HomeMy WebLinkAboutThe Russell LC-8/2/2010The Parties
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Disaster Recovery
Loan Interest Supplement Program Contract
CONTRACT #
LISP005
AWARD DATE:
, 2010
PROJECT COMPLETION DATE:
February, 2012
GRANTOR: City of Waterloo
715 Mulberry Street
Waterloo, Iowa 50703
CONTACT PERSON: Noel Anderson, Director of
Community Planning and Development
Email: Noel.Anderson@Waterloo-ia.org.
Phone: (319) 291-4366
Fax: (319) 291-4262
BUSINESS: LM Holdings, LC d.b.a.
The Russell Lamson, LC
209W5th St
Waterloo, Iowa 50701
CONTACT PERSON: Robert Heaton
Email: bob@heatonadams.com
Phone: (319) 232-1943
Fax:
GRANT AMOUNT ("Award"):
UP TO $27,112.31
C
a
PROJECT DESCRIPTION:
This grant is provided by the Grantor to the Business to reimburse the Business for a portion
or all of the interest paid with respect to a Disaster Loan (defined herein) as described in its
application (the "Project") and as provided in this Contract.
THE UNDERSIGNED AGREE to be bound by the terms and conditions stated above and the
following documents incorporated by this reference and attached to this Contract: (1) Exhibit A- Disaster
Recovery Loan Interest Supplement Program General Provisions (November 2009) and all
attachments or exhibits thereto, (2) Exhibit B -Business's Application for Disaster Recovery Loan
Interest Supplement Program, and (3) Exhibit C — List of Applicable Federal Laws. The Parties have
entered into this Contract, effective as of the last date stated below (the "Contract Effective Date").
FOR THE GRANTOR:
Signature
Print Name and Title
Date
FOR THE BUSINESS:
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EXHIBIT A
DISASTER RECOVERY LOAN INTEREST SUPPLEMENT PROGRAM
GENERAL PROVISIONS (November 2009)
1. CONTRACT DURATION. This Contract is
effective as of the Contract Effective Date stated
on Page 1 and shall remain in effect through the
Project Completion Date and until the Grantor
has closed out the Contract and provided
Business with written notice of Contract
closeout.
1A. DEFINITIONS. For purposes of this
Contract, the following terms have the following
definitions:
"Disaster Event" means the floods, storms and
tornados which resulted in the declaration of a
major disaster under Title IV of the Robert T.
Stafford Disaster Release and Emergency Act
(42 U.S.C. Section 5721 et seq.) designated by
the Federal Emergency Management
Administration as Disaster No. 1763 that
occurred between May 25, 2008 and August 13,
2008.
"Disaster Loan" means either a Physical
Disaster Loan or an Economic Injury Disaster
Loan.
"Economic Injury Disaster Loan" means a loan
provided by an Eligible Lender for (i) lost income
or lost profits of the Business; (ii) payment of
liabilities which the Business could have paid if
the Disaster Event had not occurred; (iii) working
capital for a limited period so the Business can
operate until the Business is in full operations
after the Disaster Event.
"Eligible Lender" means any of the following
entities that provide disaster recovery loans to
businesses: (i) the Small Business
Administration; (ii) a financial institution; (iii) an
economic development organization; (iv) a rural
electric or telephone cooperative with an
established Economic Development
Administration or U.S. Department of Agriculture
revolving loan fund program or intermediary re -
lending program.
"Physical Disaster Loan" means financial
assistance provided to a business by an Eligible
Lender to repair or replace physically damaged
property owned by the Business at the time of
the Disaster Event, including real estate,
inventories, supplies, machinery and equipment.
"Physically damaged" means physical damage
caused by flooding, including overland flow, or
Contract #LISP005 2
physical damage caused by tornado; provided
that damage caused by sanitary or storm sewer
backup is not included unless IDED determines
that such damage was a direct result of the
Disaster Event.
2. FUNDING. The source of funding for this
Contract is a grant from the Iowa Department
of Economic Development ("IDED") to the
Grantor for financial assistance to businesses.
