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HomeMy WebLinkAboutR02-Economic Development Agency CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Joint Public Hearing - Maya Cinemas Nortb America, Inc. - 2008 Disposition and Development Agreement (Central City North Redevelopment Project Area) DATE: November 12,2008 SvnoDSis oCPrevious Commission/CounciVCnmmittee Action(s): On November 6, 2008, Redevelopment Committee Members Estrada, Johnson and Baxter unanimously voted to recommend that the Mayor and Cnmmon Council and the Community Development Commission consider this action for their respective approvals. Recommended Motion(s): Open/Close Joint Public Hearing (Mavor and Common Cnuncil) Resolution of the Mayor and Common Council of the City nf San Bernardino consenting to the disposition of certain real property by the Redevelopment Agency nf the City of San Bernardino ("Agency") to Maya Cinemas North America, Inc. ("Developer") (450 North "E" Street - APN: 0134-131-24,25,26,27 and 28) (Central City North Redevelopment Project Area) (Community Develonment Commission) Resolution of the Community Development Commission of the City of San Bernardino approving the sale of certain real property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Maya Cinemas North America, Inc. ("Developer"), and authorizing the Interim Executive Directnr of the Agency to execute the 2008 Disposition and Development Agreement by and between the Agency and the Developer (450 North "E" Street-APN: 0134-131-24, 25, 26, 27 and 28) (Central City North Redevelopment Project Area) Contact Person(s): Colin Strange Central City North Redevelopment Project Area Phone: (909) 663-1044 Project Area(s): Ward(s): 1" Supporting Data Attached: o Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s) o Summary Report Budget Authority: N/A N/A FUNDING REQUIREMENTS: Amount: $ -0- Source: Signature: Emil A. Marzullo, ~ . Executive Director Fiscal Review: 15~ ~~~ ~~~ Barbara Lindseth, Administrative S ices Director Cnmmission/Council Notes: P:\Aaendas\Comm Dev Commiuion\CDC 2008\11.17.08 Maya Cinemas DDA SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/17/2008 Agenda Item Number: ~; '3 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT JOINT PUBLIC HEARING - MAYA CINEMAS NORTH AMERICA, INC.- 2008 DlSPOSmON AND DEVELOPMENT AGREEMENT (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) BACKGROUND: At the July 24, 2008, Redevelopment Committee meeting, Maya Cinemas North America, Inc. ("Maya Cinemas"), made a PowerPoint presentation of their proposal to revitalize the 104,900 square foot building housing the former CinemaStar 20 screen multi-plex theaters ("CinemaStar") located at 450 North "E" Street in the Central City North Redevelopment Project Area, as well as a proposal to develop the 59,636 square feet (approximately 1.3 acres) of vacant Agency property in front of the theater. Maya Cinemas conducted a brief presentation about their company and other theatre developments, introduced and discussed some concepts and possibilities to revitalize and renew the current theater operations and facilities. Their proposal was to purchase the building and property formerly leased to CinemaStar and to purchase and develop the vacant Agency property in a manner befitting its prominence and key location in Downtown with an office/retail/commercial project. After the presentation, Agency Staff was authorized to initiate discussions with Maya Cinemas to develop a Redevelopment Project Study and Exclusive Right to Negotiate Agreement ("ERN") leading to a Disposition and Development Agreement ("DDA") for the building and property then leased to CinemaStar, (the "Phase One Property"), as well as the vacant Agency property in front ofthe theater (the "Phase II Property and Phase III Property"). As a separate matter, CinemaStar proposed at that time to request an assignment of the lease to Maya Cinemas, this would then enable the Agency to enter into a DDA with Maya Cinemas for the redevelopment of the properties. However, after two months of negotiations, Maya Cinemas and CinemaStar were unable to finalize any lease assignment. Owing to the fact that the 14 months offorbearance of rent to CinemaStar now totaled $574,000, the Agency forbearance was not extended beyond September 30, 2008. CinemaStar was formally placed on notice of such denial of any further forbearance and with a request for the immediate payment of the accrued back rent amount. CinemaStar subsequently ceased operations on Sunday, September 28, 2008, and to date, the Agency have not been informed of CinemaStar's plans or intentions with regards to returning the keys to the premises or the removal of their personal property. Due to the fact that CinemaStar theater operations had ceased, the Agency forwarded an immediate termination notice to CinemaStar, but to date, no response has been received. Agency Counsel has been instructed to determine the Agency lease rights as the landlord and to take further action as necessary to obtain possession of the premises as soon as possible in order to return the premises to productive use. An unlawful detainer action was filed on October 20, 2008, and the request for entry of default is being processed by the court. The Agency will be submitting a declaration for judgment which should be forthcoming within 20 days. Maya Cinemas has affirmed their interest and commitment to purchase the Phase I Property immediately, to acquire and develop the Phase II Property within three years and the remaining Phase III Property at some future date and requested that the Agency enter into the ERN as discussed above in order for them to engage the necessary architects, engineers and other contractors necessary to prepare and perform their due diligence investigations, inspections and renovation of the premises and property as soon as possible. P:\Agendas\CommDevCommission\CDC 2008\11-17-08 Maya Cinemas DDA SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/1712008 Agenda Item Number: ~ ~ ? Economic Development Agency Staff Report Maya Cinemas DDA Page 2 Accordingly, on October 9, 2008, the Community Development Commission of the City of San Bemardino ("Commission") approved Resolution No. CDC/2008-4I, authorizing the Interim Executive Director of the Agency to enter into an ERN with Maya Cinemas for the period of one year with the purpose of negotiating and approving a DDA at the earliest opportunity. CURRENT ISSUE: Maya Cinemas intends to remodel and renovate the Phase I Property, as identified in Exhibit "A" attached, for a partial re-opening presently estimated for mid-December, 2008, which will include new seating, carpeting, tile, paintwork and signage and subsequent re-branding of the theater as a new operating entity for marketing purposes as part of the total Phase 1 Project. After the Holiday season, work will continue on extending the lobby, relocating the ticket booth into the building, relocating the concessions, reconfiguring part of the lobby into a private function room and converting one of the large auditoriums into an I-Max theater. This will involve raising the roof over the I-Max area in order to accommodate the huge screen required for an I-Max performance. Included in the initial work will be a fountain/public gathering place to the front of the theater to be identified as Phase IA. It is estimated that this work will be completed by March 2009, resulting in an entirely new cinema experience for the City. Thereafter, the Phase II Property will be developed to include an office/restaurant/retail building adjacent to the California Theatre of the Performing Arts ("California Theatre") to the west, as well as an amphitheater/or some other common gathering area to be constructed and installed adjacent to the building. Finally, the Phase III Property will see the development of the remaining vacant Agency land, as herein identified and more fully described below, for compatible downtown uses in support of the multi-plex theater as well as the Agency owned California Theatre and the Downtown Area, in general. As part of the Agreement, Maya Cinemas will enter into a license agreement with the Agency to gain interim control of the Phase II Property and the Phase 11I Property which they intend to reconfigure with new pavers or other form ofhardscape, and new lighting and landscaping. Not only will this create an exciting new public space or plaza, but it will also relieve the Agency of the expense of having to maintain this area which in excess is on one acre and costs approximately $36,000 per annum. The Phase I Property comprising the theater is now ten years old and has suffered over the last four years from severe deferred maintenance to the extent that the product is no longer competitive in the market place. Virtually all furnishings and fixtures need to be replaced including 4,400 new seats, as well as new carpeting, tile, countertops, paintwork, wall carpeting, and new digital projection equipment and movie screens and sound systems. Regrettably, it has been discovered that there are also a number of Americans with Disabilities Act ("ADA") deficiencies, including the steps to the risers in each auditorium, which must be addressed. Bringing the