HomeMy WebLinkAboutEnergyneering Loan ConversionDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of September 3, 2014
DATE: August 27, 2014
FROM: Judith M. Ure Administrative Services 541-330-4627
TITLE OF AGENDA ITEM:
Consideration of converting $34,000 business loan made to Eneryneering Solutions, Inc. to a grant.
PUBLIC HEARING ON THIS DATE? No.
BACKGROUND AND POLICY IMPLICATIONS:
The Deschutes County Business Development Forgivable Loan Program was initiated to encourage and
assist companies seeking to relocate and/or create new jobs within Deschutes County. To receive a
loan, companies must agree to create a specific number of jobs within a defined period, then maintain
this level of employment for an additional set period of time. Energyneering Solutions, Inc. received a
business development loan in the amount of $34,000 on December 26, 2012 with terms that included
adding seventeen (17) full-time employees on or before December 31, 2012 and maintaining a level of
thirty-four (34) full-time employees through June 30, 2014. As certified by Economic Development for
Central Oregon (EDCO), Energyneering Solutions, Inc. has met these terms and, in accordance with the
agreement, is eligible to have the loan converted to a grant.
FISCAL IMPLICATIONS:
None.
RECOMMENDATION & ACTION REQUESTED:
Authorize County Administrator to convert $34,000 business loan made to Energyneering Solutions,
Inc. to a grant.
ATTENDANCE: Judith Ure, Management Analyst
DISTRIBUTION OF DOCUMENTS:
N/A
Loan Recipient:
DESCHUTES COUNTY
Business Development Forgivable Loan Program
Energyneering Solutions, Inc.
15820 Barclay Drive
Sisters, OR 97759
541-549-8766
Agreement No.: DC -2012-643
Date of Agreement: December 26, 2012
On behalf of Economic Development for Central Oregon, I hereby certify that Energyneering
Solutions, Inc. has met all conditions of the Deschutes County Business Development Forgivable
Loan Program as specified in Agreement DC -2012-643 (attached).
I further attest that a representative of Economic Development for Central Oregon has reviewed
employment and payroll records furnished by Energyneering Solutions, Inc. and that such
records confirm that Energyneering Solutions, Inc.:
a) Employed a baseline of seventeen (17) full-time employees on July 31, 2011, and
b) Increased the number of full-time employees by seventeen (17) for a total of thirty-four
(34) full-time employees on or before December 31, 2012, and
c) Maintained a total of thirty-four (34) full-time employees over any 12 -month period
through June 30, 2014.
I therefore, request that the Deschutes County Board of Commissioners authorize that the
business development loan to Energyneering Solutions, Inc. be converted to a grant in
accordance with the terms of the attached agreement.
Economic Development for Central Oregon
By:
Title:
Date: f ,Ps! l'
k�Lur`lam Pc2eLra2
1EGALL
DESCHUTES COUNTY
Business Development Forgivable Loan Fund
AGREEMENT FOR Energyneering Solutions, Inc.
This Development Agreement ("Agreement") is entered into:
BETWEEN: Deschutes County hereinafter referred to as `County')
1300 NW Wall Street, Suite 200
Bend, OR 97701
Facsimile number: (541) 385-3202
Phone: (541) 388-6570
AND:
Energyneering Solutions, Inc.
15820 Barclay Drive
Sisters, Oregon 97759
541-549-8766
RECITALS
WHEREAS, the County finds that the program set forth in this Agreement will promote state and
local economic activity by creating new jobs and investment; and
WHEREAS, the Company wishes to expand its existing equipment and business operations within
Sisters by increasing employment and investing in equipment and building improvements; and
WHEREAS, the said expansion will relocate and create at least 17 new jobs between August 1, 2011
and December 31, 2012 for total employment in Sisters of 34; and
WHEREAS, the County desires to promote the expansion of the Company's facility by loaning funds
to the Company for certain equipment purchases and personnel expenses and such loan will later be
converted to a grant upon the condition that the Company satisfy certain requirements; and
WHEREAS, the County has engaged Economic Development for Central Oregon ("EDCO") to
assist in administering and implementing the loan;
NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree to as follows:
Energyneering Solutions, Inc.
Page 1 of 5
DC - 201276 43
SECTION 1
DEFINITIONS
Section 1.1 Dollars and $ shall mean lawful money of the United States of America.
