Loading...
HomeMy WebLinkAboutCDC/2001-08 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 RESOLUTION NO. CDC/2001-8 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND ACCEPTING THE PURCHASE BY REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM MDA-SAN BERNARDINO ASSOCIATES, L.L.c. OF THE CINEMASTAR THEATER PARCEL AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ON BEHALF OF THE REDEVELOPMENT AGENCY WHEREAS, the Community Development Commission of the City of San Bernardino (the "Commission") is the governing body of the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body corporate and politic, organized and existing pursuant to the Community Redevelopment Law (California Health and Safety Code Section 33000, et seq.); and WHEREAS, pursuant to that certain Disposition and Development Agreement ("DDA") between the Agency and MDA-San Bernardino Associates, L.L.c., a Delaware limited liability company ("MDA"), MDA acquired the real property described on Exhibit "A" attached hereto and incorporated herein by this reference (the "Cinemastar Theater Parcel"); and WHEREAS, pursuant to the DDA, MDA has developed and constructed on the 20 21 22 23 24 25 26 27 28 Cinemastar Theater Parcel an approximately 80,000 square foot multi-screen cinema complex and related common areas; and WHEREAS, the acquisition and development of the Cinemastar Theater Parcel and construction of the above-referenced cinema complex by MDA (the "Project") was financed by a construction loan from GMAC Commercial Mortgage Corporation, which has since been refinanced by a loan from Gold Mountain Financial Institution, Inc. ("Senior Lender"), and with financial assistance from the Agency consisting of (i) a loan pursuant to that certain 1998 Community S82001:2412.1 1 CDC/2001-8 1 Development Block Grant Program Section 108 Project Development Loan Agreement dated as of 2 December 10, 1998 (the "Second Loan") and (ii) a Project development cost contribution (the 3 "Third Loan"); and 4 5 WHEREAS, at present, the Cinemastar Theater Parcel is encumbered as follows: 6 7 (a) A deed of trust (the "First Trust Deed") in favor of the Senior Lender in the 8 original principal amount of Three Million Six Hundred Thousand Dollars ($3,600,000), the 9 outstanding principal balance of which is Three Million Six Hundred Thousand Dollars 10 ($3,600,000); 11 12 (b) A deed of trust (the "Second Trust Deed") in favor of the Agency securing 13 the Second Loan, the outstanding principal balance of which is approximately Seven Million Dollars 14 ($7,000,000); and 15 16 (c) A deed of trust (the "Third Trust Deed") in favor of the Agency securing the 17 Third Loan, the outstanding principal balance of which is approximately One Million Three 18 Hundred Twenty-Five Thousand Five Hundred Seventy-Five Dollars ($1,325,575); and 19 20 WHEREAS, the Cinemastar Theater Parcel is subject to that certain Multi-Plex 21 Theater Lease dated December 20, 1996 between MDA, as Landlord, and CinemaS tar Luxury 22 Theaters, Inc., a California corporation ("Cinemastar"), as Tenant, and amended by that certain First 23 Amendment to Multi-Plex Theater Lease dated December 10, 1998 (the "Lease"); and 24 25 WHEREAS, Cinemastar is in default under the Lease, has not paid rent to MDA 26 since September, 2000 and has filed a voluntary petition for relief under Chapter 11 of the U.S. 27 Bankruptcy Code; and 28 SB200 I :2412.1 2 CDC/2001-8 1 WHEREAS, in the absence of rental income derived from the Lease, MDA is unable 2 to make further payments on the indebtedness secured by the First Trust Deed, the Second Trust 3 Deed and the Third Trust Deed, although the indebtedness secured by the First Trust Deed is current 4 through the end of January, 2001; and 5 6 WHEREAS, MDA wishes to sell the Cinemastar Theater Parcel to the Agency and 7 assign the Lease to the Agency; and 8 9 WHEREAS, in order to protect the investment the Agency has heretofore made in 10 the Project and to preserve the security afforded by the Second Trust Deed and Third Trust Deed, 11 the Agency desires to purchase the Cinemastar Theater Parcel from MDA; and 12 13 WHEREAS, a Purchase and Sale Agreement and Joint Escrow Instructions by and 14 between the Agency and MDA has been presented to this Commission for approval. 15 16 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION 17 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN 18 BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 19 20 21 22 23 Section 2. The Commission hereby approves the Purchase and Sale Agreement 24 and Joint Escrow Instructions attached hereto as Exhibit "B". Section 1. The Commission hereby approves and accepts the purchase by the Agency of the Cinemastar Theater Parcel. 25 26 Section 3. The Executive Director ofthe Agency is hereby authorized to execute 27 the Purchase and Sale Agreement and Joint Escrow Instructions on behalf of the Agency in 28 substantially the form attached hereto, together with such changes therein as may be approved by SB2001:2412.1 3 CDC/2001-8 1 the Executive Director and Agency Special Counsel. The Executive Director or such other 2 designated representative of the Agency is further authorized to do any and all things and take any 3 and all actions as may be deemed necessary or advisable to effectuate the purposes of the Purchase 4 and Sale Agreement and Joint Escrow Instructions. 5 1/1 6 /II 7 /II 8 /II 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 S82001:2412.1 4 CDC/2001-8 1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND ACCEPTING THE PURCHASE BY 2 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM MDA-SAN BERNARDINO ASSOCIATES, L.L.c. OF THE CINEMAST AR THEATER PARCEL AND 3 AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ON BEHALF OF THE 4 REDEVELOPMENT AGENCY 5 6 7 Section 4. This Resolution shall become effective immediately upon its adoption. 8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 9 Development Commission of the City of San Bernardino at a ;oint regular meeting thereof, 10 held on the 5th 11 12 Commission ESTRADA 13 LIEN MCGINNIS 14 SCHNETZ SUAREZ 15 ANDERSON McCAMMACK 16 day of February , 2001, by the following vote, to wit: AYES X X x X X X NAYS ABSTAIN ABSENT x 17 18 19 The foregoing Resolution is hereby approved this ~ day of February , 2001. ~~~ Betty Dean-Anderson, Vice-Chair Commumty Development CommIsSIOn of the City of San Bernardino 5 1 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss 2 CITY OF SAN BERNARDINO ) 3 I, Secretary of the Community Development Commission ofthe City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached 4 copy of Community Development Commission of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this office. 5 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal 6 of the Community Development Commission of the City of San Bernardino this day of , 2001. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Secretary of the Community Development Commission of the City of San Bernardino SB2001:2412.1 6 CDC/2001-8 1 EXHIBIT "A" 2 LEGAL DESCRIPTION OF THE CINEMASTAR THEATER PARCEL 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB200J :2412.1 7 CDC/2001-8 1 EXHIBIT "B" 2 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 582001:2412.1 8 CDC/2001-8 PUR9HASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BY AND BETWEEN MOA-SAN BERNARDINO ASSOCIATES, LLC, a Delaware limited liability company ("MOA") AND REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Agency") 882001:3726.1 CDC/2001-8 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS l. Parties. THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ( "Agreement"), is made thi s _ day of February, 2001 by and between MDA-SAN BERNARDINO ASSOCIATES, LLC, a Delaware limited liability company ("MDA"), and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Agency"). 2 Recital.s. 2.1 Pursuant to that certain Disposition and Development Agreement between MDA and Agency (the "DDA") which was recorded in the Official Records of San Bernardino County, California ("Official Records") on December 29, 1998 as Document No. 19980556709, MDA acquired the real property described on Exhibit "A" attached hereto and incorporated herein by reference (the "Property") . Pursuant to the DDA, MDA has developed and constructed on the Property an approximately 80,000 square foot multi-screen cinema complex and related common areas leased t.o Cinemastar Luxury Theaters, Inc., a California corporation. MDA's acquisition and development of the Property and construction of the above-referenced cinema complex (the "Project") was financed by a construction loan from GMAC which has been since refinanced by a loan from Gold Mountain Financial Institution, Inc. ("Gold Mountain"), and with financial assistance from the Agency consisting of loans represented by the "Agency Note" and the "Second Agency Note". The Agency Note is secured by a deed of trust encumbering the Property junior to a first deed of trust securing the Gold Mountain loan, and the Second Agency Loan is secured by a third deed of trust junior only to the deed of trust securing the Gold Mountain loan and the deed of trust securing the Agency Note. At the present, the Property is subject to only the following monetary encumbrances: _ (a) A deed of trust (the "First Trust Deed") in favor of Gold Mountain in the original principal amount of Three Million Six Hundred Thousand Dollars ($3,600,000), the outstanding principal balance of which is Three Million Six Hundred Thousand Dollars ($3,600,000); 5B2001:3726.1 Page 1 of 24 CDC/2001-8 (b) A deed of trust (the "Second Trust Deed") in favor of the Agency securing the Agency Note, the outstanding principal balance of which is approximately. Seven Million Dollars ($7,000,000); and (c) A deed of trust (the securing the Second Agency Note, the balance of which is approximately One Twenty-Five Thousand Five Hundred ($1,325,575) . "Third Trust Deed") outstanding principal Million Three Hundred Seventy-Five Dollars 2.2 MDA and Agency entered into that certain Parking Agreement dated December. 10, 1998 (the "Parking Agreement") recorded in the Official Records on December 29, 1998 as Document No. 19980556712. 2.3 The Property is subject to that certain Multi-Plex Theater Lease dated December 20, 1996 between MOA, as Landlord, and Cinemastar Luxury Theaters, Inc., a California corporation ("Tenant"), as Tenant, as to which a Short Form of Lease dated December 10, 1998 was recorded in the Official Records on December 29, 1998 as Document No. 19980556713. Such Lease was amended by that certain First Amendment to Multi-Plex Theater Lease dated December 10, 1998. Such Lease, as amended, is herein called the "Lease". 