HomeMy WebLinkAboutR05-Economic Development Agency
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DEVELOPMENT DEPARTMENT
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REOUEST FOR COMMISSION/COUNCD..ACTION
FROM: KENNETII J. HENDERSON
Executive Director
SUBJECT: RADISSON HOTEL - CONSENT
OF ASSIGNMENT AND
TRANSFER
DATE: October 12,1994
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Svnonsis of Previous Commlsslon/CouneWCommittee Actlon(s):
None.
Recommended Motion(s):
(CommunItY Develonment Commission)
MOTION A: That the Community Development Commission on behalf of the Redevelopment Agency of the City of
San Bernardino consider and take possible action to adopt resolutions regarding the transfer of real
property interest and rights under Owner Participation Agreement relating to Ihdio.<um Hotel property
from Maruko to Foster-Khoury International, Inc.; and from Foster-Khoury International, Inc., to an
afIiliate of Northwest Lodging, Inc.
(Motions continued to next page....)
~ator
If&OJ,,=J~('!u/;f if
KiNNETHJ.HENDERSON I
Executive Director
Contact Person(s): Kenneth 1. Henderson/Jolm HoelZer
Phone:
5081
Project Ares(s):
Central City (CC)
Ward(s):
One(J)
Supporting Data Attsched: Staff Report: Resolutions
FUNDING REQUIREMENTS: Amount: $ N/A
N/A
Source:
Budget Authority: N/A
Commission/Council Notes:
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COMMISSION MEETING AGENDA
MEETING DATE: 10/17/1994
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Agenda Item Number: I: )
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REQUEST FOR COMMIQON/COUNCn.. ACTION
Radisson Hotel - Consent of Assignment and Transfer
September 26, 1994
Page Number -2-
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Recommended Motionls) Continued:
(Mavor and Common Council)
MOTION B: That the Mayor and Common Council consider and take possible action to adopt
resolutions regarding approve in concept the transfer of real property interest
and rights under Owner Participation Agreement and Convention Center
Sublease and Operating Agreement relating to the Radisson Hotel property from
Maruko to Foster-Khoury International, Inc., and from Foster-Khoury
International, Inc., to an affiliate of Northwest Lodging, Inc.
BJL:lag: 1 O.Q 1-02.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 10/17/1994
Agenda Item Nnmber: '1
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DEVELOPMENT DEPARTMENT
ECONOMIC DEVEWPMENT AGENCY
STAFF REPORT
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Radisson Hotel- Consent of Assitmment and Transfer
Foster-Khoury International, Inc., a California corporation, is proceeding to purchase the
Radisson Hotel and Convention Center at 295 North "E" Street from Maruko, Inc., the current
owners. Under the terms of the Agency's Owner Participation Agreement it is required that
Maruko obtain written approval of both the Agency and the City in order to convey title and
rights, including the benefits of the OPA. As is customary, Foster-Khoury has requesteaissuance
of estoppel certificates to be delivered in connection with both the OP A and the Sublease.
Further, Foster-Khoury has asked for the City and Agency to consent to a transfer of stock to His
Royal Highness Shaikh Mohamed Bin Sulman AI KhaIifa, the younger brother of His Royal
Highness the Amir of Bahrain.
At the same time, the City and the Agency will want Foster-Khoury to assume all ofMaruko's
obligations, without exception, to the provisions of the OPA and the Sublease. Pursuant to this
arrangement Foster-Khoury will become responsible for performance under the agreements
including those previously due but unperformed, if indeed any such exist. To clarifY the current
status of the property, the Agency and City will issue a Certificate of Compliance to indicate
completion of construction under the OP A.
o The staff has been informed that it is the intention of Foster-Khoury to enter into a lease with
Northwest Lodging for operation of the hotel. Several proposed sets of deal points have been put
forward but no agreement is available for review at this time. Northwest operates 12 hotels and
motels on the West Coast and is affiliated with Hawaii based Aston Hotels and Resorts which
manages thirty (30) hotels and resorts. Additional information on Northwest is attached as
Exhibits I and 2.
After a formal contractual arrangement has been executed between Foster-Khoury and
Northwest, the necessary Commission and Council resolutions and documentation will be
submitted for consideration and formal approval at a subsequent meeting. It is requested at this
time that both the Commission and Council approve and consider the transfer to Foster-Khoury
with the understanding that this action would still require official approval of the final City and
Agency documents if fina\ documents have not been received prior to the meeting. In the event,
however, that staff receives and can review all final documents, it may be possible to have
resolutions ready for adoption at the October 3, 1994 meeting.
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KENNETH J. HENDERSON, Execntive Director
Development Department
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COMMISSION MEETING AGENDA
MEETING DATE: 10/17/1994
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Agenda Item Number:
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NORTHWEST LODGING INC.
Overview
Northwest Lodging, named for its start in the Pacific Northwest, is a hotel management
company that currently operates twelve hotels and motels with 1,700+ rooms in locations
throughout Washington, Oregon, and California. It currently operates eight Ramada Inns and
Hotels -- four in Washington (Downtown Seattle, Bellingham, Kennewick, and Olympia), three
in Oregon (portland Airport, Beaverton, and Corvallis), and one in California (San Francisco).
It also operates a Howard Johnson Lodge in Tacoma, W A and a Howard Johnson Hotel in San
Francisco, California. Additionally, it operates the WestCoast Everett Pacific Hotel &
Convention Center in Everett, Washington, and the Execulodge Hotel in Salem, Oregon.
Northwest Lodging, Inc. is affiliated with Seattle based, Hotel Food & Beverage Inc, an
operator of hotel based restaurants, meeting and banquet facilities, and catering services. Both
companies are also affiliated with Hawaii based, Aston Hotels and Resorts. Aston manages
more than thirty hotels, condominium resorts, and resort hotels, cumulatively valued in excess
of $1. 6 billion.
Northwest Lodging, Inc. intends to expand with the addition of three to four new properties per
year over the next 5 years to reach our target of some 20 managed hotels in the Western U.S.
Each hotel/motel added, enhances the referral base of the portfolio. Northwest Lodging Inc.
operates AAA-rated "Two Diamond" and "Three Diamond" hotels and motels varying from
"limited service" motels to "full service conference center" hotels.
GrowthlProfit Strategy
Northwest Lodging Inc. has achieved superior growth and net revenues for its properties
because ofits:
*
Effective Flagging Strategy. As the holder of now ten franchise agreements with
Hospitality Franchise Systems, Inc. (the parent of Ramada, Howard Johnson, and Days
Inn), it has demonstrated its ability to expediently convert hotels to an established brand
in order to add value to the property in the consumer's eyes as well as to add direct
bottom line impact by significantly increasing reservations. The management team has a
proven track record ofma,nmhing the benefits of the franchise affiIiation.
*
Western Focus. It is committed to hotel operations in California, Oregon, and
Washington. Its management team is west coast based and can respond to both local
emergencies and regional marketing conditions.
*
Growth Orientation. Northwest Lodging, Inc. is a young company in an active period of
growth. In its first four years of operation, it has moved successfully to operate twelve
hotels valued in excess of $1 00 Million.
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Synergy. With its affiliated companies, Hotel Food & Beverage Inc and ASTON Hotels
and Resorts, the combined portfolio of all properties under management is valued in
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excess of$1. 7 Billion and includes more than 40 hotels, motels, resort properties, and
hotel based restaurants, meetings and banquet facilities, and conference/convention
facilities in four states.
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ASTON Relationship. Northwest Lodging, Inc. shares operating philosophies and a
commitment to quality operation with ASTON Hotels & Resorts. This 5,000+ room,
Honolulu-based hotel management company is owned by Mr. Andre S. TatJ."ouet,
Northwest Lodging, Inc.'s Chairman. Operating in the very competitive Hawaiian
market, ASTON Hotels & Resorts has a thirty+ year reputation for generating profits in
operating properties in the AAA-rated "Two Diamond" to AAA-rated "Four Diamond"
luXIUY resorts range.
.
Range of Hotels. Northwest Lodging Inc operates hotels that range in size from 66 to
250 rooms and in scope from a "rooms-only" inn in Bellingham to the WestCoast
Everett Pacific Hotel & Convention Center with more than 11,000 sq ft of meetings,
banquet, and conference facilities.
.
Marketing and Sales. Northwest Lodging Inc. has the marketing and sales ability to
generate results. This is due to the organized, well-trained efforts of qualified sales and
marketing people, in addition to the aggressive sales activities of each local property
team. Northwest Lodging Inc. directs and monitors sales and marketing programs on an
ongoing basis that guarantee the greatest possible growth opportunities in revenue and
rate.
In addition to the local on-property sales and marketing team, each hotel benefits from
the Northwest Lodging sales and marketing team of more than 20 people on the west
coast, plus the sales and marketing team of more than 30 sales persons selling worldwide
for ASTON and Northwest Lodging managed properties.
.
Presetving and Enhancing Property Values. Northwest Lodging, Inc. applies a rigorous
preventative maintenance program at each hotel to enhance property value, increase
guest safety, and reduce the cost of insurance. During the Due Diligence/Transition
period, a complete "OPPORTUNl1Y PLAN" is created for the owner showing
optimum goals and targets under favorable conditions. Following the ASTON tradition,
Northwest Lodging identifies the long term and short term action step s necessary to
maximize the Opportunity Plan. A few of the critical items reviewed include:
A complete Sales and Marketing evaluation,
A property specific training program evaluation,
A risk management audit,
A review of financial and managerial controls,
An asset review of all plant and equipment, and
A franchisor services evaluation.
We manage both the operating business and the physical plant equally as a part of a
holistic strategy to improve the quality of the guest experience and increase the value of
the property.
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Workouts. Northwest Lodging, Inc. has successful experience working as court
appointed Receiver, and working with Courts, Bank REO Departments, Trustees, and
Creditors in situations involving receivership, foreclosure and court-ordered estate-
liquidation. It is familiar with the processes required to remove liens, restructure debt
and satisfY the requirements imposed by these proceedings. It has the flexibility,
patience and energy to participate in "work out" situations as a constructive facilitator to
all of the involved stakeholders."
Identifying "Turn Around" Opportunities
Northwest Lodging, Inc. restores "troubled" or "distressed" properties to profitability by
implementing the management strategy discussed in the next section. Before considering
Northwest Lodging, Inc. 's prescription for improvement, it is helpful to consider the underlying
causes of distress that may be found in a "troubled hotel:"
*
Absentee owner. Troubled hotels typically suffer from the ownership or management
company visiting the property only once or twice per year. This inattention may be
caused by an owner with too many distractions, the age or infirmity of the owners, or a
lack of understanding of the active role which must be played by the owner or the
management company.
*
Complacency/ Acceptance of the Status Quo. The owners, managers and staff of a
"troubled" hotel will frequently tolerate:
Failure to maximize sales and marketing opportunities,
Ineffective housekeeping,
Out-of-control receivables,
Lack of basic preventative maintenance,
Excessive inventories,
Obvious safety problems,
Poor franchisor/franchisee relations.
*
Out-of-Control Labor Costs. Labor is the most important "controllable" cost of a hotel.
Its control requires a level of management attention which is typically absent in a
"troubled" property.
*
Numerous Insurance Losses. Workers compensation expense is frequently increased by
accidents caused by improper training of the staff and unsafe conditions n the workplace.
Liability and property loss runs are often a reflection of poor physical security, lack of
appropriate guest safety programs, and lack of management ability to appropriately
resolve guest claims.
*
Deferred Maintenance. Essential preventative maintenance has frequently been deferred
on both the hidden mechanical parts of the hotel and on cosmetic areas--painting, wall
vinyl, landscaping--which are noticeable by guests.
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Declining product. Frequently "troubled hotels" exude a sense of having declined from a
previous higher standard. Often the strategy to maintain occupancy in the face of this
"decline" has been to reduce prices relative to the competition.
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Lowered Market Position. "Troubled hotels" frequently succumb to the temptation to
achieve high occupancy levels and a perception of success by reducing rates. Over a
period of time, the hotel finds itself competing for a lower-profit market segment than it
should given its true quality.
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Misuse of cash. Frequently, "troubled hotels." even with many of the problems noted
above, have significant cash flows, but have had cash removed to support other ventures
of the owners. This frequently leads to excessive accounts payable, unpaid mortgages
and late payment of property taxes.
.
Late, or no Financial Statements. Usually, "troubled hotels" do not produce accurate
and/or timely financial statements.
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Over-capitalization. Sometimes hotels have been constructed at a cost per room which
exceeds the ability of the market to generate sufficient business to cover expenses.
Northwest Lodging Inco's Turn-Around Program
Northwest Lodging, Inc. has a management strategy which is designed to rapidly cause a
"distressed" hotel to achieve its highest potential and then maintain this performance over the
long run. The key elements of the program are:
.
Empower General managers. The Hotel's General Manager is empowered as the local
Chief Executive Officer (CEO). This means that the focal point for decisions about the
hotel will be a fully-accountable local manager and not some distant, anonymous
corporate staff:
.
Corporate Consultants. The corporate staff develops goals and standards for the
properties rather than issuing commands. The Northwest Lodging, Inc. corporate staff
have responsibility for functional areas of the business--sales, safety, quality, physical
assets, financial assets, etc.-- and work on a "consulting" basis with the General
Managers and their staffs to implement programs. The corporate staff also assists in
developing a "turn around" plan for each property which allows it to reach its highest
achievable performance level.
.
Everyone is part of Sales. Everyone working at Northwest Lodging, Inc. hotels is part
of the Sales team The General manager is expected to lead the sales effort assisted by
the Sales Director and the desk staff: But all the other employees of the hotel--
housekeeping, drivers, maintenance, laundry, etc. -- have a responsibility to make sure
that our friendliness, professional demeanor, and effective performance encourage repeat
business.
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0 . Safety. Implement risk management programs corporate-wide to include comprehensive
hotel safety programs: Safety audits, property, liability and workers compensation
insurance procurement, centralized claims management, and centralized coordination of
third-party safety inspections.
. Rate Strategies. An annual room rate strategy (rack rates, proposed reduced-rate
programs, etc.) is developed with corporate concurrence, but General Managers have
the authority and responsibility to make day-by-day changes within the strategy. The
Vice President, Sales and Marketing consults daily with General Managers to assure that
these decisions are being made in as optimal a manner as possible.
. Pay levels. Personnel compensation issues including wage levels, benefits and bonus
programs are reviewed personally by the President. Northwest Lodging, Inc. has found
that corporate review of these matters improves the fairness and consistency of
compensation administration. It also eliminates the possibility that hasty personnel
decisions could inadvertently reduce the economic viability of the hotel
. Outside Contracting. General Managers are delegated the authority to contract for any
service which must be performed within 24 hours in order to avoid serious damage to
the hotel or its sales program, but all other contracting requires corporate co-approval.
This assures that contracts for security services, landscaping, or other maintenance
services are let in a way that meets all of Northwest Lodging, Inc.'s bidding and conflict-
0 of-interest standards.
. Capital improvements. Decisions about capital improvements are made at the corporate
level based on the recommendation of the General Manager and the corporate staff The
corporate staffis also involved in replacement versus repair decisions on major
equipment--repairing only where the remaining life is longer than 24 months and/or the
total lifetime cost of expected repairs and operation of the old unit is less than the
expected operation, maintenance and financing cost of a new unit.
. Key Vendor Programs. Each hotel is expected to utilize certain key vendors-osuch as
for linens or cleaning supplies--where a corporate-wide buying program has been
initiated in order to maintain quality control and/or reduce costs.
. Centralized Accounting. Accounting and financial services are highly centralized.
Having delegated a high degree of autonomy to the local property, financial reporting
and control systems are vigorously monitored for indications of business problems or
financial malfeasance. Aspects of these programs include daily review of sales reports,
daily monitoring of bank deposits and disbursements, unannounced field audits, monthly
on-site financial reviews, and daily review of detailed "night audit" reports and
documents.
. Timely Financial Reporting. Monthly "Flash" financial reports are issued before the
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tenth of each month so Northwest Lodging, Inc. management can react to developments
and report to owners on a timely basis. Final financial packets with the appropriate
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variance analysis and related action steps are distn"buted to owners by the twentieth or
each month. This includes an overview of each critical area such as:
Operations,
Marketing and Sales,
Finance and Accounting,
Capital Projects and Renovations,
Maintenance, and
EmployeeIHuman Resources.
· Preventative Maintenance. An exhaustive preventative maintenance program is
implemented at each hotel and administered by the maintenance personnel The ptupose
of the program is to assure that all mechanical and safety equipment is performing
satisfactorily and all repairs and adjustments are made as required. Northwest Lodging,
Inc. explicitly tries to avoid "emergency" repairs which disrupt the work schedule of the
hotel staff; frequently inconvenience or endanger the guests, and often require
extraordinary expense for outside professionals due to overtime or expedited shipment
of parts.
.
Training. Training and the opportunity for advancement by all its employees is an
essential part of the Northwest Lodging, Inc. strategy. It supports the "CHA" (Certified
Hotel Administrator) Program of the American Hotel & Motel Association, other
AlIMA programs, and University hotel education programs by reimbursing staff tuition
payments. It emphasizes exchanges of information at the peer level-- General Manager
meetings, Head Housekeeper meetings and Maintenance Manager meetings. It also
takes maximum advantage of the wide range of training programs offered by its
franchise companies for individual and group training.
.
Inside versus Outside Maintenance. Outside contractors are utilized for non-routine
maintenance and repairs such as major plumbing or electrical repairs, large-scale rug
cleaning, construction projects, etc. The goal is to keep the hotel staff focused on guest
services and to secure the payment terms, warranties, pennitting, liability insurance,
professional skills, and self-management provided by outside vendors.
.
Connnunity Participation. Participation in local connnunity groups (such as the local
Chamber ofConnnerce and Visitors bureau) by Northwest Lodging, Inc. General
Managers is supported as a way to develop customers, financing sources and
information about local economic conditions.
.
Inspect what you Expect. Finally, Northwest Lodging, Inc. audits the performance of
each hotel in all areas to measure progress and assist in setting goals. Inspections, that
occur at least monthly, include its Corporate Officer Inspection Program, franchise
company inspections, inspections by insurance underwriters and a stringent safety
inspection program. The goal is to identify the areas of complacency and under-
achievement so that its hotels achieve superior results for quality, safety and sales.
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HOTELS OPERATED BY NORTHWEST LODGING, INC.
· RAMADA INN DOWNTOWN SEATILE, WASHINGTON
120 guest rooms in the heart of downtown Seattle, along the Monorail, walking distance to Westlake Mall,
Seattle Center and the Space Needle, Pike Place Market and many additional tourist attractions. We offer spacious
guest rooms. remote control T.V., cozy restanrant and lounge, meeting and reception rooms. (206) 441-9785
· RAMADA INN GOVERNOR HOUSE, OLYMPIA, WASHINGTON
125 deluxe guest rooms, rated "Olympia's finest hotel" by Best Places in Western Washington, Executive floor,
heated pool, spa, outstanding restaurant and lounge, conference, meeting and banquet facilities for up to 700.
Complete fitness center, cable T. V., kitchenettes available, only four blocks from the Capitol Campus.
(206) 352 7700
· RAMADA INN AND CONFERENCE CENTER PORTLAND AlRPORT, PORTLAND, OREGON
202 deluxe guest rooms with 98 mini suites. Only five minutes from the airline terminals, with free shuttle
service, microwaves and wet bars, free movie and sports channels, heated pool, fitness room, jacuzzi, conference
meeting, and banquet facilities for up to 1200. (503) 255-6511
· RAMADA INN BELLINGHAM, WASHINGTON
66 spacious guest rooms, Whatcom County's most convenient and centrally located hotel, between Bellis Fair
Mall. Western Washington University and the Alaskan Ferry Terminal, heated pool, free cable T.V., free
continental breakfast, small meeting facilities. (206) 734-8830
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RAMADA INN BEA VERTON, OREGON
143 spacious guest rooms in the heart of Beaverton just offHwy. 217 and featuring heated swimming pool, free
continental breakfast, free movie and sports channels; kitchenettes available, Executive floor, fitness, meeting and
hospitality room. (503) 643-9100
.
HOWARD JOHNSON LODGE TACOMA, WASHINGTON
144 comfortable, newly renovated guest rooms, conveniently located just off Interstate 5, free movie and sports
channels, heated pool, "kids fun zone"; only minutes from Fort Lewis and McCord Airforce Base. (206) 535-3100
.
RAMADA INN AND CONFERENCE CENTER CORVALLIS, OREGON
120 spacious guest rooms next to Oregon State University. Full service hotel offering O'Callahans Restaurant
and Lounge. Heated pool, kitchenettes available, banquet, conference, and meeting facilities for 1,000. All
visiting sport teams stay at hotel. (503) 753-9151
.
EXECULODGE SALEM, OREGON
114 rooms located in the heart of Salem's downtown area with shopping, theaters and historical sights within
walking distance, Black Angus restaurant on premise, free continental breakfast, jacuzzi and sauna, VCR and
movie rental. (503) 363-4123
.
RAMADA INN AT UNION SQUARE SAN FRANCISCO, CALIFORNIA
120 deluxe rooms in the heart of Union Square. Within walking distance of shopping, cable cars, Chinatown and
the fabulous sights of Fish erman's Wharf. Relax in anyone of our deluxe accommodations, the Huckleberry Finn
Restaurant or the Torn Sawyer Bar. (415) 673-2332
.
HOWARD JOHNSON PICKWICK HOTEL SAN FRANCISCO, CALIFORNIA
189 refurbished guest rooms located downtown with outside city views. Rooms are complete with in room coffee
makers, personal safe, color t.v., pay movies and personal voice mail. Meeting rooms and banquet facilities
available. (415) 421-7500
.
WESTCOAST EVERETT PACIFIC HOTEL & CONVENTION CENTER EVERETT, W A
250 deluxe guest rooms and suites just 20 minutes north of Seattle, Everett's premier hotel features indoor pool,
fitness center, whirl pool and sauna; dining and entertainment in the Everett Roaster & Ale House, and more than
11,000 square feet of meeting, convention, and banquet facilities. (206) 339-3333
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REFERENCES
ANDRE S. TATIBOUET
Mr. Richard A Coons
Managing Partner
Deloitte & Touche
Suite 1700
1132 Bishop Street
Honolulu, HI 96813
(808) 543-0700
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Mr. Lawrence M. Johnson
President and COO
Bancorp Hawaii Inc.
130 Merchant Street
Honolulu, HI 96813
(808) 537-8220
Mr. Roy Doumani
President and CEO
World Trade Bankcorp
9944 Santa Monica Blvd.
Beverly Hills, CA 90212-1691
(213) 551-0100
Jerrold M. Michae~ Ph.D.
Dean
School of Public Health
University of Hawaii
1960 East-West Road
Biomedical Sciences Bldg. Room D-209
Honolulu, HI 96822
(808) 956-8491
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Mr. Malcolm Tom
Partner
KPMG Peat Marwick
Pauahi Tower, Suite 2100
P.O. Box 4150
Honolulu, HI 96812-4150
(808) 531-7286
Mr. Robert G. Reed ill
Chairman and CEO
Pacific Resources Inc.
733 Bishop Street
Honolulu, HI 97813
(808) 547-3111
Mr. Don Horner
President
First Hawaiian Credit Corp.
Senior Vice President
First Hawaiian Bank
(808) 525-6161
Mr. Kent M. Keith
President
Chaminade University of Honolulu
3140 Waialae Avenue
Honolulu, HI 96816-1578
(808) 735-4741
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lAWRENCE P. HORWITZ
Mr. Martin A Steele
Vice President & Manager
Seafirst Bank
Columbia Center
701 Fifth Avenue, Floor 47
Seattle, WA 98111-3085
(206) 358-3144
John V. Rindlaub
Chairman
Seafirst Bank
Columbia Center
701 Fifth Avenue, Floor 56
Seattle, WA 98104
(206) 358-3100
Mr. Rick Tuttle
Controller, City of Los Angeles
Room 220
City Hall
Los Angeles, CA 90012
(213) 485-5066
Ms. Susan K Swartz
Partner
KPMG Peat Marwick
3100 Two Union Square
601 Union Street
Seattle, W A 98101
(206) 292-4212
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Richard E. Keefe
Managing Partner
Foster Pepper & Shefehnan
1111 Third Avenue
Seattle, WA 98101
(206) 447-4400
Henry Silverman
Chairman & Chief Executive Officer
Hospitality Franchise Systems, Inc.
339 Jefferson Road
Parsippany, NJ 07054-0278
(206) 428-9700
John Ueberroth
Principal
The Contrarian Group
P.O. Box 7322
Newport Beach, CA 92658
(714) 720-9646
TIDl Marsh
Director of Community Relations
Seattle SuperSonics
190 Queen Anne Avenue N
Seattle, WA 98109
(206) 281-5815
Randy Garfield
Executive Vice President
Wait Disney W orId Attractions
PresidentlWalt Disney Travel
P.O. Box 10000
Lake Buena Vista, FL 32830
(407) 828-4640
Mr. Larry L. Linenschmidt
Vice President
Wells Fargo Real Estate Group
12222 Merit Drive
Dallas, TX 75251
(214) 661-8980
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LAWRENCE P. HORWITZ
2200 Fifth Avenue, Suite 301
Seattle, W A 98121
(206) 389-9860 (office) (206) 282-2622 (residence)
Svnoosis
A dynamic, highly experienced executive with proven success in management, sales, marketing,
administration, finance, team building and motivation. Especially skillful in:
· Maintaining disciplined control and developing financial safeguards while building and
expanding established bases of business.
· Exercising entrepreneurial talents in start-up and turn-around situations.
· Strategically planning for growth and repositioning businesses for higher and better
use of existing resources
· Creating and managing divisional and departmental organizations, establishing goal-
oriented personnel standards and tracking systems.
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Professional Accomolisbments
Growth and Exvansion
As co-founder and President/CEO, directed the acquisition and repositioning of a $100 million
portfolio of hotel and motel properties over a four year period, successfully turning around more
than fourteen businesses which had been operating as Bank OREO, under receivership or
reorganization, or under the supervision of bank special credits departments. Directed financing
activities, recruited and assembled a team of seasoned professionals to allow for continued growth
and expansion. Created second company to focus on operating food and beverage businesses
within hotels. Combined sales of both companies will exceed $40 million during fifth year of
operations.
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As Senior Vice President/Sales and Marketing, directed all sales, marketing and reservations
activities for 39 hotels and resorts in Hawaii, San Francisco and Mexico. Established international
sales offices, field sales network, public relations program and marketing research function.
Established marketing standards for hotels, sales forecast and deviation tracking program for sales
and marketing employees, incentive and tracking program for sales managers, and marketing
training program for non-marketing employees. Developed cooperative marketing/advertising
programs with national partners contributing in excess of $1 million. Created marketing alliance
programs with non-competing hotel chains and with nationally branded consumer products
companies. Implemented centralized negotiations and purchasing for collateral production,
printing and advertising. Established chain-wide image campaign and budgeting/accounting
systems for sales division and individual hotels to monitor advertising and marketing program
costs.
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Lawrence P Horwitz
Page 2
Turn-Around Situation
Became President of 85-year-old travel company when it was acquired by $2 billion parent
o~zation. Added new products and services to expand into luxury and incentive travel markets.
Directed relocation of company to corporate headquarters, including hiring and training of 52 new
employees. Increased sales from $16 million to $28 million (75%) in two years, reversing seven
year slide that led to company sale.
Start-UD Situation
As Vice President and General Manager of a new division of a major retail travel company,
o~zed the sales, marketing, product development, reservations and operations systems.
Directed development of new products to Europe, Hawaii, Reno, Mexico, China and ski areas.
Created conunercial travel products to offer corporate accounts. Led sales and marketing team as
division grew from zero to $135 million in three years.
Stratef!ic Planninf!
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As Vice President/Corporate Planning, developed strategic plan for corporate travel services and
leisure travel opportunities, identified new services and operating systems, and implemented a long-
term corporate marketing program for $400 million company. Directed conunercial services
automation project and directed product development and marketing for special travel agency
programs.
Administration
As Vice President Marketing - Leisure Travel for a $2+ billion travel and hospitality corporation,
developed parent company marketing division to consolidate negotiations for overrides, wholesale
contracts and marketing programs. Created and implemented cooperative marketing programs
with domestic and international tourist boards, visitor associations and hotel chains. Reo~zed
and directed national sales team, resulting in increased sales of nearly $80 million.