building back to its original state will require Maya Cinemas to incur expenditures of $5.2 million. In order to take the project to the next level, so gaining market superiority in the region, the Developer has signed a license agreement with I-Max to operate a 3-D I-Max cinema at this location. The closest I-Max to the west is in the City of Ontario and to the east in Cathedral City. The terms of the I-Max license agreement restrict the number ofl-Max movie theaters in anyone geographical region so, according to the license, there can be no additional I-Max theaters in the Inland Empire which will undoubtedly give the San Bemardino multi-plex a distinct advantage over surrounding communities. The value of the I-Max improvements, including the projection equipment, refitting one auditorium for an I-Max screen (which involves raising the roof to accommodate the large screen) and the related licenses amount to a further $2.9 million bringing the total value of the Phase I Property improvements to $8.1 million. The Phase II Property exterior improvements include the installation and maintenance of new hardscape, landscaping and a fountain at a cost of an additional $1.2 million, which will relieve the Agency of the financial burden of having to P:\Agendas\Comm DevCommissionlCDC 2008\] 1-)7-08 Maya Cinemas DDA SRdoc COMMISSION MEETING AGENDA Meeting Date: 1l/1712008 Agenda Item Number: :1l-; ? Economic Development Agency Staff Report Maya Cinemas DDA Page 3 maintain the exterior at a current expenditure of approximately $36,000 per year. The Phase 1 Property acquisition and improvements will likely be financed with a combination of a HUD Section 108 loan and Maya Cinemas' equity, and Agency license agreement for the Phase II and Phase III Property to transfer the maintenance obligations for these areas to Maya Cinemas. The Phase II Property project will consist of the development of an office, retail, restaurant and entertainment use upon the vacant Agency land adjacent to the California Theatre of approximately 11,000 square feet to accommodate both uses of the public and the California Theatre. The remaining Phase III Property shall be developed within seven years with similar uses, but not limited to, retailers, book stores, restaurants, nationally recognized coffee shops and other retail uses with approximately 20,000 to 30,000 square feet of gross building area, plus related lighting, landscaping and related improvements. Maya Cinemas is to commence construction on the Phase II Property improvements within three years or forfeit development rights for the facilities for which construction was not commenced. ENVIRONMENTAL IMPACT: The Agency has reviewed the proposed project under the California Environmental Quality Act ("CEQA") and has determined that the transfer of the CinemaStar property is exempt pursuant to Chapter 2.6, Section 21080 of the Public Resources Code, CEQA Statutes, and Section 15061 (b)(3) of the CEQA statutes. FISCAL IMPACT: Maya Cinemas will acquire the Phase 1 Property for the sum of $4.6 million and additional new money for the rehab will be provided in a new $8.2 - $8.5 million HUD Section 108 loan with the amount outstanding on the Agency HUD 108 loan not to exceed three years, after which the property will be refinanced and the HUD Section 108 loan satisfied. Failure to refinance the Phase 1 Property within the specified time will result in forfeiture of a $450,000 Maya Cinemas letter of credit which will be on deposit with the Agency. The Phase II Property and the Phase III Property will be acquired at market value at the appropriate time, however, these properties were recently appraised by a qualified MAl appraiser at a total of $71 5,000. RECOMMENDATION: That the Mayor and Common Council and the Community Development Commission adopt the attached Resolutions. ~ Emil A. Marzullo, Interim Executive Director P:\Agendas\Comm [lev Commission\CDC 2008\11-17-03 Maya Cinemas DDA SR.doc COMMISSION MEETING AGENDA Meeting Date: II/1712008 Agenda Item Number: ~ ~ ~ / Gene Harvey Theatres P.O. Box 3885 SAN DIMAS, CALIFORNIA 91773-7885 (909) 599-4119 Fax: (909) 394-6106 TO: The Economic Development Agency City of San Bernardino INTRODUCTION I am Gene Harvey, founder and CEO of Gene Harvey Theatres, Canyon Theatre Company, and Harvey Cinemas, Inc. I have, for the past 30 years, built, bought, sold, operated, booked films for, and been consultant to many movie theatre venues in Central and Southern California and Arizona. I have in recent years owned and operated theatres in San Bernardino, Pomona, Corona, San Dimas, Pasadena, Los Angeles, Panorama City, and Prescott, Arizona. Recently we downsized to some theatre complexes close to home, namely Pomona and San Bernardino, and one in Monterey County, an area I have close personal ties to, having grown up in that area. The Pomona 8-screen theatre is presently closed because the school district which owned the property wanted it for educational use. Because of severe budget cutbacks, there has been some talk of returning it to movie theatre use. Currently we operate the Sterling Cinema 6 in the Del Rosa district of San Bernardino, and a fairly new three-screen theatre in King City. My wife and I are homeowners in the historic Ganesha Hills area of Pomona and enjoy many social contacts and events in San Bernardino: the California Theatre, ballroom dancing events, and some favorite restaurants. I am a consultant to developers who are restoring the historic Fox Pomona Theatre (vintage 1931) in downtown Pomona. Also, I have had meetings with developers and the Pomona planning department about a possible (and very probable) 14-screen multiplex in Pomona. I have for many years been active in the Rotary clubs of San Dimas and Pomona and also the Chambers of Commerce of those cities. Other groups and organizations with which I and my employees have been involved include YMCA, Boys' and Girls' Clubs, various high school fund-raising events, college fundraisers, churches, youth groups, Boy and Girl Scouts, and many others. In addition to my movie theatre activity over the years, I have also at times worked in film production (camera work, assistant director, even some acting). Other business ventures have included restaurants, poster production, and award-winning vintage automobile restoration. I am a classic car enthusiast and sometime collector and feel privileged to live near the marvelous annual Route 66 Rendezvous right here in San Bernardino. What an opportunity that presents to the move complex for interesting tie-ins and "car movie" presentations! Rl-- \ \ - z 5-0& / PROPOSAL What follows is my proposal for the creation of the EMPIRE ENTERTAINMENT CENTER, a state-of-the-art, world class complex that includes movie exhibition of a wide and varied nature, ballroom dancing both professional and amateur, jazz music performances, dining in an elegant but affordable dinner house, snacks and lunches in a fun-atmosphere cafe, and music instruction for beginning and advanced students. PHASE I PROPERTY The core and anchor of the entire entertainment center is, of course, the cinema complex which would occupy the building formerly occupied by CinernaStar Theatres. Putting 20 screens to creative use means the potential for combining both conventional and unusual film programming. Here is a listing of what I would be presenting ifI and my team ran the cinema complex. 1. All mainstream first-run films from the major movie studios. We have long- standing good working relationships with all these film companies and are currently showing these films right here in San Bernardino at the Sterling Cinema. Our licensing agreements with The Walt Disney Company, Universal Pictures, Warner Bros. Studios, Paramount Pictures, Metro-Goldwyn-Mayer Studios, and all other majors will make possible a smooth and immediate booking of films into the Empire 20. 2. An Imax theatre screen should be brought into this complex. It would require considerable modifications to one of the existing auditoriums, but would be worthwhile becanse of the lack of Imax in our area stretching from Ontario to Cathedral City. The Imax people have stated that an Imax licensing agreement can be obtained for the San Bernardino area and agree that it is quite desirable. Large format produced films and regular release films made available in that format are becoming increasingly available and desirable including the 3-D adjunct of the large format. 3. Smaller independent and so-called "art films" from the lesser film companies, including dramas, comedies, documentaries, and others. 4. At least one screen will be devoted to vintage and classic films, enabling people to experience on a giant theatre screen the impact and glory of important films from the past. 5. Faith-based movies have become an important genre of films these days and there will be a constant showing of these for the ever-growing audiences and enthusiastic support from our community of churches and other places of worship. 6. One or two screens devoted to the showing of Spanish language films, including not only films produced in Spanish, but also certain domestic mainstream films 2 made available with Spanish soundtracks and/or subtitles. Included in this group would be certain vintage and classic films from Mexico and South America. 