2.4 Tenant is in default under the Lease, has not paid rent to MOA since September, 2000 and has filed a voluntary petition for relief under Chapter 11 of the U. S. Bankruptcy Code. In the absence of rental income derived from the Lease, MDA is unable to make further payments on the indebtedness secured by the First Trust Deed, the Second Trust Deed and the Third Trust Deed, although the indebtedness secured by the First Trust Deed is current through the end of January, 2001. 2.5 MDA wishes to sell the Property to Agency and, in connection therewith, to terminate the DDA, and to assign the Lease, the Guaranty of Lease, and the Parking Agreement to Agency, and Agency wishes to purchase and acquire the Property as herein set forth. 3 Purchase and Sale. 3.1 MDA agrees to sell, convey and deliver the Property to Agency and Agency agrees to purchase and accept the Property from SB2001: 3726.1 Page 2 of 24 CDC/2001-8 MDA, at the Purchase Price, and on the terms and conditions contained hereinafter. 3.2 As used herein, the term ~Property" means collectively the Property, and all improvements thereon, and, to the extent owned by MDA and transferable or assignable, all of the following: (a) All appurtenant easements, rights of way, and similar items running in favor of or benefitting the Property; (b) All landscaping, curbs other improvements of MDA's interest in the driveways, and gutters, utility installations and all and fixtures located on the Property; (c) All right, title and interest of MDA in all personal property located on and used in connection with the operation of the improvements, including but not limited to, (i) fixtures, heating, ventilation and air conditioning fixtures and equipment, lighting, and electrical and plumbing fixtures and equipment, and (ii) all intangible personal property used in connection with the Property (collectively, the ~Personal Property"); and (d) All of MDA' s right, title and interest as Landlord under the Lease, including, but not limited to, ail rights to receive rents which have been earned and are owing and rents which may hereinafter accrue and become owing, security deposits, if any, any and all amounts which may be owing by Tenant to Landlord pursuant to the Lease and all rights of MDA as an additional insured under insurance policies maintained by the Tenant. (e) The Guaranty of Lease attached to the Lease as Exhibit ~D." 4 Purchase Price. The purchase price (~Purchase Price") for the Property shall be an amount equal to the sum of the indebtedness secured by the First Trus~ Deed, the Second Trust Deed and the Third Trust Deed, plus Ten Thousand Dollars ($10,000). The Purchase Price shall be paid by Agency as follows: SB2001: 3726.1 Page 3 of 24 CDC/2001-8 4.1 At the Closing, Agency shall take the Property subject to the First Trust Deed, the Second Trust Deed and the Third Trust Deed. 4.2 On or before the uClosing Date" (as defined in Section 5.2 below) Agency shall have on deposit in Escrow, in funds available for disbursement to MDA on the date specified for Close of Escrow (hereinafter defined), the sum of Ten Thousand Dollars ($10,000), plus additional amounts required to pay Agency's expenses as provided herein, if any. 5 Escrow. 5.1 Within five (5) business days after the execution of three (3) copies of this Agreement by Agency and MDA, the parties shall open an escrow (UEscrow") at First American Title Insurance Company in San Bernardino, California (UEscrow Holder"), in order to consummate the purchase and sale of the Property. A fully executed copy (or counterpart executed copies) of this Agreement shall be deposited with Escrow Holder and shall be considered as the instructions of the parties as to the terms and conditions of the Escrow. Escrow Holder's General Provisions of escrow, as set forth on Exhibit UB" attached hereto, are hereby incorporated herein. In the event of a conflict between this Agreement and the General Provisions, the terms of this Agreement shall prevail. . 5.2 As used herein (i) the term uOpening of Escrow" shall mean the date that the Escrow Holder acknowledges its agreement to act as Escrow Holder in accordance with the provisions of this Agreement; (ii) the terms UClose of Escrow" and uClosing" shall mean the recording of the Grant Deed in the Official Records of San Bernardino County, California; (iii) the term uClosing Date" shall mean that date on which the Close of Escrow occurs; and (iv) the term UDate of Agreement" shall mean the date upon which the Agency and MDA have executed and delivered this Agreement. Escrow Holder shall confirm by notice to Agency and MDA, in writing, the date of Opening of Escrow. The Close of Escrow shall occur on February 22, 2001, or on such other date mutually agreeable to the parties. 6 Closi~q Costs. The cost of an ALTA standard owner's title insurance policy, or such other policy of title insurance desired by Agency, with liability in the amount of the Purchase Price shall be paid by Agency. The escrow fee and costs shall be borne by Agency. Agency 582001: 3726.1 Page 4 of 24 CDC/2001-8 shall pay all documentary transfer taxes payable in connection with the recordation of the Grant Deed. Agency shall pay Escrow Holder's customary charges to Agency for document preparation, recording and miscellaneous charges. 7 Conditions Precedent: Due Diliqence Investiqation: Title. 7.1 Notwithstanding any provision of this Agreement to the contrary, Agency's obligation to purchase the Property is subject to Agency's approval or waiver of the following contingencies, which approval or waiver shall be in writing and given or withheld in Agency's sole discretion. Agency may withhold its approval for any reason whatsoever without regard to considerations of reasonableness. In the event Agency disapproves, in Agency's sole discretion, or is deemed to have disapproved of any of the following contingencies within the applicable date(s) set forth below, this Agreement shall automatically terminate without notice whereupon neither party shall have any further rights or obligations hereunder (except for those provisions which, pursuant to the terms of this Agreement, survive such termination) . (a) Unless otherwise set forth specifically herein, Agency shall have until 5:00 p.m. on the seventh (7th) business day after the Opening of Escrow (the "Due Diligen~e Period") within which to make such investigations, tests and studies of the Property as Agency deems appropriate. Agency 's review of the Property, including physical inspections of the Property shall be conducted at Agency's sole cost and expense. (b) Agency shall have until the expiration of the Due Diligence Period to deliver to MDA a notice disapproving the Due Diligence Documents (as defined in Section 7.3) or the Property. Failure to so notify MDA in writing by the expiration of the Due Diligence Period shall be conclusively deemed Agency's disapproval of the Due Diligence Documents and the Property. 7.2 The following are additional conditions precedent to Agency's obligations under this Agreement, and are intended solely for the benefit of Agency and may be waived only by Agency in writing. In the event any conditions precedent set forth in this Section 7.2 are not satisfied as of the Close of Escrow, Agency may, in its sole and absolute discretion, by written notice delivered to MDA, terminate this Agreement, whereupon all rights and obligations of Agency and MDA hereunder (except provisions of SB2001:3726.1 Page 5 of 24 CDC/2001-8 this Agreement which recite that they survive termination) shall automatically terminate and be of no further force or effect. (a) Agency has obtained all necessary consents and authorizations to perform its obligations hereunder. (b) The issuance by First American Title Insurance Company (the "Title Company") to Agency of the Title Policy (hereafter defined) . (c) All of MDA's written representations and warranties contained in or made pursuant to this Agreement shall have been true and correct when made and shall be true and correct as of the Closing Date. (d) There shall be no litigation or administrative agency or other governmental proceeding pending or threatened against the Property, which, after Closing, would materially adversely affect the value of the Property or the ability of Agency to operate the Property, other than Tenant's bankruptcy proceedings under Chapter 11 of the United States Bankruptcy Code (United States Bankruptcy Court, Southern District of California, Case No. 01-00110-JM11). (e) After the Due Diligence Period and through and including the Close of Escrow, there shall be no material adverse physical change in the Property. (f) MDA's delivery to the Agency of an estoppel certificate from Tenant certifying that MDA is not in default or breach of any of the terms of the Lease, as amended. (g) guaranties related to MDA's assignment to the Agency of all and warranties of contractors and subcontractors the Property. (h) MDA's assignment to the Agency of all its interests in that certain Guaranty of Lease attached as Exhibit "D" to the Lease. 7.3 Due Diliqence Documents. MDA will deliver to Agency the following documents ("Due Diligence Documents") promptly after Opening of Escrow: 582001:3726.1 Page 6 of 24 CDCj2001-8 (a) A Copy of the Lease and any other written agreements regarding the Property that are to remain in effect after the Closing Date) . (b) that relate possession Copies of the to the Property, or control. most recent property tax bills to the extent they are in MOA's (c) A Natural Hazard Disclosure Statement in accordance with the requirements of Civil Code ~ 1102.6(c). (d) All documents relating to MDA's ownership and operation of the Property, including without limitation, surveys, title reports, environmental reports, construction records, all guarantees of contractors and subcontractors, employee records, etc. 7.4 Accuracy of Due Diliqence Documents. Except as otherwise provided in this Agreement or in documents or instruments delivered in connection with this transaction, including without limitation in the closing documents executed and delivered by MDA pursuant to Section 12.1 below, MDA makes no representation or warranty as to the accuracy or completeness of the Due Diligence Documents or any information and materials contained therein to the extent that any such information is the work product of an independent third-party contractor. However, MDA warrants that it provided to Agency all information and documents in MOA's possession or control regarding ownership and operation of the Property. 