HomeMy WebLinkAboutRA 003-2009 Colony Square Reimbursement Agrmt'Q 5 RECEIVED
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NOV - 5 2009
REIMBURSEMENT AND INDEMNIFICATION AGREEMENT
(Atascadero California) CITY OF ATASCADERO
CITY CLERK'S OFFICE
This Reimbursement and Indemnification Agreement ("Agreement") is entered into as of
October 23, 2009, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF ATASCADERO ("CRA"), as the indemnified party on the one hand, and COLONY
SQUARE LLC, a California limited partnership, JAMES M. HARRISON, an individual
("Harrison"), and PETER F HILF, an individual ("Hilf'), collectively on the other hand
(collectively "Indemnitors"), who for good and valuable consideration agree as follows
1 Recitals This Agreement is made with reference to the following facts and
circumstances which the parties acknowledge to be true
(a) Pursuant to that certain Construction Loan Agreement dated as of October
23 2009 (the "Loan") by and between Mission Community Bank (the Lender") as lender, and
Colonv Square LLC (the "Borrower") as borrower [* need to confirm name(s) of Borrower]
Borrower is borrowing from Lender the principal amount of Nine Million Dollars
($9 000 000 00) to be used for the construction of a commercial project located at El Camino
Real and Santa Ysabel in the City of Atascadero, California (the "Project") , all as more
particularly described in the Loan.
(b) In connection with entering into the Loan with Borrower, Lender has
required that CRA guarantee certain obligations of Borrower under the Loan and execute and
deliver to Lender a Loan Guarantee Agreement (the "Guaranty"), a copy of the Guaranty is
attached hereto as Exhibit "1
(c) Harrison and Hilf have material financial interests in Borrower and will
directly benefit from the making of the Loan, and Indemnitors (Borrower, Harrison and Hilf) all
desire that CRA enter into, execute and deliver the Guaranty
(d) CRA is willing to enter into execute and deliver the Guaranty provided
that Indemnitors agree to the matters contained in this Agreement, including, without limitation,
reimbursement and indemnification of CRA for any liability it may have under the Guaranty on
the terms provided in this Agreement, and as a material inducement to CRA to enter into
execute and deliver the Guaranty Indemnitors are willing to so agree and to so reimburse and
indemnify CRA
2 Reimbursement. If CRA at any time or from time to time shall be obligated to
male and actually does make any payment pursuant to the terms of the Guaranty whether
voluntarily involuntarilti or pursuant to any judgment or other court order ("Guaranty
Pavnnent"), hndeimmtors agree to pay to and reimburse CRA for the fill amount of such Guaranty
Payment with interest at 10% per annum from the date of actual payment by CRA under the
terms of the Guaranty Such payment and reimbursement shall be made to CRA without
abatement, deduction, offset or counterclaim within twelve (12) months following the giving of
written notice by CRA to Indemnitors of the making of such Guaranty Payment, provided, that
the failure of CRA to give such notice shall not release Indemmtors from their obligation to pay
and reimburse CRA for the full amount of such Guaranty Payment. Such payment and
reimbursement shall be made to CRA at the address to which notices to CRA are to be given
pursuant to Section 8(a) of this Agreement. Further, upon CRA becoming obligated to make or
actually making, a Guaranty Payment, Indemnitors authorize and direct Lender, and its
successors and assigns, to release to CRA all personal financial information pertaining to
Indemnitors which Indemmtors have provided to Lender The obligations and agreements of
Indemmtors contained in this Section 2 shall survive the expiration or termination of the
Guaranty
3 Indemnification. Indemnitors agree to indemnify and hold harmless CRA, its
present and future board members officers, agents, servants and employees, and each of them,
against and from any and all claims, damages, losses, liabilities, judgments, costs and expenses
(including attorneys' fees and costs) which they, or any of them, may suffer or incur which arise
from, relate to or are connected with the Project or any payment by or liability of CRA under the
Guarantv Upon demand by any party indemnified pursuant to this Section 3 at any time
Indemmtors agree to reimburse said party for any legal or other expenses incurred in connection
with investigating or defending against the foregoing. If any action, suit or proceeding arising
from any of the foregoing is brought against any party indemnified pursuant to this Section 3
Indemnitors, to the extent reasonably determined by such party as necessary or advisable in order
to protect the rights of such party in connection with such action, suit or proceeding, will resist
and defend such action, suit or proceeding by counsel designated by CRA (which counsel shall
