HomeMy WebLinkAboutCDC/2001-15
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(See Companion Resolutions CDC/2001-16, 2001-81)
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RESOLUTION NO. CDC/2001-15
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RESOL UTI ON OF THE COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO APPROVING FLOAT LOAN
AGREEMENT BY AND BETWEEN CITY OF SAN
BERNARDINO AND THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO
WITH RESPECT TO CINEMASTAR PROPERTY
ACQUIRED BY THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO FROM MDA-
SAN BERNARDINO ASSOCIATES, L.L.c.
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WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency")
10 desires to borrow Three Million Six Hundred Thousand Dollars ($3,600,000.00) (the "Loan")
from the City of San Bernardino (the "City") for the purpose of acquiring that certain Note
Secured by Deed of Trust executed by MDA-San Bernardino Associates, L.L.C., a Delaware
limited liability company ("MDA") in favor of Gold Mountain Financial Institution, Inc., a
12 California corporation ("Gold Mountain") in the original principal amount of Three Million Six
13 Hundred Thousand Dollars ($3,600,000.00)(the "Note"); and
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14 WHEREAS, the Note was delivered by MDA to Gold Mountain in connection with the
refinancing of a construction loan obtained by MDA from GMAC Commercial Mortgage
15 Corporation to construct an approximately 80,000 square foot multi-screen cinema complex and
related common areas (the "Project") on certain real property located in the City of San
16 Bernardino (the "Property"); and
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WHEREAS, the Note is secured by a first deed of trust on the Property in favor of Gold
18 Mountain (the "Senior Deed of Trust"); and
19 WHEREAS, in connection with the construction of the Project, the Agency loaned to
MDA the amount of Seven Million Dollars ($7,000,000.00) pursuant to that certain 1998
20 Community Development Block Grant Program Section 108 Project Development Loan
21 Agreement dated as of December 10, 1998 (the "Section 108 Loan"); and
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22 WHEREAS, the Section 108 Loan is secured by a deed of trust on the Property in favor
of the Agency (the "Section 108 Deed of Trust"); and
WHEREAS, the Agency further made a Project development cost contribution loan to
24 MDA in the amount of One Million Three Hundred Twenty Five Thousand Five Hundred
25 Seventy Five Dollars ($1,325,575.00) (the "Development Cost Contribution Loan"); and
26 WHEREAS, the Development Cost Contribution Loan is secured by a deed of trust on
the Property in favor of the Agency (the "Contribution Loan Deed of Trust"); and
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SB~W 10245.1
CDC/2001-15
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WHEREAS, a condition precedent to the refinancing by Gold Mountain of the GMAC
2 Commercial Mortgage Corporation construction loan was that the Senior Deed of Trust constitute
a first position lien against the Property prior and superior to the Section 108 Deed of Trust and
3 the Contribution Loan Deed of Trust; and
4 WHEREAS, MDA, Gold Mountain and the Agency entered into that certain
Subordination and Intercreditor Agreement dated as of June 6, 2000 (the "Subordination and
5 Intercreditor Agreement"), pursuant to which the Agency agreed to subordinate the note
6 evidencing indebtedness under the Section 108 Loan and the note evidencing indebtedness under
the Development Cost Contribution Loan to the Note; and
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WHEREAS, pursuant to the Subordination and Intercreditor Agreement, the Senior Deed
8 of Trust constitutes a first position lien against the Property; and
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WHEREAS, the Project was leased to CinemaStar Luxury Theaters, Inc., a California
10 corporation ("CinemaStar") pursuant to that certain Multi-Plex Theater Lease by and between
MDA, as Landlord, and CinemaS tar dated December 20, 1996 and amended December 10, 1998
(the "Lease"); and
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12 WHEREAS, in October 2000, CinemaS tar ceased making rental payments to MDA under
13 the Lease and subsequently filed a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code; and
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WHEREAS, in the absence of rental income derived from the Lease, MDA was unable
15 to make further payments on the Note and on the Section 108 Loan and the Development Cost
Contribution Loan; and
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17 WHEREAS, MDA proposed to sell the Property to the Agency and the Agency agreed
to purchase the Property from MDA in order to maintain the economic viability of the Project and
18 to protect the Agency's investment in the Project pursuant to the Section 108 Loan and the
Development Cost Contribution Loan; and
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WHEREAS, pursuant to a Purchase and Sale Agreement and Joint Escrow Instructions
20 dated February _,2001 (the "Purchase and Sale Agreement"), MDA sold the Property to the
21 Agency, subject to the Note, the Section 108 Loan and the Development Cost Contribution Loan;
and
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WHEREAS, the sale of the Property pursuant to the Purchase and Sale Agreement
23 included the sale to the Agency of all of MDA's right, title and interest as Landlord under the
24 Lease; and
WHEREAS, the Agency and CinemaS tar subsequently entered into that certain Second
Amendment to Multi-Plex Theater Lease dated as of February 26, 2001 (the "Second Lease
26 Amendment"), pursuant to which CinemaStar has agreed to pay annually to the Agency Nine
Hundred Eighty Four Thousand Dollars ($984,000.00) as Minimum Annual Rent, until the
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0245.1
CDC/2001-15
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expiration of the Lease Term (November 26,2018), said Minimum Annual Rent being payable
2 in advance, in twelve (12) equal monthly installments in the amount of Eighty Two Thousand
Dollars ($82,000.00) per month; and
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WHEREAS, the Second Lease Amendment was approved by the bankruptcy court on
4 April , 2001; and
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WHEREAS, the Minimum Annual Rent payable under the Second Lease Amendment has
6 been calculated to be sufficient to repay (i) the Section 108 Loan and (ii) an indebtedness at zero
interest cost of Three Million Six Hundred Thousand Dollars ($3,600,000.00); and
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WHEREAS, the Note bears interest at the rate of twelve percent (12%) per annum; and
WHEREAS, the Agency desires to acquire with Loan proceeds the Note (the "Note
9 Acquisition") and to amend and restate the Note to provide, among other things, that prior to a
10 default on the Note the Note shall bear no interest, in order to effect an interest cost savings
integral to the maintenance of the economic viability of the Project and to the repayment of
11 indebtedness associated with the Project; and
12 WHEREAS, the City desires to make the Loan to the Agency; and
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WHEREAS, a Float Loan Agreement by and between the City and the Agency (the
14 "Agreement") has been presented to this Commission for its review.
15 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING
ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
1 G BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
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Section 1.
18 by this reference.
The Recitals contained herein are true and correct and incorporated herein
19 Section 2. The Commission hereby approves the Agreement and authorizes and directs
the Executive Director to execute the Agreement in substantially the form attached hereto as
20 Exhibit "A", with such changes therein as the Executive Director may determine to be necessary
21 or advisable, the execution of the Agreement by the Executive Director being conclusive
evidence of such determination.
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Section 3. The Executive Director is hereby further authorized and directed to execute
23 such other agreements and documents as may be necessary or advisable to effectuate the
24 provisions ofthe Agreement, and the Executive Director, the Secretary or Assistant Secretary and
such other designated representatives ofthe Agency are hereby authorized and directed to do any
25 and all things and take any and all actions as may be necessary or advisable to effectuate the
provisions of the Agreement.
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SB~~:1 245.1
cnC/ZOOl-lS
1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
2 CITY OF SAN BERNARDINO APPROVING FLOAT LOAN AGREEMENT BY AND
BETWEEN CITY OF SAN BERNARDINO AND THE REDEVELOPMENT AGENCY OF
3 THE CITY OF SAN BERNARDINO WITH RESPECT TO CINEMASTAR PROPERTY
ACQUIRED BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
4 BERNARDINO FROM MDA-SAN BERNARDINO ASSOCIATES, L.L.C.
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Section 4.
This Resolution shall become effective immediately upon its adoption.
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
7 Development Commission of the City of San Bernardino at aj oint regular meeting
thereof, held on the 16th day of April ,2001, by the following vote, to wit:
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Commission
9 ESTRADA
10 LIEN
McGINNIS
11 SCHNETZ
SUAREZ
12 ANDERSON
13 McCAMMACK
AYES
X
X
X
X
X
NAYS
ABSTAIN ABSENT
X
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The foregoing Resolution is hereby approved this ~day of April
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, 2001.
19
. zt~L'~__
a es, Chairperson
C unity Development Commission
ft e City of San Bernardino
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21 Approved as to form
and legal content:
:~ By 0~~
Sp€CI,,{
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SB~~ I 245.1
SB2~~ 1 245.1
STATE OF CALIFORNIA )
2 COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
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I I, Secretary of the Community Development
4 Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and
attached copy of Community Development Commission ofthe City of San Bernardino Resolution
5 No. is a full, true and correct copy of that now on file in this office.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
7 seal ofthe Community Development Commission ofthe City of San Bernardino this day
of ,2001.
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Secretary of the
Community Development Commission
of the City of San Bernardino
FLOAT LOAN AGREEMENT
(Redevelopment Agency of the City of San Bernardino)
THIS FLOAT LOAN AGREEMENT is dated as of April 16, 2001 (the
"Agreement") and is entered into by and between the CITY OF SAN
BERNARDINO, a municipal corporation (the "City") and the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body
corporate and politic(the "Agency"). The City and the Agency are
sometimes hereinafter referred to as a "Party" and collectively as
the "Parties", and this Agreement is entered into in light of the
facts set forth in the following Recitals:
R E C I TAL S
A. WHEREAS, the City has entered into an agreement with the
United States of America through its Department of Housing and
Urban Development ("HUD") to execute a Community Development Block
Grant ("CDBG") pursuant to the Housing and Community Development
Act of 1974, as amended (the "Act") i and
B. WHEREAS, the Agency desires to borrow an amount not to
exceed Three Million Six Hundred Thousand Dollars ($3,600,000.00)
(the "Loan") or so much thereof as may then be available from the
special fund of the City described below, for the purpose of
acquiring that certain Note Secured by Deed of Trust dated June 14,
2000, executed by MDA-San Bernardino Associates, L.L.C., a Delaware
limited liability company ("MDA") in favor of Gold Mountain
Financial Institution, Inc., a California corporation ("Gold
Mountain") in the original principal amount of Three Million Six
Hundred Thousand Dollars ($3,600,000.00) (the "Note") i and
C. WHEREAS, the Note was delivered by MDA to Gold Mountain
in connection with the refinancing of a construction loan obtained
by MDA from GMAC Commercial Mortgage Corporation to construct an
approximately 80,000 square foot multi-screen cinema complex and
related common areas (the "Project") i and
D. WHEREAS, the Note is secured by a first deed of trust on
the property described in Exhibit "A" attached hereto (the
"Property") in favor of Gold Mountain (the "Senior Deed of Trust") i
and
E.
