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HomeMy WebLinkAboutAgr 2002-01-01 (Tiburon Lodge) TOWN 'OF TIBURON I~ ..~ I 1505 TIBURON BOULEVARD . TIBURON . CAL'IFdRNIA 94920 . (415) 435-7373 FAX (415) 435-2438 'Office of the Town Attorney (415) 435-7370 1/. 0 !J February 5, 2002 Mr. David M. Walsh Paul, Hastings, Janofsky & Walker, LLP . 555' South. Flower Street, 23r~ Floor Los Angeles,."CA 90071-2371 Re: Tiburon ,Lodge Elder Hostel Program Settlement Agreement Dear Dave: . I enclose a copy of the fully executed Settlement Agreement and Deposit Account Control Agreement'. . Would you please arrange for the bank to send the first statement as soon as possibleT Thank you for your assistance. If you have any questions' or concems~please call me at the above' nurnber. Very truly yours, ~~~ Ann R. Danforth Town Attonley ..' Enclosure :.': cc: Alex D. McIntyre, Town'Manager (w/enclosure) Heidi McVeigh, Assistant to the Town Manager (w/enclosure) ORIGINAL DEPOSIT ACCOUNT CONTROL AGREEMENT THIS DEPOSIT ACCOUNT CONTROL AGREEMENT (the "Asp-eement") is dated as of January L, 2002, and is by and among REGIONAL MANAGEMENT COMPANY, INC., an Oklahoma corporation having its business address at 82 Armstrong Drive, Mustang, Oklahoma 73064-3102 (the "Depositor"), TOWN OF TIBURON, a municipal corporation having its business address at 1155 Tiburon Boulevard, Tiburon, California ("Tiburon"), and NbanC dba NBC, a [state banking association] having its business address at 13401 North Pennsylvania Ave., P.O. Box 21000, Oklahoma City, Oklahoma, 73156-1000 (the "Bank"). WHEREAS, the Tiburon and the Tiburon Lodge Limited Partnership (the "Lodge") are parties to that certain Settlement and Release Agreement dated November _, 2001 (the "Settlement Agreement"), pursuant to which, among other things, the Lodge is obligated to pay Tiburon the sum of $95,314.92 (the "Settlement Sum") in satisfaction of that certain claim for unpaid occupancy taxes made by Tiburon (a copy of the Settlement Agreement and Release ("Settlement Agreement") is attached hereto as Exhibit "A" and is incorporated herein by this reference.) WHEREAS, the Depositor desires to grant to Tiburori a security interest in, and further perfect Tiburon's security interest in, the Account (as defined below) and the proceeds thereof to secure the Lodge's obligation to fully pay the Settlement Sum; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. Account. The Depositor hereby grants to Tiburon a security interest in the Account and all proceeds thereof to secure the Lodge's payment of the Settlement Sum under the Settlement Agreement. The Bank consents to such security interest and hereby confirms that the Account is a non-negotiable, non-transferable time deposit account bearing Account Number CD18336 with a deposit amount of One Hundred Thousand Dollars ($100,000.00) (the "Account") which matures on October 24, 2002 (the "Maturity Date"). 2. Depositor's Waiver of Authority. In order to perfect by control Tiburon's security interest in the Account and the proceeds thereof, until either (a) the Bank receives Tiburon's written instructions to the contrary, or (b) this Agreement terminates in accordance with the terms hereof, whichever shall occur first, the Bank will comply with instructions originated by Tiburon directing disposition of the funds in the Account without further consent by the Depositor, and the Depositor irrevocably waives its authority to transfer, withdraw or otherwise disburse funds from the Account. Tiburon agrees to provide Depositor with a concurrent copy of any instructions it gives to the Bank. 3. Default Under Settlement Agreement. In the event that Tiburon notices a default under the terms of the Settlement Agreement, and the Lodge fails to cure said default in the time provided for under the terms of the Settlement Agreement, then Tiburon may submit to LA/7091 1 1.6 the Bank a declaration under penalty of perjury (the "Declaration of Default") setting forth the facts of the default and the Lodge's breach of the Settlement Agreement and the amount of Settlement Sum due, owing and unpaid (the "Unpaid Amount") as of the date of the default (with proper credit given for all portions of the settlement sum paid to Tiburon by the Lodge prior to the notice of default). Depositor authorizes Bank to immediately pay to Tiburon the Unpaid Amount upon receipt of Tiburon's Declaration of Default. Payment of the Unpaid Amount to Tiburon by the Bank shall be made without further action by the Lodge or Depositor. Tiburon shall simultaneously provide the Bank, the Lodge and Depositor with a copy of the Declaration of Default. 