Any termination, reduction, or delay of funds
available due, in whole or in part, to (i) lack of,
reduction in, or a deappropriation of funds, or (ii)
any other reason beyond the Grantor's control,
may, in the sole discretion of the Grantor, result
in the termination, reduction or delay of funds to
the Business.
3. ACKNOWLEDGEMENT OF OBLIGATIONS.
Business acknowledges and agrees that: a) this
Award is made in consideration of Business's
representations and warranties described in this
Contract, and b) upon violation of such
covenants and warranties, Business is obligated
to immediately repay any amounts the Grantor
determines Business received without fulfillment
of Business's obligations under this Contract,
plus applicable costs described in Section 14, all
as further provided herein.
4. CONDITIONS TO DISBURSEMENT OF
FUNDS; DISBURSEMENT TERMS. No Award
funds will be disbursed to the Business until:
(a) the Business and the Grantor have signed
this Contract, (b) the Business is open and
operating during the calendar quarter
immediately preceding the disbursement and on
the date of disbursement, and (c) the Business
requests a disbursement of funds. All
disbursements of Award funds shall be subject
to receipt by the Grantor of requests for
disbursement, in form and content acceptable to
Grantor, submitted by the Business. All requests
shall include documentation of interest paid (and
with respect to a line of credit, documentation
that expenditures related to any draws on such
line of credit meet the qualifications of a Disaster
Loan (defined herein)) that have been paid with
respect to the Disaster Loan. The Business shall
submit to Grantor such supporting evidence as
may be reasonably requested by Grantor to
substantiate all payments which are to be made
out of any requisition and/or to substantiate all
payments then made with resect to the Project.
5. ALLOWABLE COSTS. The Award shall
consist of an amount equal to up to thirty-six
(36) months' interest on a Disaster Loan paid
with respect to a Disaster Loan in a total amount
not to exceed $50,000. In the event the Disaster
Loan is restructured, the total award under this
Contract will be equal to or less than thirty-six
(36) months of interest on the Disaster Loan as
it was originally entered into.
6. SUSPENSION OF DISBURSEMENT. Upon
the occurrence of an Event of Default (as
defined in Section 11) the Grantor may suspend
payments to Business until such time as the
default has been cured to Grantor's satisfaction.
Notwithstanding anything to the contrary in this
Contract, upon a termination of this Contract on
account of an Event of Default, Business will no
longer have the right to receive any
disbursements after the effective date of default.
7. INVESTMENT OF GRANT FUNDS.
a. In the event that Award funds disbursed to
Business are not immediately utilized,
temporarily idle Award funds held by the
Business may be invested in accordance with
the laws of the State of Iowa (the "State"),
including but not limited to the provisions of Iowa
Code chapter 12C concerning the deposit of
public funds. Interest accrued on temporarily
idle Award funds held by the Business shall be
credited to and expended on the Project prior to
the expenditure of other Award funds.
b. All proceeds remaining, including accrued
interest, after all allowable Project costs have
been paid or obligated shall be returned to the
Grantor within thirty (30) days after the Project
Completion Date. Within ten (10) days of receipt
of a written request from Grantor, the Business
shall inform the Grantor in writing of the amount
of unexpended Award funds in the Business's
possession or under the Business's control,
whether in the form of cash on hand,
investments, or otherwise.
8. BUSINESS'S REPRESENTATIONS AND
WARRANTIES. Business represents and
warrants to Grantor as follows:
a. Authority and validity of obligations.