Project,
WHEREAS, in connection with the construction of the
the Agency loaned to MDA the amount of Seven Million
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Dollars ($7,000,000.00) pursuant to that certain 1998 Community
Development Block Grant Program Section 108 Project Development
Loan Agreement, dated as of December 10, 1998 (the "Section 108
Loan"); and
F. WHEREAS, the Section 108 Loan is secured by a deed of
trust on the Property in favor of the Agency (the "Section 108 Deed
of Trust"); and
G. WHEREAS, the Agency further made a Project development
cost contribution loan to MDA in the amount of One Million Three
Hundred Twenty Five Thousand Five Hundred Seventy Five Dollars
($1,325,575.00) (the "Development Cost Contribution Loan"); and
H. WHEREAS, the Development Cost Contribution Loan is secured
by a deed of trust on the Property in favor of the Agency (the
"Contribution Loan Deed of Trust"); and
I. WHEREAS, a condition precedent to the refinancing by Gold
Mountain of the GMAC Commercial Mortgage Corporation construction
loan was that the Senior Deed of Trust constitute a first position
lien against the Property prior and superior to the Section 108
Deed of Trust and the Contribution Loan Deed of Trust; and
J. WHEREAS, MDA, Gold Mountain and the Agency entered into
that certain Subordination and Intercreditor Agreement, dated as of
June 6, 2000 (the "Subordination and Intercreditor Agreement"),
pursuant to which the Agency agreed to subordinate its note
evidencing indebtedness of MDA to the Agency under the Section 108
Loan to the Note and its separate note evidencing indebtedness of
MDA to the Agency under the Development Cost Contribution Loan to
the Note; and
K. WHEREAS, pursuant to the Subordination and Intercreditor
Agreement, the Senior Deed of Trust constitutes a first position
lien against the Property; and
L. WHEREAS, the proj ect was leased to CinemaS tar Luxury
Theaters, Inc., a California corporation ("CinemaStar") pursuant to
that certain Multi-Plex Theater Lease by and between MDA, as
Landlord, and CinemaStar dated December 20, 1996 and amended
December 10, 1998 (the "Lease"); and
M. WHEREAS, in October 2000, CinemaStar ceased making rental
payments to MDA under the Lease and subsequently filed a voluntary
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petition for relief under Chapter 11 of the United States
Bankruptcy Code; and
N. WHEREAS, in the absence of rental income derived from the
Lease, MDA was unable to make further payments on the Note and on
the Section 108 Loan and the Development Cost Contribution Loan;
and
O. WHEREAS, MDA proposed to sell the Property to the Agency
and the Agency agreed to purchase the Property from MDA in order to
maintain the economic viability of the Project and to protect the
Agency's investment in the Project pursuant to the Section 108 Loan
and the Development Cost Contribution Loan; and
P. WHEREAS, pursuant to a Purchase and Sale Agreement and
Joint Escrow Instructions dated February 2001 (the "Purchase and
Sale Agreement"), MDA sold the Property to the Agency, subject to
the Note, the Section 108 Loan and the Development Cost
Contribution Loan; and
Q. WHEREAS, the sale of the Property pursuant to the Purchase
and Sale Agreement included the sale to the Agency of all of MDA's
right, title and interest as Landlord under the Lease; and
R. WHEREAS, the Agency and CinemaStar subsequently entered
into that certain Second Amendment to Multi-Plex Theater Lease
dated as of February 26, 2001 (the "Second Lease Amendment"),
pursuant to which CinemaStar has agreed to pay annually to the
Agency Nine Hundred Eighty Four Thousand Dollars ($984,000.00) as
Minimum Annual Rent, until the expiration of the Lease Term
(November 26, 2018), said Minimum Annual Rent being payable in
advance, in twelve (12) equal monthly installments in the amount of
Eighty Two Thousand Dollar ($82,000.00) per month; and
S. WHEREAS, the Second Lease Amendment was approved by the
bankruptcy court on April _, 2001; and
T. WHEREAS, the Minimum Annual Rent payable under the Second
Lease Amendment has been calculated to be sufficient to repay (i)
the Section 108 Loan and (ii) under the terms and conditions set
forth herein, an indebtedness of the Agency to the City under this
Agreement (the "Loan") in an amount not to exceed Three Million Six
Hundred Thousand Dollars ($3,600,000.00) which Loan would be used
and applied by the Agency to purchase the Note; and
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U. WHEREAS, the Note bears interest at the rate of twelve
percent (12%) per annum; and
V. WHEREAS, the Agency desires to acquire the Note with Loan
proceeds, and other available funds of the Agency (the "Note
Acquisition") to effect an interest cost savings integral to the
maintenance of the economic viability of the Project and to the
repayment of indebtedness associated with the Project under the
Section 108 Loan, the Development Cost Contribution Loan and the
Loan; and
W. WHEREAS, the City desires to make the Loan to the Agency,
on the terms and conditions set forth herein; and
x. WHEREAS, the City has made a determination that
maintenance of the economic viability of the Project and repayment
of the indebtedness associated with the Project, an integral part
of which is the Note Acquisition, qualifies under HUD Regulations
as a special economic development activity based upon the resulting
public benefits. The Project meets the national objective of
assisting low and moderate income residents by providing an area
benefit through provision of a service to residents of low and
moderate income census tracts. The Project will provide
entertainment services to over 104,000 individuals in low and
moderate income census tracts. Further, the Project provides jobs
to approximately one hundred (100) full time employees.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OTHER
GOOD AND VALUABLE CONSIDERATION AS HEREINAFTER PROVIDED, THE CITY
AND THE AGENCY AGREE AS FOLLOWS:
1. LOAN BY THE CITY.
A. The City agrees, subject to the terms and conditions of
this Agreement and in consideration of the representations,
covenants and obligations of the Agency contained in this
Agreement, to loan to the Agency, from CDBG monies, as set forth
below, and from no other source of funds of the City, an amount not
to exceed Three Million Six Hundred Thousand Dollars
($3,600,000.00) or so much thereof as may be available to the City
from such special source of funds, to be used by the Agency solely
for the purpose described in the next sentence. The Agency
covenants to use the proceeds of the Loan, together with other
funds of the Agency, solely for the Note Acquisition.
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B. Provided that the Agency makes a payment on the Note to
Gold Mountain on or before April 30, 2001, of not less than One
Million Two Hundred Thousand Dollars ($1,200,000) and concurrently
obtains an acknowledgment of forbearance and acceptance from Gold
Mountain substantially in the form attached hereto as Exhibit "B"
(the "Gold Mountain Acceptance"), the Note Acquisition shall be
effected through an escrow (the "Escrow") to be administered by
First American Title Insurance Company, located at 323 West Court
Street, San Bernardino, California 92401 (the "Escrow Holder"). The
Escrow shall be deemed open upon the receipt by the Escrow Holder
of a copy of this Agreement fully executed by the Parties. The
Escrow Holder shall promptly confirm to the Parties the loan escrow
number assigned by the Escrow Holder to the transaction.
1. The City shall fund the Loan in two (2) disbursements
as follows:
(a) the first disbursement of the Loan shall be the
sum of One Million Dollars ($1,000,000), and such sum
shall be remitted by the City for the account of the
Agency in immediately available funds to Gold Mountain
promptly following receipt by the Escrow Holder of a copy
of the Gold Mountain Acceptance executed by Gold
Mountain. Concurrently with the remittance by the City
of the first disbursement of the Loan, the Agency shall
execute and deliver to the City the Agency Note in the
form attached hereto as Exhibit "C";
(b) the second disbursement of the Loan shall be a
sum not to exceed Two Million Six Hundred Thousand
Dollars ($2,600,000), or so much thereof as may then be
available to the City as of October 1, 2001, or as soon
thereafter as practicable from the special source of City
funds described below; provided however, that the amount
of the second disbursement of the Loan shall be an amount
not less than One Million Four Hundred Thousand Dollars
($1,400,000) .
The second disbursement of the Loan shall be administered
by the Escrow Holder when the Escrow Holder has received the
second disbursement from the City in immediately available
funds for the account of the Agency, and when the Escrow
Holder has also received the Note (as appropriately endorsed
by Gold Mountain) and confirmed the satisfaction of the
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matters set forth in Section 1. B. 2 through Section 1. B. 5,
inclusive, below.
2 . Prior to the payment by the Escrow Holder of the
second disbursement of the Loan to Gold Mountain for the order
and account of the Agency, the Agency shall cause Gold
Mountain to deposit into Escrow: (a) the Note, showing
endorsement by Gold Mountain to the Agency, and (b) an
assignment to the Agency in recordable form, substantially in
the form attached hereto as Exhibit "D", of the beneficial
interest of Gold Mountain under the Senior Deed of Trust (the
"Gold Mountain Assignment of Deed of Trust")
3. The Agency shall: (a) endorse the Note to the City
and (b) deposit into Escrow an assignment to the City,
substantially in the form attached hereto as Exhibit "E", of
its beneficial interest under the Senior Deed of Trust (the
"Agency Assignment of Deed of Trust") .
4. The Escrow Holder shall cause to be recorded in the
Office of the County Recorder of the County of San Bernardino,
first, the Gold Mountain Assignment of Deed of Trust and
second, the Agency Assignment of Deed of Trust when the Escrow
Holder has confirmed its receipt of the second installment of
the Loan from the City for the order and account of the
Agency, the Agency Note from the City which the Escrow Holder
shall mark as cancelled when the instruments referenced above
are recorded and confirmed its receipt of the City forbearance
letter described in Section 1.C.
5. Escrow-related transaction expenses or escrow closing
costs incurred by the Escrow Holder in connection with this
transaction shall be paid for by the Agency.
6. The Parties shall execute such supplementary loan
escrow instructions addressed to the Escrow Holder as may be
requested by the Escrow Holder and approved by the Parties.
C. The City and the Agency agree that upon delivery to the
City the Note shall be held by the City as collateral for repayment
of the indebtedness of the Agency to the City under the Loan under
the terms and conditions of the City forbearance letter
substantially in the form attached hereto as Exhibit "F" and that
for so long as there is no default by the Agency under this
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Agreement no interest shall be payable by the Agency to the City
under the Loan.
D. The Loan proceeds may not be used for, and the Agency
hereby covenants that it shall not use such proceeds for, any
ineligible purchases and expenditures, as set forth in 24 CFR
570.207. In no event shall the Agency use or otherwise invest the
proceeds of the Loan, except as expressly authorized in this
Agreement.
E. Upon payment in full of the Loan by the Agency to the
City, the City shall endorse and deliver the Note to the order and
instruction of the Agency together with an appropriately executed
acknowledgment of release and full reconveyance of the Senior Deed
of Trust.
F. Upon the request of the Agency, the City shall provide a
written statement of the outstanding principal balance of the Loan.
