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14-0710_FRIENDS OF THE LIBRARY_Loan AgreementLIBRARY BOOKSTORE RELOCATION LOAN AGREEMENT THIS LIBRARY BOOKSTORE RELOCATION LOAN AGREEMENT ("Agreement") is made and entered into as of the 10th of July, 2014, by and between the CITY OF SAN JUAN CAPISTRANO, a California municipal corporation ("City"), and SAN JUAN CAPISTRANO FRIENDS OF THE LIBRARY, INC., a California nonprofit public benefit corporation ("Friends"). RECITALS A. Friends is a California nonprofit public benefit corporation existing to support and raise public awareness about supporting the San Juan Capistrano Library (the "Library") and its programs. B. Friends currently operates a bookstore at the northwest corner of the Library on real property owned by City (the "Bookstore"). Sales from the Bookstore provide necessary funding for Library operations. C. The Bookstore does not have direct pedestrian visibility or access from El Camino Real or Acjachema Street. For the past eight years, Friends has engaged in fundraising efforts to relocate the Bookstore. D. Friends, City, and the County of Orange have identified the "Bland Garden" area of the Library as an appropriate location for relocating the Bookstore because the area is located along El Camino Real, faces the Library's main parking lot, and construction within the area would be relatively simple. E. Friends has actively engaged in fundraising efforts to fund the relocation of the Bookstore, and has raised Two Hundred Eighty -Seven Thousand Two Hundred Forty -Three Dollars ($287,243) (the "Friends' Funds"). F. On September 18, 2012, Friends and City entered into that certain Memorandum of Understanding for Friends of the Library Bookstore Relocation that sets forth the parties' intentions with respect to the proposed relocation of the Bookstore (the "MOU"). The MOU provides for Friends to fund all of the costs of relocating the Bookstore. G. Pursuant to the MOU, (i) Friends provided to City plans and specifications for bidding the construction of the new bookstore building (the "Project"), and deposited with City the Friends' Funds, and (ii) City (a) solicited bids for construction of the Project, (b) with the consent of Friends, selected Avi-con Inc. dba CA Construction ("Avi-con"), the lowest bidder, to construct the Project, and (c) entered into a Contract with Avi-con to construct the Project (the "Avi-con Contract"). H. Avi-con's bid of Three Hundred Twenty -Seven Thousand Dollars ($327,000) exceeds the amount of the Friends' Funds by approximately Forty Thousand Dollars ($40,000). 235/028428-0002 7053515.2 a07/10/14 I. To enable the Project to move forward without further delay, City now desires to provide to Friends a loan in an amount up to Sixty Thousand Dollars ($60,000) (the "City Loan"). AGREEMENT: In consideration of the foregoing Recitals, which are incorporated herein by this reference, and the covenants and promises hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows: 1. City Loan. Subject to the terms and conditions of this Agreement, City shall provide to Friends the City Loan. At such time as the Friends' Funds have been fully expended on costs incurred by City under the Avi-con Contract, City shall disburse proceeds of the City Loan directly to Avi-con to pay costs incurred under the Avi-con Contract. 2. City Loan Note. Concurrently with the execution of this Agreement, and as a condition to City's obligation to provide the City Loan, Friends shall execute and deliver to City a promissory note substantially in the form attached hereto and incorporated herein as Exhibit "A" evidencing the City Loan (the "City Loan Note"). 3. Effectiveness of MOU. Except as expressly provided in this Agreement, all of the terms, conditions, and provisions set forth in the MOU shall remain in full force and effect. 4. Legal Actions. Any legal actions to enforce the terms of this Agreement must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Southern District of California. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. 5. Non -Liability of Officials and Employees of City. No member, official or employee of City shall be personally liable to Friends, or any successor in interest, in the event of any default or breach by City, or for any amount which may become due to Friends or its successors, or on any obligations under the terms of this Agreement. 6. Entire Agreement, Waivers , and Amendments. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and collectively with the MOU, supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of City and Friends. All amendments hereto must be in writing by the appropriate authorities of and Friends. 7. Time of Essence. Time is of the essence in the performance of this Agreement. 8. Interpretation. This Agreement shall be construed according to its fair meaning. 235/028428-0002 7053515.2 a07/10/14 —2— 9. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 10. Notices. Any written notice given under the terms of this Agreement shall be either delivered personally, delivered by reputable overnight courier that provides a receipt with the time and date of delivery, or by U.S. Mail, certified mail, postage prepaid, addressed to the party concerned as follows: To City: City of San Juan Capistrano Attn: City Manager 32400 Paseo Adelanto San Juan Capistrano, CA 92675 To Friends: San Juan Capistrano Friends of the Library Attn: President and/or Jennie Green, Treasurer, Government Liaison, Board of Directors 21495 El Camino Real San Juan Capistrano, CA 92675 Notices personally delivered or delivered by courier shall be effective upon receipt. Notices delivered by U.S. Mail shall be effective two (2) days after deposit in a U.S. Mail receptacle. 11. No Third Party Beneficiaries. The parties intend and agree that no third parties shall have any rights to enforce any provision of or any obligation created by this Agreement. 