Chronolol!ical Experience
1990 - Present
Northwest Lodging Inc., Seattle, Washington
President/CEO
Hotel Food & Beverage, Inc., Seattle, Washington
President/CEO (founded 1994)
1987 - 1990
Aston Hotels & Resorts, Honolulu, Hawaii
Senior Vice President - SaleslMarketing (1987 - 1990)
Vice President - Marketing Services (1987)
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Lawrence P Horwitz
Page 3
1981- 1987
Carlson Companies, Carlson Travel Group, Minneapolis, Minnesota
Vice President/Marketing, Leisure Travel (1986-1987)
President, Cartan Travel (1984 - 1986)
Vice President/Sales & Marketing, Firstours (1982 - 1984)
Vice President/CoIporate Planning, First Travel (1981 - 1982)
1980 - 1981
Coopers & Lybrand, Los Angeles, California
Consultant - Finance, Management & AccoWlting Group
1978 - 1980
First Travel COIporation, Los Angeles, California
Manager, Special Projects
Community Service
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· Supporter of Woodland Park Zoological Society, Pacific Science Center, March of Dimes,
Juvenile Diabetes FOWldation, ARC of Benton COWlty, YMCA of Greater Seattle, Queen
Anne Helpline, Poncho, Seattle Repertory Theatre, Boys and Girls Clubs, Jewish Federation of
Greater Seattle
· Board member, Anti-Defamation League, Pacific Northwest Region
· Member, Board of Trustees, The Evergreen School
· Member, Seattle Chamber of Commerce
· UCLA Chancellor's Associates
· UCLA Graduate School of Management Jacoby Associates
Education
University of California, Los Angeles
MBA, Finance and AccoWlting (1980)
BA, Political Science (1976)
Awards
State of Hawaii Senate Citation for "exceptional contributions. . . to the state of Hawaii"
State of Hawaii House of Representatives Citation for "exceptional job to promote the state"
UCLA Chancellor's Citation for "extraordinary achievement and outstanding contribution"
Interests
Active adventure traveler -- have visited more than 50 COWltries and all continents, including
Antarctica, the North Pole and the Himalayas.
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DE~LO'PMENT DEPARTME9T
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
MEMORANDUM
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TO: Mayor Minor
Members of the City Council
FROM: KENNETH 1. HENDERSON
Executive Director
SUBJECT: RADISSON HOTEL - CONSENT OF ASSIGNMENT AND TRANSFER
DATE: October 14, 1994
COPIES: File
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Following the distribution of the agenda package for the October 17, 1994 meeting of the Council
and Commission, staff received executed copies of final documents from the principals in the
Radisson hotel purchase and lease transaction. The attached lease is between the proposed owner
(Foster-Khoury/Rabweh) and the proposed operator (ARK ServiceslNorthwest Lodging). Six
attached resolutions would be necessary to approve the contemplated transaction which would
then become final if Foster-Khoury was successful in obtaining the hotel in the sales proceedings
to be held by the bankruptcy court on November 15, 1994.
BASIC TRANSACTION STRUCTURE
1. Maruko, Inc., will sell the Hotel at auction on November 15, 1994. Maruko will transfer
its rights under the OP A and Operating Agreement and under the Sublease to Foster-
Khoury.
2. The principals of Foster-Khoury will sell their shares to Rabweh International
Corporation, a California corporation solely owned by the Sheikh, which will be the owner
of the Hotel and lessee of the Convention Center.
3. Rabweh will lease the Hotel and Convention Center to ARK Services Company, a new
company formed to operate the Hotel and Convention Center, and an affiliate of
Northwest Lodging. Background on Northwest Lodging was provided in the staff report
dated October 12, 1994.
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KJlI:.JBII:JIg910.01.mcm
AGENDA ITEM 15
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DEVELOPMENT DEPAR~ STAFF REPORT
Radisson Hotel - Consent of Assignment and Transfer
October 13,1994
Page Number -2-
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4. The obligations of ARK under the Hotel lease with Rabweh will be guaranteed by
Northwest Lodging. The City and Agency will be made third party beneficiaries of the
guarantee.
5. Rabweh will remain fully liable to the City and Agency, notwithstanding the lease to ARK.
PROPOSED LEASE PROVISIONS
The following salient points are contained in the attached lease:
a Leased Premises: Generally the leased premises include the hote~ the Convention Center,
rights in the parking structure; and all furnishing, fixtures, and equipment. This includes
the benefits available under the existing Development Agreements between Maruko and
the City/Agency (approximately $1,420,000 remains to be paid by the Agency under these
agreements. )
b.
Term: The lease is for 10 years with two 10 year options to renew. ARK can terminate
the lease with 180 day's notice after the first two years. ARK can do so without cause and
without liability to Rabweh but ARK will give up any investment it has made in the
property.
c. Rent: Rent is free for the first three months. Minimum rent is $30,833 per month
thereafter, rising to $36,666 per month by the end of the sixth year. Tenant will also be
responsible for the Convention Center rent under the City's Sublease.
d. Cutover Fund: Rabweh will place $500,000 in a fund to be used to pay for various repairs
and obligations.
e. Improvements by Tenant: ARK will install a minimum of$I,SOO,OOO in FF&E
improvements during the initial lease term. These improvements and other investments in
the property will be secured by a deed of trust for the Hotel in first position.
f. Right of First Refusal: ARK will have a 10 day right offirst refusal to obtain the Property
upon the same terms and conditions as offered.
g. Participation in Sale: ARK will participate in any sale of the hotel by receiving its
accumulated net investment together with interest calculated at 4 points over prime; plus
the greater of $1 million or 10% of the adjusted sales proceeds; plus any other amounts
owed by Rabweh.
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KJH:JBII:1ai:94-1D-Ol.DlCll1
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DEVELOPMENT DEPAR~ STAFF REPORT
Radisson Hotel - Consent of Assignment and Transfer
October 13, 1994
Page Number -3-
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NORTHWEST LODGING (ARK Services)
From the point of view of the Agency, the principal party of interest is actually the tenant.
Operating performance will be guaranteed by Northwest Lodging, Inc. and the Agency will look
to Northwest to operate the Hotel in accordance with the provisions of the OPA and the
Sublease. In addition to materials previously submitted (some of which are attached to the
distributed agenda material) staff has checked references supplied by Northwest.
Conversations with Northwest's auditors and with its bankers have confirmed Northwest's
performance. A senior officer at Seafirst (Bank of America) in Seattle has affirmed that the firm
is financially capable of undertaking the proposed transaction.
RECOMMENDATION
To implement the proposed authorization, the Council and Commission should take action to
adopt the following six resolutions.
(Community Develooment Commission)
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO ON BEHALF OF THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE
ISSUANCE OF CERTIFICATE OF COMPLIANCE, AND EXECUTION OF
CONSENT TO TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS
UNDER OWNER PARTICIPATION AGREEMENT, ASSUMPTION AGREEMENT
RELATING TO HOTEL PROPERTY AND ESTOPPEL CERTIFICATE [FOSTER-
KHOURY]
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO, ON BEHALF OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO, AUTHORIZING AND
DIRECTING EXECUTION OF CONSENT TO TRANSFER OF REAL PROPERTY
INTEREST AND RIGHTS UNDER OWNER PARTICIPATION AGREEMENT AND
TO HOTEL LEASE AGREEMENT, AND EXECUTION OF ASSUMPTION
AGREEMENT RELATING TO HOTEL PROPERTY [RABWEH-ARK SERVICES]
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KJH:JBH:Jaa:94-10-01.mcm
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DEVELOPMENT DEPAR~NT STAFF REPORT
Radisson Hotel - Consent of Assignment and Transfer
October 13, 1994
Page Number -4-
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(J\'Iayor and Common Council)
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE ISSUANCE
OF CERTIFICATE OF COMPLIANCE, AND EXECUTION OF CONSENT TO
TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT, ASSUMPTION AGREEMENT RELATING TO
HOTEL PROPERTY AND ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE
EXECUTION OF CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS
UNDER CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT,
AND ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING EXECUTION OF
CONSENT TO TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS
UNDER OWNER P ARTlCIP ATION AGREEMENT AND TO HOTEL LEASE
AGREEMENT, AND EXECUTION OF ASSUMPTION AGREEMENT RELATING
TO HOTEL PROPERTY [RABWEH-ARK SERVICES]
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE
EXECUTION OF CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS
UNDER CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT
[RABWEH-ARK SERVICES]
Staff recommended adoption of the resolutions.
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KENNETH J. HENDERSON, Executive Director
Development Department
Administrator
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KJH:JBH1eg94-10..01.mem
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HOTEL LEASB AGRBBKmIT
SAIl BBRliARDDl'O HOTEL AIilD COHVBNTXOB CENTER
San Bernardino, california
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HOTEL LBASB AGR!lBHEN'J!
(san Bernardino Hotel and convention center)
This Hotel Lease Agreem.ent ("LeaseD) is made as of this
day of october, 1994 , by and between ARK services C01llpany, a
limited liability company ("TenantD), and Ral:lweh International
corporation, a Calitornia corporation ("Landlord"), and shall
become effective upon the satisfaction or waiver of the
contingencies described in Saction 53 hereof. ~
THE PARTIES ENTER INTO THIS AGREEMENT on the basis of the
following facts, understandings, and intentions:'
A. Landlord is in the process of purchasing the real
property and improvements ("Improvements") located on the real
property legally described in Exhibit A hereto (the "Land"), known
as the san Bernardino Hotel and Convention center, from Maruko,
Inc., a Japan corporation ("Maruko"), pursuant to that certain
Purchase and Sale Agreement and Escrow Instructions, dated August
5, 1994 (the "Sale Agreement"), a copy of Which is attached hereto
as Exhibit B and incorporated herein by reference.
B. The Improvements include a hotel facility (the "Hotel")
(including 231 guest rooms, lobby, meeting roolnS and restaurant{
lounge and fitness center) located at 295 North "E" street in
San Bernardino, California and situated on the Land. The facility
is currently operated as a Radisson Hotel.
C. The Hotel includes a fine dining restaurant
(DRestaurant") currently operated as Spencer's, together with
Lombard's lounge and,BoOlller's nightClub.
O. Landlord is in the process of obtaining a leasehold
estate entitling Landlord to the use and possession of the
convention center facility adjacent: to the Hotel (the "Convention
center">.
E.
operation
contained
Agreement
The parties hereto desire to have Tenant take over the
of the Property pursuant to the terms and conditions
in this Lease, effective on the Closing Date of the Sale
("cutover" or "Commencement Date").
F. Tenant intends to significantly upgrade the Property
("Upgrades") consistent with Radisson hotel standards, and expects
to invest One Million Dollars ($1,000,000) during the first five
(5) years of the lease term, and an additional Five Hundred
Thousand Dollars ($500,000) during the next five (5) years of the
lease term toward the improvement of the. Hotel in those areas that
are Tenant's obligation or responsibility. For purposes of this
Lease I such investment shall be treated as a loan made by Tenant to
Landlord secured by the Tenant Deed of Trust as set forth herein.
G. As used herein, the word "Property" or "Premises" shall
mean the Land, all easements and other rights relating to the Land,
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the Hotel, the Restaurant, the Convention Center, and all
improvements, fixtures, and personal property located on the Land
and used in connection with the operation of the Hotel, the
Convention Center, and the Restaurant, as more clearly defined in
Section 1 below.
H. As more particularly set forth herein, it is intended
that Tenant will be responsible for ordinary and customary matters
involving the operation of the Hotel and Convention Center, and
that Landlord will, as owner, retain all other risks and
responsibilities, except as may be specifically allocated otherwise
herein.
The parties agree:
1. Leased Premises/Propertv. Effective as of the
Commencement Date, Landlord hereby leases to Tenant all of
Landlord's rights to and rights relating to the Property, subject
to the terms and conditions contained herein. The Property
consists of all real, personal and intangible property utilized in
connection with the Hotel and Convention Center and their
operation, except Excluded Items referenced in section 1.12. The
Property includes, but is not limited to:
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1. 1 Improvements. All of the buildings, structures and
improvements located on the Land, including without limitation the
Hotel facility having 231 guest rooms, banquet and meeting room
areas and all other facilities involved with the Hotel.
1.2 Restaurant. The Restaurant, including kitchen,
lounge, dining room and meeting room facilities and all furniture,
fixtures, equipment and other tangible and intangible property
relating thereto.
1.3 convention Center. The convention Center,
including all meeting rooms, furniture, fixtures and equipment, the
right to possession of which shall be assigned or subleased to
Tenant upon terms and conditions acceptable to Tenant. Tenant
shall pay the basic rent due on Landlord's lease of the Convention
center, as provided in Section 5.3 herein.
1.4 Parkinq Garaqe. All of Landlord's right and
interest in the use of the covered parking garage facility adjacent
to the Hotel (the "Parking Garage") as provided in that certain
Covenant and Agreement Regarding Parking, a copy of which is
attached hereto as Exhibit D and incorporated herein by reference.
Tenant shall pay any rent due for the use of the above referenced
parking spaces in the Parking Garage, as provided in Section 5.3
herein.
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1.5
FF&E: FF&E Leases.
equipment
or owned,
1.5.1
utilized in
including,
FF&E. All furniture, fixtures and
connection with the property whether leased
without limitation, carpeting, draperies,
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window and door screens and awninqs, trade fixtures, bed linens and
towels, telephones and related equipment, televisions, television
antennas an~ satellite ~ishes and related equipment, pool
equipment, HVAC equipment, bed,Unq, window treatments, sa~Qty
equipment, landscaping, data processing and computer equipment
inclucUng, without limitation, front desle, reservation ap.d back
office system(s), property management system and other automation
equipment and software, smallwares, dishes, silverware, kitchen
equipment, chairs, tables, banquet equipment, pOdiums, audio visual
equipment, and other tangible items of personalty (collactively,
the "FF&E"). A complete list of all FF&E is attached as Schedule
1. 5 .:l hereto.
1.5.2
are no leases Or other
purchase of PF&E.
FF&E Leases. Landlord warrants: that there.
aqreements with respect to the lease Or
1.6 Contracts.
1.6.1 Assumed Cont.racts. All leaselll, subleases,
contracts and agreements affecting the Property ("Assumed
Contracts") are listed on Schedul.o 1.6. Landlord shall assign to
Tenant and Tenant shall asswne all of the Assumed Contracts,
effective as of the commencement Dato. Except for the Assumed
Contracts specifically listed on Schedule 1.6 hereto, Tenant does
not assume or agree to become liable in any manner for any other
liabilities or 'obliqations of Landlord, and Landlord shall
indemnify and hold TQnant harmless from and against any contract
not listed on Schedule 1.6. All security or other deposits with
respect to the Assumed Contracts shall become the property at
Tenant, and Tenant shall have the benefit of any warranties,
representations or performance of third parties with respect
thereto.
1.6.2 Convention Center and Develonment
Acrreelllents. The Hotel and Convention Center are parts of a complex
developed in accordance with or governed by certain contracts,
riqhts, easements and agreements (collectively, the RDevelopment
Agreements"). The Development Agreements include, without
limitation, a Convention Center Lease between the City of San
Bernardino ("City") and Maruko (the "Convention center Lease") T an
Owner Participation and Development Agreement between The
Redevelopment Agency of the City of San Bernardino, the city and
Maruko ("OPA"); and certain other dOC'Ulllents and instruments,
includinq any amend1llents or changes thereto. The parties hereto
acknowledqe t.hat the benefits of the Development Agreements,
including the TOT (as hereinafter defined), are an integral part of
this Lease and the partie$ agree not to take any actions which
would jeopardize the Oevelopment Agreements and the TOT.
Tenant shall sublease the Convention Center area from Landlord
and shall have the right to operate the Convention Center and
receive payment of the TOT pursuant to the OPA, as further
described in this Lease.
1.7 Permits. All transferable consents,
authorizations, variances, waivers, licenses, permits and approvals
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board, commission, bureau or other entity or instrumentality in
respect of the Hotel, including, without limitation. those with
respect to the foundation, use, utilities, building, fire, life
safety, alcoholic beverage ("Liquor License"), traffic and zoning
(collectively, the "permits") heretofore or hereafter held by or
granted to Landlord. The Liquor License shall either be
transferred to Tenant, or Tenant and Landlord shall be jointly
listed thereon.
1.8 Inventor\/:. All inventories of. supplies or raw
materials used in connection with the operation of the Hotel and
the Restaurant, including but not l.iII1ited to paper goods,
brochures, stationery, office supplies, food, beveraqes, chinaware,
glassware, flatware, linens, bedding, janitorial and maintenance
supplies, soap, ga501ine, fuel oil, maintenance parts and
replacement items, gift 5hop items, and othQX' operational. and guest
suppl.ies (the "Inventory"). Tenant shall purchase from Landl.ord at
the aggregate invoice all\Ount (includinlJ all shipping charges,
ta.xes, etc.) all Inventory on hand at the Property. Such Inventory
shall include only new or unused (in opened packalJing or
otherwise), located at the property as determJ.ned by Maruko,
Landlord and Tenant between 7: 00 p.m. of the eveninq immediately
before the commencement Date and 7:00 a.m. on the day after the
O Commencement Date. In no event shall the amount paid by Tenant for
such items exceed Forty Thousand Dollars ($40,000).
1. 9 Records. All books, records, files, accounting
da ta , quest registers, employntent records, maintenance records ,
rental and reservations records, and any customer or frequent quest
lists (collectively, the "Records") of Landlord in connection with
the operation and maintenance of the Hotel, exclusive of
(i) original Records Which Landlord desires to retain, provided
that Landlord shall permit Tenant, at its expense, to examine and
make copies thereof, and (ii) Landlord's income tax records.
Landlord shall provide copies of all: Records to Tenant within five
(5) days of execution of this Lease.
1.10 Reservations. All advance reservations and
bOOkings with respect to the Hotel. as the same may be amended,
cancel.ed and renewed (the "Reservations"), and advance deposits
made in respect thereof (the "Reservation Deposits").
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1.11 Name: other T...ndlord R1ahts. The name "San
Bernardino Hot~l and convention center" and all telephone numbers
and intangible riqhts with respect to the Hotel, the convention
Center, and the Restaurant. Provided, however, that Tenant shall
have no obligation to compensate Landlord or any other party for
the use thereof, nor shall Tenant have any OblilJation to continue
to use such name. Tenant shall also have the benefit of all othQX'
Landlord rights with respect to the property, inclUding but not
limited to the benefits of warrantie5/representations of
manufacturers, suppliers, contractors or third parties and the
right to require contractors or agents to perform under applicable
agreements and contracts.
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1.12 Excluded Items. The Property excludes only:
1.12.1 House Funds. House funds, as set forth in
section 7.5 below.
1.12.2 Accounts Receivable. Accounts Receivable,
except as set forth in Section 7.5 below.
1.12.3 Pavables. Any payables or other amounts
owed by Landlord as of cutover, except as set forth in section 7.6
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1.12.4 Excluded Items. Specific excluded items,
if any, listed on Schedule 1.12.4 hereto.
1. 13 Acceotance of the Premises: Cutover Fund: Access to
Cutover Fund.
1. 13 . 1 Acceotance of the Premises. Attached
hereto as Schedule 1.13 is a "punchlist" of any defects in the
Premises which are required to be corrected by Tenant, with the use
of the Cutover Fund, pursuant to this Lease. Landlord has not
relied upon any representations of Tenant regarding the condition
of the property or any defects in the Property.
1.13.2 Cutover Fund. Prior to the Commencement
Date, Landlord shall deposit the sum of Five Hundred Thousand
Dollars ($500,000) into an interest bearing trust account of the
law offices of Hart, King & Coldren, Santa Ana, California (the
"Cutover Fund") for the benefit of Tenant, together with
instructions to such firm that such funds are to be utilized to (a)
pay for repairs to the buildings and improvements on the Property
provided in Section 1.13.1 above; (b) take corrective action to
satisfy Landlord representations and warranties which have been
breached; (c) pay obligations/ liabilities involving the Property
arising prior to the Commencement Date; (d) pay for Initial Work
Order items set forth in section 5.2 below and otherwise discharge
Landlord responsibilities and obligations known to exist at the
Commencement Date; (e) pay for fees, costs or expenses in
transferring the Radisson franchise to Tenant; (f) repay to Tenant
uncollected accounts receivable pursuant to Section 7.5; or (g)
pay, if any, obligations/liabilities involving employees arising
prior to the Commencement Date.
Examples of items to be covered by the Cutover Fund include,
without limitation, Landlord's obligations as tenant of the
Convention Center Lease, Development Agreement obligations not
specifically assumed by Tenant hereunder, bringing the buildings
and improvements on the Property into operating condition and into
compliance with codes, addressing fire and safety issues,
compliance with ADA requirements, bringing the buildings and
improvements up to franchisor standards (exclusive of Hotel guest
room FF&E), implementation of corrections and work set forth on
Schedule 1.13 recommended by DMJM Engineering, payment of pre-
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Cutover liabilities such as taxes, utilities and service contracts
and payment of pre-Cutover employee claims and obliqations.
1.13.3 Access to cutover Fund. Tenant shall
access the cutover Fund by written request by (i) specifying the
Lease section under which Landlord's obligation to fund requested
items arises, and (ii) providinq invoices for work performed,
materials purchased or services rendered, if the work has already
been performed, or quotes, bids or estimates if the work h_as not
been performed. Within ten (10) days of such request, Landlord
shall cause such funds to be disbursed to Tenant to rei.lDburse
Tenant for amounts paid by Tenant, or to pay over to the
appropriate contractors or parties upon completion of the work.
Tenant shall, within fifteen (15) days of the end of each quarter,
account, to Landlord as to the use of all :funds disbursed from the
cutover fund.
Any substantial non~mergency work to be performed with
cutover Fund proceeds (i. e., work in excess of Ten Thousand Dollars
($10,000)) shall be described and presented to Landlord in advance
of work performance. Work of an emergency nature can be performed
prior to any attempt to access the cutover FUnd. Such work will
include without limitation matters involvinq security or safety
issues, matters which could ~aterially interrupt operation of the
Hotel business, ~att.rs involving utilities which may lead t.o
interruption thereof, corrections required by governmental
authorities or matters required by the Hot.el franchisor which could
result in a default under the applicable franohise agreements. All
work shall be done at o01llpetitive rates, and Landlord or its
affiliates shall be able to bid on appropriate projects, provided
that all work will be performed with the same quality and
expertise. In the event Landlord fails to disburse funds from the
CUtover Fund within ten (10) days of a request therefor, Landlord
shall notify Tenant in .writinq of the specific reason for suoh
refusal to fund. Tenant may thereafter submit the matter to arbi
tration. Tenant may also, at its discretion, proceed with the work
pending arbitration but in such event Tenant: aSSUllles the risk as to
the arbitrator's decision. Any decision by the arbitrator requirinq
funds to be distributed to Tenant shall include interest at the
prime rate published by the Wall street Journal, plus four percent
(4%). The arbitrator shall be instructed to also award costs and
attorney fees to the most prevailinq party, which if such award is
aqainst Landlord, shall not be funded from the Cutover Fund.
In the event Landlord fails to pay an amount requested by
Tenant to be disbursed from the cutover Fund within ten (10) days
of a request for disbursement, and does not notify Tenant as set
forth above as regards Landlord'S reason for such failure to pay,
Tenant may proceed to perform the requested work/services, and such
expenditures by Tenant shall be deemed to be Tenant's performance
on behalf of Landlord and Tenant shall have the riqht to offset
such amount against any Rent due Landlord.
The cutover Fund shall remain in place for the sooner to occur
of disbursement of all funds required to be deposited therein or 24
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months from cutover, at which point any funds remaining in the
Cutover Fund shall be returned to Landlord.
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'2. Franchise Aareement. At Tenant's option, either (1) the
existing franchise agreement (with Radisson) shall be transferred
to Tenant, or (2) Tenant shall enter into a new franchise agreement
with Radisson. In the event the franchisor thereunder insists on
changes or charges any transfer fee, such fee or charge shall be
paid from the CUtover Fund. Notwithstandill9 the foregoing, ~enant
shall have the riqht (with the consent of Landlord, which consent
will not be unreasonably withheld, and with the consent of the
City, if required), bUt not the Obligation, to elect to reflaq the
Hotel with a comparal:>le or better flaq. In the event Tenant elects
to reflaq the Property, Tenant shall incur all of the costs of
terminating the prior franchise and installing the new franchise.
In the event that this Lease is terminated due to the actions of
Tenant, any new franchise shall be the property of Landlord. In
the event that this Lease is terminated due to the actions of
Landlord or due to the expiration of the term of this Lease, any
new franchise shall be the property of Landlord and Landlord shall
pay to Tenant the unamortized franchise fee and any costs of
transfer I and Landlord shall indemnify, protect, hold harmless and
defend Tenant for any costs, liabilities, claims, obligations and
expenses (including attorneys' fees) arising in connection with any
early termination of the franchise. '
3. Use of Premises: Collltlliance with Laws.
3.1 YH. Tenant shall use the premises for hotel,
convention center and hospitality purposes and uses incidental
thereto.
3.2 Comoliance with Laws. Durinq the teJ;1ll hereof
Tenant shall comply with all applicable governmental rules, orders,
regulations or requirements relatinq to the use and occupancy of
the premises, provided, however that Tenant shall not be required
(but may do so in Tenant's discretion) to make any material capital
improvements to the Property to be in such compliance (for example,
compliance with the Americans With Disabilities Act) with respect
to laws and ragulations existing as of the COllllllencement Date
("Existing' Laws"). Landlord shall be responsible for the expense
of bringing the Property into compliance with Existing Laws.
4. Term.
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4.1 Initial Term. Subject to satisfaction and/or
waiver of the contingencies described in Section 53 hereof, the
term of this Lease and Tenant's obligation to pay rent hereunder
shall COlllll1ence on the COlllll1encemant Date and shall continue after
its cOlllll1encement for a period of ten (10) years unlass earlier
terminated as herein provided. Within ten (10) days after the
COlllll1encement Date, Landlord and Tenant shall execute a memorandum
setting forth the Commencement Date.
4.2 Tenant's Riaht to Renew. Tenant shall have
successive rights to renew the te= of this Lease at the end of the
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initial term described in section 4.1 above for two (2) successive
periods of ten (10) years each ("Renewal Periods"), by giving
notice as provided in section 4.2.1.
4.2.1 Notice. Such renewal shall be effective
only if written notice of the exercise of such right to renew shall
be given to Landlord no later than six (6) months prior to the
expiration of the then existing term; provided, however, that if
Tenant shall not have exercised such right to renew no later than
six (6) months prior to expiration of the then existing term,
Tenant's right to renew shall not lapse until the sooner to occur
of: (a) ten (10) days after Landlord shall have givetl Tenant
written notice of its failure to renew, or (b) Tenant's written
notice that it does not elect to renew.
4.2.2 Terms and Conditions. Tenant's occupancy
during the Renewal Periods shall be upon the same terms and
conditions as provided in this Lease but at the rental rate as set
forth in section 5.1.
4.2.3 Condition Precedent to Second Renewal
Period. Tenant's right to renew the lease term for the final
Renewal Period is contingent upon Tenant demonstrating to the
reasonable satisfaction of Landlord that during the initial ten
(10) year term of this Lease, Tenant has made upgrades (the
"Upgrades") to the Property totalling in excess of One Million Five
Hundred Thousand Dollars ($1,500,000). Upgrades will occur only in
those areas where Tenant is responsible hereunder for such
improvements, and will focus primarily on FF&E. Tenant estimates
that such Upgrades may include approximately Five Thousand Dollars
($5,000) per room in furniture, case goods, carpet, drapes, etc.
during the first five (5) years of the Lease, approximately Five
Hundred Thousand Dollars ($500,000) in public area refurbishment in
the Hotel and Conference Center for carpet, wall coverings, paint,
artwork and the like and lease/purchase of vans, buses, limos or
other vehicles for use in connection with the Hotel. If Tenant is
unable to comply with the foregoing contingency prior to the
expiration of the first Renewal Period, then Tenant shall not be
entitled to renew the Lease for the second (and final) Renewal
Period. In determining whether Tenant has satisfied this One
Million Five Hundred Thousand Dollars ($1,500,000) requirement,
Tenant's obligation is to make arrangements for same at no cost to
Landlord. Accordingly, all means utilized by Tenant, including
lease, purchase and/or financing, shall be credited towards this
obligation.
5. Minimum Rent.
5.1 Initial Term. Minimum Rent (the "Minimum Rent")
shall commence as of the second quarter of the Initial Term (there
shall be no rent payable during the first quarter) and thereafter
shall be payable quarterly in arrears, at such place as Landlord
may designate in writing, as set forth in the fOllowing schedule:
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Period
Mo. '" - 4B
Mo. 49 - n
Mo. 73 - 120
Annual Amount
$370,000
400,000
440,000
Monthlv Amount
$30,833.33
33,333.33
36,666.6-;:
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If the term hereof commences on a day other than the first Clay of
a month, then the Minimum Rent for the fract:ion of the. month
starting with the COmQencement Date shall be paid on such date,
prorated on the basis of the actual num))er of days in the month.
If the term hereof expires or is earlier terminated on a day other
than the last day of a month, then the Mini.lalm1 Rent for the month
during which the Lease expires or is earlier terminated Shall be
prorated on the basis of the actual number of days in the month.
5.2 initial Work order. Tenant has acp:eed to initially
perform the following' work: on beha1f of Landlord: Ca) replacing'
(as necessary) the convention Center carpeting, (b) reconditioning'
or repairing Cas necessary) the Convention Center HVAC system, (c)
reconditioninq or repairing (as necessary) the Hotel's boiler
equipment, Cd) reconditioning or repairing the Hotel's water
heating system, (e) replenishing the Hotel's linen supply to meet
franchise standards, and (f) acquiring additional chairs,
furniture, dishes, smallwaras and the lilte to allow the Convention
Center to be reasonably equipped for lIlUltiple functions at maximum
capacity. However, nothing contained in this Section 5.2 shall be
daemed to otherwise enlarga Tenant's obliqations, or dinlinish
Landlol:d's obligations, set forth in Section 14 hereof. Tenant' s
aqree~ent to be responsible for items (ll) throuqh (f) above shall
extend only to the initial repair, repleniShment or replacement
thel:eof and not to subsequent repair, replenishment or replacement
to the extent same . is a Landlord obliqation hereunder. Tenant
shall be reinlbursed from.the cutover Fund tor all 'Il'ork performed by
Tenant pursuant to this Section 5.2. In no event, howevar, shall
Landlord be responsible tor more than Five Hundred Thousand Dollars
($500,000) in initial repairs, replacements, etc., pursuant to this
Section 5.2 and section 1.13.1.
