04-945Council File # 0 � l`i�
Green Sheet # 3�ZZ-� �� —
Presented By
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA 2Z
Referred To Committee: Date
WHEREAS, in 1990, the City's Department of Finance and Management Services established a
performance bond collateral fund for small businesses participating in Saint Paul's Tazgeted Business
Program pursuant to a grant from O�ord Development Minnesota; and,
WHEREAS, because of changes in Minnesota Statutes, use of the bond fund has been underutilized in
recent yeazs; and,
WHEREAS, the Contract and Analysis Services Section of the Office of Financial Services has
gathered information about the needs of women-owned, minority-owned and small businesses through focus
groups and interviews with business assistance agencies and has determined that such businesses often need
access to working capital to participate in the public contracting process; and
WHEREAS, Contract and Analysis staff haue conducted a Request For Proposals process to identify
potential alternative uses of the performance bond fund and has received proposals from WomenVenture Inc.
and Selby Area CDC Inc. for converting the bond fund into revolving working capital funds to help minority-
owned, women-owned and small businesses to participate in Saint Paul's contracting process; and
WHEREAS, the creation of the working capital funds would help the City accomplish the purposes
identified in Chapter 84 of the Saint Paul Administrative Code (the Vendor Outreach Program; and
WHEREAS, the Mayor, pursuant to Section 10.07.1 of the Charter of the City of Saint Paul does
hereby certify that $104,913 in funds are available for appropriation in excess of those estimated in the 2004
budget and recommends the changes to the 2004 budget that follow; now, therefore be it
RESOLVED, upon recommendation of the Mayor and with the advice of the Office of Financial
Services and the Department of Planning and Economic Development, the Council of the City of Saint Paul
hereby approves the restructuring of the performance bond collateral fund (Activity 165-31158) under the
jurisdiction of the Office of Financial Services into the Vendor Outreach Program Working Capital Fund;
and be it
RESOLVED, that the Council approves the transfer of funds pursuant to the attached Loan Agreements,
to WomenVenture Inc. and Selby Area CDC Inc. to assist the City in administering revolving loan funds for
minority-owned, women-owned, and small businesses to be used for the purchase of performance bonds and
other authorized working capital needs that will allow such businesses to better participate in Saint Paul's
contracting process; and be it
FINALLY RESOLVED, that the City Council approves the following changes to the 2004 budget. to
impiement the above plan.
Current
Budget
OFFICE OF FINANCIAL SERVICES
Finance Snecial Proiects Fund- Vendor Outreach Workin¢ Cauital
Financing Plan:
165 - 31158 - 9830 Use of Fund Balance $75,000
Spending Plan
165-31158-0547 Payment to Subconhactors $75,000
I65-31158-0558 Interfund Transfers Out 0
Contract and Analvsis Services - Electronic Government Initiatives
Financing Plan:
124 - ll256 - 7305 Interfund Transfers In 0
Spending Plan:
124-11256-0299 Miscellaneous Services
DEPARTMENT OF PLANNING & ECONOMIC DEVELOPMENT
State and Local Grants ProErams Fund - Vendor Outreach Proeram
Financing Plan:
101-36310-7305-00000
Spending Plan
101-36310-0547-61669
Interfund Transfers In
Payment to Subcontractors - Vendor
Outreach Revolving Loan
�
��-9,�5
Amended
Chanaes Bud¢et
$29,913 $104,913
($75,000)
$104,913
$ 4,913
$ 4,913
0
$104,913
$ 4,913
$ 4,913
0 $100,000
$1000,000
0 $100,000 $100,000
����� Requested by the Department of:
Yeas I Navs � Absent
Benanav Y i
Bostrom ✓
Harris ✓
Heloaz ✓ I
Lantrv ✓
Montcromez�v ✓
Thune J
� n � n� � n � i �
Adopted by Council: Date ��+�f �P� ��
Adoption Certified by Council Secretary
/L�i "��%'.
-.. -. . . ..
Office of Financial Services
By � ^
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Form �gproved ,y City Attorney:
By �2� -
n
by Mayor For Submission
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� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
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I � DepartrnenUoffice/wuncii: � Datelnitiated: � Green Sheet NO: 3022502 '
F$ - Financial Services 16SEP-04
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� Contact Person 8 Phone:
� Deoartrnent SentToPerson InitiaVD
LINDA CAMp - CONT SERVS � 0 nancial rvices � � ,
68920 Assign 1 manaal Services De artment Director �
Must Be on Council Agenda by (Date): ( Number 2 'nancial Servlces I�ce Fioaocial Servi � I
For � I
Routing 3 'tv Attornev � Pete McCalt
Orde� 4 a or' �ce I Ma or/Assi pnt I
5 oaneil I Ciri Couucil
6 � CiN Clerk Ciri C�erk
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I
Total # of Signature Pages (Clip All Lowtions for Signature)
Action Requestetl:
ADOPT RESOLUTION AUTHORIZING THE ESTABLISHbfENT OF A VENDOROUTREACH WORKING CAPITAT,PROGRAM
WITH SELBY AREA CDC & WOMEN VENTURE & SETTING FORTH THE APPROPRIATE BUDGET AUTHORITY
�
Recommendations: Approve (A) or Rejed (Rj: Personal Service Contrects Must Answer the Following Questions:
Planning Commission 1. Has this person/firm ever worked under a contract tor this department?
CIB Committee Yes No
Civil Service Commission 2. Has this person/firm ever been a city employee?
Yes No
3. Does this person/firm possess a skill not normaily possessed by any
current ciry employee?
Yes No
F�cplain all yes answers on separate sheet and attach to green sheet �
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
CAS HAS IMPLEMENTED A PERFORMANCE BOND FUND AS PART OF THE VENDOR OUTREACH PROGRAM SINCE 1991.
BECAUSEOFCHANGESINSTATELAW,PERFORMANCEBONDSARENOLONGERMANDATORYONSNIALLCONTRACTS,
SOTI IEFUNDHASBEENUNDERUTILIZIEDINRECENTYEARS.FOCUSGROUPS&VENDORSURV EYSSUGGESTEDTHATTHI
FUND BE RESTRUCT[JRED TO ALLOW A BROADER SCOPE OF USE.
ASARESULT OF AN RFP PROCESS -Tf� CITYRECEIVED 2 PROPOSALS TOCONVERT THEBOND FUNDINTO A WORKING
CAPITAL REVOLVING LOAN FCIND. THIS WII,L PROVIDE A BE
Advantages If Approved:
NEW SOURCE OF WORKING CAPITAL WILL HELP MINORITY & WOMEN OWNED FIRMS TO PARTICIPATE IN THE CITY'S
CONTRACTINGPROCESS
pisadvantapes If Approved:
Disadvanqqes If Not Approved:
F[JNDS REMAIN UNDER UTILIZED. OPPORTCJNITY TO HELP BUSINESSES MISSEDG��,�� RCSP�SCI', G8Ci48�
Total Amount of 104913 CosURevenue Budgeted: y
Transaction:
FundinA Source: Activity Number. 165-39158
Financiai Information: g[JNDS BEING TRANSFERED FROM OFS TO PED FOR IMPLEMTATION ALONG WITH OTHER
(Explain) g�VOLVINGLOANPROGRAMS -
I
o �t-a�
City of Saint Paul
Worldng Capital Loan Agreement For
Vendor Outreach Program Revotving Loan Fund
TFIIS LOAN AGREEMENT (the "Agreement") is made and entered into this _ day
of , 2004, by and between the City of Saint Paul, a municipal corporation (the "City")
and WomenVenture, a Minnesota nonprofit corporation (the "Bonower") whose address is 2324
University Avenue, Saint Paul, Nfiimesota 55114.
WIT'NESSETH;
R'IIEREAS, on , 2004, the Saint Paul City Council, by resolution Number
, authorized a deferred Loan in the Amount of $50,000 ("Working Capital Loan") to the
Borrower to provide financing for the operation of a Revolving Loan Fund described in the
Program Statement which is attached hereto as Attachment A and Program Guidelines which is
attached hereto as attachxnent B; and
WHEREAS, the City and Bonower desire to enter into this Loan Agreement for the
purpose of setting forth their respective responsibilities with respect to the Working Capital
Loan.
NOW, THEREFOItE, the parties hereto agree as follows:
I. Definitions
As used in this Agreement, the following terms will have the following meaning:
Borrower pocuments: Any and all documents and instruments in connection with the Revolving
Loan Program as reasonably requested by the City; including those described herein.
CERT Proaram - The set of activities and policies administered by the joint powers entity
consisting of Saint Paul, Minneapolis, Hennepin County, and Ramsey CounTy to certify
businesses as Women-Owned, Minority-Owned or Small Business Enterprises.
End-Borrower: Any entity or person who borrows funds from the Borrower who is operating the
Revolving Loan Program with loan funds from the City.
End-Bonower Security Documents: The mortgage, security agreement and fixture financing
statement and any other document by the End-Borrower, as mortgagoz, and delivered to the
Bonower, as mortgagee, pursuant to which the End-Borrower has granted a mortgage and
security interest to the Borrower in and to the Proj ect to secure, among other things, payment of
the End-Borrower Note.
Note: The Note of even date herewith executed by the Borrower and payable to the order of the
City.
Oy-��15
Eli i�ble Aetivitv - The permitted use of the Revolving Loan Fund by the End-Borrower as
described in Section 5(e) of the City's Progr� Statement contained in Appendis A of this
Agreement.
End-Borrower Note- The End-Bosower Note executed by the End-Borrower and payable to the
order of the Borrower in an original principal amount defined in the Program Guidelines.
Vendor Outreach Proeram (VOP)- The set of policies and activities to assist certain businesses
as contained in Chapter 84 of the Saint Paul Administrative Code, and as it may be amended
from time to time.
VOP Revolvine Loan Proeram - The Bonower's Revolving Loan Program established with the
Working Capital Loan provided by the City pursuant to this Agreement.
II. Working Capital Loan Scope
A. Term.
This Agreement will take effect upon execution and will expire 60 months aRer that date
(2009) unless eazlier terminated as provided in this Agreement.
B. Descrirotion.
Subject to the terms and conditions of this Agreement, the City agrees to make the Working
Capital deferred Loan to the Borrower to be used for a Revolving Loan Program, which
Working Capital Loan will be disbursed pursuant to this Agreement. The Bonower will
perform all activities set forth in the Program Statement (Attachment A) and the Program
Guidelines (Attachment B).
C. Assienment. The Bonower is enritled to assign its interest to the City on a loan-by-loan basis,
provided that the Borrower first pursues all avenues and uses its best efforts to secure
payinent of the loan from the End-Bonower. When the End-Borrower is more than 30 days
delinquent on its payments to the Bonower, the Borrower will inform the City in writing of
such default and proceed to determine and pursue the best course of collec6on action to take
against the End-Borrower under the End-Borrower Note and Security Documents.
D. Fees and Incentives
1. The Borrower may collect from the End-Borrower a loan closing fee of $100 to cover lien
searches, UCC filings, liens, and release of liens upon payment in full. Loans requiring a
mortgage of property may incur additional fees, which the End-Borrower will be
responsible for and will be taken from the proceeds of the loan as part of the closing.
2. The Borrower may collect from the End-Borrower, a loan filing fee for filing the Security
Documents.
3. The Borrower may chazge an interest rate of from 10% to 14% or up to 4% over Prime,
whichever is greater.
