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HomeMy WebLinkAboutR42-Economic Development Agency . ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Gary Van Osdel Executive Director 0;' ,-. ~: ~ ,', L i ~ i ....... SUBJECT: REFINANCING OF INLAND PLAZA INDUSTRIAL DEVELOPMENT BONDS DATE: April 10, 2002 SvnoDsis of Previous Commission/Council/Committee Action(s): 1983-City issued Industrial Development Bank to fmance the construction ofInland Plaza on South "E" Street. I 995-Bonds were refmanced as partial tax-exempt and taxable issues with an Agency Standby Loan Agreement with maturity date of May I, 2002. April 4, 2002, the Redevelopment Connnittee recommended approval. Recommended Motion(s): (Community Development Commission) MOTION A: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AMENDMENT NO. I TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) MOTION B: TO AUTHORIZE THE RE-ESTABLISHMENT OF, AND THE DRAW FROM, THE WELLS FARGO LINE OF CREDIT FOR AMOUNTS REQUIRED TO PAY AGENCY OBLIGATIONS UNDER THE BOND STANDBY LOAN AGREEMENT Contact Person(s): Project Area(s) Gary Van Osdel Central City Projects Phone: (909) 663-1044 Ward(s): First Supporting Data Attached: Ii'] Staff Report Ii'] Resolution( s) 0 Agreement( s )/Contract( s) 0 Map( s) 0 Reports FUNDING REQUIREMENTS Amount: $ 2,085,000 Source: Wells Fargo Line of Credit Requested Budget Authority: /'1 SIGNATURE: Commission/Council Notes: -~ #-Q(r..;:::J. C\Od---Q(J GVO:sj 4_15_02 Standby Loan Agmt-Inland Plaza CO /Z 'f~ ~;JJ?iv ~ --e---- _.._.... "-~..U&","".. ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Amendment No.1 to Standby Loan Al!reement Unland Plaza Proiect) BACKGROUND: In 1983, the City of San Bernardino ("City") issued its Industrial Development Revenue Bonds, Series 1983A (Inland Plaza Project) (the "1983 Bonds"). The 1983 Bond proceeds were loaned to Inland Plaza Ltd, a California general partnership ("Owner") and applied to construction costs associated with the Inland Plaza, a 44,125 square foot retail mall located at 955 South E Street (across from the Inland Center Mall) ("Project"). The outstanding balance on the 1983 bonds came due in 1993 and, at that time, the Owner was unable to pay the 1983 Bonds in full or refinance the 1983 Bonds with conventional financing. In order to prevent a default, and thus maintain the Project within the City, the City and the Redevelopment Agency of the City of San Bernardino ("Agency") assisted the Owner with a refinancing of the Project. The City entered into a one year Extension Agreement with the Owner and the bank holding the bonds to allow the Owner time to increase occupancy and to obtain conventional financing. Due to the market conditions at the time, the Owner was unable to obtain financing within the year. Thus, to prevent a default the City extended the maturity of the 1983 Bonds and re-offered $1,949,701 of tax exempt industrial development bonds and issued $225,000 of taxable industrial development bonds (the "1995 Bonds"), which were secured by the revenues of the Project, and then additionally secured by a Bond Standby Loan Agreement provided by the Agency ("Standby Loan Agreement"). The Owner has timely met interest only debt service on the 1995 bonds since the issuance. However, on March 28, 2002, the Owner informed the Agency that while the Owner is prepared to make the interest payment of $210,750, the Owner will be unable to make the final maturity payment of approximately $2,085,000 which comes due on May I, 2002. In the event that the Owner is unable to make the full May I, 2002 payment, the Agency would be required to pay the amount coming due as provided in the Bond Standby Loan Agreement. The Bond Standby Loan Agreement is secured by a deed of trust and personal guarantees of the general partners of the Owner. The Owner informed the Agency that it recently secured an extension of the lease with its largest tenant, Chuck E Cheese (the lease extension is for a four year term). The Owner now plans to obtain conventional financing prior to the end of the year. However, prior to doing so, it must purchase the remaining fee interest in the land underneath the Project. Currently, it only owns one-half of the land underneath the Project and cannot finance the Project with conventional financing until it owns the entire fee. The Owner is currently in negotiations with the owner of the fee, but as of April 2, 2002, the parties had not reached an agreement. GVO:sj 4-15-02 Standby Loan Agmt-Inland Plaza COMMISSION MEETING AGENDA Meeting Date: 04/15/02 Agenda Item Nnmber: . Since the Agency Bond Standby Loan Agreement will be called on May 1, 2002, the Agency will be required to pay the $2,085,000. The Bond Standby Loan Agreement requires that the amount drawn thereunder be repaid within 30 days at 11 % interest, plus all costs of the Agency including legal fees. Since the Owner cannot pay the amount of the draw within 30 days, Staff recommends providing an extension of 180 days to allow the Owner to obtain conventional financing to repay the Bond Standby Loan draw. Tenants in the Project, other than Chuck E Cheese, include Ortho Mattress, Subway Sandwiches, Supercuts, Pizza Time and American General Finance, among others. The Project occupancy rate is approximately 90%. The last appraisal of the Project was completed in 1994. At that time, the estimated value of the Project was approximately $3.2M. The current value of the property is unknown. Previously, the Agency had a Line of Credit with Wells Fargo Bank, which was not renewed after the Line of Credit was paid-off. It is now proposed that the Wells Fargo Line of Credit be re-established and utilized for the required payment under the Bond Standby Loan Agreement. Since the Agency's interest rate was approximately 7% during the term of the Line of Credit, the interest charge under the Line of Credit is anticipated to be lower than the 11 % interest per annum that the Owner is required to pay the Agency. ENVIRONMENTAL IMPACT: Activity exempt under CEQA. FISCAL IMPACT: $2,085,000 against Agency's re-established line of credit with Wells Fargo Bank. RECOMMENDATION: Staff recommends approval of the following Resolution and the Motion set forth on the cover sheet. flu :f~;Y Gary v~ OsdeI Execu.tlve Director GYO:sj 4,15-02 Standby Loan Agmt-Inland Plaza COMMISSION MEETING AGENDA Meeting Date: 04/15/02 Agenda Item Number: . .13 14 .25 L, l v ,----",,' u RESOLUTION NO. 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERL'IARDINO APPROVING AMENDMENT NO.1 TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) 3 4 5 WHEREAS, the Community Development Commission of the City of San Bernardino 6 7 (the "Commission") is the governing body of the Redevelopment Agency of the City of San 8 Bernardino (the "Agency"), a public body corporate and politic, organized and existing pursuant 9 to the Community Redevelopment Law (California Health and Safety Code Section 33000, et 10 seq.); and II WHEREAS, the City of San Bernardino (the "City") has heretofore issued its Industrial 12 Development Revenue Bonds, Series 1983A (Inland Plaza Project) (the "1983A Bonds") and its Taxable Industrial Development Revenue Bonds, Series 1995A (Inland Plaza Project) (the "1995A Bonds) (the 1983A Bonds and the 1995A Bonds being hereinafter from time to time 15 collectively referred to as the "Bonds"); and 16 WHEREAS, the 1983A Bonds were issued in order to enable the City to make a loan (the 17 "1983 Loan") to Inland Plaza, a California general partnership (the "Developer") pursuant to 18 that certain Loan Agreement, dated as of July 15, 1983, by and between the City and the 19 Developer, as amended pursuant to Amendment No. 1 to Loan Agreement, dated as of May 1, 20 1995 (as so amended, the "1983 Loan Agreement") to retire an existing construction loan on, 21 and to provide additional funds to pay remaining costs of acquisition, construction and 22 installation with respect to, a multi-tenant strip shopping center known as Inland Plaza and 23 located in the City (the "Project"); and 24 WHEREAS, the 1983A Bonds were re-offered in 1995; and II S82002:10641.1 -1- e 25 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BER1'lARDINO APPROVING AMENDMENT NO.1 TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) WHEREAS, the 1995A Bonds were issued for the purpose of making a loan (the "1995 Loan") to the Developer pursuant to that certain Loan Agreement dated as of May I, 1995 (the "1995 Loan Agreement") (the 1983 Loan Agreement and the 1995 Loan Agreement being hereinafter from time to time referred to collectively as the "Loan Agreements") to pay the costs ofre-offering the 1983A Bonds and the costs of issuance of the 1995A Bonds; and WHEREAS, the Bonds are secured by and payable from revenues derived by the City pursuant to the Loan Agreements and certain other agreements and by funds and accounts held pursuant to that certain Trust Indenture dated as of July 15, 1983, as amended by a Supplemental Indenture dated as of May I, 1995 (the "1983 Indenture") by and between the City and Bank of America National Trust and Savings Association, as trustee (the 'Trustee") and that certain Trust Indenture dated as of May I, 1995 (the "1995 Indenture") (the 1983 Indenture and the 1995 Indenture being hereinafter from time to time referred to collectively as the "Indentures") by and between the City and the Trustee; and WHEREAS, the payment of principal of, premium, if any, and interest on the Bonds is further secured by, among other things, that certain Standby Loan Agreement dated as of May I, 1995 (the "1995 Standby Loan Agreement") by and among the Agency, the Developer and 20 the Trustee; and 21 WHEREAS, under the 1995 Standby Loan Agreement, the Agency has pledged its 22 general revenues, including available reserves, to the payment of principal of, redemption 23 premium, if any, and interest on the Bonds to the extent that payments made by the Developer 24 pursuant to the Loan Agreements and moneys on deposit in the funds and accounts held under the Indentures are insufficient therefor; and S82002:10641.1 -2- e e 13 14 15 16 17 18 19 20 21 22 23 24 e 25 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERl~ARDINO APPROVING AMENDMENT NO.1 TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) 3 4 WHEREAS, a final sinking fund payment on the Bonds in the amount of Two Million 5 Eighty-Five Thousand Dollars ($2,085,000) is due May I, 2002; and 6 WHEREAS, the Developer has notified the Agency that it has not yet been able to 7 secure conventional financing for the Project; and 8 WHEREAS, the Developer has requested that the Agency make the final sinking fund 9 payment on the Bonds pursuant to the Standby Loan Agreement; and 10 WHEREAS, the Agency's making the final sinking fund payment on the Bonds 11 pursuant to the Standby Loan Agreement is in the best interests of the City and of the Agency; 12 and WHEREAS, Section 3 of the Standby Loan Agreement provides that in the event the Agency makes payments to the Trustee thereunder, the Developer shall reimburse the Agency within thirty (30) days all amounts paid to the Trustee and any other costs expended by the Agency in connection therewith, including Agency staff and administrative costs, legal, accounting and interest on all such amounts as then owed by the Developer to the Agency at an interest rate of 11 % per annum for the actual number of days such amounts are owed and until paid by the Developer to the Agency; and WHEREAS, the Developer has requested that Section 3 of the Standby Loan Agreement be amended to provide that the Developer shall reimburse the Agency on or before that date which is one hundred and eighty (180) days following the payment to the Trustee by the Agency of the final sinking fund payment on the Bonds an amount equal to the payment made by the Agency to the Trustee and any other costs expended by the Agency in connection therewith, including Agency staff and administrative costs, legal and accounting costs; and SB2002olO641.1 .3. . . 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AMENDMENT NO.1 TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) 3 4 WHEREAS, the Developer is willing to pay to the Agency each month commencing 5 May 1, 2002, and on the first of each month thereafter, interest on all amounts owed to the 6 Agency by the Developer in connection with the Agency's making the final sinking fund 7 payment on the Bonds at an interest rate of 11 % per annum for the actual number of days such 8 amounts are owed and until paid by the Developer to the Agency; and 9 WHEREAS, the Agency and the Developer desire to amend the Standby Loan 10 Agreement to effectuate the foregoing. 11 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAL~ BERNARDINO DOES HEREBY RESOLVE, DETERt'\1INE AND ORDER AS FOLLOWS: 12 13 14 SECTION 1. The recitals set forth above are true and correct. 15 SECTION 2. The Commission hereby approves Amendment No. 1 to the Standby 16 Loan Agreement on file with the Secretary. 17 SECTION 3. The Executive Director is hereby authorized and directed to execute 18 Amendment No. 1 on behalf of the Agency, with such technical and conforming changes as 19 may be approved by the Executive Director and Agency Special Counsel. The Executive 20 Director of the Agency or such other designated representative of the Agency is further 21 authorized to do any and all things and take any and all actions as may be deemed necessary or 22 advisable to effectuate the purposes of Amendment No.1. 1// 23 1// 24 . 1// 25 1// S82002,10641.1 -4- . 2 3 4 5 6 7 8 9 10 11 12 . 13 14 15 16 17 18 19 20 21 By: 22 23 24 e 25 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERL'lARDINO APPROVING AMENDMENT NO.1 TO STANDBY LOAN AGREEMENT (INLAND PLAZA PROJECT) SECTION 4. This Resolution shall become effective immediately upon its adoption. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernardino at a meeting thereof, held on the day of , 2002, by the following vote, to wit: Commission ESTRADA LIEN MCGINNIS DERRY SUAREZ ANDERSON MCCAMMACK AYES NAYS ABSTAIN ABSENT Secretary The foregoing Resolution is hereby approved this _ day of ,2002. Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 582002:10641.1 -5- . 3 4 5 6 7 8 9 10 11 12 . 13 14 15 16 17 18 19 20 21 22 23 24 . 25 2 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of Community Development Commission of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Community Development Commission of the City of San Bernardino this day of , 2002. 