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5.3 Convention Centar Rent. Tenant shall be
responsible for and pay the rent speoified at section 3.1 of the
Convention Center Lease ("convention Center Rentlt), inclUding the
payment of any fees or rent for the garage or parking for Hotel
quests or convention Center users ("Garage Rent") pursuant to the
Parking Acp:eemant. Tenant 'Il'ill pay Convention Center Rent and
Garage Rent to the City directly. Any additional rent or charges
clue under the Convention Center Lease, includinq without
limitation, rent or expenses payable as a result of Landlord's
amendmant of tha Convention Center Lease, or any arrearages with
respact thereto occurring priol: to CUtover, shall be Landlord's
obligation. in the avant that Landlord obtains any reduction in
Convention Center Rent: or Garaqe Rent, such benefits shall be
passed through to Tenant.
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5.4 Rent Durina Renewal Periods.
Rent during each Renewal Period shall be an
greater of:
The annual Minimum
amount equal to the
(a)
the produet of the annual Minimum Rent for the year prior
to the applicable Renewal period multiplied by one
hundred ten percent (llOlt): or
the produet of Rooms Revenue (as defined herein) for each
month of the Renewal Period multiplied times ten pereent
(10') .
(b)
Such annual Minimum Rent shall be paid in four equal quarterly
installments in arrears in the manner set forth in Seetion 5.1. If
the annual Minimwn Rent is to be based upon ROoms Revenue as set
forth in Section 5.4(b),.then to the extent actual revenue data is
not available the quarterly installment shall be based upon
Tenant's written capital Spending Budget for the applicable yoar,
and at the end of the applieable lease year Tenant shall calculate
and reconcile the actual percentage rent due for such year, and
within thirty (30) days after the end of such lease year shall
either pay any additional amount of percentage rent owing to
Landlord or receive a credit for any overpayment of percentage rent
(applicable to the rent payment next due Landlord). .
As used herein, "Rooms Revenue" shall mean all gross proceeds
from the rental of guest rooms, including any Rooms Revenue
equivalents pursuant to long term contracts for the rental of rooms
with volume customers. ROOms Revenue shall not include food &
beverage proceeds, vendinq, laundry and other guest services.
meeting/conference room usage, insurance or condemnation proceeds,
or any other revenue or income (except for telephone revenues)
which is not for the rental of rooms by guests. Rooms Revenue
shall include telephone revenues generated by telephones on the
Property, but net of all direct cost and expense related thereto,
including but not limited to telephone utility bills, telephone
maintenance and repair, taxes imposed on telephone service and
rental of telephone equipment. Rooms Revenue shall mean only the
amount actually collected bY Tenant for the rental of rooms, and
shall exclude allowances, discounts, credit card fees, gratuities
uncollectible accounts, cOlllplimentary rooms, refunds, overcharges,
travel agent commissions, and the value of food & beverage or other
Hotel service included in the room rate to induce Hotel quests to
utili::!e the rooms and all taxes assessed on goods or services which
are paid by customerslguests but collected by Tenant.
6. No Encwnbrances. Landlord warrants that as of the
Commencement Date, there exists no monetary encumbrances inCluding
without limitation liens, judqments, or similar claims against the
Property. Throughout the term of this I.ea5e (including Renewal.
Periods, if applicable), Landlord shall not encumber the Property
or permit any liens to be filed against the Property superior to
the Tenant Deed of Trust, and Landlord shall fully indemnify Tenant
with respect to same and shall take prO)llpt action to remove any
nonpermitted encumbrances. Landlord shall have a reasonable time
to deal with disputed encumbrances, provided Landlord provides a
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bond or other reasonable security to protect Tenant with respect
thereto.
7. Prorations. The following (collectively "Prorations")
for the Property shall be apportioned between Landlord and Tenant
upon cutover as provided in the Sale Agreement:
7. l. Taxes. All general real estat.e and ad valorem
personal property taxes and assessments shall be prorated as of
midnight of the Commencement Date using the latest availa~e tax
rates and assessments. Landlord shall be responsible for all
gen..ral real estate and ad val.oram personal property taxes and all
special taxes or assessments accruing with respect to the Property'
for all periods prior to midnight of the commencement Cate and
Tenant shall be responsible for all of such taxes and assessments
which accrue after IDidniqht of the Commencement Date. Any tax
refunds or rebates which apply to periods before midnight of the
Commencement. Dat.e shall remain the property of Landlord. :If
subsequent to the Commencement Date it beoOll\es apparent that the
amount of real estate taxes for the Property at the tilDe of the
Commencement Date was or becomes higher or lower than the amount
that was used for apportionment as of the Commencement Date
(whether by reason of a"chanqe in either the asset value of the
Property or the applicable tax rates or otherwise), real estate
taxes shall be re-prorated and Landlord aqrees to pay to Tenant and
Tenant aqrees to pay to Landlord within seven (7) calendar days
after demand any amount owed to the other as a result thereof.
7.2 Utilities. Prior to the Commencement Date,
Landlord and Tenant shall notify all utility companies servicing
the property of the anticipated change in ownerShip of the Property
and request that all billings after the Commencement Date be made
to Tenant at the Hotel address. Utility meters will be read, to
the extent that the utility company will do so, during the daylight
hours on the calendar day immediately before the Commencement Date,
with charges accruing prior to 7:00 a.m. on the commencemcmt Date
paid by Landlord and charges accruinq thereafter paid by Tenant.
prepaid utility charqes shall be prorated. Charges for utilities
which are unmetered, charges for the meters which have not been
read by the Commencement Date, or any special assessments relatin9
to utilities prior to 7:00 a.m. on the Commencement Date, will be
prorated between Tenant and Landlord as of 7:00 a.m. on the
Commencement Date, and an adjustment lDB.de to any determinations
made by the utility companies necessary to reflect actual
operations as.of 7:00 a.m. on the Commencement Date if reasonably
estimable or, if not, after the Commencement Date based upon
utility billings received after the COllllllElncement Date in which case
Landlord or Tenant, as appropriate, shall, upon receipt, suimit a
copy of the utility billinqs for any such charges to the other
party and such party shall pay its pro rata share of such charges
to the party requesting payment within seven (7) calendar days from
the date of any such request. Landlord shall be credited and
Tenant debited for all deposits previously made by Landlord or
Maruko which the u.tility company in question will apply to Tenant's
account. Tenant shall be responsible for replacing and/or paying,
on or before the Commencement Date, all deposits which will not be
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applied by utility companies for Tenant's account or which are
otherwise required by utility companies in order to continue
service at the Hotel for periods after noo a.m. on the
commencement Date and shall take any other action and make any
other paYll\ents required to assure uninterrupted availability of
utilities at the Property for all periodS after the cOllllDencement
Date. Buyer agrees that as of or following the Close of Escrow,
all utility deposits previously made by Lanc1J.ord which are not
applied Tenant's account may be refunded directly to Land~ord by
the utility company holding same. -
7.3 Assumed contracts. All income and e>cpenses with
respect to the Assumed contracts, excludinq any contract with
respect to fuel oil, will be prorated as of lIlidnig'ht on the
Commencement Date.
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7.4 Reservations. Tenant will honor for its account,
all guest and banquet roolll and restaurant reservation agreements
and deposits for dates after the COllllDencemQnt Date. Tenant
authorizes Landlord to continue to accept reservations for guest
rooms, meeting' X'OOIQS, restaurant and banquet facilities for periods
after the Commencement Date provided the terms and conditions of
the reservations are in the ordinary course, and Tenant aqX'ees to
honor all such rQservations in accordance with their terms. Any
pre-Closing deposits or post-Closing' deposits accepted by Landlord
with respect to confirmed reservations for dates after the
Commencement Date will be forwarded to Tenant.
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7.5 House Funds. Trav (Guest) Ledaer and Accounts
Receivable. All cash on hand in cash reg'isters, cashier's
"banks", and change funds as of 7:00 a.lII. on the Commencement Date
will be purchased by Tenant. All C85h on hand in the PropGrty's
operating' accounts and reserve account5 for furniture, fixtures and
equipment, and restricted and other cash accounts as of 7:00 a.m.
on the Commencement Date (the "House Funds") shall remain the sole
property of Landlord. House Funds shall J:)e applied and returned to
Landlord upon the commencement Date. All amounts in the accounts
ot guests who have not checked out as of 7:00 a.m. on the
commencement Date (the "Tray (Guest) Ledger") (including charges
tor rooms, food, beverage, telephone charg-es and otherwise)
accruing prior to 7:00 a.m. on the COllllDenc_ant Date shall be the
property of Landlord, and all amounts in the Tray (Guest) Ledg'er
accruing after 7:00 a.1\I. on the Commencelllent Date shall be
transferred to Tenant. The entire Tray (Guest) Ledger shall
thereupon becollle the property of Tenant. All accounts receivable
of guests and/or patrons of the Property who have received Hotel
services but not yet paid for such services other than the Tray
(Guest) Ledqer (the "City Ledger") accruing prior to 7:00 a.m. on
the CommenceJllent Date shall be paid by Tenant to Landlord at
eighty-five percent (85') of their fe-ce amount. Any accounts
receivable which have not been collect~d by Tenant after ninety
(90) days of the Commencement Date shall be repaid to Tenant from
the cutover Fund. All accounts receivable designated as "other" on
the books and records of Landlord or Maruko (which are typically
intercompany accounts and which are being retained by Landlord or
Maruko) shall not be purchased by Tenant. All accounts receivable
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related to customer credit card charges shall be dealt with in the
same manner as the city Ledger. All other accounts receivable
accruing prior to 7:00 a.m. on the Commencement Date shall be paid
by Tenant at their face amount.
7.6 Accounts pavable and Expenses. subj ect to the
following, all unpaid accounts payable and expenses relating to
operations of the property prior to the Commencement Date shall be
paid by Landlord. By way of illustration, Landlord shall pay (i)
accounts payable and expenses relating to personal property,
inventory or otherwise; (ii) expenses arising from items noj: a part
of inventory (e. g ., energy , utilities, insurance, advertising,
trade association dues, subscriptions, etc.); 'lmd (iii) amounts
outstanding for services provided (e.g., by employees, independent
contractors, professionals, other consultants, and vendors pursuant
to service contracts, etc.). Tenant alone shall be responsible for
all accounts payable related to Inventory or supplies to the extent
not yet delivered, or services, to the extent not yet rendered, as
of the Commencement Date, providing same are incurred in the
ordinary course of business. In addition to the foregoing, all
accounts payable and expenses relating to operations of the
Property after the Commencement Date will be paid by Tenant.
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7.7 Hotel Aqreements. All costs and expenses with
respect to the Development Agreements will be prorated as of
midnight on the Commencement Date.
7.8 Emplovees. The Manager of the Property shall be
terminated by Landlord prior to the Commencement Date. In the
event that the Manager is not so terminated, Landlord shall
indemnify Tenant for any and all claims, causes of action, costs,
expenses (including attorneys' fees), liabilities, obligations and
damages Tenant sustains as a result of the Manager's employment
prior to the Commencement Date. All other employees employed on
the property will be employed by Tenant from and after the
Commencement Date in the same capacity of employment and at the
same level of compensation and benefits enjoyed by such employees
immediately prior to the Commencement Date. Regular periodic
employee compensation, vacation pay and sick pay accrued as of
midnight on the Commencement Date shall be prorated and all amounts
thereof which relate to periods prior to midnight on the
Commencement Date shall be paid by Landlord or Maruko.
7.9 Fuel oil. Fuel oil for the property's emergency
generator system shall not be apportioned but shall be considered
part of the Property. Tenant shall be responsible for any
replenishment of this fuel oil.
8. operation of Hotel: Transition Upon Commencement.
C 8.1 Valuables and Baqqaqe. Tenant shall work with
Maruko prior to the Commencement Date to implement procedures to be
utilized at the Commencement Date to account for and safeguard
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guest valuables and baggage left in the custody of Landlord as of
the Commencement Date.
8.2 Inventorv. Between 7:00 p.m. on the evening prior
to the Commencement Date and 7:00 a.m. on the day after the
Commencement Date, representatives of Maruko, Landlord and Tenant
shall jointly conduct an inventory of the FF&E, Records and
Inventory items, and shall list same on schedules to be executed by
both representatives. The inventory of FF&E shall be generally
consistent with the list of FF&E to be attached hereto pursuant to
section 1. 5.
8.3 capital Spendina Budaet. within thirty (30) days
of the commencement Date, Tenant shall provide Landlord with a
detailed Capital Spending Budget for the Hotel for the first Lease
year. Thereafter, Tenant shall provide an annual Capital Spending
Budget at least sixty (60) days prior to each Lease year. Within
ninety (90) days of the Commencement Date, Tenant shall provide
Landlord with a five-year Capital Spending Budget, which Tenant
shall update from time to time. All Capital Spending Budgets shall
be mutually agreed upon by Landlord and Tenant; provided that the
Budgets shall not limit Tenant's or Landlord's responsibilities or
liabilities for maintenance and other matters as set forth in this
Lease.
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8.4 pricina: Special
respect to services or goods in
Convention Center shall be at the
Benefits. All pr~c~ng with
connection with the Hotel and
sole discretion of Tenant.
9. Warranties and Representations of Landlord. To induce
Tenant to execute this Lease, Landlord hereby represents and
warrants to Tenant that as of the Commencement Date:
9.1 Title: Leasehold Title Insurance. Landlord owns
and has good and marketable title to the Property (including FF&E)
free and clear of all liens, subject only to the Accepted
Encumbrances set forth on Schedule 9.1 hereto. upon cutover, title
to the Property will be marketable and clear of all liens,
encumbrances or adverse claims except (a) easements and
restrictions of record not incompatible with the use of the
Property, and (b) other items accepted in writing by Tenant
("Accepted Encumbrances") and attached hereto as Schedule 9.1.
Upon cutover, Landlord shall provide Tenant with ALTA extended
leasehold title insurance coverage and an ALTA lender's policy on
Tenant's Deed of Trust, all in form and endorsements acceptable to
Tenant. The expense of such title insurance shall be paid by
Landlord.
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9.2 Zonina and Permits. The present zoning for the
Property fully and completely permits the use of the Property as a
hotel and convention center facility with related activities as
currently operated by Maruko and/or Maruko's concessionaires.
Landlord is not aware of any notice or action by governmental
authorities or agencies with respect to any nonconformance of the
Property or any component thereof with respect to applicable or
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pending codes or regulations, or of any proposed change in use or
zoning with respect to the Property. All Permits or approvals
necessary with respect to such operation, including the Liquor
License, are listed on Schedule 1.7 hereto, are in full force and
effect and are transferable to Tenant.
9.3 Condition of FF&E and Prooertv. All of the FF&E
set forth at Schedule 1.5.1 hereto is present on the Hotel premises
and the FF&E and Property and components thereof are in the same
condition as when Tenant conducted its physical inspection of same.
Landlord is not aware, directly or indirectly, of any l!Iaterial
defects or conditions with respect to the FF&E or the Property,
except as set forth on Schedule 9.3 hereto, . including without
limitation, latent defects, proposed changes in use or zoning or
potential adverse business or competition factors. Upon
termination or expiration of this Lease, Tenant shall return all
FF&E to Landlord, in not less than the same condition as at the
Commencement Date, reasonable wear and tear and casualty excepted.
If Tenant replaces any FF&E items (for example an air conditioning
unit which breaks and is not economically feasible to repair) then
any such replacement items may be returned to Landlord subject to
a lease, or to financing, if Tenant elects to lease or finance
same. Any such lease or financing shall be part of and subject to
the limitations of Sections 13.1 and 13.2 below. Notwithstanding
any provision herein to the contrary, Landlord specifically
warrants that all sewer lines serving the property meet applicable
codes and regulations, and are in good operating condition, without
breaks or leaks, and that the roofs of the buildings on the
Property are in good operating condition as of Cutover, without any
leaks. The cost of any repairs made by Tenant on behalf of
Landlord to comply with this warranty and representation shall be
a Tenant expenditure on behalf of Landlord.
9.4 Claims/Litiaation. There is no litigation, action,
claim or proceeding pending or threatened against Landlord or the
Property or which could adversely affect the use thereof, the Hotel
business or this transaction, including any claims or actions by
the City, the Redevelopment Agency or any division, agency or
affiliate thereof.
9.5 Riaht of possession: Ootions. Except as
specifically provided by the convention Center Lease or the Owner
Participation and Development Agreement, no person or entity other
than Landlord has any right of possession to the Property or any
part thereof. The Property is not subject to any outstanding
agreements of sale, options, liens, rights of first refusal or
other rights of third parties to acquire any interest therein.
without limiting the foregoing, Landlord possesses and shall
maintain throughout the term of this Lease (including Renewal
Periods, if applicable) the right to use and possess the Property,
including the Convention Center and any rights relating to the
Parking Garage, for the benefit of the Hotel and its patrons, and
Landlord shall, as of the Commencement Date, assign or sublease
such right to use and possess the Convention Center and any rights
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relating to the Parking Garage to Tenant upon terms and conditions
acceptable to Landlord and Tenant.
9.6 Hazardous Substances. Landlord has conducted a due
and diligent inquiry with respect to Hazardous Substances, and is
not aware, directly or indirectly, of the presence of same with
respect to the Property, except as disclosed on Schedule 9.8
hereto. "Hazardous Substances" means any industrial waste, toxic
waste, chemical contaminant or other substance which, as of the
date of this Lease, is designated as hazardous or toxic under any
federal, state or local legislation applicable to the Property or
is defined as hazardous, dangerous or toxic by any governmental
authority having jurisdiction over the Property, including but not
limited to asbestos and PCB's, any explosives, petroleum or
petroleum by-products, or any other substances which may pose a
hazard to the health or safety of occupants of the Property as
members of the public. Except as disclosed on Schedule 9.8 hereto,
the Property is free of the presence of Hazardous Substances, there
have been no releases of Hazardous Substances on the Property, the
Property has not at any time been used for the generation,
transportation, management, handling, treatment, storage,
manufacture, emission, disposal or deposit of any Hazardous
Substances or fill or other materials containing Hazardous
Substances in excess of levels permitted under applicable law, and
the Property is in compliance with all related environmental laws.
In the event that during the term of the Lease Hazardous Substances
are determined to have been on the Property prior to cutover, and
are in violation of applicable hazardous substance laws or
regulations and/or could be required to be removed or contained
under applicable laws or regulations, Landlord shall perform and
pay the cost and expense of appropriately dealing with such
Hazardous Substances.
Landlord shall indemnify, protect, hold harmless and defend Tenant
from and against any and all claims, costs, expenses (including
attorneys' fees and court costs), liens, judgments, liabilities and
obligations arising from Hazardous Materials existing on the
Property prior to the Commencement Date or brought onto the
Property by Landlord, its agents, contractors or employees. Tenant
shall indemnify, protect, hold harmless and defend Landlord from
and against any and all claims, costs, expenses (including
attorneys' fees and court costs), liens, judgments, liabilities and
obligations arising from Hazardous Materials existing on the
Property after the Commencement Date or brought onto the Property
by Tenant, its agents, contractors or employees.
9.7 Other Aqreements. Except for Development
Agreements specifically provided by Landlord to Tenant prior to
cutover, Landlord has not entered into any commitments or
agreements with any person, entity, federal, state or local
government authority or agency affecting the Property.
9.8 Authoritv. The persons executing this Agreeme~t
are fully authorized to execute same, and their signature ~s
sufficient to bind Landlord hereunder as owner of the property.
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Landlord is free to transfer, assign and lease the Property without
the consent or approval of any other person or entity. If Landlord
is an entity, such entity is duly formed and in good standing as of
the Commencement Date.
9.9 ComDliance with Laws. The Property complies with
all covenants, conditions, restrictions and encumbrances ("CC&R's")
and all rules, regulations, statutes, ordinances, laws and building
codes (collectively "Laws") affecting the Property. Except as
specified otherwise herein, all electrical, plumbing, heating,
ventilating, air conditioning, fire protection, elevator and
similar building service systems are in worki~g order -and good
condition. Tenant shall have no obligation to construct any
alteration or improvement required to comply with any Law or CC&R
now or hereafter enacted, which alteration or improvement is
properly capitalized under generally accepted accounting
principles, unless such compliance is necessitated solely because
of Tenant's peculiar use of the Property. Landlord shall construct
all other capital alterations and improvements to the Property
required to comply with any existing or future CC&R's or Laws.
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9.10 Assessments. There are no local improvement
districts or special assessments pending or contemplated which
affect the property.
9.11 Flood Plain. No portion of the Property is located
within a flood plain.
9.12 Underaround storaae Tanks. The Property has one
(1) underground storage tank, which tank, except as provided in the
report by DMJM Engineering and listed on Schedule 1.13, fully
complies with all applicable federal, state and local laws and
regulations.
9.13 Landlord Liabilities: Obliaations. Except as
contemplated by section 7.6 hereof, all liabilities or other
obligations of Landlord with respect to the Property arising or
accrued before Cutover have been fully paid and satisfied.
9.14 Leases. Except for the Convention Center Lease,
the Development Agreements and any Assumed Contract, there are no
leases or rental agreements, oral or written, with respect to the
property.
9.15 Landlord's Obliaation on Warranties. In the event
of any breach of a warranty or representation by Landlord
hereunder, upon notice of such breach Landlord shall promptly take
such action as may be reasonably necessary to promptly cure such
breach or misrepresentation.
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9.16 pavment and ComDliance. Landlord has paid all
amounts due to be paid by Landlord under this Agreement on or prior
to Cutover and has complied with all Landlord obligations and
landlord liabilities to be performed hereunder on or before
Cutover.
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9. 17 Develooment Aareements. Landlord shall fully
enforce all Development Agreements against the city or third
parties obligated thereunder. If Landlord fails to do so, Tenant
may take action to enforce same, and the cost thereof shall be a
Tenant expenditure on behalf of Landlord.
10.
Landlord
warrants
Warranties and Reoresentations
to execute this Lease, Tenant
to Landlord that:
of Tenant. To induce
hereby represents and
10.1 Authoritv. The persons executing this Agreement
are fully authorized to execute same, and t,p.eir signature is
sufficient to bind Tenant hereunder. If Tenant is an entity, such
entity is duly formed and in good standing as of the Commencement
Date.
10.2 No Consent. Tenant is free to lease the Property
without the consent or approval of any other person or entity.
10.3 Defects to FF&E. Tenant is not aware directly or
indirectly, of any material defects or conditions with respect to
the FF&E or the property except as set forth on Schedule 10.3
hereto, including, without limitation, latent defects, proposed
changes in use or zoning or potential adverse business or
competitive factors.
11. ouiet En;ovment. Landlord covenants and agrees that so
long as Tenant is in compliance with all of Tenant's obligations
under this Lease, Tenant shall lawfully and quietly hold, occupy
and enjoy the Premises during the term of this Lease without
disturbance by Landlord or by any person having title paramount to
Landlord's title or by any person claiming under Landlord.
12. utilities and Other Services. Landlord represents and
warrants that the Premises are served by water, sewer, garbage,
electrical and other utilities adequate for the purposes of
conducting a Hotel, Restaurant and Convention Center operation
therein, that such utilities serve only the Property and that the
charges with respect thereto are normal and reasonable for the area
and do not involve waste or leakage. As of the Commencement Date
Tenant shall be responsible for all charges incurred by it for
water, sewer, garbage, electrical, natural gas, and other
utilities. In the event Tenant fails to do so, Landlord shall have
the right, but not the obligation, to pay any billings related to
the above and have the amount paid by Landlord added to the next
month's rental billing.
13. Imorovements: Financina.
13.1 Imorovements. In accordance with the Capi tal
Spending Budgets outlined pursuant to Section 8. 3 , Tenant may
during the term of this Lease make non-structural improvements to
the Property as deemed appropriate by Tenant and Landlord, but
except as specifically provided in this Lease, shall have no
obligation to make any improvements, except as may be reasonably
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required to keep the Property in qood repair and good operating
condition not involving casualty.
13.2 New FF&E Financina. It is anticipated that in
order to keep the Property competitive, the FF&E on the property
will from time to time need to be upgraded and/or replaced. In
accordance with the Capital Spending Budgets outlined pursuant to
Section 8.3, Tenant shal.l undertake such I1p9rading/replacement to
the extent Tenant and Landlord deem appropriate. All upgraded or
replacement PF&E may be leased or financed by Tenant ("New FF&E
Financing") and the lessor or lender of same (which may be Tenant
or an affiliate) shall have a first priority security interest on
all such replacement or upgraded FF&E. During the term hereof,
Tenant shall indemnify Landlord with respect to the New FF&E
Financing as set forth in Section 24.2 hereof. Any New FF&E
Financinq for items which replace existing items which have a
useful life of less than five (5) years and which replaced items
are not subject to an Existing FF&E Lease or financing as of the
COllllllencement Date ("Replacement FF&E") shall upon expiration or
termination of this Lease be Tenant's sole responsibility and
Tenant shall take appropriate action (bY payoff, lease transfer or
otherwise) to hold Landlord harmless therefrom. "Upon expiration or
termination of this Lease, I.andlord shall aSSWlle, obtain the
release of and hold Tenant harmless trom all other New F!'&E
Financing, includinq but not limited to those covering FF&E items
with a useful life of five (5) years or more, FP&E items which are
significantly upgraded from that existing as of the Commencement
Date and any FF&E items which are new to the Property and not a
replacement for FF&E items existing as of the Commencement Date.
14. Maintenance.
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14.1 Landlo~d's Resconsibilities. Landlord shall, at
its sole east and expense, be responsible for all eapital expenses
and all repair, maintenance and replacement of the buildings and
improvements located on the property and their structural
components and mechanical and other systems, such as major
electrical and plumbing repair or replacement, and shall make all
capital improvements, repairs and replacements (the cost of which
lI\ay be capitalized in accordance with qenerally accepted accounting
principles) that are necessary to keep the buildings and all other
improvements located on the property (including the Hotel,
Restaurant and convention Center), their components and systems and
major equipment: items in 9000. working order and condition,
including without limitation, the roofs, exterior, windows,
signage, major equipment, structural components, and building
systems (HVAC, electrical. plumbing, etc.) and all other repairs,
replacelllents and maintenance not specifically identified as a
Tenant responsibility. Landlord shall retain the Obligation to
maintain the Convention Center pursuant hereto, regardless of the
provisions of the Convention Center Lease or any assignment thereof
to Tenant. By way of illustration and not limitation, Landlord
shall be responsible for the repair, maintenance, or replacement
(as necessary) of the following items and system.s (and any damages
suffered by Tenant as a result of Landlord's failure to perfOrm. as
required herein after sufficient notice by Tenant): identified as
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of the Commencement Date to be deficient: Convention Center roof
(numerous leaks); Hotel plumbin9 system (if required by applicabla
law or if failure of the system affects more than a modest number
of rooms); removal of asbestos (if required) or maintenance of
asbestos pursuant to a program that complies with applicable laws,
and structural, mechanical and electrical deficiencies referenced
in the report of DMJM Engineering.
14.2 ;renant's Resnonsibilities. Tenant shall,_-at its
sole cost and expense, be responsible for all normal and custOlllary
costs and expenses of _intaininq, conductinq and supervisin9 the
on90in9 operation of a hotel, restaurant and banquet business after
Cutover, along with customary, ordinary or necessary repair and
maintenance to the Premises (and any damages suffered by Landlord
as a result of Tenant's failure to perform as required herein),
including but not limited to, for example:
(i) The cost of all operating equipment (e.9.
linens, china, glassware, uniforms, etc.) except as initially
supplied by Landlord or provided by Landlord pursuant to the
provisions hereof;
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(ii) The compensation of all employees employed at
the Hotel by Tenant includinq salaries, waqes, fringe benefits,
unemployment compensation, pension fund contributions, worker'S
compensation, and other reasonable employee benefits customary in
the industry;
(iil) The costs of repairs to and maintenance of
FF&E, carpets, drapes, walls, signs and other items pertaining to
the operation of the Property that are not the responsibility of
Landlord pursuant to Section 14.1;
(iv) The cost of replacement of minor FFloE items,
ease goods, soft good!;!, carpet, etc.. as necessary, but not
including replacelllElnt of major equipment or mechanical items which
shall be the responsibility of Landlord;
(v) All taxes, assessments and other charqes
(other than federal, state or local income taxes, and franchise
taxes or the equivalent) payable by or assessed with respect to the
operation of the Hotel;
(vi) Leqal fees and fees of any CPA for services
directly related to the operation of or for the benefit of the
Hotel ~hich relate to the operation of the Hotel;
(vii) The costs and expenses of technical
and specialized operational experts for specialized
connection with non-recurring work on operational.,
decoratinq, desiqn or construction problems and
consultants
services in
functional,
activities;
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(viii) All expenses for advertising the Hotel and
all expenses of sales promotion and public relations activities.
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By way of illustration and not limitation, nOnlal and
customary costs and expenses do not include: (a) the costs and
expenses for which Landlord is responsible pursuant to Section
14.1; (b) any special assess~ents (oth~ than qeneral real estate
taxes); or (c) any franchise fee or cost associated with the
existing Radisson franchise aqreement (other than royalties or
marketing fees accruing after CUtover).