12. Counterparts. This Agreement may be executed in counterparts, each of which, when both parties hereto have signed this Agreement, shall be deemed an original. [SIGNATURES ON FOLLOWING PAGE] 235/028428-0002 7053515.2 a07/09/14 —3— IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first written above. RU AN TUCKER, LLP AL41re,6 City Attorney "City" "Friends" SAN JUAN CAPISTRANO FRIENDS OF THE LIBRARY, a California nonprofit public benefit corporation By: + cacif-" nie Green Its: l [END OF SIGNATURES] 235/028428-0002 7053515.2 a07/09/14 -4- EXHIBIT "A" CITY LOAN NOTE [SEE FOLLOWING DOCUMENT] 235/028428-0002 7053515.2 a07/09/14 PROMISSORY NOTE Loan Amount: $50,325.34 July 15, 2014 San Juan Capistrano, California FOR VALUE RECEIVED, SAN JUAN CAPISTRANO FRIENDS OF THE LIBRARY, a California nonprofit public benefit corporation ("Borrower") promises to pay to CITY OF SAN JUAN CAPISTRANO, a California municipal corporation ("City"), the principal sum of FIFTY THOUSAND THREE HUNDRED TWENTY FIVE DOLLARES AND THIRTY-FOUR CENTS ($50,325.34), pursuant hereto and in accordance with that certain Library Bookstore Relocation Loan Agreement between City and Borrower dated on or about the same date hereof (the "Agreement"), in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to City for the repayment of certain funds (the "City Loan") loaned to Borrower by City pursuant to the Agreement. 1. Interest. Except as provided in section 3 below, the disbursed and unpaid principal balance of the City Loan shall bear no interest. As used herein, the term "disbursed" shall mean and refer to the time when City has disbursed such funds to Avi-con, pursuant to the Agreement. 2. Repayment. Subject to the provisions of Section 4 herein, which provide for acceleration of the then outstanding principal and immediate payment thereof in the event of a default by Borrower, Borrower shall repay the outstanding principal balance of this Note and any other amounts due hereunder in five (5) equal annual installments, commencing on the first anniversary of this Note. 3. Acceleration. The entire outstanding principal balance of this Note, and other amounts payable hereunder, shall, at the election of City and upon notice to Borrower thereof, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower: (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note without curing such failure within ten (10) days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower); (b) The failure of Borrower to perform any non -monetary covenant or obligation under this Note without curing such failure within thirty (30) days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such that it cannot be 235/028428-0002 7053515.2 a07/09/14 1 cured within a 30 -day period, it shall be deemed cured if Borrower commences the cure within said 30 -day period and diligently prosecutes such cure to completion thereafter; (c) The failure of Borrower to perform any covenant or obligation under the Agreement or the MOU, unless the default is cured within the applicable cure period (if any). 4. Pre a meet• Application of Payments. At any time after the disbursement of the City Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the City Loan and any other sums outstanding without penalty. All payments, including any prepayments or funds received upon acceleration pursuant to Section 4 above, shall be applied first toward any outstanding costs of collection or other amounts (excluding City Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, and finally toward the remaining principal balance under the Note. 5. Borrower Assignment Prohibited. In no event shall Borrower assign or transfer any portion of this Note without the prior express written consent of City, which consent may be withheld or conditioned in City's sole and absolute discretion. 6. Attorneys' Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, Borrower will pay all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 7. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, first class mail certified or registered, return receipt requested, or reputable overnight delivery service that provides a receipt with the time and date of delivery and addressed as follows: To City: City of San Juan Capistrano Attn: City Manager 32400 Paseo Adelanto San Juan Capistrano, CA 92675 To Friends: San Juan Capistrano Friends of the Library Attn: President and/or Jennie Green, Treasurer, 21495 El Camino Real San Juan Capistrano, CA 92675 Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 235/028428-0002 7053515.2 a03/28113 -2- 8. Severability. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 9. Irate retation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Borrower has been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor of or against any party on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 10. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 11. Waivers. (a) Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time at City's sole, discretion and that City may accept security in consideration for any such extension or release any security for this Note at its sole discretion all without in any way affecting the liability of Borrower. (b) No extension of time for payment of this Note made by agreement by City with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part. (c) The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reasons whatsoever. (d) Borrower waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights or interests in or to properties securing this Note, and the benefit of any exemption under any homestead exemption laws, if applicable. (e) No previous waiver and no failure or delay by City in acting with respect to the terms of this Note or the MOU or Agreement shall constitute a waiver of any breach, default, or failure or condition under this Note, the MOU or Agreement. A waiver of any term of 235/028428-0002 7053515.2 a03/28/13 -3- this Note, the MOU or Agreement must be made in writing and shall be limited to the express written terms of such waiver. 12. Joint and Several Obligation. This Note is the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, successors and assigns. 13. Amendments and Modifications. This Note may not be changed orally, but only by an amendment approved by City and evidenced in a writing signed by Borrower and by City. 235/028428-0002 7053515.2 a03/28/13 [End — Signature page follows] In IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. ^rrAu v V -a i v r uism: RUTAN & U KER, LLP 171 a City A orney 235/028428-0002 7053515.2 a03/28/13 "Friends" -5- r SAN JUAN CAPISTRANO FRIENDS OF THE LIBRARY, a California nonprofit public benefit corporation By: J nie Green