4. The Borrower shall use any interest and fees eamed from loans to End-Borzowers to cover
the costs of loan adtninistration and servicing. The Bonower may collect additional fees
from the End-Borrower to provide technical assistance during the term of the loan.
5. The Working Capital Loan shall be drawn down and disbursed to the Borrower in one lump
sum within 30 days of the execution of this Agreement. Borrower shall house these funds
in its own account with a separate accounting code.
6_ The VJorking Capital Loan shall be a no-recourse loan so long as the Borrower uses all due
diligence to recover the funds in collection. All recoveries minus the cost of collection
shall be retumed to the loan fund principai.
E. Additional Funds
The Bonower shall make reasonable efforts to use the Working Capital Loan to leverage
additional funds from various sources to expand the scope of the fund to accomplish the
purposes described in the Program Statement. Any such additional funds shall be described
and related activity included as part of the regular quarterly reports required in Sec6on III B
of this A�eement.
III. Loan Agreement Requirements
A. Mazketin�.
1. Borrower agrees to provide mazketing and promotion of the Revolving Loan Program to
eligible businesses and entrepreneurs throughout the term of this Agreement. Mazketing
plans will be provided annually to the City.
B. Record and Re�orts.
1. The Borrower will submit to the Manager of the City's Contract and Analysis Services
Section on a quarterly basis, a full account of the status of the activities undertaken as part
of this Agreement. This shail include, but will not be limited to a11 of the information
listed in Section III (2) of the Program Statement (Attachment A).
2. The following records will be maintained by the Borrower, copies of which will be
submitted in such to the City upon its request in such form as the City may prescribe:
a. All receipts and invoices relating to expenditure or use of the Working Capital Funds,
including records documenting payments made and documentation of completion of the
Project for which the loan was initiated.
b. Accounting records that are supported by source documentation. Borrower will
establish a separate, identifiable accounting record for the Working Capital Loan.
Records will be sufficient to reflect a11 costs incurred in performance of the Working
Capital Loan. The books, records, documents, and accounting procedures, relevant to
the Working Capital Loan will be subject to examination by the City and state agencies
and the legislative auditor.
c. Records of Liability Insurance, including proof of insurance in effect, and proof of
payment of insurance premiums.
d. Records of Board or Committee meetings relating to decisions governing the use of the
Working Capital Loan funds.
e. Bonower will also subxnit to the City annually during the life of tivs Agreement,
financial statements prepazed in accordance with generally accepted accounting
principles. Fiscal year end statements will be compiled/reviewed/audited statements.
All such statements will include, but not be limited to, a listing of all assets and
liabilities of the Borrower, income and expense statements and income ta�c returns.
C. General Contract Requirements
1. Non Discrimination. The Bonower will be deemed a contractor for the application of all
provisions, ordinances, and other laws against discrimination. Borrower agrees to comply
with the provisions of Section 183 of the Saint Paul Legislative Code, as may be amended
from tune to time, and Minnesota Statutes, Section 363 as may be amended from time to
time, pertaining to discrimination and affirmative action during the term of this Agreement.
2. Insurance. The Borrower agrees that; to protect itself as well as the City under the
indemnity provision contained in this Agreement, it will obtain and keep in force, at its
expense during the term of this Agreement, Commercial General Liability of not less than
$1,000,000 per occurrence and will not contain an"aggregate"" policy limit unless
specifically approved in writing by the City.
The genezal liability coverage will contain an endorsement naming the City of Saint Paul as
Additional Named Insured as to acts committed by the Borrower for which the City could
be held responsible.
The Borrower will furnish Certificates of Insurance evidencing compliance with this
Section, which certificates will become part of this Agreement. Each insurance policy will
contain a provision requiring thirty (30) days notice of cancellation or change of the policy.
The City will not be obligated to honor payment requests at any time when the coverages
required by this Agreement are not in force. All Certificates of Insurance will contain a
statement that "Each coverage afforded to the City as an additional insured under this
policy expressly includes the duty to de€end and the duty to indemnify,"
3. Audit. The Borrower agrees to maintain all business records in such a manner as will
readily conform to the terxns of this Agreement and to make such materials available at its
office at all reasonable times during this Agreement period and for six (6) yeazs from the
date of the final payment under the contract for audit or inspection by the City, the Auditor
of the State of Minnesota, or other duly authorized representative.
4. Public Info. Borrower agrees to abide strictly by Chapter 13, Minnesota Government
Data Practice Act , and in particulaz Miuu. Stat.§§ 13.05, subd. 6 and 11; and 13.37, subd.
1(b) and Minn. Stat §§ 138.17 and 15.17. All of the data created, collected, received,
stored, used, maintained, or dissemivated by the Bonower in performing functions under
this Agreement is subject to the requirements of the Minnesota Govemment Data Practices
Act and Borrowert must comply with those requirements as if it were a governmental
entity. The remedies in Minn. Stat. § apply to the Borrower. If any provision of this
Agreement is in conflict with the Miunesota Government Data Pracrices Act or other
Minnesota state laws, state law shall control.
IV. Loan RepaymenUSecurity
A. Pavments.
1. Payxnents of principal will be deferred for the term of this Agreement execution and no
interest will accrue during this deferral period.
2. Upon the end of the A�eement, any remaining Working Capital Loan funds shall be
payable to the City in a lump sum in accordance with a schedule to be mutually agreed
upon, but no later than one yeaz after contract completion.....
3. All payments must be made in lawful money of the United States at the following address:
City of Saint Paul
VOP Working Capital Program
Office of Pinancial Services
160 City Hall/Court House Building
15 W. Kellogg Blvd.
SaintPaul, MN 55102
4. A prepayment fee will not e charged should the Working Capital Loan be paid earlier than
scheduled.
B. Securitv
1. Repayxnent of the
herewith.
Working Capital Loan will be evidenced by the Note of even date
2. The Borrower will not have any personal liability to repay this Note to the City, it being
recognized by the City that the obligations of the Borrower under this Note are nonrecourse
obligations. Notwithstanding the nonrecourse nature of the Borrower's obligations under
this Note, the Borrower is personally liable for:
a. Application of the payments received from an End-Borrower other than pursuant to
this Agreement; and
b. Fraud or misrepresentation by the Borrower.
3. The Borrower will secure the End-Borrower Note by all security documents necessary to
collateralize the End-Borrower's note, which may include:
a End-Bozrower's Loan Agreement and
b. End-Borrower's Note; and
c. Bnd-Bonower's Mortgage upon End-Bonower's real estate situated in Ramsey County,
Minuesota; and
d. End-Borrower's Commercial Security Agreement; and
e. Personal Guarauty of the End-Borrower; and\
f. End-Borrower's security interest in personal properiy pursuant to the Minnesota
Uniform Commercial Code on all macYunery and equipment, furniture and fistures now
owned or hereafter acquired by the Bonower.
4. Bonower operating a Revolving Loan Program must submit promissory note, mortgage,
and any other collateral/security documents to the City for approval prior to use.
5. To secure the repayment of the Borrower's Note to the City, Borrower will execute and
deliver to City a Working Capital Sub-Loan Security Agreement in the form attache.d
hereto as Attachment C, which will include a security interest in the account described in
Section II D(5), a UCC-1 Financing Statement, and for each End-Borrower. Bonower
sha11 execute and deliver to City in recordable form, a Conditional Assignment of the End
Boaower Note and Security Documents, and the original End-Borrower Note shall be
delivered to City.
V. Borrower's Covenants, Representations, Warranfies and Agreements
A. Borrower covenants, represents, wazrants, and agrees that:
1. Borrower is a Minnesota cozporation duly organized under the laws of the State of
Minnesota, is duly authorized to operate in the Sate, has the power to enter into and execute
this Agreement and by appropriate corporate action has authorized the execution and
delivery of this Agreement. A copy of organization documents will be provided upon
request to the City.
2. The borrower pocuments will not result in any breach of or constitute a default under any
other mortgage, lease, loan, grant, or credit agreement, corporate charter, by-law or other
instrument to which Borrower is a party or by which it may be bound or affected.
3. The Borrower pocwnents will constitute legal and binding obligations enforceable against
the Borrower as its interest appears.
4. Bonower will pemut the City, upon reasonable notice, to examine all books, records,
contracts, plans, permits, bills and statements of account pertaining to the Revolving Loan
Program and to make copies as the City may require.
5. Borrower warrants that no conflict of interest eacists as evidenced by signed Conflict of
Interest Statement disclosure attested to by the director and president of the board, which
is attached hereto as Attachment D.
6. The City of Saint Paui's Vendor Outreach Program wiJl be credited in any advertising or
publicity of this project.
7. All funds used in this Revolving Loan Program will be used for Working Capital to assist
End-Borrowers in developing the capacity to participate in the public contracting process.
8. Borrower reaffirms the truthfulness of the facts and statements contained in its application
for the Working Capital Loan.
9. Borrower wili obey and comply with all federal, staze, and local laws, rules and regulations
in Connection with tbe operation of the Revolving Loan Program described herein.
VI. Default
A. Event of Default.
Any one or more of the following will constitute an Event of Default under this Agreement.
1. Bonower fails to pay as and when due any amount under this Agreement and the Note.
2. Borrower fails to observe or perform or breaches any covenant, condition, or agreement
under this Agreement, Note or any other agreement executed contemporaneously herewith,
for a period of thirty (30) days after mailing of a notice to it by the City specifying such'
default or breach and requesting that it be remedied, unless the City will a�ee in writing to
an extension of such time prior to its expiration for such long periods as may be reasonably
necessary to remedy such default provided that Borrower is proceeding with reasonable
diligence to remedy same.
3. Borrow is in default of any term of any other agreement relafing to the Working Capital
Loan.
4. Any representation or warranty made by Borrower herein or any document or certificate
furnished to the City proves at any time to be in correct or misleading as of the date made.
5. Borrower engages in any illegal activities.
6. Borrower uses any of the Loan funds contrary to this Agreement.
7. Borrower does not use the Working Capital Funds in a timely manner.
8. Borrower fails to obtain and/or keep in force insurance of the types and the amounts as
specified within this Agreement, ar fails to indemnify and hold harmless the City as set
forth herein; in such event, Borrower will be liable for all costs and fees, including
reasonable attorney fees, that may be incurred by the City in enforcement of Borrower's
agreements to indemnify and(or to obtain and keep in force the agreed-upon insurance
coverage.
7
9. Borrower does any of the following:
a. files a petifion in bankruptcy or for a reorgauizarion, arrangement, composition,
readjustment, liquidation, dissolution, or similaz federal or state law; or
b. submits in writing its inability to pay its debts generally as they become due; or
c. is adjudicated as banlmtpt or insolvent; or if a petition or answer proposing the
adjudication of the Borrower as banlmipt or its reorganization under any present or
future federal bat��uptcy act or any similaz federal or staxe law is filed in any court
and such petition or answer is not discharged or denied within ninety (90) days after
the filing thereof; or a receiver, trustee or liquidator of the Borrower is appointed in
any proceeding brought against the Borrower and is not dischazged within ninety (90)
days after such appointment, or if the Borrower consents to an acquiescence in such
appointrnent.
VII. Remedies
A. Whenever any Event of Default will have happened and be subsisting, any one or more of the
foliowing remedial steps may to the extent permitted by law be taken by the City:
1. The City may terminate this Agreement.
2. The City may suspend its performance under this Agreement during the continuance of the
Event of Default;
3. The City may, at its option, enforce the Borrower's Note, and any other security documents.
4. The City may, at its option, declare the full amount of the Working Capital Loan plus
Accrued interest to be immediately due and payable whereupon the same will become
immediately due and payable by the Bonower.