Subject to the limitations and al-locations set torth '-herein,
Tenant shall maintain and operate the Hotel anl1 the Property in
accordance with all applicaJ:lle provisions and standards of the
Hotel franchisor.
15. Alterations. Rellairs and Chanaes. Tenant llIaY llIake
Changes, improvements or- alterations to the Premises in accordance
with the Capital spending Budgets as approved by Landlord and
Tenant. Any consent required of Landlord shall not be unreasonably
withheld. All such chanqes, improvements and alterations and
repairs, if any, ~ade by Tenant which are incorporated into the
Pre~ises and which cannot be removed trom the Premises without
damage to the Premises shall remain on the Premises and shall
become the property of Landlord upon the expiration or sooner
termination of this Lease. Except as otherwise provided herein,
Tenant ~ay remove its equipment and trade fixtures from the
Property, provided Tenant repairs any damage occasioned thereby.
Any changes, improvements or alterations made by Tenant shall not
decrease the value of the Property.
16. Taxes.
16.1 Taxes. Tenant shall pay prior to delinquency all
taxes assessed and payable with respect to the Premises (includinq
but not limited to real property, personal property, sales, use,
and license taxes) during the term of this Lease.
~6. 2 Transient Occunancv Taxes. Tenant acknowledqes
that it has reviewed the. Development Acp:'eements. Pursuant to the
OPA, the Ag'ency has aqreed to pay, on a periodic basis, an amount
equal to a percentage of the transient occupancy taxes ("TOT")
actually paid to the City, up to Three Killion Dollars
($3,000,000), on or before July 20, 2003, that woUld otherwise be
payable with respect to quest utilization of the Hotel. Tenant has
been advised by Landlord that as of October 13, 1994, $1,418,753.37
of TOT remains to be paid by the Ag'ency pursuant to a formula set
forth in the OPA. Landlord agrees not to chanqe the TOT to be paid
by the Aqency without the consent of Tenant. On or prior to
cutover, Landlord and Tenant will obtain from the City an estoppel
letter, in form acceptable to Landlord and Tenant, confirminq that
at least $1,418,753.37 of TOT will be available durinq the initial
term of this Lease.
17. Siems. In Tenant's sole discretion Tenant shall be
entitled to display any sign, notice or advertising matter in or
about the Premises.
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18. Leasehold Mortaaae Authorized. On one or more occasions,
Tenant may , without Landlord's consent, mortgage or otherwise
encumber Tenant's leasehold estate created by this Lease to a
lender or investor ("Tenant's Lender"), and assign this Lease as
security for such mortgage or mortgages; it being understood that
by signing this Lease, Landlord shall be deemed to have consented
to any such mortgage. Further, Landlord shall reasonably cooperate
with Tenant and Tenant's Lender in connection with obtaining such
mortgage or mortgages, including without limitation, the execution
of a document (or documents) that modifies this Lease to provide
for commercially reasonable provisions and protections customarily
requested by leasehold mortgagees.
19. Liabilitv Insurance. Tenant shall, at Tenant's expense,
maintain public liability and property damage insurance insuring
against any and all claims for injury to or death of persons and
loss of or damage to property occurring upon, in or about the
Premises. Such insurance shall have primary liability limits
(including liquor liability) of not less than One Million Dollars
($1,000,000) in respect of injury or death to anyone person, an
aggregate of not less than Two Million Dollars ($2,000,000) for all
such injuries, and not less than One Million Dollars ($1,000,000)
for property damage. Tenant shall also maintain umbrella liability
coverage up to Ten Million Dollars ($10,000,000). All such
insurance shall name both Landlord and Tenant.
All such insurance shall be issued by carriers reasonably
acceptable to Landlord and shall contain a provision whereby the
carrier agrees not to cancel or modify the insurance without at
least twenty (20) days prior written notice to Landlord.
On or before taking possession of the Premises pursuant to
this Lease, Tenant shall furnish Landlord with a certificate
evidencing such insurance coverage, and renewal certificates shall
be furnished to Landlord at least thirty (30) days prior to the
expiration date of each policy for which a certificate was
theretofore furnished.
20. Casualtv Insurance.
20. 1 Improvements. Tenant shall maintain casualty
insurance coverage in an amount sufficient to cover the replacement
cost including ordinance coverage of the Property as reasonably
determined by Landlord. All proceeds of such insurance shall be
applied to the restoration of the Property to the extent provided
in Section 21 below and any proceeds of such insurance remaining
after such restoration shall belong to Landlord.
20.2 Earthauake Insurance. Tenant shall not be required
to insure the Property for earthquake or earth movement, which
risks shall be that of Landlord. Landlord may elect to insure
against such risks, or not insure against such risks, at Landlord's
discretion, but Landlord shall in any event be obligated as set
forth in section 57 hereof, Allocation of Risks.
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20.3 personal ProDertv. Tenant shall maintain on all of
Tenant's personal property and leasehold improvements and
alterations on the Premises a policy of standard fire and casualty
insurance, with extended coverage, in thQ amount of their replace-
ment value as reasonably determined by Tenant. Such insurance
shall name Landlord, Tenant and any applicable existing or new FP&.E
lea$e le$&or, as _y be requireCl by the respective applioable
documents. All proceeds of any such insurance shall be appl.ied to
the restoration of fixtures, iJ\lProv_ents and alterations to the
extent provided in Section 21 below; any proceads of such insuranoe
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21. Damaqe or Destruction.
21.1 RiSk of Loss. In the event of material damaqe or
casualty loss to the Property, Tenant _y el.ect to require Landlord
to rebuild all damaged Property as soon as reasonably possible or
Tenant _y elect to terminate this Lease as set forth in Section
25.5, in which case Tenant shall not be entitled to any insurance
proceeds on the IlDprovements or FF&E except as set forth in Section
20.3 hereof. In the event that the material damage or casualty
loss occurs within the last three (3) years of the first two (2)
terms of this Lease, before Tenant may elect to require Landlord to
rebuild the damaged Property, Tenant must exercise its right to
renew the term of this Lease for another ten (10) year period.
Notwithstanding anything conbdned herein, if the material
damage or casualty loss occurs during the last five (5) years of
the second Renewal Period and the damage or loss is greater than
twenty-five percent (25%) of the Property, Landlord may terminate
this Lease and repay to Tenant: (i) the amount of Tenant's
Investment Recapture, (ii) any other amounts owed to Tenant
hereunder not alrea4y included in Tenant'S Investment Recapture,
and (iil) all Inventory on hand at the Property and all accounts
receivable of guests and/or patrons of the Property Who have
received Hotel services but not yet paid for such services other
than the Tray (Guest) Ledger.
21. 2 Rebuildina. If the property is damaged or
destroyed by tire or any other cause and Tenant el.ects to require
Landlord to rebuil.d pursuant to Section 21.1 above, Landlord shall
restore the Property as nearly as practicable to its condition
immediately prior to such damage or destruction. All insurance
proceeds shall be first applied to the cost of rebuilding and
Landlord shall be fully responsible for any uninsured/under insured
loss. Landlord shall commence construction as soon as possible and
shal.l diligently pursue such construction to completion.
21. 3 Rent Abatement. If Landlord. undertakes to restore
the Premises as provided above in this Section 21, then commencinq
with the date of the damage or destruction and continuing throuqh
the period of restoration, the rent for the Premises shall be
abated for such period in the same proportion as the untenable
portion of the Premises bears to the whole thereof. The entire
Property shall be considered untenable if the damage is so
extensive that it is impractical to operate the Property as a hotel
during the rebuilding.
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22. Assianment. Successors and Assians. Tenant shall have
the right to assign its rights under this Lease to any entity owned
or controlled by or under common control with Tenant, or any entity
which owns or controls or is under common control of Tenant, or any
successor by merger or consolidation on any entity that acquires
all or substantially all of Tenant's assets provided at least
fifty-one percent (51%) of such entity is owned and controlled and
continues to be owned by Tenant's shareholders or provided the
Lease is held by an entity used by Tenant's shareholders to effect
a public offering of stock. This Lease shall inure to the benefit
of and be binding upon the parties hereto and their respective
successors and assigns. Except as set forth above, this~ease is
not assignable to any other party without the express written
consent of Landlord, which consent shall not be unreasonably
withheld. provided that the City has approved such assignment,
Landlord shall have the right to assign is rights hereunder but
shall not be relieved of liability hereunder as a result thereof.
23. Restaurant. Tenant shall have the right to operate or
sublease the Restaurant portion of the Hotel in whatever manner
Tenant deems most desirable, including continuation of the
Restaurant under its present name, changing the name and/or concept
thereof, leasing out the Restaurant and/or the other food and
beverage operations of the Hotel or entering into a franchise
agreement for the Restaurant so long as any agreements with respect
thereto entered into by Tenant do not exceed the term of this
Lease.
24. Mutual Indemnitv.
24.1 Tenant Indemnitv of Landlord. Tenant shall defend,
indemnify and hold harmless Landlord, its officers, agents and
employees, from and against any and all claims arising from injury
to persons, loss of life or damage to or loss of property occurring
in or about the Premises and from and against any and all costs,
expenses, damages and liabilities (including, without limitation,
reasonable attorneys' fees) incurred by Landlord and/or its
affiliates in or in connection with any claim or any proceeding
based thereon, to the extent such injury, loss of life, damage to
or loss of property, cost, expense, damage or liability arises out
of (i) any act, neglect, fault or omission of Tenant, any of its
officers, employees, agents, contractors, licensees or invitees, or
(ii) any breach, default, violation or nonperformance of any
obligation or covenant on Tenant's part to be performed or observed
under the terms of this Lease, or (iii) any obligations due but not
performed under the Development Agreements prior to the
Commencement Date. If any action or proceeding shall be brought
against Landlord by reason of any such claim, Tenant upon notice
from Landlord shall defend the same at Tenant's expense by or
through counsel reasonably satisfactory to Landlord. If any such
claim involves potential liability in excess of Fifty Thousand
Dollars ($50,000), is not covered by Tenant's insurance or if the
defense of the matter is not accepted by such insurer, then in such
event, Landlord may, at its discretion but at Tenant's expense,
engage attorneys of its own choosing to defend Landlord therein.
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24.2 Landlord Indemnitv of TC!nant. Landlord shall
defend, indemnify and hold harmless Tenan~, its officers, aqents
and employees, from and against any and all claims arising from
injury to persons, loss of life or damaqe to or 10S8 of property
occurrinq in or about the prelllises and from and against any and all
costs, expenses, damages, and liabilities (includinq, without
limitation, reasonable attorneys' fees) incurred by Tenant and/or
its affiliates in or in connection with any claim or any proceeding
based thereon, to the extent such injw:y, loss of life, daJllage to
or 1055 of property, cost, expense, damage or liltbility arises out
of (i) any act, neqlect, fault or OIIIission of LandlorQ, any of its
officers, employees, aqents, contr~ctors, licensees or invitees,
(ii) any breach, default, violation or nonperformance--of any
obligation or covenant on Landlord's part to be pedormed or
observed under the terms of this Lease, includinq but not limited
to the warranties and reprElsentations macle by Landlord, (iU) the
failure of any third party to an MS1.UIIed. Contract or other
agreement to which Tenant is a ~arty or a beneficiary, to perform
any obligation contained there1.n to be performed by such third
party, or (iv) any obliqations due but not performed under the
Deve~opment Agreements :prior to the Commencement Date. I:f any
action or proceeding shall be brought aqainst Tenant b:{ reason of
an:{ such claim, LandlorQ upon notice from Tenant shall defend the
same at Landlord's expense by or through counsel reasonably
satisfactory to 'renant. :tf any such claim involves: potential
~iability in excess of Fifty Thousand Dollars ($50,000) or is not.
covered by Landlord's insurance (and the defense accepted by such
insurer) then in such event, Tenant may, at its discretion but at
Landlord's expense, enqage attorneys of its own choosinq to defend
Tenant therein.
Tenant shall have a claim against the cutover Fund and any of
Landlord's assets, or otherwise as set forth herein, for amounts
owed by Landlord to Tenant pursuant to this indemnification.
25. Default; Remedies.
25.1. Tenant's Default. The occurrence of any of the
following events shall be deemed a breach of this Lease by Tenant:
(a) Tenant fails to pay the rent or any part
thereof or lIlake any other paYJllent required to be made by Tenant
hereunder as and when due and such failure continues for :Hve (5)
business days after notice thereof by Landlord to Tenant; or
(b) Tenant fails to observe or perform any other
provision of this Lease to be observed or performed by Tenant and
suCh failure continues for thirty (30) days after notice by
Landlord to Tenant (but if the nature of the default is such that
it cannot reasonably be cured within the 3o-day period, Tenant
shall not be deemed to be in default if Tenant shall within the 30-
day periOd commence to cure and thereafter diligently attempts to
prosecute such cure to completion). :tn addition, Tenant. shall be
in default hereunder if Tenant defaults under the Convention Center
Lease or the OPA.
25.2 Landlor~'s Remedies for Tenant's Default. In the
event of default of the Lease by Tenant, after written notice and
subject to Tenant's right to cure, in addition to any other
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remedies at law or in equity (including but not limited to specific
performance), Landlord may:
(a) Terminate the Lease and declare the Lease term
hereof ended and re-enter the Property and take possession thereof,
and Tenant shall have no further claim thereon or hereunder; or
(b) without declaring a termination of the Lease,
or the Lease term hereof ended, re-enter the Property and occupy
the whole or any part thereof for and on account of Tenant; or
(c) Even though Landlord may have re-ene~red the
property, thereafter elect to terminate this Lease and all of the
rights of Tenant in or to the Property.
25.3 Landlord's Damaaes. Should Landlord have re-
entered the Property under the provisions of section 25.2 above,
Landlord shall not be deemed to have terminated this Lease or the
liability of Tenant to pay any rental or other charges thereafter
accruing, or to have terminated Tenant's liability for damages
under any of the provision hereof by any action in unlawful
detainer or otherwise, to obtain possession of the Property, unless
Landlord shall have notified Tenant in writing that it has so
elected to terminate this Lease, and Tenant further covenants that
the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State of California and the surrender of
possession pursuant to such notice shall not (unless Landlord
elects to the contrary at the time of or any time subsequent to the
serving of such notice and such election is evidenced by a written
notice to Tenant) be deemed to be a termination of this Lease.
Should Landlord elect to terminate this Lease pursuant to the
provisions of section 25.2 above, Landlord may recover from Tenant
as damages, the following:
(a) The worth at the time of the award of any
unpaid rent and other charges which had been earned at the time of
termination; plus,
(b) The worth at the time of the award by which
the unpaid rent and other charges which would have been earned
after termination until the time of the award exceeds the amount of
the loss of such rental and other charges that Tenant proves could
have been reasonably avoided; plus,
(c) The worth at the time of the award of the
amount by which the unpaid rent and other charges for the balance
of the Lease term after the time of the award exceeds the amount of
the loss of such rental and other charges that Tenant proves could
have been reasonably avoided; plus,
(d) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which, in
the ordinary course of things, would be likely to result therefrom.
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(e) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from
time to time by epplicable California law.
25.4 Landlord's Default. Landlord sl1all be in default
hereunder if Landlord fails to 1Dake any payment required hereunder
within the time specified herein or if not so specified, within
five (5) business days after notice thereof by Tenant to LandlOrd,
or fails to perform any other provision of this Lease required to
be performed by Landlord (inClUding a breach ot. a Landlord warranty
or representation which after notice by Tenant, Landlord doe$ not
promptly and diligently attempt to cure), and such failure
continues for thirty (30) days atter notice by Tenant to Landlord
(but if the nature of the default is such that it cannot r_$onably
be cured within the 3D-day period, Landlord shall not be deemocl to
be in default if Landlord shall within the 30-day period cOllllllence
to cure and thereafter diliqently a.ttempts to prosecute s:uch cure
to completion). In addition, Landlord shall be in default
hereunder if Landlord defaults under the COnvention Center Lease or
the OPA.
25.5 Tenant's Remedies for Landlord's Default. In the
event of a default by or breach of warranty by Landlord after
written notice and subject to Landlord's right to cure, in addition
to other remedies specified herein (includinq the right to
terminate pursuant to section 35) or available .at law or equity
(including but not limited to specific performance), Tenant may:
(a) cure the default, inCluding, but not limited
to, making any repairs or replacements to the Property, and
Landlord shall reimburse Tenant, on demand, for all of Tenant's
costs and expenses incu=ed in connection with such cure, plus
interest at the prime rate published by the well Street Journal,
plus four percent (4%) per annum., until paid in full. or in the
alternative, Tenant may offset against the Minimum Rent an amount
equal to Tenant's costs and expenses incurred in connection with
such cure, plus interest; or
(b) abate the rent in full until such time as
Landlord cures the default; or
(c) declare the outstanding princi.pal balance of
the Loan (as defined in Section 28) and all accrued but unpaid
interest thereon immediately due and payable, and apply the rent
payments otherwise due hereunder toward the repayment of the Loan;
or
(d) terminate this Lease by delivery of a written
notice of terminati.on to Landlord.
rn all events, Tenant shall be entitled to repayment of all
amounts secured by the Tenant Deed of 'rrUst, in addition to any
other amounts owed by Landlord to Tenant, in addition to any
damages resulting from Landlord's default and in addition to any
damages resulting from Landlord's failure to perform any obligation
of Landlord. Alternati~ely, Tenant may. continue this Lease, and
shall in any event be entitled to offset all damaqes as a Tenant
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offset, secured by the Tenant Deed of Trust. Notwithstanding ~~
cure period set forth in section 25.1, Tenant may cure any default
without notice to Landlord, where the failure promptly to cure such
default would, in the reasonable opinion of Tenant, create or allow
to persist an emergency condition or materially adversely affect
the operation of Tenant's business on the Premises.
26. Trade Fixtures. Tenant may install on the Premises such
trade fixtures and/or signs as is customarily used in the type of
business conducted by Tenant on the Premises. Upon the expiration
or sooner termination of this Lease, Tenant shall, at ~enant's
expense, remove from the Premises all such trade fixtures:Or signs
and all other property of Tenant and repair any damage to the
Premises occasioned by the removal thereof.
27. Condemnation. If all of the Premises are taken by any
public authority under the power of eminent domain, or any
equivalent, this Lease shall terminate as of the date possession is
taken by such public authority pursuant to such condemnation and
Landlord and Tenant shall be released from any liability thereafter
accruing pursuant to this Lease.
If any part of the Premises is so taken and, in the reasonable
opinion of either Landlord or Tenant, it is not economically
feasible to continue this Lease in effect, either party may
terminate this Lease. Such termination by either party shall be
made by notice to the other given not later than thirty (30) days
after possession is so taken, the termination to be effective as of
the later of thirty (30) days after said notice or the date
possession is so taken.
If part of the Premises is so taken, and neither Landlord nor
Tenant elects to terminate this Lease, or until termination is
effective, as the case may be, rent shall be abated in the same
proportion as the portion of the Premises so taken bears to the
whole of the Premises, and Landlord shall make such repairs or
alterations, if any, as are required to render the remainder of the
Premises tenantable.
Tenant shall be entitled to receive from Landlord the portion
of any damages awarded for the taking or damaging of all or any
part of the Premises that represents the value of this Lease, and
any damage to the Hotel business. If this Lease is terminated
pursuant to this section 27, Tenant's right to receive reasonable
compensation for its rights hereunder from the condemning
authorities, or from Landlord if included in Landlord's award,
shall not be affected or diminished.
In any event, in the event of a condemnation which results in
a termination of this Lease, such termination shall be treated as
a termination covered by section 25.5 hereof, and Tenant shall have
a first priority claim against any award to Landlord to fully
satisfy all sums payable to Tenant, including full satisfaction of
amounts secured by the Tenant Deed of Trust.
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A voluntary sale by Landlord to any public body or agency,
either under threat of condemnation or while condemnation
proceedings are pending, shall be considered a taking under the
power of eminent domain for purposes of this section.
28. Tenant Deed of Trust. This Lease is intended as a long
term arrangement in which Tenant will make substantial financial
commitments, including costs and expenses pertaining to the
Upgrades based upon occupying the Property and conducting the Hotel
business for the full term hereof, and Tenant is also relying on
Landlord to fulfill Landlord's financial and other obligations
hereunder. Accordingly, repayment of the amount of all ~pgrades
made to the Property by Tenant, and all amounts' subject to Tenant
offset or otherwise owed by Landlord to Tenant pursuant to this
Lease shall be deemed to constitute a loan from Tenant to Landlord
(the "Loan") the repayment of which will be secured by a Deed of
Trust/Security Agreement in the form attached hereto as Schedule 28
("Tenant Deed of Trust") on the Property, inferior in priority only
to this Lease and matters of record as of the Commencement Date.
Landlord shall execute any documents and take any other actions
which may from time to time be necessary to document and record the
Tenant Deed of Trust.
The parties acknowledge that at commencement of this Lease the
Property is experiencing substantial operating losses, which losses
are expected to continue for some time and will be absorbed/funded
by Tenant. In the event this Lease is terminated for any reason
other than the default of Tenant, Landlord shall also be obligated
to repay to Tenant all of Tenant's accumulated operating losses at
the time of termination which obligation shall also be secured by
the Tenant Deed of Trust. Accumulated operating losses shall mean
losses incurred by Tenant under generally accepted cash basis
accounting principles after the cutover, plus any costs/expenses
related to the property incurred/paid by Tenant prior to cutover,
plus interest.
Every expenditure by Tenant for an Upgrade or otherwise on
behalf of Landlord for any purpose, every increment of accumulated
operating loss from the Cutover Date, and any other amounts due
Tenant pursuant to Section 56, shall constitute an advance under
the Loan and the principal balance of Landlord's obligation secured
by the Tenant Deed of Trust shall increase accordingly.
All amounts secured by the Tenant Deed of Trust shall become
due and payable as otherwise set forth herein or by law, but in any
event at such time as this Lease is terminated for any reason prior
to the full duration of the term hereof, including any extension
terms exercised by or available to Tenant.
Notwithstanding any provision hereof to the contrary, the
Tenant Deed of Trust shall survive any termination or expiration of
this Lease, until fully paid and satisfied.
29. Waiver of Subrooation. Landlord and Tenant shall each
procure, if obtainable without payment of an additional premium, an
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appropriate clause in, or an endorsement on, any policy of fire or
extended coverage insurance covering the Premises and the personal
property, fixtures and equipment located in or on the Premises,
pursuant to which the insurance companies waive subrogation or
consent to a waiver of right of recovery, and, conditioned upon a
party having obtained such clauses or endorsements or waiver of
subrogation or consent to a waiver of right of recovery, such party
hereby agrees that it shall not make any claim against or seek to
recover from the other for any loss or damage to its property, or
the property of the other, resulting from fire or other hazards
covered by such insurance, notwithstanding other .provision~ of this
Lease; provided, however, that the release, discharge, exoneration
and covenant not to sue herein contained shall be limited by the
terms and provisions of the waiver of subrogation clauses or
endorsement consenting to a waiver of right of recovery, and shall
be coextensive therewith. If either Landlord or Tenant is unable
to obtain such clause or endorsement, such party shall promptly
give the other party notice of such inability. If either Landlord
or Tenant is able to obtain such clause or endorsement only upon
payment of an additional premium, such party shall promptly give
the other party notice to that effect, in which event the other
party shall have the right to pay such additional premium, and upon
such payment, the party whose insurer requires such payment shall
promptly procure such clause or endorsement.
30. Landlord Exoenditures.
30.1 Budqet Approved Items. Any item contained and
approved by Landlord in any Capital Spending Budget as provided for
in Section 8.3 hereinabove, shall be paid by Landlord within ten
(10) days of Tenant's notice to pay. In the event that Landlord
does not remit payment within said ten (10) day period after
notice, Tenant shall have the right to offset such amount against
any rent due to Landlord.
30.2 Ordinarv and Necessarv Expenditures. Tenant may,
without Landlord's approval and without inclusion in the Capital
spending Budget, expend up to Fifty Thousand Dollars ($50,000): (i)
in ordinary and necessary mechanical expenditures where the cost to
repair any mechanical item is (1) greater than ten percent (10%) of
the cost to replace said item, or (2) greater than fifty percent
(50%) of the then book value of the item; and, (ii) in ordinary
and necessary electrical and plumbing expenditures where the
electrical or plumbing problem affects over five percent (5%) of
the guest rooms.
30.3 Items Not Included in Budqet. Any expenditure
required pursuant to governmental notice which is not included in
a Capital Spending Budget shall be paid by Landlord within thirty
(30) days of Tenant's notice to pay.
30.4 Emerqencv Expenditures. In the event of a 1ife-
threatening situation or a situation which causes a substantial
interruption in the day-to-day operations of the Property, Tenant
may directly advance an expenditure. In such case, Tenant shall
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provide notice of the expenditure and the reason therefor to
Landlord and Landlord shall have fifteen (15) days within which to
reimburse Tenant for such expenditure.
30.5 Interest on Advancements. Upon any advancement by
Tenant of expenditures as provided in this Section 30, Tenant
shall, so long as it is entitled to be repaid, be entitled to
interest thereon at the existing prime rate published by the Wall
Street Journal, plus four percent (4%).
31. prioritv of Tenant's Interest. This Lease, and Tenant's
right to occupy the Property pursuant to this Lease, is and shall
throughout the term hereof (as extended, if applicable) be prior to
any and all monetary encumbrances affecting the Property.
32. Surrender of premises. Subject to Landlord's obligations
hereunder, Tenant, at the expiration or sooner termination of this
Lease, shall quit and surrender the Premises in good, neat, clean
and sanitary condition, except for reasonable wear and tear and
casualty damage.
33. Force Ma;eure. Tenant's and Landlord's failure to timely
perform any of their respective obligations under this Lease shall
be excused if due to causes beyond the reasonable control and
without the fault or negligence of Tenant or Landlord, including
but not restricted to acts of God, acts of the public enemy, acts
of any government, fires, floods, epidemics, unusual "and adverse
market factors, such as a dramatic drop in lodging occupancy in the
general area, closure of the adjacent mall, sustained closure of an
airport serving the area, environmental, catastrophes and the like.
34. Interference with Tenant's Use. If all or any part of
the Property should become unsuitable for Tenant's use for any
reason (other than Tenant's fault) including, but not limited to,
force majeure events, then Tenant shall be entitled to a full
abatement of rent for the period of time the Property (or portion
thereof) is unsuitable for Tenant's use after thirty (30)
consecutive days of unsuitability; provided, however, that if the
Property (or portion thereof) remains unsuitable for Tenant's use
for one hundred twenty (120) consecutive days or more, then in
addition to abatement of rent, Tenant shall be entitled to elect
(in Tenant's sole discretion) (a) to declare the outstanding
principal balance of the Loan and any accrued but unpaid interest
thereon immediately due and payable, or (b) to terminate this Lease
by delivery of written notice of termination to Landlord, or (c) do
both (a) and (b).
35. Tenant's Riqht to Terminate Lease. In light of Tenant's
entering into this Lease without conducting its normal extensive
due diligence, Tenant shall have the right, after the first two (2)
years of this Lease and upon one hundred eighty (180) days' notice,
to terminate this Lease without cause, and without liability to
Landlord, provided that if Tenant does so, the Tenant Deed of Trust
shall be deemed extinguished and Landlord shall succeed to
ownership of any improvements made by Tenant.
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TO TENANT:
c/o Northwest Lodging, Inc.
Box C- 1 9167
Seattle, Washington 98109
Attn: Lawrence P. Horwitz and
Attn: John T. Blanchard
Phone: (206) 389-9860 or
(206) 621-3555
Fax: (206) 727-2207
WITH A COpy TO:
Craig Anders
Brobeck, paleger & Harrison
550 West C street, Suite 300
San Diego, California 92101
Telephone: (619) 234-1966
Fax: (619) 234-3848
Notices shall be deemed received upon personal delivery or
confirmed fax, or at the earlier of actual receipt or three (3)
business days after deposit into the mail. Purchaser and Seller
may change their respective addresses and add additional addressees
by written notice to the other party.
39. Interpretation. This Agreement has been submitted to the
scrutiny of all parties hereto and their counsel, if desired, and
shall be given a fair and reasonable interpretation in accordance
with the words hereof, without consideration or weight being given
to its having been drafted by any party hereto or its counsel.
40. Partial Invaliditv. If any term or provision of this
Lease or the application thereof to any person or circumstance
shall to any extent be invalid or unenforceable, the remainder of
this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and be enforced as written
to the fullest extent permitted by law.
41; Estoppel Certificate. Landlord and Tenant agree from
time to time to promptly execute, acknowledge and deliver to the
other party a statement in writing certifying that the Lease is
unmodified and in full force and effect (or if there have been
modifications that the same is in full force and effect as modified
and stating the modifications), whether any party is in default or
breach of the Lease, and the dates to which the basic rent and
other charges have been paid in advance, if any.
42. Consent/Approval.
approval is required, such
unreasonably withheld.
Where another party's consent or
consent or approval shall not be
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43. Entire Aareement. This Agreement contains all
representations and the entire understanding between the parties
hereto with respect to the subject matter hereof.
44. Time. Time is of the essence hereof.
45. Distlutes: Arbitration. In the event of a dispute between
Landlord and Tenant regarding this Lease or their respective duties
hereunder, the matter shall be submitted to binding arbitration.