Business has full right and authority to enter into
this Contract. The person signing this Contract
has full authority to sign this Contract on behalf
of the Business, and obligate the Business to
the performance of each and all of the
obligations under the Contract.
b. Approvals received. This Contract delivered
Contract #LISP005 3
by the Business has been duly authorized,
executed and delivered by the Business and
constitutes the valid and binding obligation of the
Business and is enforceable against the
Business in accordance with its terms. Business
has secured all necessary authorizations and
approvals with any governmental, regulatory or
governing board that may be necessary to
permit Business to execute this Contract and
comply with its terms.
c. Governmental Approvals, Permits and
Licenses. To the best of its knowledge,
information, and belief after reasonable due
diligence and investigation to determine the
accuracy of this representation, Business
represents that it has received all licenses,
permits, and approvals of all federal, state, and
local govemmental authorities, if any, necessary
to conduct its business, in each case where the
failure to obtain or maintain the same could
reasonably be expected to have a material
adverse effect. No investigation or proceeding
which, if adversely determined, could reasonably
be expected to result in revocation or denial of
any material license, permit, or approval is
pending or, to the knowledge of the Business,
threatened.
d. Litigation and Other Controversies. There is
no litigation or governmental proceeding
pending nor, to the knowledge of the Business,
threatened, against the Business which if
adversely determined would adversely impact
Business's ability to perform under this Contract.
e. Compliance with Laws. To the best of its
knowledge, information, and belief after
reasonable due diligence and investigation to
determine the accuracy of this representation,
Business represents that it is in compliance with
the requirements of all federal, state and local
laws, rules and regulations applicable to or
pertaining to the operations of Business.
f. Operation of Business. The Business was
open and operating at the time of the Disaster
Event and remains open and operating on the
date hereof.
g. Application. All statements of the Business
contained in its Application, attached hereto as
Exhibit B (the "Application"), including any
attachments and documentation with respect to
any Disaster Loans incurred by the Business,
are true and correct as of the date hereof.
h. Disaster Loan. The Business has received
a loan meeting the requirements of a Disaster
Loan, and the documentation with respect to
such Disaster Loan was executed prior to June
1, 2009.
i. No Residential Facilities. No portion of the
proceeds of the Disaster Loan received by the
Business were expended with respect to any
residential facility.
9. EFFECTIVE DATE OF
REPRESENTATIONS AND WARRANTIES.
The warranties and representations of Section 8
are made as of the Award Date set forth on
page one (1) of this Contract and shall be
deemed to be renewed and restated by the
Business at the time each request for
disbursement of funds is submitted to the
Grantor.
10. COVENANTS OF BUSINESS. The
Business covenants that:
a. Repayment Obligations. Upon the
occurrence of an unremedied Event of Default
as described in Section 11, Business agrees to
immediately repay such amounts determined by
Grantor as due and payable.
b. Required Reports. For the duration of this
Contract the Business shall provide the Grantor
with such reports as requested by the Grantor to
assist in evaluation of the Program's
effectiveness and to determine compliance with
this Contract. Business shall promptly comply
with all such requests.
c. Disbursement Requests. Business shall
prepare, sign and submit disbursement requests
as specified in this Contract in the form and
content required by Grantor. Business shall
review all disbursement requests and verify that
claimed expenditures are allowable costs.
Business shall maintain documentation
adequate to support the claimed costs.
d. Inspection and Audit. Business shall permit
the Grantor and its duly authorized
representatives, the U.S. Department of Housing
and Urban Development ("HUD"), IDED or other
state and federal agencies and their duly
authorized representatives to visit and inspect
any of the Business's properties, books and
financial records related to the Project, to
examine and make copies of the books of
accounts and other financial records, and to
discuss the affairs, finances and accounts with,
and to be advised as to the same by, its officers
and independent public accountants (and by this
provision Business authorizes such accountants
to discuss with the Grantor and the Grantor's
duly authorized representatives the finances and
affairs of the Business) at such reasonable time
and reasonable intervals as the Grantor may
designate. Routine inspections and audits
performed by Grantor will be at Grantor's
expense. In the event any special audits are
conducted at Grantor's request, the cost of such
special audits will be at Business's expense.
e. Compliance with Laws. Business will comply
in all material respects with the requirements of
all federal, state and local laws, rules,
regulations and orders including, but not limited
to prevention of discrimination in employment,
equal employment opportunity and affirmative
action, worker rights and worker safety,
including those laws listed in Exhibit C attached
hereto, and IDED's administrative rules and
guidelines for the Disaster Recovery Loan
Interest Supplement Program, as such laws,
rules, regulations, orders, administrative rules
and guidelines may be amended from time to
time.