4. Settlement Upon Maturity. In the event that Tiburon does not declare a default under Paragraph 3, above, the Lodge and Tiburon instruct the Bank to transfer, on the Maturity Date, an amount equal to the difference between the Settlement Sum and the aggregate amount of all payments made by the Lodge to Tiburon pursuant to the Settlement Agreement up to the Maturity Date, which aggregate amount shall be communicated to the Bank by the Depositor and Tiburonjointly in writing. The parties hereby agree that the Depositor shall otherwise receive all remaining proceeds in the Account. 5. Bank's Setoff Waiver and Subordination of Security Interest. The Bank, for its own account, (a) irrevocably waives any right of setoff or recoupment against the Depositor that the Bank may from tim.e to time have with respect to funds credited to the Account, and (b) irrevocably subordinates in favor of Tiburon, any security interest in the Account and in any proceeds thereof that the Bank may have from time to time. The parties agree that the foregoing setoff and recoupment waiver and subordination of security interest will not affect the Bank's rights or ability to make account adjustments, charge-back or otherwise to charge the Account for unpaid fees and expenses relating to the Account as provided in this Agreement. Notwithstanding the provisions of this paragraph, the Lodge shall insu~e that, at all times relevant to this Agreement, the balance in the account net of the fees and other expenses referenced in this Paragraph 5 shall not fall below the outstanding portion of the settlement sum - - - net of any payments made by the Lodge hereunder - - - then due and owing. 6. Account Fees, Expenses, and Returns. The Depositor and Tiburon instruct the Bank to charge any and all fees, expenses, and account adjustments, associated with the Account to the Account, but only to the extent permitted to be charged to the Account by that certain Time Deposit Agreement by and between the Depositor and the Bank dated October 24, 2001. Notwithstanding the provisions of this paragraph, the Lodge shall insure that, at all times relevant to this Agreement, the balance in the account net of the fees and other expenses referenced in this Paragraph 6 shall not fall below the outstanding portion of the settlement sum - - - net of any payments made by the Lodge hereunder - - - then.due and owing. The Lodge, Depositor and Bank agree that the balance in the Account shall not be less than $50,000 at any time during the term of this Agreement. The Depositor shall provide Tiburon with monthly (if available) or quarterly statements from Bank reflecting all activity in the Account for the preceding time period. 7. No Other Control Agreement. Unless otherwise consented to by Tiburon in writing, the Bank agrees not to enter into any agreement with any third party which obligates the LN7091 I 1.6 2 Bank to comply with instructions directing disposition of funds in the Account originated by such third party without the consent of the Depositor. 8. Force Majeure. The Bank shall not be responsible for actions or omissions caused by events beyond its control, including without limitation fire, casualty, breakdown in equipment or failure of telecommunications or data processing services, lockout, strike, unavoidable accidents, acts of God, riot, war or the issuance or operation of any adverse governmental law, ruling, regulation, order or decree, or an emergency that prevents the Bank from operating normally. 9. Term and Termination. Except for the provisions of Section 10 below, the parties agree that this Agreement will terminate at the earlier of (a) the Bank's receipt of Tiburon's notice to terminate this Agreement and return the right to withdraw available funds in the Account to the Depositor; (b) the date on which the Lodge's obligations to pay Tiburon the Settlement Sum fully satisfied or discharged; or (c) October 24, 2002. No such termination shall affect any right or obligation arising under this Agreement prior to the effective date of termination, nor shall it affect any right or obligation which, by its terms, is expressly intended to survive such termination. The Depositor shall not have power unilaterally to instruct the Bank to terminate this Agreement and/or to close the Account prior to the termination date. 10. Insolvency of Depositor. In the event that (a) the Depositor becomes subject to a voluntary or involuntary proceeding under the United States Bankruptcy Code, or (b) the Bank is otherwise served with legal process which the Bank believes affects funds deposited in the Account, the Bank shall have the right to place a hold on funds deposited in the Account until such time as the Bank receives an appropriate court order or other assurances satisfactory to the Bank establishing that the funds may continue to be disbursed according to the instructions contained in this Agreement. The Parties recognize that the Settlement Sum provided for herein is in payment of unpaid taxes and, as such, should be accorded priority in any bankruptcy proceeding based on that characterization. In addition, the Parties agree that the term of this Agreement shall be extended by the term of any bankruptcy proceedings filed by the Lodge. 