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HomeMy WebLinkAbout2005-025 Santa Lucia Bank C:!iY lei'^I --0.r.--- CONTRACT#� AGREEMENT BETWEEN THE CITY OF ATASCADERO AND SANTA LUCIA BANK FOR SERVICES RELATED TO THE LOCAL ROAD IMPROVEMENT LOAN PROGRAM This agreement is made upon the date of execution, as set forth below, by and between Santa Lucia Bank, hereinafter referred to as "Bank", and the City of Atascadero, California, a Municipal Corporation, hereinafter referred to as "City". The parties hereto, hereby agree to the following terms and conditions: 1.00 GENERAL PROVISIONS 1.01 PURPOSE: To establish a partnership between a bank and the City that provides low interest loans to neighborhoods for improving their local streets. The City will deposit funds in the form of a negotiated certificate of deposit with the bank to be used as collateral for the loans. This collateralization allows loans to be made to all residents regardless of their credit and also provides a competitive, fixed interest rate. Bank administers the loan program on behalf of the City. 1.02 TERM: This agreement will become effective on the date of execution set forth below, and will continue for a period of two years. At the conclusion of the initial term, new loans will not be offered unless the agreement is extended for another term mutually agreed to by both parties. 1.03 SERVICES TO BE PERFORMED BY CONSULTANT: Bank agrees to perform or provide the services specified in "Obligations of Bank" section of this agreement. Bank shall determine the method, details and means of performing the above- referenced services. 1 .04 COMPENSATION: In consideration for the services to be performed by Bank, namely the administration of the program, Bank shall charge the borrowers the negotiated CD rate for the City's collateralized funds plus .50%. The rate shall be fixed for the term of the loan. This shall be the only compensation Bank receives for administering the loan program. 2.00 OBLIGATIONS OF BANK 2.01 LOAN ADMINISTRATION/APPROVAL: Bank agrees to manage all components of the loan ' application and approval process including the processing of applications, correspondence with borrowers, running credit checks, property valuations and title searches, and collection of payment. For purposes of loan approval, the maximum loan to value for any given loan will be 90%. The City has the option to approve a credit that would not meet the bank's normal underwriting standards as to credit criteria, loan to value maximums, and/or income, 2.02 NOTIFICATION: Bank shall serve as the responsible party for all communications with participants regarding the loan program including but not limited to loan award, payment collection, loan status, default, and changes to the program. 2.03 RELEASE OF FUNDS: Bank shall only release loan proceeds to the approved general contractor performing the work, and only after the City has given final sign-off to the project. 2.04 DETERMINATION OF DEFAULT: Default will be defined by Bank as any loan that has become more than 60 days past due. The City will be notified of the default and the default process will be completed within 90 days. Upon default and payment in full of the Santa Lucia Bank note, Bank will assign all rights under the executed promissory note and deed of trust to the City. 2.05 PLEDGING OF ASSETS: Bank will enter into an agreement with the City regarding the pledging of bank assets to collateralize the certificate of deposits provided as collateral to the loans as defined under Government Code Section 53601. 2.06 CERTIFICATE OF DEPOSIT: Bank will deposit the City's funds being used for collateral in the form of a ten-year certificate of deposit. The rate on the certificate will be negotiated by both parties at the time of funding and interest shall be paid semi-annually. 2.07 REPORTS: Bank will provide reports on loans included in this program on mutually agreed upon intervals. 2.08 INDEMNIFICATION: Bank hereby agrees to, and shall, hold City, its elective and appointive boards, officers, agents and employees, harmless and shall defend the same from any liability for damage or claims for damage, or suits or actions at law or in equity which may allegedly arise from Bank's or any of Bank's employees' agents' negligent operations, errors and omissions, be by Bank or by any one or more persons directly or indirectly employed by, or acting as agent for, Bank. 3.00 OBLIGATIONS OF CITY 3.01 COOPERATION: City agrees to comply with all reasonable requests of the bank necessary to the performance of Bank's responsibilities under this agreement. 3.02 PROJECT SELECTION/DESIGN/APPROVAL: The City will meet with neighborhoods to answer questions about the program and will provide information regarding the process for making the street improvements being requested. Upon expression of interest from a given neighborhood to financially support the project, receipt of a signed petition from 51% of the residents along the impacted street consenting to the project, and receipt of construction documents that are within the City's standards, the City shall issue an encroachment permit for access to the street, therefore authorizing the pending street improvements. 