582002:10641.1 Secretary of the Community Development Commission of the City of San Bernardino -6- e e e AMENDMENT NO. I TO STANDBY LOAN AGREEMENT (Inland Plaza Project) THIS AMENDMENT NO. I is entered into as of the _day of April, 2002, by and among the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency"), Inland Plaza, a Califomiageneral partnership (the "Borrower") and U.S. Bank, N.A., a national banking association organized and existing under the laws of the United States of America (as successor to Bank of America), as Trustee (the "Trustee"). WHEREAS, the City of San Bernardino (the "City") has heretofore issued its Industrial Development Revenue Bonds, Series 1983A (Inland Plaza Project) (the" 1983A Bonds") and its Taxable Industrial Development Revenue Bonds, Series 1995A (Inland Plaza Project) (the" 1995A Bonds") (the 1983A Bonds and the 1995A Bonds being. hereinafter from time to time collectively referred to as the "Bonds"); and WHEREAS, the 1983A Bonds were issued in order to enable the City to make a loan to the Borrower pursuant to that certain Loan Agreement, dated as ofJuly IS, 1983, by and between the City and the, as amended pursuant to Amendment No. I to Loan Agreement, dated as of May I, 1995 (as so amended, the "1983 Loan Agreement") to retire an existing construction loan on, and to provide additional funds to pay remaining costs of acquisition, construction and installation with respect to, a multi-tenant strip shopping center known as Inland Plaza and located in the City (the "P . ") d rOJect ; an WHEREAS, the 1983A Bonds were reoffered in 1995; and WHEREAS, the 1995A Bonds were issued for the purpose of making a loan (the "1995 Loan") to the Borrower pursuant to that certain Loan Agreement dated as of May I, 1995 (the" 1995 Loan Agreement") (the 1983 Loan Agreement and the 1995 Loan Agreement being heteinafter ftom time to time referred to collectively as the "Loan Agreements") to pay the costs of reoffering the 1983A Bonds and the costs of issuance of the 1995A Bonds; and WHEREAS, the Bonds are secured by and payable from revenues derived by the City pursuant to the Loan Agreements and certain other agreements and by funds and accounts held pursuant to that certain Trust Indenture dated as of July IS, 1983, as amended by a Supplemental Indenture dated as of May I, 1995 (the" 1983 Indenture") by and between the City and the Trustee and that certain T rustlndenture dated as of May 1, 1995 (the "1995 Indenture")(the 1983 Indenture and the 1995 Indenture being hereinafter from time to time referred to collectively as the "Indentures") by and between the City and the Trustee; and WHEREAS, the payment of principal of, premium, if any, and in1erest on the Bonds is further secured by, among other things, that certain Standby Loan Agreement dated as of May 1, 1995 (the" 1995 Standby Loan Agreement") by and among the Agency, the Borrower and the Trustee; and S82oo2:11229.2 1 . WHEREAS, under the 1995 Standby Loan Agreement, the Agency has pledged its general revenues, including available reserves, to the payment of principal of, redemption premium, if any, and interest on the Bonds to the extent that payments made by the Borrower pursuant to the Loan Agreements and moneys on deposit in the funds and accounts held under the Indentures are insufficient therefor; and WHEREAS, final sinking fund payments on the Bonds in an amount totaling Two Million Eighty Five Thousand Dollars ($2,085,000) are due May 1, 2002; and WHEREAS, the Borrower has notified the Agency that it has not yet been able to secure conventional financing for the Project; and WHEREAS, the Borrower has requested that the Agency make the final sinking fund payments on the Bonds pursuant to the Standby Loan Agreement; and . WHEREAS, Section 3 of the Standby Loan Agreement provides that in the event the Agency makes payments to the Trustee thereunder, the Borrower shall reimburse the Agency within thirty (0) days all amounts paid to the Trustee and any other costs expended by the Agency in connection therewith, including Agency staff and administrative costs, legal, accounting and interest on all such amounts as then owed by the Borrower to the Agency at an interest rate of 11 % per annum for the actual number of days such amounts are owed and until paid by the Borrower to the Agency; and WHEREAS, the Borrower has. requested that Section 3 of the Standby Loan Agreement be amended to provide that the Borrower shall reimburse the Agency on or before that date which is one hundred and eighty (180) days following the payment to the Trustee by the Agency of the final sinking fund payments on the Bonds an amount equal to the payment made by the Agency to the Trustee and any other costs expended by the Agency in connection therewith, including Agency staff and administrative costs, legal and accounting costs; and WHEREAS, the Borrower is willing to pay to the Agency each month commencing June 1,2002, and on the first of each month thereafter, interest on all amounts owed to the Agency by the Borrower in connection with the Agency's making the final sinking fund payment on the Bonds at an interest rate of 1 1% per annum based on a 365-day year for the actual number of days such amounts are owed and until paid by the Borrower to the Agency; and WHEREAS, the Agency and the Borrower desire to amend the 1995 Standby Loan Agreement to effectuate the foregoing. . NOW, THEREFORE, in consideration of the premises and Such other good and valuable consideration, receipt of which is acknowledged by the parties, the parties hereto agree as follows: SB2002,11229.2 2 . . . Section 1. Except as hereby amended, the 1995 Standby Loan Agreement is in all respects ratified and confirmed and all of the terms, provisions and conditions thereof shall be and remain in full force and effect. Section 2. Except as otherwise provided herein, all terms not otherwise defined in this Amendment No.1 shall have the same meanings in this Amendment No.1 as those terms are given in the 1995 Standby Loan Agreement. Section 3. Section 3 of the 1995 Standby Loan Agreement is amended in its entirety to read as follows: "3. In the event the Agency makes payments to the Trustee hereunder, the Borrower shall reimburse the Agency within thirty (30) days, all amounts paid to the Trustee and any other reasonable costs expended by the Agency in connection therewith, including reasonable Agency staff and administrative costs, legal, accounting and interest on all such amounts as then owed by the Borrower to the Agency at an interest rate of 11 % per annum based on a 365 day year for the actual number of days such amounts are owed and until paid by the Borrower to the Agency; provided, however, that in the event the Agency makes the final sinking fund payments on the Bonds in an amount totaling $2,085,000 to the Trustee on May 1, 2002, the Borrower shall (i) reimburse the Agency on or before that date which is one hundred eighty (180) days thereafter $2,085,000 and any other reasonable costs expended by the Agency in connection therewith, including reasonable Agency staff and administrative costs, legal and accounting costs and (ii) pay to the Agency each month commencing June 1,2002, and on the first business day of each month thereafter, interest on all amounts owed to the Agency by the Borrower in connection with the Agency's making the final sinking fund payments on the Bonds at an interest rate of 11 % per annum based on a 365 day year for the actual number of days such amounts are owed and until paid by the Borrower to the Agency. Notwithstanding the provision set forth in Section II.A. of that certain Owner Participation Agreement dated as of May 1, 1995 (the "Owner Participation Agreement") by and S82002:11229.2 3 r--- . . . between the Agency and the Borrower, the Standby Loan (as that term is defined in the Owner Participation Agreement) shall remain in existence until all amounts owed by the Borrower to the Agency under this Standby Loan Agreement have been paid by the Borrower to the Agency, and the Second Deed of Trust shall remain in full force and effect until the reimbursement and payment obligations of the Borrower to the Agency under this Standby Loan Agreement are fully discharged. Any failure of the Borrower to reimburse the Agency in full as required herein shall constitute an event of default hereunder, and without any further notice, the Agency may commence any proceeding in equity or law, including foreclosure of the Second Deed of Trust and demand under the Guarantees, as provided by law. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Amendment and the Standby Loan Agreement on behalf of the Agency shall be considered as "legal costs" for the purposes ofthis section." Section4. This Amendment No. I may be executed in counterparts, each of which shall be an original, and all of which shall constitute but one and the same instrument. 4 . . . IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. I as of the date first above written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM AND LEGAL CONTENT: Agency Special Counsel U.S. BANK N.A., as Trustee By: Authorized Representative INLAND PLAZA, a California general partnership By: Sam Watson By: Rod S. Chamberlain By: David Myhre By: Lawrence M. Campeau SB2002: 11229.2 5 e Re CH ~ e " ..J -- j ) e ["...."......j:l..r . Recorded in.Official Records, County of l'LEASE COIIP\.F.TE TIllS ItlFORJIA l10N San Bernard.no, Errol J. Mackzum, Recorder RECORDIHG REQUESTED BY: Doc No. 19950170986 cording Requested By 08:00am 05/16/95 ICAGO TITLE COMPANY ~nica~o litle ~m AND WHEN RECORDED MAIL TO: $.6...hn ~~(-;Jt("("J0 A .~. PG TIPE FEE STFEE ADD NM CT ADD ftF PEN PR PCOR ~n \ (',/.)\A.h/l,,:AS RcL. cJ5 S~~~ ~(I.~: 5 ~ 6 ~1 !) C' ^ .h. ~ (t,P. . - C1 I 3(V~ - I ::;'C)S' NON ST IN SVY C1T-CO TRANS TAX ND FEE CHRG EXAM c.":J. SPACE ABOVE FOR RECORDER'S USE ONLY <d,.J D <-Dce.J. o~'tf'LLU~ ~ l'<'C~ S-e.~lUL~\ I..~ A~i'Ce.<::. M~~ 1llle of Document nns PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) 11:'IrooC'fDf"l'l....,..."pOl.M11 9~-17098t; ~ RECORDING REQUESTED BY CITY OF SAN.BERNAROINO AND WHEN RECORDED MAIL TO: Sabo & Green, A Professional Corporation 23801 Calabasas Road, suite 2039 Calabasas, California 91302 (Space Above For Recorder's Use) SECOND DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS ~ dated as of May 1, 1995 by Inland Plaza, a California general partnership to chicago Title Insurance Company, for the Benefit of the Redevelopment Agency of the City of San Bernardino e $2,200,00 CITY OF SAN BERNARDINO INDUSTRIAL DEVELOPMENT REVENUE BONDS SERIES 1983 A (INLAND PLAZA PROJECT) $225,000 CITY OF SAN BERNARDINO TAXABLE INDUSTRIAL DEVELOPMENT REVENUE BONDS SERIES 1995 A . . . 9:J:-17098f; SBEO\Ol32\DOC\21 5\15\95 10:00 ew SECOND DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS THIS SECOND DEED OF TRUST AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the 1st day of May, 1995, by Inland Plaza, a general partnership ("Trustor"), to Chicago Title Insurance Company, as trustee ("Trustee"), for the benefit of the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic ("Beneficiary"). I. GRANTS AND OBLIGATIONS SECURED A. Grants. 1.01. Trustor hereby irrevocably grants, transfers and assigns to Trustee, in trust, with power of sale and right of entry and possession, (i) that certain leasehold estate created by, and all of the right, title and interest under, that certain Ground Lease dated June 11, 1981, by and between Helen C. Coe, as Landlord; and Trustor, as Tenant, ("Lease") a memorandum of which Lease was recorded on June 11, 1981, as Instrument No. 81-127735 in the office of the County Recorder of San Bernardino County, California by which Lease there was demised to Tenant for the term set forth in the Lease, covering that certain property described as Parcel No. 1 and Parcel No. 2 in Exhibit A attached hereto and made a part hereof and (ii) that certain real property situated in the County of San Bernardino, State of california, described as Parcel No. 3 in Exhibit A attached hereto and made a part hereof (collectively the "Land"), together with all right, title and interest of Trustor in and to: (a) All buildings and other improvements now or hereafter located on the Land, all water and water rights (whether riparian, appropriative, or otherwise, and whether or not appurtenant), pumps and pumping stations used in connection therewith and all shares of stock evidencing the same, all machinery, equipment, appl iances, fixtures, and other property including, but not limited to, all storage tanks and pipe lines, all gas, electric, heating, cooling, air conditioning, refrigeration and plumbing fixtures and equipment, which have been or may hereafter be attached or affixed in any manner to any building now or hereafter on the Land (the "Improvements"). (b) All the rights, rights of way, easements, licenses, profits, privileges, tenements, hereditaments and appurtenances, -1- e e e 9::;-17098f; now or hereafter in any way appertaining and belonging to or used in connection with the Lease and/or the Land and any part thereof or as a means of access thereto, including, but not limited to, any claim at law or in equity, and any after acquired title and reversion in or to each and every part of all streets, roads, highways and alleys adjacent to and adjoining the same; (c) All rentals, earnings, income, receipts, royalties, revenues, issues and profits which, after the date hereof, and while any portion of the indebtedness secured hereby remains unpaid, may accrue from the Lease and/or the Land and any part thereof and/ or from any Improvements, subj ect, however, to the right, power and authority conferred upon Beneficiary to collect and apply such proceeds set forth herein; (d) All deposits made with or other security given to utility companies by Trustor with respect to the Lease, the Land and/ or the Improvements, and all advance payments of insurance premiums made by Trustor with respect thereto and claims or demands relating to insurance; (e) Any of the foregoing arising or acquired by Trustor after the date hereof, the Lease, the Land and the property described in paragraphs (a), (b), (c), (d) and (e) of this Section 1.01 being defined hereinafter as the "Property." 1.02. Trustor, as debtor, hereby grants to Beneficiary, as secured party, a security interest in all personal property of Debtor presently owned or hereafter acquired which shall include but not be limited to all present and hereafter acquired equipment and inventory of Debtor wherever located, including but not limited to all machinery and machine tools, furniture, fixtures, furnishings, drawings, blueprints, reports and additions, accessories, accessions and substitutions thereto and all proceeds thereof, including but not limited to all money, deposit accounts, accounts, chattel paper, instruments, documents, general intangibles, insurance proceeds and other tangible and intangible property of Debtor resulting from the sale, lease or other disposi tion of the foregoing equipment and inventory. Trustor warrants and agrees that there is no financing statement covering the Property, or any part thereof, on file in any public office. The personal property in which Beneficiary has a security interest includes goods which are or shall become fixtures on the Property. 1.03. Trustor hereby assigns and transfers to Beneficiary, as additional security, all damages, royalties and revenue of every kind, nature and description whatsoever that Trustor may be entitled to receive from any person or entity owning or having or hereafter acquiring a right to the oil, gas or mineral rights and reservations of the Property, with the right in Beneficiary to receive and receipt therefor and apply the same to the indebtedness secured hereby either before or after any default -2- e e e 9~-17098t) hereunder, and Beneficiary may demand, sue for and recover any such payments, but shall not be required to do so. B. Obliqations Secured. 