HomeMy WebLinkAboutCDC/2006-20
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RESOLUTION NO. CDCj2006-20
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.2 TO THE DECEMBER
6, 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-11) (CENTRAL
CITY EAST REDEVELOPMENT PROJECT AREA)
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WHEREAS, the Community Development Commission of the City of San Bernardino
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(the "Commission") is the governing board of the Redevelopment Agency of the City of San
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Bernardino (the "Agency"); and
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WHEREAS, the Agency Property is located at the southwest comer of 4th Street and
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Waterman Avenue within the Central City East Redevelopment Project Area and is
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unimproved; and
WHEREAS, on December 6, 2004, the Commission adopted Resolution No.
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CDC/2004-49 approving the sale of certain real property (APN: 0135-191-11) (the "Agency
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Property") by the Agency to Waterman Holdings, LLC (the "Developer") and authorizing the
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Agency Executive Director to execute the 2004 Disposition and Development Agreement (the
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"DDA") between the Agency and the Developer; and
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WHEREAS, on June 20, 2005, the Commission adopted Resolution No. CDC/2005-19
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approving and authorizing the Executive Director of the Agency to execute Amendment No.1
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to the DDA between the Agency and Developer; and
WHEREAS, Amendment No. 1 to the DDA caused Phase I and Phase II of the Project
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to exchange locations for each such Phase; and
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WHEREAS, it is appropriate for the Commission to approve Amendment No.2 (the
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"Amendment") to the DDA between the Agency and the Developer in this Resolution.
':\ApDdu\IleIolutiomlJt.nolutiom\2006\06.I9-06 Watmaaa Holdinp. Amnd NO.2 COC IleIo.doc
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
2 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
3 FOLLOWS:
4 Section 1. The Commission hereby approves the attached Amendment No. 2in the
5 form presented at the meeting at which this Resolution is adopted. The Executive Director of the
6 Agency is hereby authorized and directed to execute the Amendment No. 2 on behalf of the
7 Agency, together with such technical and non-material conforming changes as may be
8 recommended by Agency Counsel.
9 Section 2. The Resolution shall become effective immediately upon its adoption.
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P:\ApndII\lleIOluliou\R.aolutaoo.\2006\06-19-06 w~ Holdinp - AmcDd No. 2 CDC Re.o.dof;
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.2 TO THE DECEMBER
6, 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-11) (CENTRAL
CITY EAST REDEVELOPMENT PROJECT AREA)
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
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Community Development Commission of the City of San Bernardino at aj t. regular
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, 2006, by the following vote to wit:
meeting thereof, held on the 19th day of June
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Commission Members:
10 ESTRADA
11 BAXTER
12 MCGINNIS
13 DERRY
14 KELLEY
15 JOHNSON
MC CAMMACK
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Abstain
Absent
Aves
Navs
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----X-
----X-
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x
~j~
Secretary /
ot.lSf day of
,2006.
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19 The foregoing resolution is hereby approved this
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June
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Pa' . Morris, Chairperson
Community Development Commission
of the City of San Bernardino
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Approved as to Form and Legal Content:
25 By: ~~
Agency Counsel
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AMENDMENT NO.2
TO THE
2004 DISPOSITION AND DEVELOPMENT AGREEMENT
WATERMAN HOLDINGS, LLC
(4th and Waterman Property)
This AMENDMENT NO.2 (this "Second Amendment") is dated as of June 19,2006, by
and between the Agency and the Buyer, and is an amendment to that certain 2004 Disposition
and Development Agreement by and between the Redevelopment Agency of the City of San
Bernardino (the "Agency") and Waterman Holdings, LLC (the "Buyer" or "Developer"), a
California limited liability company, dated as of December 6, 2004, for the sale and purchase of
certain Agency owned property located at the southwest corner of 4th Street and Waterman
Avenue (the "Agency Property") within the City of San Bernardino (the "City") and within the
Central City East Redevelopment Project Area of the Agency (the "DDA" or "Agreement"), as
amended by that certain Amendment No. I to the DDA, dated June 20, 2005, by and between the
Agency and the Buyer (the "First Amendment"), and is entered into in light of the facts set forth
in the following Recital Paragraphs.
RECITALS
A. The Agency and the Buyer executed the DDA on December 6, 2004. The Agency
and the Buyer executed the First Amendment to the DDA on June 20, 2005. The First
Amendment modified the Agreement, to provide, without limitation, for the transposition of the
Phase I Property and the Phase II Property (as those real properties are defined in the
Agreement).
B. The Agency is the owner of that certain real property commonly known as APN
0135-191-11 located at the southwest corner of Waterman Avenue and 4th Street, San
Bernardino, California (the legal description of which is attached hereto and incorporated herein
by this reference as Exhibit "A") (collectively, the "Agency Property"). The Agency Property is
located in the Central City East Redevelopment Project Area and consists of an approximately
3.92 acre parcel located at the intersection of 4th Street and Waterman Avenue. The Agency is
also the owner of an approximate 0.67 acre parcel commonly known as APN 0135-191-15 that
consists of the flood control channel presently aligned to the south of the Agency Property (the
"Flood Control Channel Property"), and the Flood Control Channel Property is located in the
Central City East Redevelopment Project Area. The parcel map for the Agency Property and for
the Flood Control Channel Property is set forth in Exhibit "B" attached hereto. The legal
description for the Flood Control Channel Property is as set forth in Exhibit "c" attached hereto.
