HomeMy WebLinkAboutC2008-082 - 3/11/2008 - ApprovedAGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB
DEVELOPMENT CORPORATION AND ACCIDN TEXAS, INC. FOR AN INTEREST
BUY-DOWN PROGRAM FOR SMALL BUSINESSES
This Interest Buy-Down Program for Small Businesses Agreement {"Agreement"} is entered into
between the Corpus Christi Business and Job Development Corporation ("Corporation") and
ACCIDN Texas, Inc., a Texas nonprofit corporation "ACCIDN Texas").
WHEREAS, the Texas Legislature in Section ~A of Article 5190.6, Vernon's Texas Revised
Civil Statutes (Development Corporation Act of 1979} empowered local communities with the
ability to adopt an optional local sales and use tax as a means of improving the economic health
and prosperity of their citizens;
WHEREAS, on November 5, 2002, residents of the City of Corpus Christi ("City") passed
Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales
and use tax for the promotion and development of new and expanded business enterprises at the
rate of one-eighth of one percent to be imposed for 15 years;
WHEREAS, the 118' cent sales tax authorized by passage of Proposition 2 was subsequently
enacted by the City Council and filed with the State Comptroller of Texas, effective April 1,
2003, to be administered by the Corpus Christi Business and Job Development Corporation
Board;
WHEREAS, the Corpus Christi Business and Job Development Corporation exists for the
purposes of encouraging and assisting entities in the creation of jobs for the citizens of Corpus
Christi, Texas;
WHEREAS, the Board of Directors of the Corporation ("Board"}, on September 10, 2007,
amended the Corporation's Guidelines and Criteria for Granting Business Incentives;
WHEREAS, Section 21 of the Texas Development Corporation Act of 1979, Art. S 190.6,
Vernon's Texas Revised Civil Statutes, requires the City Council to approve all programs and
expenditures of the corporation;
WHEREAS, the City Council approved the Corporation's amended Guidelines and Criteria for
Granting Business Incentives on September 18, 2007;
WHEREAS, ACCIDN Texas is a Texas nonprofit corporation whose principal mission is to
provide loans to small business owners lacking access to commercial credit;
WHEREAS, ACCIDN Texas anticipates, over the next five months, providing interest buy-down
to 5.5% for approximately 7 loans with an average value of $35,000 to low and moderate income
micro and small business owners in Corpus Christi to generate 7 new permanent full-time jobs;
WHEREAS, the Board has determined that it is in the best interests of the citizens of Corpus
(`hr;ct; Texas that business development funds be provided to ACCIDN Texas, through this
2008-082
~3/21/~$ ia1200813-I 11ACCION TEXAS $SOK interest buy-down 080219.doc
Res. 027509
Accion Texas, Inc.
contract with ACCION Texas, to be used by Accion Texas to buy-down the interest on
commercial loans to 5.5% interest for small businesses and which will result in creation of new
full-time permanent jobs in the city of Corpus Christi.
In consideration of the covenants, promises, and conditions stated in this Agreement,
Corporation and ACCION Texas agree as follows:
1. Effective Date. The effective date of this Agreement {"Effective Date") is the latest date that
either party executes this Agreement.
2. Term. The term of this Agreement is for one year from March 1, 2008, through July 31,
2008.
3. Interest Buy Down Program.
a. In consideration for creation and maintenance of new jobs as provided in this
Agreement, the Corporation agrees to pay ACCION Texas up to $50,000 for the
Interest Buy-Down Program as follows:
i. ACCION Texas must first receive a request for a loan from a small business that
has been in existence for not more than five (S) years located in Corpus Christi, or
a business locating in Corpus Christi ("Business").
ii. ACCION Texas shall review the request for a loan from the Business.
iii. Upon ACCION Texas approval of a loan and prior to the closing of the loan,
ACCION Texas shall submit Attachment "A" to the Corporation requesting funds
to buy down the interest rate from the interest rate allowable per the underwriting
criteria to S.5%. The Corporation authorizes an interest buy-down up to 7% of
the interest rate to f Hance the loan. Payment by Corporation shall not exceed
$17,500 per loan and shall be calculated using the following formula:
{Loan amount x interest rate to buy down to 5.5%)1 12 = N
N x number ofpayments=interest buy down reimbursement to Accion for
business loan. (The number of monthly payments shall not exceed sixty {60).)