Submission of the matter to arbitration shall not be a default
under this Lease. Arbitration shall be as follows:
(a) ANY DEMAND FOR ARBITRATION SHALL BE IN WRITING
AND MUST BE MADE WITHIN A REASONABLE TIME AFTER THE CLAIM, DISPUTE
OR OTHER MATTER IN QUESTION HAS ARISEN. IN NO EVENT SHALL THE
DEMAND FOR ARBITRATION BE MADE AFTER THE DATE THAT INSTITUTION OF
LEGAL OR EQUITABLE PROCEEDINGS BASED UPON SUCH CLAIM, DISPUTE OR
OTHER MATTER WOULD BE BARRED BY THE APPLICABLE STATUTE OF
LIMITATIONS. NOTICE OF DEMAND FOR ARBITRATION MUST PROVIDE: (a) A
DESCRIPTION OF THE DISPUTE; (b) FACTS FROM WHICH THE DISPUTE
ARISES, INCLUDING WITNESSES, DATES, TIMES, AND CIRCUMSTANCES; (c)
A DESCRIPTION OF THE RELIEF OR ACTION REQUESTED.
(b) ANY DISPUTE BETWEEN THE PARTIES THAT IS TO BE
RESOLVED BY ARBITRATION SHALL BE SETTLED AND DECIDED BY ARBITRATION
BY AMERICAN ARBITRATION ASSOCIATION (" AAA ") IN ORANGE COUNTY,
CALIFORNIA. IF AAA IS UNWILLING OR UNABLE TO ACT AS ARBITRATOR,
THEN THE PARTIES SHALL APPLY TO THE PRESIDING JUDGE OF THE SUPERIOR
COURT OF THE COUNTY IN WHICH THE PROPERTY IS LOCATED. AAA (OR, IF
APPLICABLE, THE PRESIDING JUDGE) SHALL PROVIDE BOTH PARTIES WITH A
LIST OF AT LEAST THREE (3) NEUTRAL ARBITRATORS, FROM WHICH THE
PARTIES SHALL SELECT THE ARBITRATOR. SHOULD THE PARTIES FAIL TO
AGREE UPON AND SELECT AN ARBITRATOR THEREFROM, AAA (OR, IF
APPLICABLE, THE PRESIDING JUDGE) SHALL MAKE THE SELECTION FROM SAID
LIST. EACH PARTY SHALL, HOWEVER, BE GIVEN THE RIGHT OF ONE (1)
PREEMPTORY CHALLENGE. ARBITRATION SHALL BE HELD AND CONDUCTED
BEFORE THE ONE (1) SELECTED ARBITRATOR.
(c) ALL PROCEEDINGS INVOLVING THE PARTIES SHALL BE
REPORTED BY A CERTIFIED SHORTHAND COURT REPORTER, AND WRITTEN
TRANSCRIPTS OF THE PROCEEDING SHALL BE PREPARED AND MADE AVAILABLE
TO THE PARTIES.
(d) THE ARBITRATOR OR ARBITRATORS SHALL PREPARE
AND PROVIDE THE PARTIES WITH WRITTEN FACTUAL FINDINGS AND THE
REASONS ON WHICH THE DECISION OF THE ARBITRATOR IS BASED.
(e) FINAL DECISION BY THE ARBITRATOR MUST BE MADE
WITHIN ONE HUNDRED SIXTY (160) DAYS FROM THE DATE THE ARBITRATION
PROCEEDINGS ARE INITIATED.
(f) THE PREVAILING PARTY SHALL BE AWARDED
REASONABLE ATTORNEYS FEES, EXPERT AND NON-EXPERT WITNESS COSTS AND
EXPENSES, AND OTHER COSTS AND EXPENSES INCURRED IN CONNECTION WITH
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THE ARBITRATION. COSTS AND FEES OF THE ARBITRATOR SHALL BE BOP~~
BY THE NON-PREVAILING PARTY.
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(g) AS SOON AS PRACTICABLE AFTER SELECTION OF THE
ARBITRATOR, THE ARBITRATOR SHALL DETERMINE A REASONABLE ESTIMATE OF
ANTICIPATED COSTS AND FEES OF THE ARBITRATOR, AND EACH PARTY SHALL
DEPOSIT WITH THE ARBITRATOR AN AMOUNT EQUAL TO ONE-HALF (\) OF THE
ESTIMATED AMOUNT WITHIN FIVE (5) DAYS FROM THE DETERMINATION.
FAILURE OF ANY PARTY TO MAKE SUCH DEPOSIT SHALL RESULT IN A
FORFEITURE BY THE NON-DEPOSITING PARTY OF THE RIGHT TO DEFEND OR
PROSECUTE THE CLAIM SUBJECT TO ARBITRATION, BUT SHALL NOT OTHERWISE
SERVE TO ABATE, STAY OR SUSPEND THE ARBITRATION PROCEEDINGS.
(h) ARBITRATION SHALL BE CONDUCTED PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET SEQ. THE
PROVISIONS OF TITLE 9 OF PART 3 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE, INCLUDING SECTION 1283.05, AND SUCCESSOR STATUTES,
PERMITTING EXPANDED DISCOVERY PROCEEDINGS SHALL BE APPLICABLE TO
ALL DISPUTES WHICH ARE ARBITRATED.
(i) IF THESE ARBITRATION PROVISIONS ARE HELD
UNENFORCEABLE FOR ANY REASON, IT IS AGREED THAT ALL ARBITRABLE
ISSUES IN ANY JUDICIAL PROCEEDING WILL BE SUBJECT TO AND REFERRED
ON A MOTION BY ANY PARTY FOR HEARING AND DECISION BY A REFEREE AS
PROVIDED BY CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 ET SEQ.
(j) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO
THE CONTRARY, THE FOLLOWING MATTERS SHALL BE EXEMPT FROM
ARBITRATION:
i) UNLAWFUL DETAINER AND FORCIBLE DETAINER
ACTIONS; AND
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ii) ACTIONS FOR INJUNCTIVE RELIEF PROVIDED,
HOWEVER, THAT SAID ACTIONS SHALL BE ABATED OR STAYED EXCEPT TO THE
EXTENT NECESSARY TO AFFORD THE PARTIES THE RIGHT TO OBTAIN AND
ENFORCE PROVISIONAL INJUNCTIVE RELIEF (TEMPORARY RESTRAINING ORDERS
AND PRELIMINARY INJUNCTIONS).
iii) NOTICE: BY INITIALING IN THE SPACE BELOW
YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE
BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND
APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER THE AUTHORITY OF THIS CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.
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WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARiSING oUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION TO THE NEUTRAL ARBITRATION.
Tenant's In1tLa1s
Land1ord's Initials
46. survival. The ;representations, warranties, covenants and
agreement=, made herein sha11 survive the co_nc_ent Date and
Cutover.
47. Governincr Law. Venue. This Agreement shall be qoverned
by and construed under the laws of the State of California. Venue
for any leqal action cOll\lllenced between the parties hereto shall be
in San Bernardino, california.
48. Commissions. No real estate, finders or other
cOll\lllissions are payab1e with respect to this transaction. Each
party aqrees to defend, indemnify and ho1d the other harmless with
respect to any breach by or through such party of this mutual
representation.
49. creditor List. Prior to cutover, Landlord shall provide
Tenant with a current list of a11 Landlord'S vendors, supp1iers and
creditors ("Creditors") whiCh Landlord sha11 represent to be
complete and accurate. Such list shall be attached as Schedule 49
hereof _ All such creditors shal1 be paid by Landlord. Landlord
shall defend, indemnify and hold Tenant harmless from and aqainst
any 1iability with respect to such creditors or any creditor
omitted from such list, l1-nd any other liability accruing to Tenant
as a result thereof. Tenant shall assist Landlord in preparinq
such creditors' list but shall not be liable for the accuracy
thereof.
50. Schedules and Exhibite.
hereto are as follows:
The Schodu1oSl and Exhibits
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Exhibits
Descriotion
A
B
C
'0
Legal Description
Purchase and Sale Aqreement
Guaranty of Lease
Covenant and Aqree_nt Reqarding Parking
Schedules
Descrintion
~~S.~
~.6
1.1.2.4
1.1.3
9.1
9.3
9.6
10.3
28
49
51
n&E
Ass1UIled Contracts
Specifio Excluded J:tems
DMJH Recommended Repairs/corrections
Acoepted EncUlllhrances
Defects to FF&E Known to Landlord
Hazardous substanoes
Defects to FF&E Known to Tenant
Oeed of Trust/Seourity Aqreelllent
Creditor List
Memorand1Ull of Lease
51. Memorandum of Lease. This Lease shall not be recorded
vi-t:hout the oonsent of both parties. However, the parties aqree to
exeoute a memorand1Ull of this Lease, in form set forth at
Schedule 51, upon the other's request.
52. Counteroarts. This Lease Ag1:'eement may be executed in
two or more oounterparts, each of wb.ioh shall constitute an
original and all of which shall be one and the same agree_nt.
S3. continaencies.' This Aqraement shaJ.l be contingent upon
the fOllowing:
53.1 Close of Sale Aareement. Landlord purchasing the
Property from Kamka pursuant to the Sale Agreement. The purchase
and sale is scheduled to close on or before November 30, ~994.
53.2 Guarantv. Northwest Lodgin'J, a Washington
corporation, executing a "Guaranty of Lease", in form substantially
similar to Exhibit C attached hereto and incorporated herein by
reference.
S3 .3 cutover Fund. Landlord estab1ishinq the Cutover
FUnd as provided by Section 1.13.2.
53.4 Acnroval of City. Approval by the city of this
Lease and the assignment to Tenant of Landlord's rights under the
OPA and the Convention Center Lease.
53.5 AODroval af Agency:. Approval by the A9'enoy of this
Lease and the assignment to Tenant of Landlord's rights under the
OPA.
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53.6 Licruor License. Approval by the Bureau of Al.cohol
and Beveraqe Control to the assiqn=ent of the Liquor License as
provided in Section 1.7.
53.7
agreement with
between Tenant
Radisscn Aaree.mAn't.
Radisson or execution
and Radisson.
Transfer of the franchise
of a new franchise acp:eelllent
53. 8~. Issuance of the ALTA l.ender's and ALTA
owner's policies with endorsements acceptable to Tenant.
53.9 Deed of Trust. Recordation of the Tenant 'Deed of
Trust and execution of such other documents reasonably necassary to
evidence the Loan and Tenant's security interest in the Property,
in form satisfactory to Landlord and Tenant.
53.10 Memorandum of Lease. Recordation of a Memorandum
of Lease in form satisfactory to Landlord and,Tenant.
53.11 EstoDDel Certificates. Execution of estoppel
certificates by the city and the Agency in favor of Landlord and
Tenant, in form acceptable to Landlord and Tenant.
54. No PartnershiD. Nothinq contained herein or in any
instrument relating hereto shal.l. be construed as creating a
partnel;"ship or joint venture between Landlord and Tenant or between
Landlord and any other party, Or cause LandlOrd to })e responsible
in any way for debts or obligations of Tenant or any other party.
55. Riaht of First Refusal.. In the event Landl.ord receives
an offer to sell its interest in the Property covered by this
Lease, Landlord hereby grants to Tenant the ri9'ht of first refusal.
to . acquire the property on the same terms and conditions as
offered. The consideration under such offer shall be entirely
monetary. 'rhis right of first refusal shall not apply to a sal.e,
assiqnment or transfer to Landlord's principals or to an entity
owned or controlled by Landlord andlor its principals or to an
exchanc;e for other property. Tenant shall have ten (10) days after
receipt of a complete copy of the offer to notify Landlord of its
intention to match such offer. Within said ten (10) days and
accompanyinc; Tenant's notice of intent to match such offer, Tenant
must deliver a cashier's check to the Landlord for the amount of
any calih deposit called for in such offer. Tenant's failure to
exercise this right of first refusal timely shall release Landlord
of any further obliqation to Tenant with respect to Tenant's riqht
of first refusal and Landlord shall be free to'sell the Property.
However, should Landlord's sale fail to consummate, and a new offer
is received by Landlord, Tenant shall again have the right of first
refusal as heretofore provided. Tenant's offer shall be
noncontinqent as to due diligence and property investiqation
matters.
Tenant acknowledqes that thi.. riqht of first refusal may
adversely affect Landlord's marketing of the Property if Landlord
wishes to sell same. Accordingly, Tenant aqrees to reasonably
cooperate with Landlord as regards Landlord's desire to sell the
property and to giva bona fide consideration to waiving this right
of first refusal in the event (Ill Landlord advises Tenant in
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writing of the pr.i.<:e and general terms under which Landlord wishes
to sell the Property, (b) Tenant does not wish to pur~hasca U%\dar
such terms and conditions, and (C) Landlord subsequently sells the
Property pursuant to such previously stated terms and COllcditions,
but not otherwise.
56. ParticiDation in Sale: T..rmination of Lease. The parties
acknowledge that Tenant's operation of the Property will affect the
value thereof, and that Tenant should participata in the increase
in value of the Property over a certain level. Aecordinqly, shoul.d
Landlord elect to sel.l the Property at any time durinq the term
hereof, Tenant shall be entitled to receive in cash at the closinq
of the sale the fol.lowing: (a) Tenant's aCCUlllulat.ed capital
investment in the Property and accumulate<l losses, if any, existinq
at the time of sale, plus interest thereon from t.he time incurred
at the prime rate published by the Wall street Journal, plus four
percent (4t) (coll.ectively RTenant's :Investment. Recapturen) plUS
(b) the qreater of ten percent (1.0t) of the Adjusted Sale Proceeds
resulting from the sale .of the Property, or One Million Dollars
($1,000,000) plus cc) any amounts owing by Landlora to Tenant
pursuant to this Lease ana not included in calculating (a) above
(collectively "Tenant ParticipationR). Landl.ord's obliqation to
pay Tenant the amounts hereunder shall be secured by the Tenant
Deed of Trust.
In determining the.Tenant Particip~tion the following shall
apply:
Adjusted Sale Proceeds shall. mean gross proceeds of the sale
includinq the total of all consideration received or to be receivQd
by the seller whether same is cash, debt reductian{forqiveness,
other property, promissory notes or other evidence of indebtedness,
services or consideration of any nature, less (i) Five Million
Dollars ($5,000.000), (ii) an amount equal to total TOT aredits
actually taken or received by Tenant during the term of this Lease,
directly from the City or indirectly from Landlord, and (iii) the
amoU%\t of Tenant's Investment Recapture paid to Tenant pursuant to
(a.) above.
Tenant's investment Recapture shall be determined quarterly on
the basis of cumulative Cash Flow generated by the Property
commencing as of cutover.
"cumulative cash FlowR shal.l be calculated in accordance with .
qenerally accepted cash basis accounting principl.es as follows:
(i) calculate beqinninq CUmulative cash Plow as of the start of
each quarter; (ii) further include any capital expenditures made by
Tenant in that quarter; (iii) furth.u: include any cash Losses
incurred by Tenant durinq that quarter,' ("cash Losses- means net
inC011le without deduction of noncash expenses such as depreciation,
amortization, ana reserves or inclusion of noncash credits not
immediately availabl.e to Tenant, if any); (ivJ" net any Cash prOfits
durinq that quarter ("Cash Profits" means net income withouttdeduction of noncash expenses such as depreciat.ion, amortization
and reserves or inclusion of noncash credits not immediately
available to Tenant, if any); and (iv) apply applicable cumulative
interest.
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It is intended that if the Property generates sufficient cash
basis profits to offset Tenant's cumulative losses and capital
expenditures, plus interest, then in such event Tenant's Investment
Recapture "account" would be zeroed out and Tenant will not receive
that particular aspect of sale proceeds, but will in any event
receive the amounts set forth at (b) and (c) above.
In the event of a sale, upon payment to Tenant of all amounts
owed to Tenant pursuant to this section 56, this Lease shatl
terminate and Tenant shall remove the Tenant Deed of Trust from the
Property. ~
Upon six (6) months notice, Landlord may, in Landlord's
discretion, terminate this Lease at any time without involving a
sale of the Property by paying to Tenant the sum of (i) Tenant's
Investment Recapture, (ii) any other amounts owed to Tenant
hereunder not already included in Tenant's Investment Recapture,
(iii) a cash payment of One Million Dollars ($1,000,000), and (iv)
all inventory on hand at the Property and all accounts receivable
of guests and/or patrons of the Property who have received Hotel
services but not yet paid for such services other than the city
Ledger.
57. Allocation of Risks. The parties acknowledge that the
Property has historically experienced significant losses and that,
notwithstanding a certain level of due diligence by both Landlord
and Tenant, and notwithstanding that Tenant is a prudent,
experienced and successful hotel operator, neither Landlord nor
Tenant is intimately familiar with the Property and the various
business, ownership and other risks attendant thereto. Landlord
and Tenant have agreed that in entering into this Lease, Tenant is
assuming certain operating risks concerning the Property as
specifically set forth herein, but that Landlord is assuming all
risks of ownership of the property and all other risks not
specifically allocated to Tenant herein, including but not limited
to those risks specified at section 57.2 hereof.
57.1 Risks Allocated to Tenant.
(a) All risks and obligations specifically set
forth herein as Tenant's responsibility;
(b) Normal, customary and recurring risks of
operation of a hotel/convention center business;
(c) Normal and customary risks of dealing with
guests and the public in the context of hotel/convention center
operation;
(d) Risks attendant to Tenant's employment of
personnel after Cutover, but specifically excluding
claims/obligations arising or accruing prior to Cutover or relating
to former employees not hired by Tenant.
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(e) Compliance with franchisor standards f~
operational aspects of the Hotel/Convention center, to the extent
same are not a Landlord obligation or responsibility hereunder.
57.2 Soecific Risks Allocated to Landlord.
(a) All maintenance, repair and replacement in
conjunction with the buildings and improvements and components
thereof including, without limitation, roof, structure, exterior,
windows, plumbing, electrical, HVAC, pools, major equipment and the
like, and excluding only normal maintenance and repair that is a
normal and customary charge to Hotel operations, rt being
understood that Tenant will be responsible only for normal and
customary operational aspects of the business and Landlord shall be
responsible for all other items and matters.
(b) Earthquake/earth movement damage and impacts.
(c) Unusual and significant market conditions such
as, without limitation, adverse publicity (not caused by Tenant)
concerning the Property, the city or the surrounding area, which
may significantly affect Hotel/Convention Center operations or
closure of a major facility or resource such as freeways, airports,
shopping areas and the like.
(d) The relationship of the Hotel/Convention
Center with the city, enforcement of Development Agreements or
other contractual arrangements, realization of the TOT credits and
maintenance/repair of any areas of the Property, the Parking Garage
or adjacent common areas to the extent same is the responsibility
of the city or third parties.
(e) Claims, damages or issues relating to
obligations, actions or inaction of Maruko, or any former operator
or contractor of the Property or any aspect thereof, it being
understood that Tenant assumes no such risks or obligations of any
nature.
(f)
Property other than
Tenant obligation.
All risks and obligations concerning the
those specifically identified herein as a
The indemnity provisions of Section 24 hereof shall apply to
any obligation owed by one party to the other herein which is not
performed and thus must be performed by the other party. In
addition, in the event there is an occurrence that is a Landlord
risk that affects the Property to such an extent as Tenant
reasonably determines that it is not feasible for Tenant to
continue to operate the Property pursuant to this Lease, and
Landlord after written notice and reasonable opportunity to respond
is unwilling or unable to take appropriate steps to allow Tenant to
continue to operate, then Tenant may terminate this Lease without
further obligation to Landlord and Landlord shall upon such
termination pay to Tenant the full amount then secured by the
Tenant Deed of Trust, reduced only by the amount of
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depreciation/a~ortization then taken with respect to I~provements
made by Tenant, in accordance with generally accepted accounting
principles.
The parties acknowledge that Tenant is relyinq substantially
on the Property and the Tenant Dead of TrUSt for security as
regards this Lease. It! the event Lartdl.ord, as a result of a
natural disaster or otherwise, elec:ts to directly or indirectly
abandon the Property, then in addition to any other r~edies
specified herein or available to Tenant by law, Landlord shall upon
request of Tenant assign to Tenant all of itll rights all rQ9ards the
Property, including without liJnitation, the right to insurance
proceeds and the right to apply for qovarnmantal assistance or
participation in governmental prograll\S. The Proparty will bQ
deemed to be abandoned if Landlord fails to commit to Tenant to
rebuild the Property as soon as is reasonably practicable.
In the event Landlord elects to purchase earthquake and/or
earth l\Iovement insurance coverage for the Property, such coverage
shall include Tenant as an additional insured.
58. Interest. Any interest provided for under this Lease
shall be at the pril\le rate published by the Wall street Journal,
plus four percent (4%).
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DATED as of the date first written al:love.
LANDLORD :
TENrolT :
O~0265~.05
RaDweh J:nternational corporation
a california corporation.
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B. ~ ~ ~
-&-r:ry ves~ra, e=etary
ARB: Services Company,
a limited lial:lility company
By:
Name:
Its:
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DATED as .o~ the date first ~.itten above.
LANDLORD:
TENANT:
010265J..04
~eh :In~~'"tIationa]. corporation
a ca1ifoxnia corpo1:'ation .:
SV'
. . t.ar.ry Vesces:a, SecretL""Y
ARK services ccmpany,
a C~/.ra-,"" UII~ V#.I~U'-" C>i'r"AJ>,
By:~~
l<rame: ~/J~~ f. !t.;tI4/T'-
:tts: /4:1/4&-1 r-
t. ;;.../....
#07& U~c 4-GU$I?6J r-
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City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
C
INTEROFFICE MEMORANDUM
October 14, 1994
TO: Chairman Tom Minor and Commission Members
Community Development Commission
FROM: Timothy C. Steinhaus, Agency Administrator
Economic Development Agency
SUBJECT: RADISSON HOTEL
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Attached please find the completed resolutions for Community Development Commission agenda
item No. 5, for Monday, October 17,1994.
TCS:pc:radhotel.res
Altachments
cc: Shauna Clark, City Administrator
James Penman, City Attorney
La Vonda Pearson, Recording Secretary, EDA
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Item:
Exhibit "A"
Exhibit "B"
Exhibit "C"
Action to
be Taken:
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COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BE~ARDINO, ON
BEHALF OF THE REDEVELOPMENT. AGENCY OFcrHE CITY OF
SAN BERNARDINO, AUTHORIZING AND DIRECTING
EXECUTION OF CONSENT TO TRANSFER OF REAL PROPERTY
INTEREST AND RIGHTS UNDER OWNER PARTICIPATION
AGREEMENT AND TO HOTEL LEASE AGREEMENT, AND
EXECUTION OF ASSUMPTION AGREEMENT RELATING TO
HOTEL PROPERTY [RABWEH-ARK SERVICES]
Hotel Lease Agreement
Assumption Agreement
Consent to Transfer
Adopt Resolution.
Certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOOl\DOC\1033
10\12\94 1230 law
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO, ON BEHALF OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO,
AUTHORIZING AND DIRECTING EXECUTION OF CONSENT TO
TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS UNDER
OWNER PARTICIPATION AGREEMENT AND TO HOTEL LEASE
AGREEMENT, AND EXECUTION OF ASSUMPTION AGREEMENT
RELATING TO HOTEL PROPERTY [RABWEH-ARK SERVICES]
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WHEREAS, the City of San Bernardino (the "City"), the
Redevelopment Agency of the City of San Bernardino (the "Agency")
and Maruko, Inc. ("Maruko") entered into that certain Owner
Participation and Development Agreement ("OPA") on or about July
20, 1987, with regard to certain real property located in the
City, described in Exhibit "A" of the OPA, which property is
improved with a hotel (the "Property"); and
WHEREAS, the OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
( "Amendment No.1"); and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the United States; and
WHEREAS, Maruko has entered into an agreement for the
sale of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"); and
WHEREAS, the principals of Foster-Khoury, Angela Foster
and Najib Khoury, intend to sell their shares and interest in
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Foster-Khoury to Rabweh International Corporation, a Californ1a
corporation ("Rabweh") owned and controlled by His Royal Highness
Shaikh Mohamed Bin Sulman Al Khalifa, contemporaneously with or
as soon as possible after Foster-Khoury's acquisition of the
Property; and
WHEREAS, the Agency has consented or is
contemporaneously herewith consenting to the transfer of the
Property, and of an assignment of Maruko's interests in the OPA,
to Foster-Khoury; and of the sale of the shares of Foster-Khoury
to Rabweh; and
WHEREAS, it is the intention of Foster-Khoury and
Rabweh that the rights and obligations of Foster-Khoury in and to
the OPA should vest in and be exercised and performed by Rabweh;
and
WHEREAS, Rabweh intends to enter into that certain
Hotel Lease Agreement (the "Hotel Lease"), a copy of which is
attached hereto as Exhibit "A" and incorporated herein by this
reference, whereby some, but not all, of Rabweh's rights and
obligations in and to the OPA will be transferred to and assumed
by ARK Services Company, presently in formation either as a
California limited liability company or a limited partnership,
("Hotel Lessee"), an affiliate of Northwest Lodging, Inc., a
Washington corporation, ("Northwest"), with the balance of the
non-transferred rights and obligations remaining with Rabweh, and
whereby Hotel Lessee will manage and operate the Property; and
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WHEREAS, Section 6.5 (c) of the OPA provides that
neither title to the Property nor the interests of Foster-Khoury
and/or the Rabweh under the OPA may be assigned without the prior
written consent of the Agency, which consent shall not be
unreasonably withheld, and further provides that the Agency may
require the proposed assignee or transferee to assume~ by written
agreement, all of the obligations, covenants, conditions and
restrictions imposed on the transferor under the OPA; and
WHEREAS, the Agency deems it to be in the public
interest to consent to the transfer to Rabweh of title of the
Property, and to the assignment of Foster-Khoury's interest under
the OPA, and to consent to the subsequent transfer of some of
Rabweh's rights and obligations under the OPA to the Hotel Lessee
under the Hotel Lease upon the condition that the Hotel Lessee
assume all of the obligations, covenants, conditions and
restrictions of Rabweh and Foster-Khoury under the OPA, as
amended, and that Rabweh and Foster-Khoury nevertheless remain
fully liable to the Agency under the OPA, notwithstanding the
partial assignment to Hotel Lessee, and, further, that Northwest
guarantee the obligations of the Hotel Lessee under the Hotel
Lease.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION
ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
FOLLOWS,
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SECTION 1. The Recitals hereinabove are true and
correct and are incorporated herein by this reference.
SECTION 2. The Agency hereby consents to the
transfer to Rabweh of Foster-Khoury's interests in the Property,
together with related easements and rights. appurtenant thereto,
whether by express transfer and assignment or by merger or other
corporate reorganization of Foster-Khoury and Rabweh.
SECTION 3. The Agency hereby consents to the
assignment to Rabweh of all of Foster-Khoury's rights and
obligations under the OPA, as amended, whether by express
assignment or by merger or other corporate reorganization of
Foster-Khoury and Rabweh, providing that Foster-Khoury remains
fully liable under the provisions of the OPA, not withstanding
such assignment.
SECTION 4. The Agency further consents to the
execution by Rabweh and the Hotel Lessee of the Hotel Lease,
substantially in the form attached hereto as Exhibit "A", with
such changes as may be reasonably acceptable to the Chairman and
Agency counsel, and to the transfer of rights set forth therein.
This consent is contingent upon: (i) an assumption by the Hotel
Lessee of the obligations of Rabweh and Foster-Khoury under the
OPA; (ii) Rabweh and Foster-Khoury remaining fully liable to the
Agency for the performance of the OPA notwithstanding the
assumption of obligations by the Hotel Lessee; (iii) the
execution by Rabweh, Foster-Khoury and the Hotel Lessee of the
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Assumption Agreement in the form attached hereto as Exhibit "B"
and incorporated herein by reference; and (iv) a guarantee by
Northwest of the Hotel Lessee's obligations under the Hotel Lease
and the OPA, which guaranty shall be in a form satisfactory to
the Chairman and Agency counsel.
SECTION 5. The consents contained in Sections 2, 3
and 4 hereof are contingent upon such transfers being completed
within 180 days of the date of execution of the Consent to
Transfer attached hereto as Exhibit "C". A transfer under any of
said Sections after such period shall require a further review
and approval by the Agency not to be unreasonably withheld.
SECTION 6. The Agency authorizes and directs the
Chairman to execute and deliver the Consent to Transfer in the
form attached hereto as Exhibit "C", and incorporated herein by
reference, and the Assumption Agreement in the form attached
hereto as Exhibit "B", with such non-substantive changes as may
be reasonable and which are acceptable to both the Chairman and
to Agency counsel.
SECTION 7. No subsequent transfers of any interest
in the Property or of the rights and obligations under the OPA
shall occur except in compliance with Section 6.5 of the OPA.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO, AUTHORIZING AND DIRECTING EXECUTION OF CONSENT
TO TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT AND TO HOTEL LEASE AGREEMENT, AND
EXECUTION OF ASSUMPTION AGREEMENT RELATING TO HOTEL PROPERTY
[RABWEH-ARK SERVICES]
SECTION 8.
The findings and determinations herein
shall be final and conclusive. This Resolution shall-take effect
upon the date of 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
1994, by the following vote, to wit:
Commission Members:
AYES
NAYS
ABSTAIN ABSENT
NEGRETE
CURLIN
HERNANDEZ
OBERHELMAN
DEVLIN
POPE-LUDLAM
MILLER
day of
Secretary
The foregoing resolution is hereby approved this
, 1994.