2. MATURITY DATE(S) OF THE LOAN; TERM
Upon delivery of the Agency Note to the City, the City shall
insert the "Initial Maturity Date", thereon which is the date that
is two and a half (2 1/2) years from the date of the City's first
disbursement under the Loan. The Loan may be extended by the City
at its option in two and a half (2 ~ ) year intervals for a total
term of the Loan not to exceed twelve and a half (12 V2) years. The
option of the City to renew the Loan shall be exercised by and in
the sole discretion of the Executive Director of the Economic
Development Agency of the City (the "Executive Director") and only
upon a determination by the Executive Director that sufficient CDBG
funds are available to the City to fund disbursements under the
Loan in addition to the other CDBG eligible activities of the City
during any such optional renewal period. Such determinations shall
be made by the Executive Director at least ninety (90) days prior
to the Applicable Maturity Date (as defined below). If the City
elects to extend the Loan upon the expiration of the Initial
Maturity Date, the Loan, as extended shall, then, mature on the
last day of the sixtieth (60th) month following the first
disbursement of the Loan (the "First Optional Maturity Date"). If
the City elects to further renew the Loan upon the expiration of
the First Optional Maturity Date, the Loan, as extended shall,
then, mature on the last day of the ninetieth (90th) month following
the first disbursement of the Loan (the "Second Optional Maturity
Date"). If the City elects to renew the Loan upon the expiration
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of the Second Optional Maturity Date, the Loan shall, then, mature
on the last day of the one hundred twentieth (120th) month following
the first disbursement of the Loan (the "Third Optional Maturity
Date"). If the City elects to renew the Loan upon the expiration
of the Third Optional Maturity Date, the Loan shall, then, mature
on the last day of the one hundred and fiftieth (150th) month
following the first disbursement (the "Fourth Optional Maturity
Date") . The Initial Maturity Date, the First Optional Maturity
Date, the Second Optional Maturity Date, the Third Optional
Maturity Date and the Fourth Optional Maturity Date are,
collectively, referred to herein as the "Applicable Maturity Date."
In the event that the City may extend the term of the Loan under
one or more of the Optional Maturity Dates set forth above, in
writing, the City shall upon the request of the Agency concurrently
acknowledge to the Agency that the terms and conditions of the City
forbearance letter with respect to the Note, shall remain in full
force and effect as extended to the then Applicable Maturity Date.
On the Applicable Maturity Date, the entire unpaid principal
balance of the Loan, and any other amounts payable by the Agency
on the Loan under the terms of this Agreement shall be due and
payable. All payments by the Agency on the Loan, including any
prepayments or funds received upon acceleration pursuant to
Section 3 below, shall be applied first toward costs of collection
and default interest charges, if any, then toward the unpaid
principal balance under the Loan. As used herein, the word "Term"
shall mean the period of time commencing with the date of the Loan
and terminating on the date when the Agency has repaid the entire
outstanding principal balance (and accrued interest, if applicable)
on the Loan.
3. ACCELERATION.
The entire principal balance of the Loan shall be due and
payable on the Initial Maturity Date, or if such date is extended a
the option of the City on the Applicable Maturity Date; provided,
however, that the entire principal balance of the Loan, at the
election of the City and upon notice to the Agency thereof (except
with respect to Non-Curable Defaults as defined in Section 13 (A) (1)
below, as to which no notice is required), shall become immediately
due and payable upon the occurrence of any Event of Default as set
forth in Section 13 of this Agreement, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived
by the Agency.
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4 . LOAN
PREPAYMENT.
REPAYMENT;
VOLUNTARY
PREPAYMENT;
MANDATORY
The Agency shall make monthly payments to the City, prior to
the Maturity Date of the Loan, in the amount of $21,692.38 per
month, commencing on June 1, 2001 and, thereafter on the first day
of each following calendar month until the Initial Maturity Date,
or if such date is extended at the option of the City on the
Applicable Maturity Date, when the remaining principal balance of
the Loan shall be paid in full to the City.
At any time after the date of the Agency Note (i.e., the first
disbursement of the Loan proceeds), the Agency may, subject to its
compliance with the following procedure, prepay all or a portion of
the unpaid principal balance of the Loan without penalty. In the
event the Agency wishes to prepay all or any portion of the unpaid
principal amount of the Loan and accrued interest thereon (a
"Voluntary Prepayment"), the Agency shall deliver written notice to
the City of such election (the "Prepayment Notice") which
Prepayment Notice shall identify (i) the date such prepayment is to
occur (the "Prepayment Date") and (ii) the total principal balance
to be paid. The Prepayment Notice shall be delivered to the City
at least ten (10) days prior to the Prepayment Date.
It is acknowledged by the Parties that the City may require
prepayment (a "Mandatory Prepayment") (either in whole or in part)
of the Loan at such times and in such amounts at any time prior to
the Initial Maturity Date or an Applicable Maturity Date as the
City may determine from time to time is necessary to cover any
default or shortfall to the City's CDBG line of credit by delivery
of written notice (the "Notice of Mandatory Prepayment") to the
Agency. The Notice of Mandatory Prepayment shall set forth (i) the
date such prepayment is to occur (the "Mandatory Prepayment Date"),
and (ii) the total principal to be paid. The Notice of Mandatory
Prepayment shall be delivered to the Agency at least ten (10) days
prior to the Mandatory Prepayment Date.
The amount of principal of the Loan set forth in either the
Notice of Mandatory Prepayment or the Prepayment Notice as the
amount to be prepaid shall constitute an amount owing by the Agency
to the City, under this Agreement as of the Mandatory Prepayment
Date or the Prepayment Date, as applicable.
The Agency hereby agrees and understands that the prepayment
of the Loan shall not relieve the Agency of the duty to comply with
4/25/01 jmm
5B2001:9949.2
9
the terms and conditions set forth in the applicable CDBG
regulations or the covenants described in Sections 10 and 11
herein, and such obligations and covenants shall remain in full
force and effect pursuant to their terms.
No interest shall accrue or be payable by the Agency under the
Loan prior to the Initial Mandatory Date or the Applicable Maturity
Date; provided however, that upon the occurrence of an "Event of
Default", as defined below, interest shall accrue on the
outstanding balance of the Loan at a rate per annum of four percent
(4%), commencing on the date of such Event of Default.
5. SOURCES OF PAYMENT; SECURITY FOR THE LOAN.
Except for Mandatory Prepayments, the Loan shall be payable
prior to its Initial Maturity Date, and later prior to any
Applicable Maturity Date from rent payments received by the Agency
from CinemaS tar pursuant to the Second Lease Amendment and
remaining, after application of such rent payments by the Agency to
pay amounts due the fiscal agent under the Section 108 Loan in
accordance with the terms of the Section 108 Loan, and from other
revenues of the Agency available therefor.
Mandatory Prepayments shall be payable from the general fund
of the Agency. Upon receipt of a Notice of Mandatory Prepayment,
and in the case of each such receipt, the Agency shall, in
accordance with 24 CFR Section 570.301(b) (4) (iii), transfer monies
in the amount of the Mandatory Prepayment, as set forth in the
Notice of Mandatory Prepayment, from the general fund of the Agency
to the City on or before the Mandatory Prepayment Date stated in
the Notice of Mandatory Prepayment.
As of the date of the disbursement by the Escrow Holder of the
second installment of the Loan to the order and account of the
Agency, the Loan shall be secured by the Senior Deed of Trust,
which shall constitute a first lien on the Property.
6. CONDITIONS TO THE CITY FUNDING THE LOAN.
The obligation of the City to make any disbursement of Loan
proceeds under this Agreement shall be expressly subject to the
following conditions:
A. The execution of this Agreement by the authorized officer
officers of the City and the Agency.
4/25/01 jmm
5B200L9949.2
10
B. The availability
CDBG funds in an amount
disbursement of the Loan.
to the City of allocated but undrawn
sufficient to fund the applicable
C. In the case of the second disbursement of the Loan to the
Agency under Section 1.B., the deposit into Escrow of the Note,
showing endorsement by Gold Mountain to the Agency and endorsement
by the Agency to the City and the deposit into Escrow of the
executed Gold Mountain Assignment of Deed of Trust and the executed
Agency Assignment of Deed of Trust.
D. Receipt by the City from the Agency of such documents,
certifications and opinions of legal counsel to the Agency as are
reasonably required by the City, in form and substance satisfactory
to the City, evidencing (i) that this Agreement and all other
documents given or executed or endorsed by the Agency in connection
herewith are duly and validly executed or endorsed by and on behalf
of and constitute the valid and enforceable obligation of the
Agency thereunder, pursuant to the respective terms of each of such
documents, and (ii) that the execution and delivery of this
Agreement and all other documents executed, or given hereunder or
in connection herewith and the endorsement and delivery of the
Note, and the performance by the Agency under this Agreement, will
not breach or violate any agreement to which the Agency is a party
or violate any law or governmental regulation nor, to the best of
the Agency's knowledge, constitute a breach of or default under any
instrument or agreement to which the Agency may be a party, and
(iii) such other matters as are reasonably required by the City.
E. If necessary, receipt of environmental clearance for the
Note Acquisition.
F. No uncured Event of Default shall have occurred.
7. OBLIGATION OF AGENCY UNCONDITIONAL.
The obligation of the Agency to repay the Loan (and all
accrued interest thereon, if applicable) shall be absolute and
unconditional, and until such time as all of the outstanding
principal of (and interest on, if applicable) the Loan shall have
been fully paid, the Agency agrees that it:
A. Will use Loan proceeds solely for the purpose set forth
in this Agreement; and
4/25/01 jmm
5B200L9949.2
11
B. will not terminate or suspend any payment or obligations
under this Agreement or any other document executed or endorsed
hereunder or in connection herewith for any cause, including
without limitation, any acts or circumstances that may constitute
failure of consideration, commercial frustration of purpose, or any
duty, liability or obligation arising out of or in connection with
this Agreement or any document executed or endorsed hereunder or in
connection herewith.
8. ADDITIONAL COVENANTS OF AGENCY.
A. Compliance with Laws. As additional consideration
for the making of the Loan by the City, the Agency covenants that
the Agency shall, during the Term, comply with all applicable
federal, state, and local laws, ordinances, regulations and
directives as they pertain to the performance of this Agreement.
This Agreement is subject to and incorporates the terms of the Act
and 24 Code of Federal Regulations, Chapter V, Part 570, and all
amendments or successor laws, regulations or guidelines thereto
(collectively, the "Laws, Regulations and Guidelines"). The Agency
understands that the Note Acquisition must comply at all times
during the Term with one or more of the three broad national
objectives set forth in 24 CFR 570.208 and the Agency covenants
that it will cooperate with the City and HUD, as reasonably
necessary, to maintain compliance therewith.
B. Covenant to Perform Services. The Agency shall,
during the Term, perform services consistent with the goals and
objectives set forth in the City of San Bernardino Community
Development Block Grant Statement of Objectives and Projected Use
of Funds, as adopted during the Term by the Mayor and Common
Council of the City of San Bernardino, which Statement is
incorporated herein by this reference.
C. Audit bv State and Federal Aqencies. The Agency
agrees that in the event this Agreement or the Loan is subjected to
audit, monitoring or other inspections by appropriate state and
federal agencies, it shall be responsible for complying with such
inspections and paying, on behalf of itself and the City, the full
amount of the liability to the funding agency resulting from such
inspections in the event such liability results from a failure by
the Agency to satisfy applicable law or its obligations under this
Agreement.
4/25/01 jmm
SB2001:9949.2
12
D. Hazardous Materials. The Agency covenants and agrees
that, during its ownership of the Project and the land on which the
Project is situated (the "Site"), it shall not (i) deposit
"Hazardous Materials" (as defined below) in, on or upon the Site,
or (ii) knowingly permit the deposit of Hazardous Materials in, on
or upon the Site, and the Agency hereby assumes any and all
liability arising in connection with any such deposit of Hazardous
Materialsi provided, that this sentence shall not be construed or
understood to prohibit the Agency from allowing Hazardous Materials
to be brought upon the Site so long as they are materials which are
customary and common to the normal course of business on the Site
so long as such materials are used, stored and disposed of in
accordance with all applicable governmental restrictions. The
Agency agrees to indemnify, defend and hold the City harmless from
and against any Claims respecting the presence of Hazardous
Materials in, on or upon the Site to the extent such Hazardous
Materials are brought thereon by or on behalf of the Agency, its
employees, agents or contractors.
