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HomeMy WebLinkAboutAGMT - Amonix Inc. Tina Knapp From: Patrick Gallegos Sent: Tuesday, September 03, 2013 2:59 PM To: Tina Knapp Subject: RE: Amonix Tina -The Amonix agreement is in effect until 12/14/2014. They have never been paid as they have never generated the minimum sales tax required for payment. Patrick Gallegos, Administrative Manager City of Seal Beach - 211 Eighth Street, Seal Beach, CA 90740 (562) 431-2527 Ext. 1308 s For Information about Seal Beach, please see our city website: http://www.sealbeachca.qov NOTICE:This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication,or an employee or agent responsible for delivering this communication to the intended recipient,please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents.Thank you. 1 AGREEMENT between - SEA1 v I • ii ,,,c:OUNTY ca,_ City of Seal Beach 211 - 8th Street Seal Beach, CA 90740 Amonix, Inc. 1709 Apollo Court Seal Beach, CA 90740 THIS AGREEMENT ( "Agreement "), dated as of December 14, 2009, is entered into by and between the CITY OF SEAL BEACH, a California charter city ( "City ") and AMONIX, INC., a Delaware corporation ("Al"). 1 of 9 S7296 -I 114 \1185862v5.doc RECITALS l� 041 A. AI designs, manufactures, and sells _photovoltaic power generation systems for large commercial and utility scale applications at j -09 Apollo Court, Seal Beach, CA 90740 (the "Site "). AI wishes to maintain and expand its operations in Seal Beach. B. AI's continued operation and expansion is expected to contribute to the economic vitality of the City, provide additional jobs, expand the City's tax base, and otherwise improve economic and physical conditions in the City. C. In order to induce AI to maintain its operations at the Site and expand its business in Seal Beach, the City is willing to provide contingent financial assistance to AI as described in this Agreement. D. The City Council finds and determines that performance of the City's obligations under this Agreement and the undertakings of Al required by this Agreement will promote the public health, safety, and welfare of the citizens of the City and will be of substantial economic benefit to the City. E. The City's obligations under this Agreement for any particular Fiscal Year of the City is contingent upon: 1. AI's remaining in the City during all of such Fiscal Year; 2. AI generating Sales and Use Taxes from operations within the City that equal or exceed a threshold amount of $25,000 during each Quarter; and 3. the City's actual receipt of such Sales and Use Taxes generated. AGREEMENT NOW, THEREFORE, in consideration of the promises set forth in this Agreement, the City and AI agree as follows: ARTICLE 1. DEFINITIONS The following terms as used in this Agreement shall have the meanings given unless expressly provided to the contrary: 1.1 "Fiscal Year ": the City's fiscal year, which commences July 1 and ends on June 30 of each calendar year. 1.2 "Operating Term ": the period commencing on the Starting Date and terminating on the fifth anniversary of the Starting Date. 1.3 "Party ": AI or City. "Parties ": AI and City. 1.4 "Penalty Assessments ": penalties, assessments, collection costs, and other costs, fees, or charges resulting from late or delinquent payment of Sales and Use Taxes. 1.5 "Quarter ": one -fourth of the Fiscal Year. The first Quarter shall commence July 1 and end on September 30. The second Quarter shall commence on October 1 and end on 2 of 9 S7296- 1114 \1185862v5.doc December 31. The third Quarter shall commence on January 1 and end on March 31. The fourth Quarter shall commence on April 1 and end on June 30. 1.6 "Sales and Use Taxes ": the taxes derived from AI's business conducted on the Site and allocated to and actually received by the City pursuant to the Uniform Local Sales and Use Tax Law, commencing with California Revenue and Taxation Code Section 7200 et seq., as amended. Sales and Use Taxes shall not include Penalty Assessments, taxes levied by, collected for or allocated to the State of California, the County of Orange, any district or other entity, or any funds paid, granted or allocated to the City by the State of California, the County of Orange, any district or other entity, notwithstanding that such funds received by the City are derived or measured by such other entity based upon taxable sales. For purposes of this Agreement, the term "Sales and Use Taxes" shall not include: (i) any portion of taxes received by the City from the operation of any of the Site that the City may be required to pay, transfer, assign, or allocate to any other entity or entities by virtue of any law now or hereafter existing, or by virtue of any agreement entered into between City and any other governmental entity under California state law; (ii) the State Board of Equalization's administrative and processing fee attributable to the City's portion of such taxes (calculated at the same percentage of such taxes as applies city- wide); and (iii) any sales tax "over- rides" for transportation and public safety. "Sales and Use Taxes" shall not be considered to have been received by the City until the City is able to confirm receipt of such taxes from the State Board of Equalization. 