. The applicant anticipates completing the improvements in the first half of Fiscal Year 2022-2023.
ATTACHMENTS
Resolution No. 22-61....................................................................................................... 3 Loan Agreement File No. 616.4 ...................................................................................... 6 Promissory Note ............................................................................................................ 17 - Page 2 of 19 -
CITY OF BELLFLOWER
RESOLUTION NO. 22-61
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE AGREEMENT FILE NO. 616.4, IN A FORM
APPROVED BY THE CITY ATTORNEY, WITH GOLDEN
FLOWER, INC. TO LEND FUNDS FOR LANDSCAPING
IMPROVEMENTS AT GOLDEN CORRAL RESTAURANT
(17308 BELLFLOWER BOULEVARD), PER THE ECONOMIC
DEVELOPMENT BUSINESS ASSISTANCE PLAN, CHAPTER 3
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. On October 8, 2013, the Governor signed Senate Bill No. 470 Community development: economic opportunity, in an effort to promote economic development on a local level so that communities can enact local strategies to increase jobs, create economic opportunity, and generate tax revenue for all levels of government;
B. On May 24, 2021, City Council approved the City’s Operating Budget for Fiscal Years 2021-22 and 2022-23, in which $220,000 was approved in each fiscal year for special economic development programs related to marketing, business retention, tenant improvements, web/social media business support, façade/sign improvements, restaurant attraction, and other financial assistance to business operators and developers;
C. On July 11, 2022, the City Council adopted Resolution No. 22-34 to approve policies and procedures for distributing Economic Development funds to attract or retain customers to business and/or property owners participating in the Economic Development Business Assistance Plan (the Plan) including the addition of the Small Business Microloan Program (Chapter 5) and a budget amendment to increase the allocation for special economic development programs by $420,000 for Chapters 3.3, 4 and 5 of the Plan;
D. In September 2022, Golden Flower Inc., dba Golden Corral Restaurant at 17308 Bellflower Boulevard, completed an Application for Chapter 3 of the Plan, which provides qualified business owners with a 66% matching loan that may be used towards building façade or landscape improvements, per the Plan policies and procedures;
E. Economic Development staff carefully reviewed the Application and determined that the Applicant qualifies for a $23,000 (Twenty-three Thousand Dollar) forgivable, matching loan based on the policies and procedures of Chapter 3 of the Plan;
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City of Bellflower
Resolution No. 22-61
F. On October 10, 2022, the City Council heard public testimony and considered evidence in a public hearing held and noticed in accordance with Government Code § 6066; and
G. After careful consideration, including a review of the documentary and testimonial evidence submitted during the public hearing, the City Council finds it is in the public interest to adopt this Resolution.
SECTION 2. Loan Approved, Findings. This Resolution declares Golden Flower, Inc.’s Chapter 3 Loan Application for landscape improvements at 17308 Bellflower Boulevard as qualified. To be executed, the total loan amount granted to the Applicants is $23,000.00 (Twenty-three Thousand Dollars) and is subject to the policies and procedures of the Plan and Agreement File No. 616.4
SECTION 3. Administration. The Economic Development Director or designee is authorized to administer the Plan. The Economic Development Department will monitor and enforce the terms of Agreement File No. 616.4.
SECTION 4. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution’s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.
SECTION 5. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
SECTION 6. To the extent that any other resolution is incorporated into this Resolution, it is superseded or amended in its entirety.
SECTION 7. The City Manager will establish policies and procedures as necessary to carry out this policy.
SECTION 8. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 9. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
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City of Bellflower
Resolution No. 22-61
SECTION 10. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 10th DAY OF OCTOBER 2022.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
- Page 5 of 19 -
LOAN AGREEMENT FILE NO. 616.4
BETWEEN THE CITY OF BELLFLOWER
AND
GOLDEN FLOWER INC.