5. The City may, at its oprion, enforce the assignments by the Borrower to the City of the
Notes and Security Instruments from the End-Bonower and assume control of the
Revolving Loan Fund.
6. The City may take whatever action at law or in equity may appear necessary to appropriate
to enforce performance and observance of any obligation, agreement, covenant,
representation, or warranty of the Bonower under this Agreement, or any related
instruxuent; or to otherwise compensate the City for any damages on account of such Event
of Default;
7. No remedy conferred upon or reserved to the City is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy will be cumulative and will
be in addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equiTy or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default will impair or any such right or power not will
be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. To entifle the City to exercise any
remedy reserved to it in this Section, it will not e necessary to give any notice, otber than
such notice as may be herein expressly required or be required by law.
VIII. Additional Provisions
A. Indexnnitv, Hold Harmless
The Borrower will bear all loss, expense (including attomey's fees) and damages in connection
with, and agree to indemnify, defend, and hold harmless the Ciry, its agents, servants, and
employees from all clanns, demands, and judgments made or recovered against the City, its
agents, servants, and employees, because of bodily injuries, including death at any time
resulting therefrom, and/or because of damages to property of the CiTy or others (including
loss of use) from any cause whatsoever, arising out of, incidental to, or in connection with the
Project, whether or not due to any act of omission or commission, including negligence of the
City or any Contractor or its or their employees, servants, or agents. The Borrower's liability
hereunder will not be limited to the extent of insurance cazried by or provided by the Borrower
or subject to any exclusions from coverage in any insurance policy.
B. Independent Contractor.
For the purpose of this Agreement, Borrower will be deemed an independent contractor (s)
and not an employee(s) or agent(s) of the City. Any and all employees or agents of the
Borrower will not be considered employees or agents of the City.
C. Notices
All notices provided for herein will be in writing and will be deemed to have been given when
delivered personally or when deposited in the United States mail, registered or certified,
postage prepaid, addressed as follows:
If to Borrower: WomenVenture
Attn: Christine Pigsley
2324 University Avenue
Saint Paul, MN 55114
If to City: Office of Financial Services
15 W. Kellogg Blvd
Room 160 City HalUCourt House Bldg.
St. Paul, Minnesota 55102
Attention: Director
and copy to: Assistant City Attomey
400 City Hall
15 West Kellogg Slvd.
St. Paul, Minnesota 55102
or addressed to any such party at such other address as such party will hereafter furnish by
notice to the other parties as above provided.
D. Binding Effect; Waiver.
The provisions of this Agreement will inure to the benefit of and be binding upon Bonower
and City and their respective successors and assign. No delay on the part of City in
exercising any right, power or privilege will operate as a waiver thereof, nor will any single
or partial exercise of any right, power or privilege constitute such waiver nor e�aust the
same, which will be continuing. The rights and remedies of City specified in tYus Agreement
will be in addition to and not exclusive of any other right and remedies which City, by
operation of law, would otherwise have.
E. Survival of Warranties
All agreements, representafions and warranties made in this Agreement by Borrower will
survive its termination.
F. Govezning Law.
This Agreement and the attachments are to be construed and enforced according to and
govemed by the laws of the State of Minnesota.
G. Counterparts.
This Agreement may be executed in any number of countezparts, all of which will constitute a
single agreement, any one of which bearing signatures of all parties will be deemed an
original.
H. Enfire A�reement.
This Agreement contains the entire agreement of the parties hereto on the matters covered
herein. No other agreement, statement or promise made by any party or by any employee,
officer or agent of any party hereto that is not in writing and signed by all the parties to this
Agreement will be binding.
I. No Joint Venture
The relationship between City and Borrower is solely that of lender/grantor and
borrower/grantee and the relationship by and among City, and Borrower is not, nor will it be
deemed to create, a partnership or joint venture in any eligible activity.
Venue.
All matters whether sounding in tort or in contract, relating to the validity, construction,
performance, or enforcement of this Agreement will be controlled by and deternvned in
accordance with the laws of the 5tate of Mimiesota, and Borrower agrees that alllegal actions
uutiated by Borrower with respect to or arising from any provision contained in this
Agreement will be initiated, filed and venued exclusively in the State of Minnesota, Ramsey
County, District Court.
isl
K. Assianment.
This Agreement may not be assigned by Borrower without the prior written consent of City.
L. Attomevs' Fees and Expenses. In the event the Borrower should default under any of the
provisions of this Agreement and the City should employ attomeys or incur other expenses for
the collection of amounts due hereunder or the enforcement of performance of any obligation
or agreeLnent on the part of the Borrower, the Borrower will on demand pay to the City the
reasonable fee of such attorneys and such other expenses so incurred.
TX. Amendment
This Agreement will not be amended or modified without the prior written approval of the City's
Director of Financial Services.
IN WITNESS WFIEREOF, the parties have caused this Aa eement to be executed the day and
yeaz first above written.
For the City:
For the Borrower:
I:�
Director, Office of Financial Services
Mayor or Designee
:
Its
Approved as to Form:
Assistant City Attomey
Funding:
Activity
TaYpayerID:
11
Attachment A:
Working Capital Loan Program Statement
I. Purpose
Saint Paul is interested in partnering with otfier entities to establish "working capital funds" to
help minority-owned, women-owned, and small business enterprises (MBEs, WBEs, SBEs)
grow and thrive in the local marketplace. A primary goal for the funds is to increase the
diversity of businesses who participate in the public contracting process, and particularly in Saint
Paul's contracting process. Therefore, one important measure of the success of the funds will be
the number of MBEs, WBEs and SBEs who receive loans and are then able to respond to Saint
Paui solicitations or serve as subcontractors for Saint Paul projects.
II. Criteria
The City will provide loans to community partners to create revolving working capital loan funds
that meet the following criteria:
1. Provide loans to businesses in accordance with these priorities:
a. MBEs, WBEs, SBEs who are already certified with the City of Saint Paul through its
CERT Program.
b. MBES, WBEs, SBEs who sell goods, services, maxerials, supplies that the City is
likely to purchase and who are eligible for certification and willing to go through the
certification process.
c. Other Saint Paul based, emerging small businesses.
2. Use the City's defened loan to leverage support for and additional funding to expand the
overall resources available to accomplish the purposes described here.
3. Provide a method for the City to monitor the use of the deferred loan and resutts achieved.
III. Requirements
1. Develop and submit an annual plan for identifying, trauung, and otherwise working with
businesses who may be eligible for the program. Plan should identify resources to be used,
activities, time lines, sample materials.
2. Pxovide quarterly reports to the City's designated contract managers that include:
a. Number and type of businesses contacted about the Warking Capital Loan Fund
b. Number and type of businesses that have submitted applications
c. Loans granted (number, amount of each, length of each, purpose of loan, type of
businesslcommodity area, certification status)
d. Loans rejected and reasons for rejection
e. Results of loan (i.e. whether loan allowed recipient to participate in a solicitation ox
other accomplishment)
12
3. Provide certificarion information and forms to each loan applicant as part of the application
process.
4. Participate in an annual review of the Working Capital Fund with City representatives
5. Laans to qualified businesses aze govemed by the following terms:
z. Interest Rate- interest rates on loans may vary from 10-14% interest or up to 4% over
Prime, whichever is �eater.
b. Application Fee- an application fee shall be assessed to each applicant (per owner of
the business and partners as applicable) to obtain a credit report.
c. Loan FeesfClosing Costs - A fee will be chazged to close each 1oan. This fee will
include lien searches, UCC filings, liens, and release of liens upon payment in full.
Loans requiring a mortgage of property will incur additional fees, which the borrower
is responsible for and will be taken from the proceeds of the loan as a part of the
closing.
d. Minimum/Maximum Loan Amounts- $250/$15,000 No more than one loan per
company or per individual at any given time from either the WomenVenture VOP
Working Capital Fund or the Selby Area CDC VOP Working Capital Fund. Applicants
that successfiilly pay off their debts are encouraged to apply again for future assistance.
e. Use of Funds- This loan fund is specifically designated to increase the ability of CERT
eligible businesses to compete for City, County and other public and private sector
procurement opportunities. Therefore, all funds must be linked to this purpose.
The Working Capital Loan Fund will lend far the following purposes:
• Staff payroll and associated expenses.
• Purchase of insurance, performance/payment bonds, and bid bonds.
• Purchase of inventory, materials and other tools necessazy to complete
the contracted activity.
• Purchase of equipment specific to a project or a line of business where
the costs can be quickly recovered through contract award.
The following uses aze not allowed under this program:
13
• Refinancing of any existing or previous debts.
• Payment of taxes, fines, fees or lien releases.
• Pinancial support (salary or draw) of the owner(s) of the business during
the pre-contract period.
• Purchase of real estate or capital improvements.
• Investment in any enterprise owned by another individual (buying into a
company of LLC/LLP}.
• Payment of franchise or network marketing membership fees.
IV. Contract Term and Amount
The City will provide a non-recourse, deferred loan of $50,000 to the Working Capital "Partner"
upon execution of a contract. The Partner will be expected to deposit the funds with a financial
institution acceptable to the City. The contract will be for a period of five years, with annual
reviews of performance and may be extended with sarisfactory performance and mutual
agreement between the City and the Parhier.
The Working Capital Partner will be allowed to retain any interest or fees generated from the
individual loans as compensafion for administering the revolving loan program
Upon contract completion or temunation, the deferred loan must be repaid to the City within one
year.
V. City Role and Responsibilities.
The City will work closely with the working capital partner(s) to achieve the goals of the
program. Staff in Contract and Analysis Services (CAS) will make available contracting and
bidding informafion, access to lists of certified vendors, inforxnation about past and estimated
spending , among other information. CAS staff will also be available to assist with training and
outreach. The City's Vendor Outreach Program Coordinator will be available to answer
questions about the CERT Program or certification proecess.
14
AtEachment B:
WomenVenture /VOP Revolving Fund Guidelines
I. Purpose
Recogniziug that many minority and disadvantaged businesses in SL Paul have the capability
to perform in contracts with the City and other business entities but often lack the capital
necessary to secure and successfully perform the contract. The VOP Revolving Loan Fund
provides small short-term loans to potential and new contract awardees for working capital
(such as bid bonds and insurance premiums) and assets (such as the purchase of raw
materials or tools) necessary to complete a job.
II. Applicant Eligibility
Eligible businesses include individuals (sole proprietors) and other organized business units
deemed eligible for the Central Certification Program (CERT). Businesses do not need to be
certified before application far loan fixnds but completion of the application is reguired at the
time of submission for program eligibility verification purposes.
The following CERT categories, as defined in Chapter 84 of the Saint Paul Administrative
Code {the Vendor Outreach Program) shall be used:
• Small Business Enterprise
• Minority-owned Business Enterprise
• Women-owned Business Enterprise
III. Minimum/Masimum Loan Amounts
Loan amounts will range from $250 to $15,000. No more than one loan per company or per
individual will be granted at any given time through either the WomenVenture VOF
Revolving Loan Fund or the Selby Area CDC/VOP Revolving Loan Fund. Applicants that
successfully pay off their debts aze encouraged to apply again far future assistance.
IV. Use of Funds
This loan fund is specifically designated to increase the ability of CERT eligible businesses
to compete for City, County and other public and private sector procurement opportunities.
Therefore, all funds must be linked to this goal..
