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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 Page 1 of 3 Pages C:\Docurnents and Settings\dkramer~Local Settings\Temp\kerntech.doc Created on 9/2512003 4:17 PM 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. Page 2 of 3 Pages C:~Documents and Settings\dkramer\Local Settings\Temp\kerntech.doc Created on 9/25/2003 4:17 PM 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 Page 3 of 3 Pages C:\Documents and Settings\dkramer\Local Settings\Temp\kerntech.doc Created on 9/25/2003 4:17 PM