1.04. The grants, assignments and transfers made in Paragraphs 1.01, 1.02 and 1.03 are for the purpose of securing, in such order of priority as Beneficiary may determine: (a) Payment of the indebtedness evidenced under the Owner Participation Agreement dated as of May 1, 1995, by and between the Beneficiary and the Trustor (the "Owner Participation Agreement") for payments made by the Beneficiary under the Standby Loan Agreement (the "Standby Loan Agreement") dated as of May 1, 1995, and any renewals, extensions, modifications or amendments thereof, in the principal amount of Two Million One Hundred Seventy Four Thousand Seven Hundred One Dollars ($2,174,701) together with interest thereon and late charges if any as provided therein, each of which are made a part hereof by reference. (b) Payment of such further sums as Trustor or any successor in ownership hereafter may borrow from Beneficiary when evidenced by a note or notes, or any other form of evidence, of indebtedness reciting it is so secured, payable to Beneficiary or order and made by Trustor or any successor in ownerShip. (c) Payment of all other moneys herein provided to be paid by Trustor and performance of obligations of Trustor contained herein and any modification or change hereto. agreed or all other amendment, (d) Performance of each agreement of Trustor contained in any other agreement given by Trustor to Beneficiary which is for the purpose of further securing any indebtedness or obligation secured hereby and which recites it is so secured. II. COVENANTS OF TRUSTOR A. Condition and Operation of Propertv. 2.01. Trustor agrees (i) to keep the Property in good condition and repair, (ii) not to commit or permit any waste or deterioration of the Property, (iii) not to commit or permit any removal, demolition or substantial alteration of the Property except for such alterations as may be required by any law, ordinance, rule, regulation or order of any governmental authority having jurisdiction over the Property, (iv) to complete in good and workmanlike manner any construction or restoration which may be performed on the Property, (v) to promptly restore any portion of the Property which may be damaged or destroyed, and (vi) not to permit any mechanics' or materialmen's liens against the Property. -3- e e e 9;j~ 17098f; 2.02. Trustor shall not commit, permit or allow to exist, any violation of any law, ordinance, rule, regulation or order of any governmental authority having jurisdiction over the Property or of any matter of record affecting the Property. 2.03. Trustor shall maintain, or cause to be maintained, in the County in which the Property is located, proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the property or in connection with any services, equipment or furnishings provided in connection with the operation of the Property, whether such income or expense be realized by Trustor or by any other person or entity whatsoever excepting persons unrelated to and unaffiliated with Trustor and who leased from Trustor portions of the Property for the purposes of occupying the same. Upon the request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such financial statements regarding operation of the Property as Beneficiary may reasonably request. Beneficiary, or its designee, shall have the right from time to time during normal business hours to examine such books, records and accounts and to make copies or extracts therefrom. B. Insurance 2.04. Trustor shall, at all times, provide, maintain and keep in force all of the following: (a) Policies of insurance insuring the Property against loss or damage by fire and lightning and against loss or damage by other risks embraced by coverage of the type now known as the broad form of extended coverage, including, but not limited to, riot and civil commotion, vandalism and malicious mischief, and against such other risks or hazards as Beneficiary may from time to time reasonably designate in an amount sufficient to prevent Beneficiary or Trustor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation and each such policy shall contain a Replacement Cost Endorsement if available. (b) A policy or policies of comprehensive general liability insurance insuring Trustor and Beneficiary, as their interests may appear, against loss for any occurrence resulting in (i) bodily injury to or the death of one person and consequential damages arising therefrom in the amount of at least $1,000,000, (ii) bodily injury to or the death of more than one person and consequential damages arising therefrom in the amount of at least $3,000,000, and (iii) property damage involving injury or destruction of the tangible property of third parties in the amount of at least $100,000. -4- e e e 9;]-17098f; (c) Insurance against the loss of "rental value" of the Improvements on a "rented or vacant basis" arising out of fire or the perils of the broad form of extended coverage, including, but not limited to, riots and civil commotion, vandalism and malicious mischief in an amount equal to one year's gross rent under all leases entered into by Trustor for the Property, with co-insurance in such percentage as may be acceptable to Beneficiary. "Rental value" as used herein is defined as the sum of (i) the total anticipated gross rental income from tenant occupancy of the Improvements as furnished and equipped by Trustor, (ii) the amount of all charges which are the legal obligation of tenants and which would otherwise be the obligation of Trustor, and (iii) the fair rental value of any portion of the Improvements which is occupied by Trustor. (d) Flood insurance upon the Property in the event that such insurance is available pursuant to the provisions of the Flood Disaster Protection Act of 1973 or other applicable legislation. Beneficiary shall reserve the right to require that Trustor secure flood insurance in excess of the amount provided by the Flood Disaster Protection Act of 1973 if such insurance is commercially available up to the amount provided in Paragraph 2.04(a) hereof. (e) Such other insurance (including, but not limited to, business interruption insurance, boiler and machinery, plate glass, general liability and/or earthquake), and in such amounts, as may from time to time be reasonably required by Beneficiary; provided, however that earthquake insurance will not be required unless such insurance is usually carried in the case of premises similarly situated, due regard being given to the height and type of buildings thereon and their construction, use and occupancy. 2.05. All policies required by Paragraph 2.04 shall (i) be issued by companies approved by Beneficiary, (ii) shall be subject to the approval of Beneficiary as to amount, content and forms of policies and expiration dates, (iii) contain a Non- Contributory standard Mortgagee Clause and the Lender's Loss Payable Endorsement, or their equivalents, in favor of Beneficiary, (iv) provide that the proceeds thereof shall be payable to Beneficiary (to the extent of its interest) and (v) provide that it cannot be modified or cancelled without thirty days' prior written notice to Beneficiary. 2.06. Trustor shall furnish to Beneficiary the original of each policy required under Paragraph 2.04 and, at least thirty days prior to expiration of any such policy, proof of issuance of a policy continuing in force the coverage provided by the expiring policy. In the event Trustor does not deposit with Beneficiary a new policy of insurance with evidence of payment of premiums within such period, Beneficiary may, but shall not be obligated to, procure such insurance and Trustor shall pay the premiums thereon promptly upon demand. -5- . . . 9;J-17098ti 2.07. After the happening of any casualty insured against under Paragraph 2.04, Trustor shall give prompt written notice thereof to Beneficiary. 2.08. Trustor hereby assigns to Beneficiary all insurance proceeds which it may be entitled to receive and such proceeds shall be delivered to and held by Beneficiary to be applied, at the option of Beneficiary, to the reduction of the unpaid indebtedness secured by this Deed of Trust or, so long as Trustor is not in default hereunder and as long as Beneficiary's security is not materially impaired, to the restoration of any portion of the Property that has been damaged or destroyed to the same condition, character and value as existed prior to such damage or destruction; provided, however, that the proceeds of the insurance required by Paragraph 2.04(b) shall be applied to the payment of the indebtedness secured hereby and other payments required to be made by Trustor hereunder and under the Owner Participation Agreement and Standby Loan Agreement until such time as the Improvements have been restored and placed in full operation, at which time, provided Trustor is not then in default under the Owner Participation Agreement and this Deed of Trust, the balance of such insurance proceeds, if any, held by Beneficiary shall be returned to Trustor. In the event that in Beneficiary's sole judgment the insurance proceeds are not sufficient to accomplish such restoration, Beneficiary shall have the option, unless Trustor deposits with it the additional amounts necessary to accomplish such restoration upon demand by Beneficiary, to apply the insurance proceeds upon any indebtedness secured hereby in such order as Beneficiary may determine or release such proceeds to Trustor without such release being deemed a payment of any indebtedness secured hereby, rather than to apply such proceeds to the restoration of the Property. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If the Property is restored at a cost less than the available insurance proceeds, then such excess proceeds shall, if Trustor is not then in default hereunder, be paid over to Trustor. 2.09. In the event of the foreclosure of this Deed of Trust or other transfer of the title to the Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Trustor in and to any insurance policy then in force shall pass to the purchaser or grantee. C. pavments 2.10. Trustor shall pay the principal, interest and other charges due under the Owner Participation Agreement and Standby Loan Agreement according to their terms. 2.11. Trustor shall pay when due: -6- I. . . 9~-17098t; (a) All taxes, assessments and other governmental or pUblic charges affecting the Property, including assessments on appurtenant water stock, and any accrued interest, cost and/or penalty thereon and shall submit receipts therefor to Beneficiary at least ten (10) days before delinquency. (b) All encumbrances (including any debt secured by deed of trust), ground rents, liens, and/or charges, with interest, on the Property or any part thereof which appear to be prior or superior hereto and all costs, fees and expenses related thereto. (c) All charges for utilities or services including, but not limited to, electricity, gas, water and sewer. 2.12. [Intentionally Omitted) 2.13. Trustor shall pay immediately without demand after expenditure, all sums expended or expense incurred by Trustee and/or Beneficiary under any of the terms of this Deed of Trust, the Owner Participation Agreement and standby Loan Agreement, including sums necessary to compel payment under the Owner Participation Agreement and Standby Loan Agreement in connection with any default thereunder, including without limitation attorneys' fees incurred in any bankruptcy or judicial or nonjudicial foreclosure proceeding, with interest from date of expenditure at the rate of eleven percent (11%) per annum or at such other rate as may be the maximum amount of interest permitted to be charged under California law at the time of such expenditure. 2.14. Trustor shall pay the amount demanded by Beneficiary for any statement regarding the obligations secured hereby; providing, however, that such amount may not exceed the maximum amount allowed by law at the time request for the statement is made. D. Condemnation 2.15. If the Property, or any part thereof, is taken or damaged by reason of any public improvement or condemnation proceeding, or in any other manner, Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor, and shall be entitled at its option to commence, appear in and prosecute in its own name any action or proceeding or to make any compromise or settlement in connection with such taking or damage. All such compensation, awards, damages, rights of action and proceeds (the "Proceeds") are hereby assigned to Beneficiary, who shall after deducting therefrom all its reasonable expenses, including attorneys' fees, apply or release the Proceeds with the same effect and as provided in Paragraph 2.08 above with respect to disposition of insurance proceeds other than rent insurance proceeds; provided, that if there are any excess Proceeds after application thereof to the restoration of the Property, Beneficiary -7- . . e 9;J-17098f; shall be entitled to apply such excess to the reduction of the principal balance due under the Owner Participation Agreement and standby Loan Agreement without any adjustment in the dollar amount of monthly installments due under the Owner Participation Agreement and Standby Loan Agreement, if any. Trustor agrees to execute such further assignments of the Proceeds as Beneficiary or Trustee may require. Nothing herein contained shall prevent the accrual of interest on any portion of the Proceeds to be applied to the principal balance due under the Owner Participation Agreement and Standby Loan Agreement until the Proceeds are received by Beneficiary. E. Rents and Leases. 2.16. Trustor shall submit to Beneficiary for its prior written approval any form of lease to be used by Trustor for leasing any portion of the Improvements, and after approval by Beneficiary, shall not modify such form of lease without the prior written consent of Beneficiary. Each lease of any portion of the Improvements having a term, including extension and renewal options, of more than five years shall be satisfactory in form and substance to, and approved in writing by, Beneficiary. 2.17. Each lease of any portion of the Improvements shall be absolutely subordinate to the lien of this Deed of Trust but shall contain a provision satisfactory to Beneficiary that in the event of the exercise of the private power of sale or a jUdicial foreclosure hereunder such lease, at the option of the purchaser at such sale, shall not be terminated and the tenant thereunder shall attorn to such purchaser and, if requested to do so, shall enter into a new lease for the balance of the term of such lease then remaining upon the same terms and conditions. Each such lease shall be assigned to Beneficiary and each such assignment shall be recorded and acknowledged by the tenant thereunder. 2.18. Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the income, rents, issues, profits and proceeds of the Property, whether now due, past due or to become due, and hereby gives to and confers upon beneficiary the right, power and authority to collect such income, rents, issues, prof i ts and proceeds. Trustor irrevocably appoints Benef iciary its true and lawful attorney, at the option of Beneficiary at any time, to demand, receive and enforce payment, to give receipts, releases, and satisfactions, and to sue, either in the name of Trustor or in the name of Beneficiary, for all such income, rents, issues, profits and proceeds and apply the same to the indebtedness secured hereby. It is understood and agreed that neither the foregoing assignment of income, rents, issues, profits and proceeds to Beneficiary, nor the exercise by Beneficiary of any of its rights or remedies under this Paragraph 2.18 or under Paragraph 2.21 hereof shall be deemed to make Beneficiary a "mortgagee-in- -8- e e e 9~-17098f; possession" or otherwise responsible or respect to the Property or the use, operation of all or any portion thereof. liable in any manner with occupancy, enjoyment or F. Other Riqhts and Obliqations. 2.19. In addition to any other grant, transfer or assignment effectuated hereby, Trustor shall assign to Beneficiary, as security for the indebtedness secured hereby, Trustor's interest in all agreements, contracts, licenses and permits affecting the Property, such assignments to be made by instruments in form satisfactory to Beneficiary; but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract, license or permit so assigned, or to impose upon Beneficiary any obligations with respect thereto. 2.20. In the event of the passage, after the date of this Deed of Trust, of any law deducting from the value of the Property for the purpose of taxation, any lien thereon, or changing in any way the laws now in force for the taxation of deeds of trust or debts secured by deeds of trust, or the manner of the collection of any such taxes, so as to affect this Deed of Trust, or imposing payment of the whole or any portion of any taxes, assessments or other similar charges against the Property upon the Beneficiary, the indebtedness secured hereby shall immediately become due and payable at the option of the Beneficiary; provided, however, that such election by Beneficiary shall be ineffective if such law either (a) shall not impose a tax upon Beneficiary nor increase any tax now payable by Beneficiary or (b) shall impose a tax upon Beneficiary or increase any tax now payable by Beneficiary and prior to the due date: (i) Trustor is permitted by law and can become legally obligated to pay such tax or the increased portion thereof (in addition to all interest, additional interest and other charges payable hereunder and under the Owner Participation Agreement and Standby Loan without exceeding the applicable limits imposed by the usury laws of the State of California); (ii) Trustor does pay such tax or increased portion and (ii) Trustor agrees with Beneficiary in writing to pay, or reimburse Beneficiary for the payment of, any such tax or increased portion thereof when thereafter levied or assessed against the Property or any portion thereof. The obligations of Trustor under such agreement shall be secured hereby. 2.21. Should Trustor fail or refuse to make any payment or do any act which it is obligated hereunder to make or do, at the time and in the manner herein provided, then Beneficiary, or Trustee upon written instructions from Beneficiary (the legality thereof to be determined solely by Beneficiary), may, without notice to or demand upon Trustor, without releasing Trustor from any obligation hereunder and without waiving its right to declare a default as herein provided or impairing any declaration of -9- e e e 9~-17098f; default or election to cause the Property to be sold or any sale proceeding predicated thereon: (a) Make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary and Trustee being authorized to enter upon and take possession of the Property for such purposes; (b) conunence, appear in and/or defend any action or proceeding purporting to affect the security hereof, and/or any additional or other security therefor, the interests, rights, powers and/or duties of Trustee and/or Beneficiary hereunder, whether brought by or against Trustor, Trustee or Beneficiary; (c) Pay, purchase, contest or compromise any claim, debt, lien, charge or encumbrance which in the judgment of either may affect or appear to affect the security of this Deed of Trust, the interest of Beneficiary or the rights, powers and/or duties of Trustee and/or Beneficiary hereunder; and (d) Beneficiary is authorized either by itself or by its agents to be appointed by it for that purpose or by a receiver appointed by a court of competent jurisdiction, to enter into and upon and take and hold possession of any portion or all of the Property/ both real and personal, and exclude Trustor and all other persons therefrom; and to operate and manage the Property and rent and lease the same, perform such reasonable acts of repair or protection as may be reasonably necessary or proper to conserve the value thereof, and collect any and all income, rents, issues, profits and proceeds therefrom, the same being hereby assigned and transferred to Beneficiary for the benefit and protection of Beneficiary, and from time to time apply and/or accumulate such income, rents, issues, profits and proceeds in such order and manner as Beneficiary or such receiver in its sole discretion shall consider advisable, to or upon the following: the expense of receivership, if any, the proper costs of upkeep, maintenance, repair and/or operation of the Property, the repayment of any sums theretofore or thereafter advanced pursuant to the terms of this Deed of Trust upon the indebtedness secured hereby, the taxes and assessments upon the Property then due or next to become due, and/ or upon the unpaid principal of such indebtedness. The collection and/or receipt of income, rents, issues, profits and/or proceeds from the Property by Beneficiary, its agent or receiver, after declaration of default and election to cause the Property to be sold under and pursuant to the terms of this Deed of Trust shall not affect or impair such default or declaration of default or election to cause the Property to be sold or any sale proceedings predicated thereon, but such proceedings may be conducted and sale effected notwithstanding the receipt and/or collection of any such income, rents, issues, profits and/or proceeds. Any such income, rents, issues, profits and/or proceeds in the possession of Beneficiary, its agent or receiver, at the time of sale and not -10- . . e 9:j-17098fi theretofore applied as herein provided, shall be applied in the same manner and for the same purposes as the proceeds of the sale. Neither Trustee nor Beneficiary shall be under any obligation to make any of the payments or do any of the acts referred to in this Paragraph 2.21 and any of the actions referred to in this Paragraph 2.21 may be taken by Beneficiary irrespective of whether any notice of default or election to sell has been given hereunder. 2.22. If required by Beneficiary, at any time during the term of this Deed of Trust, Trustor will execute and deliver to Beneficiary, in form satisfactory to Beneficiary, an additional security agreement and/or financing statement covering all personal property of Trustor which may at any time be furnished, placed on, or annexed or made appurtenant to the Property and used, useful or held for use, in the operation of the improvements thereon. Any breach of or default under such security agreement shall constitute an event of default under this Deed of Trust. 2.23. Trustor shall do any and all acts which, from the character or use of the Property, may be reasonably necessary to protect and preserve the security of Beneficiary, the specific enumerations herein not excluding the general. 2.24. Trustor will faithfully perform each and every covenant to be performed by Trustor under any lien or encumbrance including, without limiting the generality hereof, mortgages, deeds of trust, leases, declaration or covenants , conditions and/ or restrictions and other agreements which affect the Property, in law or in equity, which Beneficiary reasonably believes may be prior and superior to the lien or charge of this Deed of Trust; and that a breach of or a default under any such lien or encumbrance shall constitute an event of default under this Deed of Trust. 2.25. Upon election of either Beneficiary or Trustee so to do, employment of an attorney is authorized and payment by Trustor of all attorneys' fees, costs and expenses in connection with any action and/or actions, (including without limitation the cost of evidence or search of title or any attorneys fees incurred in a bankruptcy proceeding) which may be brought for the judicial or nonjudicial foreclosure of this Deed of Trust, and/or for possession of the property covered hereby, and/or for the appointment of a receiver, and/or for the enforcement of any covenant or right in this Deed of Trust contained as hereinafter provided shall be secured hereby. -11- . e e 9;J-17098t; III. DEFAULTS AND REMEDIES A. Defaults 3.01. Trustor shall be in default hereunder if any of the following events shall occur and be continuing: (a) Breach or default in payment of any indebtedness secured hereby or in performance of any agreement under the Owner Participation Agreement and Standby Loan Agreement or hereunder or under any other agreement securing such indebtedness; (b) Failure by Trustor to comply with any of the covenants, conditions and restrictions now or hereafter affecting the Property, or any part thereof, or contained in any agreement related to the Property or the indebtedness secured hereby; or (c) A receiver or trustee is appointed for Trustor or its property, or Trustor makes an assignment for the benefit of creditors, or Trustor admits in writing its inability to pay its debts as they become due, or Trustor becomes insolvent, or a petition is filed by or against Trustor pursuant to any of the provisions of the united States Bankruptcy Act, as amended. B. Remedies 3.02. In the event of any default hereunder, then and in each such event, Beneficiary may declare all sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale herein. Should Beneficiary elect to foreclose by exercise of the power of sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the Owner Participation Agreement and Standby Loan Agreement and such receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at pUblic auction to the highest bidder for cash in lawful money of the united States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any -12- e e e 9;J-17098t; covenant or warranty, express or implied. The recitals in such deed or deeds or any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at such sale. 3.03. Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Owner Participation Agreement, Standby Loan Agreement and/or this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. 3.04. In the event of any default hereunder then and in each such event, Beneficiary, as a matter of right and without notice to Trustor or anyone claiming under it, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Property, and Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided herein and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property unless such receivership is sooner terminated. 3.05. After deducting all costs, fees and expenses of Trustee and of this Deed of Trust, including the cost of evidence of title in connection with sale and attorneys' fees, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the maximum rate per annum permitted by law at the time of such expenditure; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 3.06. If Beneficiary at any time holds additional security for any obligations secured hereby, it may enforce the terms hereof or otherwise realize upon the same, at its option, either before or concurrently herewith or after a sale is made hereunder, and may apply the proceeds upon the indebtedness secured hereby without affecting the status of or waiving any right to -13- e e e 9::i-17098ti exhaust all or any other security, including the security hereunder, and without waiving any breach or default or any right or power whether exercised hereunder or contained herein or in any such other security. 3.07. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by this instrument to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. 3.08 In the event of the foreclosure of this Deed of Trust or other transfer of the title to the Property in extinguishment, in whole or in part, of the indebtedness secured hereby, all right, title and interest of Trustor in and to any insurance policy relating to the Property then in force shall pass to the purchaser or grantee. IV. MISCELLANEOUS PROVISIONS 4.01. By accepting payment of any sum secured hereby after its due date or in an amount less than the sum due, Beneficiary does not waive its rights either to require prompt payment when due of all other sums so secured or to declare a default as herein provided for failure to pay the total sum due. 4.02. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of the Property, Trustee may: reconvey any part of the Property; consent in writing to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4.03. Beneficiary shall be subrogated for security to the lien, although released of record, of any encumbrances paid out of the proceeds of the loan secured Deed of Trust. further and all by this 4.04. Beneficiary is authorized by itself, its agents, employees or workmen, to enter at any reasonable time upon any part of the Property for the purpose of inspecting the same, and for the -14- e e e 9;J-17098t; purpose of performing any of the acts it is authorized to perform under the terms of this Deed of Trust. 4.05. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the Agency or any subsequent obligor under the standby Loan Agreement, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 4.06. So long as no default by Trustor in the payment of any indebtedness secured hereby or in the performance of any obligation, covenant or agreement contained herein shall exist and be continuing, Trustor shall have the right to collect all income, rents, issues, profits and proceeds from the Property and to retain, use and enjoy the same. 4.07. Trustee, upon presentation to it of an affidavit signed by or on behalf of Beneficiary, setting forth any fact or facts showing a default by Trustor under any of the. terms or conditions of this Deed of Trust, is authorized to accept as true and conclusive all facts and statements in such affidavit and to act hereunder in complete reliance thereon. 4.08. If any provision hereof should be held unenforceable or void, then such provision shall be deemed separable from the remaining provisions and shall in no way affect the validity of this Deed of Trust. 4.09. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. The Trust created hereby is irrevocable by Trustor. 4.10. Trustee shall be under no obligation to notify any party hereto of any action or proceeding of any kind in which Trustor, Benef iciary and/ or Trustee shall be a party, unless brought by Trustee, or of any pending sale under any other deed of trust. 