1.7 "Starting Date ": the first day of the first Quarter after September 30, 2009 in which the Sales and Use Taxes derived from AI's business actually received by the City exceeds $24,999.99. ARTICLE 2. OBLIGATIONS OF AI 2.1 Operation of Business. At all times during the Operating Term, Al shall operate its business at the Site. Al shall use Al's commercially reasonable efforts to cause the Site to be the point of sale for all of AI's sales. • 2.2 Site. Al may from time to time during the Operating Term move its business to another location in the City of Seal Beach; and the new location in the City of Seal Beach shall be deemed to constitute the "Site" for purposes of this Agreement. AI shall provide the City with 10 days advance notice of any such move. 2.3 Local, State, and Federal Laws. AI shall carry out the operation of its business in conformity with all applicable local, state, and federal laws. 2.4 Reports. AI shall provide to the City true and correct copies of all reports filed with the State Board of Equalization by Al within 10 days after filing every such report, in order to allow the City to preliminarily determine the amount of Sales and Use Taxes paid by Al on account of sales from the Site; provided, however, that the City shall not be deemed to have received any Sales and Use Taxes until the City's actual receipt thereof. 3 of 9 S7296 -1114\ 1185862v5.doc ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF AI Al makes the following representations and warranties as of the date of this Agreement: 3.1 Enforceability. AI has full right, power, and authority to execute and deliver this Agreement and all instruments executed pursuant hereto, and to perform the undertakings of AI contained in this Agreement and all agreements executed pursuant hereto. This Agreement and all agreements executed pursuant hereto constitute valid and binding obligations of AI which are legally enforceable in accordance with their terms, subject to the application and effect of all governmental requirements including, without limitation, the laws of bankruptcy, creditor's rights exceptions, and equity. 3.2 No Breach. None of the undertakings of Al contained in this Agreement and all agreements executed pursuant hereto violates any applicable governmental requirements, or conflicts with, or constitutes a breach or default under, any agreement by which Al or the Site is bound or regulated. 3.3 Financial Information. All financial information prepared by AI and delivered to the City by AI, including, without limit, information relating to AI or the Site, fairly and accurately represents such financial condition in all material respects as of the date such financial information was prepared. No material adverse change in such financial condition has occurred as of the date of this Agreement from that disclosed in such financial information. 3.4 Accuracy. To the best of AI's knowledge, all documents, reports, instruments, papers, data, information and forms of evidence delivered to the City by Al with respect to this Agreement and all agreements executed by Al pursuant hereto are accurate and correct in all material respects, are materially complete insofar as completeness may be necessary to give the City true and accurate knowledge of the subject matter thereof, and do not contain any material misrepresentation or omission by AI. The City may rely on such reports, documents, instruments, papers, data, information, and forms of evidence without any investigation or inquiry. 3.5 Taxes. To the best of AI's knowledge, Al has filed all federal, state, county and municipal tax returns required to have been filed by AI, and has paid all taxes which have become due pursuant to such returns. 3.6 Warranties Against Payment of Consideration for Agreement. AI represents and warrants that AI has not employed or retained any Person to solicit or secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees of AI. AI further represents and warrants that no gratuities, in the form of entertainment, gifts or otherwise have been or will be given by Al or any of its agents, employees, or representatives to any elected or appointed official or employee of the City in an attempt to secure this Agreement or favorable terms or conditions for this Agreement. Breach of the representations or warranties of this Section 3.6 shall automatically terminate this Agreement, without further notice to or action by either Party, and AI shall immediately refund any reimbursements made pursuant to Article 4 of this Agreement prior to the date of any such termination. 4 of 9 S7296 -1114\ 1185862v5.doc ARTICLE 4. FINANCIAL ASSISTANCE 4.1 Reimbursement Upon City Receipt of Quarterly Sales and Use Taxes Equal to or Greater Than $25,000. Within 15 days after the City confirms that its quarterly receipt of Sales and Use Taxes as defined in Section 1.6 exceeds $24,999.99, the City shall provide financial assistance to AI in an amount equal to 30% of such Sales and Use Taxes actually received for that previous Quarter. The City will have no obligation to provide any financial assistance to AI for any Quarter in which the Sales and Use Taxes actually received does not exceed $24,999.99. 4.2 Annual Adjustments. Promptly after each Fiscal Year that includes a portion of the Operating Term, the City shall determine with respect to the preceding Fiscal Year, both the amount of Sales and Use Taxes actually received by the City for each Quarter and the amount of all quarterly reimbursements made to AI pursuant to Section 4.1. Such accounting shall be used for purposes of making the adjustments allowed by this Section 4.2. Any Party claiming such an adjustment must give the other Party notice of its claim within 60 days of the close of the Fiscal Year for which an adjustment is claimed. 