Example: ($10,000 x 7%) / 12 = 55.33
55.33 x 36 = $2,100 =amount to be reimbursed to ACCION for business loan.
iv. The Corporation shall provide a response to approve or deny the reimbursement
for the Interest Buy Down Program funds to ACCION Texas within 2 business
days of receipt of Attachment "A." The Corporation shall reimburse funds within
30 days after evidence of closing the loan is submitted.
v. The total funds available on an annual basis under the Interest Buy-Down
Program under this agreement is $50,000.
b. The loans assisted with the program shall be within the range of $10,000 to $50,000.
This program shall result in the creation of one permanent full-time job per every loan
assisted with the Interest Buy Down Program. ACCION Texas shall ensure that the
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loan will result in the creation of one new full-time permanent job in the city of
Corpus Christi.
d. Businesses assisted through this program must be:
i. Unable to obtain a loan from a traditional financial institution or unable to qualify
for the total needed for a business loan through a bank or credit union, in which
case ACCION Texas can loan the remaining amount with the buy-down interest
rate program in conjunction with the banklcredit union.
ii. Located in or locating in Corpus Christi city limits.
iii. A business or home-based business in existence for not more than five (5) years
located in the Carpus Christi city limits.
iv. Current on payment of all sales taxes.
v. Current on payment of all ad valorem taxes in the City of Corpus Christi.
e. The following projects are ineligible for this program:
i. Refinancing of existing loans or debt
ii. Businesses located outside the Corpus Christi city limits
iii. Home-based businesses located outside the Corpus Christi city limits
iv. Loans to existing businesses which are not planning an expanding
v. Business retention.
£ ACCION Texas shall provide the Corporation with quarterly reports as provided in
Attachment "B" to identify the loans made, name and address of the business
receiving the loan, j obs created under the Interest Buy-Down Program, and other
reports as requested by the Corporation.
g. ACCION Texas shall provide funds for operations and loan capital to implement and
sustain the program.
h. ACCION Texas shall develop loan underwriting criteria and payment terms and
conditions for its loan program and provide to the Corporation.
4. Job Creation Qualification.
a. In order to count as a created job under this Agreement, the job must pay wages as
required by Section 38(b) of the Development Corporation Act of 1979, as amended,
which is the median wage of the occupation in the Corpus Christi MSA as determined
by Texas Workforce Commission's Texas Industry Profiles report.
b. A full-time permanent job is one that provides at least 2,x80 hours annually.
c. ACCION Texas agrees to confirm and document to the Corporation that each job
created as a result of funding provided by this Agreement is maintained throughout
the term of the loan to the Business.
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d. ACCI~N Texas agrees to provide Corporation with a sworn certificate by authorized
representative of each shall business assisted under this Agreement certifying the
number of full-time permanent employees employed by the small business.
e. ACCION Texas shall ensure that the Corporation is allowed reasonable access to
personnel records of the small businesses assisted under this Agreement.
5. Buy Local Provision.
a. ACCION Texas agrees to use its best efforts to give preference and priority to local
manufacturers, suppliers, contractors, and labor, except where not reasonably possible
to do so without added expense, substantial inconvenience, or sacrifice in operating
efficiency.
b. For the purposes of this section, the term "local" as used to describe manufacturers,
suppliers, contractors, and labor includes firms, businesses, and persons who reside in
or maintain an office within a 50-mile radius of Nueces County.
6. Local Offices. Two staff persons of ACCION Texas offices shall be located in Corporation
designated offices or a mutually agreeable location.
Representation on ACCION Texas governing board. ACCION Texas
agrees to appoint a person designated by the Corporation as a member of
ACCION Texas governing board.
7. Warranties. ACCION Texas warrants and represents to Corporation the following:
a. ~ACCION Texas a corporation duly organized, validly existing, and in good standing
under the laws of the State of Texas, has all corporate power and authority to carry on
,its business as presently conducted in. Corpus Christi, Texas.
b. ACCION Texas has the authority to enter into and perform, and will perform, the
terms of this Agreement.
c. ACCION Texas has timely filed and will timely file all local, State, and Federal tax
reports and returns required by laws to be filed and all Texas, assessments, fees, and
other governmental chaxges, including applicable ad valorem taxes, have been timely
paid, and will be timely paid ,during the term of this Agreement.
d. ACCION Texas has received a copy of the Texas Development Corporation Act of
1979, Art. 5190.b, Vernon's Texas Revised Civil Statutes, and acknowledges that the
funds granted in this Agreement must be utilized solely for purposes authorized under
State law and by the terms of this Agreement.
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e. If an audit determines that the funds were not used for authorized purposes, Accion
Texas agrees to reimburse Corporation for the sums of money spent for purposes not
authorized by law within 30 days written notice requesting reimbursement.
f. The parties executing this Agreement on behalf of ACCION Texas are duly
authorized to execute this Agreement on behalf of ACCION Texas.