7.5 Propertv Inspection. Agency, Agency's representatives, and/or authorized agents may enter the Property during the Due Diligence Period to make tests or other studies of the Property; provided, however, that (i) Agency shall not unreasonably interfere with the use of the Property by Tenant, (ii) Agency shall not conduct any invasive testing of the Property, (iii) Agency shall pay for all such tests and studies, (i v) Agency shall keep the Property free and clear of any liens arising out of Agency's entry onto the Property or the tests and studies and shall name MDA as an additional insured on Agency's comprehensive general liability insurance, -and a copy of Agency's insurance certificate shall be furnished to MDA prior to entry on the Property, and (v) Agency shall promptly repair all damage to the Property arising out of or caused by such entry or the tests and studies. Phase 1 environmental investigation, structural engineering investigation 582001:3726.1 Page 7 of 24 CDC/2001-8 and property surveys are not "invasive testing" for the purposes of this Agreement. 7.6 Title Condition and Deed. (a) Upon execution of this Agreement, MDA shall deliver to Agency a preliminary title report covering the Property, with copies of all documents referenced as exceptions therein (collectively the "Reports") from the Title Company. Agency shall have until the expiration of the Due Diligence Period to deliver to MDA in writing Agency's approval of the Title Report or, alternatively, Agency may deliver to MDA in writing any objections to the Property or the condition of title as set forth therein; provided, however, Agency shall not object to (i) a lien to secure payment of real estate taxes, not yet due and payable as of the Closing Date; (ii) the First, Second or Third Trust Deeds, including an assignment of the Lease to the lenders; (iii) any matter recorded pursuant to the DDA; and (iv) matters affecting the condition of title created by, or with the consent of, Agency. (b) Failure of Agency to approve, by written notice to MDA, to any exception shown in the Reports within the Due Diligence Period, shall be conclusively deemed Agency"s disapproval of such exceptions. In the event of Agency 's disapproval, this Agreement shall automatically terminate, whereupon neither party shall have any further rights or obligations hereunder Escrow shall be canceled. (c) At Close of Escrow MDA shall convey the Property to Agency by Grant Deed in the form of Exhibit "C" attached hereto and incorporated herein modified as mutually agreed to by the Parties, subject to those title exceptions, matters and restrictions of record approved in writing by Agency. At the Closing, title shall be evidenced by the unconditional commitment of the Title Company to issue its ALTA standard owner's form policy of title insurance in the amount of the Purchase Price or such other policy of title insurance desired by Agency, showing title to the Property vested in Agency subject only to the exceptions and matters approved in writing by Agency (the "Title Policy") . 7.7 Consent of Gold Mountain. Notwithstanding any provision of this Agreement which may be to the contrary, Agency's obligation SB2001:3726.1 Page 8 of 24 CDC/2001-8 to purchase the Property is subject to MDA having obtained and delivered to Agency prior to the expiration of the Due Diligence Period an unqualified Consent to Sale from Gold Mountain in a form approved by Agency. In the event such Consent to Sale has not been delivered to Agency prior to the expiration of the Due Diligence Period, and Agency has not waived such requirement, this Agreement shall automatically terminate without notice, whereupon neither party shall have any further rights or obligations hereunder Escrow shall be canceled. 8 Representations and Warranties. 8.1 Agency hereby makes the following representations and warranties to MDA, which r~presentations and warranties are, and as of the Close of Escrow shall be, true in all material respects: (a) Leqallv Bindinq. This Agreement and the other documents to be executed by Agency hereunder upon execution and delivery thereof by Agency, will have been duly entered into by Agency and will constitute legal, valid and binding obligations of Agency, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (b) Consents. All requisite action has been taken by Agency and all requisite consents have been obtained in connection with entering into this Agreement by Agency, and shall have been taken by Agency prior to the expiration of the Due Diligence Period for the consummation of the transaction contemplated by this Agreement, and no consent of any other party is required. (c) Authoritv. Agency has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein, and to consummate the transaction contemplated hereby. The individuals executing this Agreement and the instruments to be delivered by Agency at Closing on behalf of Agency hereby represent and warrant that ~hey have the power, right and authority to bind Agency. (d) Other Obliqations. Neither the execution of this Agreement nor the consummation of the transaction contemplated by this Agreement shall result in a breach of or constitute a default under any agreement, document, instrument 552001:3726.1 Page 9 of 24 CDC/2001-8 or any other obligation to which Agency is a party or by which Agency may be bound or affected, or under any law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body, applicable to Agency. 8.2 MDA hereby makes the following representations and warranties to Agency, which representations and warranties are, and as of the Close of Escrow shall be, true in all material respects: (a) Leqall v Bindinq. This Agreement and the other documents to be executed by MDA hereunder upon execution and delivery thereof by MDA, will have been duly entered into by MDA and will constitute legal, valid and binding obligations of MDA except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (b) Consents. Subject to obtaining the consent of Gold Mountain, all requisite action has been taken by MDA and all requisite consents have been obtained in connection with the entering into this Agreement by MDA and the consummation of the transactions contemplated by this Agreement, and no consent of any other party is required. (c) Authoritv. MDA has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein, and to consummate the transaction contemplated hereby. The individuals executing this Agreement and the instruments referenced herein on behalf of MDA hereby represent and warrant that they have the power, right and authority to bind MDA. (d) Other Obliqations. Neither the execution of this Agreement nor the consummation of the transaction contemplated hereby shall result in a breach of or constitute a default under any agreement, document, instrument, or other obligation to which MDA is a party or by which MDA or the Property may be bound, or under any law, statute, ordinance, rule, -governmental regulation or any writ, injunction, order or decree of any court or governmental body, applicable to MDA or the Property. SB2001:3726.1 Page 10 of 24 CDC/2001-8 (e) Litiqation. MDA has no actual current knowledge of any existing, pending or threatened litigation against MDA or the Property which could be binding on Agency or the Property after the Close of Escrow, except as may be disclosed to Agency in writing during the Due Diligence Period, and except for the fact that Tenant has fi.led a voluntary petition for relief under Chapter 11 of the u.s. Bankruptcy Code. From and after full and complete execution of this Agreement through the Closing, MDA shall promptly notify Agency of any such litigation which, to the actual knowledge of MDA, is thereafter threatened or pending. (f) Violations of Law. There are no violations of governmental laws, ordinances, regulations, rules, permits, or private covenants, conditions and restrictions with respect to the Property which MDA has not complied or corrected, except as disclosed to Agency in writing during the Due Diligence Period. From and after the full and complete execution of this Agreement through the Closing, MDA shall promptly notify Agency of any such violation of law which, to the actual knowledge of MDA, is thereafter threatened or pending. (g) The Lease has not been further amended or modified except as set forth herein. The Lease is in full force and effect, subject only to the effect of the Tenant having filed a voluntary petition for relief under Chapter 11 of the u.s. Bankruptcy Code and Tenant's default by not making required payments of rent or other amounts owing under the Lease from and after those payments due for the month of September, 2000. Further, MDA is not in default or breach of the Lease, as amended. (h) Eminent Domain. MDA has no actual current knowledge of any pending or threatened proceeding in eminent domain which would affect the Property or any portion thereof, except as disclosed in writing to Agency during the Due Diligence Period. From and after the full and complete execution of this Agreement through the Closing, MDA shall promptly notify Agency of any such eminent domain proceeding whicht to the actual knowledge of MDA, is thereafter threatened or pending. (i) Environmental Violations. Seller has no actual or constructive knowledge of any violations of any environmental law referenced in Exhibit "I" to this Agreement SB2001 :3726.1 Page 11 of 24 CDC/2001-8 with respect to the Property, nor to MDA's actual current knowledge has MDA received any written notice that hazardous materials or substances may be present on the Property which are required by law to be remediated by MDA and which MDA has not remediated. MDA has not disposed of or caused a release of hazardous material or substance on or under the Property. (j) Insolvency. subject of a petition under insolvency laws. MDA has not filed, or been the any federal or state bankruptcy or (k) MDA has delivered all documents in its possession or control regarding the ownership and/or operation of Property. 