4.2.1 If for any reason (including but not limited to reporting errors or other adjustments) the amount of any quarterly payment made by the City for a Quarter in which the Sales and Use Tax generated by AI exceeded $24,999.99 is less than 30% of Sales and Use Taxes generated during the corresponding Quarter, the City shall pay to AI an adjustment payment equal to the amount of the deficiency. If for any reason (including but not limited to reporting errors or other adjustments) the amount of any quarterly payment made by the City for a Quarter in which the Sales and Use Tax generated by Al exceeded $24,999.99 is more than 30% of Sales and Use Taxes generated during the corresponding Quarter, the amount of the excess shall be applied towards the next quarterly payment due under Section 4.1; except that if any unapplied excess remains after the Operating Term, AI shall pay the amount of the unapplied excess to the City upon demand. 4.2.2 If for any reason (including but not limited to reporting errors or other adjustments) the amount of Sales and Use Taxes in a given Quarter during the Operating Term for which the City did not previously give AI any financial assistance under Section 4.1 exceeds $24,999.99 in the final Fiscal Year accounting, City shall pay AI in an amount equal to 30% of such Sales and Use Taxes actually received for that Quarter. If for any reason (including but not limited to reporting errors or other adjustments) the amount of Sales and Use Taxes in a given Quarter does not in the final Fiscal Year accounting exceed $24,999.99, AI shall reimburse City for any and all financial assistance previously paid to AI for that Quarter pursuant to Section 4.1. The amount of the excess shall be applied towards the next quarterly payment due under Section 4.1; except that if any unapplied excess remains after the Operating Term, Al shall pay the amount of the unapplied excess to the City upon demand. 4.3 Disputes. In the event of any dispute regarding the amounts payable under this Article, the Parties shall promptly meet and confer in good faith to attempt to resolve the dispute. 5 of 9 S7296- 1114 \1185862v5.doc ARTICLE 5. TERMINATION; CANCELLATION 5.1 Breach and Remedies. If either Party breaches any material obligation under this Agreement and fails to cure the breach within 30 days after receiving notice of the breach from the other Party (unless the breach cannot be cured within thirty days, in which event the cure period shall be extended so long as the Party commences the cure within the thirty -day period and thereafter diligently pursues the cure to completion), the non - defaulting Party may terminate this Agreement, in addition to all other remedies available at law or in equity. 5.2 Cancellation Option. AI may at its option cancel this Agreement at any time upon providing the City written notice at least 90 days prior to the effective date of cancellation. Notwithstanding Article 4, the City is under no obligation to provide financial assistance to AI if AI cancels this Agreement before the end of the Operating Term, and AI shall repay to the City all financial assistance provided by the City to AI pursuant to Section 4.1 of this Agreement during the Fiscal Year in which AI cancels this Agreement. ARTICLE 6. GENERAL PROVISIONS 6.1 Construction. The Parties acknowledge that each Party has been advised to have this Agreement reviewed by counsel, and agree that each Party and its counsel (and/or such other business and financial advisers as each Party desires) have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits hereto. 6.2 Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement, in their entirety, by this reference. 6.3 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions of this Agreement shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any rights or powers under this Agreement at any one time or more times be deemed a waiver or relinquishment of such right or power at any other time or times. 6.4 No Third Party Beneficiaries. The performance of the Parties' respective obligations under this Agreement is not intended to benefit any Person other than the City and AI, except as may be expressly provided otherwise in this Agreement. No Person not a signatory to this Agreement shall have any rights or causes of action against any Party to this Agreement as a result of that Party's performance or non - performance under this Agreement, except as otherwise expressly provided in this Agreement. 