(DBA GOLDEN CORRAL RESTAURANT)
THIS AGREEMENT is entered into this 10th day of October, 2022 by and between the CITY OF BELLFLOWER, a subdivision of the State of California ("Lender") and GOLDEN FLOWER INC., dba Golden Corral Restaurant ("Borrower").
RECITALS
Borrower requested credit accommodations from Lender and Lender is willing to extend credit accommodations to Borrower, subject to the representations, warranties and terms set forth below. In consideration of these Recitals and of the mutual covenants and conditions set forth below, Borrower and Lender agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS. The following terms, as used in this Agreement, have the following meanings, unless the context clearly indicates otherwise:
"Agreement" means this Loan Agreement.
"Credit Accommodation" means any debt of the Borrower to the Lender and all terms and conditions of said debt.
"Event of Default" means any act or occurrence specified as an Event of Default in Section
7. "Generally Accepted Accounting Principles" means generally accepted accounting principles and practices as applicable under Section 1.2 below.
"Guarantor" means any person, corporation, or other entity, which guarantees any Obligation or any Note or has granted Lender a security interest in any of its assets to secure any Obligation or Note.
"Note" means any and every note, agreement, application, disclosure statement, contract and other document evidencing or securing any Obligation.
"Obligation" means any credit accommodations extended or committed by Lender to Borrower and any amount or indebtedness owed or, if contingent, which may be owed Lender by Borrower in connection with or in reliance on or during the term of this Agreement, including loans, advances, letters of credit, Lender's acceptances, guarantees, extensions of credit and any other facility or indebtedness.
“Plan” means the Economic Development Business Assistance Plan adopted by City Council by Resolution 22-34 on July 11, 2022. All terms and conditions in this Agreement are subject to the Plan’s requirements.
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City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
1.2 ACCOUNTING TERMS AND DETERMINATIONS. All accounting terms used will be interpreted, all accounting determinations will be made, and all financial statements required to be delivered will be prepared in accordance with Generally Accepted Accounting Principles, except for changes after the effective date of this Agreement principles related to inflation accounting, applied on a basis consistent (except for changes approved by Borrower's independent public accountants) with the most recent financial statements of Borrower delivered to Lender.
SECTION 2
TERMS OF AGREEMENT AND OBLIGATION
2.1 TERM OF AGREEMENT. This Agreement will continue in full force and effect so long as any Obligation is owed Lender by Borrower or Lender has committed to extend any Obligation to Borrower, unless terminated by Lender in writing.
2.2 TERMS OF OBLIGATION. Lender agrees to extend a loan not-to-exceed $23,000 (Twenty-three Thousand Dollars) from the Plan’s Chapter 3 Commercial Façade Improvement Program at an interest rate of 0.0% per annum (the “Loan”) for a 5 year term immediately following the execution date of this Agreement. The not-to-exceed loan amount must be used toward eligible building façade improvements at the Applicant’s business, as described in Section 5.2, and has been allocated towards the following expense categories:
Architectural Design $ 3,000.00
Landscaping Improvements $20,000.00
Of the total Loan amount, $3,000.00 is allocated for costs to develop professional landscape architectural designs for the Landscape Improvements and does not require the Borrower to contribute any matching requirement. The remaining Loan amount of $20,000.00 will provide a match of two-thirds (66%) of eligible Building Façade Improvement costs, which is contingent upon the Applicant matching the remaining third (34%).
All loan amounts will be distributed to the Borrower on a cost-reimbursement basis.
Borrower must provide the City with copies of the invoices that he/she wishes to have reimbursed, along with proof of payment. Once received and approved, the City will process for reimbursement payment using loan funds.
2.3 OBLIGATION FORGIVENESS. One Hundred percent of the Loan will be amortized and forgiven over the period of five consecutive years immediately following the execution date of this Agreement. If the Borrower defaults on the Loan, as described within Section 7, within the five-year term, the remaining balance of the amortized portion of the Loan will be accelerated and must be immediately paid to the City.