be reasonably satisfactory to Indemnitors) The indemnities and agreements of Indemnitors
contained in this Section 3 shall survive the expiration or termination of the Guaranty
4 Environmental Indemnity In addition to, and without limiting, the obligations of
hndemnrtors under this Agreement, Indemnitors agree to indemnify and hold harmless CRA, its
present and future board members, officers agents, servants and employees, and each of them
against and from (a) anv and all claims, actions, losses, liabilities, costs and expenses, including,
without limitation, all foreseeable and all unforeseeable consequential damages directly or
indirectly arising out of the use generation, storage or disposal of Hazardous Materials on or
about the Project by Colony Square LLC or any of it agents, employees, servants, contractors,
customers, guests or invitees, and (b) the cost of any required or necessary action, repair,
clean-up or detoxification and the preparation of any closure or other required plans to the full
extent that such action is attributable, directly or indirectly, to the use, generation, storage
release threatened release or disposal of Hazardous Materials on or about the Project by Colony
Square LLC or any of its agents, employees, servants, contractors, customers, guests or invitees
As used herein, Hazardous Materials means any flammable explosives, radioactive materials,
asbestos, PCBs, hazardous waste toxic substances or related materials, including, without
limitation, substances defined as "Hazardous Substances" "Hazardous Materials" or "Toxic
Substances" in the Comprehensive Environmental Response Compensation and Liability Act of
1980 as amended, 42 U S C Section 9601, et seq , the Hazardous Materials Transportation Act,
49 U S C Section 1801, et seq , the Resource Conservation and Recovery Act, 42 U S C Section
6901 et seq the Toxic Substances Control Act, 15 U S C Section 2601 et seq , any other
federal state or local law now or hereafter applicable to the Project, and in the rules and
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regulations now or hereafter adopted or promulgated under or pursuant to any of said laws The
provisions of this Section 4 shall survive the expiration or termination of the Guaranty
5 Obligations Absolute The obligations of Indemnitors hereunder are absolute and
unconditional, and shall not be affected, diminished, impaired nor released by reason of the
unenforceability or invalidity of the Loan or the existence of any defense to or right of offset res-
pecting payment or performance of the obligations under the Loan which Colony Square LLC or
its heirs, administrators, representatives, successors or assigns may now possess or hereafter
have it being the express intent of the parties hereto that Indemnitors be obligated to provide
reimbursement, payment and indemnity as herein provided notwithstanding any such
unenforceability invalidity defense or right of offset, including but not limited to, (i) any
defense that may arise by reason of Lender's election of any remedy to enforce the Loan against
Borrower including, without limitation an election by Lender to exercise its rights under the
power of sale in any Deed of Trust securing the Loan, (n) any rights and benefits that may arise
in favor of Borrower under California Code of Civil Procedure Sections 580a, 580b 580d and
726, to the extent these statutory Sections may have any application, (iii) all rights and benefits
under Civil Code Section 2809 purporting to reduce a guarantor's obligation in proportion to the
principal obligation, or (iv) any defense based on any statute or rule of law that provides that the
obligation of a guarantor must be neither larger in amount or in any other respects more
burdensome than that of a principal
6 Notices to CRA. Indemnitors shall immediately give to CRA a complete copy of
any notice given by Lender or its successors or assigns, to Indemnitors, including, without
limitation, any notices of nonperformance or default with respect to the Loan, and a complete
copy of any notice given by Indemnitors, or any of them, to Lender its successors or assigns
7 Guaranty Fee In consideration of and as a material inducement to CRA to enter
into, execute and deliver the Guaranty, and in consideration thereof, Indemnitors agree to pay the
Loan Guaranty Fee and annual servicing fee for the CRA's guarantee as specified in the
Guaranty ("Guaranty Fee") Payment of the Guaranty Fee shall be made without counterclaim,
abatement, deduction or offset. The obligations and agreements of Indemnitors contained in this
Section 7 shall survive the expiration or termination of the Guaranty
8 Prevailing wage CRA submitted a request for a coverage determination to the
Department of Industrial Relations ("DIR") regarding the subject of prevailing wage
requirements for the Project arising from CRA's entering into the Loan Guarantee Agreement.