C. The sale by the Agency to the Buyer of the Agency Property and the right of first
refusal (the "First Refusal Right") granted by the Agency to the Buyer to purchase the Flood
Control Channel Property, and the purchase by the Buyer from the Agency of the Agency
Property and the exercise by the Buyer of the First Refusal Right shall be subject to the terms,
covenants and conditions of this Amendment.
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D. The Agency and the Buyer desire to approve and execute this Second Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
1. Recital A and Recital B. Recital A and Recital B in the DDA shall be deleted in
their entirety.
2. Section 1.01. Purpose of Ae:reement. The following provision shall be added at
the end of the first sentence in Section 1.01 ofthe DDA:
"the granting by the Agency to the Buyer of the First Refusal Right, and the
exercise by the Buyer ofthe First Refusal Right."
The second sentence of Section 1.01 of the DDA shall be deleted in its entirety
and replaced by the following:
"The purchase and development of the Agency Property, the granting by the
Agency to the Buyer of the First Refusal Right, and the exercise by the Buyer of the First
Refusal Right pursuant to this Agreement are in the vital and best interests of the City of San
Bernardino (the "City") and the health, safety and welfare of its residents, and is in accord with
the public purposes and provisions of applicable state and local laws."
The last sentence of Section 1.01 of the DDA shall be deleted in its entirety and
replaced by the following:
"The Agency has determined that the purchase and development of the Agency
Property, the granting by the Agency to the Buyer of the First Refusal Right, and the exercise by
the Buyer of the First Refusal Right contemplated by this Agreement are consistent with the
Redevelopment Plan for the Project Area."
3. Section 1.02. The Ae:encv Property. Section 1.02 of the DDA shall be deleted
in its entirety and shall be amended to read as follows: "The Agency Property consists of
approximately 3.92 acres of land. The Buyer intends to develop a minimum of 45,000 square
feet of office space for lease to the County of San Bernardino ("County") on the Agency
Property for use and occupancy by the County of San Bernardino, Transitional Assistance
Department (the "County Lease Agreement"), which Department provides jobs and employment
services to residents and job training programs and other facilities at the proposed location to be
made available for the County Department of Health Services. The Buyer shall be entitled to
close escrow to acquire the Agency Property at anytime on or before June 1,2007 unless such
date has been extended in writing at the discretion of the Executive Director for a total period of
time not to exceed six (6) months without an amendment to this Agreement."
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Except as may be specifically excepted herein, wherever the term "Phase I Property and
the Phase II Property" is used in the DDA, it shall be replaced in each instance with the term
"Agency Property". Such other conforming grammatical changes to conform with those changes
authorized by this Section 3 shall be applied to the entirety of the DDA. Other similar
conforming changes shall likewise be made where the intent of the parties implies the use of the
term "Agency Property" to replace any other term intending to describe the real property which
is the subject matter ofthe purchase and sale described in this Agreement."
4. Section 1.03. Benefit To Project Area. The following words shall be added
immediately following the words: "Agency Property" in the second line of Section 1.03 of the
DDA:
", the granting by the Agency to the Buyer of the First Refusal Right and the
exercise by the Buyer of the First Refusal Right"
5. Section 1.05. Parties to the Agreement. Section 1.05(b) of the DDA are hereby
amended to read as follows:
"Section 1.0S(b). The Buyer, as said term is defined herein, is a California
limited liability company. Buyer's principal place of business for purposes of this Agreement is
4221 Wilshire Boulevard, Suite 240, Los Angeles, California 90010."
6. Section 1.07. List of Attachments to Agreement. Exhibit "B" and Exhibit "c"
of the DDA shall be amended, as provided below, and a new Exhibit "F," as defined below, shall
be inserted in Section 1.07 of the DDA:
Exhibit "B" "Legal Description and Site Map of the Agency Property"
Exhibit "c" "Legal Description of the Flood Control Channel Property"
Exhibit "F" "Agency Revenues Promissory Note"
7. Section 2.02. Conditions for Transfer of the Property. In Section 2.02 of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" where
appearing in the title. Additionally, Section 2.02(c) shall be deleted in its entirety.
8. Section 2.03. Purchase Price. Section 2.03(a) of the DDA shall be amended as
provided below, and Section 2.03(b) shall be amended as provided below:
"Section 2.03. Purchase Price:
(a) The purchase price of the Agency Property is $512,424.00 (the "Agency
Property Purchase Price"). The fair market valuation for the real properties comprising the
Agency Property is $512,464.00 (the "Agency Property Purchase Price"). The Agency Property
consists of 170,808 square feet based upon recent lot line adjustments and the final engineering
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survey of the Agency Property. The Agency Property Purchase Price was determined on the
basis of a land valuation pursuant to an independent appraisal report equal to $3.00 per square
foot multiplied by 170,808 square feet which equals $512,424.00 and is the valuation determined
by the Agency to be the fair market value for the Agency Property to be sold to the Buyer.
(b) Upon the Opening of Escrow (as defined below) for the Agency Property,
the Buyer shall have previously delivered to Escrow a non-refundable (except in the case of a
Seller default or a failed condition to closing) deposit in the amount of Twenty Thousand Dollars
($20,000.00) (the "Deposit") for such escrow. In connection with the purchase by Buyer of the
Agency Property, the Deposit, together with the remaining balance of the Agency Property
Purchase Price in the amount of $492,424.00, as an additional cash amount, shall be remitted by
the Buyer into Escrow and shall equal the Agency Property Purchase Price."
9. Section 2.04. Openin2 of Escrow. Section 2.04(a) of the DDA shall be deleted
in its entirety and replaced by the provision provided below:
"Section 2.04(a): The transfer and sale of the Agency Property shall take
place through escrow (the "Escrow") to be administered by the Escrow Holder. The Escrow for
the Agency Property shall be deemed open ("Opening of Escrow") upon the receipt by the
Escrow Holder of a fully executed copy of this Agreement. The Escrow Holder shall promptly
confirm to the parties the escrow number and the title insurance order number assigned to the
Escrow for the Agency Property with the Escrow Holder."
10. Section 2.06(a). Conveyance of Title. The first sentence of Section 2.06(a) of
the DDA shall be deleted and replaced by the following: 'Title to the Agency Property shall be
conveyed from the Agency to the Buyer through Escrow on or before the day designated as the
date for the Close of Escrow for the Agency Property (the "Closing Date"), provided that (i) the
Escrow Holder has delivered a preliminary title report to the parties issued through the Escrow
and (ii) all other conditions ofthis Agreement have been met."
Section 2.06(a)(3) shall be amended as follows: "(3) the Redevelopment Plan
(existing as of the date of the Second Amendment);"
II. Section 2.08. Closin2 Obli2ation of Buver. Subsection (b) of Section 2.08 shall
be amended as provided hereinbelow and subsection (c) of Section 2.08 shall be deleted in its
entirety.
Section 2.08(b). The first sentence of Section 2.08(b) shall be deleted in its
entirety and replaced by the following: "Prior to the Close of Escrow for the Agency Property,
the Buyer shall provide to the Executive Director of the Agency (i) an originally executed copy
of the County Lease Agreement, and (ii) copies of the development permit approvals as issued
by the Development Services Department of the City demonstrating that the facility
contemplated by the County Lease Agreement has been granted by the City as to all entitlements
and building permits to allow for the immediate commencement of construction upon the Close
of Escrow for the Agency Property; and (iii) written evidence of construction financing and/or
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equity funds to provide for the construction of the facility that will be the subject of the County
Lease Agreement." The words "such Lease Agreement" where appearing in the second sentence
of Section 2.08(b) shall be deleted and replaced by the following words: "such County Lease
Agreement" .
12. Section 3.06. A2encv Quit Claim Deed. The second sentence of Section 3.06
shall be deleted in its entirety as replaced by the following:
"Accordingly, Sections 3.01 to 3.05, inclusive, shall SurvIve the Close of
Escrow."
13. Section 3.07. Maintenance Condition of the Agency Property. The following
provision shall be added to the end of the first sentence of Section 3.07(a) of the DDA: ", from
and after the Close of Escrow." In the fifth line of Section 3.07(a) of the DDA, the words
"Notice of Memorandum of Agreement" shall be deleted and replaced by the words "Agency
Quit Claim Deed."
14. Section 3.08. Pled2e of Tax Increment Revenues. The heading of Section 3.08
shall be amended, as follows: "Section 3.08. Pled2e of A2encv Revenues to Buver. "
Sections 3.08(a), and 3.08(b) of the DDA, shall be deleted and replaced by Sections 3.08(a), and
3.08(b), as set forth below. Section 3.08(c) and 3.08(d) shall be amended as set forth below.
Section 3.08(e) shall be added, as set forth below:
Section 3.08. Pled2e of A2encv Revenues to Buver.
Section 3.08(a). The Agency hereby pledges to the Buyer certain revenues of the
Agency attributable to sources of funds that are legally available to the Agency in each fiscal
year during the term of such pledge (the "Agency Revenues") in an amount based upon the Index
as hereinafter defined. The Index for the calculation of the dollar amount of the Agency
Revenues to be remitted in each fiscal year to the Buyer shall be on the basis of (A) sixty percent
(60%), multiplied by (B) the one percent (I %) general property taxes, exclusive of any override
taxes, special taxes, ad valorem taxes for general obligation bonded indebtedness or other special
assessments, that are actually paid by the Buyer and/or Buyer's successor-in-interest to the
ownership of the Agency Property attributable to the development to occur on the Agency
Property pursuant to this Agreement (such 60% of the I % of the real property taxes as actually
paid by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property
to the County is herein referred to as the "Index"). On or before the date of the issuance by the
City of the certificate of occupancy for the development that occurs upon the Agency Property,
the Agency shall execute and deliver to the Buyer the Agency Revenues Promissory Note in the
form as attached hereto as Exhibit "F" which provides for certain additional late payment fees
and other remedies that are available to the Buyer in the event of any default by the Agency to
remit the timely payments pursuant to such Agency Revenues Promissory Note.
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Section 3.08(b). The payments of the Agency Revenues shall commence in the
fiscal year next succeeding the fiscal year in which the Buyer receives a certificate of occupancy
for the development of the Agency Property and continuing for a total of ten (10) fiscal years
thereafter with the initial fiscal year commencing as of the fiscal year following the fiscal year in
which a certificate of occupancy is so issued by the City for the development of the Agency
Property. Such payments shall be remitted by the Agency to the Buyer within thirty (30)
calendar days after the Buyer has provided written documentation to the Agency that the
applicable property taxes on the Agency Property as of each December 10 and/or April 10 (or
any other delinquency date established by the County for the payment of supplemental property
taxes) have been duly paid. The Buyer shall provide to the Agency a copy of the property tax
bill and a copy of the cancelled check illustrating payment of the appropriate real property tax
amount. The Agency shall within thirty (30) calendar days after receipt of the documentation
required by this Section, remit the appropriate payment of the Agency Revenues based upon the
Index to the Buyer. Any failure of the Agency to dispute in writing the adequacy of the
documentation as submitted by the Buyer within the applicable 3D-day period of time, shall
constitute approval of same by the Agency. The Agency shall be obligated to provide written
notice to the Buyer within said 3D-day period of time as to any inadequacy of any documentation
provided by the Buyer to the Agency. Failure of the Agency to remit the requested payment of
the Agency Revenues within ten (10) calendar days after the expiration of the initial thirty-day
period for review of the documentation as submitted, unless notice has been provided by the
Agency to the Buyer in the manner as provided above, shall subject the Agency to a three
percent (3%) late charge on the amount owed and interest at the rate of five percent (5%) per
annum calculated on the number of days from the due date of the applicable payment until such
amount has been paid to the Buyer.
Section 3.08(c). It shall be a condition precedent to each payment of the Agency
Revenues hereunder that as of each such Agency Revenues payment due date there has been no
Transfer, assignment, or sale or other conveyance of the Agency Property or any interest in this
Agreement which is prohibited by this Agreement.
Section 3.08( d). In the event that the Buyer should Transfer any interest in this
Agreement or the Agency Property in violation of this Agreement, or sell the Agency Property in
violation of this Agreement, at any time within ten (10) years from and after the issuance of the
certificate of occupancy, the obligation of the Agency for any further remittances of the Agency
Revenues shall immediately cease and terminate as to that portion of the Agency Property to
which such prohibited Transfer or other sale or conveyance has occurred.
Section 3.08(e). Notwithstanding anything herein to the contrary, upon the
issuance of a certificate of occupancy by the City for the Agency Property, any of the following
transactions shall not be deemed a "Transfer" prohibited by this Agreement: (i) the transfer of
fee title to the Agency Property to any entity in which an entity directly or indirectly majority-
owned and controlled by Jian Torkan is the general partner or managing member or partner, (ii) a
transfer of fee title to the Agency Property in a transaction in which the Buyer enters into a lease
for the Agency Property pursuant to which it is obligated to pay all property taxes or (iii) a
transfer to any entity which is directly or indirectly majority-owned and controlled by Jian
Torkan. On and after the issuance of the certificate of occupancy as specified above and for a
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period of time equal to ten (10) years after the date of the issuance of the certificate of
occupancy, and in addition to the ability of Buyer to enter into a transaction that is deemed not to
be a Transfer as defined above, Buyer may sell, transfer or assign the Agency Property and/or
this Agreement to any other person or entity subject to the following: (i) such subsequent owner
of the Agency Property has assumed in writing all duties and obligations of the Buyer as
contained in this Agreement and the Agency Revenues Promissory Note in form and substance
as may be reasonably required by the Agency General Counsel and (ii) the subsequent owner has
assumed all Agency Property maintenance, covenants and obligations set forth herein, or in any
other document mutually signed by the Agency and the Buyer. Following the ten (10) year
period referred to above, there shall be no restriction or condition to any sale of transfer by Buyer
of the Agency Property and/or Buyer's interest in this Agreement. Notwithstanding anything
herein to the contrary, any transfer of the Agency Property and/or Buyer's interest in this
Agreement pursuant to a foreclosure or deed-in-lieu thereof shall not constitute a prohibited
Transfer.
Section 3.08(f). The Buyer shall have all rights and remedies against the Agency
pursuant to the laws of the State of California and as further set forth in this Agreement and in
the Agency Revenues Promissory Note. Any failure of the Agency to remit the timely payments
of the Agency Revenues to the Buyer shall be deemed to be a default hereof for which the Buyer
shall be entitled, after delivery of notice or otherwise as set forth in the Agency Revenues
Promissory Note, to be reimbursed for all costs and expenses of the collection of any dollar
amount that is then due and payable by the Agency to the Buyer from the Agency Revenues.
15. Section 3.09. A2encv Phase II Property Interim Site Improvements. Section
3.09 to the DDA shall be deleted.
16. Section 3.10. Developer First Refusal Ri2ht. Subject to the terms and
conditions set forth below, if the Agency at any time on or prior to June 19, 2009, receives a
bona fide offer acceptable to the Agency, or makes a bona fide offer acceptable to an offeree, for
a disposition of the Flood Control Channel Property, then the Developer shall have the right and
option, but not the obligation, to purchase the Flood Control Channel Property on the following
terms and conditions:
(a) The Agency shall provide the Developer with a written notice (the
"Agency Notice") which shall (i) set forth the true identity of the proposed purchaser (including
the identity of the principals of the purchaser, if known to the Agency), (ii) include a description
of the Flood Control Channel Property, (iii) include a description of all material terms of the
proposed disposition (including, without limitation, the price, earnest money, due diligence
inspection period and closing date), and (iv) offer to consummate such disposition with the
Developer upon the same terms and conditions as set forth in the Agency Notice. The Agency
Notice shall have attached to it a true, correct and complete copy of the contract of sale or other
agreement that governs the rights and obligations of the Agency and the proposed purchaser with
respect to the proposed dispositions (the "Disposition Document"). Any time periods in the
Disposition Document shall be deemed extended as necessary to allow the Developer the full 30-
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day period following receipt of the Agency Notice in which to decide whether to exercise the
Developer's First Refusal Right.
(b) During the 30-day period following actual receipt by the Developer of the
Agency Notice the ("Response Period") the Developer shall have the right, at its expense, to
enter onto and conduct tests and investigations on the Flood Control Channel Property. The
Developer shall be responsible for any damages or injuries resulting from any entry by the
Developer onto the Flood Control Channel Property and conducting such tests and inspections.
If the Developer does not elect to purchase the Flood Control Channel Property by delivering
written notice of such election to the Agency and the check for $25,000.00 as a non-refundable
deposit as further specified in subsection (d) below within the Response Period, the Agency may
effect a disposition of the Flood Control Channel Property to the proposed purchaser identified in
the Agency Notice (i) at a price that is not less than the price that would have been paid by the
Developer if the Developer had elected to purchase the Flood Control Channel Property pursuant
to the Agency Notice, and (ii) upon other terms and conditions that are not more favorable to the
proposed purchaser than those offered to the Developer in the Agency Notice; provided such
closing occurs with the third party purchaser of the Flood Control Channel Property no later than
one hundred eighty (180) days after the expiration of the Response Period; and provided further
that if such closing to the proposed purchaser does not occur within such l80-day period, the
Agency shall again be required to comply with the this Section 3.l0(b) before it makes any other
disposition of the Flood Control Channel Property on or before the expiration of the First Refusal
Right.
(c) If the Developer does not elect to accept the offer from the Agency with
respect to a disposition in accordance with the terms hereof, and such disposition from the
Agency is not made on the price and terms set forth in Section 3.l0(b) above (subject to the
maximum l80-day closing period and other terms set forth above), Section 3.1 O(b) shall remain
in full force and effect with respect to the Flood Control Channel Property until the expiration
date as provided above.
(d) If the Developer exercises the First Refusal Right by delivering written
notice of such exercise to the Agency and a check equal to $25,000.00 as a non-refundable
deposit within the Response Period, the Developer and the Agency shall close the purchase and
sale of the Flood Control Channel Property in accordance with the terms set forth in the Agency
Notice and the Disposition Document. If the sale to the Developer is consummated, then the
$25,000.00 shall be applied to the purchase price, and if the sale is not consummated for any
reason other than an Agency default or a failed condition to closing set forth in the Disposition
Document, then the Deposit shall be retained by the Agency and shall be non-refundable to the
Developer. If the sale to the Developer is not consummated due to an Agency default or failed
condition to closing set forth in the Disposition Document, the $25,000 Deposit shall be refunded
to the Developer.
(e) Notwithstanding any provision contained herein to the contrary, in the
event: (i) the Developer does not elect to accept the Agency's offer, (ii) the Agency sells the
Flood Control Channel Property pursuant to the terms of this Agreement to another purchaser,
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then the Developer shall have no further rights as to any acquisition of the Flood Control
Channel Property thereafter.
17. Section 5.01. Notices, Demands and Communications Between the Parties.
In line seven of Section 5.01 of the DDA, 1.03(a) shall be deleted and replaced by the following:
"1.05(c)", and 1.03(b) shall be deleted and replaced by the following: "1.05(b)".
18. Section 5.05. Enforced Delav: Extension of Time of Performance. Section
5.05(a) and (c) of the DDA shall be amended as follows:
Section 5.05(a). The last sentence in Section 5.05(a) shall be deleted.
Section 5.05(c). In line nine in Section 5.05(c), the word "Agency" shall be
inserted immediately preceding the word "Property".
19. Exhibit Headinl!s. The following Exhibit headings shall be modified as set forth
below together with the including of the additional Exhibits as provided herein.
Exhibit "B". Exhibit "B" shall be amended as follows together with the
inclusion of a new Site Map for the Agency Property:
"PARCEL MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "C" shall be amended as follows:
"LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
Exhibit "E". Exhibit "E" shall be amended with the deletion of the text as
presently set forth therein and the substation of the following text:
"The Improvements on the Agency Property shall consist of an approximately 2-story 45,000
square foot office building of concrete tilt-up or concrete block construction with sufficient
parking spaces to comply with both City ordinances and the County Lease Agreement. The
building will include full tenant improvements as required for the County Lease Agreement for
use by the County of San Bernardino, Transitional Assistance Department, the tenant."
Exhibit "F'. A new Exhibit "F" shall be attached to the Agreement and shall be
entitled as follows:
EXHIBIT "F"
"AGENCY REVENUES PROMISSORY NOTE"
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20. Modification to First Amendment to the Ae:reement. Section 2, Section 3,
Section 4 and Section 5 of the First Amendment shall be deleted in their entirety.
21. Lee:al Effect. The DDA and the First Amendment shall only be amended to the
extent set forth herein. All other terms, covenants and/or conditions of the DDA and the First
Amendment, unless specifically amended or modified by the terms, covenants and/or conditions
of this Second Amendment, shall remain unmodified and in full force and effect. In the event of
any inconsistency, contraction and/or ambiguity between the terms, covenants and conditions of
this Second Amendment and the DDA and/or the First Amendment, the inconsistency,
contraction and/or ambiguity shall be resolved in favor of the terms, covenants and conditions set
forth in this Second Amendment.
22. Defined Terms. Terms not otherwise defined or redefined III this Second
Amendment shall have the meanings provided for in the DDA.
23. Effective Date. This Second Amendment shall take effect from and after the date
offinal approval hereof by the governing body of the Agency at a duly held public meeting and
after the execution of this Second Amendment by the Agency and the Buyer.
END OF PAGE
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,
IN WITNESS WHEREOF, the parties have signed this Amendment as of the date first
set forth above.
REDEVELOPM
CITY OF SAN BE
By:
Approved as to Form and Legal Content:
-~~~
Agency Counsel
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE AGENCY PROPERTY
APN: 0135-191-11
PARCEL 1 OF PARCEL MAP 7140, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN OF MAP FILED IN BOOK 69
OF PARCEL MAPS, PAGES 1 AND 2, RECORDS OF SAID COUNTY.
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EXHIBIT "B"
PARCEL MAP FOR THE AGENCY PROPERTY
AND FOR THE FLOOD CONTROL CHANNEL PROPERTY
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EXHIBIT "C"
LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL PROPERTY .
APN: 0135-191-15
PARCEL 9 OF PARCEL MAP 7140, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN OF MAP FILED IN BOOK 69
OF PARCEL MAPS, PAGES I AND 2, RECORDS OF SAID COUNTY.
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EXHIBIT "D"
SEE ORIGINAL AGREEMENT
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EXHIBIT "E"
The Improvements on the Agency Property shaIl consist of an approximately 2-story 45,000
square foot office building of concrete tilt-up or concrete block construction with sufficient
parking spaces to comply with both City ordinances and the County Lease Agreement. The
building will include fuIl tenant improvements as required for the County Lease Agreement for
use by the County of San Bernardino, Transitional Assistance Department, the tenant.
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EXHIBIT "F'
AGENCY REVENUES PROMISSORY NOTE
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AGENCY REVENUES PROMISSORY NOTE
Date: July --' 200_
Los Angeles, California
The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, a public agency (the "Agency"), promises to pay, and pledges to WATERMAN
HOLDINGS, LLC, a California limited liability company, or order (the "Buyer"), or Buyer's
assignee, one or more principal advances of a portion of the Agency Revenues (as that term is
defined below) due and owing by the Agency to the Buyer in accordance with and pursuant to the
terms, covenants and conditions of this Agency Revenues Promissory Note (the "Note") and the
Agreement (as that term is defined in this Note), together with interest on the unpaid principal
balance thereof, at the Interest Rate (as that term is defined in this Note), in lawful money of the
United States, with the then outstanding principal balance thereof, all accrued and unpaid interest,
late charges, fees, and all other amounts due and owing under this Note being due and payable by the
Agency to the Buyer on the Maturity Date (as defined in this Note). The principal, interest, late
charges, fees and all other amounts due under this Note are payable by the Agency to the Buyer at
4221 Wilshire Blvd., Suite 240, Los Angeles, California 90010.
This Note shall be subject to the following terms, covenants and conditions:
I. Defmitions. The initially capitalized terms defined herein shall have the following meanings
where appearing in this Note. Otherwise, any initially capitalized term (not defined herein) shall
have the meaning provided for in the Second Amendment (as defined below).
1.1 Al!:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), and as further amended by the
Second Amendment (as defined below), as executed by and between the Agency and the Buyer, and
all exhibits attached thereto.
1.2 Certificate of Occupancv. The "Certificate of Occupancy" shall mean the
Certificate of Occupancy issued by the City to the Buyer in connection with the development,
construction and installation of the improvements at the Agency Property (as that term is defined in
the Agreement).
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
1.5 First Amendment. The "First Amendment" shall mean that certain First
Amendment to the Original Agreement, dated June 20, 2005, as executed by and between the
Agency and the Buyer.
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1.6 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1. 7 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (1 st) Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.8 Interest Rate. The "Interest Rate" shall mean five percent (5%) per annum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the manner
provided for in Section 3(b) of this Note.
1.9 Late Charl!e. The "Late Charge" shall mean three percent (3 %) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.10 Maturity Date. The "Maturity Date" shall mean the first business day following the
expiration of the Term.
1.11 Oril!inal Al!reement. The "Original Agreement" shall mean that certain 2004
Disposition and Development Agreement, dated December 6, 2004, as executed by and between the
Agency and the Buyer.
1.12 Principal. The "Principal" shall mean one or more principal advances, in the
aggregate, of a portion of the Agency Revenues due and owing by the Agency to the Buyer in
accordance with and pursuant to the terms, covenants and conditions of this Note and the
Agreement, as increased, decreased and adjusted from time to time. As of the date of this Note,
there is no discemable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.13 Second Amendment. The "Second Amendment" shall mean that certain
Amendment NO.2 To The 2004 Disposition and Development Agreement Waterman Holdings, LLC
(4th and Waterman Property), dated June 19, 2006, as executed by and between the Agency and the
Buyer.
1.14 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the first Fiscal Year ofthis ten (1 O)-year Fiscal Year period). This Note
has been duly executed and delivered as ofthe July I next succeeding the Fiscal Year of the Agency
during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, interest on the unpaid Principal under this Note will accrue at the fixed annual Interest
Rate until paid in full by the Agency to the Buyer. Interest shall be computed based on a 365-day
year and the actual number of days elapsed.
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3. Payment Of Principal. Interest and Late Charee.
(a) The Agency hereby pledges to the Buyer certain revenues of the Agency
attributable to sources of funds that are legally available to the Agency in each fiscal year during the
term of such pledge (the "Agency Revenues") in an amount based upon the Index as hereinafter
defined. The Index for the calculation of the dollar amount of the Agency Revenues to be remitted
in each fiscal year to the Buyer shall be on the basis of (A) sixty percent (60%), multiplied by (B)
the one percent (1 %) general property taxes, exclusive of any override taxes, special taxes, ad
valorem taxes for general obligation bonded indebtedness or other special assessments, that are
actually paid by the Buyer and/or the Buyer's successor-in-interest to the ownership of the Agency
Property attributable to the development to occur on the Agency Property pursuant to this
Agreement (such 60% of the 1 % of the real property taxes as actually paid by the Buyer and/or
Buyer's successor-in-interest to the ownership of the Agency Property to the County is herein
referred to as the "Index").
(b) The payments of the Agency Revenues shall commence in the fiscal year next
succeeding the fiscal year in which the Buyer receives a Certificate of Occupancy for the
development of the Agency Property and continuing for a total often (1 0) fiscal years thereafter with
the Initial Fiscal Year commencing as of the fiscal year following the fiscal year in which a
Certificate of Occupancy is so issued by the City for the development of the Agency Property. Such
payments shall be remitted by the Agency to the Buyer within thirty (30) calendar days after the
Buyer has provided written documentation to the Agency that the applicable property taxes on the
Agency Property as of each December 10 and/or April 1 0 (or any other delinquency date established
by the County for the payment of supplemental property taxes) have been duly paid. The Buyer
shall provide to the Agency a copy of the property tax bill and a copy of the cancelled check
illustrating payment of the appropriate real property tax amount. The Agency shall within thirty (30)
calendar days after receipt of the documentation required by this Section, remit the appropriate
payment of the Agency Revenues based upon the Index to the Buyer. Any failure ofthe Agency to
dispute in writing the adequacy of the documentation as submitted by the Buyer within the
applicable 30-day period of time, shall constitute approval of same by the Agency. The Agency
shall be obligated to provide written notice to the Buyer within said 30-day period of time as to any
inadequacy of any documentation provided by the Buyer to the Agency. Failure of the Agency to
remit the requested payment of the Agency Revenues within ten (10) calendar days after the
expiration of the initial thirty-day period for review of the documentation as submitted, unless notice
has been provided by the Agency to the Buyer in the manner as provided above, shall subject the
Agency to a three percent (3%) late charge on the amount owed and interest at the rate of five
percent (5%) per annum calculated on the number of days from the due date of the applicable
payment until such amount has been paid to the Buyer.
(c) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or any
interest in the Agreement which is prohibited by the Agreement.
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(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property in violation of the Agreement or this Note, or sell the Agency
Property in violation of the Agreement or this Note, prior to the expiration of the applicable ten-year
period for the receipt of the Agency Revenues, the obligation of the Agency for any further
remittances of the Agency Revenues shall immediately cease and terminate as to that portion of the
Agency Property to which such prohibited Transfer or other sale or conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property, any of the following transactions shall
not be deemed a "Transfer" prohibited by the Agreement or this Note: (i) the transfer of fee title to
the Agency Property to any entity in which an entity directly or indirectly majority-owned and
controlled by Jian Torkan is the general partner or managing member or partner, (ii) a transfer offee
title to the Agency Property in a transaction in which the Buyer enters into a lease for the Agency
Property pursuant to which it is obligated to pay all property taxes or (iii) a transfer to any entity
which is directly or indirectly majority-owned and controlled by Jian Torkan. On and after the
issuance of the Certificate of Occupancy as specified above and for a period of time equal to ten (I 0)
years after the date of the issuance of the Certificate of Occupancy, and in addition to the ability of
Buyer to enter into a transaction that is deemed not to be a Transfer as defined above, Buyer may
sell, transfer or assign the Agency Property, the Agreement and this Note to any other person or
entity subject to the following: (i) such subsequent owner of the Agency Property has assumed in
writing all duties and obligations of the Buyer as contained in the Agreement and this Note in form
and substance as may be reasonably required by the Agency General Counsel and (ii) the subsequent
owner has assumed all Agency Property maintenance, covenants and obligations set forth in the
Agreement, or in any other document mutually executed by Buyer and the Agency. Following the
ten (10) year period referred to above, there shall be no restriction or condition to any sale of transfer
by Buyer of the Agency Property and/or Buyer's interest in this Agreement. Following the
expiration of the Term, the Agency shall have no further duty or obligation to make any payment of
the Agency Revenues, or any portion thereof, to Buyer or to any successor-in-interest in the
ownership of the Agency Property (except for the Agency Revenues and/or any other amounts due
and owing by the Agency to Buyer under this Agreement). Notwithstanding anything herein to the
contrary, any transfer of the Agency Property and/or Buyer's interest in the Agreement and in this
Note pursuant to a foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) The Buyer shall have all rights and remedies against the Agency pursuant to
the laws of the State of California and as further set forth in this Agreement and in this Note. Any
failure of the Agency to remit the timely payments of the Agency Revenues to the Buyer shall be
deemed to be a default hereof for which the Buyer shall be entitled, after delivery of notice or
otherwise as set forth in this Note, to be reimbursed for all costs and expenses of the collection of
any dollar amount that is then due and payable by the Agency to the Buyer from the Agency
Revenues.
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4. Prepavment. This Note may be prepaid by the Agency, at any time, in whole or in part,
without premium or penalty, as long as any principal prepayment is accompanied by a payment of
interest accrued to the date of prepayment on the amount prepaid, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
5. Application ofPavments. Each payment under this Note shall be credited first to any late
charges and fees (including, without limitation, attorneys' fees and costs), all accrued and unpaid
interest, if any, and then to Principal then due and payable under this Note.
6. Maturity Date. On the Maturity Date, the Agency shall pay to the Buyer the then
outstanding Principal balance, all accrued and unpaid interest, late charges, fees, and all other
amounts (including, without limitation, attorneys' fees and costs) then due and payable under this
Note.
7. Condition Precedent. The Agency shall have no duty or obligation to execute, deliver or
perform under this Note until all conditions precedent provided for in this Note and the Agreement
have been fully performed and satisfied by or for the Buyer (or have been expressly waived in
writing by the Agency).
8. Notice. Any notice required to be provided in this Note shall be given in writing and shall be
sent (i) for personal delivery by a delivery service that provides a record of the date of delivery, the
individual to whom delivery was made, and the address where delivery was made; (ii) by first-class
certified United States mail, postage prepaid, return receipt requested; or (iii) by a nationally
recognized overnight courier service, marked for next day business delivery. All notices shall be
addressed to the party to whom such notice is to be given at the address stated below or to such other
address as a party may designate by written notice to the other. All notices shall be deemed effective
on the earliest of (a) actual receipt; (b) rejection of delivery; ( c) if sent by certified mail, the third day
on which regular United States mail delivery service is provided after the day of mailing or, if sent
by overnight delivery service, on the next day on which such service makes next-business day
deliveries after the day of sending. The address for the Agency and for the Buyer shall be as
follows, subject to any written notice of a change of address by one party to the other:
Address For the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Attention: Executive Director
Address For the Buyer:
Waterman Holdings, LLC
4221 Wilshire Blvd., Suite 240
Los Angeles, CA 90010
Attention: lian Torkan
9. Default. Subject to Section 7 of this Note, and any applicable cureperiod(s) provided for in
this Note and/or in the Agreement, a default shall occur whenever the Agency fails to pay to Buyer
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any sum due under this Note when it becomes due and payable, or (b) any breach of any other
promise or obligation in this Note, the Agreement or any other instrument, document and/or
agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in
connection with, the transaction contemplated in the Agreement and/or this Note (collectively, a
"Default"). Upon the occurrence of a Default, Buyer may, at its option, declare this Note (including,
without limitation, all principal, all accrued and unpaid interest, late charges, attorneys' fees and
costs) to be immediately due and payable, regardless of its Maturity Date, subjectto the cure periods
provided for in this Note and/or the Agreement (collectively, the "Default Payment Amount"), and
the Agency shall immediately pay to the Buyer the Default Payment Amount.
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or
personal property of any nature whatsoever.
11 Modification. This Note may not be modified, amended, waived or extended, changed,
discharged or terminated orally or by any act on the part ofthe Agency or of the Buyer, but only by
an agreement in writing signed by the Agency and the Buyer.
12. Headinl!s. The headings of this Note are for purposes of reference only and shall not limit or
otherwise affect the meaning thereof.
13. Interpretation. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the identity of the person or entity may in the context
reqUire.
14. Governinl! Law. This Note shall be governed by and construed in accordance with the laws
of the State of California.
15. Judicial Proceedinl!s and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out of this Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be
commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assi2Dment. This Note may be assigned by the Buyer (subject to the restrictions and
limitations provided for in Section 3.08(c), 3.08(d) and 3.08(e) of this Note) and by the Agency (but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder).
The terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of,
the successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3.08(d), and 3.08(e)ofthis Note)) and of the Agency.
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IN WITNESS WHEREOF, the Agency has executed this Agency Revenues Promissory
Note as of the date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino
By:
Maggie Pacheco, Executive Director
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