3.03 PROVISION OF FUNDS: The City will deposit funds being used for loan collateral within a timely manner and before the loan is funded. 4.00 TERMINATION OF AGREEMENT 4.01 TERMINATION ON NOTICE: Notwithstanding any other provision of this agreement, at any time, without cause by giving at least thirty (30)_ days prior written notice to the other parties to this agreement. Termination shall apply to future loans only and does not relieve obligations already established from previous loans. 4.02 TERMINATION ON OCCURRENCE OF STATED EVENTS: This agreement shall terminate automatically on the occurrence of any of the following events: (1) Bankruptcy or insolvency of any party; (2) Sale of the business of any party; (3) The end of the thirty 30 days as set forth in Section 4.01 ; (4) Assignment of this agreement by bank without the consent of the City. 5.00 MISCELLANEOUS 5.01 REMEDIES: The remedies set forth in this agreement shall not be exclusive but shall be cumulative with, and in addition to, all remedies new or hereafter allowed by law or equity. 5.02 NO WAIVER: The waiver of any breach by any party of any provision of this agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of this agreement. 5.03 ASSIGNMENT: This agreement is specifically not assignable by bank to any person or entity. Any assignment or attempt to assign by Bank, whether it be voluntary or involuntary, by operation of law or otherwise, is void and is a material breach of this agreement giving rise to a right to terminate as set forth in Section 4.02. 5.04 ATTORNEY FEES: In the event of any controversy, claim or dispute between the parties hereto, arising out of or relating to this agreement, or the breach thereof, the prevailing party shall be entitled, in addition to other such relief as may be granted, to a reasonable sum as and for attorney fees. 5.05 NOTICES: Except as otherwise expressly provided by law, any and all notices or other communications required or permitted by this agreement or by law to be served on or given to any party to this agreement shall be in writing and shall be deemed duly served and given when personally delivered or in lieu of such personal service when deposited in the United States mail, first-class postage prepaid to the following address for each respective party: PARTY ADDRESS A. CITY OF ATASCADERO 6500 EI Camino Real, Suite 6 Atascadero, CA 93422 Attention: Assistant City Manager B. SANTA LUCIA BANK 7480 EI Camino Real Atascadero, CA 93422 Attention: Senior Vice President-Credit 5.06 GOVERNING LAW:This agreement and all matters relating to this agreement shall be governed by the laws of the State of California in force at the time any need for the interpretation of this agreement or any decision or holding concerning this agreement arises. 5.07 BINDING EFFECT: This agreement shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto, but nothing in this Section shall be construed as a consent by City to any assignment of this agreement or any interest in this agreement. 5.08 SEVERABILITY: Should any provision of this agreement be held by a court of competent jurisdiction or by a legislative or rulemaking act to be either invalid, void or unenforceable, the remaining provisions of this agreement shall remain in full force and effect, unimpaired by the holding, legislation or rule. 5.09 SOLE AND ENTIRE AGREEMENT: This agreement constitutes the sole and entire agreement between the parties with respect to the subject matter hereof. This agreement correctly sets forth the obligations of the parties hereto to each other as of the sate of this agreement. All agreements or representations respecting the subject matter of this agreement not expressly set forth or referred to in this agreement are null and void. 5.10 DUE AUTHORITY: The parties hereby represent that the individuals executing this agreement are expressly authorized to do so on and in behalf of the parties. 5.11 CONSTRUCTION: The parties agree that each has had an opportunity to have their counsel review this agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this agreement or any amendments of exhibits thereto. The captions of the sections are for convenience and reference only, and are not intended to be construed to define or limit the provisions to which they relate. 5.12 AMENDMENTS: Amendments to this agreement shall be in writing and shall be made only with the mutual written consent of all of the parties to this agreement. L/. Executed on _ 2��� / , 2005, at Atascadero C� Attest: CITY OF ATASCADERO ct_.Lp", 1 I/1%.�1�— By: Udt Marcia McClure Torgerso Wade G. McKinney City Cleric City Manager Approved as to for . i By: Patrick L. Enright 4®ry H. Putnam City Attorney President/CEO Santa Lucia Bank