Tom Minor, Chairman
Community Development
Commission of the
City of San Bernardino
Approved as to
form and legal content:
By:
Agency Counsel
SBEO\OOOl\DOC\1033
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their
signature(s) on the instrument the person(s), or the-entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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0 1 EXHIBIT "A"
2 HOTEL LEASE AGREEMENT
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EXHIBIT "B"
ASSUMPTION AGREEMENT
[RABWEH-ARK SERVICES]
This Assumption Agreement ("Agreement") is entered into
as of October , 1994, by and between the City of San
Bernardino, California (the "City"), the Redevelopment Agency of
the City of San Bernardino (the "Agency"), Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury"),
a California corporation, Rabweh International~ Inc., a
California corporation ("Rabweh") and ARK Services Company
("ARK") .
Recitals
A. The City, the Agency, Foster-Khoury and Maruko,
Inc. ("Maruko") have entered or are contemporaneously herewith
entering into an assumption agreement (the "Foster-Khoury
Assumption Agreement") whereby Foster-Khoury assumes the rights
and obligations of Maruko under in and to that certain Owner
Participation Agreement ("OPA") entered into on or about July 20,
1987. The OPA concerns certain real property located in the City
(described in Exhibit "A" to the OPA) , which property is improved
with a hotel (the "Property"). The OPA was amended by virtue of
that certain Amendment No. 1 to Owner Participation and
Development Agreement and Convention Center Sublease and
Operating Agreement.
B. Under the Foster-Khoury Assumption Agreement,
Foster-Khoury also assumes the rights and obligations of Maruko
under that certain City of San Bernardino Convention Center
Sublease and Operating Agreement (the "Operating Agreement")
dated as of August 4, 1987. The Operating Agreement concerns
certain convention center facilities (the "Leased Premises")
located adjacent to the Property.
C. The City and the Agency have consented or are
contemporaneously herewith consenting to the transfer of the
shares of Foster-Khoury from Angela Foster and Najib Khoury to
Rabweh.
D. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the OPA and the Operating Agreement vest in Rabweh and be
exercised and performed by Rabweh.
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Foster-Khoury under
the OPA may be assigned without the prior written consent of the
City and the Agency, which consent shall not be unreasonably
withheld, and further provides that the City and the Agency may
require the proposed assignee or transferee to assume, by written
agreement, all of the obligations, covenants, conditions and
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restrictions imposed on Foster-Khoury under the OPA.
F. Section 12.1 of the Operating Agreement provides
that Foster-Khoury may not assign its interests under the
Operating Agreement without the City's prior written consent, not
to be unreasonably withheld.
G. The City and the Agency have consented to the
transfer to Rabweh of Foster-Khoury's interests in the Property,
together with related easements and rights appurtena~t thereto,
Foster-Khoury's rights and obligations under the OPA,-as amended,
and Foster-Khoury's rights and obligations under the Operating
Agreement, whether by express transfer and assignment or by
merger or other corporate reorganization of Foster-Khoury and
Rabweh.
H. Rabweh and ARK have or will enter into that
certain Hotel Lease Agreement (the "Hotel Lease"), whereby ARK
will lease the Property and sublease the Leased Premises from
Rabweh, acquire some, but not all, of Rabweh's rights and
obligations under the OPA and the Operating Agreement and whereby
ARK will manage and operate the Property and the Leased Premises.
Pursuant to the Hotel Lease, Rabweh shall execute a deed of trust
("Tenant Deed of Trust") in favor of ARK, encumbering Rabweh's
interest in the Property and the Leased Premises, as security for
Rabweh's performance of certain obligations under the Hotel
Lease. The City and the Agency have consented to the Hotel Lease
and the Tenant Deed of Trust upon certain conditions as set forth
in that certain Consent to Transfer [Convention Center Sublease
and Operating Agreement] executed by the City concurrently
herewith.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS HEREINAFTER
PROVIDED.
Terms and Conditions
1. The Recitals stated above are true and correct and
incorporated herein by reference.
2. Rabweh assumes all of Foster-Khoury' s obligations,
without exception, and acquires all of Foster-Khoury's rights,
under the provisions of the OPA, as amended.
3. Rabweh hereby assumes all of Foster-Khoury's
obligations, without exception, and acquires all of Foster-
Khoury's rights, under the provisions of the Operating Agreement.
4. By the assumptions set forth in Sections 2 and 3
above, Rabweh agrees to perform each and every obligation of
Foster-Khoury under the OPA and/or the Operating Agreement,
including obligations, if any, previously due but unperformed.
Foster-Khoury agrees to remain fully liable for all of its
obligations under the OPA and/or the Operating Agreement,
notwithstanding Rabweh's assumption thereof.
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5 . During the term of the Hotel Lease, ARK shall
operate the Property and the Leased Premises in a manner
consistent with the terms and conditions of the OPA and the
Operating Agreement. As more particularly set forth in the Hotel
Lease, ARK shall, during the term of the Hotel Lease, assume
certain of the obligations of Rabweh and Foster-Khoury under the
OPA and the Operating Agreement. This assumption by ARK shall in
no way release Foster-Khoury or Rabweh from their obligations
under the OPA and the Operating Agreement, and they shall remain
fully liable therefor.
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6. The City and the Agency hereby agree that so long
as the Hotel Lease shall remain in effect or the Tenant Deed of
Trust shall remain a lien on Rabweh's interest in the Property
and the Leased Premises, the City shall not accept a voluntary
surrender of the Operating Agreement and the City and the Agency
shall not accept a voluntary termination of the OPA by Rabweh,
unless the City is legally required or contractually bound to do
so.
7. In the event of a default by Rabweh or Foster-
Khoury under the OPA or the Operating Agreement, the City and the
Agency shall give to ARK all of the rights and remedies given to
an approved "Lender" under Article 18 of the Operating Agreement,
which is incorporated herein by this reference. Without limiting
the generality of the foregoing, the City and the Agency agree to
deliver any notices of default under the Operating Agreement
and/or the OPA to ARK concurrently with delivery to Rabweh, and
to afford ARK the opportunity to cure such defaults within the
time periods set forth in Article 18 of the Operating Agreement.
8. The various transfers and assumptions contained in
this Agreement are subject to the provisions of the OPA, the
Operating Agreement, the Consent to Transfer in favor of Foster-
Khoury previously given by the City and the Agency, and the
Foster-Khoury Assumption Agreement.
9. The parties hereto agree that no further transfer
of any right in or title to the Property or of rights under the
OPA or the Operating Agreement may occur except in compliance
with the applicable provisions of the OPA and/or the Operating
Agreement. No transfer or assignment of any rights and
obligations under the OPA may be made unless the rights and
obligations under the Operating Agreement are likewise
transferred or assigned to the same transferee, and vice versa.
10. This Agreement shall become effective upon the
Closing Date of Foster-Khoury's purchase of the Property from
Maruko (as "Closing Date" is defined in the Purchase and Sale
Agreement and Escrow Instructions dated August 5, 1994, by and
between Maruko and Najib Khoury and Angela Foster). No rights or
obligations of any party to this Agreement shall be deemed to be
changed, amended or modified hereby until the effective date
hereof.
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11. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
By:
City Attorney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By:
Agency Counsel
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Chief Financial Officer
.APPlU)
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AM( SERVICES COMPANY:
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JUlPROVED AS 'rO FORM:
By:
AttOt'n4ys for AllK
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EXHIBIT "c"
CONSENT TO TRANSFER
[Owner Participation and Development Agreement]
[RABWEH-ARK SERVICES]
This Consent to Transfer is made as of October ,
1994, by the City of San Bernardino, California (the "City") and
by the Redevelopment Agency of the City of San Bernardino (the
"Agency"), with respect to the following facts:
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1987, with regard to
certain real property located in the City, described in
Exhibit "A" of the OPA, which property is improved with a hotel
(the "Property"). The OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment No.1").
B. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"). The principals of
Foster-Khoury, Angela Foster and Najib Khoury, intend to sell
their shares and interest in Foster-Khoury to Rabweh
International Corporation, a California corporation ("Rabweh")
owned and controlled by His Royal Highness Shaikh Mohamed Bin
Sulman Al Khalifa, contemporaneously with or as soon as possible
after Foster-Khoury's acquisition of the Property. The City and
the Agency have consented or are contemporaneously herewith
consenting to the assignment of Maruko's rights and obligations
under the OPA and to the transfer of the shares of Foster-Khoury
to Rabweh.
C. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the OPA vest in and be exercised and performed by Rabweh.
D. Rabweh and ARK Services Company ("ARK") have or
will enter into a certain Hotel Lease Agreement (the "Hotel
Lease") whereby ARK will acquire some, but not all, of Rabweh's
rights and obligations under the OPA and whereby ARK will manage
and operate the Property, and sublease the convention center
property adjacent to the Property ("Convention Center") .
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Foster-Khoury under
the OPA may be assigned without the prior written consent of the
Ci ty and the Agency, which consent shall not be unreasonably
withheld, and further provides that the City and the Agency may
require the proposed assignee or transferee to assume, by written
agreement, all of the obligations, covenants, conditions and
restrictions imposed on Foster-Khoury under the OPA.
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Consent
1. The City and the Agency hereby consent, upon the
conditions set forth in Sections 2 and 3 below, to the following:
a. Foster-Khoury may transfer to Rabweh its
interests in the Property, together with related easements and
rights appurtenant thereto, whether by express transfer and
assignment or by merger or other corporate reorganization of
Foster-Khoury and Rabweh. -
b. Foster-Khoury may assign to Rabweh all of
Foster-Khoury's rights and obligations under the OPA, as amended,
whether by express assignment or by merger or other corporate
reorganization of Foster-Khoury and Rabweh. Foster-Khoury shall
remain fully liable under the provisions of the OPA,
notwithstanding the assignment to Rabweh.
c. Rabweh and ARK may enter into the Hotel
Lease, in the form approved by the City and Agency, with such
changes as may be reasonably acceptable to the City and Agency.
Rabweh (and Foster-Khoury) shall remain fully liable under the
provisions of the OPA, notwithstanding the Hotel Lease.
2. The consents set forth in Section 1 above are
contingent upon the following, to which the parties hereto agree:
a. During the term of the Hotel Lease, ARK shall
operate the Property in a manner consistent with the restrictions
set forth in the OPA and shall assume certain of the obligations
of Rabweh and Foster-Khoury under the OPA, which assumption shall
not release Rabweh and Foster-Khoury from their obligations under
the OPA.
b. Pursuant to the Hotel Lease, ARK will
sublease from Rabweh the Convention Center and assume certain of
the obligations of Rabweh and Foster-Khoury under that certain
City of San Bernardino Convention Center Sublease and Operating
Agreement (the "Operating Agreement") dated as of August 4, 1987.
Such assumption by ARK will not release Rabweh and Foster-Khoury
from their obligations under the Operating Agreement.
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c. ARK, Rabweh and Foster-Khoury shall execute
and deliver to the City and Agency the Assumption Agreement in
the form required by the City and Agency.
d. Northwest Lodging, Inc. , a Washington
corporation and affiliate of ARK ("Northwest") shall guarantee
the obligations of ARK under the OPA and the Operating Agreement,
with such guarantee to be in a form acceptable to the City and
the Agency.
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3. The consents set forth in this agreement are
contingent upon completion of the contemplated transactions
within ~80 days of the date hereof. Any transaction not
completed within that time shall require the further review and
consent of the City and the Agency.
4. No subsequent transfers or assignments of the
property, or the rights under the OPA, other than as permitted
hereunder, shall occur without compliance with Section 6.5 of the
OPA.
APPROVED AS TO FORM
AND LEGAL CO TNT'
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
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By:
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
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Item:
Exhibit "A"
Exhibit "B"
Exhibit "C"
Action to
be Taken:
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COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE COMMUNITY ~EVELOPMENT
COMMISSION OF THE CITY OF SAN B~ARDINO ON
BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND DIRECTING THE
ISSUANCE OF CERTIFICATE OF COMPLIANCE, AND
EXECUTION OF CONSENT TO TRANSFER OF REAL PROPERTY
INTEREST AND RIGHTS UNDER OWNER PARTICIPATION
AGREEMENT, ASSUMPTION AGREEMENT RELATING TO HOTEL
PROPERTY AND ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
Certificate of Compliance
Consent to Transfer
Assumption Agreement
Adopt Resolution.
certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOOl\DOC\t022
10106194 1110 Jaw
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO ON
BEHALF OF THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO AUTHORIZING AND
DIRECTING THE ISSUANCE OF CERTIFICATE OF
COMPLIANCE, AND EXECUTION OF CONSENT TO
TRANSFER OF REAL PROPERTY INTEREST AND
RIGHTS UNDER OWNER PARTICIPATION AGREEMENT,
ASSUMPTION AGREEMENT RELATING TO HOTEL
PROPERTY AND ESTOPPEL CERTIFICATE [FOSTE~-
KHOURY] .
WHEREAS, the City of San Bernardino (the "City"), the
Redevelopment Agency of the city of San Bernardino (the "Agency")
10 and Maruko, Inc. ("Maruko") entered into that certain Owner
Participation and Development Agreement ("OPA") on or about
July 20, 1987, with regard to certain real property located in
the City, described in Exhibit "A" of the OPA, which property is
improved with a hotel (the "Property"); and
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16 WHEREAS, the OPA was amended by virtue of that certain
17 Amendment No. 1 to Owner Participation and Development Agreement
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and convention Center Sublease and Operating Agreement
("Amendment NO.1"); and
WHEREAS, Section 4.3 of the OPA provides that upon
completion of Improvements (as defined in Section 2.16 of the
OPAl and upon the opening of the hotel for the purposes of
receiving guests, the city and the Agency will issue a
Certificate of Compliance evidencing completion of Maruko I s
obligations as set forth in the OPA, in the form attached hereto
as Exhibit "A"; and
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WHEREAS, the Improvements have been completed and the
hotel has opened for the purpose of receiving guests, but no
Certificate of Compliance has yet been issued; and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the United States; and
WHEREAS, Maruko has entered into an agreement for the
sale of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"); and
WHEREAS, the principals of Foster-Khoury, Angela Foster
and Najib Khoury, intend to sell their shares and interest in
Foster-Khoury to Rabweh International Corporation, a California
corporation owned and controlled by His Royal Highness Shaikh
Mohamed Bin Sulman Al Khalifa ("Transferee"), contemporaneously
with or as soon as possible after Foster-Khoury's acquisition of
the Property; and
WHEREAS, Section 6.5 (c) of the OPA provides that
neither title to the Property nor the interests of Maruko under
the OPA may be assigned without the prior written consent of the
Agency, which consent shall not be unreasonably withheld, and
further provides that the Agency may require the proposed
assignee or transferee to assume, by written agreement, all of
the obligations, covenants, conditions and restrictions imposed
on Maruko under the OPAl and
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1 WHEREAS, Section 9.10 of the OPA provides that t~e
2 parties to the OPA will, from time to time and upon request of
3 the other party, execute an estoppel certificate stating that the
4 OPA is unmodified and in full force and effect, the dates to
5 which Redevelopment Assistance has been paid and the existence of
6 any known default under the OPA; and
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8 WHEREAS, Foster-Khoury has requested that the City and
9 the Agency provide it with such an estoppel certificate; and
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11 WHEREAS, the Agency deems it to be in the public
12 interest to consent to the transfer of title of the Property, and
13 to the assignment of Maruko's interest under the OPA, to Foster-
14 Khoury, and to consent to the subsequent transfer of the
15 ownership of the shares of Foster-Khoury to Transferee, upon the
16 condition that Foster-Khoury assume all of the obligations,
17 covenants, conditions and restrictions of Maruko under the OPA,
18 as amended.
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20 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION,
21 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
22 SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
23 FOLLOWS:
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25 SECTION 1. The Recitals hereinabove are true and
26 correct and are incorporated herein by this reference.
27 III
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SECTION 2. The Agency hereby authorizes and directs
the Chairman to execute and deliver the certificate of Compliance
in the form attached hereto as Exhibit "A", with such non-
substantive changes as the Chairman and the Agency's counsel may
find reasonably necessary and acceptable.
SECTION 3. The Agency hereby consents to the sale
of the property, together with related easements and rights
appurtenant thereto, from Maruko to Foster-Khoury.
SECTION 4. The Agency hereby consents to the
assignment of all of Maruko's rights and obligations under the
OPA, as amended, to Foster-Khoury.
SECTION 5. The Agency further hereby consents to
the transfer of ownership of the shares of Foster-Khoury to
Transferee at any time within 180 days of the execution of the
consent in the form attached hereto as Exhibit "B". A transfer
of said shares after that date shall require a further review and
approval by the Agency not to be unreasonably withheld.
SECTION 6. The Agency authorizes and directs the
Chairman to execute and deliver the Consent to Transfer in the
form attached hereto as Exhibit "B" and the Assumption Agreement
in the form attached hereto as Exhibit "C", with such non-
substantive changes as may be reasonable and which are acceptable
to both the Chairman and to the Agency's counsel.
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1 SECTION 7. The Agency authorizes and directs the
2 Chairman to execute an estoppel certificate, in a form approved
3 by Agency counsel, as and when requested by Foster-Khoury,
4 reflecting, as of the date of such estoppel certificate, the
5 status of the OPA, payments due thereunder and such other
6 information as reasonably requested by. Foster-Khoury and/or
7 required under Section 9.10 of the OPA.
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9 SECTION 8. No subsequent transfers of any interest
10 in the Property or of the rights and obligations under the OPA
11 shall occur except in compliance with Section 6.5 of the OPA.
12
13 SECTION 9. The Agency's consent is expressly
14 contingent upon execution by Foster-Khoury and delivery to the
15 Agency of the assumption by Foster-Khoury of all of the
16 obligations of Maruko under the OPA, as amended, which assumption
17 shall be substantially in the form attached hereto as
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Exhibit II ell .
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III
III
III
III
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III
III
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY
2 OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE ISSUANCE OF
CERTIFICATE OF COMPLIANCE, AND EXECUTION OF CONSENT TO TRANSFER
3 OF REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER PARTICIPATION
AGREEMENT, ASSUMPTION AGREEMENT RELATING TO HOTEL PROPERTY AND
4 ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
5
SECTION 10.
The findings and determinations herein
6 shall be final and conclusive. This Resolution shall_take effect
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upon the date of 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
12 thereof, held on the
day of
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1994, by the following vote, to wit:
ABSTAIN
ABSENT
NAYS'
commission Members:
AYES
NEGRETE
CURLIN
HERNANDEZ
OBERHELMAN
DEVLIN
POPE-LUDLAM
MILLER
Secretary
The foregoing resolution is hereby approved this
, 1994.
day of
Tom Minor, Chairman
Community Development
commission of the
city of San Bernardino
APprove~
formc~ egal~tent:
) Q.
By:
-gency Counsel
SBEO\OOOI\DOC\1022
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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
, 1994.
Secretary of the
Community Development Commission
of the City of San Bernardino
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EXHIBIT "A"
After Recording, Mail to:
City Clerk
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
CERTIFICATE OF COMPLIANCE
PROJECT NAME:
San Bernardino Hotel/Convention Center
LEGAl DESCRIPTION:
See Exhibit "A"
OWNER OF PROPERTY/
PARTICIPANT:
Maruko, Inc.
c/o KOAR, Inc., 555 S. Flower Street,
Los Angeles, CA 90071
PROJECT DESCRIPTION: Completion of Hotel/Convention Center in
accordance with the terms of that "Owner Participation Agreement"
between the City of San Bernardino, the Redevelopment Agency of
the City of San Bernardino and Maruko, Inc., dated July 20, 1987
(the "Agreement").
ADDRESS:
NOTICE IS HEREBY GIVEN that the above described proj ect
has been completed in compliance with the terms and conditions of
the Agreement.
DATED:
CITY OF SAN BERNARDINO
By:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their
signature(s) on the instrument the person(s), or the-centity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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EXHIBIT "B"
CONSENT TO TRANSFER
[Owner Participation and Development Agreement]
This Consent to Transfer is made as of October ,
1994, by the City of San Bernardino, California (the "City") and
by the Redevelopment Agency of the City of San Bernardino (the
"Agency"), with respect to the following facts:
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1987, with regard to
certain real property located in the City, described in Exhibit
"A" of the OPA, which property is improved with a hotel (the
"Property") . The OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment No.1").
B. The City and Agency have issued a Certificate of
Compliance as required under Section 4.3 of the OPA.
C. Maruko has filed for protection under the
bankruptcy laws of the United States.
D. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"). The principals of
Foster-Khoury, Angela Foster and Najib Khoury, intend to sell
their shares and interest in Foster-Khoury to Rabweh
International Corporation, a California corporation owned and
controlled by His Royal Highness Shaikh Mohamed Bin Sulman Al
Khalifa ("Transferee"), contemporaneously with or as soon as
possible after Foster-Khoury's acquisition of the Property.
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Maruko under the OPA
may be assigned without the prior written consent of the City and
the Agency, which consent shall not be unreasonably withheld, and
further provides that the City and the Agency may require the
proposed assignee or transferee to assume, by written agreement,
all of the obligations, covenants, conditions and restrictions
imposed on Maruko under the OPA.
Consent
1. The City and the Agency hereby consent, upon the
condition set forth in Section 3 below, to the following:
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a. Maruko may transfer to Foster-Khoury title to
the Property, together with related easements and rights
appurtenant thereto.
b. Maruko may assign to Foster-Khoury all of
Maruko's rights and obligations under the OPA, as amended.
c. Angela Foster and Najib Khoury may, at any
time within 180 days of execution of this consent, sell, transfer
or assign their shares in Foster-Khoury to Transferee. Any such
sale, transfer or assignment occurring after the 18~day period
will require a further review and approval by the City and the
Agency, not to be unreasonably withheld. .
2. No subsequent transfers or assignments of the
Property, the rights under the OPA or of ownership of Foster-
Khoury, other than as permitted hereunder, shall occur without
compliance with Section 6.5 of the OPA.
3. This consent is expressly contingent upon
execution by Foster-Khoury of the Assumption Agreement approved
by the City and the Agency, and delivery thereof to the City and
the Agency, whereby Foster-Khoury assumes all of the rights and
obligations of Maruko under the OPA, as amended.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Torn Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
By:
City Attorney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Torn Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By:
Attorneys for the Agency
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EXHIBIT "C"
ASSUMPTION AGREEMENT
This Assumption Agreement ("Agreement") is entered into
as of October , 1.994, by and between the City of San
Bernardino, California (the "City"), the Redevelopment Agency of
the City of San Bernardino (the "Agency"), Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury")
and Maruko, Inc., a Japanese corporation.
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1.987, with regard to
certain real property located in the City (described 1n
Exhibit "A" of the OPAl, which property is improved with a hotel
(the "Property"). The OPA was amended by virtue of that certain
Amendment No. 1. to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment No. 1.").
B. The City and Maruko entered into that certain City
of San Bernardino Convention Center Sublease and Operating
Agreement (the "Operating Agreement") dated as of August 4, 1.987,
whereby the City, as sublessor, subleased the Leased Premises
(described in Exhibit "A" of the Operating Agreement), generally
consisting of convention center facilities adjacent to the
Property, to Maruko as sublessee.
C. The City, as owner of the Leased Premises, had
previously leased the same to the San Bernardino Civic Center
Authority (the "Authority") as lessee by way of a lease recorded
June 4, 1.970. The Authority, in turn, subleased the Leased
Premises back to the City by virtue of a sublease recorded
June 4, 1.970. Since the date of the Operating Agreement, the
Authority has assigned, transferred or released its interests in
the Leased Premises in favor of the City, which now holds all
ownership and lease rights in the Leased Premises, save for the
rights held by Maruko under the Operating Agreement.
D. Maruko has filed for protection under the
bankruptcy laws of the United States.
E. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury, subject to the approval of the
bankruptcy court.
F. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Maruko under the OPA
may be assigned without the prior written consent of the City and
the Agency, which consent shall not be unreasonably withheld, and
further provides that the City and the Agency may require the
proposed assignee or transferee to assume, by written agreement,
all of the obligations, covenants, conditions and restrictions
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imposed on Maruko under the OPA.
G. Section 12.1 of the Operating Agreement provides
that Maruko may not assign its interests under the Operating
Agreement without the City's prior written consent, not to
unreasonably be withheld.
H. The City and the Agency have consented to the
transfer of Maruko's title to the Property to Foster-Khoury, and
to an assignment of Maruko's rights and obligations under the OPA
and the Operating Agreement, contingent upon execution of this
Agreement.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS HEREINAFTER
PROVIDED.
Terms and Conditions
1. The Recitals stated above are true and correct and
incorporated herein by reference.
2. Foster-Khoury hereby assumes all of Maruko's
obligations, without exception, and acquires all of Maruko's
rights, under the provisions of the OPA, as amended.
3. Foster-Khoury hereby assumes all of Maruko's
obligations, without exception, and acquires all of Maruko's
rights, under the provisions of the Operating Agreement.
4. By the assumptions set forth in Sections 2 and 3
above, Foster-Khoury agrees to perform each and every obligation
of Maruko under the OPA and/or the Operating Agreement, including
obligations, if any, previously due but unperformed.
5. The City and the Agency agree that Maruko shall
have no further obligations under either the OPA or the Operating
Agreement, and Maruko agrees that it shall have no further rights
under either the OPA or the Operating Agreement.
6. The City and Foster-Khoury acknowledge and agree
that the Operating Agreement shall hereinafter be deemed to be a
lease from the City, as owner of the Leased Premises, to Foster-
Khoury as lessee, and that the Authority has no further rights or
interests in the Leased Premises. They further agree to execute
a restated lease form, if requested by the City, which reflects
the provisions of this Section, providing that no other
substantive provision of the Operating Agreement is altered.
7. Foster-Khoury agrees that no further transfer of
any right in or title to the Property or of rights under the OPA
or the Operating Agreement may occur except in compliance with
the applicable provisions of the OPA and/or the Operating
Agreement, save for a transfer of ownership rights in the shares
of Foster-Khoury to which the City and the Agency have agreed.
No transfer or assignment of any of Foster-Khoury's rights and
obligations under the OPA may be made unless its rights and
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obligations under the Operating Agreement are likewise
transferred or assigned to the same transferee, and vice versa.
8. This Agreement shall become effective upon the
Closing Date of Foster-Khoury's purchase of the Property from
Maruko ( as "Closing Date" is defined in the Purchase and Sale
Agreement and Escrow Instructions dated August 5, 1994, by and
between Maruko and Najib Khoury and Angela Foster). No rights or
obligations of any party to this Agreement shall be deemed to be
changed, amended or modified hereby until the effective date
hereof.
9. By its execution of this Agreement, Maruko agrees
to all of the foregoing terms and provisions, subject to approval
by the United States Bankruptcy Court.
10. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
~a~
G,., 'Jr. ci t torney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By: (2;3:::~ ~t~
Ag~~~y -c~el
C - 3
pr.
~} ...,
?~\.
:.:".
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FOSTER-KHOURY INTERNATIONAL, INC.,
a California corporation
By:
Nama:
Title:
to eys
:I:nternatio
MARllKO, INC.,
a Japanese corporation
By:
Name:
Title or Capacity:
APPROVED AS TO FORM:
By:
Attorneys for Maruko, Inc.
SB&O\IlOO1\DOOtll'll-A
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Item:
Exhibit "A"
Exhibit "B"
Action to
be Taken:
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MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, -AUTHORIZING
AND DIRECTING THE EXECUTION OF -~ONSENT TO
ASSIGNMENT OF SUBLESSEE'S RIGHTS UNDER CONVENTION
CENTER SUBLEASE AND OPERATING AGREEMENT [RABWEH-
ARK SERVICES]
Assumption Agreement
Consent to Transfer
Adopt Resolution.
Certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOOl\DOC\1032
10\12\94 1230 law
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING AND DIRECTING THE EXECUTION OF
CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS
UNDER CONVENTION CENTER SUBLEASE AND
OPERATING AGREEMENT [RABWEH-ARK SERVICES]
WHEREAS, the City of San Bernardino (the-;j'City") and
Maruko, Inc. ("Maruko") entered into that certain City of San
Bernardino Convention Center Sublease and Operating Agreement
(the "Operating Agreement") on or about August 4, 1987, with
regard to certain real property located in the City, described in
Exhibit "A" of the Operating Agreement, which property consists
of convention center facilities and related improvements and
personal property (the "Leased Premises"); and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the United States; and
WHEREAS, Maruko has entered into an agreement for the
sale of Maruko's hotel property (the "Property") which adjoins
the Leased Premises to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"); and
WHEREAS, the principals of Foster-Khoury, Angela Foster
and Najib Khoury, intend to sell their shares and interest in
Foster-Khoury to Rabweh International Corporation, a California
corporation owned and controlled by His Royal Highness Shaikh
Mohamed Bin Sulman Al Khalifa ("Rabweh"), contemporaneously with
or as soon as possible after Foster-Khoury's acquisition of the
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1 Property; and
2
3 WHEREAS, the City has consented or is contemporaneously
4 herewith consenting to the transfer of the Property, and of an
5 assignment of Maruko's interests in the Operating Agreement, to
6 Foster-Khoury; and of the sale of the shares of Foster-Khoury to
7 Rabweh; and
8
9 WHEREAS, it is the intention of Foster-Khoury and
10 Rabweh that the rights and obligations of Foster-Khoury in and to
11 the Operating Agreement should vest in and be exercised and
12 performed by Rabweh; and
13
14 WHEREAS, Rabweh intends to enter into that certain
15 Hotel Lease Agreement (the "Hotel Lease"), which has been or is
16 contemporaneously herewith approved by the City, whereby some,
17 but not all, of Rabweh's rights and obligations in and to the
18 Operating Agreement will be transferred to and assumed by ARK
19 Services Company, presently in formation either as a California
20 limited liability company or a limited partnership, ("Hotel
21 Lessee"), an affiliate of Northwest Lodging, Inc., a Washington
22 corporation, ("Northwest"), with the balance of the non-
23 transferred rights and obligations remaining with Rabweh, and
24 whereby Hotel Lessee will manage and operate the Leased Premises;
25 and
26
27 WHEREAS, Section 12.1 of the Operating Agreement
28 provides that the interests of Foster-Khoury under the Operating
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1 Agreement may not be assigned without the prior written c~~=c~~
2 of the City, which consent shall not be unreasonably withheld;
3 and
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5 WHEREAS, the City deems it to be in the public interest
6 to consent to the assignment to Rabweh of Foster-Khoury's
7 interest under the Operating Agreement, and to consent to the
8 subsequent transfer of some of Rabweh's rights and obligations
9 under the Operating Agreement to the Hotel Lessee under the Hotel
10 Lease upon the condition that the Hotel Lessee assume all of the
11 obligations, covenants, conditions and restrictions of Rabweh and
12 Foster-Khoury under the Operating Agreement, and that Rabweh and
13 Foster-Khoury nevertheless remain fully liable to the City under
14 the Operating Agreement, notwithstanding the partial assignment
15 to Hotel Lessee, and, further, that Northwest guarantee the
16 obligations of the Hotel Lessee under the Hotel Lease.