A. The Working Capital Loan Fund will lend for the following purposes:
1. Staff payroll and associated expenses.
2. Purchase of insurance, performance/payment bonds, and bid bonds to meet a public
contract requirement.
3. Purchase of inventory, materials and other tools necessary to complete the conh�acted
activity.
4. Purchase of equipment specific to a project or a line of business where the costs can be
quickly recovered through coniract awazd.
B. The following uses are not allowed under this program:
1. Refmance of any existing or previous debts.
15
2. Payment of taYes, fines, fees or lien releases.
3. Financial support (salary or draw) of the owner(s) of the business during the pre-
contract period.
4. Purchase of real estate.
5. Investment in any enterprise owned by another individual (buying into a company of
LLC/LLP).
6. Payment of franchise or network marketing membership fees.
C. Disputes
The WomenVenhue Business Development D'uector shall have the fmal say in any dispute
of eligible use of funds. Appeals can be made direcfly to her in writing and she will have 15
working days to xespond to the claim.
IV. Loan Terms and Conditions
A. Term.
Loans will be granted for no more than 12 months.
B. Interest Rate
Interest rates on loans will vary from 10-14% interest or 4% over Prime, whichever is
greater. Islamic fmancing options aze available.
C. Application Fee
A$10 fee sl�all be assessed to each applicant (per owner of the business and paz as
applicable) to obtain a credit report.
A. Loan Fees/Closing Costs
A fee of $100 will be charged to close each loan. This will include lien searches, UCC
filings, liens, and release of liens upon payment in full. Loans requiring a mortgage of
property will incur additional fees, which the borrower is responsible for and will be taken
from the proceeds of the loan as a part of the closing.
V. Appiication Process
WomenVenture will use the following documents to make loan decisions:
L Loan application form.
2. A copy of the business' CERT nofification letter or a completed CERT application.
3. Credit report- WomenVenture will pull the report when the $10 fee is paid.
4. Copy of previous year's taxes- personal or business as applicable.
5. One month's bank statement or copy of previous quarter's profit and loss statement
and balance sheet.
6. Copy of the driver's license for each owner of the business.
Decision-Making Process-
l. Project Lending: a business with a secured contract can receive fmancing for a
specific set of expenses related to that contract. Applicant must show proof of the
16
contract and WomenVenture will contact and establish a repayment schedule based
upon payment schedule for contracted services. Payment to the client for the conttact
shall be in the form of a two pariy check in the name of the business and
WomenVenture. "1'he lending decision for these loans shall be made within 2
business days from the verification of the contract and repayment arrangements with
the contracting agency. Lending decisions will be made by the Business
Development Director with the sign off of the President of WomenVenture.
2. 2. Short Term Lending: applicants can apply for short-term working capital financing
through the WomenVenture loan application. Complete application packets will be
reviewed by loan committee members. The committee will meet up to twice
monthly. Loan applications will be due 5 business days prior to the loan committee
meeting for review and decision. A simple majority of the members present is
required to approve a loan. WomenVenture lending staff will recommend the term
and the amount based upon underwriting guidelines. Loans under $5,000 will go
through an internal loan committee made up of Business Development Department
staff that meets weekly.
17
Attachment C:
Worldng Capital Sub-Loan Security Agreement
�
c is� e
4 � e � �
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6c
CTTY OF SAINT PAUL, MINNESOTA
Vendor Outreach Worldng Capital
SUB-LOAN SECISRTTY AGREEMEN'I'
WomenVenture (hereinafter called "Debtor"), whose address is 2324 University Avenue,
St. Paui, MN 55114, for value received, hereby grants to The City of Saint Paul, 15 VJest
Kellogg Blvd, Saint Paul MN 55102 (hereinafter called "5ecured Party"), a security
interest in tbe property described below (heLeinafter collectively called "Collateral") to
secwe the payment of the principal and interest on and all obligauons under a note
(hereinafter called the "Promissory Note"), dated September _,2004, of the Debtor
payable to the order of the Secured Pariy, in the principal amount of Fifly thousand
Dollazs ($ 50,000), all renewals and extensions of the Note, and all costs, expenses,
advances and liabilities which may be made or incurred by Secured Party in the
disbursement, administration and collection of the loan evidenced by the Note and in the
protection, maintenance and liquidation of the security interest hereby granted with
interest at the maximum legal rate on such costs, expenses, advances and liabilities. The
Note and all other obligations secured hereby are herein collectively called the
"Liabilities."
2. The Collateral in which this security interest is granted shall consist of all of the
following-described property and Debtor's rights, title and interest in such property
whether now owned or hereafter acquired by Debtor and wherever located, together with
all proceeds and products therefrom.
A) All monies, instruments, and savings, checking or other deposit accounts
that are now or in the future in Debtor's custody or control which represent
payments from an End-Bonower, as that term is defined in the Loan Agreement
dated the same date hereof between the Debtor and Secured Party ("Loan
AgreemenY'); and
B) All of the End-Borrower Security Documents, as that terxn is defined in
the Loan Agreement.
All accessions, accessories, additions, amendments, attaclunents, modifications,
replacements and subtractions to any of the above; All proceeds and products of any of
the above; All policies of insurance pertaining to any of the above as well as any
proceeds and unearned premiums pertaining to such policies; and All books and records
pertaining to any of the above.
3. Debtor sha11 not transfer, sell or assign Debtor's interest in the Collateral nor permit any
other security interest to be created thereon without Secured Party's prior written
approval, except that Debtor may seli the inventory listed in Paragraph 2.c. hereof in the
ordinary course of business on customary terms and at usual prices and may collect as
Secured Pariy's agent sums due on accounts receivable and contract rights listed in
Parag�aphs 2.d. and 3.e. until advised otherwise by Secured Pariy.
19
4. Debtor sball keep, store or regularly garage all Collateral at locarions approved by
Secured Pariy in writing.
5. Debtor sY�all not conduct business under any other name than that given above nor change
or reorganize the type of business entity under which it does business except upon prior
written approval of Secured Party. If such approval is given, Debtor guarantees that all
documents, iustruments and agreements demanded by Secured Pariy shall be prepazed
and filed at Debtor's expense before such change of name or business enfity occurs.
6. Debtor shail pay the filing and recording costs of any documents or instruments
necessary to perfect, eatend, modify, or terminate the securiTy interest created hereunder,
as demanded by Secured Party.
Debtor shall maiutain all Coilateral in good condition, pay promptly all taxes, judgxnents,
or changes of any kind levied or assessed thereon, keep current all rent due on premises
where Collateral is located, and maintain insurance on all Collateral against such hazards,
in such amounts and with such companies as Secured Party may demand, a11 such
insurance policies to be in the possession of Secured Pariy and to contain a Lender's Loss
Payable Clause naming Secured Party in a matuier satisfactory to Secured Party. Debtor
hereby assigns to Secured Party any proceeds of such policies and a11 unearned premiums
thereon, and authorizes and empowers Secured Party to collect such sums and to execute
and endorse in Debtor's name all proofs of loss, drafts, checks and any other documents
necessary to accomplish such collections, and any persons or entities making payments to
Secured Party under the terms of this Pazagraph aze hereby relieved absolutely from any
obligation to see to the application of any sums so paid.
8. Debtor shall be in default thereunder if Debtor fails to perform any of the liabilities
imposed hereby or any other obligation required by the various instruments or papers
evidencing or securing this loan, or if the full balance of the loan becomes immediately
payable under the terms of such instruments, either automatically or by declaration of the
Secured Party. In the event of any default, Secured Party may, in its own discretion, cure
such default and, if it does so, any expenditures made for such purpose shall be added to
the principal of the Note.
9. In the event of default, Debtor shall assemble and make available a11 Collateral at any
place designated by Secured Party. Debtor acknowledges being advised of a
constitutional right to a court nofice and hearing to deternune whether, upon defaults
there is probable cause to snstain the validity of the Secured Party's claim and whether
the Secured Parly is entitled to possession of the Collateral and being so advised. Debtor
hereby voluntarily gives up, waives and surrenders any right to a notice and hearing to
determine whether there is probable cause to sustain the validity of Secured Party's claim.
Any notices required pursuant to any state or local law shall be deemed reasonable if
mailed by Secured Party to the persons entitled thereto at their last lrnown addresses at
least ten days prior to disposition of the Collateral, and, in reference to a private sale,
need state only that Secured Party intends to negotiate such a sale. Disposition of
20
Collateral shall be deemed commercially reasonable if made pursuant to a public offering
advertised at least twice in a newspaper of general circulation in the community where
the Collateral is located or by a private sale for a sum equal to or in excess of the
liquidation value of the Collateral as determined by Secured Party.
10. All rights conferred on Secured Party hereby aze in addition to those granted to it by any
state or local law or any other law. Failure or repeated failure to enforce any rights
hereunder shall not constitute an estoppel or waiver of Secured Party's rights to exercise
such rights acczuing prior or subsequent thereto. Secured Party sha11 not be liable for any
loss to Collateral in its possession, nor sha11 such loss dinunish the debt due, even if the
loss is caused or contributed to by Secured Party's negligence.
IN WITNESS WFIEREOF, Debtor consents to its property being collateralized as
herein provided this day of , 2004.
DEBTOR
WomenVenture
Signature
y��Iil:��It � • :711►•fi
City of Saint Paul, Minnesota
Signature
Date
Date
21
Attachment D:
Vendor Outreach Working Capital Fund
Promissory Note
22
CTTY OF SAINT PAUL, MIl�TNESOTA
Vendor Outreach Working Capital Program
PROMISSORY NOTE
Project Title: WomenVenture Revolving Loan
Amount: $ 50,000 Account Code:
Date: Saint Paul, Minnesota
FOR VALUE RECEIVED, WomenVenture Ina (the "Borrower") hereby promises to pay to
the order of the City of Saint Paul, Minnesota (the "City") or its successors and assigns, the
principal amount of Fifiy thousand Dollazs and no/100 ($50,000 ) or so much thereof as shall be
advanced pursuant to that certain Loan Agreement of even date herewith by and between
Borrower and City, (the "Loan Agreement") together with interest thereon, as follows:
1. The term of the Loan will be five (5) years.
2. Payments sha11 be made by Borrower to City in accordance with the Loan Agreement as
follows:
A. Payments of principal will be deferred for the term of the loan from the
date hereof and no interest will accrue during this deferral period.
B. Payments of interest will be deferred for the term of the loan from the date
hereof and no interest will accrue during this defenal period.
C. The total outstanding principal balance plus any accrued interest shall be due and
payable in full on , 2009 (Maturity Date).
3. Borrower agrees to pay to City a late payxnent chazge of five percent (5%) of the payment
due, if the payment of principai and/or interest due on the Loan is paid more than fifteen
(30) days after the due date thereof.
4. All payments must be made in lawful money of the United States. Checks must be made
out to the City of Saint Paul and sent to the following address:
City of Saint Paul
Office of Financial Services
160 City Hall
15 W. Kellogg Blvd.
Saint Paul, MN 55102
5. A prepayment fee will not be charged should the loan be paid eazlier than scheduled.
6. Ali payments made by or for the Bonower hereunder shall, at the option of the City, first
be applied to payment of intexest and the remainder to the payment of principal. The
Borrower is operating a revolving loan program and upon assigxunent of its interest in an
End Loan, as defined in the Loan Agreement, to the City in compliance with the Loan
Agreement, then the assignment will constitute a prepayxnent of this Note and shall be
applied to the remaining unpaid principal balance of this Note. Upon prepayment, this
Note shall be reamortized and a new monthiy payment of principal and interest shall be
23
detenniued using the remaining principal halance and the remaining term of this Note.