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City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
SECTION 3
CONDITIONS TO CREDIT
Lender's obligation to grant, extend or continue any Obligation to Borrower is subject to the following conditions:
3.1 DOCUMENTS. Lender must receive the following to its satisfaction:
A. Documentation. Borrower’s Promissory Note evidencing the Obligation and any security interests granted in connection therewith and any other instrument or document Lender reasonably requests.
B. Corporate or Other Action: Certified copies of resolutions of the Board of Directors or other organizational authorization of Borrower approving and authorizing the execution, delivery and performance of this Agreement, the Promissory Note and all other documents required by this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties contained in Section 4 of this Agreement are accurate and complete as of the date of this Agreement and at the date of the incurrence of each Obligation.
SECTION 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
4.1 AUTHORIZATION. The execution, delivery and performance by Borrower of this Agreement and each Note: (a) was duly authorized and does not require any other consent or approval, (b) does not violate any article, bylaw, organizational document, law, rule, regulation, order, writ, judgment or decree applicable to Borrower, and (c) will not result in or constitute a default under any indenture, credit agreement, or any other agreement or instrument to which Borrower is a party or to which any of its property is subject.
4.2 FINANCIAL STATEMENTS. The personal financial statement or credit history, as of April 2022 is complete, correct and fairly presents the financial position of Borrower and the results of operations for the periods indicated. The financial statements were prepared in accordance with the Generally Accepted Accounting Principles and practices consistently followed in the periods covered.
4.3 FINANCIAL CONDITION. Since the latest statement referred to above, there has been no materially adverse change in the condition of Borrower, financial or otherwise.
Borrower has no contingent liabilities of any substantial amount, which are not reflected in financial statements described above. Since that date, Borrower has not entered into, incurred or assumed any material long-term debts, mortgages, leases or oral or written commitments, nor commenced any significant project, nor made any significant purchase or acquisition of any property.
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City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
4.4 ASSETS. Borrower has good and marketable title to all property and assets, except property and assets sold or otherwise disposed of in the ordinary course of business subsequent to that date. Borrower does not have any outstanding liens or encumbrances on any of its properties or assets. Borrower is not a party to any security agreements or title retention agreements, whether in the form of leases or otherwise, of any personal property.
4.5 LITIGATION. There are no actions, suits, proceedings or investigations pending or, to the knowledge of Borrower upon reasonable inquiry, threatened against or affecting Borrower at law, in equity, or before or by any governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, which if adversely determined would have a materially adverse effect on the business or condition of Borrower. Borrower is not in default of any order, writ, injunction or decree.
4.6 BURDENSOME PROVISIONS. Borrower is not a party to any indenture, agreement, instrument or lease, or subject to any charter, by-law, or other restriction, or any law, rule, regulation, order, writ, judgment or injunction, materially and adversely affecting the business, operations, properties or assets of Borrower.
4.7 OTHER AGREEMENTS. Borrower is not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any debenture, note or other evidence of indebtedness of Borrower or in any indenture or agreement of Borrower.
4.8 TAXES. Borrower has filed all United States federal and state tax returns which are required to be filed and has paid or made adequate provision for the payment of all taxes which have or may become due pursuant to those returns, to any matters raised by audits, assessments received by Borrower, and for any other causes known to it, including foreign taxes.
4.9 THE LOAN . This Agreement, any Note and any other documents delivered by Borrower to Lender at any time will, when executed and delivered, constitute valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally. Borrower will duly and punctually pay any principal and interest when due on any Obligation.
SECTION 5
AFFIRMATIVE COVENANTS OF BORROWER
Unless Lender waives compliance in writing, Borrower agrees to do the following until the full and final payment of each Obligation:
5.1 FINANCIAL STATEMENTS.
A. Borrower to provide CPA-prepared FYE financial statements within 90 days of FYE or calendar year (owners chooses either of reporter period).
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City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
B. Borrower to provide copy of personal tax return for guarantor within 15 days of filing.
C. Deliver such additional information as Lender from time to time may reasonably request with respect to the business affairs and financial condition of Borrower.