4.11. Beneficiary may, from time to time, by a written instrument executed and acknowledged by Beneficiary and recorded in the county or counties where the Property is located, substitute a successor or successors for the Trustee named herein or acting hereunder. 4.12. The right to plead any and all statutes of limitation as a defense to any demand secured by this Deed of Trust is hereby waived to the full extent permitted by law. -15- . . . 9~-17098f; 4.13. Notwithstanding any provision herein or in the Owner Participation Agreement or standby Loan Agreement, the total liability for payments in the nature of interest shall not exceed the applicable limits imposed by the usury laws of the state of California. 4.14. All notices hereunder shall be deemed to have been duly given if mailed by the united states registered or certified mail, with return receipt requested, postage prepaid to the parties at the following addresses (or at such other addresses as shall be given in writing upon any party to the others) and shall be deemed complete upon any such mailing: To Trustor: Inland Plaza, c/o Tracy Mortgage 2900 Bristol Street, suite B205 Costa Mesa, California 92626 To Beneficiary: Attention: city of San Bernardino c/o Redevelopment Agency of the city of San Bernardino 201 North "E" Street, Third Floor San Bernardino, California 92401 (Finance Department) with a copy to: Bank of America, National Trust and savings Association Corporate Trust Dept., #8510 333 South Beaudry Avenue, 25th Floor Los Angeles, California 90017 In the event of any strike or occurrence of another similar event which interrupts mail service, notices may be served personally upon an individual, partner, or an officer or director of a corporation which is or is part of the party being served hereunder. 4.15. Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth above. 4.16. upon written request of Beneficiary stating that all sums secured hereby have been paid and upon surrender to Trustee of this Deed of Trust and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 4.17. This Deed of Trust shall be construed and enforced in accordance with the laws of the state of California. -16- e e e 9;J-17098ti 4.18. In the event that the Land or Improvements, or any part thereof, or any interest therein is sold, agreed to be sold, conveyed, alienated or otherwise transferred by the Trustor, whether by operation of law or otherwise, the amounts owed under the Owner Participation Agreement and Standby Loan Agreement, irrespective of the maturity dates expressed therein, at the option of Beneficiary, and without demand or notice, shall immediately become due and payable. In the event that Beneficiary does not elect to declare the amounts owed under the Owner Participation Agreement and Standby Loan Agreement immediately due and payable, then the successor to or transferee of the undersigned hereof shall assume the obligations of the undersigned under the Owner Participation Agreement and Standby Loan Agreement and this Deed of Trust and any other instrument securing the Owner Participation Agreement and Standby Loan Agreement, pursuant to the terms of an assumption agreement to be executed by such successor or transferee in a form acceptable to Beneficiary. In connection with such assumption, Beneficiary shall be paid an assumption fee in the amount of $100.00. The failure to execute such an assumption agreement and to deliver an executed counterpart thereof to Beneficiary, or to pay such fee to Beneficiary within twenty (20) days from the date on which such successor or transferee succeeds to the interest of the undersigned, shall constitute a default hereunder and shall thereupon allow Beneficiary to declare any indebtedness or obligation secured hereby immediately due and payable. This provision shall apply to each and every sale, transfer or conveyance, regardless of whether Beneficiary has consented to, or waived, Beneficiary's rights hereunder, whether by action or non-action in connection with any previous sale, transfer or conveyance. For the purposes hereof, if Trustor is a corporation, a sale or other transfer of control thereof shall be deemed a sale of said property and, if Trustor is a partnership, a change in the identity of any of the general partners thereof, except for the addition of general partners, shall be deemed a sale of said property. v. LEASE 5.01. with respect to the Lease, Trustor agrees to all of the following: (a) To keep and perform each and every covenant, agreement and obligation of the tenant set forth in the Lease, and not to commit, suffer or permit any breach thereof. If Trustor shall default under the Lease, Beneficiary may, at its option but without any obligation to do so, take any action necessary or desirable to cure any default by Trustor in the performance of any of the terms, covenants and conditions of the Lease, Beneficiary being authorized to enter upon the Property for such purposes. Trustor shall, immediately on demand, pay to Beneficiary all costs of Beneficiary incurred in curing any such default, together with -17- e e e 9:i-17098f; interest at the maximum rate permitted by law from the date of expenditure. All sums due to Beneficiary pursuant to this Article V shall be secured by this Deed of Trust. Any default by the tenant under the Lease shall be a default hereunder. (b) To give immediate notice to Beneficiary of any defaul t under the Lease wi thin Trustor's knowledge or of the receipt by it of any notice of default from the landlord under the Lease, and to furnish to Beneficiary all information that it may request concerning the performance by Trustor of the covenants of the Lease. (c) That the provisions hereof shall be deemed to be obligations of Trustor in addition to Trustor I s obligations as tenant with respect to similar matters contained in the Lease; provided, however, the inclusion herein of any covenants and agreements relating to similar matters under which Trustor is obligated under the Lease shall not restrict or limit Trustor's duties and obligations to keep and perform promptly all of its covenants, agreement and obligations as tenant under the Lease and nothing in this Deed of Trust shall be construed as requiring the taking of or the omitting to take any action by Trustor or Beneficiary which would cause a default under the Lease. (d) That so long as this Deed of Trust is in effect, there shall be no merger of the Lease or any interest therein nor of the leasehold estate created thereby with the fee estate in the Property or Land or any portion thereof by reason of the fact that the Lease or such interest therein or such leasehold estate may be held directly or indirectly by or for the account of any person who shall hold the fee estate in the Property or Land or any portion thereof or any interest of the landlord under the Lease. In case Trustor acquires the fee title or any other estate, title or interest in the Land, this Deed of Trust shall attach to and cover and be a lien upon the fee title or such other estate so acquired, and such fee title or other estate shall, without further assignment, mortgage or conveyance, become and be subject to the lien of and covered by this Deed of Trust. Trustor shall notify Beneficiary of any such acquisition by Trustor and, on written request by Beneficiary, shall cause to be executed and recorded all such other and further assurances or other instruments in writing as may in the opinion of Beneficiary be required to carry out the intent and meaning hereof. (e) That no surrender (except a surrender upon the expiration of the term of the Lease or upon the termination by the landlord thereunder pursuant to the provisions thereof) by Trustor, as tenant under the Lease, to the landlord under the Lease, or any portion thereof or of any interest therein, and no termination of the Lease by Trustor as tenant thereunder, shall be valid or effective, and neither the Lease nor the terms thereof may be amended, modified, changed, surrendered or cancelled, or -18- 9S-17098fi e .ated to any fee mortgage, to any lease, or to any other , either orally or in writing, without the prior written of Beneficiary so long as this Deed of Trust is in effect, tor agrees that any such action, without the prior written of Beneficiary shall be void. (f) That if the Lease is for any reason whatsoever .ed prior to the natural expiration of its term and, if to any provision of the Lease or otherwise, Beneficiary or gnee shall acquire from the landlord thereunder a new lease Land or of any part of the Land, Trustor shall have no :itle or interest in or to such new lease or the leasehold :reated thereby. (g) Trustor warrants that the Lease is in all respects ld subsisting, that it is not in default under any of its : provisions, that no controversies exist involving any = such default and that the term of the Lease expires on 2036. e e -19- . . . 9;j-17098t; IN WITNESS WHEREOF, Trustor has executed this Deed of Trust and Security Agreement with Assignment of Rents as of the day first written above. INLAND PLAZA, a California general partnership By: WATSON CHAMBERLAIN & CO., G eral P tner By: Cbd..S. Cham . I /. ~ . BY:-;~ ,,~~- David MYhr~/ By: M. SBEO\0l32\D0C\21 -20- I~-- . . . 9;J-17098ti STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) On May 3, 1995, before me, MARTIN H. BERNSTEIN, NOTARY PUBLIC, personally appeared SAM M. WATSON, ROD S. CHAMBERLAIN, DAVID MYHRE and LAWRENCE M. CAMPEAU personally known to me (or pro~ed to me on the basis of satisfactory evidence) to be the p~rsonrcsn whose nam~ is~~ subscribe to the within instrument and a&hc~edged to me tkit: he/ they executed the same in.... hiS/her t 'ir authorized capacity ies , ~at by his/her~~~ signatur on the instr~t the perso (s), or the entity u on behalf of which the perso~acted, execu ed the instrument. WITNESS my hand and official seal. Signature '/frJ~ if. ;:S-P.n~. (Seal) @ OFFICiAl NOTARY SEAL .'~.' . MARTIN HERMAN BERNSTEIN , -.' Nolaty PubiIC - CaIi""ni. . ,-*" LOS ANGELES COUNTY " My Comm. ExPir.. JUN 05,1995 DESCRIPTION EXHIBIT "A" 9S-17098ti Oruer No. 9407744 11 Page 1 . PARCEL 1: . . THAT PORTION OF LOT 14, BLOCK 30, RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING ON THE EAST LINE OF "E" STREET AT A POINT 1606.6 FEET SOUTH OF THE NORTHWEST CORNER OF LOT 9, BLOCK 30, RANCHO SAN BERNARDINO, SAID POINT ALSO BEING THE SOUTHWEST CORNER OF THE PROPERTY CONVEYED TO PAUL I. KELLY AND OPAL G. KELLY, HUSBAND AND WIFE, BY DEED RECORDED JUNE 30, 1938, IN BOOK 1281 OF OFFICIAL RECORDS, PAGE 330, THENCE SOUTH 890 48' 30" EAST 404.9 FEET, MORE OR LESS, TO THE SOUTHEAST CORNER OF THE AFOREMENTIONED KELLY PROPERTY; THENCE NORTH 00 11' 30" EAST 125 FEET; THENCE NORTH 890 48' 30" WEST 404.9 FEET, MORE OR LESS, TO A POINT ON THE EAST LINE OF "E" STREET; THENCE SOUTH ALONG THE EAST LINE OF "E" STREET 125 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. PARCEL 2: A PORTION OF LOT 14, BLOCK 30, RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF THE LAND CONVEYED TO PAUL 1. KELLY ET AL., AS PER DEED RECORDED JUNE 30, 1938, IN BOOK 1281 OF OFFICIAL RECORDS, PAGE 330, RECORDS OF SAID COUNTY; THENCE SOUTH 890 48' 30" EAST ALONG THE SOUTH LINE OF SAID KELLY PROPERTY 401.53 FEET TO TilE EAST LINE OF SAID LOT 14, SAID EAST LINE OF LOT 14 BEING THE CENTER LINE OF WARM CREEK, TIlENCE SOUTH 170 01' 15" WEST ALONG THE SAID CENTER LINE OF ,IARM CREEK 20.89 FEET TO ITS INTERSECTION WITH A LINE PARALLEL WITH AND DISTANT SOUTHERLY 20.00 FEET MEASURED AT RIGHT ANGLES FROM TilE SAID SOUTH LINE OF KELLY PROPERTY; THENCE NORTH 890 48' 30" WEST ALONG SAID PARALLEL LINE 396.50 FEET TO ITS INTERSECTION WITH THE EAST LINE OF SOUTH "E" STREET (FORMERLY STATE HIGHWAY); THENCE NORTHERLY ALONG SAID EAST LINE OF "E" STREET AND ALONG TilE ARC OF A CURVE TO THE WEST FROM AN INITIAL TANGENT BEARING NORTH 30 22' 27" EAST WITH A RADIUS OF 2D50.00 FEET THROUGH A CENTRAL ANGLE OF 00 33' 35" A DISTANCE OF 20.02 FEET TO THE POINT OF BEGINNING. PARCEL 3: BEINd A PORTION OF LOT 14, BLOCK 30, RANCHO SAN BERNARDINO, IN TilE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER ){AP RECORDED IN BOOK 7 PAGE 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND STATE, SHOWN AS PARCEL II ON THAT CERTAIN RECORD OF SURVEY RECORDED IN BOOK 21, PAGE 37 OF RECORD OF SURVEYS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND STATE, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWEST CORNER OF THE LAND CONVEYED TO PAUL I. KELLY ET AL., AS PER DEED RECORDED JUNE 30, 1938 IN BOOK 1281, PAGE 330, OFFICIAL RECORDS OF SAID COUNTY AND STATE, THENCE SOUTH 890 48' 30" EAST ALONG THE SOUTH LINE OF SAID KELLY PROPERTY, A DISTANCE OF 301.53 FEET TO THE EAST LINE OF SAID LOT 14, BEING ALSO THE CENTER LINE OF WARM CREEK AS LOCATED ON THAT CERTAIN RECORD OF SURVEY RECORDED IN BOOK EXHIBIT"A" CONT. DESCRIPTION 9~)-17098f; Page 2 Order No. 9407744 11 . 17, PAGE 62 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND STATE, AND ALSO RECORD OF SURVEY RECORDED IN BOOK 21, PAGE 37, THENCE SOUTH 27' 11' 51" WEST -ALONG THE CENTERLINE OF WARM CREEK A DISTANCE OF .