HomeMy WebLinkAboutRES NO 185-03RESOLUTION NO.! 8 5" 0 3
A RESOLUTION OF THE COUNCIL OF THE CITY OF
BAKERSFIELD REGARDING AGREEMENT NO. 97-65
WITH KERN-TECH, INC.
WHEREAS, on March 26, 1997, the City of Bakersfield ("CITY") entered into
Agreement No. 97-65 ("the Agreement") with Kern-Tech, Inc.; and
WHEREAS, pursuant to the Agreement, CITY loaned Kern-Tech money to
purchase equipment that would be installed in Kern-Tech's facility located at 405 East
19th Street ("the Loan"); and
WHEREAS, in order to be eligible to receive the Loan, Kern-Tech was to retain
ten (10)jobs and create eighteen (18)jobs and have a majority of those jobs available
to Iow- and moderate-income persons; and
WHEREAS, the amount of the Loan was ONE HUNDRED SIXTY-NINE
THOUSAND, SEVEN HUNDRED NINETY-SEVEN AND NO/100 DOLLARS
($169,797.00); and
WHEREAS, as security for the Loan, CITY filed UCC-1 statements on the
equipment purchased with the Loan proceeds and the owners of Kern-Tech executed
personal guaranties; and
WHEREAS, pursuant to the Agreement, the Loan was to bear no-interest and
was due and payable on March 26, 2002; and
WHEREAS, throughout the term of the Agreement, Kern-Tech hired forty-one
(41) individuals and 67.5% of them were Iow- or moderate-income persons; and
WHEREAS, prior to the Loan payoff date, Kern-Tech requested that the Loan be
restructured to permit loan payments to be made at ONE THOUSAND DOLLARS
($1,000.00) per month until the Loan was totally repaid; and
WHEREAS, on March 20, 2002, CITY and Kern-Tech amended the Agreement
to permit the Loan to be restructured for six months and then the issue would be
reviewed to determine if the payment amounts should be increased; and
WHEREAS, in September, 2002, one of the two partners of Kern-Tech passed
away and the remaining partner, Michael Miller, committed to continue the business,
repay the Loan and remain personally liable for the repayment; and
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WHEREAS, on November 6, 2002, the Agreement was again amended to allow
the monthly payments of ONE THOUSAND DOLLARS ($1,000.00) to continue, to
indicate that Michael Miller was now the sole guarantor on the Loan and to permit an
extension of the UCC-1 statement for another five years; and
WHEREAS, additionally, that November 6, 2002 amendment set forth that in
October, 2003, the amount of the monthly repayment would be revisited, and if Kern-
Tech could afford to increase its monthly payment, it would and, if Kern-Tech could not
afford to increase its monthly payments, other terms would be negotiated; and
WHEREAS, Kern-Tech has been approached by GF Kern-Tek, Inc., a California
corporation ("Buyer") willing to purchase the entire company and retain all of the current
employees; and
WHEREAS, Buyer will not consummate the purchase while the Loan is
outstanding and the UCC-1 statements are on file; and
WHEREAS, if the sale proceeds, after all of Kern-Tech's debts are paid,
approximately THIRTY-TVVO THOUSAND DOLLARS ($32,000.00) will be available for
repayment of the Loan; and
WHEREAS, CITY desires to declare Kern-Tech in default, permit the sale of
Kern-Tech to Buyer, to record a satisfaction and release of the UCC-1 statements and
make a claim on the unencumbered funds remaining after consummation of the
purchase.
NOW, THEREFORE, BE IT RESOLVED, incorporating the above recitals herein,
by the Council of the City of Bakersfield as follows:
Kern-Tech is in default under Agreement No. 97-65 and the Agreement is
hereby terminated; and
The purchase of Kern-Tech and all its assets and other liabilities by GF
Kern-Tek, Inc. is hereby approved by the City of Bakersfield;
City staff is authorized to file a claim on the unencumbered funds
remaining after the consummation of the sale of KermTech to GF Kern-
Tek;
The City of Bakersfield will record a satisfaction and release of the UCC-1
filings created by the debt set forth in Agreement No. 97-65 within ten (10)
calendar days of the adoption of this resolution.
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the
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by
Council of the City of Bakersfield at a regular meeting thereof held on
OCT 0 8 ;Z003 ., by the following vote:
NOES:
ABSTAIN:
ASSENT:
COUNCILMEMBERCOUCH, CARSON, BENHAM, MAGGARD, HANSON, SULLIVAN, SALVAGGIO
COUNCILMEMBER
COUNCILMEMBER
COUNCILMEMBER
APPROVED 06'f 0 8
Mayor
CITY CLERK and Ex Officio~lerk of the
Council of the City of Bakersfield
APPROVED AS TO FORM:
BART J. THILTGEN
City Attorney
~' JANICE SCANLAN
Deputy City Attorney
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