11. Court Orders; Indemnification. Nothing contained in this Agreement shall prevent the Bank from complying with any valid legal process or other order of a court of competent jurisdiction affecting funds in the Account. The Bank will notify Tiburon and Depositor in writing after the Bank receives any such legal process or becomes aware of the issuance of any such order. If, notwithstanding the issuance of any such order or legal process, and after the Bank notifies Tiburon and Depositor in writing o(the Bank's receipt of such legal process and provides a copy of same to Tiburon and Depositor, the Bank continues to perform its obligations in favor of Tiburon pursuant to this Agreement, Tiburon shall indemnify and hold the Bank harmless from and against any and all claims, demands, liabilities, actions, causes of action, losses and expenses (including without limitation reasonable attorneys' fees and court costs), both legal and equitable, incurred or sustained by the Bank that arise from, or are related to, the continuing performance by the Bank of its obligations under this Agreement. The provisions of this Section 10 are intended to survive the termination hereof. 12. Modification of Agreement. This Agreement may not be modified, altered or amended, except by an agreement in writing, signed by each of the parties hereto. LN709111.6 3 13. Severability. If a court of competent jurisdiction deems any part of this Agreement to be unenforceable, the parties agree that only the offending part shall be stricken and that the remaining parts shall be unaffected. 14. Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California. 15. Governing Agreements. In the event of a conflict between the terms and provisions of this Agreement, and the terms and provisions of any lockbox or other agreement relating to the provision by the Bank of depository or cash management services, the terms of this Agreement shall control. 16. Independent Contractor. Tiburon and the Depositor agree that, in performing the services under this Agreement, the Bank will be acting as an independent contractor and not as an employer, employee, partner or agent of Tiburon or the Depositor. 17. Miscellaneous Provisions. Nothing contained in this Agreement, nor any course of dealing between or among the parties hereto, shall constitute a commitment or other obligation by the Bank to extend credit to the Depositor. The parties may use any reasonable means to record and/or retain any and all telephone conversations and/or data transmissions among the parties to this Agreement. This Agreement is for the benefit of the parties hereto and is not intended, and shall not be construed as, granting any rights to or otherwise benefiting any third parties. This Agreement will be binding upon, and shall inure to the benefit of, the permitted successors and assigns of the parties. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all of which counterparts taken together shall constitute but one and the same instrument. Each of the parties hereto intends that a facsimile transmission of a duly executed counterpart shall be as valid, in all respects, as an original. Time is of the essence of this Agreement. This Agreement embodies the entire understanding and agreement of the parties hereto with respect to the subj ect matter hereof, and supersedes all prior agreements, understandings and inducements, whether express or implied, oral and written. No provision of this Agreement shall be construed against, or interpreted to the disadvantage of, any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have drafted, structured or dictated such prOVISIon. 18. Any notice given pursuant to this Agreement shall be in writing and may be given via telefacsimile, overnight delivery or hand delivery to the following persons: To Tiburon: Town of Tiburon Attention: Ann Danforth, Town Attorney 1155 Tiburon Boulevard Tiburon, California 94920 LN7091 I 1.6 4 To Lodge: The Tiburon Lodge Limited Partnership Attention: Mark McDowell 82 Armstrong Drive Mustang, Oklahoma 73064 To Depositor: Regional Management Company, Inc., 82 Armstrong Drive Mustang, Oklahoma 73064-3102 To Banle NbanC dba NBC 13401 North Pennsylvania Avenue P.O. Box 21000 Oklahma City, Oklahoma 73156-1000 With Copy to: Mike Schuminsky 501 South Rancho, Suite C-17 Las Vegas, Nevada 89106 IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specfied at the beginning of this Agreement. THE DEPOSITOR: REGIONAL MANAGEM an Oklahoma corporation By: Name: Title: V;r.p Prp~lr1pnt ~pSTO FORM ./ t.NN DANFORTH TOV'JN ATTORNEY TOWN OF TIBURON TIBURON: TOWNOF~ a municipal c on By: ___~-- Name: Al.-t4 b. M.el,.,~u. Y Title: IOlMU M~u,.... 