f. Use of Award Funds. Business shall use
Award funds extended under this Contract solely
for the purposes set forth in this Contract.
g. Notice of Proceedings. Business shall
promptly notify the Grantor of the initiation of any
claims, lawsuits, or other proceedings brought
against Business, which would adversely impact
the Project.
h. Accounting Records. Business shall
maintain its books, records and all other
evidence pertaining to this Contract in
accordance with generally accepted accounting
principles and such other procedures specified
by Grantor. These records shall be available to
Grantor, its internal or external auditors, the
Auditor of the State of Iowa, the Attorney
General of the State of Iowa, IDED and the Iowa
Division of Criminal Investigations at all times
during the Contract duration and any extensions
thereof, and for five (5) full years from the date
this Contract is closed out by Grantor or longer
in the event that litigation, audit or claims are
commenced or instituted, in which case
Business shall retain the records until the
litigation, audit or claim has been fully resolved
in the sole discretion of the Grantor.
j. Indemnification. Business shall indemnify,
defend and hold harmless the Grantor, IDED
and their respective departments, divisions,
agencies, sections, commissions, officers,
employees and agents, from and against all
losses, liabilities, penalties, fines, damages and
claims (including taxes), and all related costs
and expenses (including reasonable attorneys'
fees and disbursements and costs of
Contract #LISP005 4
investigation, litigation, settlement, judgments,
interest and penalties), arising from or in
connection with any of the following: (1) any
claim, demand, action, citation or legal
proceeding arising out of or resulting from the
Project; (10 any claim, demand, action, citation or
legal proceeding arising out of or resulting from
a breach by Business of any representation or
warranty made by the Business in this Contract;
NO any claim, demand, action, citation or legal
proceeding which results from an act or
omission of Business or any of its agents in its
or their capacity as an employer of a person;
and (iv) any claim, demand, action, citation or
legal or administrative proceeding arising out of
or resulting from Business's breach of the terms
and covenants set forth herein, including but not
limited to claims made against Grantor by IDED
and claims relating to Grantor's inability to
comply with agreements with IDED as a result of
Business's breach of the terms and covenants of
this Contract.
k. Conflict of Interest. (i) General. No persons
identified in paragraph (ii) below who exercise or
have exercised any administrative functions or
responsibilities with respect to Community
Development Block Grant ("CDBG") assisted
activities, including the Award funds under this
Contract, or who are in a position to participate
in a decision-making process or gain inside
information with regard to such activities, may
obtain a personal or financial interest or benefit
from a CDBG assisted activity, or have an
interest in any contract, subcontract or
agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with
whom such person has a family or business
relationship, during their tenure and for one year
thereafter. (ii) Persons covered. The conflict of
interest provisions described in paragraph (i) of
this subsection apply to any person who is an
employee, agent, consultant, officer or elected
or appointed official of IDED, the Grantor or the
Business as a sub -recipient of CDBG funds in
the form of the Award funds under this Contract.
11. EVENTS OF DEFAULT. Any one or more of
the following shall constitute an event of default
(an "Event of Default") hereunder:
a. Noncompliance with Contract. Default in
the observance or performance of any provision
of this Contract; or
b. Material Misrepresentation. Any
representation or warranty made by the
Business in this Contract or in any statement or
certificate furnished by it pursuant to this
Contract, or in connection with any of the above,
proves untrue in any material manner as
determined in the sole discretion of the Grantor;
or
c. Adverse Change in Financial Condition. Any
change shall occur in the financial condition of
the Business which would have a material
adverse effect on the ability of the Business to
perform under this Contract, as determined in
the sole discretion of the Grantor; or
d. Bankruptcy or Similar Proceedings Initiated.