Payment of the entire or any portion of the outstanding principal balance plus accrued
intezest may be made prior to the Maturity Date hereof without any prepayment penalty.
8. In the event the undersigned shall fail to pay the interest on or principal amount of this
Promissory Note ("Note") when due, and if such failure be subsisting, or if any covenant
of the Loan Agreement or Security Agreement executed and delivered of even date
herewith by the Bonower in favor of City (the "Security Documents"), is breached or if a
default e�sts, the unpaid principal of the Note together with accrued interest sha11 be
immediately due and payable.
9. If this Note is reduced to judgment, such judgment shall bear the lawfui interest rate
pertainiug to judgments. The undersigned agrees to pay all costs of collection including
reasonable attomeys' fees and costs.
10. The remedies of the City, as provided herein, by law and in the Security Documents, are
not exclusive and shall be cumulative and concurrent and may be pursued singiy,
successively or together, at the sole discretion of the City, and may be exercised as often
as occasion therefore shall occur, and the failure to exercise any such right or remedy
shall in no event be construed as a waiver or release thereof.
1 l. The City shall not be deemed, by any act or omission or commission, to have waived any
of its rights or remedies hereunder unless such waiver is in writing and signed by the City
and then only to the extent specifically set forth in writing. A waiver with reference to
one event shall not be construed as a bar to or waiver of any right or remedy as to a
subsequentevent.
12. The Borrower shall not haue any personal liability to repay this Note to the City, it being
recognized by the City that the obligafions of the Borrower under this Note aze
nonrecourse obligations. Notwithstanding the nonrecourse nature of the Bonower's
obligafions under this Note, the Borrower is personally liable for:
A. Application of the payments received from an End-Borrower other than
pursuant to the Loan Agreement; and
B. Fraud or misrepresentafion by the Borrower.
13. Nothing in this Note shall affect, limit or impair the right of the City to seek a monetary
judgement against Borrower to the ea�tent necessary to enforce the Security Documents
(except that Borrower shall not be personally liable for payment of any such judgment to
the extent that the judgxnent is for payment of the indebtedness evidenced by this Note
and no deficiency judgement will be sought or obtained against Bonower for payment of
the indebtedness evidenced by this Note except for those acts described in Section 12
above).
14. Demand, protest and notice of demand and protest aze hereby waived.
15. This Note is made with reference to and shall be construed in accordance with the laws of
the State ofMinnesota.
24
IN WITNESS WHEREOF, the Borrower has executed and delivered this Note on the
date first mentioned above.
I:�1 : : I `1I91:7
I�
Its:
25
Attachment E:
City of Saint Paul Worldng Capital Loan
Conflict of Interest Statement for Borrower
To Whom It May Concern
WomenVenture has a conflict of interest policy which applies to all of its board members
and employees.
On behalf of the Boazd and employees of WomenVenture, I declaze that no conflicts of interest
currently exist or that any possibilities of conflicts of interest have been disclosed to the City of
Saint Paul in connect with WomenVenture's receiving funding through the City. I further
declaze that any possibility of a conflict of interest which may arise in the future n connecrion
with the Program will be disclosed to the City.
A conflict of interest may exist whenever a Board member, officer, or empioyee knows or has
reason to know that the organization with which that person is a participant in a project/program
that will yield a monetary or other material benefit to that person, the person's spouse or
dependent.
Si�ed by
Its
Date
26
O�t-°l�l5
City of Saint Paul
Worldng Capital Loan Agreement For
Vendor Outreach Program Revolving Loan Fund
THIS LOAN AGREEMEIVT (the "Agreement") is made and entered into this _ day
of , 2004, by and between the City of Saint Paul, a municipal corpoLation (the "City"} and
Selby Area CDC, a Minnesota nonprofit corporation (the "Borrower") whose address is 626
Selby Avenue, Saint Paul, Minnesota 55104.
WITNESSETH;
WHEREAS, on , 2004, the Saint Paul City Council, by resolution Number
, authorized a deferred Loan in the Amount of $50,000 ("Working Capital Loan") to the
Borrower to provide fmancing for the operation of a Revolving Loan Fund described in the
Program Statement which is attached hereto as Attachment A and Program Guidelines which is
attached hereto as Attachment B; and
W�IEREAS, the City and Bonower desire to enter into this Loan Agreement for the
purpose of setting forth their respective responsibilities with respect to the Working Capital
Loan.
NOW, THEREFORE, the parties hereto agree as follows:
I. Defmitions
As used in this Agreement, the following terms will have the following meaning:
Bonower pocuments: Any and all documents and insh•uments in connection with the Revolving
Loan Program as reasonably requested by the City; including those described herein.
CERT Proeram - The set of activities and policies administered by the joint powers entiTy
consisting of Saint Paul, Minneapolis, Hennepin County, and Ramsey County to certify
businesses as Women-Owned, Minority-Owned or Small Business Enterprises.
End-Borrower: Any enrity or person who borrows funds from the Borrower who is operating the
Revolving Loan Program with loan fivads from the City.
End-Borrower Securitv Documents: The mortgage, security agreement and fixture financing
statement and any other document by the End-Borrower, as mortgagor, and delivered to the
Borrower, as mortgagee, pursuant to which the End-Borrower has granted a mortgage and
security interest to the Borrower in and to the Project to secure, among other things, payment of
the End-Borrower Note.
Note: The Note of even date herewith executed by the Borrower and payable to the order of the
City.
���jy�
Eligible Activity - The permitted use of the Revolving Loan Fund by the End-Borrower as
described in Section 5(e) of the City's Program Statement contained in Appendix A of this
Agreement.
End-Bonower Note- The End-Borrower Note executed by the End-Bonower and payable to the
order of the Bonower in an original principal amount defined in the Prograui Guidelines.
Vendor Outreach Program (VOP)- The set of policies and activiries to assist certain businesses
as contained in Chapter 84 of the Saint Paul Administrative Code, and as it may be amended
from tune to time.
VOP Revolvine Loan Proeram - The Borrower's Revolving Loan Program established with the
Working Capital Loan provided by the City pursuant to this Agreement.
II. Working Capital Loan Scope
A. Term.
This Agreement will take effect upon execution and will expire 60 months from that date
(2009) unless eazlier terxninated as provided in this Agreement.
B. Description.
Subject to the terms and conditions of this Agreement, the City agrees to make the Working
Capital deferred Loan to the Borrower to be used for a Revolving Loan Program, which
Working Capital Loan will be disbursed pursuant to this Agreement. The Borrower wi11
perForm a11 activities set forth in the Program Statement (Attachment A) and the Program
Guidelines (Attachment B).
C. Assienment. The Bozrower is entitled to assign its interest to the City on a loan-by-loan basis,
provided tk�af the Borrower first pursues all avenues and uses its best efforts to secure
payment of the loan from the End-Borrower. When the End-Borrower is more than 30 days
delinquent on its payments to the Borrower, the Borrower will inform the City in writing of
such default and proceed to determine and pursue the best course of collection action to take
against the End-Borrower under the End-Bonower Note and Security Documents.
D. Fees and Incentives
1. The Borrower map collect from the End-Bonower a loan closing fee of $100 to cover lien
seazches, UCC filings, liens, and release of liens upon payment in fuli. Loans requiring a
mortgage of property may incur additional fees, which the End-Borrower will be
responsible for and will be taken from the proceeds of the loan as part of the closing.
2. The Borrower may collect from the End-Bonower, a loan filing fee for filing the Security
Documents.
3. The Bonower may charge an interest rate of from 10% to 14°l0 or up to 4% over Prime,
whichever is greater.
bµ-9'�5
4. The Borrower shall use any interest and fees earned from loans to End-Borrowers to cover
the costs of loan administration and servicing. The Borrower may collect additional fees
from the End-Borrower to provide technical assistance during the term of the loan.
5. The Working Capital Loan shall be drawn down and disbursed to the Borrower in one lump
sum withiu 30 days of the execution of this Agreement. Borrower shall house these funds
in its own account with a sepazate accounting code.
6. The Working Capital Loan shall be a no-recourse loan so long as the Borrower nses all due
diligence to recover the funds in collection. All recoveries minus the cost of collection
shall be returned to the loan fund principal.
E. Additional Funds
The Borrower shall make reasonable efforts to use the Working Capital Loan to leverage
additional funds from various sources to expand the scope of the fund to accomplish the
purposes described in the Program Statement. Any such additional funds shall be described
and related acfivity included as part of the regular quarterly reports required in Section IFI B
of this Agreement.
III. Loan Agreement Requirements
A. Mazketin�.
l. Borrower agrees to provide marketing and promotion of the Revolving Loan Program to
eligible businesses and entrepreneurs throughout the term of this Agreement. Markering
plans will be provided annually to the CiTy.
B. Record and Reports.
1. The Bonower will submit to the Manager of the City's Coniract and Analysis Services
Section on a quarterly basis, a full account of the status of the activities undertaken as part
of this Agreement. This shall include, but will not be limited to all of the information
listed in Section III (2) of the Program Statement (Attachment A).
2. The following records will be maintained by the Borrower, copies of which will be
submitted in such to the City upon its request in such form as the City may prescribe:
a. All receipts and invoices relating to expenditure or use of the Working Capital Funds,
including records documenting payments made and documentation of completion of the
Project for which the loan was initiated.
b. Accounting records that aze supported by source documentation. Borrower will
establish a separate, identifiable accounting record for the Worldng Capital Loan.
Records will be sufficient to reflect all costs incurred in performance of the Working
Capital Loan. The books, records, documents, and accounting procedures, relevant to
the Working Capital Loan will be subject to examination by the City and state agencies
and the legislarive auditor.
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c. Records of Liability Insurance, including proof of insurance in effect, and proof of
payment of insurance prexniums.
d. Records of Boazd or Committee meetings relating to decisions governing the use of the
Working Capital Loan funds.
e. Bonower will also submit to the City annually during the life of tYus Agreement,
finaucial statements prepazed in accordance with generally accepted accounting
principles. Fiscal yeaz end statements will be compiled/reviewed/audited statements.
All such statements will include, but not be lunited to, a listing of all assets and
liabilities of the Borrower, income and expense statements and income tax returns.
C. General Contract Requirements
1. Non-Discrimination. The Borrower will be deemed a contractor for the application of a11
provisions, ordinances, and other laws against discrimination. Bonower agrees to comply
with the provisions of Section 183 of the Saint Paul Legislative Code, as may be amended
from time to time, and Minnesota Statutes, Section 363 as may be amended from time to
time, pertaining to discrimination and affirmative action during the term of this Agreement.
2. Insurance. The Borrower agrees that, to protect itself as well as the City under the
indemnity provision contained in this Agreement, it will obtain and keep in force, at its
expense during the term of this Agreement, Commercial General Liability of not less than
$1,OOQ,000 per occurrence and will not contain an"aggregate"" policy 1'unit unless
specifically approved in writing by the City.
The general liability coverage will contain an endorsement naming the City of Saint Paul as
Additional Named Insured as to acts committed by the Bonower for which the City could
be held responsible.
The Bonower will fiunish Certificates of Insurance evidencing compliance with this
Section, which certificates will become part of this Agreement. Each insurance policy will
contain a provision requaring thirty (30) days notice of cancellation or change of the policy.
The CiTy will not be obligated to honor payment requests at any time when the coverages
required by this Agreement aze not in force. All Certificates of Insurance will contain a
statement that 'Bach coverage afforded to the City as an additional insured under this
policy expressly includes the duty to defend and the duty to indemnify."