9 Condition of Property: As-Is. "AS IS ." BUYER IS BUYING THE PROPERTY "AS IS" AND, EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN SECTION 8.2 ABOVE OR IN THE CLOSING DOCUMENTS, WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY KIND WHATSOEVER, BY SELLER, ITS AGENTS, BROKERS, CONSULTANTS, COUNSEL, EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, TRUSTEES OR BENEFICIARIES OR ANY OTHER PERSON. BUYER SPECIFICALLY AGREES AND UNDERSTANDS THAT TENANT HAS FILED A CHAPTER 1'1 PROCEEDING UNDER THE U. S. BANKRUPTCY CODE. BUYER HAS RECEIVED NOTICE OF SUCH PROCEEDING AND IS NOT RELYING UPON ANY ADVICE OR INFORMATION PROVIDED BY SELLER WITH RESPECT TO SUCH PROCEEDING, OR THE OUTCOME THEREOF. Agency understands and agrees that Agency is relying solely on its and its consultants' expertise and financial analysis of the desirability of purchasing the Property, and except as provided in 8.2 above Agency hereby releases MDA or MDA's Affiliates, and each of them, from any claims Agency may now or hereafter have against them as a result of the information they shall have provided to Agency. 10 ASsiqnments/Indemnities. 10.1 Aqency's Indemnities. At the Close of Escrow, Agency shall, pursuant to the "Assignment of Lease", the "Assignment of Parking Agreement" and the "Assignment of Guaranty of Lease" (collectively, "Assignments"), assume in writing all of MDA's SB2001:3726,l Page 12 of 24 CDC/2001-8 obligations under the Lease, the Parking Agreement and the Guaranty of Lease accruing from and after Close of Escrow and Agency shall indemnify, defend with counsel reasonably satisfactory to MDA and hold MDA harmless from any and all losses, claims, liabilities, actions, causes of action, costs, expenses, judgments and damages (herein, collectively, "Claims") that arise out of events or incidents on or about the Property occurring after the Close of Escrow or that in any way arise out of Agency's ownership of the Property. 10.2 MDA's Indemnities. At the Close of Escrow MDA shall, pursuant to the Assignments, assign in writing all of MDA's obligations under the Lease and the Parking Agreement accruing from and after Close of Escrow and MDA -shall indemnify, defend with counsel reasonably satisfactory to Agency and hold Agency harmless from any and all Claims that arise out of events or incidents on or about the Property occurring prior to and as of the Close of Escrow or that in any way arise out of MDA's ownership of the Property. 11 Taxes and Prorations of Certain Expenses. 11.1 All of the documentary transfer taxes in respect to the subject transaction shall be paid by Agency. There shall be no prorations whatsoever and Agency shall take the Property subject to any amounts owing or to become owing for real property taxes', insurance and operating expenses, including, but not limited to, charges for utilities, landscaping and common area expenses. Rent under the Lease shall not be prorated, and rents that are presently owing .under the Lease shall inure to the benefit of the Agency while there shall be no adjustment for rents that have been paid but which have not been earned. At the Close of Escrow, MDA shall cause to be delivered and disbursed to the Agency, through the Escrow or as Agency may direct, all monies in the MDA's operating account for the Property which the MDA estimates shall be in the approximate amount of Eighty Thousand Dollars ($80,000), less a reserve for payment of bills which are received after the Closing in the amount of Seven Thousand Five Hundred Dollars ($7,500). Within forty five (45) days after the Closing, MDA shall give Agency an accounting of any bills which were received after the Closing an~ which were paid by MDA, and shall remit to Agency the balance, if any, of such Seven Thousand Five Hundred Dollars ($7,500) reserve. Prior to the Closing, MDA shall provide to Agency an accounting of the funds in MDA's operating account for the Property. Pending the Closing, MDA shall continue to pay bills in respect of the Property including the First Trust Deed payments, SB2001: 3726.1 Page 13 of 24 CDC/2001-8 landscaping costs, utilities and other Project related expenses but shall not make payments on the Agency Loans. Agency shall have the right of approval of such accounting prior to the Close of Escrow. 12 Closinq: Deliveries bv MeA and Aqencv. 12.1 On or before the Closing Date, except as provided below, MDA shall deliver or cause to be delivered to Escrow Holder the following: (a) The Grant Deed executed and acknowledged by MDAi (b) Two counterparts of the Assignment of Lease in the form attached as Exhibit "D" executed by MDA and AgencYi (c) Two counterparts of the Assignment of Parking Agreement in the form attached hereto as Exhibit "E" executed by MDA and AgencYi (d) All monies in MDA I S operating account for the Property, estimated to be approximately $80,000.00, less $7,500.00 to be held in trust by MDA for the benefit of the Agency to pay bills received by MDA after Closing; (e) A "Bill of Sale" in the form attached hereto as Exhibit "F" executed by MDAi (f) Two counterparts of the Termination of Disposition and Development Agreement and Mutual Release ("Termination and Release") in the form attached hereto as Exhibit "G" executed by MDA; (g) An affidavit certifying that MDA is not a "foreign person" within the meaning of Sections 7701 and 1445 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder, and California Form 597-Wi (h) The "Tenant Notice" signed by MDA in the form attached hereto as Exhibit "H"; (i) Original of the Lease, to the extent in MDA IS possession (to be delivered to Agency outside of Escrow) i (j) A satisfactory to executed by MDAi Closing Statement Agency and MDA (the and in a form and content "Closing Statement") duly 5B2001: 3726.1 Page 14 of 24 CDC/2001-8 (k) An estoppel certificate from Tenant certifying that MDA is not in default or breach of any of the terms of the Lease, as amended; and (1) warranties of Property; and MDA I S assignment to the Agency of all guaranties and contractors and subcontractors related to the (m) Two counterparts of the Assignment of Guaranty of Lease in the form attached hereto as Exhibit UJ" executed by MDA and Agency; and (n) Resolutions or other evidence of appropriate actions of each of the entities subscribing this Agreement on behalf of MDA authorizing the execution of this Agreement by each such entity and authorizing the individual or individuals subscribing this Agreement to bind each entity by their execution of this Agreement; and (0) Any other documents, instruments or agreements reasonably necessary to close the transaction as contemplated by this Agreement. 12.2 All closing documents to be delivered by MDA under this Section 12.1 are subject to approval by the Agency and its legal counsel as to form and content. 12.3 On or before the Closing Date, Agency shall deliver to Escrow Holder the Purchase Price and to MDA or Escrow Holder the following, in form and substance reasonably acceptable to MDA: (a) Two counterparts of the Assignment of Lease executed by Agency; (b) Two counterparts of the Assignment of Parking Agreement duly executed by Agency; (c) Two counterparts of the Termination and Release executed by Agency; (d) The Closing Statement duly executed by Agency; and (e) Any other reasonably necessary by this Agreement. documents, instruments or agreements to close the transaction as contemplated SB2001: 3726.1 Page 15 of 24 CDC/2001-8 13 Disbursements and Other Actions by Escrow Holder. 13.1 Upon the Close of Escrow, Escrow Holder shall perform the following, in the manner herein below indicated: (a) Cause the Grant Deed and any other documents that the parties hereto may mutually direct to be recorded in the Official Records of San Bernardino County, California; (b) Disburse Holder in payment therefrom all items to this Agreement; to MDA all funds deposited with Escrow of the Purchase Price after deducting chargeable to the account of MDA pursuant (c) Deliver the Title Policy, to Agency; (d) Deliver fully executed Assignment of Lease, Assignment of Mutual Release to MDA and Agency; counterparts of Parking Agreement the the (e) Deliver the executed Bill of Sale to Agency; (f) Deliver to MDA and Agency conformed copies of all documents recorded at Close of Escrow; and (g) Deliver to the appropriate parties any documents or instruments to be delivered through pursuant to the terms hereof. other Escrow 14 Possession, Risk of Loss. Possession of the Property shall be given to Agency at the Close of Escrow. All risk of loss or damage with respect to the Property shall be borne by MDA prior to and until Closing, and shall pass from MDA to Agency at the Close of Escrow. 15 Brokeraqe Commissions. Agency and MDA hereby acknowledge and represent that there are no broker's commissions or finder's fees due in connection with this transaction. Agency and MDA shall each hold harmless and indemnify the other from any claims of brokers, agents or finders, licensed or otherwise, claiming through, under or by reason of the SB2001:3726.1 Page 16 of 24 CDC/2001-8 conduct of the indemnifying party with respect to the transaction contemplated hereunder except as disclosed above. 16 Notices. All notices, demands, and requests under this Agreement by either party shall be hand delivered or sent by United States first class mail, certified or express, postage prepaid, or by a national express courier such as Federal Express, U.P.S., etc., or sent by telecopier or facsimile transmission with confirmation of receipt, and addressed to the parties as follows: MDA: with a copy to: Agency: with a copy to: SB200~:3726.~ MDA-San Bernardino Associates, LLC 300 Continental Blvd., Suite 360 EI Segundo, CA 90245 Attn: Jason Kamm Telephone: (310) 416-1100 Facsimile: (310) 416-8711 Greenberg Glusker Fields Claman Machtinger & Kinsella LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, CA 90067 Attn: Stephen Claman, Esq. Telephone: (310) 201-7474 Facsimile: (310) 553-0687 Redevelopment Agency of the City of San Bernardino 201 North E Street, Suite 301 San Bernardino, CA 92401-1507 Attn: Gary Van Osdel Executive Director Telephone: (909) 663-1044 Facsimile: (909) 888 -9413 Lewis, D'Amato, Brisbois & Bisgaard, LLP 650 East Hospitality Lane, Suite 600 San Bernardino, CA 92408 Attn: Timothy J. Sabo Telephone: (909) 387-1130 Facsimile: (909) 387-1138 Page 17 of 24 CDC/2001-8 Notices, demands, and requests served in the above manner shall be considered sufficiently given or served for all purposes under this Agreement at the time the notice, demand or request is actually delivered to the addresses shown above during normal business hours, or otherwise the next business day. 17 Assiqnment. Agency shall have the right to designate vesting in a grantee other than Agency at Close of Escrow. Except for this right to designate vesting, Agency shall not assign or attempt to assign this Agreement, or any rights hereunder to any other person or entity without the prior written consent of MDA. In any event, Agency shall remain responsible for the performance of all obligations of the Agency under this Agreement through and including the Closing. MDA reserves the right to approve the form of any assignment. Any assignment or purported assignment (other than a designation of vesting at Close of Escrow as aforesaid) which has not received MDA's prior written consent shall be null and void and of no force and effect whatsoever. 