For purposes of this Agreement, the term "Hazardous
Materials" means, without limitation, gasoline, petroleum
products , explosives , radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances,
polychlorinated biphenyls or related or similar materials,
asbestos or any other substance or material as may now or
hereafter be defined as a hazardous or toxic substance by any
federal, state or local environmental law, ordinance, rule or
regulation, including, without limitation, (i) the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act (42 U.S.C. Section 6901, et ~.),
(ii) the Federal Water Pollution Control Act (33 U. S. C.
Section 1251, et seq.), (iii) the Clean Air Act (42 U.S.C.
Section 7401, et seq.), (iv) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984 (42 U.S.C. Section 6902, et ~.), (v) the
Toxic Substances Control Act (15 U.S.C. Section 2601-2629),
(vi) the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801, et seq.), (vii) the Carpenter-Presley Tanner
Hazardous Substance Account Act (CA Health & Safety Code
Section 25300, et seq.), (viii) the Hazardous Waste Control
Law (CA Health & Safety Code Section 25100, et seq.), (ix) the
Porter Cologne Water Quality Control Act (CA Water Code
Section 13000, et seq.), (x) the Safe Drinking Water and Toxic
4/25/01 jrnrn
8B2001:9949.2
13
Enforcement Act of 1986, (xi) the Hazardous Materials Release
Response Plans and Inventory (CA Health & Safety Code
Section 25500, et seq.), (xii) the Air Resources Law (CA
Health & Safety Code Section 39000, et seq.), or (xiii) in any
of the regulations adopted and publications; promulgated
pursuant to the foregoing.
E. Other Requirements. The Agency shall, during the
Term, comply with all other applicable requirements of a
subrecipient of CDBG funds including without limitation compliance
with the Lead Based Paint Poisoning Prevention Act (42 U. S. C.
4831(b)), and any other applicable laws including any laws
respecting relocation, displacement and federal labor standards
requirements.
9. DISCRIMINATION.
The Agency and the City agree that no person shall, on the
grounds of race, sex, creed, color, religion, national origin, or
age be excluded from participation in, be refused the benefits of,
or otherwise be subjected to discrimination in any activities,
programs, or employment supported by this Agreement. The Agency
shall comply with all applicable regulations set forth in 24 CFR
570.600-602, including without limitation, the requirement that the
Agency comply with Title VI of the Civil Rights Act of 1964 (Public
Law 88-352) and regulations at 24 CFR Part 1; Section 109 of the
Act and the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and
Executive Order 11246 and the regulations issued pursuant thereto
(41 CFR Chapter 60), if applicable; and the requirements of the
Americans With Disabilities Act (42 U.S.C. 12101-12213).
10. INDEPENDENCE OF PARTIES.
In their performance of this Agreement, the Parties will be
acting in an independent capacity and not as agents, employees,
partners, j oint venturers, or associates of one another. The
employees or agents of one Party shall not be deemed or construed
to be the agents or employees of the other Party for any purpose
whatsoever, including workers' compensation liability.
4/25/01 jmm
8B2001:9949.2
14
11. ASSIGNMENT; ACCELERATION.
Notwithstanding anything which may be or appear to be herein
to the contrary, no purported assignment of this Agreement shall be
effective if such assignment would violate the terms, conditions
and restrictions of the CDBG or any other Laws, Regulations and
Guidelines applicable to this Agreement or such assignment.
The Agency shall not assign this Agreement or any performance
or benefit under the terms of this Agreement, without the prior
written consent of the City, and any purported assignment hereof
shall be null and void and shall constitute a material breach of
this Agreement. In the event of a sale or transfer of the Property
and/or the Project (other than an encumbrance of the Property
and/or the Project for security purposes) without an assignment of
this Agreement approved in writing by the City, the City may, at
its option, declare the entire principal balance of the Loan and
all accrued and unpaid interest thereon immediately due and
payable.
The City shall not assign the Loan or the Agency Note, or
later, the Note to a third person without the prior written consent
of the Agency; provided however, that an assignment by the City of
the Loan, the Agency Note or the Note to the Secretary of the
United States Department of Housing and Urban Development shall not
require the consent of the Agency.
12. FISCAL LIMITATIONS.
The United States of America through HUD, may in the future
place programmatic or fiscal limitations on CDBG funds not
presently anticipated. Accordingly, the City reserves the right to
revise this Agreement in order to take account of federal
government actions affecting HUD program funding. In the event of
funding reduction in CDBG funds to such a level that materially
affects the ongoing CDBG activities of the City, the City may
reduce or eliminate, as necessary, the Loan in whole or in part.
13. EVENTS OF DEFAULT AND REMEDIES.
A. Events of Default. The occurrence of any of the
following shall, after the giving of any notice described therein,
constitute an event of default ("Event of Default") hereunder:
4/25/01 jmm
882001:9949.2
15
1. The failure of the Agency to payor perform any
covenant or obligation hereunder without curing such failure
within ten (10) days after receipt of written notice of such
default from the City (or from any party authorized by the
City to deliver such notice as identified by the City in
writing to the Agency). Further provided, that the herein
described notice requirements and cure periods shall not apply
to the following (hereinafter, "Non-Curable Defaults"): (i) any
failure by the Agency to transfer monies from the general fund
of the Agency to the City to make Mandatory Prepayments, as
provided in Section 5 of this Agreement or (ii) the Event of
Default described in the following Section 16(A) (2).
2. Failure of the Agency to pay the outstanding
principal balance of the Loan on any Applicable Maturity Date;
3. Any attempted assignment or transfer by the Agency
not in compliance with Section 11 above;
4. The falsity of any material representation or breach
of any material warranty made by the Agency under the terms of
this Agreement or any other document executed in connection
herewith;
5. A determination by the City or HUD that use of the
Loan proceeds by the Agency does not constitute an eligible
activity under the Act, 24 CFR 570.200 et ~., or other
applicable regulations;
6. The Agency shall either (a) apply for or consent to
the appointment of a receiver, trustee, liquidator or
custodian or the like of its property, (b) fail to payor
admit in writing its inability to pay its debts generally as
they become due, (c) make a general assignment for the benefit
of creditors, (d) be adjudicated a bankrupt or insolvent or
(e) commence a voluntary case under the Federal bankruptcy
laws of the United States of America or file a voluntary
petition or answer seeking an arrangement with creditors or an
order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy
or insolvency proceeding; or
7. If without the application, approval or consent of
the Agency, a proceeding shall be instituted in any court of
4/25/01 jmm
5B2001,9949.2
16
competent jurisdiction, under any law relating to bankruptcy,
in respect of the Agency, for an order for relief or an
adjudication in bankruptcy, a composition or arrangement with
credi tors, a readj ustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the
Agency or of all or any substantial part of the Agency 's
assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being
contested by the Agency, in good faith, the; same shall (a)
result in the entry of an order for relief or any such
adjudication or appointment, or (b) continue undismissed, or
pending and unstayed, for any period of ninety (90)
consecutive days.
B. Remedies. Upon the occurrence of an Event of Default
hereunder, the City may, in its sole discretion, take anyone or
more of the following actions:
1. By notice to the Agency (unless an Event of Default
is a Non-Curable Default as defined in Sections 13 (A) (1)
above in which case no notice shall be required), declare the
entire principal balance of the Loan then unpaid together with
interest accrued thereon immediately due and payable, and the
same shall become due and payable without further demand,
protest or further notice of any kind, all of which are
expressly waived. Upon such declaration the outstanding
principal of the Loan shall thereafter bear interest ("Default
Interest") at the annual rate of interest equal to the lesser
of (a) four percent (4%) above the rate of interest announced
from time to time by Bank of America, Downtown San Bernardino
Branch (or, in the event that said bank is acquired or ceases
operations, then, if there is no successor bank, another
established and financially secure institutional lender
selected by the City), as its prime or reference rate or (b)
the maximum rate of interest permitted to be paid to the City
pursuant to any applicable usury law, payable from the date of
such declaration until paid in full;
2. Take action at law or in equity as may appear
necessary or desirable, in the sole discretion of the City, in
order to collect the amounts then due and thereafter to become
due hereunder and under the Loan, and to enforce performance
and observance of any obligation, agreement or covenant of the
Agency under this Agreement or under any other document
executed in connection herewith;
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8B2001:9949.2
17
3. Take any and all actions and do any and all things
which are allowed, permitted or provided by law, in equity or
by statute to enforce and collect upon the Loan, including
without limitation suing on the Note or foreclosing legally or
judicially on the Senior Deed of Trust.
C. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the City is intended to be exclusive of any other
available remedy or remedies, but each such remedy shall be
cumulative and shall be in addition to every other remedy given
under this Agreement or now existing at law or in equity or by
statute; and may be exercised in such number, at such times and in
such order as the City may determine in its sole discretion. No
delay or omission to exercise any right or power upon the
occurrence of any Event of Default hereunder shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as
often as may be deemed expedient by the City. In order to entitle
the City to exercise any right or remedy reserved to it under this
Agreement, no notice shall be required except as expressly provided
herein.
14. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES.
The Agency agrees to payor reimburse the City, upon demand by
the City, for all reasonable out-of-pocket costs incurred by the
City in connection with the enforcement of this Agreement, the
Note, including without limitation, reasonable attorneys' fees and
costs (i) if the City shall determine to utilize an attorney to
collect any sums due under this Agreement or any other documents
executed in connection with this Agreement following any default by
the Agency, or (ii) if the City becomes a party or otherwise
appears in any legal proceeding relating to this Agreement or any
documents issued hereunder or in connection herewith, or (iii) if
there shall be filed by or against the Agency any proceedings under
any federal or state bankruptcy or insolvency laws, whether the
Ci ty is a creditor in such proceeding or otherwise. For the
purposes of this Agreement, the phrase "reasonable attorneys' fees"
shall include the salaries, overhead and benefits of the City
Attorney for the City of San Bernardino and the attorneys employed
in his office.
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8B2001:9949.2
18
15. CONFLICT OF INTEREST; NO INDIVIDUAL LIABILITY.
No official or employee of the City shall have any personal
interest, direct or indirect, in this Agreement, nor shall any
official or employee of the City participate in any decision
relating to this Agreement which affects such official's or
employee's pecuniary interest in any corporation, Partnership or
association in which such official or employee is directly or
indirectly interested. No official or employee of the City shall
be personally liable in the event of a breach of this Agreement by
the City.
16. AMENDMENTS, CHANGES AND MODIFICATIONS.
This Agreement may only be amended, changed, modified or
altered by a writing signed by both of the Parties.
17. EXECUTION OF COUNTERPARTS.
This Agreement may be executed in several counterparts each of
which shall be an original and all of which shall constitute one
and the same document.