Audit The Borrower agrees to maintain a11 business records in such a manner as will
readily conform to the terms of this Agreement and to make such materials available at its
office at all reasonable times during this Agreement period and for sis (6) years from the
date of the fmal payment under the contract for audit or inspection by the City, the Auditor
of the State of Minnesota, or other duly authorized representative.
4. Public Info. Borrower agrees to abide strictly by Chapter 13, Minnesota Government
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Data Pracfice Act , and in particulaz Minn. Stat.§§ li.05, subd. 6 and 11; and 1337, subd.
1(b) and Minu. Stat §§ 138.17 and 15.17. All of the data created, collected, received,
stored, used, inaintained, or disseminated by the Bonower in perfonning functions under
this Agreement is subject to the requirements of the Minnesota Govemment Data Practices
Act and Borrower must compiy with those requirements as if it were a governmental
enrity. The remedies in Minn. Stat. § apply to the Bonower. If any provision of this
Agreement is in conflict with the Minnesota Govemment Data Practices Act or other
Minuesota state laws, state law shall control.
IV. Loan RepaymentJSecurity
A. Payments.
1. Payments of principal will be deferred for the term of this Agreement execution and no
interest will accrue during this deferral period.
2. Upon the end of the Agreement, any remaining Working Capital Loan funds shall be
payable to the City in a luxnp sum in accordance with a schedule to be mutually ageed
upon, but no later than one yeaz after contract completion.
3. All payments must be made in lawful money of the United Staxes at the following address:
City of Saint Paul
VOP Working Capital Program
Office of Financial Services
160 City HalUCourt House Building
15 W. Kellogg Blvd.
Saint Paul, MN 55102
4. A prepayment fee will not e chazged should the Working Capital Loan be paid earlier than
scheduled.
B. Securitv
1. Repayment of the Working Capital Loan will be evidenced by the Note of even date
herewith.
2. The Borrower will not have any personal liability to repay this Note to the City, it being
recognized by the City that the obligations of the Borrower under this Note are nonrecourse
obliga6ons. Notwithstanding the nonrecourse nature of the Bonower's obligafions under
this Note, the Borrower is personally liable for:
a. Application of the payments received from an End-Bonower other than pursuant to
this Agreement; and
b. Fraud or misrepresentation by the Borrower.
3. The Borrower will secure the End-Borrower Note by all security documents necessary to
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collateralize the End-Borrower's note, which may include:
a End-Borrower's Loan Agreement and
b. End-Borrower's Note; and
c. End-Borrower's Mortgage upon End-Borrower's real estate situated in Ramsey County,
Minnesota; and
d. End-Borrower's Commercial Security Agreement; and
e. Personal Guaranty of the End-Borrower; and\
f. End-Borrower's security interest in personal properiy pursuant to the Minnesota
Uniform Commercial Code on all machinery and equipment, fiuniture and fixtures now
owned or hereafter acquired by the Borrower.
4. Borrower operating a Revolving Loan Program must submit promissory note, mortgage,
and any other collateraUsecurity documents to the City for approval prior to use.
To secure the repayment of the Borrower's Note to the City, Borrower will execute and
deliver to City a Working Capital Sub-Loan Security Agreement in the form attached
hereto as Attachment C, which will include a security interest in the account described in
Section II D(5), a UCGl Financing Statement, and for each End-Bonower. Borrower
shall execute and deliver to City in recordable form, a Conditional Assignment of the End
Borrower Note and Security Documents, and the original End-Borrower Note shall be
delivered to City.
V. Borrower's Covenants, Representations, Warranfies and Agreements
A. Bonower covenants, represents, warrants, and agrees that:
1. Borrower is a Minnesota corporation duly organized under the laws of the State of
Minnesota, is duly authorized to operate in the Sate, has the power to enter into and execute
this Agreement and by appropriate corporate action has authorized the execution and
delivery of this Agreement. A copy of organization documents will be provided upon
request to the City.
2. The bonower pocuments will not result in any breach of or constitute a default under any
other mortgage, lease, loan, grant, or credit agreement, corporate charter, by-law or other
instrntnent to which Borrower is a party or by which it may be bound or affected.
3. The Borrower pocuments will constitute legal and binding obligations enforceable against
the Borrower as its interest appeazs.
4. Borrower will permit the City, upon reasonable notice, to examine all books, records,
contracts, plans, permits, bills and statements of account pertaining to the Revolving Loan
Program and to make copies as the City may require.
5. Borrower warrants that no conflict of interest exists as evidenced by signed Conflict of
Interest Statement disclosure attested to by the director and president of the board, which
is attached hereto as Attachment E.
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6. The City of Saint Paul's Vendor Outreach Prograzn will be credited in any advertising or
publicity of this project
7. All funds used in this Revolving Loan Program will be used for Working Capital to assist
End-Borrowers in developing the capacity to participate in the public contracting process.
8. Borrower rea�rms the truthfulness of the facts and statements contained in its application
for the Working Capital Loan.
9. Bonower will obey and comply with all federal, state, and local laws, rules and regulations
in Connection with the operation of the Revolving Loan Program described herein.
VI. Default
A. Event of Default.
Any one or more of the following will constitute an Event of Default under this Agreement.
1. Borrower fails to pay as and when due any amount under this Agreement and the Note.
2. Bonower fails to observe or perform or breaches any covenant, condition, or agreement
under this Agreement, Note or any other agreement executed contemporaneously herewith,
for a period of thirty (30) days after mailing of a notice to it by the City specifying such
defautt or breach and requesting that it be remedied, unless the City will agree in writing to
an extension of such time prior to its expiration for such long periods as may be reasonably
necessary to remedy such default provided that Borrower is proceeding with reasonable
diligence to remedy same.
3. Bonow is in default of any term of any other agreement relafing to the Working Capital
Loan.
4. Any representation or warranty made by Borrower herein or any document or certificate
furnished to the City proves at any time to be in correct or misleading as of the date made.
5. Borrower engages in any illegal activities.
6. Bonower uses anp of the Loan funds contrary to this Agreement.
7. Borrower does not use the Working Capital Funds in a timely manner.
8. Borrower fails to obtain and/or keep in force insurance of the types and the amounts as
specified within this Agreement, or fails to indemnify and hold hannless the City as set
forth herein; in such event, Borrower will be liable for all costs and fees, including
reasonable attornep fees, that may be incutred by the City in enforcement of Borrower's
agreements to indemnify and/or to obtain and keep in force ttae agreed-upon insurance
coverage.
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9. Borrower does any of the following:
a. files a petition in bankruptcy or for a reorganizarion, arrangement, composition,
readjustment, liquidation, dissolution, or similaz federal or state law; or
b. submits in writing its inability to pay its debts generaily as they become due; or
c. is adjudicated as banlffupt or insolvent; or if a petifion or answer proposing the
adjudication of the Bonower as bankzlipt or its reorganization under any present or
future federal bankruptcy act or any similaz federal or state law is filed in any court
and such petition or answer is not dischazged or denied within ninety (90) days after
the filing thereof; or a receiver, trustee or liquidator of the Bonower is appointed in
any proceeding brought against the Bonower and is not dischazged witYun ninety (90)
days after such appointment, or if the Borrower consents to an acquiescence in such
appointment.
VII. Remedies
A. Whenever any Event of Default will have happened and be subsisting, any one or more of the
following remedial steps may to the extent permitted by law be taken by the City:
1. The City may terminate this Agreement.
2. The City may suspend its performance under this Agreement during the continuance of the
Event of Default;
3. The City may, at its option, enforce the Borrower's Note, and any other security documents.
4. The City may, at its option, declare the full amount of the Working Capital Loan plus
Accrued interest to be immediately due and payable whereupon the same will become
immediately due and payable by tbe Borrower.
5. The City may, at its option, enforce the assignments by the Borrower to the City of the
Notes and Security Instruments from the End-Bonower and assume control of the
Revolving Loan Fund.
6. The City may take whatever action at law or in equity may appeaz necessary to appropriate
to enforce performance and observance of any obligation, agreement, covenant,
representarion, or warranty of the Borrower under this Agreement, or any related
instnunent; or to otherwise compensate the City for any damages on account of such Event
of Default;
7. No remedy conferred upon or reserved to the City is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy will be cumulative and will
be in addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default will 'unpair or any such right or power not will
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be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. To entiUe the City to exercise any
remedy reserved to it in this Section, it will not e necessary to give any notice, other than
such notice as may be herein expressly required or be required by law.
VIII. Addifionai Provisions
A. Indemnitv, Hold Harmless
The Bonower will beaz all loss, expense (including attorney's fees) and damages in connection
with, and agree to indemnify, defend, and hold liarmless the City, its agents, servants, and
employees from all clauns, demands, and judgments made or recovered against the City, its
agents, servants, and employees, because of bodily injuries, including death at any tune
resulting therefrom, and/or because of damages to property of the City or others (including
loss of use) from any cause whatsoever, arising out of, incidental to, or in connection with the
Project, whether or not due to any act of omission or comxnission, including negligence of the
City or any Contractor or its or their employees, servants, or agents. The Borrower's liability
hereunder will not be limited to the extent of insurance carried by or provided by the Borrower
or subject to any exclusions from coverage in any insurance policy.
B. Independent Contractor.
For the purpose of this Agreement, Borrower will be deemed an independent contractor (s)
and not an employee(s) or agent(s) of the City. Any and all employees or agents of the
Bonower will pot be considered employees or agents of the City.
C. Notices
All notices provided for herein wi11 be in writing and will be deemed to have been given when
delivered personally or when deposited in the United States mail, registered or certified,
postage prepaid, addressed as follows:
If to Borrower: Selby Area CDC
Attn: Executive Director
626 Selby Avenue
Saint Paul, MN 55104
If to City: Office of Financial Services
15 W. Kellogg Blvd
Room 160 City Ha1UCourt House Bldg.
St. Paul, Minnesota 55102
Attention: Director
and copy to: Assistant Cit7 Attorney
400 City Hall
15 West Kellogg Blvd.
St. Pau1, Minnesota 55102
or addressed to any such party at such other address as such party will hereafter furnish by
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notice to the other parties as above provided.
D. Bindin2 Effect; Waiver.
The provisions of this Agreement will inure to the benefit of and be binding upon Bonower
and City and their respective successors and assigp. No delay on the part of City in
exercising anp right, power or privilege will operate as a waiver thereof, nor will any single or
partial exercise of any right, power or privilege constitute such waiver nor e�aust the same,
which will be continuing. The rights and remedies of City specified in this Agreement will be
in addition to and not exclusive of any other right and remedies which CiTy, by operation of
law, would otherwise have.
E. Survival of Warrauties
All agreements, representations and warranties made in this Agreement by Borrower will
survive its terminafion.
E GoveminQ Law.
This Agreement and the attachments aze to be construed and enforced according to and
governed by the laws of the State of Minnesota.
G. Counterparts.
This Agreement may be executed in any number of counterparts, all of which will constitute a
single agreement, any one of which bearing signatures of all parties will be deemed an
original.
H. Entire Aereement.
This Agreement contains the entire agreement of the parties hereto on the matters covered
herein. No other agreement, statement or promise made by any party or by any employee,
officer or agent of any party hereto that is not in writing and signed by all the parties to this
Agreement wili be binding.