18 Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) the plural and singular numbers shall each be deemed to include the other; (b) the masculine, feminine and neuter genders shall each be deemed to include the others; (c) "or" is not exclusive; and (d) "includes" and "including" are not limiting. Time is of the essence for each and every term, condition, covenant, obligation and provision of this Agreement. 19 Draftinq Interpretation. This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with in this Agreement. In addition, each party has been or has had the opportuni ty to be represented by experienced and knowledgeable counsel. Accordingly, any rule of law (including California Civil Code ~1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is hereby waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose of the parties and this Agreement. SB2001: 3726.1 Page 18 of 24 CDC/2001-8 20 Attorneys' Fees. Should any party hereto institute any action or proceeding to enforce any provision hereof by reason of the alleged breach of this Agreement, the prevailing party shall be entitled to receive from the losing party such amount as the court may adjudge to be reasonable attorneys' fees, expert fees, and consultant fees for services rendered to the prevailing party, and other costs of litigation. For the purposes of this Agreement, the phrase "reasonable attorneys' fees" shall include the salaries, costs and expenses of the attorneys employed in the office of the City Attorney of the City of San Bernardino. 21 Conflicts. In the event of a conflict between the provisions of this Agreement and the provisions of any other documents executed or purported to be executed between the parties prior to the date hereof, the provisions contained in this Agreement shall in all instances govern and prevail. 22 Severability. In the event any portion of this Agreement shall be declared by any court of competent jurisdiction to be invalid, illegal or unenforceable, such portion shall be severed from this Agreement and the remaining parts hereof shall remain in full force and effect as fully as though such invalid, illegal or unenforceable portion had never been part of this Agreement, provided the remaining Agreement can be reasonably and equitably enforced. 23 Bindinq on Successors. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto. 24 Required Actions of Aqency and MDA. Agency and MDA agree to execute all such instruments and documents and to take all actions (including the deposit of funds in addition to such funds as may be specifically provided for herein) as may be required in order to consummate the purchase and sale herein contemplated and shall use their best efforts to accomplish the Close of Escrow in accordance with the provisions hereof. SB2001:3726.1 Page 19 of 24 CDC/2001-8 25 Governinq Law and Venue. The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereunder, shall be interpreted and construed pursuant to and in accordance with the laws of the State of California. The parties select San Bernardino County, California as the proper and sole venue for any action filed to enforce, construe or interpret this Agreement. 26 Headinqs. Section headings have been inserted in this Agreement as a matter of convenience onlYi such Section headings are not a part of this Agreement and shall not be used in the interpretation of this Agreement. 27 Entire Aqreement. This Agreement constitutes the final, complete and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings or agreements of the parties. No party has been induced to enter into this Agreement by, nor is any party relying on, any representation or warranty outside those expressly set forth in this Agreement. 28 Counterparts: Facsimile Siqnatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. Agency and MDA each (i) agrees to permit the use of telecopied signatures, from time to time, where appropriate in order to expedite the transaction contemplated by this Agreement, (ii) intends to be bound by its respective telecopied signature, (iii) is aware that the other party will rely on the telecopied signature, and (iv) acknowledges such reliance and waives any defenses to the enforcement of the documents and notices effecting the transaction contemplated by this Agreement based on the fact that a signature or notice was sent by telecopy. SB2001:3726.1 Page 20 of 24 CDC/2001-8 29 No Third Party Benefit. Except as provided in Sections 19 and 25, the parties acknowledge and agree that the provisions of this Agreement are for the sole benefit of the parties hereto and are not for the benefit, directly or indirectly, of any other person or entity. 30 Business Davs. In the event that the Closing Date or the last day of the Due Diligence Period falls on a Saturday, Sunday or holiday, then the time for performances due hereunder on or before such date shall be performed, if at all, on the next business day. 31 Glossarv. The capitalized terms in the Agreement shall have the following meanings: UAs Is" shall have the meaning ascribed to such term in Article 9. UAssignment of Lease" shall have the meaning ascribed to such term in Section 12.1(b). UAssignment of Parking Agreement" shall have the meaning ascribed to such term in Section 12.1(c). UBill of Sale" shall have the meaning ascribed to such term in Section 12.1(e). UAgency" shall mean the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic of the State of California. UClaims" shall have the meaning ascribed to such term in Section 11.1. UClose of Escrow" shall have the meaning ascribed to such term in Section 5.2. UClosing" shall have the meaning ascribed to such term in Section 5.2. SB2DD1:3726.1 Page 21 of 24 CDC/2001-8 "Closing Date" shall have the meaning ascribed to such term in Section 5.2. "Closing Statement" shall have the meaning ascribed to such term in Section 12.1(j). "Date of Agreement" shall have the meaning ascribed to such term in Section 5.2. "Due Diligence Documents" shall have the meaning ascribed to such term in Section 7.3. "Due Diligence Period" shall have the meaning ascribed to such term in Section 7.1(a). "Escrow" shall have the meaning ascribed to such term in Section 5.1. "Escrow Holder" shall have the meaning ascribed to such term in Section 5.1. "Escrow Holder's General Provisions" shall have the meaning ascribed to such term in Section 5.1. "Gold Mountain" shall mean Gold Mountain Financial Institution, Inc., a California corporation. "Grant Deed" is attached as Exhibit "C." Lease" shall have the meaning ascribed to such term in Section 2.3. "Natural Hazard Disclosure Statement" shall have the meaning ascribed to such term in Section 7.3(c). "Opening of Escrow" shall have the meaning ascribed to such term in Section 5.2. "Personal Property" shall have the meaning ascribed to such term in Section 3.2(c). "Property" shall have the meaning ascribed to such term in Section 3.2. SB2001: 3726.1 Page 22 of 24 CDC/2001-8 "Purchase Price" shall have the meaning ascribed to such term in Article 4. "Reports" shall have the meaning ascribed to such term in Section 7.6(a). "MDA" shall mean MDA-San Bernardino Associates, LLC, a Delaware limited liability company. "Tenant" shall means Cinemastar Company Theaters, Inc., a California corporation. "Tenant Notice" shall have the meaning ascribed to such term in Section 12.1(h). "Termination and Release" shall have the meaning ascribed to such term in Section 12.1(f). "Title Company" shall mean First American Title Insurance Company. "Title Policy" shall have the meaning ascribed to such term in Section 7.6(c). SB2001:3726.1 Page 23 of 24 CDC/2001-8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. "SELLER" MDA-SAN BERNARDINO ASSOCIATES, LLC, a Delaware limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation ::~ (~d'&tfr Rex Swanson, President "BUYER" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic the Stat of California By: Name: Its: By: Name: Its: 5B2001: 3726.1 Page 24 of 24 CDC/2001-8 EXHIBIT "A" LEGAL DESCRIPTION PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 186 OF PARCEL MAPS, PAGE(S) 14 AND 15, RECORDS OF SAID COUNTY. TOGETHER WITH ALL APPURTENANT EASEMENTS, INCLUDING, WITHOUT LIMITATION, THE EASEMENT CONTAINED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENTS, RECORDED. DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556710, SAN BERNARDINO COUNTY RECORDS, AND THE EASEMENTS CONTAINED IN THE PARKING AGREEMENT RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556712, SAN BERNARDINO COUNTY RECORDS. 5B2001: 3726.1 Page 1 of 1 CDC/2001-8 EXHIBIT "B" ESCROW COMPANY GENERAL PROVISIONS 5B2001: 3726.1 CDC/2001-8 EXHIBIT "e" FORM OF GRANT DEED SB2001: 3726.1 CDC/2001-8 RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 300 San Bernardino, CA 92401 MAIL TAX STATEMENTS TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 300 San Bernardino, CA 92401 (Space above line for use by Recorder) GRANT DEED The recordation of this document is exempt from payment of recording fees (Government Code Section 6103) and payment of documentary transfer taxes (Revenue and Taxation Code Section 11922) . MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company, HEREBY GRANTS TO: the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California, the following property in the County of San Bernardino, State of California: SEE EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. "GRANTOR" MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development, L.P., a California limited partnership Its: Sole Member By: SK Metro Corp., a California corporation Its: General Partner Dated: , 2001 By: Rex Swanson, President 552001:3726.1 Page 1 of 3 CDC/2001-8 NOTARIAL ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss. ) COUNTY OF LOS ANGELES On 2001, before me, Notary Public, personally appeared Rex Swanson, 0 personally known to me OR 0 proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he execut.ed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Notary Public (Seal) SB2001:3726.1 Page 2 of 3 CDC/2001-8 EXHIBIT "A" TO GRANT DEED Legal Description PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 186 OF PARCEL MAPS, PAGE(S) 14 AND 15, RECORDS OF SAID COUNTY. TOGETHER WITH ALL APPURTENANT EASEMENTS, INCLUDING, WITHOUT LIMITATION, THE EASEMENT CONTAINED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENTS, RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556710, SAN BERNARDINO COUNTY RECORDS, AND THE EASEMENTS CONTAINED IN THE PARKING AGREEMENT RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556712, SAN BERNARDINO COUNTY RECORDS. SB2001: 3726.1 Page 3 of 3 CDC/2001-8 EXHIBIT "D" ASSIGNMENT AND ASSUMPTION OF LEASE SB2001:3726.1 CDC/2001-8 ASSIGNMENT AND ASSUMPTION OF LEASE 1. Parties. This Assignment and Assumption of Lease, dated as of , 2001 (UAssignment"), is entered into by and between MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company ("Assignor") and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Assignee"). Assignor and Assignee are sometimes collectively referred to as the "Parties" or individually as a "Party. " 2. Recitals. 