7. Student films and other first-time or experimental films need an opportunity for public showing and can be presented in regular engagements or special festivals or midnight shows. 8. Various special festivals can be developed and presented and can evolve into annual events. These can include groups of documentaries. or festivals featuring certain actors, or certain directors, or certain subject matters. These festivals can include special speakers, awards given, and attendance by celebrities and film makers. 9. Movies are a fun and lucrative way to host fundraisers for a wide variety of community organizations including, for example, Rotary and other service clubs, YMCA, Boys' and Girls' Clubs, school bands, hospitals, PTAs, charity groups. 10. Children's show series on Saturdays or summer vacations with greatly reduced admission prices and special snack packages. Series of this type showing specially selected films for young children can also include games, contests, and drawings for prizes, and provide a well-rounded afternoon of fun for children while their parents shop, attend meetings, or just simply relax. II. Senior citizens of our community enjoy shows and programs specially formulated for them. These programs include vintage or current movies especially of interest to seniors, live music performed on stage ahead of the movie, and drawings for prizes. 12. Mothers with young children (infants, toddlers) would be welcome to special showings of certain movies on certain days and at certain times reserved for them without fear of audience members objecting to the presence of the young children. 13. Several of the theatre auditoriums must be equipped with new digital projection equipment which makes possible many exciting new presentations. Coming now with increased frequency, there are performances by the New York Metropolitan Opera that result in sold-out presentations in movie theatres. There are also championship sporting events, including, but not limited to, basketball, football and auto racing, and some of these events are in high-definition 3-D. There is also an ever-increasing number of mainstream movies planned in the near future with a 3-D format, and the showing of these films in 3-D is made possible by this digital equipment. I and my team of colleagues are experienced and familiar with every single type of movie programming mentioned above. In operating many types of movie venues in many locations, we have had wide exposure to many audiences and film requirements. 3 This particular location seems ideal for bringing together many theatres into one spot under one roof for the enjoyment and benefit of San Bernardino, the entire county, and the whole Inland Empire in general. Other features of the Empire 20 Movie complex: I. A fully equipped and stocked concession stand offering a wide range of snacks from standard movie theatre fare such as popcorn and beverages, to whatever items the location and patronage seem to desire and request. In our locations we have always featured top quality, award-winning, highly acclaimed popcorn and offered it at prices below those of large theatre chains. 2. A museum of movie history and a special section on the history of movie theatres in San Bernardino, told with photos and memorabilia. * * * PHASE II AND PHASE m PROPERTY The nearly 60,000 square foot area in front of the existing theatre building can be developed into an entertainment/food/retail complex that will be very unique in the Inland Empire and would create significant synergy with the movie complex and the California Theatre of Performing Arts. The developments would include the following: 1. A worid-class, state-of-the-art dance ballroom with a 5000 square foot hardwood dance floor and luxurious seating accommodations that include comfortable seating for spectators and dancers and table arrangements for spectators/dancers/ diners. This facility would have the very best in sound and lighting capl\bilities and would be adaptable to a wide range of dance activity from professional presentation to individual dance instruction. As a full-time available venue, it can host public and private affairs, public ballroom dance events, private corporate events, wedding receptions, etc. 2. A jazz club with an intimate stage and seating area that would feature well known artists as well as provide performance opportunities for local and/or lesser known talent. 3. A restaurant that will be elegant and stylish and yet moderately priced. It will be strategically located so that it can furnish food and drink to the ballroom and jazz club patrons as well as functioning as a dinner house on its own. 4. A cafe featuring lunches and snacks and specializing in a wide variety of quality soups, salads and sandwiches. 5. Retail boutique shops specializing in items related to the entertainments presented in the complex. For example, one store will sell movie souvenirs and memorabilia, one store will sell dance clothing and shoes, and one store will offer music instruments and private studios for music instruction. 4 6. An outdoor patio/stage/amphitheater arena which will accommodate performances and spectators or be used at times simply for public meetings. 7. A media store with DVDs and CDs, and also books relating to entertainment topics. CONCLUSION I would like to get the theatre open as soon as possible and start getting it reestablished. As soon as access to the facility is possible, we could set to work immediately getting the building and fixtures cleaned up, repaired as needed, book films, and get the place partially or totally open for business. We would like a short-term (six months?) arrangement to run the theatre during which time we would pay the EDA $50,000 rent per month. During this time, we would do refurbishing of the property (carpets, seats, paint) and heavily promote and advertise the venue to get it reestablished as rapidly as possible as a competitive movie location in the region. By June 30, 2009, we will purchase the theatre land and building and contents (phase I) and the vacant land in front of the theatre (phases II and III) for $6,000,000. The development of Phases II and III would begin in the following six-month period, the latter part of2009. The current economic climate makes conventional bank financing for the purchase almost impossible. However, I have private investment sources interested in such a purchase if I can indeed show that this currently closed venue is capable of sustaining business once again as a competitive, first-run movie theatre. Upon getting the theatre open and running, I can immediately put together this consortium of investors, furnishing to you their names and pertinent information, and proceed rather rapidly with putting the deal together and executing a purchase arrangement with the EDA. Funds for the further refurbishing, enhancement and general improvement of the theatre facility as well as funds for the development of the now-vacant land will also be forthcoming from private investors within the movie and entertainment industry as soon as the core entity, the 20-screen movie cinema, is re-established as a functioning entity. I can't emphasize enough that the most pressing, immediate issue with this facility is to get it open and functioning as soon as possible. I and my company team can move quickly to make this happen. We have management and administrative people in the region and we are already booking and showing first-run movies in San Bernardino at the Sterling Cinema. 5 1 2 3 4 5 6 7 8 9 10 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE SALE OF CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO MAYA CINEMAS NORTH AMERICA, INC. ("DEVELOPER"), AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND THE DEVELOPER (450 NORTH "E" STREET - APN: 0134-131-24, 25, 26, 27 AND 28) (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a public body, corporate and politic existing under the laws of the State of California, Health and 11 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and 12 underutilized land; and 13 14 WHEREAS, the Community Development Commission of the City of San Bernardino (the 15 "Commission") is the governing board of the Agency; and 16 WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation 17 and charter city, duly organized and existing pursuant to the provisions of the Constitution of the 18 State of California; and 19 20 21 22 23 WHEREAS, the Agency owns certain real property consisting of a 20 screen multi-plex Cinema Building, (the "Phase I Property") on Exhibit "A" as attached, as well as the Phase II Property and Phase III Property as per Exhibit "A" attached; and WHEREAS, the Phase I Property is located at the northwest corner of 4th Street and "E" Street within the Central City North Redevelopment Project Area and consists of one 110,642 24 square-foot parcel which has been improved with a 104,900 square-foot 20-plex cinema building 25 and the PIuise II Property and the Phase III Property which are located south of the adjacent Phase I 26 Property and totals 59,636 square foot; and 27 28 I ~1.u,'lM B l't~ ttaJt2. 