5.2 USE OF LOAN PROCEEDS. Borrower must use the Loan for the following uses:
Expenses of a new or existing commercial business for permanent exterior improvements, including, but not limited to: removal of old signs, awnings and other exterior clutter, exterior painting, repair or replacement of exterior siding, installation of entry/exit doors that meet ADA requirements, installation of display windows, new awnings, new signs, new exterior lighting, permanent landscaping, and/or construction of outdoor dining or gathering spaces.
To use loan proceeds on expenses not listed above, the Applicant must first obtain approval from the Economic Development Director or designee.
5.3 MAINTENANCE OF EXISTENCE. Borrower must remain in and continue to operate substantially the same line of business he/she is presently engaged in; maintain and preserve its existence and all rights, privileges and franchises necessary or desirable in the conduct of its business; and conduct its business in an orderly, efficient and customary manner for a period of 5 consecutive years immediately following the execution of this Agreement.
5.4 MAINTENANCE OF PROPERTIES. Borrower must maintain, preserve and keep all its properties and assets necessary or useful in its business in good working order and condition for a period of 5 consecutive years immediately following the execution of this Agreement.
5.5. PREVAILING WAGE. In accordance with Section V(E) of the Plan, Borrower must comply with Labor Code § 1720 and 8 California Code of Regulations § 16000 regarding payment of prevailing wages. It is Borrower’s responsibility to interpret and implement any prevailing wage requirements and Borrower agrees to pay any penalty or civil damages resulting from a violation of the prevailing wage laws.
5.5 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable laws, rules, regulations and orders of all governmental authority, including obligations imposed by ERISA and hazardous substance laws, non-compliance with which could adversely affect its business or credit, except where contested in good faith and by appropriate proceedings.
5.6 TAXES AND CLAIMS . Pay and discharge promptly all taxes, assessments, governmental charges and levies imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the date on which penalties would be imposed, and pay all lawful claims for labor, materials and supplies that, if unpaid, might become a lien or charge upon its property, provided that Borrower is not be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof is contested in good faith and by proper proceedings and if Borrower sets aside on its books and maintains adequate reserves for the payment of the same in conformity with - Page 10 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
Generally Accepted Accounting Principles. This Agreement may require Borrower to treat the deferred to forgiven loan as “income” for purposes of federal and state taxes. Borrower acknowledges that it must seek its own tax advisor’s advice regarding any taxable income under the terms of this Agreement. Nothing in this Agreement can be deemed as advice from Lender to Borrower regarding the tax consequences of executing this Agreement.
5.7 INSURANCE. Obtain and maintain insurance with responsible companies in such amounts and against such risks (a) as is usually carried by business entities engaged in similar businesses similarly situated, and (b) as is specifically required by Lender in writing, and furnish Lender on request copies of and full information as to the insurance maintained by Borrower. Lender specifically requires Borrower to obtain and maintain adequate liability and hazard insurance on business assets, including but not limited to business equipment and inventory. Lender further requires Borrower to name Lender as additional loss payee on these required insurance policies.
5.8 NOTICE OF DEFAULTS. Give prompt written notice to Lender of any Event of Default as defined in Section 7 of this Agreement or of any event of default arising under any other agreement or indenture entered into by Borrower, or of any other matter which has resulted in or might result in a materially adverse change in its financial condition or operations.
5.9 NOTICE OF LITIGATION. Give prompt written notice of any claim, action or proceeding which would, in the event of an unfavorable outcome, have a materially adverse effect on the financial condition or operations of Borrower.
5.10 RECORDS. Keep and maintain full and accurate accounts and records of its operations according to Generally Accepted Accounting Principles and practices and permit Lender and its designated officers, employees, agents and representatives to have access to such accounts, records and operations and to make examinations thereof at all reasonable times.