Section 1.2 Loan shall mean the funds loaned by County to Company as provided under Section 3
Section 1.3 Project shall mean expansion of Company employment in Deschutes County, Oregon
by the employment growth of 17 new (34 total) by December 31, 2012.
Section 1.4 Full Time Employee shall mean any employee who has been hired with the
expectation that the job will last for at least one (1) year and who will work at least
forty (40) hours per week or the equivalent of 2080 hours per year.
SECTION 2
TERM
This agreement shall be effective as of the date of execution by all parties and continue until the Loan
is paid in full or the Loan is converted to a grant as provided in Section 3.3 below.
SECTION 3
LOAN
Section 3.1 Loan
The County agrees to loan the Company the sum of $34,000 no later than 30 days following the
signing of this agreement.
Section 3.2 Loan Purpose and Representations of the Company
The purpose of the Loan is to carry out the Project, and for no other purposes. The Company
represents and warrants that it will diligently pursue and complete the following:
3.2.1 Company will employ a minimum of 17 additional Full Time Employees between
August 1, 2011 and December 31, 2012 for a total of 34 Full Time Employees and maintain
this level over any consecutive 12 month period through June 30, 2014.
3.2.2 Company will submit annual progress reports to EDCO with documentation for job
creation, capital investment relating to new facilities and equipment associated with the
Project.
3.2.3 Quarterly updates on employment progress will also be submitted to the County.
3.2.4 Company shall comply with all applicable federal, state, regional and local laws,
regulations and ordinances.
3.2.5 Company shall timely pay all Deschutes County teal and personal property tax when
due and shall satisfy all delinquent property tax accounts in full.
Section 3.3 Loan Repayment or Conversion to Grant
3.3.1 Unless the Loan is converted to a grant as provided below, the Company agrees to pay
to the order of the County the full amount of the Loan, plus interest at the rate of 8% per annum
starting with the date County releases funds to Company, upon the earlier of: (a) the occurrence of an
Event of Default, as defined below, or (b) June 30, 2014.
Energyneering Solutions, Inc.
Page 2 of 5
3.3.2 The County agrees to convert the Loan to a grant that does not need to be repaid, if
and when the County determines in its sole discretion that the Company has satisfied all of the
obligations in Section 3.2 and its other obligations under this Agreement. Such conversion shall only
be effective upon written verification by the County Administrator that the loan has been converted to
a grant.
3.3.3 The County may in its sole discretion convert a portion of the Loan to a grant if all of
the obligations under Section 3.3 and this Agreement have been satisfied to the reasonable satisfaction
of the County, except the obligation under Section 3.2.1 to employ 34 Full Time Employees. In the
event of such partial conversion of the Loan, the Loan shall continue to be payable on a pro -rated
basis in an amount determined by multiplying $2,000 by the difference between 34 and the number of
Full Time Employees employed in Deschutes County by the Company as of June 30, 2014. Annual
interest will accrue on this portion of the loan at a rate of eight percent (8%) per year from the time
the Company received the loan monies to the time they are repaid.
SECTION 4
DEFAULT
Section 4.1 Events of Default
The following shall be Events of Default:
4.1,1 Company fails to complete, or the County reasonably determines that the Company
will not be able to complete, the obligations described in Section 3.3 and its other
obligations under this Agreement; provided, however, that upon such failure or
determination, the County shall first provide to the Company written notice of such
failure or determination, and the Company shall have thirty (30) days to correct the
matter. If the matter has not been corrected by the Company within such thirty (30)
day period, to the reasonable satisfaction of the County, the County shall be entitled to
declare the Company in default of its obligations under this Agreement and the Loan,
plus accrued interest shall be payable in full.
4.1.2 Company effects a change of ownership, a change of control of its business, or
relocates its business conducted in Deschutes County, Oregon on or before June 30,
2014 (the end of the contract) without prior written consent of the County.
4.1.3 The occurrence of any event that has or may reasonably be expected to have a material
adverse effect on Company's financial condition or Company's ability to make any
payment required by this Agreement.
4.1.4 Company fails to pay, becomes insolvent or unable to pay, or admits in writing an
inability to pay Company's debts as they become due, or makes a general assignment
for the benefit of creditors.