5 THE BANK: NBanC dba NBC, a [state banking association] r~ By: L~fj ~ Name: Randolp D. Royse Title: President and em [SIGNATURE PAGE TO DEPOSIT ACCOUNT CONTROL AGREEMENT] ORIGINAL SETTLEMENT AGREEMENT AND RELEASE j)J~ This Settlement Agreement and Release (the "Agreement") is made this /sf day ofN6v GrnbGl, 2001, by and between the parties to the Agreement as defined below. RECIT ALS A. The parties to this Agreement are the Town of Tiburon (hereinafter referred to as "Tiburon") and the Tiburon Lodge Limited Partnership (hereinafter referred to as "Lodge"). B. A dispute has arisen between the parties with respect to certain taxes allegedly due to Tiburon from the Lodge through October 1, 2001. Said tax liability is allegedly based upon application of the Tiburon Transient Occupancy Tax (the "Occupancy Tax") to room revenue paid to the Lodge by Bay Area Classic Learning dba Elderhostel ("Elderhostel"). Elderhostel is a nonprofit I.R.S. Code Section SOl(c)(3) entity. Tiburon claims such tax is due, owing, past due and subject to interest charges, late charges, and penalties. For its part, the Lodge asserts that the Occupancy Tax is unconstitutionally vague and ambiguous and that, therefore, no tax is due or owing; in the alternative, the Lodge disputes the amount of the tax allegedly due, owing and past due under the Occupancy Tax . C. Tiburon and the Lodge wish to resolve the dispute and the actual and potential claims between them on the terms described below. D. As used in this Agreement, the term "party" or "parties" shall include the entities identified in Recital A, above, and each past or present officer, director, shareholder, partner, agent, employee, attorney, representative, predecessor, affiliate company, parent or subsidiary, insurer or a successor or assign of each of said entities. AGREEMENT NOW THEREFORE, in consideration of the payment of the sum of $9S.,314.92 ("the Settlement Sum"), under the terms set forth below, and the other obligations and contingencies described below, the PARTIES AGREE AS FOLLOWS: 1. The foregoing Recitals are true and correct. 2. The Lodge shall pay to Tiburon the Settlement Sum in twelve (12) equal monthly installments of$7,942.91 starting on the date of the full execution of this Agreement lA/5D6994.2 and thereafter on the first day of each month as listed below. Said payments shall be inclusive of all tax liability, i.e. principal, interest, penalties, late charges and/or other charges which may be owed to Tiburon for any and all tax liability under the OccupancyTax and arising from Elderhostel revenue through October 1, 2001. December 1, 2001 $7,942.91 January 1, 2002 $7,942.91 February 1, 2002 $7,942.91 March 1, 2002 $7,942.91 April 1, 2002 $7,942.91 May 1,2002 $7,942.91 June 1, 2002 $7,942.91 July 1, 2002 $7,942.91 August 1, 2002 $7,942.91 September 1, 2002 $7,942.91 October 1, 2002 $7,942.91 3. As security for the payments referenced in Paragraph 2, the Lodge shall execute a Deposit Account Control Agreement (the "DAC Agreement") in favor of Tiburon in at least the full amount of the Settlement Sum. Said DAC Agreement shall be in the form attached hereto as Exhibit "A." Pursuant to the DAC Agreement, if any portion of the Settlement Sum remains unpaid, due and owing on the Maturity Date specified in the DAC Agreement, the Bank shall, immediately release to Tiburon a sum sufficient to pay Tiburon any portion of the Settlement Sum then unpaid. 4. In the event that the Lodge does not timely make a payment on the date due as listed in Paragraph 3, above, Tiburon may elect to give the Lodge notice of default. If, after Tiburon properly gives notice of default hereunder, the Lodge fails to cure any such default within five (S) business days after Tiburon gives such notice, the Lodge shall be in breach of this Agreement. In the event of a breach, the full amount of the Settlement Sum, less offsets for any payments made hereunder, shall become immediately due and payable. In the event of such breach, Tiburon may immediately exercise its rights under the Deposit Account Control Agreement. 5. For the period from October 1, 2001 to December 31,2001, the Lodge shall pay tax pursuant to the Occupancy Tax to Tiburon calculated on 60 percent of the daily rate paid by each Elderhostel guest (or any similar "lodging plus food service or meeting room LA/506994.2 -2- service included" guest) for room, food service and meeting room services. Said tax liability shall be calculated and paid to Tiburon on a quarterly basis as set forth in Tiburon' s Municipal Code. 6. Beginning January 1,2002, the Lodge and continuing thereafter until changed by written agreement of the Parties, the Lodge shall pay tax pursuant to the Occupancy Tax to Tiburon calculated on 70 percent of the daily rate paid by each Elderhostel guest (or any similar "lodging plus food service or meeting room service included" guest) for room, food service and meeting room services. Said tax liability shall be calculated and paid to Tiburon on a quarterly basis as set forth in Tiburon's Municipal Code. 7. Except as to the obligations set forth above, Tiburon releases the Lodge from any and all claims, causes of action, obligations, damages and liabilities of any nature whatsoever arising out of any sums due under the Occupancy Tax due prior to October 1, 2001. For its part, the Lodge agrees to waive its arguments regarding the validity and/or enforceability of the Occupancy Tax with respect to the past tax liability resolved under the terms of this Agreement. 