5.11 EXECUTION OF OTHER INSTRUMENTS. Do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all and every such further acts, covenants, assurances or further instruments and documents as Lender may reasonably request in order to carry out the intent and purpose of this Agreement and each other agreement of Borrower with Lender.
5.12 QUARTERLY MEETINGS. Contact Lender quarterly to update Lender of Borrower's business affairs, with the purpose of Lender providing management and technical assistance to Borrower. The quarterly meetings can have several formats as requested by Lender: telephone conference calls; direct mail communications; and/or direct site visits by either Borrower or Lender. This covenant is applicable as deemed necessary by Lender.
5.13 PRIORITY. This Loan Agreement also serves as a Security Agreement whereby Borrower pledges all business assets now owned or after-acquired, including but not limited to funds, guaranties, machinery and equipment, inventory, accounts receivable, and the proceeds of such business assets, as Collateral for this Obligation. Upon execution of this agreement, Lender will file a Financing Statement with the California - Page 11 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
Secretary of State to perfect Lender’s security interest in the Collateral, as required by the Uniform Commercial Code, Article 9, Section 9501 et seq. Filing of the Financing Statement will ensure that Lender’s interest in the Collateral is secured and that Lender’s security interest has priority over any other interest arising in the same property.
SECTION 6
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of each Obligation, unless Lender waives compliance in writing, Borrower will not:
6.1 ENCUMBRANCES AND LIENS. Create, execute, assume or allow any mortgage, deed of trust, security agreement, pledge, encumbrance, including the lien of an attachment, judgment or execution, securing a charge or obligation on or of, or execute or allow to be filed any financing statement affecting, any or all of its property, real, personal or mixed, whether now owned or hereafter acquired, except:
A. Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or which remain payable without penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided Borrower sets aside on its books and maintains adequate reserves for their payment in conformity with Generally Accepted Accounting Principles.
B. Liens, deposits or pledges less than $500,000.00 made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of its business.
C. Purchase money security interests for property less than $500,000.00, hereafter acquired, conditional sale agreements, or other title retention agreements, with respect to property hereafter acquired, provided, however, that no such security interest or agreement may extend to any property other than such after-acquired property.
___________(Borrower’s Initials)
6.2 BORROWING. Sell or discount any accounts or evidences of indebtedness or other right to payment of money, nor incur, or have outstanding at any time, any indebtedness for borrowed money except for indebtedness incurred pursuant to this Agreement or other written agreement with Lender, nor incur, directly or indirectly, any other liability or obligation for borrowed money.
6.3 CONSOLIDATION AND MERGER. Liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination, except that Borrower may be consolidated with or merged with any entity, provided that in any such merger or consolidation, Borrower is the surviving or resulting entity and immediately after the effectiveness of such merger or consolidation, there is no Event of Default or any event - Page 12 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
which with notice or lapse of time or both would become an Event of Default under this Agreement.
6.4 ACQUISITIONS. Purchase, acquire or incur any liability for the purchase or acquisition of any or all of the assets or business of any person, firm or corporation.
6.5 DISPOSAL OF ASSETS. Sell, lease, assign, transfer or otherwise dispose of any material part of its property or assets, now owned or hereafter acquired, except obsolete or worn-out property and real estate not used or useful in its business, and except for inventory sold in the ordinary course of business.
6.8 DEFAULT UNDER OTHER AGREEMENTS OR INDENTURES. Commit or do, or fail to commit or do, any act or thing which would constitute an event of default under any of the terms or provisions of any other agreement, indenture, contract, document or instrument executed, or to be executed by Borrower. ______(Borrower's Initials).
6.9 PURCHASE OF SECURITIES. Utilize any part of the proceeds of the loans to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock.