4.1.5 A proceeding with respect to Company is commenced under any applicable law for the
benefit of creditors, including but not limited to any bankruptcy or insolvency law, or
an order for the appointment of a receiver, liquidator, trustee, custodian, or other
officer having similar powers over Company is entered.
Energyneering Solutions, Inc.
Page 3 of 5
SECTION 5
MISCELLANEOUS
Section 5.1 Right to Inspect
The Company agrees that the County, their agents and employees, shall be entitled, upon reasonable
prior notice to the Company, to access and inspect the property and employment records of the
Company and its affiliates in order to insure that the Company is complying with the terms of this
Agreement and all applicable federal, state and local laws and regulations. The right to inspection shall
also include any property or employment records that ate in the possession of any affiliate of the
Company. The right of inspection shall continue until all of the obligations of the Company under
this Agreement have been satisfied.
Section 5.2 Attorney's Fee Provision
In the event suit or action is instituted to enforce any of the terms or conditions of this Agreement,
the losing party shall pay to the prevailing party, in addition to the costs and disbursements allowed by
statute, such sum as the court may adjudge reasonable as attorney fees in such suit or action, in both
trial court and appellate courts.
Section 5.3 Indemnification
Company shall defend, indemnify and hold harmless County and EDCO, their officers, agents
employees and members from all claims, suits, and causes of action including attorney's fees, of any
nature whatsoever relating to claims by third parties resulting from or arising out of the Loan, this
Agreement, or funds provided to the Company under this Agreement.
Except as otherwise provided in this Section 5.3, County and EDCO shall defend, indemnify and hold
harmless Company, their officers, agents, employees and members from all claims, suits, and causes of
action including attorney's fees, relating to claims by third parties as to the validity under public
finance law of this Agreement or funds provided to the Company under this Agreement.
Section 5.4 Entire Agreement
This Agreement constitutes the entire agreement between the parties regarding the matters herein.
Section 5.6 Titles and Subtitles
The titles in this Agreement are for convenience only and in no way define, limit, or describe the
scope or intent of any provision of this Agreement.
Section 5.7 Notice
All notices, requests demands, and other communications to or upon the parties hereto shall be in
writing and shall be deemed to have been duly given or made: upon actual receipt if delivered
personally or by fax or an overnight delivery service; and at the end of the third business day after the
date of deposit in the United States mail, postage pre -paid, certified, return receipt requested; and to
the addresses set forth on page 1 of this Agreement of at such other address of which such party shall
have notified in writing the other parties hereto.
Section 5.8 Time is of the Essence
All parties agree that time is of the essence under this Agreement.
Energyneering Solutions, Inc.
Page 4 of 5
Section 5.9 Applicable Law
This agreement is made, and shall be construed and interpreted under the laws of the State of Oregon
without regard to the principles of conflicts of law. Venue shall lie in state courts located in Deschutes
County, Oregon, provided, however, if the Claim must be brought in a federal forum, then it shall be
brought and conducted solely and exclusively within the United States District Court for the District
of Oregon.
Section 5.10 Disclosure
Under Oregon law, most agreements, promises and commitments made by a lender after October 3,
1989 concerning loans and other credit extensions which are not for personal, family or household
purposes or secured solely by borrower's residence must be in writing, express consideration and be
signed by the lender to be enforceable.
Section 5.11 No Waiver
No failure or delay of County in exercising any right, power or remedy under this Agreement shall
operate as a waiver of such right, power or remedy of County or of any other right. A waiver of any
provision of this Agreement shall not constitute a waiver of or prejudice County's right otherwise to
demand strict compliance with that provision or any other provision. Any waiver, permit, consent or
approval of any kind or character on the part of County must be in writing and shall be effective only
to the extent specifically set forth in such writing.
Section 5.12 No Assignment by Company
No obligation or right under this Agreement may be assigned by the Company without the prior
consent of the County, which consent may be withheld, conditioned, or delayed in the sole discretion
of the County.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed as of
the dates set forth below their respective signatures.
Deschutes County Energyneering Solutions, Inc.
By:
Tom Anderson, Interim Administrator
By: •-lam,
Benny 13cnn, President
Date: / 2- .2 C.. -1 Date: / Z /2 v //./ 2
Energyneering Solutions, Inc.
Page 5 of 5