17
18 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
19 CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE,
20 DETERMINE AND ORDER AS FOLLOWS:
21
22 SECTION 1. The Recitals hereinabove are true and
23 correct and are incorporated herein by this reference.
24
25 SECTION 2. The City hereby consents to the
26 assignment to Rabweh of all of Foster-Khoury's rights and
27 obligations under the Operating Agreement, whether by express
28 assignment or by merger or other corporate reorganization of
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1 Foster-Khoury and Rabweh, providing that Foster-Khoury remains
2 fully liable under the provisions of the Operating Agreement, not
3 withstanding such assignment.
4
5 SECTION 3. The City further consents to the
6 assignment to the Hotel Lessee of Rabweh's right.s, or some
7 portion thereof, under the Operating Agreement, as is provided in
8 the Hotel Lease, providing that Rabweh and Foster-Khoury remain
9 fully liable under the provisions of the Operating Agreement, not
10 withstanding such assignment.
11
12 SECTION 4. The consents provided in Sections 2 and
13 3 above are contingent upon: (i) an assumption by the Hotel
14 Lessee of the obligations of Rabweh and Foster-Khoury under the
15 Operating Agreement; (ii) Rabweh and Foster-Khoury remaining
16 fully liable to the City for the performance of the Operating
17 Agreement notwithstanding the assumption of obligations by the
18 Hotel Lessee; (iii) the execution by Rabweh, Foster-Khoury and
19 the Hotel Lessee of the Assumption Agreement in the form attached
20 hereto as Exhibit "A" and incorporated herein by reference; and
21 (iv) a guarantee by Northwest of the Hotel Lessee's obligations
22 under the Hotel Lease, which guaranty shall be in a form
23 satisfactory to the Mayor and the City Attorney.
24
25 SECTION 5. The consents contained in Sections 2 and
26 3 hereof are contingent upon such assignments being completed
27 within 180 days of the date of execution of the Consent to
28 Transfer attached hereto as Exhibit "C". A transfer under either
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1 of said Sections after such period shall require a further review
2 and approval by the City not to be unreasonably withheld.
3
4 SECTION 6. The City authorizes and directs the
5 Mayor to execute and deliver the Consent to Transfer in the form
6 attached hereto as Exhibit "C", and incorporated--. herein by
7 reference, and the Assumption Agreement in the form attached
8 hereto as Exhibit "B", with such non-substantive changes as may
9 be reasonable and which are acceptable to both the Mayor and to
10 the City Attorney.
11
12 SECTION 7. No subsequent transfers of any interest
13 in the Property or of the rights and obligations under the
14 Operating Agreement shall occur except in compliance with
15 Section 12.1 of the Operating Agreement.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE EXECUTION
OF CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS UNDER CONVENTION
CENTER SUBLEASE AND OPERATING AGREEMENT [RABWEH-ARK SERVICES]
SECTION 8.
The findings and determinations herein
shall be final and conclusive. This Resolution shall take effect
upon the date of its adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the Mayor and Common Council of the City of
San Bernardino at a
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day of , 1994.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
City Attorney
By:
SBEO\OOOl\DOC\1032
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STATE OF CALIFORNIA
COUNTY OF
)
)
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their
signature(s) on the instrument the person(s), or the~entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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EXHIBIT "A"
ASSUMPTION AGREEMENT
[RABWEH-ARK SERVICES]
This Assumption Agreement ("Agreement") is entered into
as of October , 1994, by and between the City of San
Bernardino, California (the "City"), the Redevelopment Agency of
the City of San Bernardino (the "Agency"), Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury"),
a California corporation, Rabweh InternationalT Inc., a
California corporation ("Rabweh") and ARK Services Company
("ARK") .
Recitals
A. The City, the Agency, Foster-Khoury and Maruko,
Inc. ("Maruko") have entered or are contemporaneously herewith
entering into an assumption agreement (the "Foster-Khoury
Assumption Agreement") whereby Foster-Khoury assumes the rights
and obligations of Maruko under in and to that certain Owner
Participation Agreement ("OPA") entered into on or about July 20,
1987. The OPA concerns certain real property located in the City
(described in Exhibit "A" to the OPA) , which property is improved
with a hotel (the "Property"). The OPA was amended by virtue of
that certain Amendment No. 1 to Owner Participation and
Development Agreement and Convention Center Sublease and
Operating Agreement.
B. Under the Foster-Khoury Assumption Agreement,
Foster-Khoury also assumes the rights and obligations of Maruko
under that certain City of San Bernardino Convention Center
Sublease and Operating Agreement (the "Operating Agreement")
dated as of August 4, 1987. The Operating Agreement concerns
certain convention center facilities (the "Leased Premises ")
located adjacent to the Property.
C. The City and the Agency have consented or are
contemporaneously herewith consenting to the transfer of the
shares of Foster-Khoury from Angela Foster and Najib Khoury to
Rabweh.
D. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the OPA and the Operating Agreement vest in Rabweh and be
exercised and performed by Rabweh.
E. Section 6.5(c) of the OPA provides that neither
title to the Property nor the interests of Foster-Khoury under
the OPA may be assigned without the prior written consent of the
City and the Agency, which consent shall not be unreasonably
withheld, and further provides that the City and the Agency may
require the proposed assignee or transferee to assume, by written
agreement, all of the obligations, covenants, conditions and
restrictions imposed on Foster-Khoury under the OPA.
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F. Section 12.1 of the Operating Agreement prcvidee
that Foster-Khoury may, not assign its interests under the
Operating Agreement without the City's prior written consent, not
to be unreasonably withheld.
G. The City and the Agency have consented to the
transfer to Rabweh of Foster-Khoury's interests in the Property,
together with related easements and rights appurtenant thereto,
Foster-Khoury's rights and obligations under the OPA, as amended,
and Foster-Khoury's rights and obligations under the Operating
Agreement, whether by express transfer and assignment or by
merger or other corporate reorganization' of Fostei';"'Khoury and
Rabweh.
H. Rabweh and ARK have or will enter into that
certain Hotel Lease Agreement (the "Hotel Lease"), whereby ARK
will lease the Property and sublease the Leased Premises from
Rabweh, acquire some, but not all, of Rabweh's rights and
obligations under the OPA and the Operating Agreement and whereby
ARK will manage and operate the property and the Leased Premises.
Pursuant to the Hotel Lease, Rabweh shall execute a deed of trust
("Tenant Deed of Trust") in favor of ARK, encumbering Rabweh's
interest in the Property and the Leased Premises, as security for
Rabweh's performance of certain obligations under the Hotel
Lease. The City and the Agency have consented to the Hotel Lease
and the Tenant Deed of Trust upon certain conditions as set forth
in that certain Consent to Transfer [Convention Center Sublease
and Operating Agreement] executed by the City concurrently
herewith.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS HEREINAFTER
PROVIDED.
Terms and Conditions
1. The Recitals stated above are true and correct and
19 incorporated herein by reference.
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2. Rabweh assumes all of Foster-Khoury' s obligations,
without exception, and acquires all of Foster-Khoury's rights,
under the provisions of the OPA, as amended.
3. Rabweh hereby assumes all of Foster-Khoury's
obligations, without exception, and acquires all of Foster-
Khoury's rights, under the provisions of the Operating Agreement.
4. By the assumptions set forth in Sections 2 and 3
above, Rabweh agrees to perform each and every obligation of
Foster-Khoury under the OPA and/or the Operating Agreement,
including obligations, if any, previously due but unperformed.
Foster-Khoury agrees to remain fully liable for all of its
obligations under the OPA and/or the Operating Agreement,
notwithstanding Rabweh's assumption thereof.
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5. During the term of the Hotel Lease, ARK shall
operate the Property and the Leased Premises in a manner
consistent with the terms and conditions of the OPA and the
Operating Agreement. As more particularly set forth in the Hotel
Lease, ARK shall, during the term of the Hotel Lease, assume
certain of the obligations of Rabweh and Foster-Khoury under the
OPA and the Operating Agreement. This assumption by ARK shall in
no way release Foster-Khoury or Rabweh from their obligations
under the OPA and the Operating Agreement, and they shall remain
fully liable therefor.
6. The City and the Agency hereby agree ~hat so long
as the Hotel Lease shall remain in effect or the Tenant Deed of
Trust shall remain a lien on Rabweh's interest in the Property
and the Leased Premises, the City shall not accept a voluntary
surrender of the Operating Agreement and the City and the Agency
shall not accept a voluntary termination of the OPA by Rabweh,
unless the City is legally required or contractually bound to do
so.
7. In the event of a default by Rabweh or Foster-
Khoury under the OPA or the Operating Agreement, the City and the
Agency shall give to ARK all of the rights and remedies given to
an approved "Lender" under Article 18 of the Operating Agreement,
which is incorporated herein by this reference. Without limiting
the generality of the foregoing, the City and the Agency agree to
deliver any notices of default under the Operating Agreement
and/or the OPA to ARK concurrently with delivery to Rabweh, and
to afford ARK the opportunity to cure such defaults within the
time periods set forth in Article 18 of the Operating Agreement.
8. The various transfers and assumptions contained in
this Agreement are subject to the provisions of the OPA, the
Operating Agreement, the Consent to Transfer in favor of Foster-
Khoury previously given by the City and the Agency, and the
Foster-Khoury Assumption Agreement.
9. The parties hereto agree that no further transfer
of any right in or title to the Property or of rights under the
OPA or the Operating Agreement may occur except in compliance
with the applicable provisions of the OPA and/or the Operating
Agreement. No transfer or assignment of any rights and
obligations under the OPA may be made unless the rights and
obligations under the Operating Agreement are likewise
transferred or assigned to the same transferee, and vice versa.
10. This Agreement shall become effective upon the
Closing Date of Foster-Khoury's purchase of the Property from
Maruko (as "Closing Date" is defined in the Purchase and Sale
Agreement and Escrow Instructions dated August 5, 1994, by and
between Maruko and Naj ib Khoury and Angela Foster). No rights or
obligations of any party to this Agreement shall be deemed to be
changed, amended or modified hereby until the effective date
hereof.
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0 1 11. This Agreement may be executed in counterparts.
2 IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
3
CITY OF SAN BERNARDINO, CALIFORNIA
4
5 By:
Tom Minor
6 Mayor
APPROVED AS TO FORM
7 AND LEGAL CONTENT:
8 ~,fl.~ .
9 &r. ." Cit ttorney
REDEVELOPMENT AGENCY OF THE
10 CITY OF SAN BERNARDINO
11
12 By:
Tom Minor
Chairman
13 APPROVED AS TO FORM
0 AND LEGAL CONTENT:
14 sabo & Green
15 By: ~,~
(
16 Agency el
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" _ A
,.1
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By:
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FOS'1!ER-DOtlRY IN'rDNATtONAL, me..
a calUcrnU gorpon.t.ion
=_L~.icor
,
RABWEll nM!ERNA'rIont. <:oRl'OM.'1!ION,
a calUo:rnia corporation
~.
. ie~ or pac t;y: ~"";:~:""I .
Chief Financial Officer
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By:
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ARK SERVICES COMPANY
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EXHIBIT "B"
CONSENT TO TRANSFER
[Convention Center Sublease and Operating Agreement]
[RABWEH-ARK SERVICES]
This Consent to Transfer is made as of October ,
1994, by the City of San Bernardino, California (the "City") and
by the Redevelopment Agency of the City of San Bernardino (the
"Agency"), with respect to the following facts:
Recitals
A. The City and Maruko, Inc. ("Maruko") entered into
that certain City of San Bernardino Convention Center Sublease
and Operating Agreement ("Operating Agreement") on or about
August 4, 1987, with regard to certain real property located in
the City, described in Exhibit "A" of the Operating Agreement,
which property consists of convention center facilities with
related improvements and personal property (the "Leased
Premises") . The Operating Agreement was amended by virtue of
that certain Amendment No. 1 to Owner Participation and
Development Agreement and Convention Center Sublease and
Operating Agreement ("Amendment No. 1").
B. Maruko has entered into an agreement for the sale
of Maruko's adjacent hotel facility to Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury").
The principals of Foster-Khoury, Angela Foster and Najib Khoury,
intend to sell their shares and interest in Foster-Khoury to
Rabweh International Corporation, a California corporation
(" Rabweh" ) owned and controlled by His Royal Highness Shaikh
Mohamed Bin Sulman Al Khalifa, contemporaneously with or as soon
as possible after Foster-Khoury's acquisition of the hotel and of
rights under the Operating Agreement. The City has consented or
is contemporaneously herewith consenting to the assignment of
Maruko's rights and obligations under the Operating Agreement and
to the transfer of the shares of Foster-Khoury to Rabweh.
C. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the Operating Agreement vest in and be exercised and
performed by Rabweh.
D. Rabweh and ARK Services Company ("ARK") have or
will enter into a certain Hotel Lease Agreement (the "Hotel
Lease") whereby ARK will sublease the Leased Premises and acquire
some, but not all, of Rabweh's rights and obligations under the
Operating Agreement and whereby ARK will manage and operate the
Leased Premises. Pursuant to the Hotel Lease, certain of
Rabweh's obligations will be secured by a deed of trust in favor
of ARK, encumbering Rabweh's interest in the Leased Premises and
the Hotel ("Tenant Deed of Trust").
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E. Section 12.1 of the Operating Agreement provides
that the interests of Maruko under the Operating Agreement may
not be assigned without the prior written consent of the City,
which consent shall not be unreasonably withheld.
Consent
1. The City hereby consents, upon the conditions set
forth in Sections 2 and 3 below, to the following:
a. Foster-Khoury may assign to Rabweh all of
Foster-Khoury's rights and obligations under the Operating
Agreement whether by express assignment or by merger or other
corporate reorganization of Foster-Khoury and Rabweh. Foster-
Khoury shall remain fully liable under the provisions of the
Operating Agreement, notwithstanding the assignment to Rabweh.
b. Rabweh and ARK may enter into the Hotel
Lease, in the form approved by the City with such changes as may
be reasonably acceptable to the City. Rabweh and Foster-Khoury
shall remain fully liable under the provisions of the Operating
Agreement, notwithstanding the Hotel Lease.
c. Rabweh and ARK may enter into the Tenant Deed
of Trust, in a form to be approved by the Chairman and Agency
Counsel, with such approval not to be unreasonably withheld, and
ARK shall be recognized as a "Lender" as defined in Section 18.1
of the Operating Agreement.
2. The consents set forth in Section 1 above are
contingent upon the following, to which the parties hereto agree:
a. During the term of the Hotel Lease, and
pursuant thereto, ARK shall sublease the Leased Premises and
shall assume certain of the obligations of Rabweh and Foster-
Khoury under the Operating Agreement, which assumption shall not
release Rabweh and Foster-Khoury from their obligations under the
Operating Agreement.
b. ARK, Rabweh and Foster-Khoury shall execute
and deliver to the City the Assumption Agreement in the form
required by the City.
c. Northwest Lodging, Inc. , a Washington
corporation and affiliate of ARK ("Northwest") shall guarantee
the obligations of ARK under the Operating Agreement, with such
guaranty to be in a form acceptable to the City.
3. The consents set forth in this agreement are
contingent upon completion of the contemplated transactions
within 180 days of the date hereof. Any transaction not
completed within that time shall require the further review and
consent of the City.
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4. No subsequent transfers or assignments cf ':~e
Leased Premises or the rights under the Operating Agreement shall
occur without compliance with Section 12.1 of the Operating
Agreement.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
By:
City Attorney
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Item:
Exhibit "A"
Exhibit "B"
Exhibit "C"
Action to
be Taken:
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MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA,~AUTHORIZING
AND DIRECTING EXECUTION OF CONSENT TO -TRANSFER OF
REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT AND TO HOTEL LEASE
AGREEMENT, AND EXECUTION OF ASSUMPTION AGREEMENT
RELATING TO HOTEL PROPERTY [RABWEH-ARK SERVICES]
Hotel Lease Agreement
Assumption Agreement
Consent to Transfer
Adopt Resolution.
Certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOOl\DOC\1031
10\12\94 1215 law
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING AND DIRECTING EXECUTION OF
CONSENT TO TRANSFER OF REAL PROPERTY
INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT AND TO HOTEL LEASE
AGREEMENT, AND EXECUTION OF ASSUMPTION
AGREEMENT RELATING TO HOTEL PROPERTY
[RABWEH-ARK SERVICES]
WHEREAS, the City of San Bernardino (the "City"), the
Redevelopment Agency of the City of San Bernardino (the "Agency")
and Maruko, Inc. ("Maruko") entered into that certain Owner
Participation and Development Agreement ("OPA") on or about July
20, 1987, with regard to certain real property located in the
12 City, described in Exhibit "A" of the OPA, which property is
13 improved with a hotel (the "Property"); and
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WHEREAS, the OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment NO.1"); and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the United States; and
WHEREAS, Maruko has entered into an agreement for the
sale of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"); and
WHEREAS, the principals of Foster-Khoury, Angela Foster
and Najib Khoury, intend to sell their shares and interest in
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Foster-Khoury to Rabweh International Corporation, a California
corporation ("Rabweh") owned and controlled by His Royal Highness
Shaikh Mohamed Bin Sulman Al Khalifa, contemporaneously with or
as soon as possible after Foster-Khoury's acquisition of the
Property; and
WHEREAS, the City has consented or is contemporaneously
herewith consenting to the transfer of the Property, and of an
assignment of Maruko's interests in the OPA, to Foster-Khoury;
and of the sale of the shares of Foster-Khoury to Rabweh; and
WHEREAS, it is the intention of Foster-Khoury and
Rabweh that the rights and obligations of Foster-Khoury in and to
the OPA should vest in and be exercised and performed by Rabweh;
and
WHEREAS, Rabweh intends to enter into that certain
Hotel Lease Agreement (the "Hotel Lease"), a copy of which is
attached hereto as Exhibit "A" and incorporated herein by this
reference, whereby some, but not all, of Rabweh's rights and
obligations in and to the OPA will be transferred to and assumed
by ARK Services Company, presently in formation either as a
California limited liability company or a limited partnership,
("Hotel Lessee"), an affiliate of Northwest Lodging, Inc., a
Washington corporation, ("Northwest"), with the balance of the
non-transferred rights and obligations remaining with Rabweh, and
whereby Hotel Lessee will manage and operate the Property; and
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WHEREAS, Section 6.5 (c) of the OPA provides tnat
neither title to the Property nor the interests of Foster-Khoury
and/or the Rabweh under the OPA may be assigned without the prior
written consent of the City, which consent shall not be
unreasonably withheld, and further provides that the City may
require the proposed assignee or transferee. to assume{ by written
agreement, all of the obligations, covenants, conditions and
restrictions imposed on the transferor under the OPA; and
WHEREAS, the City deems it to be in the public interest
to consent to the transfer to Rabweh of title of the Property,
and to the assignment of Foster-Khoury's interest under the OPA,
and to consent to the subsequent transfer of some of Rabweh's
rights and obligations under the OPA to the Hotel Lessee under
the Hotel Lease upon the condition that the Hotel Lessee assume
all of the obligations, covenants, conditions and restrictions of
Rabweh and Foster-Khoury under the OPA, as amended, and that
Rabweh and Foster-Khoury nevertheless remain fully liable to the
City under the OPA, notwithstanding the partial assignment to
Hotel Lessee, and, further, that Northwest guarantee the
obligations of the Hotel Lessee under the Hotel Lease.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE,
DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The Recitals hereinabove are true and
correct and are incorporated herein by this reference.
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SECTION 2. The City hereby consents to the transfer
to Rabweh of Foster-Khoury's interests in the Property, together
with related easements and rights appurtenant thereto, whether by
express transfer and assignment or by merger or other corporate
reorganization of Foster-Khoury and Rabweh.
SECTION 3. The City hereby consents to the
assignment to Rabweh of all of Foster-Khoury's rights and
obligations under the OPA, as amended, whether by express
assignment or by merger or other corporate reorganization of
Foster-Khoury and Rabweh, providing that Foster-Khoury remains
fully liable under the provisions of the OPA, not withstanding
such assignment.
SECTION 4. The City further consents to the
execution by Rabweh and the Hotel Lessee of the Hotel Lease,
substantially in the form attached hereto as Exhibit "A", with
such changes as may be reasonably acceptable to the Mayor and the
City Attorney, and to the transfer of rights set forth therein.
This consent is contingent upon: (i) an assumption by the Hotel
Lessee of the obligations of Rabweh and Foster-Khoury under the
OPA; (ii) Rabweh and Foster-Khoury remaining fully liable to the
City for the performance of the OPA notwithstanding the
assumption of obligations by the Hotel Lessee; (iii) the
execution by Rabweh, Foster-Khoury and the Hotel Lessee of the
Assumption Agreement in the form attached hereto as Exhibit "B"
and incorporated herein by reference; and (iv) a guarantee by
Northwest of the Hotel Lessee's obligations under the Hotel Lease
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and the OPA, which guaranty shall be in a form satisfactory to
the Mayor and the City Attorney.
SECTION 5. The consents contained in Sections 2, 3
and 4 hereof are contingent upon such transfers being completed
within 180 days of the date of execution of the_~ Consent to
Transfer attached hereto as Exhibit "C". A transfer under any of
said Sections after such period shall require a further review
and approval by the City not to be unreasonably withheld.
SECTION 6. The City authorizes and directs the
Mayor to execute and deliver the Consent to Transfer in the form
attached hereto as Exhibit "C", and incorporated herein by
reference, and the Assumption Agreement in the form attached
hereto as Exhibit "B", with such non-substantive changes as may
be reasonable and which are acceptable to both the Mayor and to
the City Attorney.
SECTION 7. No subsequent transfers of any interest
in the Property or of the rights and obligations under the OPA
shall occur except in compliance with Section 6.5 of the OPA.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING EXECUTION OF
CONSENT TO TRANSFER OF REAL PROPERTY INTEREST AND RIGHTS UNDER
OWNER PARTICIPATION AGREEMENT AND TO HOTEL LEASE AGREEMENT, AND
EXECUTION OF ASSUMPTION AGREEMENT RELATING TO HOTEL PROPERTY
[RABWEH-ARK SERVICES]
SECTION 8.
The findings and determinations herein
shall be final and conclusive. This Resolution shalL-take effect
upon the date of its adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the Mayor and Common Council of the City of
San Bernardino at a
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is
hereby approved this
day of
, 1994.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
City Attorney
By:
SBEO\OOOl\DOC\1031
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their
signature(s) on the instrument the person(s), or the-entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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0 1 EXHIBIT "A"
2 HOTEL LEASE AGREEMENT
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EXHIBIT "B"
ASSUMPTION AGREEMENT
[RABWEH-ARK SERVICES]
This Assumption Agreement ("Agreement") is entered into
as of October , 1994, by and between the City of San
Bernardino, California (the "City"), the Redevelopment Agency of
the City of San Bernardino (the "Agency"), Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury"),
a California corporation, Rabweh International; Inc., a
California corporation ("Rabweh") and ARK Services Company
("ARK") .
Recitals
A. The City, the Agency, Foster-Khoury and Maruko,
Inc. ("Maruko") have entered or are contemporaneously herewith
entering into an assumption agreement (the "Foster-Khoury
Assumption Agreement") whereby Foster-Khoury assumes the rights
and obligations of Maruko under in and to that certain Owner
Participation Agreement ("OPA") entered into on or about July 20,
1987. The OPA concerns certain real property located in the City
(described in Exhibit "A" to the OPA) , which property is improved
with a hotel (the "Property"). The OPA was amended by virtue of
that certain Amendment No. 1 to Owner Participation and
Development Agreement and Convention Center Sublease and
Operating Agreement.
B. Under the Foster-Khoury Assumption Agreement,
Foster-Khoury also assumes the rights and obligations of Maruko
under that certain City of San Bernardino Convention Center
Sublease and Operating Agreement (the "Operating Agreement")
dated as of August 4, 1987. The Operating Agreement concerns
certain convention center facilities (the "Leased Premises")
located adjacent to the Property.
C. The City and the Agency have consented or are
contemporaneously herewith consenting to the transfer of the
shares of Foster-Khoury from Angela Foster and Najib Khoury to
Rabweh.
D. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the OPA and the Operating Agreement vest in Rabweh and be
exercised and performed by Rabweh.
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Foster-Khoury under
the OPA may be assigned without the prior written consent of the
City and the Agency, which consent shall not be unreasonably
withheld, and further provides that the City and the Agency may
require the proposed assignee or transferee to assume, by written
agreement, all of the obligations, covenants, conditions and
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restrictions imposed on Foster-Khoury under the OPA.
F. section 12.1 of the Operating Agreement provides
that Foster-Khoury may not assign its interests under the
Operating Agreement without the City's prior written consent, not
to be unreasonably withheld.
G. The City and the Agency have consented to the
transfer to Rabweh of Foster-Khoury's interests in the Property,
together with related easements and rights appurtenant thereto,
Foster-Khoury's rights and obligations under the OPA,..':"'as amended,
and Foster-Khoury's rights and obligations under the Operating
Agreement, whether by express transfer and assignment or by
merger or other corporate reorganization of Foster-Khoury and
Rabweh.
H. Rabweh and ARK have or will enter into that
certain Hotel Lease Agreement (the "Hotel Lease"), whereby ARK
will lease the Property and sublease the Leased Premises from
Rabweh, acquire some, but not all, of Rabweh's rights and
obligations under the OPA and the Operating Agreement and whereby
ARK will manage and operate the Property and the Leased Premises.
Pursuant to the Hotel Lease, Rabweh shall execute a deed of trust
("Tenant Deed of Trust") in favor of ARK, encumbering Rabweh's
interest in the Property and the Leased Premises, as security for
Rabweh's performance of certain obligations under the Hotel
Lease. The City and the Agency have consented to the Hotel Lease
and the Tenant Deed of Trust upon certain conditions as set forth
in that certain Consent to Transfer [Convention Center Sublease
and Operating Agreement] executed by the City concurrently
herewith.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS HEREINAFTER
PROVIDED.
Terms and Conditions
1. The Recitals stated above are true and correct and
incorporated herein by reference.
2. Rabweh assumes all of Foster-Khoury' s obligations,
without exception, and acquires all of Foster-Khoury's rights,
under the provisions of the OPA, as amended.
3. Rabweh hereby assumes all of Foster-Khoury's
obligations, without exception, and acquires all of Foster-
Khoury's rights, under the provisions of the Operating Agreement.
4. By the assumptions set forth in Sections 2 and 3
above, Rabweh agrees to perform each and every obligation of
Foster-Khoury under the OPA and/or the Operating Agreement,
including obligations, if any, previously due but unperformed.
Foster-Khoury agrees to remain fully liable for all of its
obligations under the OPA and/or the Operating Agreement,
notwithstanding Rabweh's assumption thereof.
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5. During the term of the Hotel Lease, ARK shall
operate the Property and the Leased Premises in a manner
consistent with the terms and conditions of the OPA and the
Operating Agreement. As more particularly set forth in the Hotel
Lease, ARK shall, during the term of the Hotel Lease, assume
certain of the obligations of Rabweh and Foster-Khoury under the
OPA and the Operating Agreement. This assumption by ARK shall in
no way release Foster-Khoury or Rabweh from their obligations
under the OPA and the Operating Agreement, and they shall remain
fully liable therefor.
6. The City and the Agency hereby agree Chat so long
as the Hotel Lease shall remain in effect or the Tenant Deed of
Trust shall remain a lien on Rabweh's interest in the Property
and the Leased Premises, the City shall not accept a voluntary
surrender of the Operating Agreement and the City and the Agency
shall not accept a voluntary termination of the OPA by Rabweh,
unless the City is legally required or contractually bound to do
so.
