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AGR-6110.A.1 - SOUTHERN COUNTIES OIL COMPANYAGR-LA 0.A. 1 FIRST AMENDMENT TO THE PARTICIPATION AGREEMENT BETWEEN CITY OF ORANGE AND SOUTHERN COUNTIES OIL CO AND ORANGE KATELLA,LLC This First Amendment ("First Amendment") to the Participation Agreement by and between the City of Orange, a municipal corporation of the State of California(hereinafter the"City"), and on the one hand, and SOUTHERN COUNTIES OIL CO.,a California limited partnership("SCOC"), ORANGE KATELLA, LLC, a California limited liability company ("Orange Katella"), on the other hand, is entered into as of May 1 , 2022 ("Effective Date"). WHEREAS, on .,c..201 the City, SCOC, and Orange Katella entered into the Participation Agreement("Original Agreement"); and WHEREAS, the City entered into the Original Agreement to induce and encourage the continued operation and possible expansion of existing commercial and industrial businesses within the City,thereby assisting the City in achieving its goals related to the development of said businesses and maintaining existing and creating new sources of sales tax revenue for the City's general fund that supports the public services that the City provides to its residents and to said businesses; and WHEREAS,the City desires to incentivize commercial and industrial business in the City by sharing a portion of the sales tax revenues generated by existing,new and expanding businesses, including the on-going operations of SCOC on certain real property owned by Orange Katella located at 1800 W Katella Ave, Orange, California("Site"); and WHEREAS, at the time of entering into the Original Agreement Orange Katella and SCOC were affiliates; and WHEREAS, on November 30, 2021, SCOC was acquired by certain wholly-owned entities owned by PILOT TRAVEL CENTERS LLC, a Delaware limited liability company Pilot"); and WHEREAS, SCOC provided notice,pursuant to Section 9 of the Original Agreement,that Orange Katella was no longer affiliated with SCOC.. WHEREAS, based upon the sale of SCOC to Pilot the City, SCOC, Orange Katella, and Pilot desire to remove Orange Katella from the Original Agreement and relieve Orange Katella of any and all liability or obligation pursuant to the Original Agreement after November 30, 2021. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows: 1 1. Incorporation of Recitals. The recitals set forth above, and all defined terms set forth in such recitals and in the introductory paragraph preceding the recitals, are hereby incorporated into this Agreement as if set forth herein in full. 2. The following terms are revised as follows: Owner" shall mean SCOC and/or its equity holders.. Affiliate" means any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust and/or individual that is controlled by, or that is under common control with, SCOC collectively, or SCOC individually, and their respective legally permissible nominees, transferees, assignees, or successors to their respective rights, powers, and responsibilities as expressly permitted hereunder. The term "control" for these purposes shall mean the ability,by ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors of a corporation, to make management decisions on behalf of, or independently to select the managing partner of, a partnership, or otherwise to have the power independently to remove and then select a majority of those individuals exercising managerial authority over an entity; control shall be conclusively presumed in the case where SCOC or its equity holders own more than 50% of the shares of an entity. Approved Business"means the on-going business of selling refined petroleum products and related sales and/or use tax-generating products by SCOC on the Site plus any business of SCOC or any Affiliate generating sales and/or use taxes on or from the Site or within the City of Orange to the extent not in conflict with any applicable law, including, without limitation Government Code Section 53084.5. Approved Business includes the on-going business of Southern Counties Lubricants, LLC, a California limited liability company, in the City of Orange. It is the intent of the Parties that nothing in this Agreement or the implementation hereof violate Government Code Section 53084.5. Owner Default Notice" shall mean notice given to the Owner in accordance with the notice and cure requirements set forth in Section 8.a. of the Original Agreement, for a default of either SCOC of any material promise, obligation, covenant or duty under this Agreement, as more particularly described in Section 8.c. of the Original Agreement. 3. Section 4(e) is hereby amended to read as follows: If, at any time within one (1) year after the receipt by the City of a quarterly confirmation and payment of Sales Tax by State Board of Equalization, the quarterly confirmation and/or payment was incorrect, an appropriate adjustment shall be made. During the Term of this Agreement and for one (1) year thereafter, the Owner shall have the right to request, and upon such request the City shall deliver to the Owner within ten(10) days of such request, any documents received by the State Board of Equalization evidencing the actual payment and receipt of Sales Tax with respect to the Approved Business. If, based upon the documents from the State Board of Equalization and quarterly confirmation and payment 2 documentation, any Payment by the City to SCOC is less than the amount due to SCOC under this Agreement, the City shall disburse to SCOC the unpaid balance for the applicable Compliance Period no later than sixty (60) calendar days after SCOC demands the City to pay such unpaid balance. If, based upon the documents from the State Board of Equalization and quarterly confirmation and payment documentation, any Payment is larger than the amount due to SCOC under this Agreement, the City may deduct the overpaid amount from any future Payments otherwise payable to SCOC under this Agreement. If this Agreement has been terminated or is expired, and the City owes SCOC any unpaid balance as described in this paragraph,the City shall pay SCOC the unpaid balance no later than sixty(60) calendar days after SCOC demands the City to pay the unpaid balance, or,if this Agreement has been terminated or is expired,and SCOC owes the City for an overpayment by City as described in this paragraph, SCOC shall pay the overpaid amount no later than sixty(60) calendar days after the City demands SCOC to pay such amount. 