11..., ~ ^t:lL P:\Agendas\Resolutions\Resolutions\2008\11-I1-oS Maya Cinemas DDA CDC Rcao.do<: 1 WHEREAS, the Agency intends to enter into a 2008 Disposition and Development 2 Agreement (the "Agreement") pursuant to which the Agency proposes to sell the Phase I Property to 3 Maya Cinemas North America, Inc. (the "Developer") for $4.6 million in the manner as provided in 4 the Agreement; and 5 WHEREAS, the Agreement provides for the redevelopment of the Phase I Property by the 6 Developer so that it may be upgraded and expanded to a modern, market competitive cinema to , 7 include an I-Max screen and digital projection equipment as identified in the Agreement; and 8 9 10 11 WHEREAS, the Developer has estimated that it will cost $8,100,000 for the construction of the improvements to the Phase I Property; and WHEREAS, the Developer will construct a public gathering place and/or a fountain in front 12 of the Phase I Property to be kuown as the Phase IA Property; and 13 WHEREAS, the Developer intends to acquire and develop the Phase II Property within three 14 years of the completion of the Phase I Property to include restaurants, retail, office and related 15 entertainment uses herein identified as compatible downtown uses in support of the multiplex 16 theater as well as the Agency owned California Theatre of the Performing Arts and the Downtown 17 Area, in general; and 18 WHEREAS, the Developer intends to acquire and develop the remaining Phase 111 Property 19 within seven years with similar, compatible uses; and 20 WHEREAS, the Agency has prepared and published a notice of joint public hearing in the 21 San Bernardino County SUN newspaper on November 1, 2008 and November 8, 2008, regarding 22 the approval ofthe Agreement; and 23 WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety 24 Code Section 33433 (the "Report") that describes the salient points of the Agreement and identifies 25 the cost of the Agreement to the Agency; and 26 27 28 WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the "CEQA") Guidelines the Agency has reviewed the proposed sale and use of the Phase I Property, 2 P:\Agendas\Resolut~ns\Rcso]utions\2008\11-17-08 Maya Cinemas DDA COC Rcso.doc 1 the Phase II Property and the Phase III Property has determined that the project, as identified in the 2 Agreement, is exempt from the Act pursuant to Chapter 2.6, Section 210S0 of the Public Resources 3 Code, CEQA Statutes, and Section l506l(b)(3) of the CEQA statutes; and 4 WHEREAS, the acquisition of the Phase I Property, the Phase II Property and the Phase III 5 Property by the Developer is consistent with the Central City North Redevelopment Plan; and 6 WHEREAS, it is appropriate for the Commission to approve the Agreement and the 7 disposition of the Phase I Property and the Phase II Property and the Phase III Property to the S Developer as set forth in the Agreement. 9 10 11 12 13 14 15 16 17 18 19 20 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DE1ERMlNE AND ORDER, AS FOLLOWS: Section 1. On November 17, 200S, the Commission, as the governing board of the Agency, conducted a full and fair joint public hearing with the Mayor and Common Council of the City of San Bernardino relating to the disposition of the Phase I Property and the Phase II Property and the Phase III Property from the Agency to the Developer and the development thereof pursuant to the Agreement. The minutes of the Agency Secretary for the November 17, 200S meeting of the Commission shall include a record of all communication and testimony submitted to the Commission by interested persons relating to the public hearing and the approval of the Agreement. Section 2. The Commission hereby receives and approves the Report and the other written materials submitted to the Commission at the meeting at which this Resolution is adopted. The Report contains information required under Health and Safety Code Section 33433. 21 22 23 24 Section 3. This Resolution is adopted in order to satisfY the provisions of Health and Safety Code Section 33433(a)(1) and (b)(2) related to the disposition of the Phase I Property and the Phase II Property and the Phase III Property to the Developer in accordance with the Agreement. The Commission hereby finds and determines as follows: that the Report contains the information described in Health and Safety Code Section 33433(b )(2) wherein the Phase I Property is being sold to the Buyer at the purchase price of $4.6 million for the redevelopment of the 20 25 26 27 28 screen multi-plex cinema building which is determined at its highest and best use in accordance 3 P:\Agendas\Resolutions\Resolutions\2008\11-]7-08 Maya Cinemas DDA CDC Reso.doc 1 with the Central City North Redevelopment Plan. The purchase price for the Phase II Property and 2 the Phase III Property are to be sold for the total sum of$7l5,OOO at the appropriate time. 3 Section 4. The Commission hereby approves the Agreement and the Interim Executive 4 Director is hereby authorized and directed to execute the Agreement on behalf of the Agency 5 together with nonsubstantive and conforming changes as may be recommended by the Interim 6 Executive Director and Agency Counsel. The Interim Executive Director is hereby authorized to 7 take all appropriate actions as set forth in the Agreement to implement the disposition and 8 redevelopment of the Phase I Property, the Phase II Property and the Phase III Property. 9 Section 5. This Resolution shall take effect from and after its date of adoption by this 10 Commission. 11 II/ 12 II/ 13 II/ 14 II/ 15 II/ 16 II/ 17 II/ 18 /11 19 /11 20 /11 21 /11 22 II/ 23 II/ 24 II/ 25 II/ 26 II/ 27 II/ 28 4 P:\Agendas\Resolutions\Resolutions\2008\11.]1-08 Maya Cinemas DDA COC Reso.doc 1 2 3 4 5 6 7 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE SALE OF CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO MAYA CINEMAS NORTH AMERICA, INC. ("DEVELOPER"), AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND THE DEVELOPER (450 NORTH "E" STREET - APN: 0134-131-24, 25, 26, 27 AND 28) (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at a 9 thereof, held on the day of 10 Commission Members: Aves 11 ESTRADA 12 BAXTER 13 BRINKER 14 DERRY 15 KELLEY 16 JOHNSON 17 MC CAMMACK 18 19 20 The foregoing Resolution is hereby approved this 21 22 23 24 meeting , 2008, by the following vote to wit: Navs Abstain Absent Secretary day of ,2008. Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino 25 Approved as to Form: 26 ~ 27 By: \ /'~ Agency 0 el 28 5 P:\Agendas\ResoJutions\R.esolulions\2008\1 J.17-08 Maya Cinemas DDA CDC Reso.doc .......... ('......;'\ '\ . . ,......., \ "". :" I '. ~ \\', I ,I ".. " ............ . . PHASE II . , . , , . . . . . . ",...1 . ........, EXHIBIT A PHASE I {.) Not to Scale FOURTH STREET D Existing Building f'...oo........ "", L__.....: Proposed Future Buildings r-'-' i......_.l Proposed Amphitheater ........... .",,............-w"W ~.........._.._... PHASE III ............................ .. .' ..' ,...." . . . . . : ....'" . ...... ...... ..",- ..,................ ...... I- W w 0:: l- t/) W 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND MAYA CINEMAS NORTH AMERICA, INC. TO BE DISTRIBUTED SEPARATELY BY THE CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY STAFF ON FRIDAY, NOVEMBER 14, 200S. 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND MAYA CINEMAS NORTH AMERICA, INC. 4815.3938.7650.1 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc Section 1.01. Section 1.02. Section 1.03. Section 1.04. Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14. Section 2.15. Section 2.16. Section 2.17. Section 2.18. Section 2.19. Section 2.20. Section 2.21. Section 2.22. Section 2.23. Section 2.24. Section 2.25. TABLE OF CONTENTS Page Purpose of Agreement........................................................................................1 The Project.........................................................................................................l Parties to this Agreement ...................................................................................2 Restrictions Against Change in Ownership, Management and Control of the Developer and Assigmnent of Agreement.....................................2 2 ARTICLE II. DISPOSITION OF THE PROPERTY.............................................4 Purchase and Sale of the Property, Purchase Price, Agency Financing; Monetary ............................................................................................................. Obligations .........................................................................................................4 Deposit ...............................................................................................................5 Opening and Closing of Escrow .....................................................................65 Escrow Instructions............................................................................................6 Conveyance of Title ........................................................................................7 6 Additional Closing Obligations of the Agency..................................................7 Closing Obligations of the Developer................................................................8 Inspections and Review ..................................................................................9 8 Due Diligence Investigation of the Property By the Developer .................11 10 Due Diligence Certificate ...........................................................................12 11 Books and Records .....................................................................................12 11 Conditions Condition of the Property-Developer's Release....................... 