-' 20.89 FEET TO THE NORTHERLY LINE OF SAID PARCEL II BEING PARALLEL WITH AND DISTANT SOUTHERLY 20.00 FEET MEASURED AT RIGHT ANGLES FROM THE SAID SOUTH LINE OF THE KELLY PROPERTY, SAID POINT BEING THE NORTHEAST CORNER OF SAID PARCEL II AND THE TRUE POINT OF BEGINNING. THENCE CONTINUING ALONG THE CENTERLINE OF WAill1 CREEK BEING THE EASTERLY LINE OF SAID PARCEL II, SOUTH 27' 11' 51" WEST A DISTANCE OF 143.49 FEET TO AN ANGLE POINT THEREON, THENCE CONTINUING ALONG SAID CENTERLINE AND EAST LINE OF SAID PARCEL II, SOUTH 02' 29' 39" EAST A DISTANCE OF 22.19 FEET TO THE SOUTHERLY LINE OF SAID PARCEL II, BEING PARALLEL WITH AND DISTANT SOUTHERLY 170.0 FEET MEASURED AT RIGHT ANGLES FROM SAID SOUTH LINE OF THE KELLY PROPERTY, THENCE NORTH 89' 48' 30" WEST ALONG THE SOUTHERLY LINE OF SAID PARCEL II, A DISTANCE OF 368.70 FEET TO THE EAST LINE OF SOUTH "E" STREET (100.00 FEET WIDE) BEING THE SOUTHWEST CORNER OF SAID PARCEL II; THENCE NORTHERLY ALONG SAID EAST LINE OF SOUTH "E" STREET BEING A CURVE CONCAVE TO THE WEST HAVING A RADIUS OF 2050.00 FEET (A RADIAL LINE TO SAID CURVE BEARS NORTH 82' 24' 53" WEST) THROUGH A CENTRAL ANGLE OF 04' 12' 40" A DISTANCE OF 150.67 FEET TO THE NORTHWEST CORNER OF SAID PARCEL II; THENCE SOUTH 890 48' 30" EAST ALONG THE NORTHERLY LINE OF SAID PARCEL II, A DISTANCE OF 418.93 FEET TO THE TRUE POINT OF BEGINNING. . . e SBEO\Ol32\DOC\66 5\16\95 830 law STANDBY LOAN AGREEMENT THIS STANDBY LOAN AGREEMENT dated as of May 1, 1995, is among the REDEVELOPMENT AGENCY OF THE CITY OF SAN CNO, CALIFORNIA (the "Agency"), a public body, INLAND PLAZA, >rnia general partnership (the "Debtor") and BANK OF AMERICA - TRUST AND SAVINGS ASSOCIATION, a national banking :ion organized and existing under the laws of the United )f America, as Trustee (the "Trustee"). CONS "Bonds" shall mean the 1983 Bonds and the 1995 Bonds. "Indentures" means the 1983 Indenture and the 1995 -:-e. "Interest Payment Date" means May 1 and November 1, .ng November 1, 1995, as long as the Bonds are outstanding. "Loan Agreements" means the 1983 Loan Agreement and the in Agreement. e "Notes" means the 1983 Note and the 1995 Note. "Pledged Revenues" means the general funds of the Agency, lyment source includes Surplus Tax Revenues and any other available funds of the Agency as may then be available for of Agency obligations and indebtedness. "Second Deed of Trust" means the Second Deed of Trust, r Agreement with Assignment of Rents dated as of May 1, 1995 the Debtor to Chicago Title for the benefit of the Agency. e "Surplus Tax Revenues" means the following surplus amounts Je available after the payment of prior liens and superior is may be evidenced by previously issued or subsequently lotes, bonds or other indebtedness, of the (i) surplus tax It revenues of the Agency, which tax increment revenues lt the application of the one percent (1%) tax rate to the lce between the then current assessed value increase over , year value attributed to the various project areas of the .s defined by Health and Safety Code section 33670; and (ii) :ride tax rate in excess of the one percent (1%) general - tax rate to the increase in the then current assessed In of property in the project areas over the base year; plus ny amounts attributable to utility property which is I by the State Board of Equalization and any amounts lting subventions or other payments made by the State to the . . . "Trustee" means the Bank of America National Trust and Savings Association, a national banking association organized and existing under the laws of the United States of America, as Trustee under that certain Trust Indenture dated as of July 15, 1983, by and between the City of San Bernardino (the "City") and The Mitsubishi Bank of California, as trustee, as amended by the Supplemental Indenture dated as of May 1, 1995, by and between the city and Bank of America, National Trust and Savings Association, as successor Trustee and that certain Trust Indenture dated as of May 1, 1995, by and between the City and Bank of America National Trust and Savings Association as Trustee. "1983 Bonds" means the $2,200,000 city of San Bernardino Industrial Development Revenue Bonds, Series 1983A (Inland Plaza Project) . "1995 Bonds" means the $225,000 City of San Bernardino, Taxable Industrial Development Revenue Bonds, Series 1995A (Inland Plaza Project). "1983 Indenture" means the Indenture by and between the Issuer and Mitsubishi Bank of California, as Trustee, as amended by the Supplemental Indenture dated as of May 1, 1995, by and between the Issuer and Bank of America, National Trust and Savings Association, as successor Trustee. "1995 Loan Agreement" means the Loan Agreement dated as of May 1, 1995, by and between the Issuer and the Company, as the same may from time to time be amended as provided therein. "1983 Loan Agreement" means the Loan Agreement dated as of July 15, 1983, as amended by Amendment No. 1 to Loan Agreement dated May 1, 1995, by and between the Issuer and the Company, as the same may from time to time be amended as provided therein. "1995 Indenture" means the Indenture dated as of May 1, 1995, by and between the City and the Trustee. "1983 Note" means the promissory note of the Company, as amended, issued pursuant to the Loan Agreement in respect of the 1983 Bonds, in substantially the form set forth in Exhibit A-1 to the 1983 Loan Agreement. "1995 Note" means the promissory note of the Company issued pursuant to the 1995 Loan Agreement in respect to the 1995 Bonds in substantially the form set forth in Exhibit A-2 to the 1995 Loan Agreement. - 2 - . . . IN WITNESS WHEREOF, the Agency hereby guaranties and agrees to pay to the Trustee for the benefit of the holders of the outstanding Bonds on the terms and conditions set forth hereinafter, the obligation of Debtor, as more specifically described hereinafter: 1. The Agency's obligations to Trustee are solely with respect to the debt incurred by Debtor by way of the Bonds. The Agency's obligation shall be paid solely out of Pledged Revenues. The Agency's obligation hereunder shall not extend to any other obligation of Debtor to Trustee, or any third party whatsoever. 2. In the event that Revenues (as defined in the Indentures) to pay the principal, premium, if any, and interest on the Bonds are insufficient to pay the Bonds in whole or in part or to pay any periodic payment on the Bonds, at least fifteen (15) days prior to an Interest Payment Date following any failure by the Debtor to make any of its payments in the amounts and at the times stated in the Loan Agreement and in the Notes, the Trustee shall provide telephonic and written notice to the Agency and the Debtor (unless the date of failure to make such payment thereunder occurs as of any April 15 or October 15 immediately prior to an Interest Payment Date, in which event the Trustee shall provide immediate telephonic and facsimile transmitted notice to the Agency and Debtor) of its request for payment hereunder, in an amount equal to the amount required in order to provide for the timely payment in full of the principal of and interest on the Bonds coming due on such Interest Payment Date. The Agency shall remit such requested payment to the Trustee at least three days prior to such Interest Payment Date. To the extent that such Interest Payment Date is the final maturity date of the Bonds, the Trustee shall immediately take such actions as may be required to payor redeem the Outstanding Bonds entitled to the benefits under this Standby Loan Agreement. All moneys drawn hereunder shall be applied to the payment of principal of and interest on the Bonds so that the lien of the Indentures by the Trustee will be discharged in accordance with their terms. Moneys drawn hereunder by the Trustee for the payment of principal and interest on the Bonds shall constitute payments made under the Loan Agreements by the Debtor. 3. In the event the Agency makes payments to the Trustee hereunder, the Debtor shall reimburse the Agency within thirty (30) days, all amounts paid to the Trustee and any other costs expended by the Agency in connection therewith, including Agency staff and administrative costs, legal, accounting and interest on all such amounts as then owed by the Debtor to the Agency at an interest rate of 11% per annum for the actual number of days such amounts are owed and until paid by the Debtor to the Agency. Any failure of the Debtor to reimburse the Agency in full as required herein shall constitute an event of default hereunder, and without any further notice, the Agency may commence any proceeding in equity or - 3 - . . . law, including foreclosure of the Second Deed of Trust and demand under the Guarantees, as provided by law. 4. The amount of the Agency I s obligations to Trustee shall not exceed the principal amount of the Bonds, plus interest, less any principal payments made on account thereof by Debtor or any other party. Any obligation of the Agency hereunder shall cease upon payment in full of all principal and interest due under the Bonds, regardless of the source of said payment. 5. The obligations of the Agency under this Standby Loan Agreement do not extend to any prior, contemporaneous or future debt owed by Debtor to Trustee. 6. Trustee may not, without the prior written consent of the Agency, enter into any modification, amendment, waiver or other change in the terms, amount or conditions of the Bonds, nor renew, extend or postpone the time for payment or otherwise change the terms of the Bonds, nor release any securi ty, if any, held therefor. 7. Trustee expressly waives any right to attach or to seek payment from or foreclose against any asset of the Agency which may be in the possession of the Trustee at any time, and agrees solely to exercise its rights under this standby Loan Agreement in accordance with the terms hereof. 8. The Agency may not terminate its obligations under the provisions of this Standby Loan Agreement until such time as the Bonds have been paid in full or the amount then owed by the Agency pursuant hereto has been paid in full. 9. In the event of litigation concerning the terms of this Standby Loan Agreement, the prevailing party shall be entitled to reasonable attorneys' fees; provided, however, the Issuer shall indemnify the Trustee, pursuant to the Indentures, for any liability arising from this section. 10. Nothing herein shall prevent or preclude the Agency from issuing bonds, notes or other obligations, including refunding obligations. This Agreement shall not be considered a lien on existing or future tax increment revenues of the Agency. 11. This Standby Loan Agreement and the respective rights and obligations created hereby are subject to and are to be construed according to the laws of the State of California. 12. Trustee may assign its rights under this Standby Loan Agreement, subject to providing fifteen days' prior written notice thereof to the Agency. - 4 - . . . Dated: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: ATTES By: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Trustee By: Jlt{j1'~--- Authorized Representative -5~ e INLAND PLAZA, a California general partnership By: WATSON CHAMBERLAIN & CO., Genera Part e B . S. Chamb. e!laLn /, //. "- ;,?~ David MYhr// By: t~-,. --I'm ~ {/ Lawrence M. Campe By: e e -6- e e e STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) On May 3, 1995, before me, MARTIN H. BERNSTEIN, NOTARY PUBLIC, personally appeared SAM M. WATSON, ROD S. CHAMBERLAIN, DAVID MYHRE and LAWRENCE M. CAMPEAU personally known to me (or proved~ me on th~asis of satisfactory evidence) to be the perso (s) whose nam (s) is~ subscrib to the within instrument and ac f~ged to e tnat he/ the executed the sam in his/her heir authorized capacity ies , a~that by hiS/her their signatur on the instr~t the erso (s) or the entity on behalf 0 ich the perso~acted, execu ed the instrument. WITNESS my hand and official seal. Signature 11flT1t If. aJ1T1/Y1.O~A^ . (Seal) @'_....OFFICIALNOTARYSEAL l ' '. MARTIN HERMAN BERNSTEIN ! ~ w Norary Pubtic - California -. ii. LOS ANGELES COUNTY . , My Comm. E'Pires JUN 05,1995 e e e SBEOI01321D0C\29{l) 5\15\95 130 law AMENDED CONTINUING LIMITED UNCONDITIONAL GUARANTY THIS AMENDED CONTINUING LIMITED UNCONDITIONAL GUARANTY is made as of this first day of May, 1995 by SAM A. WATSON ("Guarantor") . RECITALS WHEREAS, the Guarantor executed that certain Guaranty on July 15, 1983, for the purpose of inducing The Mitsubishi Bank of California to purchase the city of San Bernardino Industrial Development Revenue Bonds Series 1983A (Inland Plaza Project) (the "1983 Bonds"); and WHEREAS, in order to induce the city of San Bernardino (the "city") to extend the maturity of the 1983 Bonds, to execute a Supplemental Indenture in connection therewith and to issue the city of San Bernardino Taxable Industrial Development Revenue Bonds series 1995A (Inland Plaza Project) (the "1995 Bonds", and together with the 1983 Bonds, the "Bonds"), the Guarantor hereby agrees, as follows (All capitalized terms not otherwise defined shall have the meaning given in section 15 hereof): Guarantor hereby unconditionally guarantees to the City for the benefit of the holders of the Bonds that Inland Plaza, a California general partnership (the "Customer") will pay when due each Obligation to Bank of America National Trust and Savings Association, as Trustee (the "Trustee") as the assignee of the City under the Trust Indenture dated as of July 15, 1983, as amended, by the Supplemental Indenture dated as of May 1, 1995 (the "1983 Indenture") and the Trust Indenture dated as of May 1, 1995 (the "1995 Indenture", and together with the 1983 Indenture the "Indentures") at the place and times stated in the Indentures, or at any other place designated by the Trustee to Customer in writing, in accordance with the following terms: 1. Absolute. Unconditional. and Continuinq Guarantv. This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance by Customer of the obligations (and not of their collectability only) and is not conditioned upon any requirement that the city first attempt to collect any of the Obligations from Customer or on the Bonds or resort to any security or other means of obtaining payment of any of the Obligations or the Bonds. -1- e 2. Liabilitv of Guarantor. The liability of Guarantor hereunder shall be unlimited. e 3. The citv's Freedom to Deal with Customer and Other Persons. The City shall have complete discretion, without giving notice to or obtaining the consent of Guarantor, to deal with Customer and with each other person who now is or after the date hereof becomes liable in any manner for any of the Obligations, in such manner as the city shall decide, and accordingly Guarantor grants to the City on behalf of the holders of the Bonds full authority in its sole discretion and under its powers provided in the Indentures to do any or all of the following without limiting the generality of the foregoing: extend credit, make loans and afford other financial accommodation to Customer at such times, in such amounts and on such terms as the City may approve; vary the terms and grant extensions or renewals of any present or future indebtedness or obligations to the holders of the Bonds of Customer or of any such other person whether before or after termination of this Guaranty; grant time, alter, compromise, accelerate, or extend the time and/or the manner for the payment of the Obligations whether before or after termination of this Guaranty; vary, exchange, release or discharge, wholly or partially, any other guarantor, and compromise or make any settlement or other arrangement with Customer or any other guarantor whether before or after termination of this Guaranty, and if the Obligations are now or hereafter secured, exchange, substitute or release in part or in full all of the security given for the payment and performance of the Obligations. This Guaranty shall be in addition to any other guaranty or other security for the Obligations, and it shall not be prejudiced or rendered unenforceable by the invalidity of any such other guaranty or security. 4. No Dutv of the citv to Advise. Guarantor assumes the. responsibility for being and keeping informed of the financial condition of Customer and of all other circumstances bearing upon the risk of nonpayment of the Obligations and agrees that the city shall have no duty to advise Guarantor of information regarding any condition or circumstance or any change in such condition or circumstance. Guarantor acknowledges that the City has not made any representation to Guarantor concerning the financial condition of Customer. e 5. Unenforceabili tv of Obliaations Aaainst Customer. If for any reason Customer has no legal existence or is under no legal obligation to discharge the Obligations undertaken or purported to be undertaken by it or on its behalf, or if any of the moneys included in the Obligations cannot be recovered in full from Customer by operation of law or for any other reason, this Guaranty shall nevertheless be binding on Guarantor to the same extent as if Guarantor at all times prior to demand by the City for payment hereunder had been, and at the time of such demand was, the principal debtor on all such Obligations. -2- e e e 6. Demands For Pavment. Demands by the city for payment hereunder may be made on any number of occasions. Each demand shall be in writing and shall be effective when handed to Guarantor or placed in the mail addressed or sent by telegraph to Guarantor's usual or last-known-address. A dated statement signed by an officer of the city of the amount of the Obligations at the time owing to the City by Customer shall be conclusive evidence thereof as between Guarantor and the city in any legal proceedings against Guarantor in connection with this Guaranty. Any such statement shall state separately the amount of Obligations owing at the time thereof including all interest, banking charges and commissions and other costs and expenses chargeable to Customer and accrued (on a daily basis) to the date of such statement. 