10. Compliance with Laws. ACCION Texas shall observe and obey all applicable laws,
ordinances, regulations, and rules of the Federal, State, County and City governrrlents.
11. Noz--Discrimination. ACCION Texas covenants and agrees that ACCION Texas will not
discriminate nor permit discrimination against any person ar group of persons, with regard to
employment and the provision of services at, on, or in the Facility, on the grounds of race,
religion, national origin, marital status, sex, age, disability, or in any manner prohibited by
the laws of the United States or the State of Texas.
12. Force Majeure. If the Corporation or ACCION Texas are prevented, wholly or in part, from
fulfilling its obligations under this Agreement by reason of any act of God, unavoidable
accident, acts of enemies, fires, floods, governmental restraint or regulation, other causes of
force majeure, or by reason of circumstances beyond its control, then the obligations of the
Corporation or Accion Texas are temporarily suspended during continuation of the force
majeure. If either party's obligation is affected by any of the causes of force majeure, the
party affected shall promptly notify the other party in writing, giving full particulars of the
force majeure as soon as possible after the occurrence of the cause or causes relied upon.
13. Assignment. ACCION Texas may not assign all or any part of its rights, privileges, or
duties under this Agreement without the prior written approval of the Corporation and City.
Any attempted assignment without approval is void, and constitutes a breach of this
Agreement.
14. Indemnity. ACCION Texas covenants to fully indemnify, save, and hold harmless the
Corporation, the City, their respective officers, employees, and agents {"Indemnitees")
against all liability, damage, loss, claims demands, and actions of any kind on account of
personal injuries (including, without limiting the foregoing, workers' compensation and
death claims), or property loss or damage of any kind, which arise out of or are in any
manner connected with, or are claimed to arise out of or be in any manner connected with
ACCI~N Texas activities conducted under or incidental to this Agreement, including any
injury, loss or damage caused by the sale or contributory negligence of any or all of the
Indernnitees. ACCION Texas must, at its own expense, investigate all those claims and
demands, attend to their settlement or other disposition, defend all actions based on those
claims and demands with counsel satisfactory to Indemnitees, and pay all charges of
attorneys and ali other cost and expenses of any kind arising from the liability, damage, loss,
claims, demands, or actions.
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15. Events of Default. The following events constitute a default of this Agreement:
a. Failure of ACCI4N Texas to timely, fully, and completely comply with any one or
more of the requirements, obligations, duties, terms, conditions, or warranties of this
Agreement.
b. The Corporation or City determines that any representation or warranty on behalf of
ACCION Texas contained in this Agreement or in any financial statement, certificate,
report, or opinion submitted to the Corporation in connection with this Agreement
was incorrect or misleading in any material respect when made;
c. Any judgment is assessed against ACCION Texas or any attachment or other levy
against the property of ACCION Texas with respect to a claim remains unpaid,
undischarged, or not dismissed for a period of 30 days.
d. ACCION Texas makes an assignment for the benefit of creditors.
e. ACCION Texas files a petition in bankruptcy, or is adjudicated insolvent or bankrupt.
£ If taxes owed by ACCION Texas become delinquent, and ACCION Texas fails to
timely and properly follow the legal procedures for protest or contest.
g. ACCION Texas changes the general character of business as conducted of the date
this Agreement is approved by the Corporation.
16. Notice of Default. Should the Corporation ar City determine that ACCION Texas is in
default according to the terms of this Agreement, the Corporation or City shall notify
ACCION Texas in writing of the event of default and provide 60 days from the date of the
notice ("Cure Period"} for ACCION Texas to cure the event of default.
17. Results of Uncured Default. After exhausting good faith attempts to address any default
during the cure Period, and taking into account any extenuating circumstances that might
have occurred through no fault of ACCION Texas, as determined by the Board of Directors
of the Corporation, the following actions must be taken for any default that remains uncured
after the Cure Period.
a. ACCION Texas shall immediately pay $50,000 to Corporation, with interest at the
interest rate paid by the City on its mast recently issued general obligation bonds
from date of expiration of Cure Period until fully paid.
b. ACCION Texas shall pay Corporation reasonable attorney fees and costs of court to
collect amounts due to Corporation.
c. The Corporation shall have no further obligations to ACCION Texas under this
Agreement.
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d. Neither the City nor the Corporation may be held liable for any consequential
damages.
e. The Corporation may pursue all remedies available under law.