Either the Business shall (1) have entered
involuntarily against it an order for relief under
the United States Bankruptcy Code, as
amended, (2) not pay, or admit in writing its
inability to pay, its debts generally as they
become due, (3) make an assignment for the
benefit of creditors, (4) apply for, seek, consent
to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator
or similar official for it or any substantial part of
its property, (5) institute any proceeding seeking
to have entered against it an order for relief
under the United States Bankruptcy Code as
amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or
composition of it or its debts under any law
relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an
answer or other pleading denying the material
allegations of any such proceeding filed against
it, or (6) fail to contest in good faith any
appointments or proceeding described below;
or
e. Appointment of Officials. A custodian,
receiver, trustee, examiner, liquidator or similar
official shall be appointed for either the Business
or any substantial part of any of its respective
property, or a proceeding described above shall
be instituted against the Business and such
appointment continues undischarged or such
proceeding continues undismissed or unstayed
for a period of sixty (60) days; or
12. REMEDIES UPON DEFAULT. If, after
notice of default and opportunity to cure as
provided in Section 13, there is an unremedied
Event of Default, the Grantor may, at its sole
discretion, take any or all of the following
actions:
a. Terminate this Contract and all of the
obligations of Grantor under this Contract on the
date stated in such notice;
b. Suspend pending disbursements and
Contract #LISP005 5
terminate further disbursements of Award funds;
c. Require repayment of funds not used in
compliance with this Contract; and/or
d. Declare the total amount of Award funds
disbursed to Business, or any portion thereof in
an amount determined in the sole discretion of
the Grantor to be forthwith due and payable,
including any and all fees, charges and other
amounts payable under this Contract. The total
amount due shall be and become immediately
due and payable without further demand,
presentment, protest or notice of any kind.
13. NOTICE AND OPPORTUNITY TO CURE.
The Business shall give the Grantor notice of
any Event of Default of which Business
becomes aware. If Grantor receives such notice
or has reasonable cause to believe that an
Event of Default has occurred under this
Contract, the Grantor shall issue a written Notice
of Default to the Business, setting forth the
nature of the alleged default in reasonable
specificity, and providing therein a reasonable
period of time, which shall not be fewer than
twenty (20) days from the date of the Notice of
Default, in which the Business shall have an
opportunity to cure, provided that cure is
possible and feasible.
14. EXPENSES. Business agrees to pay to the
Grantor all expenses reasonably incurred or
paid by Grantor including reasonable attorneys'
fees and court costs, in connection with any
Default or Event of Default by the Business or in
connection with the enforcement of any of the
terms of this Contract.
15. TIMELY PERFORMANCE. The parties
hereto agree that the dates and time periods
specified in this Contract are of the essence to
the satisfactory performance of this Contract.
16. CHOICE OF LAW AND FORUM.
In the event any proceeding of a quasi-judicial or
judicial nature is commenced in connection with
this Contract, the proceeding shall be brought in
Des Moines, Iowa, in Polk County District Court
for the State of Iowa, or in Waterloo, Iowa, in
Black Hawk County District Court, if such court
has jurisdiction. If however, such court lacks
jurisdiction and jurisdiction lies only in a United
States District Court, the matter shall be
commenced in the United States District Court
for the Southern District of Iowa, Central Division
or the United States District Court for the
Northern District of Iowa. This provision shall not
be construed as waiving any immunity to suit or
liability, in state or federal court, which may be
Contract #LISP005 6
available to the Grantor, or its officers,
employees or agents. The parties hereto waive
any consent to such jurisdiction and venue of
any such court as provided in this section and
hereby waive any argument that venue in such
forums is not convenient.
17. GOVERNING LAW. This Contract and the
rights and duties of the parties hereto shall be
governed by, and construed in accordance with
the internal laws of the State of Iowa without
regard to principles of conflicts of laws.
18. CONTRACT AMENDMENTS. The Contract
may only be amended if done so in writing and
signed by the Business and the Grantor.
