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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: May 16, 2006 <br />Action Agenda <br />Item No. 9- ~y <br />SUBJECT: Consent for New Indebtedness for OE Enterprises, Inc. <br />DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): <br />A) Update on OE Enterprises' INFORMATION CONTACT: <br />Pertormance Obligations Pursuant to Dianne Reid, 245-2326 <br />Recorded Agreement between <br />Orange Enterprises and Orange <br />County <br />B) Letter from First National Bank and <br />Draft Deed of Trust <br />PURPOSE: OE Enterprises, Inc. (formerly Orange Enterprises) has secured a commitment <br />from First National Bank for $190,000 for the purpose of financing building improvement costs. <br />The bank requires the fallowing prior to closing: <br />1) Written consent from Orange Gcunty acknowledging and approving this new <br />indebtedness; <br />2) Confirmation from Orange County that the Deed of Trust which will secure this loan shall <br />be given priority to the recorded agreement between OE Enterprises, Inc. and Orange <br />County dated April 26, 2005 (the Agreement); and <br />3) Written statement from Orange County that acknowledges violations of covenants <br />referenced in said agreement and waives its exercisable rights associated with said <br />violations for the purpose of facilitating this transaction and advancing the continuation of <br />OE Enterprises, Inc.'s mission. <br />OE Enterprises seeks the Board of County Commissioners' approval for these assurances. <br />BACKGROUND: Last year, Orange County made a commitment tc contribute $825,000 to OE <br />Enterprises, Inc. (then known as Orange Enterprises) toward the purchase price and building <br />support for property located at 348 Elizabeth Brady Road. The initial County support for the <br />project in FY2005 was $525,000, with an additional $100,000 committed for FY2006, FY2007 <br />and FY2008. <br />The Agreement specified that the premises may be subjected to a deed of trust in favor of a <br />commercial lending institution in an amount not to exceed $715,000. The original bank loan at <br />the time of acquisition was $525,000. As of April 24, 2006, according to the Bank, the balance <br />on the original note is $459,511.13. This amount, added to the proposed loan, totals <br />$649,511.13, and within the $715,000 limit. <br />