6.5 Notices, Demands and Communications Between the Parties. Notices, demands and communications between the City and AI shall be deemed sufficiently given if (i) delivered personally, (ii) dispatched by registered or certified mail, postage prepaid, return receipt requested, or (iii) sent by nationally - recognized reputable overnight delivery service to the principal offices of the City and AI as set forth below (or to such other address as a Party may from time to time designate by notice in accordance with this Section), and shall be deemed received upon delivery or refusal of delivery, if delivered personally, within 3 business days after 6 of 9 S7296- 1114 \1185862v5.doc deposit of same in the United States mail, if mailed, or one business day after deposit of same with a nationally recognized reputable overnight delivery service if sent by such a delivery service. To AI: Amonix, Inc. 1709 Apollo Court Seal Beach, CA 90740 (562) 200 -7700 Attn: Chief Financial Officer To the City: City of Seal Beach 211 8th Street Seal Beach, CA 90740 Attn: City Manager With a copy to: Richards, Watson & Gershon 355 South Grand Avenue 40th Floor Los Angeles, California 90071 Attn: Quinn M. Barrow 6.6 Release of City Officials. No member, official, agent, employee, or attorney of the City shall be personally liable to AI or any successor in interest of AI in the event of any default or breach by the City or for any amount that may become due to AI or its successors, on any obligations under the terms of this Agreement. AI hereby waives and releases any claim it may have personally against the members, officials, agents, employees, consultants, or attorneys of the City with respect to any default or breach by the City or for any amount that may become due to AI or its successors, or on any obligations under the terms of this Agreement. Al makes such release with full knowledge of Civil Code Section 1542, and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. California Civil Code Section 1542 provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 6.7 Attorneys' Fees. If any Party brings an action to enforce the terms hereof or declare its rights hereunder, the losing party shall reimburse the prevailing Party reasonable attorneys' fees incurred in connection with such action. If the City, without fault, is made a party to any litigation instituted by or against Al, then AI shall defend the City and save and hold the City harmless from all costs and expenses including all attorneys' fees incurred in connection with such litigation. 6.8 Venue. In the event of any litigation hereunder, all such actions shall be instituted in the Superior Court of the County of Orange, State of California, or in an appropriate municipal court in the County of Orange, State of California, or an appropriate Federal District Court in the Southern District of California. 7 of 9 S7296- 1114 \1185862v5.doc 6.9 Applicable Law. The laws of' the State of California shall govern the interpretation and enforcement of this Agreement. 6.10 Successors and Assigns. The provisions hereof shall be binding upon, and inure to the benefit of, the City and Al and their successors and assigns, as the case or context may require; provided, however, that AI may not assign its rights or obligations under this Agreement without the prior written consent of the City, except that AI may assign its rights and obligations under this Agreement without prior written consent of the City if (i) the assignment results in merely a change in the form of ownership of AI, or (ii) the assignment is made in conjunction with a sale of substantially all of the business of Al and the buyer maintains its operations at the Site. 6.11 No Joint Venture. Nothing contained herein shall be construed to render the City in any way or for any purpose a partner, joint venture, or associated in any relationship with Al, nor shall this Agreement be construed to authorize either Party to act as agent for the other. 6.12 Records. The City or any representative or designee thereof may at any time during normal business hours, upon reasonable prior notice, examine the books and records of Al, or any officer, employee, agent, contractor, affiliate, related person, assignee or franchisee, to the extent that such books and records relate, directly or indirectly, to the determination of Sales and Use Taxes generated from the Site. AI shall keep the originals or true and correct copies, at AI's choice, of all such records at the Site or at another location in Orange County, California, reasonably approved by City. 6.13 Waiver. The waiver by City or AI of any breach by the other Party of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant, or condition herein contained. Either Party's acceptance of any performance by the other Party after the due date of such performance shall not be deemed to be a waiver by either Party of any preceding breach by the other Party of any term, covenant, or condition of this Agreement, regardless of such Party's knowledge of such preceding breach at the time of acceptance of such performance. 6.14 Entire Agreement, Waivers and Amendments. This Agreement, together with all attachments and exhibits hereto and all documents to be executed and delivered pursuant to this Agreement, constitutes the entire understanding and agreement of the Parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. Any waiver, amendment, or modification of any provision of this Agreement must be in writing and signed by both Parties. 6.15 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 8 of 9 S7296- 1114 \1185862v5.doc IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the day and year first above written. CITY: AI: CITY OF SEAL BEACH, a California AMONIX C., a Delaware corporati municipal corporation and charter city By: 0-0 By: /_ ACi David Carma Name: B ri 0 be rfst,y City Manager G v Its: A'1'1'ES • r • 410 Linda Devine City Clerk Name: i Lh ael cif ' env-( of Its: tr--0 APPROVED AS TO RM: um M. Barrow City Attorney 9 of 9 S7296- 1114 \1185862v5.doc