SECTION 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. If one or more of the following described Events of Default occurs:
A. Borrower defaults in the punctual payment of any principal or interest on any Obligation when due;
B. Any of the representations or warranties made by Borrower or any Guarantor in this Agreement or in any Note, agreement, guarantee, certificate or financial or other statements delivered or later furnished by or on behalf of Borrower or such Guarantor is false or misleading in any material respect at the time made;
C. Borrower fails to perform or observe any other covenant, term, provision, condition, agreement or obligation of this Agreement or any Note;
D. Borrower fails to perform or observe any of the covenants, terms, provisions, conditions, agreements or obligations under any other agreement, indenture, document, note or other instrument (including, but not limited to the generality of the foregoing, other indebtedness owing to Lender) executed or to be executed by Borrower;
E. Borrower or any Guarantor becomes insolvent; or admits in writing its inability to pay its debts as they mature; or fails generally to pay its debts as they become due; or make an assignment for the benefit of creditors or commences a case for its dissolution; or applies for or consents to the appointment of or taking possession by - Page 13 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
a trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) for it or for a substantial part of its property or business; or takes any action in furtherance of any of the foregoing;
F. A trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) is appointed for Borrower or for a substantial part of its property or business without its consent and is not discharged within 30 days after such appointment;
G. Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency assumes custody or control of the whole or any substantial portion of the properties or assets of Borrower or any Guarantor and is not dismissed within 30 days thereafter;
H. Any money judgment, writ or warrant of attachment, or similar process is entered or filed against Borrower or any Guarantor or any of its properties or other assets and is not vacated, bonded, or stayed within the earlier of (a) a period of 15 days or (b) before 5 days prior to the date of any proposed sale thereunder;
I. A bankruptcy, reorganization, insolvency, or liquidation case or other case for relief under any bankruptcy law or any law for the relief of debtors is commenced by or against Borrower and, if instituted against Borrower or any Guarantor, is not dismissed within 30 days after such institution, or Borrower or any Guarantor by any action or answer approves of, consents to, or acquiesces in any such case or admits the material allegations of, or defaults in answering a petition filed in any such case;
J. Borrower voluntarily suspends the transaction of business for more than 15 days in any calendar year within the term of the Loan from the effective date of this Agreement; and/or
K. This Agreement or any Note or any guarantee or other agreement taken in connection herewith or therewith, at any time while any Obligation remains unpaid, ceases to be in full force and effect or is declared null and void, or the validity or enforceability thereof is contested or any party thereto denies that it has any or further liability or obligation under this Agreement or such Note or such guarantee or any other agreement;
THEN, or at any time thereafter, and in each and every such case, unless such Event of Default is waived in writing by Lender, at the option of Lender and at Lender's sole discretion, Lender may terminate each commitment to extend any credit accommodations to Borrower and each Obligation outstanding must, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, if not otherwise then due and payable, anything herein or in any Note or other document contained to the contrary notwithstanding, and Lender may immediately, and without expiration of any period of grace, enforce any and all of Lender's rights or remedies provided by this Agreement or any Note or any other rights or remedies afforded by law.
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City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
SECTION 8
MISCELLANEOUS PROVISIONS
8.1 NOTICES. Any notices, payments, requests, reports, information or demands which any party may desire or may be required to give to the other party must be given or made upon the other party either through deposit in the mail or by hand delivery at its address as follows:
BORROWER: Golden Flower, Inc.
Attn: Ehsan Shakibaie
17308 Bellflower Blvd.
Bellflower, CA 90706
LENDER: City of Bellflower
Attn: Director of Economic Development
16600 Civic Center Drive
Bellflower, CA 90706
or to such other address as the other party may designate in writing pursuant to this Section. All such notices, requests, demands, directions and other communications must, when mailed, be effective when deposited in the mail company.
8.2 WAIVER. Neither the failure of nor any delay on the part hereto in exercising any right, power or privilege hereunder precludes other or further exercise thereof or the exercise of any right, power or privilege; nor will any waiver of any right, power, privilege or default hereunder constitute a waiver of any other right, power, privilege or default or constitute a waiver of any other default of the same or of any other term or provision. All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law, or in any Note.
8.3 BANKER'S LIEN OR SETOFF. Nothing in this Agreement will be deemed any waiver or prohibition of Lender's right of Lender's lien or setoff.
8.4 EXPENSES OF LENDER. Borrower must pay on demand all costs and expenses, including, without limitation, reasonable counsel fees, including allocated costs of Lender's in-house counsel and appellate fees and costs, incurred by Lender in connection with the administration of this Agreement and the enforcement and protection of the rights of Lender under this Agreement, including the protection of the rights of Lender in any bankruptcy, reorganization, liquidation or insolvency proceeding, whether or not litigation is commenced.
8.5 ASSIGNABILITY. This Agreement binds and its benefits inure to Borrower and Lender, and their respective successors and assigns, as the case may be. Borrower may not assign this Agreement or any of Borrower's rights as described in this Agreement without the prior written consent of Lender.
8.6 GOVERNING LAW. This Agreement, any Note and all other documents executed pursuant to this Agreement or any Note were entered into, and are governed and construed according to the laws of the State of California, unless otherwise provided for in - Page 15 of 19 -
City of Bellflower
Loan Agreement File No. 616.4 – Golden Flower Inc. (dba Golden Corral Restaurant)
writing. Exclusive venue for any action arising from this Agreement will be in Los Angeles County.
8.7 HEADINGS. The headings of this Agreement are solely for the purpose of identification and will not be construed as a part of the paragraphs they head.
CITY OF BELLFLOWER
__________________________________
Jeffrey L. Stewart, City Manager
GOLDEN FLOWER, INC.
__________________________________
Ehsan Shakibaie, President
APPROVED AS TO FORM:
__________________________________
Karl H. Berger, City Attorney
ATTEST:
__________________________________
Mayra Ochiqui, City Clerk
- Page 16 of 19 -
PROMISSORY NOTE OF
AGREEMENT FILE NO. 616.4
BETWEEN THE CITY OF BELLFLOWER
AND
GOLDEN FLOWER INC.
(DBA GOLDEN CORRAL RESTAURANT)
$23,000.00 Bellflower, CA
For value received, the undersigned (“Borrower”) promises to pay to the order of the City Bellflower, as applicable, (“Payee”) (“Holder”) at its office in the City of Bellflower, State of California or at Holder's option, at such other place as may be designated from time to time by the holder, $23,000.00 (Twenty-three Thousand Dollars) (“Obligation”), at the rate of zero percent (0.00%) interest per annum, payment to be made in installments as follows:
The Obligation will be amortized over five years immediately following the execution date of Loan Agreement File No. 616.4 (“Five Year Term”). One Hundred percent of the Obligation will be forgiven immediately after the Five Year Term, provided the Payee has not defaulted on Loan Agreement File No. XXX. However, if the Borrower defaults on the Obligation within the Five Year Term, the remaining balance of the amortized portion of the Obligation will be due immediately to the Payee.
If a payment not timely made remains overdue for a period of (10) days after the same becomes due and payable, Borrower, without notice or demand by the City of Bellflower or any other Holder of the Note, must pay a late charge in an amount equal to five percent (5%) of the delinquent payment owing (the “Late Charge”) or $100.00, whichever is greater. Borrower agrees that an amount equal to the Late Charge is a reasonable estimate of the damage to the City of Bellflower or other Holder of the Note in the event of late payment due hereunder.
Payment of any installment of principal or interest owing on this Note may be made before the maturity date thereof without penalty.
The term "Indebtedness" as used herein means the indebtedness evidenced by this Note, including principal, interest, and expenses, whether contingent, now due or hereafter to become due and whether heretofore or contemporaneously herewith or hereafter contracted. The term "Collateral" as used in the Note means any funds, guaranties, machinery and equipment, inventory, accounts receivable or other personal and real property or rights therein of any nature whatsoever, or the proceeds thereof which may have been, are, or hereafter may be assigned, pledged or hypothecated, directly by the undersigned or by third parties, in connection with, or as security for, the Indebtedness or any part thereof. The Collateral, and each part thereof, will secure the Indebtedness and each part thereof. The covenants and conditions set forth or referred to in any and all instruments of hypothecation constituting the Collateral are hereby incorporated in the Note as covenants and conditions of the undersigned with the same force and effects as though such covenants and conditions were fully set forth herein.
- Page 17 of 19 -
City of Bellflower
Promissory Note – Golden Flower Inc. (dba Golden Corral Restaurant)
Upon the nonpayment of the Indebtedness, or any part thereof, when due, whether by acceleration or otherwise, Holder is empowered to sell, assign, and deliver the whole or any part of the Collateral at public or private sale, without demand, advertisement or notice of the time or place of sale or of any adjournment thereof, which are hereby expressly waived. After deducting all expenses incidental to or arising from such sale or sales, Holder may apply the residue of the proceeds thereof to the payment of the Indebtedness returning the excess, if any, to the undersigned. The undersigned hereby waives all right of redemption or appeasement whether before or after sale.
In the event of a default, Holder is further empowered to collect or cause to be collected or otherwise to be converted into money all or any part of the Collateral, by suit or otherwise, and to surrender, compromise, release, renew, extend, exchange, or substitute any item of the Collateral in transactions with the undersigned or any third party, irrespective of any assignment thereof by the undersigned, and without prior notice to or consent of the undersigned or any assignee. Whenever any item of the Collateral is not paid when due, or is otherwise in default, whether or not the indebtedness, or any part thereof, has become due, Holder has the same rights and powers with respect to such item of the Collateral as are granted in this paragraph in case of nonpayment of the Indebtedness, or any part thereof, when due. None of the rights, remedies, privileges, or powers of Holder expressly provided for therein are exclusive, but each of them are cumulative with and in addition to every other right, remedy, privilege, and power now or hereafter existing in favor of Holder, whether at law or equity, by statue or otherwise.
The undersigned agree to take all necessary steps to administer, supervise, preserve, and protect the Collateral; and regardless of any action taken by Holder, there is no duty upon Holder in this respect. In the event of a default the undersigned must pay all expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note will become due at its maturity date or otherwise, including without limitation to reasonable attorney's fees and costs, which Holder may deem necessary or proper in connection with the satisfaction of the Indebtedness or the administration, supervision, preservation, protection of (including, but not limited to, the maintenance of adequate insurance) or the realization upon the Collateral. Holder is authorized to pay at any time and from time to time any or all of such expenses, add the amount of such payment to the amount of the Indebtedness, and charge interest thereon at the rate specified herein with respect to the principal amount of this Note.
The security rights of Holder and its assigns hereunder will not be impaired by Holder's sale, hypothecation or re-hypothecation of any note of the undersigned or any item of the Collateral, or by any indulgence, including but not limited to (a) any renewal, extension, or modification which Holder may grant with respect to the Indebtedness or any part thereof, or (b) any surrender, compromise, release, renewal, extension, exchange, or substitution which Holder may grant in respect of the Collateral, or (c) any indulgence granted in respect of any endorser, guarantor, or surety. The purchaser, assignee, transferee, pledgee of this Note, the Collateral, and guaranty, and any other document (or any of them), sold, assigned, transferred, pledged, or re-pledged, will forthwith become vested with and entitled to exercise all the powers and rights given by - Page 18 of 19 -
City of Bellflower
Promissory Note – Golden Flower Inc. (dba Golden Corral Restaurant)
2 this Note and all applications of the undersigned to Holder or, as if said purchaser, assignee, transferee, or pledge were originally named as Payee in this Note and in said application or applications.
By: _______________________ Dated: ____________
Ehsan Shakibaie, Title
Golden Flower Inc.
Note - Corporate applicants must execute Note, in corporate name, by authorized officer, and seal must be affixed and duly attested; partnership applicants must execute Note in firm name, together with signature of a general partner. - Page 19 of 19 -