18. No Waiver.
a. No waiver of any covenant or condition, or the breach of any covenant or condition of
this Agreement, constitutes a waiver of any subsequent breach of the covenant or
condition of the Agreement.
b. No waiver of any covenant or condition, or the breach of any covenant or condition of
this Agreement, justifies or authorizes the nonobservance on any other occasion of
the covenant or condition or any other covenant or condition of this Agreement.
c. Any waiver or indulgence of ACCION Texas' default may not be considered an
estoppel against the Corporation.
d. It is expressly understood that if at any time ACCION Texas is in default in any of its
conditions or covenants of this Agreement, the failure on the part of the Corporation
to promptly avail itself of the rights and remedies that the Corporation may have, will
not be considered a waiver on the part of the Corporation, but Corporation may at any
time avail itself of the rights or remedies or elect to terminate this Agreement on
account of the default.
19. Notices.
a. Any required written notices shall be sent mailed, certified mail, postage prepaid,
addressed as follows:
ACCION Texas:
ACCION Texas
Attn.: Janie Barrera
2014 Hackberry
San Antonio, Texas 78210
Corporation:
City of Corpus Christi
Business and Job Development Corporation
Attn.: Executive Director
1201 Leopard Street
Corpus Christi, Texas 78401
b. A copy of all notices and correspondence must be sent the City at the following
address:
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City of Corpus Christi
Attn.: City Manager
P.O. Box 9277
Corpus Christi, Texas 78469-9277
c. Notice is effective upon deposit in the United States mail in the manner provided
above.
20. Incorporation of other documents. The Corpus Christi Business and Job Development
Corporation Guidelines and Criteria for Granting Business Incentives {"Corporation
Guidelines"}, as amended, are incorporated into this Agreement.
21. Amendments or Modifications. No amendments or modifications to this Agreement may
be made, nor any provision waived, unless in writing signed by a person duly authorized to
sign agreements on behalf of each party.
22. Relationship of Parties. In performing this Agreement, both the Corporation and ACCION
Texas will act in an individual capacity, and not as agents, representatives, employees,
employers, partners, joint-venturers, or associates of one another. The employees or agents
of either party may not be, nor be construed to be, the employees or agents of the other party
far any purpose.
23. Captions. The captions in this Agreement are for convenience only and axe not a part of this
Agreement. The captions do not in any way limit or amplify the terms and provisions of this
Agreement.
24. Severability.
a. If.for any reason, any section, paragraph, subdivision, clause, provision, phrase or
word of this Agreement or the application of this Agreement to any person or
circumstance is, to any extent, held illegal, invalid, or unenforceable under present or
future law or by a final judgment of a court of competent jurisdiction, then the
remainder of this Agreement, or the application of the term or provision to persons or
circumstances other than those as to which it is held illegal, invalid, or unenforceable,
will not be affected by the Iaw or judgment, for it is the definite intent of the parties to
this Agreement that every section, paragraph, subdivision, clause, provision, phrase,
or word of this Agreement be given full force and effect for its purpose.
b. To the extent that any clause or provision is held illegal, invalid, or unenforceable
under present or future law effective during the term of this Agreement, then the
remainder of this Agreement is nat affected by the law, and in lieu of any illegal,
invalid, or unenforceable clause or provision, a clause or provision, as similar in
terms to the illegal, invalid, or unenforceable clause or provision as may be possible
and be legal, valid, and enforceable, will be added to this Agreement automatically.
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25. Venue. Venue for any legal action related to this Agreement is in Nueces County, Texas.
26. Sole Agreement. This Agreement constitutes the sole agreement between Corporation and
ACCION Texas. Any prior agreements, promises, negotiations,or representations,verbal or
otherwise, not expressly stated in this Agreement, are of no force and effect.
Corpus Christi Business & Job Development Corporation
By:
Elo Pirpoerson ar
Ch
Date: 17 Approved as to form:
Attest: '
GW.Smf#h
By' Assistant City Attorney
Armando Chapa, Ass an Secretary nor City Attomey
ACCION Texas,Inc. q
Janie B era
President and Chief Executive Officer SECRETARY
Date:
THE STATE OF TEXAS
COUNTY OF NUECES
This instrument was acknowledged before me on AaW t7 , 200f by Janie
Barrera, President and Chief Executive Officer for ACCION Tex s,Inc., a Texas non-profit
corporation, on behalf of ACCION Texas, Inc.
Notary I#blic
*i ANGIESANCHEZ
MY COMMISSION EXPIRES State of Texas
October i2,2008
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