CRA received a coverage determination letter from the DIR dated May 13, 2009, a true and
correct copy of which is attached as Exhibit B to the Guaranty The Parties agree that neither the
Loan Guarantee Agreement, nor any actions or communications by CRA, constitutes or shall
have the effect of making any representation by CRA that prevailing wages will not have to be
paid in connection with the Project or any portion thereof.
9 Miscellaneous
(a) Notices All notices which any party is required or desires to give
hereunder shall be in writing and shall be deemed given when delivered personally or three (3)
days after mailing by registered or certified mail (return receipt requested) to the following
address or at such other address as the parties may from time to time designate by written notice
in the aforesaid manner
If to CRA
Community Redevelopment Agency
City of Atascadero
Atascadero, CA 93422
Attention Wade McKinney
If to Indemnitors
Colony Square LLC
c/o Peter Hilf
205 East Carrillo Street, Suite 220
Santa Barbara, CA 93101
(b) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each party to this Agreement and their respective heirs, administrators, representatives,
successors and assigns, provided, that Indemnitors shall not assign any of their rights or obliga-
tions under this Agreement.
(c) No Waiver; Remedies Cumulative No failure or delay by CRA in
exercising anti remedy right, power or privilege under or with respect to this Agreement shall
operate as a waiver of such remedy, right, power or privilege, nor shall any single or partial
exercise of any such remedy, right, power or privilege preclude any other or further exercise of
such remedy, right, power or privilege, or the exercise of any other remedy, right, power or privi-
lege No remedy, right, power or privilege of CRA under or with respect to this Agreement is
intended to be exclusive of any other such remedy, right, power or privilege of CRA but each
shall be cumulative and in addition to every other such remedy, right, power or privilege of CRA
and each may be exercised concurrently or independently from time to time and as often as may
be deemed expedient by CRA
(d) Amendment. The terms and provisions of this Agreement may not be
amended, modified or waived, except by an instrument in writing signed by the parties
(e) Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior or contemporaneous
agreements, whether written or oral, with respect thereto
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(f) Severability If any term, provision, covenant or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable the
remainder of the provisions of this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
(g) Late Payment. Any amounts required to be paid to CRA hereunder which
are not paid when due shall bear interest from the date due until actually paid at the rate of ten
percent (10%) per annum
(h) Attorneys' Fees and Costs hi addition to the amounts to be reimbursed
under this Agreement, Indemnitors jointly and severally agree to pay reasonable attorneys' fees
and all other costs and expenses incurred by CRA in enforcing this Agreement in any action or
proceeding arising out of, or relating to, this Agreement.
(1) Construction and Interpretation of Agreement. The parties agree that this
Agreement was jointly prepared through negotiations of the parties and the provisions of the
Agreement are not to be strictly or liberally construed for or against anv of the parties The titles
to the sections and subsections of this Agreement are inserted for convenience only and are not a
part of this Agreement and shall have no effect upon the construction or interpretation of any part
of this Agreement. This Agreement shall be governed by and construed in accordance with the
substantive and procedural laws of the State of California.
0) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which taken together shall constitute
but one and the same instrument.
(l.) Joint and Several Obligations Each and all of the agreements, obligations
and liabilities of Indemnitors hereunder arejoint and several
SIGNATURES APPEAR ON FOLLOWING PAGE
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date
first above written
COLONY SQUARE
r
B�
(Print Name)
(Print Title)
J ES M HARRI
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF ATASCADERO
By-.. W # `4tIt't.
Wade McKinney,
Executive Director
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