2.1 Assignor and Assignee are parties to that Purchase and Sale Agreement and Joint Escrow Instructions dated February , 2001 (Upurchase Agreement") whereby Assignor, as seller, agreed to sell to Assignee, as buyer, the real property described on Exhibit UA" attached hereto(the "Property"). The Purchase Agreement is incorporated herein by this reference as though set forth in full. All capitalized terms not defined herein shall have the definitions set forth in the Purchase Agreement. 2:2 Assignor desires to assign to Assignee as of the Closing Date Assignor's interest in that certain Multi-Plex Theater Lease dated December 20, 1996 between Assignor, as landlord, and Cinemastar Luxury Theaters, Inc., a California corporation, as tenant ("the ULease" ), which Lease covers the Property, and Assignee desires to accept such assignment and assume the obligations of the landlord under the Lease accruing from and after the Closing Date. 2.3 For and in consideration of the consummation of the transactions specified in the Purchase Agreement and in order to consummate such transactions as required by the Purchase Agreement, Assignor and Assignee enter into and execute this Assignment. 3. Assiqnment and Assumption. 3.1 For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers, grants, conveys and assigns to Assignee all of Assignor's right, title and interest in, to and under the Lease, and all rents which have accrued which are past due, and all the right, title and interest of Assignor to the extent they are in Assignor's possession in prepaid rents, any security deposit, and all sums held by Assignor as landlord under the Lease, and Assignee hereby 5B2001: 3726.1 Page 1 of 5 CDC/2001-8 accepts such assignment and assumes and agrees with Assignor to perform and comply with and to be bound by all terms, covenants, agreements, provisions and conditions of the Lease accruing from and after the Closing Date, in the same manner and with the same force and effect as if Assignee had originally executed the Lease. 3.2 Assignor hereby agrees to indemnify, defend and hold harmless Assignee and Assignee's affiliates, and their respective officers, directors, trustees, shareholders, partners, members, employees, agents, lenders, attorneys, successors and assigns (collectively, the "Assignee Indemnitees"), from and against any and all liabilities, losses, damages, claims, actions, causes of action, costs and expenses (including without limitations, attorneys' fees and costs) accruing under the Lease prior to the Closing Date and Assignee hereby indemnifies, holds harmless and agrees to defend Assignor and Assignor's affiliates, and their respective officers, directors, trustees, shareholders, partners, members, employees, agents, attorneys, successors and assigns (collectively, the "Assignor Indemnitees"), from and against all liabilities, losses, damages, claims, actions, causes of action, costs, and expenses (including without limitation, attorneys fees and costs) accruing under the Lease on or after the Closing Date (excluding actions arising out of the negligence or willful misconduct of the Assignor Indemnitees) . 3.3 This Assignment shall inure to the benefit of and be binding on the respective legal representatives, successors and assigns of the Parties. 3.4 Except for representations expressly set Purchase Agreement, this Assignment is made representations or warranties, express or implied. forth in the wi thout any 4. Miscellaneous. 4.1 Attorneys' Fees. In the event of any litigation or proceeding (an "action") between the parties hereto for breach of or to enforce any provision or right hereunder, the unsuccessful party in such action shall pay to the successful party all costs and expenses, expressly including but not limited to, reasonable attorneys' fees incurred by the successful party in connection with such action. The successful party shall be that party who, in the light of the issues litigated and the court's decisions on those issues, was more successful in the action. The party who was more successful need not be determined to be the party who recovers a judgment in the action. An action shall include proceedings in bankruptcy court. 5B2001: 3726.1 Page 2 of 5 CDC/2001-8 4.2 Successors. This Assignment shall be binding upon and inure to the benefit of each of the parties hereto and to their respective successors and assigns. 4.3 Further Action. Assignor and Assignee shall at any time, or from time to time after the execution of this Assignment and whether before or after the Close of Escrow, upon request of the other, execute and del i ver such further documents and do such further acts and things as such party may reasonably request in order to fully effect the purpose of this Assignment. 4.4 Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which when taken together shall constitute but one and the same agreement. 4.5 Governina Law. This Assignment shall be governed by and construed in accordance with the laws of the State of California. - 4.6 Modifications. This Assignment may not be altered, amended, changed, terminated or modified in any respect or particular, unless the same shall be in writing and signed by the party to be charged. 4.7 Severabilitv. Wherever possible, each provision of this Assignment shall be interpreted in such a manner as to be valid under applicable law, but if any provision of this Assignment shall be invalid or prohibited thereunder, such provision shall be effective to the extent of such prohibition without invalidating the remainder of such provision or the remaining provisions of this Assignment which shall remain fully binding and in full force and effect. 4. B Headinas. The headings of the paragraphs of this Assignment are inserted solely for convenience of reference and are not a part of, and are not intended to govern, limit or aid in the construction of, any term or provision hereof. 4.9 Gender. When necessary herein, all terms used in the singular shall apply to the plural, and all terms used in the masculine or feminine genders shall apply to the neuter. 5B2001: 3726.1 Page 3 of 5 CDC/2001-8 IN WITNESS WHEREOF, the Parties hereto have executed this Assignment effective as of the date first above written. "ASSIGNOR" MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No. I, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President "ASSIGNEE" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California By: Name: Its: By: Name: Its: 5B2001: 3726.1 Page 4 of 5 CDC/2001-8 EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF LEASE LEGAL DESCRIPTION PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 186 OF PARCEL MAPS, PAGE(S) 14 AND 15, RECORDS OF SAID COUNTY. TOGETHER WITH ALL APPURTENANT EASEMENTS, INCLUDING, WITHOUT LIMITATION, THE EASEMENT CONTAINED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPRO~AL EASEMENTS, RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98 - 5 5 6710, SAN BERNARDINO COUNTY RECORDS, AND THE EASEMENTS CONTAINED IN THE PARKING AGREEMENT RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556712, SAN BERNARDINO COUNTY RECORDS. 5B2001:3726.1 Page 5 of 5 5B2001: 3726.1 CDC/2001-8 EXHIBIT "E" ASSIGNMENT AND ASSUMPTION OF PARKING AGREEMENT CDC/2001-8 ASSIGNMENT AND ASSUMPTION OF PARKING AGREEMENT 1. Parties. This Assignment and Assumption of Parking Agreement, dated as of , 2001 ("Assignment"), is entered into by and between MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company ("Assignor") and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Assignee"). Assignor and Assignee are sometimes collectively referred to as the "Parties" or individually as a "Party." 2. Recitals. 2.1 Assignor and Assignee are parties to that Purchase and Sale Agreement and Joint Escrow Instructions dated February ___, 2001 ("Purchase Agreement") whereby Assignor, as seller, agreed to sell to Assignee, as buyer, the real property described on Exhibit "A" attached hereto (the "Property"). The Purchase Agreement is incorporated herein by this reference as though set forth in full. All capitalized terms not defined herein shall have the definitions set forth in the Purchase Agreement. 2.2 Assignor desires to assign to Assignee as of the Closing Date Assignor's interest under that certain Parking Agreement dated December 10, 1998, recorded in the Official Records of San Bernardino County, California as Document Number 19980556712, between Assignor and Assignee (the "Parking Agreement"), and Assignee desires to accept such assignment and assume the obligations of the Assignor under the Parking Agreement accruing from and after the Closing Date. 2.3 For and in consideration of the consummation of the transactions specified in the Purchase Agreement and in order to consummate such transactions as required by the Purchase Agreement, Assignor and Assignee enter into and execute this Assignment. 3. Assiqnment and Assumption. 3.1 For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers, grants, conveys and assigns to Assignee all of Assignor's right, ti t Ie and interest in, to and under the Parking Agreement, and Assignee hereby accepts such assignment and assumes and agrees with Assignor to perform and comply with and to be bound by all terms, covenants, agreements, provisions and conditions of the Parking Agreement accruing from and after the Closing Date, in the same SB2001: 3726.1 Page 1 of 5 CDC/2001-8 manner and with the same force and effect as if Assignee had originally executed the Parking Agreement. 