22. NOTICES.
All notices to be given under this Agreement shall be in
writing and shall be delivered personally, by Federal Express or
other like overnight courier or by certified or registered United
States Mail, return receipt requested. Any notice shall be
effective upon delivery or refusal to accept delivery, if delivered
personally, one (1) day after deposit with the Overnight courier,
if delivered by Federal Express or other like Overnight courier,
and two (2) days after mailing, if delivered by certified or
registered United States Mail. Notices to the Agency shall be sent
to the following address:
4/25/01 jmm
SB2001:9949.2
19
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attn: Executive Director
With a copy to:
Lewis, D'Amato, Brisbois & Bisgaard LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attn: Timothy J. Sabo, Esq.
Notices, reports and statements to the City shall be delivered
or sent to the following address:
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
Attn: Mayor
With a copy to:
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
Attn: City Attorney
Each Party shall promptly notify the other Party of any
change(s) of address to which notice shall be sent pursuant to this
Agreement.
19. SEVERABILITY.
The
provisions
provision.
invalidity or unenforceability
of this Agreement will in no
of
way
anyone or more
affect any other
20. INTERPRETATION.
Whenever the context requires, all words used in the singular
will be construed to have been used in the plural, and vice versa,
and each gender will include any other gender. The captions of the
paragraphs of this Agreement are for convenience only and do not
define or limit any terms or provisions. Time is of the essence in
the performance of this Agreement.
4/25/01 jmm
SB2001:9949.2
20
21. NO WAIVER; CONSENTS.
Any waiver by the City must be in writing and will not be
construed as a continuing waiver. No waiver will be implied from
any delay or failure by the City to take action on account of any
default of the Agency. Consent by the City to any act or omission
by the Agency will not be construed to be a consent to any other or
subsequent act or omission or to waive the requirement for the
City's consent to be obtained in any future or other instance.
22. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
California.
23. AUTHORITY AND ENFORCEABILITY.
The Agency warrants and represents that its execution hereof
has been duly authorized, that the individual(s) executing this
Agreement are authorized to do so, and this Agreement constitutes a
legal, valid and binding obligation of the Agency.
24. LITIGATION AND COMPLIANCE.
To the Agency's actual knowledge, there are no suits, other
proceedings or investigations pending or threatened against, or
affecting the business or the properties of the Agency (other than
those as have been previously disclosed in writing to the City)
which could materially impair its ability to perform its
obligations under this Agreement, nor is the Agency in violation of
any laws or ordinances which could materially impair the Agency's
ability to perform its obligations under this Agreement.
25. DEFAULT.
To the Agency's actual knowledge, there are no facts now in
existence which would, with the giving of notice of the lapse of
time, or both, constitute an "Event of Default" hereunder, as
described in Section 13.
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5B2001:9949.2
21
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date and year first above written.
By: -{~-~-~
it.- Valles
person of the Community
opment Commission,
ning board of the
elopment Agency of the
City of San Bernardino
AGENCY OF THE
BERNARDINO
APPROVE AS TO FORM:
By: ~~~
Counsel
By:
SAN BERNARDINO
a~-
dith Valles
ATTEST:
By: ~~~( /J CLt~/~/
Cl Y Clerk
APPROVED AS TO FORM:
By:
City Attorney
4/25/01 jmm
SB2001:9949.2
22
EXHIBIT "A"
Legal Description
4/25/01 jmm
8B2001:9949.2
Exh. A - 1
Exhibi t "B"
Gold Mountain Acceptance
4/25/01 jmm
SB2001:9949.2
Exh. B-1
;eclt By: BAR K
510 357 5196;
Apr-26-0r 3:~2PM;
p,'\ge 2/3
City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
Redc'-'elopment. Communtty ORvslopmem . Housing. Busmess: Recn.Jltmtimt. H8(8nflon. RevlraJ;zst,Oft . Main Stf8et Inc,
April 23,2001
Mr. Barnic Ng
BAR-K,INC.
P.O. Box 717
20 I Lafayette Circle
Lafayette, California 94548
. .
\
- VIA FACSiMiLE (Y25) 283-8885 -
Dear Mr. Ng:
\
This kltcr will conllfiu our mutual understanding regarding the anticipated prepaymcnt by the
Redevelopment Agency of the City of San Bernardino ("Agency") of the tirst mortgage loan
with Gold Mountain Financial Institution, Inc., as extended by your company to MDA-Sun
Bernardino Associates, LLC, for the Downtown San Bernardino Cinema Plcx site. The original
principal fir~t 10,111 alllounl i~ 53,600,000 ("Loan"), bearing interest at 12% per annum, fully
amortized for a IS year period with current monthly payments of $43,206.05 and with a present
outstanJing balance, aller the March 31, 200 I, of approximately S3,503,000.00. The Agency has
acquired fl:e title to the Downtown San Bernardino Cinema Plex Site from MDA-San Bernardino
Associates, LLC, as of March 13.2001.
The Agency proposes to partially prepay the Loan as follows:
I. On Apnl 27,200 I, thc Agency will wire transfer an amount equal to SI,200,OOO which
will be considered to include the $43,206.05 payment due on April 30, 2001. This
payment includes interest and amortized principal payment leaving a remaining principle
balam:e ("1 st Payment") amount of $1,156,793.95.
2. On or about April 27, 2001, but no later than May 4, 2001, the Agency will wire transter
an amount equal to $1,000,000 as an additional partial principle prepayment amount ("2nd
Payment").
After the date of rcceipt of the 1st prepayment amount above, the Loan will become an interest
only obligation, \vith interest payable monthly at the rale equal to 12% per annum applied agaimt
the outstanding principal balance for the number of days in the applicable monthly calculation
period that each particular balance was outstanding_ The Agency will commence to remit
interest only payments as of May 31 and IhcrcaIlcr on or before the last day of each calendar
month subject to a IO-day grace period for all payments_ The inlercst only period for the Loan
201 North E Slr"..1. Suil9 301' San 89rnardmo. California 92401-1507' (909) 663.1044. Fax (909) 888-941.1
www.sanbernarrlinn-A<.IlIorg
Cj O~ - "103 - z. z 9 '+
~''I' :
8,,~ "
:::::. (, 3'3-;-'
,::::. c,:-"
~ - - J
Apr'" c:.'':: ('~
:J: '::JF'::
F21;1e
3 3
MK HAK.i"\JII:: NG
April 23, 2001
Page Number Two
will be fur 12 month Iy payrm:nts from l'vlay 31, 200 I, through and including April 30, 2002, with
the unpaid principal balance then becoming due and payable on May 31,2002. The Loan may
be prepaid in whole or in part from time-to-time without penalty or prepayment premium as per
the June 14,2000 N,)tc.
The Agency reserves the right to acquire from BAR-K, Inc., at any time the unpaid promissory
note and an assignment of the deed of trust upon payment to BAR-K, Inc., of the outstanding
prim;ipa! balaul:c and a.;crllcJ interest in lieu of a full repayment of the promissory note and
extinguishment thereof and reconveyance of the deed of trust.
If the terms as outlincd abovc arc acceptable to you, please indicate your acccptance on the
signature line as provided below.
\
.L"
V ef)~ yours
i/ L
~: D:~:;;O' ~ I
Redevelopment Agency of the City of San
Bernardino
THE ABOVE SET FORTH TERMS AND
CONDlTtONS ARE ACCEPTED AND
APPROVED BY THE UNDERSIGNED AS
AN AUTHORIZED REPRESENTATIVE OF
BAR-K, INC., AS OF THE DATE
NOTED BELOW:
By ~"^~~
~~::~ y yfL~ \ ~ 0
I I
EXHIBIT "C"
PROMISSORY NOTE
PAYABLE TO A PUBLIC AGENCY
(2001 City of San Bernardino Community
Development Block Grant Float Loan Agreement)
- CinemaStar Project -
PRINCIPAL AMOUNT:
San Bernardino, California
$1,000,000.00
Date: May , 2001
Initial Maturity Date: September
, 2003
For value received, the Redevelopment Agency of the City of San
Bernardino (hereinafter called "BORROWER") promises to pay to the
order of the City of San Bernardino (hereinafter called "CITY") at
its office in the City of San Bernardino, State of California or at
CITY'S option, at such other place as may be designated by CITY,
the sum of One Million Dollars ($1,000,000.00). Payments shall be
made by the BORROWER to the City prior to the Maturity Date as set
forth above in monthly installments of Twenty One Thousand Six
Hundred Ninety Two Dollars Thirty Eight Cents ($21,692.38) each,
with the first such payment due on the first day of the calendar
month following the month when this NOTE is dated and delivered to
the CITY, and thereafter, such monthly installments shall be due
and payable on the first day of each succeeding month until the
Maturity Date, when the remaining principal balance of the NOTE
shall be due and payable in full. BORROWER shall have the right to
pre-pay the NOTE in whole or in part at any time prior to the
Initial Maturity Date without penalty.
The term "INDEBTEDNESS" as used herein shall mean the INDEBTEDNESS
evidenced by this NOTE, including principal, servicing charges and
expenses, whether contingent, now due or hereafter incurred. The
term "COLLATERAL" as used in thi s NOTE shall mean any funds,
guarantees, or other property or rights therein of any nature
whatsoever or the proceeds thereof which may have been, are, or
hereafter may be, hypothecated, directly or indirectly by the
BORROWER in connection with, or as security for, the INDEBTEDNESS
or any part thereof as set forth in that certain agreement by and
between the CITY and the BORROWER entitled "Float Loan Agreement"
dated as of April 16, 2001. The COLLATERAL, and each part thereof,
4/25/01 jmm
SB2001:9949.2
Exh. C - 1
shall secure the INDEBTEDNESS and each part thereof. The covenants
and conditions set forth or referred to in any and all instruments
of hypothecation constituting the COLLATERAL are hereby
incorporated in this NOTE as covenants and conditions of the
BORROWER with the same force and effect as though such covenants
and conditions were fully set forth herein.
The INDEBTEDNESS shall immediately become due and payable prior to
the Initial Maturity Date upon the occurrence of an "Event of
Default" as this term is defined in the Float Loan Agreement.
Further, the INDEBTEDNESS shall be due and payable prior to the
Initial Maturity Date, in whole or in part, upon any "Mandatory
Prepayment" date, as set forth in the Float Loan Agreement. CITY's
failure to exercise its rights under this paragraph shall not
constitute a waiver thereof.
Upon the nonpayment of the INDEBTEDNESS, or any part thereof, when
due, CITY is empowered to exercise its rights under the Float Loan
Agreement to realize upon any part of the COLLATERAL. After
deducting all expenses incidental to or arising from such sale or
sales, CITY may apply the residue of the proceeds thereof to the
payment of the INDEBTEDNESS, as it shall deem proper, returning the
excess, if any, to the BORROWER. The BORROWER hereby waives all
right of redemption or appraisement whether before or after sale.