12 11 Review and Approval of Condition of Title by the Developer ...................14 15 RESERVED ................................................................................................14 15 Extension of Due Diligence Period.............................................................14 15 Developer's Conditions Precedent to Close Escrow .......................................15 Agency's Conditions Precedent to Close Escrow............................................16 Distribution of Documents to the Developer After Closing Date by Escrow Holder .........................................................................................................16 17 Satisfaction of Conditions...........................................................................16 17 RESERVED .....................................................................................................17 Prorations, Closing Costs, Possession .............................................................17 RESERVED 18 RESERVED....................................... 19 Breach by the Developer of Article II Liquidated Damages Payable by the Developer to the Agency ............................................................................18 19 Representations and Warranties.......................................................................19 Damage, Destruction and Condemnation ...................................................21 22 4815-3938-7650.2815-3938-7650.2 i P:\AgendaMgenda Attachments\Agend& Anacbments\Agenda Atuchments\Agnnts.Amend 2008\11-17-03 Maya Cinema - Disposition and ~elopment Asrcement. FINAL.doc -.c:+..:- Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07. Section 3.08 Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. ARTICLE III. DEVELOPMENT OF THE PROJECT .....................................22 23 Development of the Project by the Developer ............................................2223 RESERVED ......................................................................................................27 Taxes and Assessments....................................................................................27 Change in Ownership, Management and Control of the Developer-- Assignment and Transfer ............................................................................2728 Security Financing,; Right of Holders .............................................................30 Right of the Agency to Satisfy Other Liens on the Property after Conveyance of Title ....................................................................................32 33 Certificate of Completion ...........................................................................32 33 Right to Purchase the Phase II Property and the Phase III Property ARTICLE IV. USE OF THE SITE.....................................................33 34 Uses.............................................................................................................3 3 34 Maintenance of the Property ............................................................................34 Obligation to Refrain from Discrimination.................................................34 35 Form of Nondiscrimination and Nonsegregation Clauses ..........................34 35 ARTICLE V. DEFAULTS, REMEDIES AND TERMINATION .................................36 Defaults - General................................................................ .......................... ..36 Legal Actions..............................................................................................36 37 Rights and Remedies are Cumulative..............................................................37 Damages.....................................................................; Specific Performance 37 RESERVED 37 Specific Performance Prior to Close ofEscrow....................38 Agency Rights of Termination Following Close ofEscrow.......................37 38 ARTICLE VI. GENERAL PROVISIONS ...............................................38 39 Notices, Demands and Communications Between the Parties ...................38 39 Conflict of Interest ......................................................................................3 9 40 Warranty Against Payment of Consideration for Agreement.....................39 40 Nonliability of Agency Officials and Employees............................................40 Enforced Delay: Extension of Time ofPerformance.......................................40 Inspection of Books and Records ....................................................................41 Approvals .........................................................................................................41 Real Estate Commissions.................................................................................41 4815-3938-7650.2815-3938-7650.2 11 P:\Agendu\Agenda Attachments\Asenda Attachments\Agenda Attachments\Agnnts-Amend 2003\11-17-08 Maya Cinema - Disposition and Development Agreement ~ FINAL.doe Section 6.09. Section 6.1 O. Section 6.11. Section 6.12. Indemnification............................................................................................... .41 Release of the Developer from Liability..........................................................43 Attorneys' Fees ...........................................................................................43 44 Effect................................................................................................................44 ARTICLE VII. ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH AGENCY GRANT DEED; WAIVERS AND AMENDMENTS .............................................44 Section 7.01. Section 7.02. Entire Agreement; Counterparts ......................................................................44 No Merger; Waivers and Amendments ...........................................................44 ARTICLE VIII. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION 44 Section 8.01. Execution and Recordation....................................................................................44 EXHIBIT "A-I" - PHASE I PROPERTY DESCRIPTION EXHIBIT "A-2" - PHASE IA PROPERTY DESCRIPTION EXHIBIT "A-3" - PHASE II PROPERTY DESCRIPTION EXHIBIT "A-4" - PHASE III PROPERTY DESCRIPTION EXHIBIT "B" - BUDGET EXHIBIT "c" SCOPE OF DEVELOPMENT EXHIBIT "D" - SCHEDULE OF PERFORMANCE EXHIBIT "E" - AGENCY GRANT DEED EXHIBIT "F" - CERTIFICATE OF COMPLETION EXHIBIT "G" - NOTICE OF AGREEMENT 4815-3938-7650.2815-3938.7650.2 iii P:\Agendas\Agenda Attadunents\Agenda Attacbments\Agenda Attachrnents\Agrmt3-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc 2008 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND MAY A CINEMAS NORTH AMERICA, INC. THIS 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of November 17, 2008 (the "Effective Date"), by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency") and MAYA CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Developer"). The Agency and the Developer hereby agree as follows: Section 1.01. Puroose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan by providing for: (i) the purchase and redevelopment by the Developer of the Phase I Property (as defmed below) in accordance with and pursuant to this Agreement and (ii) the subsequent purchase and redevelopment by the Developer of the Phase II Property (as defined below) and/or of the Phase III Property (as defined below) in the event the Developer exercises the right to acquire the Phase II Property and/or to acquire the Phase III Property in accordance with and pursuant to this Agreement. As of the Effective Date of this Agreement, the Property is owned by the Agency and shall be conveyed by the Agency to the Developer subject to the terms, covenants and conditions of this Agreement. The redevelopment of the Property pursuant to this Agreement is in the vital and best interests of the City and of the health, safety and welfare of its residents, and is in accordance with the public purposes and provisions of applicable state and local laws. The Agency has determined that the development and the use of the Property contemplated by this Agreement are consistent with the Redevelopment Plan for the Project Area (as defmed below). Section 1.02. The Proiect. Promptly following the conveyance by the Agency to the Developer of the Phase I Property, the Developer shall promptly commence and complete the construction, development, installation and completion of the Phase I Property Improvements at, on or in connection with the Phase I Property. On and after the Close of Escrow for the Phase II Property and/or for the Phase III Property in the event the Developer exercises the right to acquire the Phase II Property and/or to acquire the Phase III Property pursuant to Section 3.08 of this Agreement, the Developer shall construct, development, install and complete the Phase II Property Improvements and/or the Phase III Property Improvements, in accordance with this Agreement. Section 1.03. Parties to this Agreement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et seq.). The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. 