7. Guarantor's Acrreements to Pav. If claim is ever made upon the city for repayment of any amount or amounts received by the city in payment of any of the obligations and the city repays all or part of said amount, then, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing the Obligations, Guarantor shall be and shall remain liable to the City for the amount so repaid to the same extent as if such amount had never originally been received by the city. Interest shall accrue on all sums not paid by Guarantor to the city after demand at the rate of three percent (3%) above the Prime Interest Rate in effect from time to time. 8. Chancres Affectincr Customer or Guarantor. This Guaranty shall continue in force, notwithstanding any change in the name, membership or constitution of Customer or Guarantor or any change of Customer or Guarantor into another form of business entity. 9. Wai vers bv Guarantor. Guarantor waives, to the fullest extent permitted by law, all defenses which at any time may be available to it or Customer by virtue of any statute of limitations. Guarantor waives any right to raise as a defense to the enforcement of this Guaranty any defense arising by reason of any disability or other defense of Customer or by reason of the cessation from any cause whatsoever of the liabilities of Customer and further waives the right to interpose any counterclaim or setoff of any nature. Guarantor also waives all rights of subrogation against Customer until all Obligations, whether or not subj ect to this Guaranty, are satisfied in full. Guarantor further waives notice of default by customer, notice of acceptance of this Guaranty, presentments, notices of protest and notices of every kind and nature including those of any action or nonaction on the part of Customer or the city. Specifically, Guarantor acknowledges that Guarantor may have certain rights under applicable law which, if not waived by Guarantor as hereinafter provided, might provide Guarantor with -3- e e e defenses against Guarantor's liability under this Guaranty under certain circumstances, including, without limitation, (a) any defense Guarantor may have pursuant to civil Code Section 2810, or otherwise, based upon (i) the cessation of liability on the part of Customer at any time after the notes evidencing the Obligations (the "Notes") are executed and delivered, or (ii) any other disability or defense of Customer or any other guarantor, whatever the cause, whether by operation of law or otherwise; (b) any right Guarantor may have pursuant to civil Code section 2825, or otherwise, to be exonerated by any discharge of the Customer from liability under the indebtedness under the Notes by operation of law, even without intervention or omission on the part of City; (c) any right Guarantor may have pursuant to civil Code Section 2845, or otherwise, to require City to proceed against Customer, or any other guarantor, endorser, co-signor or other person, or to pursue or to refrain from pursuing any other remedy in city's power whatsoever, including without limitation, any remedy which Guarantor cannot pursue or which would lighten Guarantor's burden, and the right to be exonerated to the extent Guarantor is prejudiced by any failure by City to do so; (d) until the indebtedness under the Notes is fully and finally repaid, any right of reimbursement or subrogation Guarantor may have pursuant to Sections 2847 and 2848, or otherwise, or any right to otherwise enforce any remedy which city has against the Customer or against any other guarantor, endorser or co-signor, and any right pursuant to statute or by contract or otherwise to require other guarantors, endorsers or co-signors, to contribute to or reimburse Guarantor therefor; (e) Any right Guarantor may have pursuant to civil Code Section 2850, or otherwise, to require City to have any property which may to any extent be security for the indebtedness under the. Notes first applied to satisfy or discharge the indebtedness under the Notes; (f) any defense Guarantor may have based on civil Code Section 2855, or otherwise, that any arbitration award rendered against the Customer alone will not be, or be deemed to be, or be utilized as, an award against Guarantor, or any other guarantor, endorser or co-signor; and HAVING BEEN MADE AWARE OF THE FOREGOING RIGHTS AND DEFENSES, GUARANTOR AGREES THAT GUARANTOR SHALL NOT HAVE, AND GUARANTOR DOES HEREBY WAIVE, ANY AND ALL OF THE FOREGOING RIGHTS AND DEFENSES SET FORTH ABOVE. -4- e e e 10. Subordination to the ci tv. So long as any Obligation remains unpaid or undischarged, Guarantor agrees to subordinate any and all claims against Customer to those of the City upon written demand by the ci ty.. In addition, Guarantor agrees that any indebtedness of Customer to Guarantor is hereby subordinated to the obligations of Customer to the City. Any indebtedness of Customer to Guarantor shall be collected and received by Guarantor as trustee for the city and be paid over to the City on account of the indebtedness of Customer to the city upon demand by the City. 11. Oral Chanqe. etc.. Prohibited. This Guaranty constitutes the final understanding of the City and Guarantor. No provisions of this Guaranty can be changed, waived, discharged or terminated except by a written agreement signed by the City and Guarantor expressly referring to the provision of this Guaranty. No such waiver shall extend to or affect any obligation which is not expressly waived and any such waiver shall not be deemed a continuing waiver unless specifically stated, but instead shall be effective only in the specific instance and for the specific purpose for which it was given. No course of dealing or delay or omission on the part of the City in exercising any right shall operate as a waiver. 12. Warranties bv Guarantor. Guarantor warrants that the making and performance of this Guaranty are and will continue to be within its powers, have been duly authorized and do not and will not contravene any statute, rule of law or judicial decree or administrative order in effect on the date hereof or any provision of any document defining the powers and governing the activities of Guarantor, or of any agreement to which Guarantor is a party or by which it is bound. This warranty is material and shall survive the City's acceptance of this Guaranty and continue so long as this Guaranty remains in force. The City shall be entitled to rely on such warranty, without any duty of further inquiry, whenever it sees fit to grant time, credit or accommodations to Customer. 13. Attornevs' Fees and Leqal Proceedinqs. If Guarantor fails to perform any duties hereunder, breaches any warranties or is otherwise liable to the City (herein collectively termed "defaults"), Guarantor promises to pay all costs of collection and attorneys' fees actually incurred by the City on account of such defaults, whether or not suit is filed, including all attorneys' fees and costs incurred by the city in any bankruptcy proceeding to collect the amounts due hereunder. Guarantor waives its rights, if any, to a trial by jury and agrees that this Guaranty shall be construed in accordance with the laws of the State of California. Guarantor consents to personal jurisdiction in the appropriate state or federal court located in San Bernardino or Los Angeles, California, respectively. 14. Termination of Guarantv. The obligations of Guarantor under this Guaranty shall continue in full force and -5- . . . effect until the City shall have received payment in full of the Obligations and all other amounts due hereunder. 15. Definitions. When used in this Guaranty, the following words and phrases shall have the following meaning: "Customer" means Inland Plaza, a California general partnership, and includes its successors and assigns. "Guaranty" means the Guaranty dated July 15, 1983, as amended hereby and any and all amendments and supplements thereto. The words "herein", "hereof" and "hereunder" refer to this Guaranty as a whole as originally executed and as thereafter amended or supplemented; and the words "now" and "hereafter" and the expression "date hereof" refer to the date indicated below on which this Guaranty was originally executed. "Guarantor" means the individual executing this Guaranty. "Obligations" means (i) the Series 1983A Promissory Note dated July 15, 1983, as amended by Amendment No. 1 to Note, executed by Customer in favor of the City of San Bernardino in the face amount of $2,200,000, and Series 1995A Promissory Note dated as of May 1, 1995, executed by Customer in favor of the City of San Bernardino in the face amount of $225,000, as such Notes have been assigned to Bank of America National Trust and Savings Association, as Trustee, pursuant to the terms of the 1983 Indenture ana the 1995 Indenture (ii) all interest on the foregoing and related banking charges, commissions, costs and expenses (including costs, expenses and attorneys' fees incurred by the city and Trustee in attempting to collect or enforce any of the Obligations regardless of whether a lawsuit is filed and including costs and attorneys' fees incurred in bankruptcy or insolvency proceedings) which are chargeable to Customer either by law or under arrangements with Customer, accrued in each case to the date of payment hereunder. "Obligation" means anyone of the Obligations. "Person" means and includes any individual, partnership, trust, company, corporation or other entity, corporate or unincorporated. "Prime Interest Rate" means the rate charged by the Bank of California, from time to time, as its prime rate. -6- . . . This Guaranty is signed on the date, at the place and by the person set forth below the signature line. -4~ ADDRESS OF GUARANTOR: COVENANT OF SPOUSE I, LtW.-,,,,dlA. A~IJ.e. u)J-=:,oR A. Watson, hereby expressly guarantee the obligations of Sam A. Watson and I jointly and severally guarantee the obligations of Sam A. Watson, a married man. I, the undersigned, as a married woman executing this Guaranty, hereby expressly agree that recourse may be had against my community property, and against my sole and separate property, for all my obli at ions under thi uaranty. , as the wife of Sam signed: Dated: -7- . . . STATE OF CALIFORNIA COUNTY OF ORANGE ) ) On MAY 2, 1995 before me, MARY L. PCRZIO (here insert name and title of the officer) , personally appeared LUCINDA ANNE WATSCN , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person (~ whose name (9) isjle<lXa subscribed to the within instrument and acknowledged to me that kR/she/~ executed the same in ~/her/~ authorized capaci ty (Jiles:), and that by lOOc:l/her /Xbedcx signature (~) on the instrument the person{~), or the entity upon behalf of which the person{s) acted, executed the instrument. WITNESS my hand and offic Signature ~ ... 'Cc- ""'''~ ATRYSEAL i".. . . MARY L. PORZIO :::::.. Notary Public - California ',:~>-~ . f ORANGE COUNTY ':'" '.~.. My Comm Ex.plres MAY 16.1995 seal. (Seal) -8- e e e STATE OF CALIFORNIA COUNTY OF LoS A-rl{;PLES ) ) On ~~ ') ~;qS before me, M",..l-iVl H.r,Pf~.m.,,,, tV. P':~" (here insert name and title of the officer), personally lIpp"'ared S,,;,..,,4. j,lal:rvll , personlllly known--to me (or proved to me on the bllsis of satisfactory evidence) to be thepersonOiil whose nameN} ~are subscribed to the within instrum.ent an~.~cknowledged to me that (he/she/they executed the ~am in ~her/their authorized ~pacityC1~s">, and that by his her/theu signature~ on the instrumenf ~the person~, or entity upon behalf of which the person ()Q acted, executed the instrument. WITNESS my hand and official seal. Signature 1-"/1 11~ N. A..97t/vU'firj;:" (Seal) @.......OFFICIALNOTARYSEAL :" . . . '.' MARTIN HERMAN BERNSTEIN ,~-. . NOtary PublIC - Calilornia "s- . LOS ANGELES COUNTY . . My Comm. Expj,.. JUN 05.1995 -9- e e e SBI!OI0132IDOC\6O(l) .5\1.5\9,5 930 law CONTINUING LIMITED UNCONDITIONAL GUARANTY (STANDBY LOAN) THIS CONTINUING LIMITED UNCONDITIONAL GUARANTY is made as of this first day of May, 1995 by SAM A. WATSON ("Guarantor"). In order to induce the Redevelopment Agency of the city of San Bernardino (the "Agency") to execute a standby Loan Agreement in connection with the remarketing of the city of San Bernardino Industrial Development Revenue Bonds Series 1983A (Inland Plaza Project) (the "1983 Bonds") and to issue the City of San Bernardino Taxable Industrial Development Revenue Bonds Series 1995A (Inland Plaza Project) (the "1995 Bonds", and together with the 1983 Bonds, the "Bonds"), the Guarantor hereby agrees, as follows (all capitalized terms not otherwise defined are defined in section 15 hereof): Guarantor hereby unconditionally guarantees to Agency that Inland Plaza, a California general partnership (the "Customer") will pay when due each obligation to the Agency at the place and times stated in the Standby Loan Agreement, dated as of May 1, 1995 by and among the Agency, the Customer and Bank of America National Trust and Savings Association, as Trustee (the "Standby Loan Agreement") and the Owner participation Agreement, dated as of May 1, 1995, by and between the Agency and the Customer (the "Owner Participation Agreement"), at any place designated by the Agency to Customer in writing, in accordance with the following terms: 1. Absolute. Unconditional. and continuina Guarantv. This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance by Customer of the Obligations (and not of their collectability only) and is not conditioned upon any requirement that the Agency first attempt to collect any of the Obligations from Customer or resort to any security or other means of obtaining payment of any of the Obligations. 2. Liabilitv of Guarantor. The liability of Guarantor hereunder shall be unlimited. 3. The Aaencv I s Freedom to Deal with Customer and Other Persons. The Agency shall have complete discretion, without giving notice to or obtaining the consent of Guarantor, to deal with Customer and with each other person who now is or after the date hereof becomes liable in any manner for any of the Obligations, in -1- . . . such manner as the Agency shall decide, and accordingly Guarantor grants to the Agency full authority in its sole discretion and under its powers provided in the Owner Participation Agreement and Standby Loan Agreement to do any or all of the following without limiting the generality of the foregoing: extend credit, make loans and afford other financial accommodation to Customer at such times, in such amounts and on such terms as the Agency may approve; vary the terms and grant extensions or renewals of any present or future indebtedness or Obligations of Customer or of any such other person whether before or after termination of this Guaranty; grant time, alter, compromise, accelerate, or extend the time and/or the manner for the payment of the Obligations whether before or after termination of this Guaranty; vary, exchange, release or discharge, wholly or partially, any other guarantor, and compromise or make any settlement or other arrangement with Customer or any other guarantor whether before or after termination of this Guaranty, and if the Obligations are now or hereafter secured, exchange, substitute or release in part or in full all of the security given for the payment and performance of the Obligations. This Guaranty shall be in addition to any other guaranty or other security for the obligations, and it shall not be prejudiced or rendered unenforceable by the invalidity of any such other guaranty or security. 