CITY is further empowered, to collect or cause to be collected or
otherwise to be converted into money all or any part of the
COLLATERAL, by suit or otherwise, and to surrender, compromise,
release, renew, extend, exchange, or substitute any item of the
COLLATERAL in transactions with the BORROWER or any third party,
irrespective of any assignment thereof by the BORROWER. Whenever a
sum payable by the BORROWER is not paid when due, or is otherwise
in default, whether or not the INDEBTEDNESS, or any part thereof,
has become due, CITY shall have the same rights and powers with
respect to such item of the COLLATERAL as are granted in respect
thereof in this paragraph in case of nonpayment of the
INDEBTEDNESS, or any part thereof, when due. None of the rights,
remedies , privileges, or powers of CITY expressly provided for
herein shall be exclusive, but each of them shall be cumulative
with and in addition to every other right, remedy, privilege, and
power now or hereafter existing in favor of CITY, whether at law or
in equity, by statute or otherwise.
The BORROWER agrees to take all necessary steps to administer,
supervise, preserve, and protect the Property; and regardless of
any action taken by CITY, there shall be no duty upon CITY in this
4/25/01 jmm
SB2001,9949.2
Exh. C - 2
respect. The BORROWER shall pay all expenses of any nature,
whether incurred in or out of court, and whether incurred before or
after this NOTE shall become due at its Maturity Date or otherwise,
including but not limited to reasonable attorney's fees and costs,
which CITY may deem necessary or proper in connection with the
satisfaction of the INDEBTEDNESS or the administration,
supervision, preservation, protection of (including, but not
limited to, the maintenance of adequate insurance) or the
realization upon the Property. CITY is authorized to pay at any
time and from time to time any or all such expenses, add the amount
of such payment to the amount of the INDEBTEDNESS, and charge
interest thereon at the rate specified herein with respect to the
principal amount of this NOTE.
The security rights of CITY and its assigns hereunder shall not be
impaired by CITY's sale, hypothecation or rehypothecation of this
NOTE or any item of the COLLATERAL, or by any indulgence, including
but not limited to (1) any renewal, extension, or modification
which CITY may grant with respect to the INDEBTEDNESS or any part
thereof, or (b) any surrender, compromise, release, renewal,
extension, exchange, or substitution which CITY may grant in
respect of the Property.
4/25/01 jrnrn
882001:9949.2
Exh. C - 3
The CITY shall not assign this NOTE to any person without the prior
written consent of the BORROWER; provided however, that an
assignment or transfer of this NOTE by the CITY to the Secretary of
the United States Department of Housing and Urban Development shall
not require the consent of the BORROWER.
BORROWER:
Redevelopment Agency of the City of
San Bernardino,
By:
Judith Valles
Chairperson of
Development
governing board
Redevelopment Agency
City of San Bernardino
the Community
Commission,
of the
of the
By:
Gary Van Osdel
Agency Secretary
4/25/01 jmm
8B2001:9949.2
Exh. C - 4
EXHIBIT "D"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
Space above for Recorder's Use
ASSIGNMENT OF DEED OF TRUST
THIS ASSIGNMENT OF DEED OF TRUST is executed this ___ day
of 2001, by Gold Mountain Financial Institution,
Inc., a California corporation ("Gold Mountain"), in favor of the
Redevelopment Agency of the City of San Bernardino, a public body
corporate and politic (the "Agency") .
RECITALS
A. The Redevelopment Agency of the City of San
Bernardino (the "Agency") and the City of San Bernardino (the "City")
are parties to that certain Float Loan Agreement dated
_, 2001 (the "Loan Agreement") pursuant to which the City will loan
to the Agency, on and subject to the terms and conditions set forth
therein, an aggregate principal amount not to exceed Three Million
Six Hundred Thousand Dollars ($3,600,000.00) (the "Loan").
B. Pursuant to the Loan Agreement, the Agency is using
the proceeds of the Loan to acquire that certain Note Secured By
Deed of Trust dated June 14, 2000 held by Gold Mountain (the
"Note"). The Note is secured by a Deed of Trust, Assignment of
Rents and Fixture Filing dated June 14, 2000 (the "Deed of Trust")
and more fully described below.
NOW, THEREFORE, with reference to the above recitals and
in reliance thereon, and for such other good and valuable
4/25/01 jmm
8B200109949.2
Exh. D - 1
consideration the receipt and sufficiency of which is hereby
acknowledged, the undersigned agrees as follows:
Gold Mountain hereby grants, assigns and transfers to the
Agency all beneficial interest under that certain Deed of Trust,
Assignment of Rents and Fixture Filing dated June 14, 2000,
executed by MDA-San Bernardino Associates, LLC, a Delaware Limited
Liability Company, Trustor, to Bar K, Inc., a California
corporation, Trustee, and recorded 2000, as
Instrument No. , in Book ____, Page of Official
Records in the office of the County Recorder of San Bernardino
County, California, describing land therein as:
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.
Together with all the improvements now or
hereafter erected on the Property, all
replacements, all additions, all easements,
rights, rents, royalties, mineral, oil and gas
rights, water rights and stock and all
fixtures now or hereafter a part of the
Property, the Landlord's interest in the lease
between Trustor, as landlord, and CinemaStar
Luxury Theaters, Inc., a tenant, dated
December 20, 1996 and Trustor's security
therein. All of the foregoing is referred to
as the "Property".
4/25/01 jmm
5B2001:9949.2
Exh. D - 2
TOGETHER with the Note therein described,
become due thereon with interest, and all
accrue under said Deed of Trust.
Dated
, 2001
STATE OF CALIFORNIA
ss.
COUNTY OF SAN BERNARDINO
On 2001,
before me,
personally appeared
and
personally known to me (or proved
to me on the basis of satisfactory
evidence to be) the person(s) whose
name (s) is/are subscribed to the
within instrument and acknowledged
to me that he/she/they executed the
same in his/her/their authorized
capacity(ies) and that by
his/her/their signature(s) on the
instrument the person(s) or the
entity upon behalf of which the
person acted, executed the
instrument.
4/25/01 jrnrn
SB2001:9949.2
Exh. D - 3
the money due and to
rights accrued or to
GOLD MOUNTAIN FINANCIAL
INSTITUTION, INC., a California
corporation
By:
President
By:
Secretary
EXHIBIT "E"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of San Bernardino
300 North "D" Street
San Bernardino, California
Attention: City Attorney
)
92418
Space above for Recorde~s Use
ASSIGNMENT OF DEED OF TRUST
THIS ASSIGNMENT OF DEED OF TRUST is executed this day
of , 2001, by the Redevelopment Agency of the City of
San Bernardino, a public body corporate and politic (the "Agency")
in favor of the City of San Bernardino, a municipal corporation
(the "City") .
RECITALS
A. The City and the Agency are parties to that certain
Float Loan Agreement dated 2001 (the "Loan
Agreement") pursuant to which the City will loan to the Agency, on
and subj ect to the terms and conditions set forth therein, an
aggregate principal amount not to exceed Three Million Six Hundred
Thousand Dollars ($3,600,000.00) (the "Loan").
B. Pursuant to the Loan Agreement, the Agency is using
the proceeds of the Loan to acquire that certain Note Secured By
Deed of Trust dated June 14, 2000 held by Gold Mountain (the
"Note"). The Note is secured by a Deed of Trust, Assignment of
Rents and Fixture Filing dated June 14, 2000 (the "Deed of Trust")
and more fully described below.
C. In consideration of the payment by the Agency of the
acquisition price of the Note, Gold Mountain assigned the Deed of
4/25/01 jrnrn
SB2001:9949.2
Exh. E - 1
Trust to the Agency
Trust dated
as Instrument No.
Official Records in the
Bernardino, California.
pursuant to that certain
, 2001 and recorded
in Book
office of the County
Assignment of Deed of
, 2001,
Page of
Recorder of San
NOW, THEREFORE, with reference to the above recitals and
in reliance thereon, and for such other good and valuable
consideration the receipt and sufficiency of which is hereby
acknowledged, the undersigned agrees as follows:
The Agency hereby grants, assigns and transfers to the
City all beneficial interest under that certain Deed of Trust,
Assignment of Rents and Fixture Filing dated June 14, 2000,
executed by MDA-San Bernardino Associates, LLC, a Delaware Limited
Liability Company, Trustor, to Bar K, Inc., a California
corporation, Trustee, and recorded 2000, as
Instrument No. , in Book ,Page of Official
Records in the office of the County Recorder of San Bernardino
County, California, describing land therein as:
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 - 5 5 6 71 0, SAN BERNARDINO
COUNTY RECORDS, AND THE EASEMENTS CONTAINED IN
THE PARKING AGREEMENT RECORDED DECEMBER 29,
1998, INSTRUMENT NUMBER 98-556712, SAN
BERNARDINO COUNTY RECORDS.
Together with all the improvements now or
hereafter erected on the Property, all
replacements, all additions, all easements,
rights, rents, royalties, mineral, oil and gas
rights, water rights and stock and all
fixtures now or hereafter a part of the
Property, the Landlord's interest in the lease
4/25/01 jrnrn
8B2001:9949.2
Exh. E - 2
between Trustor, as landlord, and CinemaStar
Luxury Theaters, Inc., a tenant, dated
December 20, 1996 and Trustor's security
therein. All of the foregoing is referred to
as the "Property".
TOGETHER with the Note therein described,
become due thereon with interest, and all
accrue under said Deed of Trust.
the money due and to
rights accrued or to
Dated
, 2001
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Executive Director
ATTEST:
Agency Secretary
STATE OF CALIFORNIA
ss.
COUNTY OF SAN BERNARDINO
On 2001,
before me,
personally appeared
and personally
known to me (or proved to me on
the basis of satisfactory evidence
to be) the person(s) whose name(s)
is/are subscribed to the within
instrument and acknowledged to me
that he/she/they executed the same
in his/her/their authorized
capacity(ies) and that by
his/her/their signature(s) on the
instrument the person(s) or the
entity upon behalf of which the
person acted, executed the
instrument.
WITNESS my hand and official seal.
4/25/01 jmm
SB2001:9949.2
Exh. E - 3
EXHIBIT "F"
FORM OF CITY FORBEARANCE LETTER
[DATE]
Attn: Executive Director
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street
Suite 301
San Bernardino, California 92401
Re: $3,600,000 Gold Mountain Note Acquisition
(Float Loan Agreement, dated as of April 16, 2001)
LOAN FORBEARANCE TERMS OF THE CITY OF SAN BERNARDINO
Ladies and Gentlemen:
This letter shall serve to confirm the terms of the
forbearance of the City of San Bernardino (the "City") to exercise
certain rights and remedies which the City possess as the holder in
due cause of that certain promissory note, dated June 14, 2000, in
favor of Gold Mountain Financial Institution, Inc., in the original
principal amount of $3,600,000.00 (the "Note"). A copy of the Note
is attached to this letter and is incorporated herein by this
reference.
The City has entered into an agreement entitled "Float Loan
Agreement", dated as of April 16, 2001, (the "Float Loan Agreement")
with the Redevelopment Agency of the City of San Bernardino (the
"Agency") . Pursuant to the Float Loan Agreement, the City has
provided a loan to the Agency in the principal sum of
$ (the "Loan"), subject to the terms and conditions
as set forth in the Float Loan Agreement, including without
limitation, an assignment by the Agency of the Note and the "Senior
Deed of Trust", as this term is defined in the Float Loan
Agreement, to the City as additional collateral securing the
repayment of the Loan.