4815-3938-7650.2815-3938-7650.2 1 P:\Agendas\Agenda Attachmcntll\Agenda A1tachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and ~elopment Agreement - FINAL.doc (b) The Developer is a Delaware corporation. The principal office and mailing address of the Developer for purposes of this Agreement is as set forth below, and notice shall be sufficient when served upon the notice party whether or not a copy is similarly served upon any other person: To the Developer: Maya Cinemas North America, Inc. Attn.: Moctesuma Esparza, Chief Executive Officer 1201 West 5th Street, Suite T-21O Los Angeles, California 90017 Telephone: (213) 542-4420 with a copy to: Maya Entertaimnent Group, Inc. Attn.: Jose Martinez, Jr., General Counsel 1201 West 5th Street, Suite T-210 Los Angeles, California 90017 Telephone: (213) 542-4420 (c) The City of San Bernardino is not a party to this Agreement and shall have no obligations pursuant to this Agreement. Section 1.04. Defined Terms. In addition to the usage of certain terms which have defined meaning as set forth in this Agreement certain other words and phrases are used in this Agreement to refer to the following unless the particular context of usage of a word or phrase may otherwise require: "Agency" means and refers to the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic. "Agreement" means and refers to this 2008 Disposition and Development Agreement, dated as of November 17, 2008, by and between the Agency and the Developer, as amended from time to time. The Agreement means and also includes all exhibits, schedules and riders attached thereto. "Budget" means and refers to the "Budget" prepared by the Developer and approved by the Agency in connection with the purchase, acquisition, construction, development, installation and/or completion of the Phase I Property Improvements. The Budget is attached hereto as Exhibit "B" and is incorporated herein by this reference. "City" means and refers to the City of San Bernardino located in the County of San Bernardino and in the State of California. "County" means and refers to the County of San Bernardino located in the State of California. 4815-3938-7650.2815-3938-7650.2 2 P:\Agendas\Agenda Attacbment3\Agenda Attachments\Agenda Attachments\Agrmts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FlNAL.doc "Developer" means and refers to Maya Cinemas North America, Inc., a Delaware corporation, its permitted successors and permitted assigns, subject to the terms, covenants and conditions of this Agreement. "Escrow" means and refers to the escrow created in connection with and relating to the Phase I Property, to the Phase II Property and/or to the Phase III Property in the event the Developer exercises the right to acquire the Phase II Property and/or to acquire the Phase III Property. "HUD Loan" means and refers to the loan made by HUD in favor of the City which HUD Loan is secured by a deed of trust (the "HUD Deed of Trust" encumbering the Phase I Property (but excluding the Phase IA Property). The outstanding principal balance of the HUD Loan as of the Effective Date of this Agreement is $4,600,000. "Improvements" mean and refer to the Phase I Property Improvements, to the Phase II Property Improvements and/or to the Phase III Improvements. "Laws" mean and refer to all federal, state, municipal and local laws, statutes, codes, rules, regulations, ordinances and orders, now or hereafter existing, as amended from time to time. The Laws, shall include, without limitation, the ADA. "License Agreement" means and refers to the License Agreement by and between the Developer and the Agency, of even date herewith, wherein the Agency grants to the Developer, without limitation, from the date that the Developer acquires title from the Agency in and to the Phase I Property until the termination of the License Agreement, the right of access to the Phase II Property and/or to the Phase III Property. Pursuant to the License Agreement, the Developer shall pay no license fee for such license but, in lieu of remitting license payments to the Agency, the Developer, at its sole cost and expense, shall maintain, repair and provide landscaping in connection with the Phase II Property and/or with the Phase III Property, including, without limitation, the maintenance and repair of the existing water fountains owned by the Agency. Such water fountains may be retained or removed by the Developer, at its sole discretion and expense, and the removal of such water fountains must immediately be replaced by the installation ofhardscape reasonably acceptable to the Agency, at the sole cost of the Developer, or the commencement of building improvements in connection with the Phase II Property Project and/or with the Phase III Property Project. The License Agreement shall automatically terminate, without limitation, without any further notice from the Agency to the Developer, upon the occurrence of the following events, whichever occurs first: (i) the acquisition by the Developer of the Phase II Property and/or of the Phase III Property, (ii) an event of default under this Agreement, (iii) five (5) years from the Effective Date of this Agreement. 481 5-3938-7650.2815-3938-7650.2 3 P:\Agendas\As:enda Attaclunents\Agenda Attachmcntl\Agcnda Attachmems\Agrmts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doe "Notice of Agreement" means and refers to the Notice of Agreement, dated of even date of this Agreement, as executed and ackuowledged by and between the Agency and the Developer. The Notice of Agreement is attached hereto and incorporated herein by this reference as Exhibit "G". The Escrow Officer shall record the Notice of Agreement in the Official Records of the County Recorder's Office for the County of San Bernardino, State of California, on the Closing Date of the Escrow in connection with the Phase I Property. "Phase I Property" means and refers to that certain improved land located in the City of San Bernardino, County of San Bernardino, and State of California, Assessor Parcel Number 0134-131-25, as described in Exhibit "A-I" to this Agreement attached hereto and incorporated herein by this reference. The Phase I Property also includes the following: (i) the Phase I Property Improvements to be constructed, developed, installed and completed by the Developer in accordance with this Agreement and (ii) the Phase IA Property and the Phase IA Property Improvements. "Phase I Property Deposit" means and refers to the deposit paid by the Developer to the Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase I Property, subject to the terms, covenants and conditions of this Agreement. The Phase I Property Deposit is in the amount of $100,000, receipt of which is hereby acknowledged by the Agency. "Phase I Property Due Diligence Certificate" means and refers to the Phase I Property Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this Agreement. "Phase I Property Improvements" mean and refer any and all buildings, structures, improvements and/or fixtures, now or hereafter, existing or located on or at the Phase I Property. The Phase I Property Improvements include, without limitation, the following: (i) the remodeling and rebranding of the theater, (ii) the establishment of the I-Max theater, (iii) the removal and relocation of the ticket booth, (iv) the expansion of the entry area into a public access lobby, (v) the relocation of all concessions, (vi) the providing access to the Phase I Property in compliance with the Americans With Disabilities Act (the "ADA"), (vii) the modifications to the risers in each theater to assure conformity, (viii) the replacement of all seating, (ix) the installation of digital project and sound systems and (x) the Phase lA Property Improvements. The Phase I Property Improvements must be constructed, developed, installed and completed by July 1, 2009, unless such date is extended by the Agency in its sole and absolute discretion; provided, however, that notwithstanding said stated date the Developer shall have at least one hundred twenty (120) calendar days from the Close of Escrow of the Phase I Property and receipt of all required construction and building permits to complete all such activities. 