3.2 Assignor hereby agrees to indemnify, defend and hold harmless Assignee and Assignee's affiliates, and their respective officers, directors, trustees, shareholders, partners, members, employees, agents, lenders, attorneys, successors and assigns (collectively, the "Assignee Indemnitees"), from and against any and all liabilities, losses, damages, claims, actions, causes of action, costs and expenses (including without limitations, attorneys' fees and costs) accruing under the Parking Agreement prior to the Closing Date and Assignee hereby indemnifies, holds harmless and agrees to defend Assignor and Assignor's affiliates, and their respective officers, directors, trustees, shareholders, partners, members, employees, agents, attorneys, successors and assigns (collectively, the "Assignor Indemnitees"), from and against all liabilities, losses, damages, claims, actions, causes of action, costs, and expenses (including without limitation, attorneys fees and costs) accruing under the Parking Agreement on or after the Closing Date (excluding actions arising out of the negligence or willful misconduct of the Assignor Indemnitees). 3.3 This Assignment shall inure to the benefit of and be binding on the respective legal representatives, successors and assigns of the Parties. 3.4 Except for representations expressly set Purchase Agreement, this Assignment is made representations or warranties, express or implied. forth in the without any 4. Miscellaneous. 4.1 Attornevs' Fees. In the event of any litigation or proceeding (an "action") between the parties hereto for breach of or to enforce any provision or right hereunder, the unsuccessful party in such action shall pay to the successful party all costs and expenses, expressly including but not limited to, reasonable attorneys' fees incurred by the successful party in connection with such action. The successful party shall be that party who, in the light of the issues litigated and the court's decisions on those issues, was-more successful in the action. The party who was more successful need not be determined to be the party who recovers a judgment in the action. An action shall include proceedings in bankruptcy court. SB2001:3726.1 Page 2 of 5 CDC/2001-8 4.2 Successors. This Assignment shall be binding upon and inure to the benefit of each of the parties hereto and to their respective successors and assigns. 4.3 Further Action. Assignor and Assignee shall at any time, or from time to time after the execution of this Assignment and whether before or after the Close of Escrow, upon request of the other, execute and del i ver such further documents and do such further acts and things as such party may reasonably request in order to fully effect the purpose of this Assignment. 4.4 Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which when taken together shall constitute but one and the same agreement. 4.5 Governina Law. This Assignment shall be governed by and construed in accordance with the laws of the State of California. 4.6 Modifications. This Assignment may not be altered, amended, changed, terminated or modified in any respect or particular, unless the same shall be in writing and signed by the party to be charged. 4.7 Severabilitv. Wherever possible, each provision of this Assignment shall be interpreted in such a manner as to be valid under applicable law, but if any provision of this Assignment shall be invalid or prohibited thereunder, such provision shall be effective to the extent of such prohibition without invalidating the remainder of such provision or the remaining provisions of this Assignment which shall remain fully binding and in full force and effect. 4 .8 Headinas. The headings of the paragraphs of this Assignment are inserted solely for convenience of reference and are not a part of, and are not intended to govern, limit or aid in the construction of, any term or provision hereof. 4.9 Gender. When necessary herein, all terms used in the singular shall apply to the plural, and all terms used in the masculine or feminine genders shall apply to the neuter. 552001:3726.1 Page 3 of 5 CDC/2001-8 IN WITNESS WHEREOF, the Parties hereto have executed this Assignment effective as of the date first above written. "ASSIGNOR" MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President "ASSIGNEE" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California By: Name: Its: By: Name: Its: SB2001:3726.1 Page 4 of 5 CDC/2001-8 EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF PARKING AGREEMENT LEGAL DESCRIPTION PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 186 OF PARCEL MAPS, PAGE (S) 14 AND IS, RECORDS OF SAID COUNTY. TOGETHER WITH ALL APPURTENANT EASEMENTS, INCLUDING, WITHOUT LIMITATION, THE EASEMENT CONTAINED IN THE DECLARATION OF COVENAN,TS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENTS, RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556710 I SAN BERNARDINO COUNTY RECORDS, AND THE EASEMENTS CONTAINED IN THE PARKING AGREEMENT RECORDED DECEMBER 29, 1998, INSTRUMENT NUMBER 98-556712, SAN BERNARDINO COUNTY RECORDS. SB2001: 3726.1 Page 5 of 5 CDC/2001-8 EXHIBIT "F" BILL OF SALE SB2001: 3726.1 CDC/2001-8 BILL OF SALE 1. Identification and Parties. This Bill of Sale is dated as of the day of 2001, and is made by MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company ("Seller") in favor of the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Buyer"). 2. Recitals. 2.1. Seller and Buyer entered into that certain Purchase and Sale Agreement and Escrow Instructions dated as of February __, 2001 (the "Agreement") whereby Seller agreed to sell and Buyer agreed to purchase that certain real property and improvements described with more particularity therein (the "Real Property"), together with all Personal Property as defined therein. Capitalized terms herein shall have the same meaning as in the Agreement, unless the context clearly provides to the contrary. 2.2. The Agreement requires the execution and delivery of this Bill of Sale. 2.3. For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller hereby executes this Bill of Sale. 3. Transfer. Seller hereby releases, remises, transfers and quit claims to Buyer all of Seller's right, title and interest in all Personal Property located on and used in connection with the operation of the Real Property, including but not limited to, (i) fixtures, heating, ventilation and air conditioning fixtures and equipment, lighting, and electrical and plumbing fixtures and equipment, and (ii) all intangible personal property used in connection with the Real Property. SB2001:3726.1 Page 1 of 2 CDC/2001-8 MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No. I, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President SB2001:3726..1 Page 2 of 2 SB2001:3726.1 CDC/2001-8 EXHIBIT "G" TERMINATION AGREEMENT AND MUTUAL RELEASE CDCj2001-8 TERMINATION AGREEMENT AND MUTUAL RELEASE I. Parties. This TERMINATION AGREEMENT AND MUTUAL RELEASE (UAgreement"), dated as of February ___, 2001, is entered into by and between MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company (UMDA"), and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California (UAgency"). II. Recitals. A. MDA and Agency entered into that certain Disposition and Development Agreement (the uDDA") which is recorded in the Official Records of San Bernardino County, California (UOfficial Records") on December 29, 1998 as Document No. 19980556709. B. Pursuant to the DDA, MDA acquired two parcels of real property (the uProperty") upon which MDA constructed a multi-screen cinema complex with related common areas. MDA's acquisition of the Property and construction of the above- referenced cinema project was implemented with conventional financing and with financial assistance from Agency. C. MDA has entered into a lease with Cinemastar Luxury Theaters, Inc. as Tenant. Such lease is in default and MDA has encountered financial difficulties in servicing the indebtedness secured by the Property. D. MDA has agreed to sell and convey the Property to Agency and Agency has agreed to purchase and acquire the Property pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 2001 (the uPurchase Agreement") . Capitalized terms herein used and not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement. E. Pursuant to the Purchase Agreement and in connection with Agency's purchase and acquisition of the Property, MDA and Agency have agreea to terminate the DDA and in connection therewith to release one another from any and all further obligations and liabilities relating to the DDA, the Property, the Agency Note and the Second Agency Note. 552001:3726.1 Page 1 of 4 CDC/2001-8 III. Ter.mination. A. MDA and Agency hereby agree that the DDA is hereby terminated and of no further force and effect and neither MDA nor Agency shall have further obligations to one another thereunder whatsoever and neither shall have further rights thereunder. MDA expressly relinquishes all rights to purchase and acquire from Agency additional real property, including, but not limited to, the Retail Parcel (defined in the DDA) . IV. Mutual Release. A. For good and valuable consideration, including but not limited to their mutual agreement to terminate the DDA, except for such rights and obligations that have been created or preserved under this Agreement, or under the Purchase Agreement, MDA on the one hand and Agency on the other hand, do hereby fully, completely, finally and forever release and discharge each other and their respective officers, agents, employees, attorneys, successors, heirs, and assigns from any and all claims, actions, causes of action, demands, rights, debts, promises, liabilities, damages, accountings, costs and expenses, whether known or unknown, suspected or unsuspected, of every nature whatsoever, which any of them has or may have against the other with respect to any and all matters arising out of the DDA or pertaining to the Property, the Agency Note and the Second Agency Note, all of which released matters shall sometimes hereinafter be called the "Released Claims". IT IS THE INTENTION OF THE PARTIES HERETO THAT THIS DOCUMENT SHALL BE EFFECTIVE AS A FULL AND FINAL RELEASE OF EVERY RELEASED CLAIM. IN FURTHERANCE OF THIS INTENTION, THE PARTIES HERETO, AND EACH OF THEM, ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY THEIR LEGAL COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, 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." THE PARTIES HERETO, BEING AWARE OF THIS CODE SECTION, HEREBY EXPRESSLY WAIVE ANY RIGHTS THEY MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW DOCTRINES OF SIMILAR EFFECT. 