T. No Joint Venture
The relationship between City and Borrower is solely that of lender/grantor and
borrower/grantee and the relationship by and among City, and Borrower is not, nor will it be
deemed to create, a partnership or joint venture in any eligible activity.
Venue
Ali matters whether sounding in tort or in contract, relating to the validity, construction,
performance, or enforcement of this Agreement will be controlled by and determined in
accordance with the laws of the State of Minnesota, atid Borrower agrees that alllegal actions
initiated by Borrower with respect to or azising from any provision contained in this
Agreement will be initiated, filed and venued exclusively in the State of Minnesota, Ramsey
County, District Court.
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K. Assi�nment.
This Agreement may not be assigned by Borrower without the prior written consent of City.
L. Attomevs' Fees and Exnenses. In the event the Borrower should default under any of the
provisions of this Agreement and the City should employ attorneys or incur other expenses for
the collection of amounts due hereunder or the enforcement of performance of any obligation
or agreement on the part of the Borrower, the Bonower will on demand pay to the City the
reasonable fee of such attomeys and such other expenses so incurred.
IX, Amendment
This Agreement will not be amended or modified without the prior written approval of the City's
Director of Financial Services.
IN WITNESS WI�REOF, the parties have caused this Agreement to be executed the day and
year fust above written.
For the City:
Director, Office of Financial Services
Mayor or Designee
Approved as to Form:
Assistant City Attorney
Funding:
Activity
For the Borrower:
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Its
TaxpayerID:
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04 -94 5
Attachment A:
Working Capital Loan Program Statement
I. Purpose
Saint Paul is interested in parniering with other entities to establish "working capital funds" to
help minority-owned, women-owned, and small business enterprises (MBEs, WBEs, SBEs)
grow and ttirive in the local marketplace. A prunary goat for the funds is to increase the
diversiTy of businesses who participate in the public contracting process, and particularly in Saint
Paul's contracting process. Therefore, one unportant measure of the success of the funds will be
the number of MBEs, WBEs and SBEs who receive loans and are then able to respond to Saint
Paul solicitations or serve as subcontractors for Saint Paul projects.
II. Criteria
The CiTy will provide loans to communiry pazmers to create revolving working capital loan funds
that meet the following criteria:
1. Provide loans to businesses In accordance with these priorities:
a. MBEs, WBEs, SBEs who aze already certified with the City of Saint Paui through its
CBRT Program.
b. MBES, WBEs, 5BEs who seli goods, services, materials, supplies that the City is
likely to purchase and who are eligible for certification and willing to go through the
certification process.
c. Other Saint Paul based, emerging small businesses.
2. Use the City's deferred loan to leverage support for and additional funding to expand the
overall resources available to accomplish the purposes described here.
3. Provide a method for the City to monitor the use of the deferred loan and results achieved.
ITI. Requirements
1. Develop and submit an annual plan for identifying, training, and otherwise working with
businesses who may be eligible for the program. Plan should identify resources to be used,
activities, time lines, sample materials.
2. Provide quarterly reports to the City's designated contract managers that include:
a. Number and type of businesses contacted about the Working Capital Loan Fund
b. Number and type of businesses that have submitted applicafions
c. Loans granted (number, amount of each, length of each, purpose of loan, type of
business/commodity area, certification status)
d. Loans rejected and reasons for rejecrion
e. Results of loan (i.e. whether loan allowed recipient to participate in a solicitation or
other accomplishment)
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3. Provide certification information and forms to each loan applicant as part of the applicarion
process.
4. Participate in an annual review of the Working Capital Fund with City representatives
5. I,oans to qualified businesses are governed by the following terms
a. Interest Rate- interest rates on loans may vary from 10-14% interest or up to 4% over
Prime, whichever is greater.
b. Application Fee- an application fee shall be assessed to each applicant (per owner of
the business and partners as applicable) to obtain a credit report.
c. Loan Fees/Closing Costs - A fee will be charged to close each loan. This fee will
include lien seazches, UCC filings, liens, and release of liens upon payment in full.
Loans requiring a mortgage of property will incur additional fees, which the borrower
is responsible for and will be taken from the proceeds of the loan as a part of the
closing.
d. MinimumlMcttimum Loan Amounts- $250!$15,000 No more than one loan per
company or per individual at any given time from either the WomenVenture VOP
Working Capital Fund or the Selby Area CDC VOP Working Capital Fund. Applicants
that successfully pay off their debts are encouraged to apply again for future assistance.
e. Use of Funds- This loan fund is specifically designated to increase the ability of CERT
eligible businesses to compete for City, County and other public and private sector
procurement opportunities. Therefore, all funds must be linked to this purpose.
The Working Capital Loan Fund will lend for the following purposes:
• Staff payroll and associated expenses.
• Purchase of insurance, performance/payment bonds, and bid bonds.
• Purchase of inventory, materials and other tools necessazy to complete
the contracted activity.
• Purchase of equipment specific to a project or a line of busmess where
the costs can be quickly recovered through contract awazd.
The following uses are not allowed under this program:
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• Refivancing of any existing or previous debts.
• Payment of t�es, fines, fees or lien releases.
• Financial support (salary or draw) of the owner(s) of the business during
the pre-contract period.
• Purchase of real estate or capital improvements.
• Investrnent in any enterprise owned by another individual (buying into a
company of LLC/LLP).
• Payment of franchise or network mazketing membership fees.
IV. Contract Term and Amount
The City will provide a non-recourse, deferred loan of $50,000 to the Working Capital "Partner"
upon execution of a contract. The Partner will be expected to deposit the funds with a financial
institution acceptable to the CiTy. The contract will be for a period of five years, with annual
reviews of performance and may be extended with satisfactory performance and mutual
agreement between the City and the Partner.
The Working Capital Partner will be allowed to retain any interest or fees generated from the
individual loans as compensation for administering the revolving loan program
Upon contract completion or ternrination, the deferred loan must be repaid to the City within one
yeaz.
V. City Role and Responsibilities.
The City will work closely with the working capital pariner(s) to achieve the goals of the
program. Staff in Contract and Analysis Services (CAS) will make available contracting and
bidding information, access to lists of certified vendors, information about past and estimated
spending, among other informafion. CAS staff will also be available to assist with training and
outreach. The City's Vendor Outreach Program Coordinator will be available to answer
questions about the CERT Program or certification process.
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Attachment B:
Selby Area CDC /VOP Revolving Fund Guidelines
In an effort to assist the City of St. Paul Vendor Outreach Program attaiu its goal of increasing
the diversity of businesses who participate in the public contract process, the Selby Area CDC
(SACDC) proposes to structure and manage a$�0,000 Working Capital progam as follows:
1. Provide loans to businesses in accordance with theses priorities:
a. SACDC will contact and promote the working capital program to St. Paul based
organizations that provide technical assistance to, or are in contact with MBBs, WBEs
and SBEs, e.g., the Minority Contractor's Association, St. Paul Urban League, and the
Neighborhood Development Center. In addition to the outr�each to these types of
organizations, public service announcements in local newspapers and on metro wide
radio stations may also be conducted.
b. SACDC will target businesses interested in becoming certified with the City of St. Paul
through its CERT program and assist those that meet the certification criteria through the
application process. Those businesses that aze not eligible for CERT admission will be
provided technical assistance to aid them toward program eligibility.
c. SACDC will attempt to attract other St. Paul based emerging small business through
collaborative recruihnent efforts with partners such as the Selby Area Business
Association (SABA), St. Paul Chamber of Commerce, etc.
2. Use of the City's WCL to leverage support for addition fundiug to expand the
overall resources available: The Working Capital Loan (WCL) will provide financial
assistance for new and growing small businesses to obtain loans from private and non-
profit lenders. Selby Area CDC would help business owners arrange bank or other non-
profit financing by guaranteeing (pledging a Certificate of Deposit) up to 75% or the first
$15,040 of the loan whichever is less. The amount of the loan guaranteed would not
exceed $15,000, but there would be no ceiling on the loan amount.
REQUIREMENTS
1. Develop and submit an annual plan for identifying, training and otherwise working
with businesses who may be eligible for the program:
A business owner contacts Selby Area CDC for an appointment to discuss their financing
needs; An interview is scheduled with an independent small business consultant retained
by Selby Area CDC to provide technical assistauce to entrepreneurs; The consultant
evaluates the ciient's business plan and monetary request to deterxniue their financing
readiness; If the applicant is not ready for financing they would be directed to the Micro-
entrepreneur Training Program. This a 16-week training program sponsored by Selby
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Area CDC and the Neighborhood Development Center, Inc. that assist participants
detemiine the feasibility of theu business concept, develop a written business plan and
overcome obstacles to access to small business funding; and if the applicant is deemed
financing ready, they could be directed to either to the Selby Area CDC VJorking Capital
Program or the Equity Gap Financing Program.
2. Provide quarterly reports to the City's designated contract managers that include:
The SACDC will provide the city with the following reports:
a. Number and type of businesses contacted by SACDC about the Working Capital Loan
Fund
b. I3umber and type of businesses that have submitted applicafions to SACDC
c. Loans guaranteed (number, amount of each, length of each, purpose of loan, type of
business/commodity area, certification status)
d. Loans and loan guarantees rejected and reasons for zejection
e. Results of loan, e.g. whether loan allowed recipient to participate in a solicitation or
other accomplishment
3. Provide certificafion information and forms to each loan application as part of the
application process:
The SACDC will include CERT applications in the loan application package, addition to
providing technical assistance to loan applicants in completing tl�ese forms.
4. Participate in an annual review of the Working Capital Fund with City
representatives:
The SACDC agrees to participate in annual Working Capital Fund reviews as required by
the City of St. Paul
5. Loans to qualified business are to be governed by the following
Businesses could use their own lender or receive a referral for a participating bank or
non-profit lender from Selby Area CDC.
a. Interest rate: The interest rate cannot exceed four (4%) percent over the
prime rate
b. Application Fee: A$1001oan processing fee shall be assessed to each business
applying for funds.
c. Loan Term: The loan term cannot exceed tt�ree years
d. Collateral: Established by the lender, borrower, and Selby Area CDC
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e. Structure: The loan can be either a revolving line of credit, term loan, or a
draw-down term loan
f. Key Ratios: The projected business debt to worth ratio should not exceed 3.2
and the debt service coverage ratio should not be less than $1.40
g. Eligibility: MBEs, WBEs and SBEs who aze certified or eligible for certification
with the City's Vendor Outreach Program within the City of St. Paul, Minnesota
aze eligible to apply. The business must have operated for at least one yeaz prior
to applying for the VJorking Capital Loan. Participating businesses will be
encouraged to post their job opening with various governmental and non-profit
employment organizations.
h. Use of Loan Funds: WCL Loan funds can be used for the following": Working
capital, production contracts (based on credit worthiness of customer), purchase
orders (based on credit worthiness of customer), account receivables financing,
general business operation, or Inventory purchases.
Loan guarantees will not be allowed under this program for the following:
Refmancing of existing or previous debt, payment of taxes, fines, fees or liens
releases, personal financial support of owner(s), purchase of real estate of capital
improvements, investment in any enterprise owned by another individual (buying
into a company of LLC/LLP), and payment of franchise or network marketing
membership fees.