Unless the context of the usage of an specific word or phrase
may require, the meaning of words denoted by a capitalized letter
4/25/01 jmm
8B2001:9949.2
Exh. E - 4
in the following paragraphs of this letter shall be the same as set
forth in the Float Loan Agreement.
Notwithstanding any other provision of the Note or the Senior
Deed of Trust to the contrary the City hereby acknowledges and
agrees that:
(1) for so long as no Event of Default has occurred under the
Float Loan Agreement, no interest shall accrue under the
Note;
(2) upon occurrence of an Event of Default, interest under
the Note shall commence to accrue at the rate per annum
set forth in the Float Loan Agreement;
(3) installments due under the Note prior to the Initial
Maturity Date, or the Applicable Maturity Date, shall be
the sum of $21,692.38 per month and each such installment
shall be due on the first day of the month;
(4) the Note shall mature and the remaining unpaid principal
balance shall be payable by the Agency to the City on the
Initial Maturity Date, or if applicable at the option of
the City, on the Applicable Maturity Date as set forth
under the Float Loan Agreement;
(5) the occurrence of an Event of Default under the Float
Loan Agreement shall be deemed to be a default under the
Senior Deed of Trust, and shall entitle the City to
exercise any remedy then available to it under the Senior
Deed of Trust and/or the Float Loan Agreement;
(6) the City may require a Mandatory Prepayment of the Loan,
in whole or in part, at any time as set forth in the
Float Loan Agreement, and a failure by the Agency to pay
such a Mandatory Prepayment shall be deemed a default
under the Senior Deed of Trust;
(7) upon repayment in full of the Loan by the Agency, the
City shall endorse the Note to the order and instruction
of the Agency, and the City shall release and reconvey,
and/or execute an assignment of the Senior Deed of Trust,
as applicable, to the order and instruction of the
Agency; and
4/25/01 jmm
832001:9949.2 Exh. F - 2
Executive Director
, 2001
Page 3
(8) The City shall not assign or transfer its interest in the
Note or the Senior Deed of Trust to any person without
the prior written consent of the Agency except to the
Secretary of the United States Department of Housing and
Urban Development.
The acceptance by the Agency of the proceeds of the "second
installment" of the Loan under the Float Loan Agreement shall
conclusively evidence the acceptance by the Agency of the terms and
conditions of this letter. In the event there is a conflict
between any term or provision of this letter and the Float Loan
Agreement, the provision of the Float Loan Agreement shall be
applicable to resolve such conflict.
Very truly yours,
CITY
City of San Bernardino
By:
Judith Valles
Mayor
cc: City Clerk
4/25/01 jmm
8B2001:9949.2
Exh. F - 3
04-25-01 14:57
,t BV: BAli IC
From-LEWIS, D' AMATO , BRISBOIS' BISGARD LLP
510 ~~I :11~Di
9098853187
"~I -,,-w,
'-
...
., -'.~'
,
"
San Leandro,Califomia
Date: June 14,2000
$3,600.000.00
In inslaUmel\l$ u hefCin Sfated. for ~11\le re<<ivlld, Jhe undcr&J.gnod. promise to llay to GOLD
MOUNtAIN 1l1NANClAL lNSmllTlON, INC., a CaliFonia corpClram.o, or Qrder ("l.endClr"), -
432 &11I,"IIQ AVOOue. Sill Leandro, CA 9457'1. or O\hClf placo dlat may l1e de&lsnate:d by LcQder lttrougtl
written notice to the IIndersigncd. tile sum of SJ,600,OOO.oo;rra:au MlUJON SIX IIlJNDltID
1'H01JSANP 'Pou.ARS AND NO CENTS) with inu:reSt 'from lhcdate of fu~lns (wblch ie
Juns 3D. 2000 .) on theunpi\id principal bldancepumindill&:from tbbfio dme at me
RATE or INTPEST ~18Jcdbclow.pa1abls: in KRond\\y inS~l!nent!l'il1ttm.mQiinj pf$43.206.OS per
moo" ~ on we 30th dayafoach month. besilllliner~~U'Y ~D.' ..~oo~aad ~ntil1uiP8
monthly ~~1I!'ul manarity,,~Uro~~'~. . 201~~ at~i.~~ime allSwns gr~rbitip'llmd in~
1hM romamlAI unpaid shalt bO..~~~. '~.'~..';'; ,.,.ib. ".}.~.. '.11.}1l..1.1~'.,." ~r.,~,~f'f' '"}5 ',.... '...... ';
)l~i~*~~~~~h,LA;~ 'j': ,,',, , ,<, :ill: ",: ,,"c,
RATE OF lNTlREST; d' ' " _,,0,'-:'" "",;ft ::B .....,.,. =.,."
Tho ra\O of iJnerest for me 1en1\ oftllis promissol'Y note shall be ,TWELVE pCI' "Ill (12%) per annum.
..ual'UCATlON OF ?AYMENTi COSTS OF COU,~C1'10N~
Bacb payment sball be cn:ditcd tint tQ intomt lhen due ane! paYable lAd me remainder an principDl allCl
intmll 8bIU 1hen:upon cease upon IDa.prinelpal JO crednca. Upon default in any payment of IulY
in5ta1l~ men the bal~PCC DfdUs obliption shall bCC.Qme due inunCllSialely allhc uption ofltlc! Lon4or
bereaf'. All ~ ~ses. advances and/or auomOYS' fcos iDcunooci to protect me securllY of 1bili
rromlsaaIY 'NOte: s11aU b~ inuncdiatCIYow~.from ,me Un~ wbcdtcr or Dol suit has beta. filad.
All such adv~. csxponsos;'adV.,iCGs an4IQf auomcp" f~sJa-,r iulCNo InteRlst at IbD rate lila1Id in lbi&
Pramis$orY Note tiom me .dalc Jncul1Cd until paid, .Jf, ~limcnmta wbich. BR :p~lCl under lbil
1'lUAillSocy No~ are no~~ w,bc,n duo;'t!le ~ndeJ1isned,~ )~P~,~~:&o.lbe principal Ad.
IlltCIR~ dllO lindOI' Ihia note. aJI.costS of tollactian ud~Y1' '~~~'o.,.,'. mey.I,~'Jncurrcd by mo
Londor~'" _ pf~ ~I~ -. or iH3,~~"'~Jf~.!'"""-'
lATE eJJA1Wi" ;;;~,'!.~:::. '~, .... ~';'~~'?: r '
. ,.,i<,~;"<,:?t,ji;,:f;":'::,::'~.~:~ '-'; :',' ~ ,'.,-,>:~- ~'::'~!t~ ,;. --'1'
If any inslaIlm"'t. 411' harc\lMCr Is' de:liRr:\.-cnt man:: thin ~tO,1tiy&'lho;\lndonisnc:4 asro" UI plIy · 1Iro
c:har&O on CIQI\ I~h ins1allmCll\t of 10% of the d~lnquen~ p.yment. Alllato paYmcsg cl\argos aro (0 be:
paid 1"",,",,_ _.......... 10 _ If Illy boI- p'p'.... (doliood u . p~ ""'lob 10
..__........ _.ift&!o _II< i.....""""lls dalillq"'" --.... ID.,.,.... uodoroi.,...t
.pos 10 pay . late c:harSc eq"ivaletll lOW: m~im"'ln late dl"" whi,"" eQl,ild be assessed on tbD \upfi
.1ngle reBular lnatallmant dUD undet this now. ni$ late IlhaI1C an me balloon paymant is JO canUPUII ~
bel assascd for Ollch ,ubsoqUent periad of dmo ClClual to me rosulll' instaIlmcm11lcriact qllder thls '"*
_I me bJUoon payment and omc:r feOS, jmDrc&t and c.harsCII due unditr \bi:l nctllre paid in full.
._. .,,',. , ,~' .'.;'__..... "~-.'..;.i,,,.
D01lI1'''~" "., , ' '" ,. ,. t,,\.. '
.-_no'-"'''-'.' ',. . '!, ,.~' .. ~ ',,:c.s'l'J.I!";'" ~
",. poiaolplII aod ~:~ DO 1IlIs Ill"" ~ "",.~lJl!id ,. ,wol. Dt'iJl'!'"" at lIlll'-
_.:... .Itu .. . . . ;lr~,,:;., . ,:, .,' ,. ".,.' '."~.' . .
w~Q\U paI_-'" ., 1;" _" ,,'., :" ..~~. " :! ',1. ~,:;, !{( ....,,l.l.{tdi:'
,; .. . . ...... ' ~ t '.:, '" I'" 11". J' " .' 'A. ,j;':;'~
n" .;j:, p. ,. '.'" '.:(~..~ .1l;':4~~.t ..........,,}:<\f,J.:;I
_> ~;l " . ""t)":\)M..-~J.l'
.. ~,,":.~ ~..tr"":,.r.~'~''''']'''~
: "(:ir. . :. , ~::'? '?'
PAGE'
... ~.. 0',..,
04-Z5-01 14:57
From-LEWIS,: D~AMATp,)RlSBOfS & BISGARD LLP
510 3fi7 S1aB;
9mB531B7
~pr,~,ul
T-191 P.4Z/43 F-3Z5
,,; I I rill, . W:/- -. .
,t By: BAR tc
,
....
...
. , _ ,.:;.,,~o' :;'._"',',." ;., .;....:,;'~';.,-. ", " ;-;. ;C:'.:- -:-":" ' '
. ,,' ' , ,.' ,~,~ l1, -i! :.: _ . ~. '.!,"" - . ,n.".., ~, ,i ., " ,. : : "I.
_.' _ _._..... ,'....._ .._ ~. ," . -_ II ....' .. -
lINrAlD CHECKS:
The I1Ildenill1ed an4 lAnder agreotblt ilwould be difficult to c1ctctmino the BeUlaI damascll w me
BOJl"ficlary or Bgf1cfi~lIries agent for me rcUlm af an unpaid cb~ provided by undmigned. It is
hereby aar=l dlc und<<signed will pay fOllt per cont (4%) or $25.00, whichever is arealef. Such IltIount
is in addition (Q II\)' lll~ ~harse or defl111t InUl~t milt may be IlPplicat:lle. This amount is in liou of Iny
&JaMOI)' mOl\etary penalty, if aoy. However. Lender daes aQl waive any other rights that may be
aWlfllGd PAdcr 1111 IlalUle- ... . -
~lJENAll0N or TlTU TOTll! PCURITV;':j8B8:, . " '
The: Nate is ~urcd by a Peed of Trust of even date herewim whi~conllins lt1Hol,I~~lng proviiian;
tr- to any, ur IlI1 ofTl'\IilOI"$ intereSt In me ProPCltY. TrusfOr :solis. uansfcrs, l:ontractS
'" seU, Slvos an option to purchase.. conveys, or alicn~!l)eflfopen)'. or if any or all Qf11lc: tltl~
of the Trustor is impaitld or di~ ~" volu.;-~lY or InvolUllJari!yi .or if Jitle to die
fropcRY be subjet;t UJ any prier lian or cbarso (Qd1er man curren' real prapeny JAXD5 aoG
ap~ecS assaSS1ucnlts). volunbU'ily or involu.narily. conU1lClu,lIy or SLlllllWf)', wiLtwut lbJ:
wrinon ~Qnscnt af BenefiCIary boins first had and obtained. \\'11ioR consent may b~ withheld for
JUly ~n; men BOIlClfi~iJtY sb"~ have the right of atOClluation. It il1 option, to dec:lare d\e N01e
socured by dlis Deed of Trust. irrClspeclive af the nlablrity elate expressed lherein, and wllhout
domand or notice, immediately due arid payable. No waiver of this ri&ht sball be cffearivc unless
jl is in writing. CQnsent by 8enC!ficiary 10 one &l1cb lta\'lSaaiQn shall not consUtutc W3lvtr oflbc
risM CO require liQch c;onscnJ i"~ding ttansactio~ .
This prpvisipn shall not be applicable'to ta} the; righta of th8 RedevCllopment ApI:)' 4)f
&bo Ci~ gf San Bcmardiilo in ~ ~nain SubordiRation and 1nJerCreditor A~t da;od Jane
6. 2.000 beJwcon th~ ua.d~isned;.me J,.c:nder &lid the If,.edcvllopltlcnl. ApDqOr d1a Chy of San
Bemanlino. as it'~aUlnsta the su\JOrdinzu., deeds Qf~ hel4 by wbjch ~ th9.~dcvoloplP-
AprWI afme Cit)' gfSIQ Bernardino and are licnslIPYda me Priipoity.' thiS pRWtsian shall aPt
bo appliable to a SU~\lcn~ ~wnlll' of me ;Pro~ ,~ic;h subo'laent ownar lI'=quiros utlo
1hIouab chc fgrcx;103urci.~h&J44eeds afQ'Un orf~'~ a.oqul'ltion gf dla~)' fiom d\O
aedevelopment Agency onhe ,CitY of SIP Bemarillno~~'{~~. . ,... . ,
NonCE 0' 'RAl.UlONPAVMP1':
11tlS 'ltOlvUSSORY NOTE IS PAYAPU: IN fULL ON Tlif MATUIU'N DATI! SHOWH ABOVE
AT WlflCJ4 ~ THE ~'i1&8fJUTIIC1PAL aAl.ANC5 Of nus rlWMlHsaaY 1II0TB ~D ANY
JNT1!.ltasT THBN OUB ANn ANY ADVANcas MADe MUST,P PAID. TH6 'PAYMENTS
llEQunum UNPER nus P1WM1SSOay NOTE AP NOT stJWJClBNT IN AMOUNT TO
llEPUCB mil flUNClPAL to tumItB TItUS .rlUlM1SSOltY }.IOTe ON Ok 8aPollB SUCK DA't2.
nw, oWNl!R OF THIS rRPM1S~a.Y }l!crr81S 1Il0T~WG^T6P TO ~~C8 ma LOAN
fiVlpJiNcep BY nus PllO~S$oaY Nom "T Am' n~.ON SUCROA~UflN"NCINa.
Of nus flROMlSSOlY"N'qrgJdAY.BB 1WOUUlEOIi' ';.;~.eRJ!V~tUNQ ltil"ERBST RATS
M^ Y ~R CONSlDBMB~, ~.IlI()KElt, ,THAN,' .'l'HB RAm. .. E,' a fi\tt$P,~~~?,.a;,.y,. NOlli YOU
MAY BE REQunmD TO PAY LaM! f~ ANn COSTS: '. .' a.i'f1NA'NC~!..': ::.
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14:58
From-LEWIS, D'AMATO, BRISBOIS & BISGARD LLP
51 Q 357 51$16;
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.. m,,", 1bt paym.... ........llclIllJl. 'Ill< UI1IleDipcd .............-1......'......... lAd _..i...
onimo fQf payment hereof befpf'; at. or"after maturity; conscmP to acceptance pf security far this N~
and waives demand. protclit and any applicable $t81ute of limitll~ns.
llPON >>EF,\l]J.T:
AllY Jl'l'l'lIIEST WIlICIIl\EOOMl$:.IIJ1i:.~ tBl$.~WlllCBUIlfAINS - FOil
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IlUAlILT fOIl WlIlIt mAN 0IlE I40IITIl co!l'1'lN\lOllSLY, TIIIII '\'HE JM1'EIlES1'
BAn 0$ 'l'IIIli flaB Illl1Ul'lG'IBE J'ElUOIlIII WIlICS SlleD JlJJAlIL'f lIDfAJNB
llNC111lED QlAl..L ~J,Jl(~T.O AN AMOUNT EQU~TO mB IN'IUEST BA'l'Z
THEN PUE AS STA.nD ON THE FIRST PAGE QJ'TJDS NOU lLOS FIVE rE1l cPT (5-At).
ANY 1'IlIIICU'AJ. JlAl,ANCE olJ'fSTA!QlIIIG .A5I' '\'HE J)8 J)A'fl' 011 'I1lIS NaB SIIAJ.l.
BEAll JII'UlISIlT EQUAL 'l'O 'l'IIE mqm:st 00'JIlEST \tAn lI'fA'fIl)1II tBl$ lion:
PJ,.lJSJ'lVEp.EaCENl'lS,~k,:H:" '< ,'~,; .,... J-}...r.;;,. , . " ." .'
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PROMISSORY NOTE
PAYABLE TO A PUBLIC AGENCY
(2001 City of San Bernardino Community
Development Block Grant Float Loan Agreement)
- CinemaStar Project -
PRINCIPAL AMOUNT:
San Bernardino, California
$1,000,000.00
Date: April 27, 2001
Initial Maturity Date: September 27, 2003
For value received, the Redevelopment Agency of the City of San
Bernardino (hereinafter called "BORROWER") promises to pay to the
order of the City of San Bernardino (hereinafter called "CITY") at
its office in the City of San Bernardino, State of California or at
CITY'S option, at such other place as may be designated by CITY,
the sum of One Million Dollars ($1,000,000.00). Payments shall be
made by the BORROWER to the City prior to the Maturity Date as set
forth above in monthly installments of Twenty One Thousand six
Hundred Ninety Two Dollars Thirty Eight Cents ($21,692.38) each,
with the first such payment due on the first day of the calendar
month following the month when this NOTE is dated and delivered to
the CITY, and thereafter, such monthly installments shall be due
and payable on the first day of each succeeding month until the
Maturity Date, when the remaining principal balance of the NOTE
shall be due and payable in full. BORROWER shall have the right to
pre-pay the NOTE in whole or in part at any time prior to the
Initial Maturity Date without penalty.
The term "INDEBTEDNESS" as used herein shall mean the INDEBTEDNESS
evidenced by this NOTE, including principal, servicing charges and
expenses, whether contingent, now due or hereafter incurred. The
term "COLLATERAL" as used in thi s NOTE shall mean any funds,
guarantees, or other property or rights therein of any nature
whatsoever or the proceeds thereof which may have been, are, or
hereafter may be, hypothecated, directly or indirectly by the
BORROWER in connection with, or as security for, the INDEBTEDNESS
or any part thereof as set forth in that certain agreement by and
between the CITY and the BORROWER entitled "Float Loan Agreement"
dated as of April 16, 2001. The COLLATERAL, and each part thereof,
4/25/01 jmm
5B2001,9949.2
shall secure the INDEBTEDNESS and each part thereof. The covenants
and conditions set forth or referred to in any and all instruments
of hypothecation constituting the COLLATERAL are hereby
incorporated in this NOTE as covenants and conditions of the
BORROWER with the same force and effect as though such covenants
and conditions were fully set forth herein.
The INDEBTEDNESS shall immediately become due and payable prior to
the Initial Maturity Date upon the occurrence of an "Event of
Default" as this term is defined in the Float Loan Agreement.
Further, the INDEBTEDNESS shall be due and payable prior to the
Initial Maturity Date, in whole or in part, upon any "Mandatory
Prepayment" date, as set forth in the Float Loan Agreement. CITY's
failure to exercise its rights under this paragraph shall not
constitute a waiver thereof.
Upon the nonpayment of the INDEBTEDNESS, or any part thereof, when
due, CITY is empowered to exercise its rights under the Float Loan
Agreement to realize upon any part of the COLLATERAL. After
deducting all expenses incidental to or arising from such sale or
sales, CITY may apply the residue of the proceeds thereof to the
payment of the INDEBTEDNESS, as it shall deem proper, returning the
excess, if any, to the BORROWER. The BORROWER hereby waives all
right of redemption or appraisement whether before or after sale.
CITY is further empowered, to collect or cause to be collected or
otherwise to be converted into money all or any part of the
COLLATERAL, by suit or otherwise, and to surrender, compromise,
release, renew, extend, exchange, or substitute any item of the
COLLATERAL in transactions with the BORROWER or any third party,
irrespective of any assignment thereof by the BORROWER. Whenever a
sum payable by the BORROWER is not paid when due, or is otherwise
in default, whether or not the INDEBTEDNESS, or any part thereof,
has become due, CITY shall have the same rights and powers with
respect to such item of the COLLATERAL as are granted in respect
thereof in this paragraph in case of nonpayment of the
INDEBTEDNESS, or any part thereof, when due. None of the rights,
remedies , privileges, or powers of CITY expressly provided for
herein shall be exclusive, but each of them shall be cumulative
with and in addition to every other right, remedy, privilege, and
power now or hereafter existing in favor of CITY, whether at law or
in equity, by statute or otherwise.
The BORROWER agrees to take all necessary steps to administer,
supervise, preserve, and protect the PropertYi and regardless of
any action taken by CITY, there shall be no duty upon CITY in this
4/25/01 jrnrn
8B2001:9949.2
respect. The BORROWER shall pay all expenses of any nature,
whether incurred in or out of court, and whether incurred before or
after this NOTE shall become due at its Maturity Date or otherwise,
including but not limited to reasonable attorney's fees and costs,
which CITY may deem necessary or proper in connection with the
satisfaction of the INDEBTEDNESS or the administration,
supervision, preservation, protection of (including, but not
limited to, the maintenance of adequate insurance) or the
realization upon the Property. CITY is authorized to pay at any
time and from time to time any or all such expenses, add the amount
of such payment to the amount of the INDEBTEDNESS, and charge
interest thereon at the rate specified herein with respect to the
principal amount of this NOTE.
The security rights of CITY and its assigns hereunder shall not be
impaired by CITY's sale, hypothecation or rehypothecation of this
NOTE or any item of the COLLATERAL, or by any indulgence, including
but not limited to (1) any renewal, extension, or modification
which CITY may grant with respect to the INDEBTEDNESS or any part
thereof, or (b) any surrender, compromise, release, renewal,
extension, exchange, or substitution which CITY may grant in
respect of the Property.
4/25/01 jrnrn
8B2001:9949.2
The CITY shall not assign this NOTE to any person without the prior
written consent of the BORROWER; provided however, that an
assignment or transfer of this NOTE by the CITY to the Secretary of
the United States Department of Housing and Urban Development shall
not require the consent of the BORROWER.
BORROWER:
Redevelopment Agency of the City of
San Bernardino,
By:
the Community
Commission,
board of the
t Agency of the
Ber ardino
By:
4/25/01 jrnrn
8B2001:9949.2