4. Section 6(c) of the Original Agreement is hereby amended to read as follows: SCOC covenants and agrees, for itselfand its successors and assigns, that during the Term of this Agreement,that SCOC shall not,in its name or in the name of any Affiliate of any of them,directly or indirectly solicit or accept any direct or indirect "Financial Assistance" from any other government or any other public or private Person, if such Financial Assistance is given for the purpose of causing or would result in SCOC's breach of any of the covenants or terms and conditions of this Agreement and/or would cause or facilitate the relocation of any Approved Business operating on the Site or in the City of Orange and/or the designation as the City of Orange as the point of sale for any Approved Business that is contrary to the point of sale provisions in subsection b. above. For purposes of this Section, the term "Financial Assistance" means any direct or indirect payment,subsidy,rebate,or other similar or dissimilar monetary or non-monetary benefit, including, without limitation, payment of land subsidies, relocation expenses, public financings,property or sales tax relief, rebates, and/or exemptions or credits 5. Section 7 of the Original Agreement is hereby amended to ready as follows: a.The indemnifications provided in this Section shall survive the termination of this Agreement. b.SCOC agrees to indemnify, defend (with counsel reasonably chosen by the City) and hold the City and its elected officials,officers,employees,agents,and attorneys harmless from and against all damages, judgments, orders, rulings, costs, expenses and fees (collectively, the SCOC Claims") arising from or related to any act or omission of SCOC in performing its obligations hereunder, except to the extent such damages, judgments, orders, rulings, costs, expenses and fees arise out of or are in connection with a claim,litigation or cause of action caused by the willful misconduct or negligence of the City. SCOC Claims shall include, without limitation, damages, judgments, orders, rulings, costs, expenses and fees arising out of or in connection with any claim, litigation or cause of action that includes allegations or arguments that this Agreement and/or the payment of the Payments under this Agreement, violate or are illegal or impermissible as a result of, Government Code section 53084.5 or arising out of or in connection with the failure or alleged failure of any person or entity (including Owner, its contractors and subcontractors) to pay prevailing wages as required by law or to comply with the other applicable provisions of Labor Code sections 1720 et seq. and implementing regulations in connection with 3 any other work undertaken by Owner, its contractors or subcontractors in connection with any Approved Business or the Site. c.SCOC releases the City from any SCOC Claims arising from any inability of the City to legally collect sales tax, share sales tax, or any other act or omission, including any state statute or regulation to which the City is subject, which is beyond the City's control. d.SCOC waives any right that it might have or accrue at any time during the effective period of any provision of this Agreement, including these indemnification provisions, or any of its various exhibits, to pursue any legal or equitable remedy or SCOC Claim against the City arising from this Agreement, other than for non-payment of the Owner's share of Sales Tax Increment calculated under and otherwise due under the provisions of this Agreement. e.The City agrees to indemnify, defend (with counsel chosen by City with approval by SCOC which approval may not be unreasonably withheld) and hold SCOC and their directors, officials, officers, employees, agents, and attorneys harmless from and against all damages, judgments, orders, rulings, costs, expenses and fees (collectively, the"City Claims") arising from City's failure to make any Payment when and as due under this Agreement, except to the extent such damages,judgments,orders,rulings,costs,expenses and fees arise out of or are in connection with a claim,litigation or cause of action caused by the willful misconduct or negligence of SCOC. 6. Section 8(c) of the Original Agreement is hereby amended to read as follows: Termination by City. Notwithstanding any other provision in this Agreement to the contrary, the City shall have the right to terminate its obligations under this Agreement if either SCOC defaults on any material promise, obligation, covenant or duty under this Agreement. To terminate this Agreement,the City shall first provide the Owner Default Notice. The Owner Default Notice shall indicate the reason that City has declared a termination of this Agreement and shall indicate what steps must be taken to cure the referenced default of this Agreement. If,at the end of the applicable cure period, Owner has not cured the alleged default(s), the City shall have the right, at its sole option, to deem this Agreement terminated without further notice or action by the City. In the event of such a termination of this Agreement, SCOC agrees to pay the City the Buyout Amount within sixty(60)days following written demand therefor from the City. The liability of the Owner and all Affiliates under this Agreement for the default(s)alleged in the Owner Default Notice shall be limited solely to the City's receipt of the Buyout Amount and in no event shall any recourse against any of the other assets of the Owner or any Affiliate be available to the City or any other person or entity acting on behalf of the City except for the Buyout Amount for the default(s) alleged in the Owner Default Notice. 7. Any and all notices required by the Original Agreement as revised by this First Amendment shall be provided to the following: To City: City of Orange 300 East Chapman Avenue Orange, California 92866 Attn: City Manager 4 With copy to: City of Orange 300 East Chapman Avenue Orange, California 92866 Attn: City Attorney To SCOC: Southern Counties Oil Co. 1800 West Katella Avenue, Suite 300 P.O. Box 4159 Orange, California 92863-4159 With copy to: Legal Department c/o Southern Counties Oil Co. 1800 West Katella Avenue, Suite 400 P.O. Box 4159 Orange, California 92863-4159 8.Effect on Other Provisions. Except as provided in this First Amendment,all other provisions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed the day and year first above written. SIGNATURE PAGE FOLLOWS] 5 SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE PARTICIPATION AGREEMENT BETWEEN CITY OF ORANGE AND SOUTHERN COUNTIES OIL CO AND ORANGE KATELLA,LLC CITY OF ORANGE a municipal corporation and charter city 7:Ay,/ Interim City Manager Dated: 8/0022_ APPROVED AS TO FORM: r\ By: !FAIN ty- .y a.. - .Sthea 6 SIGNATURE PAGE TO THE FIRST AMENDMENT TO THE PARTICIPATION AGREEMENT BETWEEN CITY OF ORANGE AND SOUTHERN COUNTIES OIL CO AND ORANGE KATELLA,LLC ORANGE KATELLA,LLC, a California limited liability company By:A•t•t,e4s4A'4-Z Steven P. Greinke, its manager SOUTHERN COUNTIES OIL CO., a California Limited Partnership By: _Xj.5- (- t- /-t,„4/ t/ - 7