4815-3938-7650.2815-3938-7650.2 4 P:\Agendu~ A1tacbments\Asenda Attachments\Apnda AttachmeDlS\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL.doc "Phase I Property Preliminary Title Report" means and refers to the preliminary report prepared by the Title Company in connection with the Phase I Property. The Phase I Property Preliminary Title Report shall be delivered by the Title Company to the Developer in accordance with this Agreement and shall list, describe and disclose all existing title exceptions, including, without limitation, all liens, encumbrances, deeds of trust, mortgages, leases, mechanics' liens, memorandums, covenants, conditions, restrictions and all other matters affecting, encumbering and/or relating to the Phase I Property, as amended from time to time. "Phase I Property Project" means and refers to the construction, development, installation and completion by the Developer of the Phase I Property Improvements, subject to the terms, covenants and conditions of this Agreement. "Phase I Property Purchase Price" means and refers to the purchase price paid by the Developer to the Agency in connection with the sale by the Agency and the purchase by the Developer of the Phase I Property, subject to the terms, covenants and conditions of this Agreement. The Phase I Property Purchase Price is $4,600,000. "Phase lA Property" means and refers to the land adjacent to the theater on the Phase I Property on which the Developer shall develop the Phase IA Property Improvements in accordance with this Agreement. The Phase lA Property is located in the City of San Bernardino, County of San Bernardino, State of California, as described on Exhibit "A-2" attached hereto and incorporated herein by this reference. "Phase IA Property Improvements" mean and refer to a mutually agreed upon public feature comprised of a public seating area or amphitheater plus an additional water feature to the existing installed fountains owned by the Agency plus some form of hardscape mutually acceptable to the Developer and to the Agency pending development of the Phase II Property and of the Phase III Property. "Phase II Property" means and refers to that certain unimproved land located in the City of San Bernardino, County of San Bernardino, and State of California, as described in Exhibit "A-2" to this Agreement attached hereto and incorporated herein by this reference. "Phase II Property Deposit" means and refers to the deposit paid by the Developer to the Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase II Property, subject to the terms, covenants and conditions of this Agreement. The Phase II Property Deposit shall be no more than five percent (5%) of the Phase II Property Purchase Price. "Phase II Property Due Diligence Certificate" means and refers to the Phase II Property Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this Agreement. 4815-3938-7650.2815-3938-7650.2 5 P:\Agendas\Asenda Attaclunent3\Agenda Anachmcnts\Agcnda Attachments\AsmJts-Amcnd 2008\11-17-08 Maya Cinema. Disposition and Development Asrccmcnt - FINAL.doc "Phase II Property Improvements" mean and refer to the following improvements to be constructed, developed, installed and completed by the Developer in connection with the Phase II Property Project, as described, without limitation, in the Scope of Development and in the Schedule of Performance: (i) an 11,000 square foot food, office, retail and/or commercial building adjacent to the California Theater (the "Commercial Building"), and (ii) paving stones or other low maintenance hardscape and/or landscape on remaining vacant land located at the Phase II Property and/or at the Phase III Property, as mutually agreed to by and between the Developer and the Agency, at the sole cost and expense of the Developer. Subject to Section 3.05(c) of this Agreement, in the event the Developer purchases the Phase II Property pursuant to this Agreement, the Phase II Property Improvements must be constructed, developed, installed and completed within three (3) years from the Close of Escrow for the Phase I Property. "Phase II Property Preliminary Title Report" means and refers to the preliminary report prepared by the Title Company in connection with the Phase II Property. The Phase II Property Preliminary Title Report shall be delivered by the Title Company to the Developer in accordance with this Agreement and shall list, describe and disclose all existing title exceptions, including, without limitation, all liens, encumbrances, deeds of trust, mortgages, leases, mechanics' liens, memorandums, covenants, conditions, restrictions and all other matters affecting, encumbering and/or relating to the Phase II Property, as amended from time to time. "Phase II Property Project" means and refers to the construction, development, installation and completion by the Developer of the Phase II Property Improvements, subject to the terms, covenants and conditions of this Agreement. "Phase II Property Purchase Price" means and refers to the purchase price paid by the Developer to the Agency in connection with the sale by the Agency and the purchase by the Developer of the Phase II Property in the event the Developer exercises the right to acquire the Phase II Property, subject to the terms, covenants and conditions of this Agreement. The Agency has provided the Developer with a copy of an appraisal report supporting the purchase price herein referenced, and the purchase price for the Phase II Property and for the Phase III Property shall be $715,000, in the aggregate, allocated proportionately at the time of the purchase and of the sale of the Phase II Property and/or of the Phase III Property. If the Developer elects to acquire the Phase II Property and to acquire the Phase III Property in a single transaction, the purchase price for the Phase II Property and for the Phase III Property shall be $715,000, in the aggregate, subject to the terms, covenants and conditions of this Agreement. "Phase III Property" means and refers to that certain unimproved land located in the City of San Bernardino, County of San Bernardino, and State of California, , as described in Exhibit "A-3" to this Agreement attached hereto and incorporated herein by this reference. "Phase III Property Deposit" means and refers to the deposit paid by the Developer to the Escrow Holder for the benefit of the Agency in connection with the Escrow for the Phase III Property, subject to the terms, covenants and conditions of this Agreement. The Phase III Property Deposit shall be no more than five percent (5%) of the Phase III Property Purchase Price. 4815-3938-7650.2815-3938-7650.2 6 P:\Agendas\Agenda Attachments\Agenda Attaclunents\Agenda Attacbments\Agrmts-Amend 2003\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc "Phase III Property Due Diligence Certificate" means and refers to the Phase III Property Due Diligence Certificate to be provided by the Developer to the Agency in accordance with this Agreement. "Phase III Property Improvements" mean and refer to the improvements to be constructed, developed, installed and completed by the Developer in connection with the Phase III Property Project, subject to the terms, covenants and conditions of this Agreement. "Phase III Property Preliminary Title Report" means and refers to the preliminary report prepared by the Title Company in connection with the Phase III Property. The Phase III Property Preliminary Title Report shall be delivered by the Title Company to the Developer in accordance with this Agreement and shall list, describe and disclose all existing title exceptions, including, without limitation, all liens, encumbrances, deeds of trust, mortgages, leases, mechanics' liens, memorandums, covenants, conditions, restrictions and all other matters affecting, encumbering and/or relating to the Phase II Property, as amended from time to time. "Phase III Property Project" means and refers to the construction, development, installation and completion by the Developer of the Phase III Property Improvements, subject to the terms, covenants and conditions of this Agreement. "Phase III Property Purchase Price" means and refers to the purchase price paid by the Developer to the Agency in connection with the sale by the Agency and the purchase by the Developer of the Phase III Property in the event the Developer exercises the right to acquire the Phase III Property, subject to the terms, covenants and conditions of this Agreement. The Agency has provided the Developer with a copy of an appraisal report supporting the purchase price herein referenced, and the purchase price for the Phase II Property and for the Phase III Property shall be $715,000, in the aggregate, allocated proportionately at the time of the purchase and of the sale of the Phase II Property and/or of the Phase III Property. If the Developer elects to acquire the Phase II Property and to acquire the Phase III Property in a single transaction, the purchase price for the Phase II Property and for the Phase III Property shall be $715,000, in the aggregate, subject to the terms, covenants and conditions of this Agreement. "Project" means and refers to the Phase I Property Project, to the Phase II Property Project and/or to the Phase III Property Project. "Project Area" means and refers to the Central City North Redevelopment Project Area in the City of San Bernardino, County of San Bernardino, State of California. "Property" means and refers to the Phase I Property, to the Phase II Property and/or to the Phase III Property. "Redevelopment Plan" means and refers to the Redevelopment Plan for the Central City North Redevelopment Project Area of the Agency. 