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Attachment C:
Worlang Capital Sub-Loan Security Agreement
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CITY OF SAINT PAUL, �'IINNESOTA
Vendor Outreach Working Capital
SUB-LOAN SECURITY AGREEMEN'I'
1. Selby Area CDC Ina (hereinafter calied "Debtor"), whose address is 626 Selby Avenue,
Suite C St. Paul, MN 55104, for value received, hereby grants to The Ciry of Saint Paul,
15 West Kellogg Blvd, Saint Paul MN 55102 (hereinafter called "Secured Party"), a
security interest in the property described below (hereinafter collectively called
"Collateral") to secure the payxnent of the principal and interest on and all obligations
under a note (hereinafter called the "Promissory Note"), dated ,2004, of the
Debtor payable to the order of the Secured Party, in the principal amount of Fifty
thousand Dollars ($ 50,000), a11 renewals and extensions of the Note, and all costs,
expenses, advances and liabilities wYuch map be made or incurred by Secured Party in the
disbursement, adxninisiration and collection of the loan evidenced by the Note and in the
protection, maintenance and liquidaxion of the security interest hereby granted with
interest at the maYimum legal rate on such costs, expenses, advances and liabilities. The
Note and all other obligations secured hereby are herein collectively called the
"Liabilities."
2. The Collateral in which this security interest is granted shall consist of all of the
following-described property and Debtor's rights, tifle and interest in such property
whether now owned or hereafter acquired by Debtor and wherever located, together with
all proceeds and products therefrom.
A) All monies, insh�uments, and savings, checking or other deposit accounts
that are now or in the future in Debtor's custody or control which represent
payments from an End-Bonower, as that terxn is defined in the Loan Agreement
dated the same date hereof between the Debtor and Secured Party ("Loan
AgreemenY'); and
B) All of the End-Borrower Security Documents, as that term is defined in
the Loan Agreement.
All accessions, accessories, additions, amendments, attachments, modifications, replacements
and subtractions to any of the above; All proceeds and products of any of the above; All policies
of insurance pertaining to any of the above as well as any proceeds and unearned premiums
pertaining to such policies; and All books and records pertaining to any of the above.
3. Debtor shall not transfer, se11 or assign Debtor's interest in the Collateral nor permit any
other security interest to be created thereon without 5ecured Party's prior written
approval, except that Debtor may sell the inventory listed in Pazagraph 2.c. hereof in the
ordinary course of business on customary terms and at usual prices and may coliect as
Secured Pariy's agent sums due on accounts receivable and contract rights listed in
Paragraphs Z.d. and 2.e. until advised otherwise by Secured Pariy.
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4. Debtor shall keep, store or regulazly gazage a11 Collateral at locations approved by
Secured Party in writing.
5. Debtor shall not conduct business under any other name than that given above nor change
or reorganize the type of business entity under which it does business except upon prior
written approval of Secured Pariy. If such approval is given, Debtor guarantees that all
documents, inshuments and agreements demanded by Secured Party shall be prepared
and filed at Debtor's expense before such change of name or business entity occurs.
6. Debtor shall pay the filing and recording costs of any documents or instniments
necessary to perfect, extend, modify, or tenninate the security interest created hereunder,
as demanded by Secured Party.
7. Debtor shall maintain all Collateral in good condition, pay promptly all taxes, judgments,
or changes of any kind levied or assessed thereon, keep current all rent due on premises
where Collateral is located, and maintain insurance on all Collateral against such hazazds,
in such amounts and with such companies as Secured Party may demand, all such
insurance policies to be in the possession of Secured Party and to contain a Lender's Loss
Payable Clause naming Secured Party in a manner satisfactory to Secured Pariy. Debtor
hereby assigns to Secured Party any proceeds of such policies and all unearned premiums
thereon, and authorizes and empowers Secured Pariy to collect such sums and to execute
and endorse in Debtor's name all proofs of loss, drafts, checks and any other documents
necessary to accomplish such collections, and any persons or entities making payments to
Secured Party under the terms of this Pazagraph are hereby relieved absolutely from any
obligation to see to the application of any sums so paid.
8. Debtor shall be in default thereunder if Debtor fails to perforxn any of the liabilifies
imposed hereby or any other obligation required by the various instnunents or papers
evidencing or securing this 1oan, or if the full balance of the loan becomes immediately
payable under the terms of such instruments, either automatically or by declaration of the
Secured Party. In the event of any default, Secured Party may, in its own discretion, cure
such default and, if it does so, any expenditures made for such pucpose sha11 be added to
the principal of the Note.
9. Tn the event of default, Debtor sha11 assemble and make available all Collateral at any
place designated by Secured Party. Debtor acknowledges being advised of a
constitutional right to a court notice and hearing to determine whether, upon defaults
there is probable cause to sustain the validity of the Secured Party's claim and whether
the Secured Pariy is entitled to possession of the Collateral and being so advised. Debtor
hereby voluntarily gives up, waives and surrenders any right to a notice and hearing to
determine whether there is probable cause to sustain the validity of Secured Party's clann.
Any notices required pursuant to any state or local law shall be deemed reasonable if
mailed by Secured Parry to the persons entifled thereto at their last known addresses at
least ten days prior to disposition of the Collateral, and, in reference to a private sale,
need state only that Secured Party intends to negotiate such a sale. Disposition of
Collateral shall be deemed commercially reasonable if made pursuant to a public offering
advertised at least twice in a newspaper of general circulation in the community where
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the Collateral is located or by a private sale for a sum equal to or in excess of the
liquidation value of the Collateral as determined by Secured Party.
10. All rights conferred on Secured Pariy hereby are in addirion to those granted to it by any
state or local law or any other law. Failure or repeated failure to enforce any rights
hereunder shall not constitute an estoppel or waiver of Secured Party's rights to exercise
such rights accruing prior or subsequent thereto. Secured Party shall not be liable for any
loss to Collateral in its possession, nor shall such loss diminish the debt due, even if the
loss is caused or contributed to by Secured Party's negligence.
IN WITNESS WHEREOF, Debtor consents to its property being collateralized as
herein provided this day of , 2004.
DEBTOR
3elby Area CDC Inc.
Signature Date
SECUREA PARTY:
City of Saint Paul, Minnesota
Signature Date
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Attachment D:
Vendor Outreach Worl�ng Capital Fund
Promissory Note
22
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CTTY OF SAINT PAUL, NIINNESOTA
Vendor Outreach Worlang Capital Program
PROMISSORY NOTE
Project Title: Selby Area CDC Revolving Loan
Amount of Loan: $ 50,000 Account Code:
Date: Saint Paul, Minnesota
FOR VALUE RECEIVED, Selby Area CDC Ina (the "Borrower") hereby promises to pay to
the order of the City of Saint Paul, Minnesota (the "City") or its successors and assigns, the
principal amount of Fifty thousand Dollazs and no/100 ($50,000 ) or so much thereof as shall be
advanced pursuant to that certain Loan Agreement of even date herewith by and between
Borrower and City, (the "Loan Agreement") together with interest thereon, as follows:
The term of the Working Capital Loan will be five (5) yeazs.
2. Payments shall be made by Borrower to City in accordance with the Loan Agreement as
follows:
A. Payments of principal will be deferred for the term of the loan from the
date hereof and no interest will accrue during this defenal period.
B. Payxnents of interest will be deferred for the term of the loan from the date
hereof and no interest will accrue during this deferral period.
C. The total outstanding principal balance plus any accrued interest shall be
due and payable in full on , 2009 (Mahxriry Date).
3. Borrower agrees to pay to City a late payment charge of five percent (5%) of the payment
due, if the payment of principal and/or interest due on the Loan is paid more than fifteen
(30) days after the due daze thereof.
4. All payments must be made in lawful money of the United States. Checks must be made
ont to the City of Saint Paul and sent to the following address:
City of Saint Paul
Office of Financial Services
160 City Hall
15 W. Kellogg Blvd.
Saint Paul, MN 55102
5. A prepayxnent fee will not be chazged should the loan be paid eazlier ttian scheduled.
6. All payments made by or for the Borrower hereunder shall, at the option of the City, first
be applied to payment of interest and the remainder to the payment of principal. The
Borrower is operating a revolving loan program and upon assignment of its interest in an
End Loan, as defined in the Loan Agreement, to the City in compliance with the Loan
Agreement, then the assignment will constitute a prepayment of this Note and shall be
applied to the remauung unpaid ptincipal balance of this Note. Upon prepayxnent, this
Note shall be reamortized and a new monthly payment of principal and interest shall be
23
04�-9'�5
determined using the remaining principal halance and the remaiuing term of this Note.
Payment of the entire or any portion of the outstanding principal balance plus accrued
interest may be made prior to the Maturity Date hereof without any prepayment penalTy.
8. In the event tha undersigned shall fail to pay the interest on or principal amount of this
Promissory Note ("Note") when due, and if such failure be subsisting, or if any covenant
of the Loan Agreement or Security Agreement executed and delivered of even date
herewith by the Borrower in favor of City (the "Security Documents"), is breached or if a
default exists, the unpaid principal of the Note together with accrued interest shall be
immediately due and payable.
9. If tkus Note is reduced to judgment, such judgment shall beaz the lawful interest rate
pertaining to judgments. The undersigned agrees to pay all costs of collection including
reasonable attorneys' fees and costs.
10. The remedies of the City, as provided herein, by law and in the Security Documents, are
not exclusive and shall be cumulafive and concurrent and may be pursued singly,
successively or together, at the sole discretion of the City, and may be exercised as often
as occasion therefore sha11 occur, and the failure to exercise any such right or remedy
shall in no event be construed as a waiver or release thereof.
1 l. The City shall not be deemed, by any act or omission or commission, to have waived any
of its rights or remedies hereunder unless such waiver is in writing and signed by the City
and then only to the extent specifically set forth in writing. A waiver with reference to
one event shall not be construed as a bar to or waiver of any right or remedy as to a
subsequentevent.
12. The Bonower shall not have any personal liability to repay this Note to the City, it being
recognized by the City that the obligations of the Borrower under this Note are
nonrecourse obligations. Notwithstanding the nonrecourse nature of the Borrower's
obligations under this Note, the Borrower is personally liable for:
A. Application of the payments received from an End-Bonower other than
pursuant to the Loan Agreement; and
B. Fraud or misrepresentation by the Bonower.
13. Nothing in this Note sha11 affect, limit or impair the right of the City to seek a monetary
judgement against Borrower to the extent necessazy to enforce the Security Documents
(except that Borrower shall not be personally liable for payment of any such judgment to
the extent that the judgment is for payment of the indebtedness evidenced by this Note
and no deficiency judgement will be sought or obtained against Borrower for payment of
the indebtedness evidenced by this Note except for those acts described in Section 12
above).
14. Demand, protest and notice of demand and protest aze hereby waived.
15. T'his Note is made with reference to and shall be construed in accordance with the laws of
the State of Minnesota.
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IN WITNE5S WHEREOF, the Bonower has executed and delivered this Note on the
date first mentioned above.
BOTtROWER
:
Its:
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Attachment E:
City of Saint Paul Working Capital Loan
Conflict of Tnterest Statement for Borrower
To Whom It May Concem
Selby Area CDC has a conflict of interest policy which applies to all of its boazd
members and employees.
On behalf of the Boazd and employees of Selby Area CDC, I declare that no conflicts of interest
currently exist or that any possibilities of conflicts of interest have been disclosed to the City of
Saint Paul in connect with Selby Area CDC's receiving funding through the City. I fiuther
declare that any possibility of a conflict of interest which may arise in the fixture n connection
with the Program will be disclosed to the City.
A conflict of interest may exist whenever a Boazd member, officer, or employee knows or has
reason to know that the organization with which that person is a participant in a projectlprogram
that will yield a monetary or other material benefit to that person, the person's spouse or
dependent.
Signed by
Date
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