19. NOTICES. All notices hereunder shall be in
writing and shall be given to the relevant party at
its address, or e-mail address as set forth on the
first page of this Contract. Each such notice,
request or other communication shall be
effective (i) if given by facsimile, when such
facsimile is transmitted to the facsimile number
specified and a confirmation of such facsimile
has been received by the sender, (ii) if given by
e-mail, when such e-mail is transmitted to the e-
mail address specified and a confirmation of
such e-mail has been received by the sender,
(iii) if given by mail, five (5) days after such
communication is deposited in the mail, certified
or registered with return receipt requested,
addressed as aforesaid, or (iv) if given by any
other means, when delivered at the addresses
specified.
20. HEADINGS. Section headings used in this
Contract are for convenience of reference only
and are not a part of this Contract for any other
purpose.
21. FINAL AUTHORITY. The Grantor shall
have the authority to reasonably assess whether
Business has complied with the terms of this
Contract.
22. WAIVERS. No waiver by the Grantor of any
default hereunder shall operate as a waiver of
any other default or of the same default on any
future occasion. No delay on the part of the
Grantor in exercising any right or remedy
hereunder shall operate as a waiver thereof. No
single or partial exercise of any right or remedy
by Grantor shall preclude future exercise thereof
or the exercise of any other right or remedy.
23. COUNTERPARTS. This Contract may be
executed in any number of counterparts, each of
which shall be deemed to be an original, but all
of which together shall constitute but one and
the same instrument.
24. SURVIVAL OF REPRESENTATIONS. All
representations and warranties made herein or
in any other Contract document or in certificates
given pursuant hereto or thereto shall survive
the execution and delivery of this Contract and
the other Contract documents and shall continue
in full force and effect with respect to the date as
of which they were made until all of Business's
obligations or liabilities under this Contract have
been satisfied.
25. SEVERABILITY OF PROVISIONS. Any
provision of this Contract, which is
unenforceable in any jurisdiction, shall, as to
such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the
remaining provisions hereof or affecting the
validity or enforceability of such provision in any
other jurisdiction. All rights, remedies and
powers provided in this Contract or any other
Contract document may be exercised only to the
extent that the exercise thereof does not violate
any applicable mandatory provisions of law, and
all the provisions of this Contract and any other
Contract document are intended to be subject to
all applicable mandatory provisions of law which
may be controlling and to be limited to the extent
necessary so that they will not render this
Contract or any other Contract document invalid
or unenforceable.
26. NONASSIGNMENT. This Contract may not
be assigned by Business without prior written
consent of the Grantor.
27. TERMINATION. (a) This Contract may be
terminated in the following circumstances:
(i). By the Grantor as a result of the Grantor's
determination of an Event of Default which
remains uncured after any notice and cure
period provided pursuant to this Contract;
(ii). By the Grantor as a result of the
termination or reduction of funding to the
Grantor, or a unilateral modification made by
IDED to the agreement between the Grantor and
IDED pursuant to which the Award funds are
provided or any other event or circumstance
beyond the control of the Grantor that may
cause the Grantor to terminate this Contract, as
determined in the sole discretion of the Grantor;
or
(iii). Upon written mutual agreement of the
Grantor and Business.
(b) Upon termination of this Contract as
provided in this section, no further disbursement
of funds shall be made under this Contract to
Business. In the event of termination of this
Contract due to the occurrence and continuing
of an Event of Default beyond any applicable
notice and cure periods, the remedies provided
in this Contract for such Event of Default shall
apply.
28. ORDER OF PRIORITY. In the case of any
inconsistency or conflict between provisions of
this Contract and its Exhibits, the following order
of priority shall control:
a. The terms and conditions of the Award as
outlined on Page 1 of this Contract.
b. Exhibit A —Disaster Recovery Loan Interest
Supplement Program General Provisions
(November 2009).
c. Exhibit B- Business's Application for
Disaster Recovery Loan Interest
Supplement Program Financial Assistance.
d. Exhibit C — List of Applicable Federal Laws.
29. INTEGRATION. This Contract contains the
entire understanding between the Business and
the Grantor relating to this Award under the
IDED Disaster Recovery Loan Interest
Supplement Program and any representations
that may have been made before or after the
signing of this Contract which are not contained
herein, are nonbinding, void and of no effect.
Neither of the parties has relied on any such
prior representation in entering into this
Contract.
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