582001: 3726.1 Page 2 of 4 CDC/2001-8 The parties hereto, and each of them, acknowledge that hereafter they may discover facts in addition to, or different from, those that they now know or believe to be true with respect to the subject matter of this Agreement and the Released Claims, but that, notwithstanding the foregoing, it is their intention hereby to fully and forever settle and release each of the Released Claims, and that in furtherance of this intention, the releases herein given shall be and remain in effect as full and complete releases. V. Ownership of Claims. The parties hereby represent and warrant to each other that, as to any Released Claim, each of them is;the sole and absolute owner of each Released Claim released by it or him, free and clear of all ot~er rights and interest therein, and has the right, ability and sole power to release said Released Claims. VI. Attornevs' Fees. In the event there is any dispute concerning or arising out of the terms of this Agreement or the performance of any party hereto with respect to the terms of the Agreement, the prevailing party in such dispute shall be entitled to recover, in addition to its costs, all attorneys' fees and expenses reasonably incurred by it. VII. Counterparts. This Agreement may be signed in counterparts', and all counterparts taken together shall constitute one agreement. VIII. Severabilitv. If any provision of this Agreement is held, determined or adjudicated to be invalid or unenforceable for any reason by any court of competent jurisdiction, such provision shall be severed from the remaining provisions of the Agreement and shall not affect the validity or unenforceability of the remaining provisions. IX. Controllinq Law. construed and enforced California. This Agreement shall be interpreted, in accordance with the laws of the State of X. Successors. This Agreement shall be binding upon the benefit of the parties and their respective executors, administrators, trustees, heirs, representatives and assigns. and inure to successors, personal SB2001: 3726.1 Page 3 of 4 CDC/2001-8 IN WITNESS WHEREOF, the parties hereto execute this Agreement on the date set forth opposite their respective signatures. "MDA" MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California By: Name: Its: SB2DD1: 3726.1 Page 4 of 4 CDC/2001-8 EXHIBIT "H" TENANT NOTICE SB2001:3726.1 CDC/2001-8 For.m of Tenant Notice (Date) REFERENCE: Dear This letter is to provide you with notification that MDA-SAN BERNARDINO ASSOCIATES, LLC has reached an agreement whereby Landlord's interest in the above-referenced property has been transferred to The Redevelopment Agency of the City of San Bernardino. As of , please send all rent checks and please address all notices or other communications to Landlord at the following location: The Redevelopment Agency of the City of San Bernardino 201 North E. Street, Suite 301 San Bernardino, CA 92401-1507 For property maintenance issues please call We would like to express our sincere appreciation for the business relationships we have enjoyed with your firm and wish you continued success in the future. Sincerely, MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President 582001:3726.1 Page 1 of 1 CDC/2001-8 EXHIBIT "I" HAZARDOUS MATERIALS AND ENVIRONMENTAL LAWS DEFINED "Hazardous Materials" as used in this Agreement shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances"., "hazardous materi-als", or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601, et seg., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seg., the Clean Air Act, 42 U.S.C. Section 7401 et seg., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seg., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seg.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health and Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated "hazardous substances" , "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. 5B2001:3726.1 Page 1 of 1 CDC/2001-8 EXHIBIT "J" ASSIGNMENT OF GUARANTY OF LEASE SB2001:3726.1 CDC/2001-8 ASSIGNMENT OF GUARANTY OF LEASE 1. Parties. This Assignment of Guaranty of Lease, dated as of , 2001 ("Assignment"), is entered into by and between MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company ("Assignor") and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California ("Assignee"). Assignor and Assignee are sometimes collectively referred to as the "Parties" or individually as a "Party. " 2. Recitals. 2.1 Assignor and Assignee are parties to that Purchase and Sale Agreement and Joint Escrow Instructions dated February ___, 2001 ("Purchase Agreement") whereby Assignor, as seller, agreed to sell to Assignee, as buyer, the real property described on Exhibit "A" attached to the Purchase Agreement (the "Property"). The Purchase Agreement is incorporated herein by this reference as though set forth in full. All capitalized terms not defined herein shall have the definitions set forth in the Purchase Agreement. 2.2 In connection with the sale of the Property by Assignor and the purchase of the Property by Assignee, Assignor will assign to Assignee as of the Closing Date Assignor's interest in that certain Multi-Plex Theater Lease dated December 20, 1996 between Assignor, as landlord, and CinemaStar Luxury Theaters, Inc., a California corporation ("CinemaStar"), as tenant (the "Lease") which covers the Property. 2.3 Assignor desires to assign to Assignee as of the Closing Date that certain Guaranty of Lease relating to the Lease executed on December 20, 1996 by John Ellison, Jr., Alan Grossberg, Jerry Willits and Russell Seheult (individually, a "Guarantor" and collectively, the "Guarantors"), pursuant to which each Guarantor irrevocably, unconditionally, jointly and severally guarantees the full, timely and complete (a) payment of all rent and other sums payable by CinemaStar to Assignor pursuant to the Lease, and any amendments or modifications thereto by agreement or course of conduct and (b) performance of all covenants, representations and warranties made by CinemaSatr and all obligations to be performed by CinemaStar pursuant to the Lease, and any amendments or modifications thereto by agreement or course of conduct (the "Guaranty of Lease"), and Assignee desires to accept such assignment. 2.2 For and in consideration of the consummation of the transactions specified in the Purchase Agreement and in order to S82001:3726.1 Page 1 of 4 CDC/2001-8 consummate such transactions as required by the Purchase Agreement, Assignor and Assignee enter into and execute this Assignment. 3. Assiqnment. 3.1 For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers, grants, conveys and assigns to Assignee all of Assignor's right, title and interest in, to and under the Guaranty of Lease, and Assignee hereby accepts such assignment. 3.2 This Assignment shall inure to the benefit of and be binding on the respective legal representatives, successors and assigns of the Parties. 3.3 Except for representations expressly set Purchase Agreement, this Assignment is made representations or warranties, express or implied. forth in the without any 4. Miscellaneous. 4.1 Attornevs' Fees. In the event of any litigation or proceeding (an "action") between the parties hereto for breach of or to enforce any provision or right hereunder, the unsuccessful party in such action shall pay to the successful party all costs and expenses, expressly including but not limited to, reasonable attorneys' fees incurred by the successful party in connection with such action. The successful party shall be that party who, in the light of the issues litigated and the court's decisions on those issues, was more successful in the action. The party who was more successful need not be determined to be the party who recovers a judgment in the action. An action shall include proceedings in bankruptcy court. 4.2 Successors. This Assignment shall be binding upon and inure to the benefit of each of the parties hereto and to their respective successors and assigns. 4.3 Further Action. Assignor and Assignee shall at any time, or from time to time after the execution of this Assignment and whether befQre or after the Close of Escrow, upon request of the other, execute and deliver such further documents and do such further acts and things as such party may reasonably request in order to fully effect the purpose of this Assignment. 4.4 Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, 5B2001:3726.1 Page 2 of 4 CDC/2001-8 and all of which when taken together shall constitute but one and the same agreement. 4.5 Governina Law. This Assignment shall be governed by and construed in accordance with the laws of the State of California. 4.6 Modifications. This Assignment may not be altered, amended, changed, terminated or modified in any respect or particular, unless the same shall be in writing and signed by the party to be charged. 4.7 Severabilitv. Wherever possible, each provision of this Assignment shall be interpreted in such a manner as to be valid under applicable law, but if any provision of this Assignment shall be invalid or prohibited thereunder, such provision shall be effective to the extent of such-prohibition without invalidating the remainder of such provision or the remaining provisions of this Assignment which shall remain fully binding and in full force and effect. 4.8 Headinas. The headings of the paragraphs of this Assignment are inserted solely for convenience of reference and are not a part of, and are not intended to govern, limit or aid in the construction of, any term or provision hereof. 4.9 Gender. When necessary herein, all terms used in the singular shall apply to the plural, and all terms used in the masculine or feminine genders shall apply to the neuter. 5B2001: 3726.1 Page 3 of 4 CDC/2001-8 IN WITNESS WHEREOF, the Parties hereto have executed this Assignment effective as of the date first above written. "ASSIGNOR" MDA-SAN BERNARDINO ASSOCIATES, LLC, a California limited liability company By: SK Investors No.1, L.L.C., a Delaware limited liability company By: SK Metro Development L.P., a California limited partnership Its Sole Member By: SK Metro Corp., a California corporation Its General Partner By: Rex Swanson, President "ASSIGNEE" REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic of the State of California By: Name: Its: By: Name: Its: SB2001: 3726.1 Page 4 of 4