7. In the event of a default by Rabweh or Foster-
Khoury under the OPA or the Operating Agreement, the City and the
Agency shall give to ARK all of the rights and remedies given to
an approved "Lender" under Article 18 of the Operating Agreement,
which is incorporated herein by this reference. Without limiting
the generality of the foregoing, the City and the Agency agree to
deliver any notices of default under the Operating Agreement
and/or the OPA to ARK concurrently with delivery to Rabweh, and
to afford ARK the opportunity to cure such defaults within the
time periods set forth in Article 18 of the Operating Agreement.
8. The various transfers and assumptions contained in
this Agreement are subject to the provisions of the OPA, the
Operating Agreement, the Consent to Transfer in favor of Foster-
Khoury previously given by the City and the Agency, and the
Foster-Khoury Assumption Agreement.
9. The parties hereto agree that no further transfer
of any right in or title to the Property or of rights under the
OPA or the Operating Agreement may occur except in compliance
with the applicable provisions of the OPA and/or the Operating
Agreement. No transfer or assignment of any rights and
obligations under the OPA may be made unless the rights and
obligations under the Operating Agreement are likewise
transferred or assigned to the same transferee, and vice versa.
10. This Agreement shall become effective upon the
Closing Date of Foster-Khoury's purchase of the Property from
Maruko (as "Closing Date" is defined in the Purchase and Sale
Agreement and Escrow Instructions dated August 5, 1994, by and
between Maruko and Naj ib Khoury and Angela Foster). No rights or
obligations of any party to this Agreement shall be deemed to be
changed, amended or modified hereby until the effective date
hereof.
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11. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
By:
City Attorney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By:
Agency Counsel
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FOS'1!ER-tmOtmY IN'rDlNA'l'tONAI., mc.,
a california cor;porat.ioD.
!~l~~Of<~r
,
By:
RABWBl! DlTERNATIOlt'AX. CORPOlU.'l!IOlt,
a calUo:rnia corpo~at1on
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. ie~ O~ pa~~: ~..r.~~:"'" .
Chief Financial officer
By:
,
~o s for Ra
ARR SERVICES COMPANY
By:
NlIlIlI!:
Title or capad,1:Y:
A1'JilP.OVED AS '1!O FORM:
By:
Attorneys for ARK
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EXHIBIT "C"
CONSENT TO TRANSFER
[Owner Participation and Development Agreement]
[RABWEH-ARK SERVICES]
This Consent to Transfer is made as of October ,
1994, by the City of San Bernardino, California (the "City") and
by the Redevelopment Agency of the City of San Bernardino (the
"Agency"), with respect to the following facts:
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1987, with regard to
certain real property located in the City, described in
Exhibit "A" of the OPA, which property is improved with a hotel
(the "Property"). The OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment No.1") .
B. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"). The principals of
Foster-Khoury, Angela Foster and Najib Khoury, intend to sell
their shares and interest in Foster-Khoury to Rabweh
International Corporation, a California corporation ("Rabweh")
owned and controlled by His Royal Highness Shaikh Mohamed Bin
Sulman Al Khalifa, contemporaneously with or as soon as possible
after Foster-Khoury's acquisition of the Property. The City and
the Agency have consented or are contemporaneously herewith
consenting to the assignment of Maruko's rights and obligations
under the OPA and to the transfer of the shares of Foster-Khoury
to Rabweh.
C. It is the desire and intention of Foster-Khoury
and Rabweh that the rights and obligations of Foster-Khoury in
and to the OPA vest in and be exercised and performed by Rabweh.
D. Rabweh and ARK Services Company ("ARK") have or
will enter into a certain Hotel Lease Agreement (the "Hotel
Lease") whereby ARK will acquire some, but not all, of Rabweh's
rights and obligations under the OPA and whereby ARK will manage
and operate the Property, and sublease the convention center
property adjacent to the Property ("Convention Center") .
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Foster-Khoury under
the OPA may be assigned without the prior written consent of the
City and the Agency, which consent shall not be unreasonably
withheld, and further provides that the City and the Agency may
require the proposed assignee or transferee to assume, by written
agreement, all of the obligations, covenants, conditions and
restrictions imposed on Foster-Khoury under the OPA.
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Consent
1. The City and the Agency hereby consent, upon the
conditions set forth in sections 2 and 3 below, to the following:
a. Foster-Khoury may transfer to Rabweh its
interests in the Property, together with related easements and
rights appurtenant thereto, whether by express transfer and
assignment or by merger or other corporate reorganization of
Foster-Khoury and Rabweh.
b. Foster-Khoury may assign to Raoweh all of
Foster-Khoury's rights and obligations under the OPA, as amended,
whether by express assignment or by merger or other corporate
reorganization of Foster-Khoury and Rabweh. Foster-Khoury shall
remain fully liable under the provisions of the OPA,
notwithstanding the assignment to Rabweh.
c . Rabweh and ARK may enter into the Hotel
Lease, in the form approved by the City and Agency, with such
changes as may be reasonably acceptable to the City and Agency.
Rabweh (and Foster-Khoury) shall remain fully liable under the
provisions of the OPA, notwithstanding the Hotel Lease.
2. The consents set forth in Section 1 above are
contingent upon the following, to which the parties hereto agree:
a. During the term of the Hotel Lease, ARK shall
operate the Property in a manner consistent with the restrictions
set forth in the OPA and shall assume certain of the obligations
of Rabweh and Foster-Khoury under the OPA, which assumption shall
not release Rabweh and Foster-Khoury from their obligations under
the OPA.
b. Pursuant to the Hotel Lease, ARK will
sublease from Rabweh the Convention Center and assume certain of
the obligations of Rabweh and Foster-Khoury under that certain
City of San Bernardino Convention Center Sublease and Operating
Agreement (the "Operating Agreement") dated as of August 4, 1987.
Such assumption by ARK will not release Rabweh and Foster-Khoury
from their obligations under the Operating Agreement.
c. ARK, Rabweh and Foster-Khoury shall execute
and deliver to the City and Agency the Assumption Agreement in
the form required by the City and Agency.
d. Northwest Lodging, Inc. , a Washington
corporation and affiliate of ARK ("Northwest") shall guarantee
the obligations of ARK under the OPA and the Operating Agreement,
with such guarantee to be in a form acceptable to the City and
the Agency.
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3 . The consents set forth in this agreement are
contingent upon completion of the contemplated transactions
within 180 days of the date hereof. Any transaction not
completed within that time shall require the further review and
consent of the City and the Agency.
4. No subsequent transfers or assignments of the
Property, or the rights under the OPA, other than as permitted
hereunder, shall occur without compliance with Section 6.5 of the
OPA.
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CITY OF SAN BERNARDINO, CAL-IFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
:~~~
S't'~. i ty orney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By: J:~-~4J-
Att~~;;etl'?!Pr the Agency
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Item:
Exhibit "A"
Exhibit "B"
Action to
be Taken:
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MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, _AUTHORIZING
AND DIRECTING THE EXECUTION OF -CONSENT TO
ASSIGNMENT OF SUBLESSEE'S RlGHTS UNDER CONVENTION
CENTER SUBLEASE AND OPERATING AGREEMENT, AND
ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
Consent to Transfer
Assumption Agreement
Adopt Resolution.
certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOO1\DOCll023
10\06\94 1120 law
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING AND DIRECTING THE EXECUTION OF
CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS
UNDER CONVENTION CENTER SUBLEASE AND
OPERATING AGREEMENT, AND ESTOPPEL
CERTIFICATE [FOSTER-KHOURY]
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WHEREAS, the City of San Bernardino (the "city") and
Maruko, Inc. ("Maruko") entered into that certain city of San
Bernardino convention Center Sublease and Operating Agreement
(the "Operating Agreement") on or about August 4, 1987, with
regard to certain real property located in the city, described in
Exhibit "A" of the Operating Agreement, which property consists
of convention center facilities and related improvements and
personal property (the "Leased premises"); and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the united States; and
WHEREAS, Maruko has entered into an agreement for the
sale of Maruko's hotel property which adjoins the Leased Premises
to Foster-Khoury International, Inc., a California corporation
("Foster-Khoury"); and
WHEREAS, Maruko and Foster-Khoury desire to assign
Maruko's rights and obligations under the Operating Agreement to
Foster-Khoury; and
WHEREAS, the principals of Foster-Khoury, Angela Foster
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and Najib Khoury, intend to sell their shares and interest in
Foster-Khoury to Rabweh International Corporation, a California
corporation owned and controlled by His Royal Highness Shaikh
Mohamed Bin Sulman Al Khalifa ("Transferee"), contemporaneously
with or as soon as possible after Foster-Khoury's acquisition of
the property; and
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WHEREAS, Section 12.1 of the operating Agreement
provides that the interests of Maruko under the operating
Agreement may not be assigned without the prior written consent
of the city, which consent shall not be unreasonably withheld;
and
WHEREAS, section 17.17 of the operating Agreement
provides that the parties to the Operating Agreement will, upon
request by the other party, execute an estoppel certificate
stating that the Operating Agreement is unmodified and in full
force and effect, the date to which rent is paid and the
existence of any known default under the Operating Agreement;
WHEREAS, Foster-Khoury has requested that the City
provide it with such an estoppel certificate; and
WHEREAS, the city deems it to be in the public interest
to consent to the transfer of Maruko' s interests under the
Operating Agreement.
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NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE,
DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The Recitals hereinabove are true and
correct and are incorporated herein by this referen~e.
SECTION 2. The city hereby authorizes and directs
the Mayor to execute and deliver the Consent to Transfer in the
form attached hereto as Exhibit "A", with such non-substantive
changes as the Mayor and the city Attorney may find reasonably
necessary and acceptable.
SECTION 3. The city further hereby consents to the
transfer of ownership of the shares of Foster-Khoury to
Transferee at any time within 180 days of the execution of the
consent in the form attached hereto as Exhibit "A". A transfer
of said shares after that date shall require a further review and
approval by the city not to be unreasonably withheld.
SECTION 4. The ci ty hereby consents to the
assignment of all of Maruko'srights and obligations under the
Operating Agreement to Foster-Khoury.
SECTION 5. The city authorizes and directs the
Mayor to execute an estoppel certificate, in a form approved by
the City Attorney, as and when requested by Foster-Khoury,
reflecting, as of the date of such estoppel certificate, the
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1 status of the Operating Agreement, the date to which rent has
2 been paid, the existence of any known default, and such other
3 information as reasonably requested by Foster-Khoury and/or
4 required under Section 17.17 of the Operating Agreement.
5
6 SECTION 6. No subsequent transfers of ~ny interest
7 in the Leased Premises or of the rights and obligations under the
8 Operating Agreement shall occur except in compliance with
9 section 12.1 of the Operating Agreement.
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11 SECTION 7. The city's consent is expressly
12 contingent upon execution by Foster-Khoury and delivery to the
13 city of the assumption by Foster-Khoury of all of the obligations
14 of Maruko under the Operating Agreement, which assumption shall
15 be substantially in the form attached hereto as Exhibit "B".
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE EXECUTION
OF CONSENT TO ASSIGNMENT OF SUBLESSEE'S RIGHTS UNDER CONVENTION
CENTER SUBLEASE AND OPERATING AGREEMENT, AND ESTOPPEL CERTIFICATE
[FOSTER-KHOURY]
SECTION 8.
The findings and determinations herein
shall be final and conclusive.
This Resolution shall take effect
upon the date of its adoption.
"'
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the Mayor and Common council
San Bernardino at a
of the city of
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is
hereby approved this
day of
, 1994.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
City Attorney
By:
SBEOIOOOIIDOC\I023
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STATE OF CALIFORNIA
COUNTY OF
)
)
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their
signature(s) on the instrument the person(s), or the~entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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EXHIBIT "A"
CONSENT TO TRANSFER
[Convention Center Sublease and Operating Agreement]
This Consent to Transfer is made as of October
1994, by the City of San Bernardino, California (the "city")
respect to the following facts:
Recitals
,
with
A. The city and Maruko, Inc. ("Maruko") e.ntered into
that certain city of San Bernardino Convention Center Sublease
and operating Agreement (the "operating Agreement") on or about
August 4, 1987, with regard to certain real property located in
the city, described in Exhibit "A" of the Operating Agreement,
which property consists of convention center facilities with
related improvements and personal property (the "Leased
premises").
B. Maruko has filed for protection under the
bankruptcy laws of the United States.
C. Maruko has entered into an agreement for the sale
of Maruko's adjacent hotel facility to Foster-Khoury
International, Inc., a California corporation ("Foster-Khoury"),
and Maruko and Foster-Khoury desire to transfer and assign
Maruko's rights and obligations under the operating Agreement to
Foster-Khoury. Further, the principals of Foster-Khoury, Angela
Foster and Najib Khoury, intend to sell their shares and interest
in Foster-Khoury to Rabweh International Corporation, a
california corporation owned and controlled by His Royal Highness
shaikh Mohamed Bin Sulman Al Khalifa ("Transferee"),
contemporaneously with or as soon as possible after Foster-
Khoury's acquisi tion of the hotel and of rights under the
Operating Agreement.
D. section 12.1 of the Operating Agreement provides
that the interests of Maruko under the Operating Agreement may
not be assigned without the prior written consent of the City,
which consent shall not be unreasonably withheld.
Consent
1. The city hereby consents, upon the condition set
forth in Section 4 below, to Maruko's assignment of all of its
rights and obligations under the Operating Agreement to Foster-
Khoury.
2. The City hereby consents that Angela Foster and
Najib Khoury may, at any time within 180 days of execution of
this consent, sell, transfer or assign their shares in Foster-
Khoury to Transferee. Any such sale, transfer or assignment
occurring after the 180 day period will require a further review
and approval by the city and the Agency, not to be unreasonably
withheld.
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1 3. No subsequent transfers or assignments of the
Leased Premises or the rights under the Operating Agreement shall
2 occur without compliance with section 12.1 of the Operating
Agreement.
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4. This consent is expressly contingent upon
execution by Foster-Khoury of the Assumption Agreement approved
by the city and delivery thereof to the city whereby Foster-
Khoury assumes all of the rights and obligations of Maruko under
the operating Agreement.
APPROVED AS TO FORM
10 AND LEGAL CONTENT:
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By:
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CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
city Attorney
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EXHIBIT "B"
ASSUMPTION AGREEMENT
This Assumption Agreement ("Agreement") is entered into
as of October , 1994, by and between the City of San
Bernardino, California (the "City"), the Redevelopment Agency of
the City of San Bernardino (the "Agency"), Foster-Khoury
International, Inc., a california corporation ("Foster-Khoury")
and Maruko, Inc., a Japanese corporation.
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1987, with regard ~o
certain real property located in the City (described 1n
Exhibit "A" of the OPAl, which property is improved with a hotel
(the "Property"). The OPA was amended by virtue of that certain
Amendment No. 1 to Owner Participation and Development Agreement
and convention Center Sublease and operating Agreement
("Amendment NO.1") .
B. The city and Maruko entered into that certain City
of San Bernardino convention Center Sublease and Operating
Agreement (the "Operating Agreement") dated as of August 4, 1987,
whereby the city, as sublessor, subleased the Leased Premises
(described in Exhibit "A" of the operating Agreement), generally
consisting of convention center facilities adjacent to the
property, to Maruko as sublessee.
C. The City, as owner of the Leased Premises, had
previously leased the same to the San Bernardino civic Center
Authority (the "Authority") as lessee by way of a lease recorded
June 4, 1970. The Authority, in turn, subleased the Leased
Premises back to the City by virtue of a sublease recorded
June 4, 1970. since the date of the operating Agreement, the
Authority has assigned, transferred or released its interests in
the Leased Premises in favor of the city, which now holds all
ownership and lease rights in the Leased premises, save for the
rights held by Maruko under the Operating Agreement.
D. Maruko has filed for protection under the
bankruptcy laws of the united States.
E. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury, subject to the approval of the
bankruptcy court.
F. Section 6.5(c) of the OPA provides that neither
title to the property nor the interests of Maruko under the OPA
may be assigned without the prior written consent of the city and
the Agency, which consent shall not be unreasonably withheld, and
further provides that the City and the Agency may require the
proposed assignee or transferee to assume, by written agreement,
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all of the obligations, covenants, conditions and restrictions
imposed on Maruko under the OPA.
G. section 12.1 of the Operating Agreement provides
that Maruko may not assign its interests under the Operating
Agreement without the City's prior written consent, not to
unreasonably be withheld.
H. The city and the Agency have consented to the
transfer of Maruko's title to the Property to Foster-Khoury, and
to an assignment of Maruko's rights and obligations under the OPA
and the Operating Agreement, contingent upon execu~jon of this
Agreement. .
NOW, THEREFORE, THE PARTIES HERETO AGREE AS HEREINAFTER
PROVIDED.
Terms and Conditions
1. The Recitals stated above are true and correct and
incorporated herein by reference.
2. Foster-Khoury hereby assumes all of
obligations, without exception, and acquires all of
rights, under the provisions of the OPA, as amended.
Maruko's
Maruko's
3. Foster-Khoury hereby assumes all of Maruko's
obligations, without exception, and acquires all of Maruko's
rights, under the provisions of the Operating Agreement.
4. By the assumptions set forth in sections 2 and 3
above, Foster-Khoury agrees to perform each and every obligation
of Maruko under the OPA and/or the Operating Agreement, including
obligations, if any, previously due but unperformed.
5. The city and the Agency agree that Maruko shall
have no further obligations under either the OPA or the Operating
Agreement, and Maruko agrees that it shall have no further rights
under either the OPA or the Operating Agreement.
6. The city and Foster-Khoury acknowledge and agree
that the Operating Agreement shall hereinafter be deemed to be a
lease from the city, as owner of the Leased Premises, to Foster-
Khoury as lessee, and that the Authority has no further rights or
interests in the Leased Premises. They further agree to execute
a restated lease form, if requested by the City, which reflects
the provisions of this Section, providing that no other
substantive provision of the Operating Agreement is altered.
7. Foster-Khoury agrees that no further transfer of
any right in or title to the Property or of rights under the OPA
or the Operating Agreement may occur except in compliance with
the applicable provisions of the OPA and/or the operating
Agreement, save for a transfer of ownership rights in the shares
of Foster-Khoury to which the city and the Agency have agreed.
No transfer or assignment of any of Foster-Khoury's rights and
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obligations
obligations
transferred
under the OPA may be made unless
under the Operating Agreement
or assigned to the same transferee,
its rights and
are likewise
and vice versa.
8. This Agreement shall become effective upon the
closing Date of Foster-Khoury's purchase of the Property from'
Maruko ( as "closing Date" is defined in the Purchase and Sale
Agreement and Escrow Instructions dated August 5, 1994, by and
between Maruko and Najib Khoury and Angela Foster). No rights or
obligations of any party to this Agreement shall be deemed to be
changed, amended or modified hereby until the efzective date
hereof.
9. By its execution of this Agreement, Maruko agrees
to all of the foregoing terms and provisions, subject to approval
by the United States Bankruptcy Court.
10. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
CITY OF SAN BERNARDINO, CALIFORNIA
By:
Tom Minor
Mayor
APPROVED AS TO FORM
AND LEGAL CONTENT:
BY:~
!>:-jnr. City torney
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
Tom Minor
Chairman
APPROVED AS TO FORM
AND LEGAL CONTENT:
Sabo & Green
By: ~,-a
Agency sel
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FOSTER-KHOURY INTERNATIONAL, INC.,
a California corporation
By:
NamQ:
Title:
By
MARU1(O, INC.,
a Japanese corporation
By:
Name:
Title or Capacity:
APPROVED AS TO FORM:
By:
Attorneys for Maruko, Inc.
SBEO\IlOO1\DOC\t023-.A.
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Item:
Exhibit "A"
Exhibit "B"
Exhibit "C"
Action to
be Taken:
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MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
AGENDA
October 17, 1994
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING
AND DIRECTING THE ISSUANCE OF CERtIFICATE OF
COMPLIANCE, AND EXECUTION OF CONSENT TO TRANSFER
OF REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT, ASSUMPTION AGREEMENT
RELATING TO HOTEL PROPERTY AND ESTOPPEL
CERTIFICATE [FOSTER-KHOURY]
Certificate of Compliance
Consent to Transfer
Assumption Agreement
Adopt Resolution.
Certified copy of Resolution to be returned to Sabo & Green, A
Professional Corporation.
SBEO\OOOl\DOC\1021
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
AUTHORIZING AND DIRECTING THE ISSUANCE OF
CERTIFICATE OF COMPLIANCE, AND EXECUTION OF
CONSENT TO TRANSFER OF REAL PROPERTY
INTEREST AND RIGHTS UNDER OWNER
PARTICIPATION AGREEMENT, ASSUMPTION
AGREEMENT RELATING TO HOTEL PROPERTY AND
ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
WHEREAS, the City of San Bernardino (the "City"), the
Redevelopment Agency of the City of San Bernardino (the "Agency")
and Maruko, Inc. ("Maruko") entered into that certain Owner
Participation and Development Agreement ("OPA") on or about July
20, 1987, with regard to certain real property located in the
City, described in Exhibit "A" of the OPA, which property is
improved with a hotel (the "Property"); and
WHEREAS,'the OPA was amended by virtue of that certain
Amendment No.1 to Owner Participation and Development Agreement
18 and Convention Center Sublease and Operating Agreement
19 ( "Amendment No.1"); and
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21 WHEREAS, Section 4.3 of the OPA provides that upon
22 completion of Improvements (as defined in Section 2.16 of the
23 OPAl and upon the opening of the hotel for the purposes of
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receiving guests, the City and the Agency will issue a
Certificate of Compliance evidencing completion of Maruko's
obligations as set forth in the OPA, in the form attached hereto
as Exhibit "A"; and
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WHEREAS, the Improvements have been completed and the
hotel has opened for the purpose of receiving guests, but no
Certificate of Compliance has yet been issued; and
WHEREAS, Maruko has filed for protection under the
bankruptcy laws of the united States; and
WHEREAS, Maruko has entered into an agreement for the
sale of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"); and
WHEREAS, the principals of Foster-Khoury, Angela Foster
and Najib Khoury, intend to sell their shares and interest in
Foster-Khoury to Rabweh International Corporation, a California
corporation owned and controlled by His Royal Highness Shaikh
Mohamed Bin Sulman Al Khalifa ("Transferee"), contemporaneously
with or as soon as possible after Foster-Khoury's acquisition of
the Property; and
WHEREAS, Section 6.5 (cl of the OPA provides that
neither title to the Property nor the interests of Maruko under
the OPA may be assigned without the prior written consent of the
City, which consent shall not be unreasonably withheld, and
further provides that the City may require the proposed assignee
or transferee to assume, by written agreement, all of the
obligations, covenants, conditions and restrictions imposed on
Maruko under the OPAl and
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1 WHEREAS, Section 9.10 of the OPA provides that the
2 parties to the OPA will, from time to time and upon request of
3 the other party, execute an estoppel certificate stating that the
4 OPA is unmodified and in full force and effect, the dates to
5 which Redevelopment Assistance has been paid and the existence of
6 any known default under the OPA; and
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8 WHEREAS, Foster-Khoury has requested that the City and
9 the Agency provide it with such an estoppel certificate; and
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11 WHEREAS, the City deems it to be in the public interest
12 to consent to the transfer of title of the Property, and to the
13 assignment of Maruko's interest under the OPA, to Foster-Khoury,
14 and to consent to the subsequent transfer of the ownership of the
15 shares of Foster-Khoury to Transferee, upon the condition that
16 Foster-Khoury assume all of the obligations, covenants,
17 conditions and restrictions of Maruko under the OPA, as amended.
18
19 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
20 CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE,
21 DETERMINE AND ORDER AS FOLLOWS:
22
23 SECTION 1. The Recitals hereinabove are true and
24 correct and are incorporated herein by this reference.
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26 SECTION 2. The City hereby authorizes and directs
27 the Mayor to execute and deliver the Certificate of Compliance in
28 the form attached hereto as Exhibit "A", with such non-
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substantive changes as the Mayor and the city's counsel may find
reasonably necessary and acceptable.
SECTION 3. The City hereby consents to the sale of
the Property, together with related easements and rights
appurtenant thereto, from Maruko to Foster-Khoury.
SECTION 4. The ci ty hereby consents to the
assignment of all of Maruko's rights and obligations under the
OPA, as amended, to Foster-Khoury.
SECTION 5. The City further hereby consents to the
transfer of ownership of the shares of Foster-Khoury to
Transferee at any time within 180 days of the execution of the
consent in the form attached hereto as Exhibit "B". A transfer
of said shares after that date shall require a further review and
approval by the city not to be unreasonably withheld.
SECTION 6. The City authorizes and directs the
Mayor to execute and deliver the Consent to Transfer in the form
attached hereto as Exhibit "B" and the Assumption Agreement in
the form attached hereto as Exhibit "C", with such non-
substantive changes as may be reasonable and which are acceptable
to both the Mayor and to the city Attorney.
SECTION 7. The City authorizes and directs the
Mayor to execute an estoppel certificate, in a form approved by
the city Attorney, as and when requested by Foster-Khoury,
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reflecting, as of the date of such estoppel certificate, the
status of the OPA, payments due thereunder, the existence of any
defaults thereunder, and such other information as reasonably
requested by Foster-Khoury and/or required under Section 9.10 of
the OPA.
SECTION 8. No subsequent transfers of any interest
in the Property or of the rights and obligations under the OPA
shall occur except in compliance with Section 6.5 of the OPA.
SECTION 9. The City's consent is expressly
contingent upon execution by Foster-Khoury and delivery to the
City of the assumption by Foster-Khoury of all of the obligations
of Maruko under the OPA, as amended, which assumption shall be
substantially in the form attached hereto as Exhibit "C".
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY Cr ~~;
BERNARDINO, CALIFORNIA, AUTHORIZING AND DIRECTING THE ISSUANCE OF
CERTIFICATE OF COMPLIANCE, AND EXECUTION OF CONSENT TO TRANSFER
OF REAL PROPERTY INTEREST AND RIGHTS UNDER OWNER PARTICIPATION
AGREEMENT, ASSUMPTION AGREEMENT RELATING TO HOTEL PROPERTY AND
ESTOPPEL CERTIFICATE [FOSTER-KHOURY]
SECTION 10.
The findings and determinations herein
shall be final and conclusive. This Resolution shall-take effect
::.
upon the date of its adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the Mayor and Common Council of the City of
San Bernardino at a
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is
hereby approved this
day of
, 1994.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
City Attorney
By:
SBEO\OOOl\DOC\1021
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
I personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the::entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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EXHIBIT "A"
After Recording, Mail to:
City Clerk
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
CERTIFICATE OF COMPLIANCE
PROJECT NAME:
San Bernardino Hotel/Convention Center
LEGAl DESCRIPTION:
See Exhibit "A"
OWNER OF PROPERTY/
PARTICIPANT:
Maruko, Inc.
c/o KOAR, Inc., 555 S. Flower Street,
Los Angeles, CA 90071
PROJECT DESCRIPTION: Completion of Hotel/Convention Center in
accordance with the terms of that "Owner Participation Agreement"
between the City of San Bernardino, the Redevelopment Agency of
the City of San Bernardino and Maruko, Inc., dated July 20, 1987
(the "Agreement").
ADDRESS:
NOTICE IS HEREBY GIVEN that the above described project
has been completed in compliance with the terms and conditions of
the Agreement.
DATED:
CITY OF SAN BERNARDINO
By:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
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STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by hi:.s/her/their
signature(s) on the instrument the personl.s), or the-centity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
STATE OF CALIFORNIA
COUNTY OF
On before me,
(here insert name and title of the officer), personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
7\ _ ')
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EXHIBIT "B"
CONSENT TO TRANSFER
[Owner participation and Development Agreement]
This Consent to Transfer is made as of October ,
1.994, by the City of San Bernardino, California (the "City") and
by the Redevelopment Agency of the City of San Bernardino (the
"Agency"), with respect to the following facts:
Recitals
A. The City, the Agency and Maruko, Inc. ("Maruko")
entered into that certain Owner Participation and Development
Agreement ("OPA") on or about July 20, 1.987, with regard to
certain real property located in the City, described in Exhibit
"A" of the OPA, which property is improved with a hotel (the
"Property") . The OPA was amended by virtue of that certain
Amendment No. 1. to Owner Participation and Development Agreement
and Convention Center Sublease and Operating Agreement
("Amendment No. 1.").
B. The City and Agency have issued a Certificate of
Compliance as required under Section 4.3 of the OPA.
C. Maruko has filed for protection under the
bankruptcy laws of the United States.
D. Maruko has entered into an agreement for the sale
of the Property to Foster-Khoury International, Inc., a
California corporation ("Foster-Khoury"). The principals of
Foster-Khoury, Angela Foster and Najib Khoury, intend to sell
their shares and interest in Foster-Khoury to Rabweh
International Corporation, a California corporation owned and
controlled by His Royal Highness Shaikh Mohamed Bin Sulman Al
Khalifa ("Transferee"), contemporaneously with or as soon as
possible after Foster-Khoury's acquisition of the Property.
E. Section 6.5 (c) of the OPA provides that neither
title to the Property nor the interests of Maruko under the OPA
may be assigned without the prior written consent of the City and
the Agency, which consent shall not be unreasonably withheld, and
further provides that the City and the Agency may require the
proposed assignee or transferee to assume, by written agreement,
all of the obligations, covenants, conditions and restrictions
imposed on Maruko under the OPA.
Consent
1. The City and the Agency hereby consent, upon the
condition set forth in Section 3 below, to the following: