AGREEMENT FOR SERVICES BETWEEN THE CITY OF FONTANA AND AMPAC BUSINESS CAPITAL THIS CONTRACTUAL SERVICES AGREEMENT (hereinafter the "Agreement") is entered into as of this 1st, March 2024 by and between the City of Fontana (hereinafter “the City"), a municipal corporation, and AmPac Business Capital (hereinafter “AmPac"), a California Community Development Financial Institution (together identified herein as “Parties”).
RECITALS
WHEREAS, the City desires to establish a Revolving Loan Fund (RLF) in the amount of five hundred thousand dollars ($500,000.00) to provide entrepreneurs and small businesses within the City of Fontana with access to debt financing for the purposes of business growth; and WHEREAS, the City desires to obtain a loan management system with ancillary support services to assist in facilitating the City’s RLF initiative; and WHEREAS, the City desires to engage AmPac in an agreement to provide the City with the loan management system with ancillary support services necessary to assist in facilitating the City’s RLF initiative; and WHEREAS, AmPac will function as an extension of the City’s Economic Development Department.
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement the Parties agree as follows:
AGREEMENT
ARTICLE 1. DEFINITIONS
Revolving Loan Fund - a loan fund where proceeds from principle and interest payments of loans administered from the loan fund flow back into the fund and become available to lend again. The City’s Revolving Loan Fund (RLF) will be established in the amount of five hundred thousand dollars ($500,000.00). The loan fund can be paused based on the ability of payments made back into the loan fund.
Debt Financing – is the act of borrowing money from a lender or a bank to be repaid in the future.
Business Growth – generation of revenue based on sales, management of expenses and job creation.
Loan Management System - a processing platform for data collection, loan processing and customer management.
Administrative Support Services – ancillary services, including management, maintenance, and marketing services, performed by AMPAC to sustain the loan management system.
Loan Servicing – all administrative tasks related to the application, loan and repayment processing, including but not limited to debt collection, loan monitoring, payment distribution, risk counseling and business tracking.
Origination Fee – a one-time payment associated with the establishment of the RLF.
ARTICLE 2. TERMS
General Scope of Services. The City hereby engages AmPac and AmPac agrees to perform the services as described in the “Scope of Work,” attached hereto as Exhibit A in accordance with the terms and conditions as set forth in this Agreement and pursuant to all applicable local, state and federal laws, rules and regulations. AmPac agrees to furnish to the City, subject to the terms and conditions set forth in this Agreement, all labor, materials, tools, equipment, services, incidental and customary work necessary to deliver the services outlined in this Agreement.
City Representative. The City hereby designates the City Manager, or his or her designee, to act as its representative under this Agreement ("City's Representative"). The City's Representative shall have the power to act on behalf of the City for all purposes under this Agreement. AmPac shall not accept direction or orders from any person other than the City's Representative or his or her designee.
AmPac Representative. AmPac hereby designates its President, or his or her designee, to act as its representative under this Agreement ("AmPac’s Representative"). AmPac’s Representative shall have full authority to represent and act on behalf of AmPac for all purposes of this Agreement. The representative shall supervise and direct all services performed under this Agreement, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all of the services under this Agreement.
Term. The term ("Term") of this Agreement shall be from April 9, 2024, to June 30, 2029. The Parties shall have the option to renew this Agreement for up to two (2) successive five-year terms, provided that the conditions set forth in Section 2.5 are met.
Final Program Activity Report. One hundred eighty (180) days prior to renewal of this Agreement, AMPAC shall provide the City with a final Program Activity Report. The contents of this report shall reflect such information as described in Section 3.2 of this Agreement.
ARTICLE 3. RESPONSIBILITIES OF AMPAC
Services—General. AmPac shall work closely, and cooperate fully, with the Economic Development Department to perform the services as described in this Agreement.
Program Activity Report. AmPac shall submit to the City Representative, a quarterly written report ("Program Activity Report"), on or before the last day of each quarter, consisting of data metrics illustrating AmPac’s performance. Such report shall provide information and materials that demonstrate AmPac’s progress with respect to the services outlined herein, including, but not limited to, information and materials addressing the amount of business applications processed and funded through the City’s RLF; and all business loan servicing information and materials including information on payments, job creation and retention reporting by recipients.
Accounting Records. AmPac shall maintain and complete accurate financial records, including but not limited to, receipts and disbursements, with respect to all costs and expenses incurred by AmPac during the Term of this Agreement. All such records shall be clearly identifiable. Upon City's request, AmPac shall allow a representative of the City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement.
AmPac Responsibilities for Costs and Expenses. AmPac shall be responsible for all costs and expenses incurred relative to AmPac, its personnel and its subcontractors in connection with the services performed, including and without limitation to payment of salaries, fringe benefits, contributions, payroll taxes, withholding taxes and other taxes or levies, unemployment and workers’ compensation, office overhead expense, travel expenses, telephone and other telecommunication expenses and document reproduction expenses.
Independent Contractor. The services to be performed under this Agreement shall be performed by AmPac. AmPac shall determine the means, methods, and details of performing such services subject to the requirements herein. AmPac represents that it possesses the professional and technical personnel required to perform under this Agreement. The City retains AmPac as an independent contractor and not as an employee of the City. All personnel performing on behalf of the AmPac shall at all times be under the AmPac’s exclusive direction and control.
Personnel Licenses. AmPac represents and warrants that it and all personnel performing the services as described herein are, and shall continue to be, fully qualified, authorized and permitted under state and local law to perform such services. AmPac represents and warrants that it and all personnel, including subcontractors, engaged in performing the services as described herein have and shall maintain all licenses, permits, qualifications, and approvals of whatever nature that are legally required to perform the services described under this Agreement.
Conformance to Applicable Requirements. AmPac shall conform to all applicable city, county, state, and federal laws, rules, and regulations in effect at the time services are provided. All services shall be subject to approval of the City. AmPac shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules and regulations in any manner affecting its performance under this Agreement, including all Cal/OSHA requirements, and shall give all notices required by law. AmPac shall be solely liable for all violations of such laws and regulations in connection with its performance under this Agreement. If AmPac performs any work knowing it to be contrary to such laws, rules, and regulations, AmPac shall be solely responsible for all costs arising therefrom. If AmPac performs any work without giving written notice to the City, AmPac shall be solely responsible for all costs arising therefrom. AmPac shall defend, indemnify, and hold the City, its officials, officers, employees, and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or failure to comply with such laws, rules or regulations.
ARTICLE 4. RESPONSIBILITIES OF THE CITY.
4.1 The City shall cooperate with AmPac in accordance with the provisions of this Agreement. To the extent permitted by law, the City shall provide information in its possession, or reasonably obtainable by it, as requested by AmPac as it relates to AmPac’s performance under this Agreement.
ARTICLE 5. COMPENSATION.
5.1 In consideration of the services performed by AmPac, the City shall pay to AmPac a onetime Administrative Support Services Fee in the amount of Fifteen Thousand dollars ($15,000.00) to service the principle RLF amount of Five Hundred Thousand Dollars ($500,000.00). In the event that the principle amount increases to match the current ($500,000.00) principle amount (totaling $1,000,000.00), AmPac shall receive an additional onetime Administrative Support Services Fee of Fifteen Thousand Dollars ($15,000.00) to service the $500,000.00 incremental increase.
Additionally, AmPac shall receive a three (3) percent origination fee for all loan servicing tasks, including but not limited to debt collection, loan monitoring, payment distribution and risk counseling and business tracking as an extension to Economic Development.
Total compensation for all work performed under this Agreement shall not exceed thirty thousand dollars ($30,000.00) per $500,000.00 dollars of principal funds.
ARTICLE 6. GENERAL PROVISIONS.
Termination of Agreement. Either Party may, by written notice to the other Party, terminate this Agreement at any time and without cause by giving written notice to the non-terminating Party of no less than one hundred eighty (180) days prior to the date of termination. This notice shall include the date of termination which shall be no less than one hundred eighty (180) days following the date of notice. In the event of such termination, AmPac shall be paid only for work performed under this Agreement through the date of termination. Upon termination, AmPac shall return all undistributed funds that were repaid to the revolving loan fund.
Delivery of Notices. All notices permitted or required under this Agreement shall be given at the following addresses, or at such other address as the Parties provide in writing, for the purposes of this Agreement:
AmPac: AmPac Business Capital
3110 Inland Boulevard #B
Ontario, CA 91764
Attn: President
City: City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attn: City Manager
With Copy to: Best, Best & Krieger
c/o Fontana City Attorney
2855 E. Guasti Road, Suite 400
Ontario, California 91761
Such notice shall be deemed made when personally delivered or within forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice given on the date of the actual notice given regardless of the method of service.
The Ralph M. Brown Act. The Parties do not intend, by executing this Agreement, to create a relationship which subjects AmPac to the Brown Act. The Parties hereby acknowledge that AmPac may be subject to the Brown Act if it receives funds from the City and any City Council Member is appointed by the Council to the AmPac’s governing body as a full voting member, however, no such appointment is intended under this Agreement or anticipated in the future. (See Gov. Code, § 54952, subd. (c)(1)(B).). AmPac shall keep itself fully informed of and in compliance with the Brown Act, to the extent it is applicable.
Documents & Data Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for the City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by AmPac under this Agreement (Documents & Data). AmPac shall require all subcontractors to agree in writing that the City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. AmPac represents and warrants that the City has the legal right to license any and all Documents & Data. AmPac makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals not subcontracted by AmPac or provided to AmPac by the City. The City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at the City’s sole risk.
Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information and other Documents and Data either created by or provided to AmPac in connection with the performance of this Agreement shall be held confidential by AmPac. Such materials shall not, without prior written consent of City, be used by AmPac for any purposes other than the performance of the services under this Agreement, nor shall such materials be disclosed to any person or entity not connected with the performance of this Agreement, subject to the limitations of the California Public Records Act. Nothing furnished to AmPac that is otherwise generally known, has become known, or is related to the industry shall be deemed confidential. AmPac shall not use the City’s name or insignia, photographs of any product of the Services, or any publicity pertaining to the Services in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of the City.
Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional actions as may be necessary and appropriate to attain the purposes of this Agreement.
Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative, or otherwise, arising out of or in connection with this Agreement, the prevailing Party in such litigation shall be entitled to have and recover from the losing Party reasonable attorney’s fees and all other costs of such action.
Professional Liability. At all times during the performance of the work under this Agreement AmPac shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in the amounts indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of AmPac. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer’s duty to defend.
Minimum Policy Requirements:
Insurance limits are required for the Agreement:
Commercial General Liability
$1,000,000 per occurrence / $2,000,000 aggregate for bodily injury, personal injury, and property damage Automobile Liability for bodily injury and property damage including coverage for owned, non-owned and hired vehicles $1,000,000 per occurrence
Workers’ Compensation in compliance with applicable statutory requirements and Employer’s Liability $1,000,000 per occurrence
Professional Liability
$1,000,000 per claim and aggregate (errors and omissions) ii.
Defense costs shall be payable in addition to the limits.
Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement.
Prior to execution of the Agreement, the AmPac shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
All subcontractors shall meet the requirements of this Section before commencing work. AmPac shall furnish separate certificates and endorsements for each subcontractor. Subcontractor policies of General Liability insurance shall name the City, its officials, employees, agents and authorized volunteers as additional insureds using form ISO 20 38 04 13 or endorsements providing the exact same coverage. All coverages for subcontractors shall be subject to all of the requirements stated herein except as otherwise agreed to by the City in writing.
Indemnification. To the fullest extent permitted by law, AmPac agrees to indemnify, defend —with independent counsel approved by the City, and hold harmless the City, its elected and appointed officials, officers, employees, agents, and volunteers (each an “Indemnified Party”) from and against all liabilities, including without limitation to all claims including those arising from bodily injury, death or property damage, losses, damages, penalties, fines, judgments, any and all associated investigations and administrative expenses, and defense costs including but not limited to reasonable attorneys’ fees, court costs and costs of alternative dispute resolution, regardless of nature or type, arising out of or resulting from any act or omission to act by AmPac or AmPac’s agents, officers, employees, subcontractors, or independent consultants hired by AmPac under this Agreement. AmPac’s obligations apply regardless of whether or not liability is caused or contributed to by the negligence (including passive negligence) or other act or omission of an Indemnified Party. The acceptance or approval of AmPac’s work by an Indemnified Party shall not relieve or reduce AmPac’s indemnification obligation. AmPac shall pay and satisfy any judgment, award or decree that may be rendered against the City, its officials, officers, agents, employees or representatives. The provisions of this Section shall survive completion of the work under this Agreement and the termination of this Agreement and is not limited by the provisions relating to insurance.
Entire Agreement. This Agreement contains the entire agreement of both parties with respect to the subject matter hereof, and supersedes all prior negotiations, understanding, and or agreements. This Agreement may only be modified by a writing signed by both Parties.
Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be designated as San Bernardino County.
Time of Essence. Time is of the essence for each and every provision of this Agreement.
Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.
Assignment or Transfer. AmPac shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement, or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation, or transfer.
Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not workdays. All references to AmPac shall include all personnel, employees, agents, and subcontractors of AmPac, except as otherwise specified in this Agreement. All references to the City include their respective directors, elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.
No Third-Party Beneficiaries. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties.
Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
Prohibited Interests. AmPac maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for AmPac, to solicit or secure this Agreement. Further, AmPac warrants that it has not paid, nor has it agreed to pay any company or person, other than a bona fide employee working solely for AmPac, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to immediately rescind this Agreement without liability. For the Term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement or obtain any present or anticipated material benefit arising therefrom.
Non-discrimination. The Parties represents that they are equal opportunity employers, and shall not discriminate against any subcontractor, employee or applicant for employment in any way, against any person, on the ground of race, color, national origin, religion, religious creed, age, sex and gender (including pregnancy, childbirth, breastfeeding or related medical conditions), sexual orientation, gender identity, gender expression, disability (mental and physical), medical condition, genetic information, marital status, or military and veteran status, nor exclude any person from participation in, or deny any person the benefits of, participation in any events or activities related to this Agreement.
Authority to Enter Agreement. The Parties warrant that the individuals who have signed this Agreement have the legal power, right, and authority to enter this Agreement and bind each respective Party.
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same fully executed instrument. [Signatures on following pages]
Matthew C. Ballantyne, City Manager
City of Fontana
Date:
APPROVED AS TO FORM
By:
Ruben Duran
City Attorney City of Fontana
Hilda Kennedy, President & CEO
AmPac Business Capital
Date:
EXHIBIT A
Scope of Services
AmPac Responsibilities
Loan Management System
AmPac shall provide a loan management system to support business loan applications and processing. The loan application page shall include the City of Fontana logo.
AmPac shall provide loan servicing platform that includes, but is not limited to, a debt collection feature, loan monitoring feature, payment distribution feature, risk counseling feature, business tracking feature and a customer service platform feature that AmPac shall use to perform under this Agreement.
Administrative Support Services
AmPac shall review, process and approve applications based on the following criteria:
Years in Business:
2 or more (adjustable based on earning amount)
Business
Location:
City of Fontana or looking to locate to Fontana.
Business Size:
25 or fewer employees
Business Type:
For Profit Only
Business Assistance:
Must attend Business Finance Accelerator Course - *Special consideration for businesses that complete the Fontana Business Incubator Courses.
Business Assistance:
2 or more years of Business Tax Returns
Business Credit:
No minimum Credit Score (pulled for application) * Personal + Business credit history will be considered, including recent payment history, bankruptcies, tax liens and related credit. matters.
Use of Funds:
Provide a detailed use of loan funds.
Business Docs:
Required (FBN, EIN, State, City BL)
Business
Equity:
10% of equity Bank Statements, Cash on hand, Money in Bank, Purchase Inventory, Purchase Orders in pipeline, etc.
Loan amount:
Qualified businesses can request $15,000, $30,000 or $50,000. based on credit worthiness and businesses equity injections.
Business Coverage Ratio
1 to 1 Earnings Ratio (For every dollar in debt, the expectation that the business generates at least the same revenue) Interest Rate:
6.5%
Loan Fees:
1.5%
Payment Terms:
60 months
AmPac shall provide designated link to Fontana Revolving Loan Fund application and supplemental information on website.
Program Activity Report on or before the last day of each quarter, consisting of data metrics illustrating AmPac’s performance pursuant to the services outlined and AmPac shall promote the Fontana Revolving Loan Fund on social marketing outlets. 10