8. With respect to the claims released herein, Tiburon expressly waives any benefits or rights available to it under the provisions of Section 1542 of the California Civil Code which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him, must have materially affected his settlement with the debtor. 9. Both parties acknowledge that their independently selected attorney at law has explained to it the meaning and the effect of Civil Code Section 1542. Each party understands the statutory language of Civil Code Section 1542 and, with this understanding, each party nevertheless elects to, and does, assume all risk for claims released under this Agreement heretofore and hereafter arising, known or unknown, and each party specifically waives any rights it may have under Civil Code Section 1542. Each party fully understands that if facts with respect to which this Agreement is executed are found hereafter to be other than or different from the facts now believed to be true, it expressly accepts and assumes the risk of such possible difference in facts and agrees that this Agreement shall be and remain effective notwithstanding such difference in facts. LA/506994.2 -3- 10. Any notice given pursuant to this Agreement shall be in writing and may be given via telefacsimile, overnight delivery or hand-delivery to the following persons: To Tiburon: Town of Tiburon Attention: Ann Danforth, Town Attorney 1155 Tiburon Boulevard Tiburon, California 94920 To Lodge: The Tiburon Lodge Limited Partnership Attention: Mark McDowell 82 Armstrong Drive Mustang, Oklahoma 73064 With Copy to: Michael Schuminsky 501 South Rancho, Suite C-17 Las Vegas, Nevada 89106 11. Each party's consent to this Agreement is given in recognition of the risks of litigation and in order to prevent the expense of further litigation and does not constitute an admission of liability or admission that any of the facts asserted by any party released above are true or that the claims or defenses, or any portion thereof, asserted by any party are well-founded. 12. Each party warrants and represents that this Agreement is executed on its behalf by a duly authorized officer or agent. 13. In the event that any of the terms, conditions or covenants contained in this Agreement are held to be invalid, then any such invalidity shall not affect any other terms, conditions or covenants contained hereinwith shall remain in full force and effect. 14. Each party hereto agrees that, except as provided herein, it shall bear its own costs, expenses and attorneys' fees, taxable and otherwise, incurred in or arising out of the investigation, prosecution or defense of any matter released herein. IS. The parties, and each of them, represented by competent and indepen- dently selected counsel, affirm and acknowledge that they, and each of them, have read this Agreement or have had the same explained to them by their counsel; they fully understand and appreciate the foregoing words and terms and their significance; and that they are entirely LA/506994.2 -4- satisfied with the terms of this Agreement, and have affixed their signatures hereto voluntarily of their O\vn free will and accord. 16. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of California. 17. This document, and the Exhibit hereto, embodies the entire temlS and conditions of this Agreement, and each party acknowledges that it has not relied upon any warranties, representations or promises except as set forth expressly in this Agreement. Any prior correspondence, memoranda or agreements, whether oral or written, are superseded in total by this Agreement. All words; phrases, sentences and paragraphs, including the Recitals stated above, are material to this Agreement. This Agreement may not be altered, amended, modified or otherwise changed in any respect, in particular, or whatsoever, except by \vriting executed by an authorized representative of each party hereto. 18. This Agreement shall be binding upon and for the benefit of the parties released herein, and each of them, and each of their successors, devisees, executors, representatives and assigns. 19. This Agreement may be executed simultaneously in one or more counterparts, each of \vhich shall be deemed an original, but all of \vhich taken together shall constitute one and the same instrument. DATED: IJj II 0 ( THE TOWN OF TIBu~ON, a municipal corporation By Its DATED: IJ-/I/OI GENERAL PARTNJ APPROV~ORM ~4~ A DANFORTH TOWN ATTORNEY TOWN OF TIBURON LA/506994.2 -5-