4. No Dutv of the Aqencv to Advise. Guarantor assumes the responsibility for being and keeping informed of the financial condition of Customer and of all other circumstances bearing upon the risk of nonpayment of the Obligations and agrees that the Agency shall have no duty to advise Guarantor of information regarding any condition or circumstance or any change in such condition or circumstance. Guarantor acknowledges that the Agency has not made any representation to Guarantor concerning the financial.condition of Customer. 5. Unenforceabilitv of Obliqations Aqainst Customer. If for any reason Customer has no legal existence or is under no legal obligation to discharge the obligations undertaken or purported to be undertaken by it or on its behalf, or if any of the moneys included in the obligations cannot be recovered in full from Customer by operation of law or for any other reason, this Guaranty shall nevertheless be binding on Guarantor to the same extent as if Guarantor at all times prior to demand by the Agency for payment hereunder had been, and at the time of such demand was, the principal debtor on all such Obligations. 6. Demands For Pavment. Demands by the Agency for payment hereunder may be made on any number of occasions. Each demand shall be in writing and shall be effective when handed to Guarantor or placed in the mail addressed or sent by telegraph to Guarantor's usual or last-known-address. A dated statement signed by an officer of the Agency of the amount of the Obligations at the time owing to the Agency by Customer shall be conclusive evidence -2- . e e thereof as between Guarantor and the Agency in any legal proceedings against Guarantor in connection with this Guaranty. Any such statement shall state separately the amount of Obligations owing at the time thereof including all interest, charges and commissions and other costs and expenses chargeable to Customer and accrued (on a daily basis) to the date of such statement. 7. Guarantor I s Aqreements to Pav. If claim is ever made upon the Agency for repayment of any amount or amounts received by the Agency in payment of any of the Obligations and the Agency repays all or part of said amount, then, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing the Obligations, Guarantor shall be and shall remain liable to the Agency for the amount so repaid to the same extent as if such amount had never originally been received by the Agency. Interest shall accrue on all sums not paid by Guarantor to the Agency after demand at the rate of eleven percent (11%). 8. Chanqes Affectinq Customer or Guarantor. This Guaranty shall continue in force, notwithstanding any change in the name, membership or constitution of Customer or Guarantor or any change of Customer or Guarantor into another form of business entity. 9. Wai vers bv Guarantor. Guarantor waives, to the fullest extent permitted by law, all defenses which at any time may be available to it or Customer by virtue of any statute of limitations. Guarantor waives any right to raise as a defense to the enforcement of this Guaranty any defense arising by reason of any disability or other defense of Customer or by reason of the cessation from any cause whatsoever of the liabilities of Customer and further waives the right to interpose any counterclaim or setoff of any nature. Guarantor also waives all rights of subrogation against Customer until all Obligations, whether or not subject to this Guaranty, are satisfied in full. Guarantor further waives notice of default by Customer, notice of acceptance of this Guaranty, presentments, notices of protest and notices of every kind and nature including those of any action or nonaction on the part of Customer or the Agency. Specifically, Guarantor acknowledges that Guarantor may have certain rights under applicable law which, if not specifically waived by Guarantor as hereinafter provided, might provide Guarantor with defenses against Guarantor's liability under this Guaranty under certain circumstances, including, without limitation, (a) any defense Guarantor may have pursuant to civil Code Section 2810, or otherwise, based upon (i) the cessation of liability on the part of Customer at any time after the Standby Loan Agreement and Owner Participation Agreement are executed and delivered, or (ii) any other disability or defense of Customer or -3- e e e any other guarantor, whatever the cause, whether by operation of law or otherwise; (b) any right Guarantor may have pursuant to civil Code section 2825, or otherwise, to be exonerated by any discharge of the Customer from liability under the indebtedness under the Standby Loan Agreement and Owner Participation Agreement by operation of law, even without intervention or omission on the part of Agency; (c) any right Guarantor may have pursuant to Civil Code Section 2845, or otherwise, to require Agency to proceed against Customer, or any other guarantor, endorser, co-signor or other person, or to pursue or to refrain from pursuing any other remedy in Agency's power whatsoever, including without limitation, any remedy which Guarantor cannot pursue or which would lighten Guarantor's burden, and the right to be exonerated to the extent Guarantor is prejudiced by any failure by Agency to do so; (d) until the indebtedness under the Standby Loan Agreement and Owner Participation Agreement is fully and finally repaid, any right of reimbursement or subrogation Guarantor may have pursuant to Sections 2847 and 2848, or otherwise, or any right to otherwise enforce any remedy which Agency has against the Customer or against any other guarantor, endorser or co-signor, and any right pursuant to statute or by contract or otherwise to require other guarantors, endorsers or co-signors, to contribute to or reimburse Guarantor therefor; (e) any right Guarantor may have pursuant to civil Code Section 2850, or otherwise, to require Agency to have any property which may to any extent be security for the indebtedness under the Standby Loan Agreement and Owner Participation Agreement first applied to satisfy or discharge the indebtedness under the Standby Loan Agreement and Owner Participation Agreement; (f) any defense Guarantor may have based on civil Code Section 2855, or otherwise, that any arbitration award rendered against the Customer alone will not be, or be deemed to be, or be utilized as, an award against Guarantor, or any other guarantor, endorser or co-signor; and HAVING BEEN MADE AWARE OF THE FOREGOING RIGHTS AND DEFENSES, GUARANTOR AGREES THAT GUARANTOR SHALL NOT HAVE, AND GUARANTOR DOES HEREBY WAIVE, ANY AND ALL OF THE FOREGOING RIGHTS AND DEFENSES SET FORTH ABOVE. 10. Subordination to the Aaencv. So long as any Obligation remains unpaid or undischarged, Guarantor agrees to subordinate any and all claims against Customer to those of the Agency upon written demand by the Agency. In addition, Guarantor agrees that any indebtedness of Customer to Guarantor is hereby -4- e e e subordinated to the Obligations of Customer to the Agency. Any indebtedness of Customer to Guarantor shall be collected and received by Guarantor as trustee for the Agency and be paid over to the Agency on account of the indebtedness of Customer to the Agency upon demand by the Agency. 11. Oral Chanqe. etc.. Prohibited. This Guaranty constitutes the final understanding of the Agency and Guarantor. No provisions of this Guaranty can be changed, waived, discharged or terminated except by a written agreement signed by the Agency and Guarantor expressly referring to the provision of this Guaranty. No such waiver shall extend to or affect any Obligation which is not expressly waived and any such waiver shall not be deemed a continuing waiver unless specifically stated, but instead shall be effective only in the specific instance and for the specific purpose for which it was given. No course of dealing or delay or omission on the part of the Agency in exercising any right shall operate as a waiver. 12. Warranties bv Guarantor. Guarantor warrants that the making and performance of this Guaranty are and will continue to be within its powers, have been duly authorized and do not and will not contravene any statute, rule of law or judicial decree or administrative order in effect on the date hereof or any provision of any document defining the powers and governing the activities of Guarantor, or of any agreement to which Guarantor is a party or by which it is bound. This warranty is material and shall survive the Agency's acceptance of this Guaranty and continue so long as this Guaranty remains in force. 13. Attornevs' Fees and Leqal Proceedinqs. If Guarantor fails to perform any duties hereunder, breaches any warranties or is otherwise liable to the Agency (herein collectively termed "defaults"), Guarantor promises to pay all costs of collection and attorneys' fees actually incurred by the Agency on account of such defaults, whether or not suit is filed, including all attorneys' fees and costs incurred by the Agency in any bankruptcy proceeding to collect the amounts due hereunder. Guarantor waives its rights, if any, to a trial by jury and agrees that this Guaranty shall be construed in accordance with the laws of the state of California. Guarantor consents to personal jurisdiction in the appropriate state or federal court located in San Bernardino or Los Angeles, California, respectively. 14. Termination of Guarantv. The obligations of Guarantor under this Guaranty shall continue in full force and effect until the Agency shall have received payment in full of the Obligations and all other amounts due hereunder. 15. Definitions. When used in this Guaranty, the following words and phrases shall have the following meaning: -5- - - - "Customer" means Inland Plaza, a California general partnership, and includes its successors and assigns. "Guaranty" means this Guaranty dated as of the first day of May, 1995, and any and all amendments and supplements thereto. The words "herein", "hereof" and "hereunder" refer to this Guaranty as a whole as originally executed and as thereafter amended or supplemented; and the words "now" and "hereafter" and the expression "date hereof" refer to the date indicated below on which this Guaranty was originally executed. "Guarantor" means the individual executing this Guaranty. "Obligations" means any amounts due and owing to the Agency by the Customer as a result of the Agency's obligations under the Standby Loan Agreement and Owner Participation Agreement. "Obligation" means anyone of the Obligations. "Person" means and includes any individual, partnership, trust, company, corporation or other entity, corporate or unincorporated. -6- e e e This Guaranty is signed on the date, at the place and by the person set forth below the signature line. :~ I/.Jj~ ------ ADDRESS OF GUARANTOR: COVENANT OF SPOUSE , . "\ I, U-\CI ~.)(t!'1 I, JKT:S,'\I.j , as the wife of Sam A. Watson, hereby expressly guarantee the obligations of Sam A. Watson and I jointly and severally guarantee the obligations of Sam A. Watson, a married man. I, the undersigned, as a married woman executing this Guaranty, hereby expressly agree that recourse may be had against my community property, and against my sole and separate property, for all my obligations under this Guaranty. ,--C '. Q . '\)., Signed: {\.'\>r,,\.' ) ( (iC,-'\d" J\ '. Dated: '-\'\ \\... ,~ \ c, '-I ,,). 1~ I -7- . . . STATE OF CALIFORNIA COUNTY OF Lff A,v"ELr:: --5' ) ) ...L On. J'1t1~ ,; /0/9.>' before me, (\I\<^t:,,'n H. (l,f'Y"H.5f,>,,, f +'1 j?~'ollt{here insert name and title of the offJ.cer) , personally app~ed SC\.h-I,4, Ldt7 +..5'1> h , personally kno~ to me (or proved to me on the basis of satisfactory evidence) to be the person (.Sj" whose name (~ @are subscribed to the within instrument an~knOWledged to me that Oi'el/she/they executed the ~ in his her/their authorized ~pacity(~), and that by his er/th r signature~ on the instrument the person ~, or 1:: entity upon behalf of which the person (('0 acted, executed the instrument. WITNESS my hand and official seal. Signature /h1..mL H. i2,gn~. (Seal) @.....OFFICIALNOTARYSEAL f~ . MARTIN HERMAN BERNSTEIN >11>-. . Notary PublIC - California . .,~, LOS ANGELES COUNTY " . My Comm. E>pj,es JUN 05,1995 t e ST ATE OF CALIFORNIA ) COUNTY OF ORANGE ) On MAY 4, 1995 before me, MARY L. PORZIO (here insert name and title of the officer), personally appeared LUCINDA A. WAT~ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person (IJ whose name (~ is /...au subscribed to the within instrument and acknowledged to me that .AelsheAAey executed the same in -Imfher/Hleir signatureW on the instrument the person (1.), or the entity upon behalf of which the person(() acted, executed the instrument. Signatur I ~~\ O>'FICIALNOATRYSEAL 1,..~.!.A ., MARYLPORZIO , ::;:,....1'::' ~~;:) Notary PUbilC - California iI~' ..'..,;-;"......A:!i.;; CHANGE COUNTY ~ ", ,,' /1 ~.~~ _./ My Comm E~plres i\1AY 16.1995 ,I -,....... ~-.",......~"'7~ WITNESS my hand and official e (Seal) e . . ** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** RESOLUTION AGENDA ITEM TRACKING FORM Meeting Date (Date Adopted): 1 i -15 - 0:1- Vote: Ayes ~..JI Nays Change to motion to amend original documents: R.. L/ ;)... Item # .-&- Abstain Reso. # On Attachments: L Contract term: Note on Resolution of Attachment stored separately: -=- Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY By: Date Sent to Mayor: 4- - liP - 0 "Y Date of Mayor's Signature: -4 - \ (:, -6;) Date ofClerk/CDC Signature: 4-( 1-0.:2- Date Memo/Letter Sent for Signature: ~ 1\ 60 Day Reminder Letter Sent on 30th day: 90 Day Reminder Letter Sent on 45th day: See Attached: See Attached: See Attached: Request for Council Action & Staff Report Attached: Updated Prior Resolutions (Other Than Below): Updated CITY Personnel Folders (6413, 6429, 6433,10584,10585,12634): Updated CDC Personnel Folders (5557): Updated Traffic Folders (3985, 8234, 655, 92-389): Copies Distributed to: City Attorney Parks & Rec. Code Compliance Dev. Services Public Services Water Police Notes: Resolution # er c[)C..h.oo.:<. -dO Absent B- Nnll/Void After: ~ Reso. Log Updated: Seal Impressed: ./ Date Returned: ~-f/ -0;)- YesL Yes No By_ By_ By_ By_ By_ NOt No No No_ Yes Yes Yes EDA / MIS Finance Others: BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.) Ready to File: ~ Date:") .. %,-{);::J- Revised 01/12/01