4815-3938-7650.2815-3938-7650.2 7 P:\Agendas\Agenda Attacluncnts\Agenda Attachments\Aaenda Attachments\Agrmts-Amend 2008\11.17'()8 Maya Cinema. Disposition and Development Agreement. FINAL.doc "Schedule of Performance" means and refers to the Schedule of Performance on which the Agency and the Developer shall describe in detail the schedule of performance in connection with: (i) the construction, development, installation and completion of the Phase I Property Project, (ii) the construction, development, installation and completion of the Phase II Property Project, and/or (iii) the construction, development, installation and completion of the Phase III Property. The Schedule of Performance is attached hereto and incorporated herein by this reference as Exhibit "D." "Scope of Development" means and refers to the construction, development, installation and completion by the Developer of the Phase I Property Improvements, of the Phase II Property Improvements and/or of the Phase III Property Improvements in the event the Developer exercises the right to acquire the Phase II Property and/or to acquire the Phase III Property. The Scope of Development is described in Exhibit "C" to this Agreement which Exhibit is attached hereto and incorporated herein by this reference. "State" means and refers to the State of California. Section 1.05. Restrictions Against Change in Ownership. Management and Control of the Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Prior to the issuance of a Certificate of Completion as set forth in Section 3.07, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement. The Developer shall not, except as set forth above or as authorized in Section 3.04 hereof for a Transfer as a Permitted Transfer, assign all or any part of this Agreement or any rights hereunder prior to the issuance of the Certificate of Completion with respect to the Project, or any part thereof, without the prior written approval of the Interim Executive Director of the Agency, which approval shall not be unreasonably withheld, delayed or conditioned. The Developer shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities and individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and prior to issuance of the Certificate of Completion such a change in the ownership, or control of the Developer occurs with respect to the Phase I Property, the Phase II Property and/or the Phase III Property in the event the Developer acquires the Phase II Property and/or the Phase III Property pursuant to this Agreement; provided, however, that (i) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following 4815-3938-7650.2815-3938-7650.2 8 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17"()8 Maya Cinema - Disposition and Development Agreement - FINAL.doc receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. Section 1.06. Benefit to Proiect Area. The Agency has determined that the conveyance by the Agency to the Developer of the Property, or any portion thereof, will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Property. (a) Purchase and Sale of the Propertv. Subject to the terms, covenants, conditions and provisions of this Agreement: (i) the Agency agrees to sell to the Developer and the Developer agrees to purchase from the Agency the Phase I Property at and for the Phase I Property Purchase Price, and (ii) upon the exercise by the Developer of its right to acquire the Phase II Property and/or the Phase III Property pursuant to this Agreement, the Agency agrees to sell to the Developer and the Developer agrees to purchase from the Agency, the Phase II Property at and for the Phase II Property Purchase Price and/or the Phase III Property at and for the Phase III Property Purchase Price. The Phase I Property Purchase Price shall be deemed to have been paid by the Developer to the Agency upon either (i) the HUD Loan Assumption (as hereinafter defmed) by the Developer with the approval of HUD, or (ii) the repayment of the existing $4,600,000 principal balance of the presently outstanding HUD Loan with the proceeds of any other Financing or a new 108 HUD Loan, if approved by HUD. (b) Phase I Propertv Purchase Price. The Phase I Property Purchase Price which the Agency agrees to accept from the Developer and which the Developer agrees to pay and to deliver to the Agency for the purchase by the Developer of the Phase I Property is $4,600,000. The Phase I Property Purchase Price shall be delivered to the Escrow Officer on behalf of the Agency. (c) Phase II Property Purchase Price. The Phase II Property Purchase Price which the Agency agrees to accept from the Developer and which the Developer agrees to pay and to deliver to the Agency for the purchase by the Developer of the Phase II Property is the Phase II Property Purchase Price, subject to the terms, covenants and conditions of this Agreement. The Phase II Property Purchase Price shall be delivered to the Escrow Officer on behalf of the Agency. (d) Phase III Property Purchase Price. The Phase III Property Purchase Price which the Agency agrees to accept from the Developer and which the Developer agrees to pay and to deliver to the Agency for the purchase by the Developer of the Phase III Property is the Phase III Property Purchase Price, subject to the terms, covenants and conditions of this Agreement. The 4815-3938-7650.2815-3938-7650.2 9 P:\Agendas\Agenda Attachments\Ascnda A1tacbments\Agenda Attaclnnents\AsrtnU-Amend 2008\11-17-fJ8 Maya Cinema - Disposition and Development Agreement - FINAL.doc Phase III Property Purchase Price shall be delivered to the Escrow Officer on behalf of the Agency. Section 2.02. Phase I Property Deposit. the Phase II Property Deposit and the Phase III Property Deposit. (a) The Agency acknowledges receipt of the Phase I Property Deposit from Developer and shall within five (5) calendar business days deliver to the Escrow Holder (as hereinafter defmed) the Phase I Property Deposit. Upon receipt of the Phase I Property Deposit together with a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow to be opened as provided in Section 2.03, and the Escrow Holder shall place the Phase I Property Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow (as defined below) in connection with the Phase 1 Property, the Phase I Property Deposit shall be applied as a credit to the Phase I Property Purchase Price. (b) Within five calendar (5) business days following receipt by the Developer of written notice from the Developer to the Agency of the election by the Developer to acquire the Phase II Property and/or the Phase III Property (the "Notice"), the Developer shall deliver to the Escrow Holder the Phase II Property Deposit and/or the Phase III Property Deposit, an executed copy of the Notice and a fully executed copy of this Agreement. Upon receipt by the Escrow Holder of the executed copy of the Notice, the Phase II Property Deposit and/or the Phase III Property Deposit and of a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow to be opened as provided in Section 2.03, and the Escrow Holder shall place the Phase II Property Deposit and/or the Phase III Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow in connection with the Phase II Property, the Phase II Property Deposit shall be applied as a credit to the Phase II Property Purchase Price. At the Close of Escrow in connection with the Phase III Property, the Phase III Property Deposit shall be applied as a credit to the Phase III Property Purchase Price. (c) The Phase I Property Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer in the event that: (i) the Agency or the Developer terminates this Agreement pursuant to Section 2.03(b); or (ii) the Developer does not deliver its Phase I Property Due Diligence Certificate to the Escrow Holder pursuant to Section 2.03(b) and this Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16 are not satisfied (unless satisfaction has been waived by the Developer) and this Agreement is terminated; or 4815.3938-7650.2815-3938-7650.2 10 P:\Agendas\Agenda Attacbments\Agenda Attachmentll\Agenda Attachments\Agrmts-Amend 2008\11.17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc (iv) the Phase I Property is materially damaged prior to the Close of Escrow (as defined below), or an action of eminent domain is commenced by a governmental entity with respect to the Phase I Property prior to the Close of Escrow, and the Developer elects to terminate this Agreement pursuant to Section 2.25. (d) The Phase II Property Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer in the event that: (i) the Agency or the Developer terminates this Agreement pursuant to Section 2.03(e); or (ii) the Developer does not deliver its Phase II Property Due Diligence Certificate to the Escrow Holder pursuant to Section 2.03( e) and this Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16 are not satisfied (unless satisfaction has been waived by the Developer) and this Agreement is terminated; or (iv) the Phase II Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with respect to the Phase II Property prior to the Close of Escrow, and the Developer elects to terminate this Agreement pursuant to Section 2.25. (e) The Phase III Property Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer in the event that: (i) the Agency or the Developer terminates this Agreement pursuant to Section 2.03( e); or (ii) the Developer does not deliver its Phase III Property Due Diligence Certificate to the Escrow Holder pursuant to Section 2.03(e) and this Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16 are not satisfied (unless satisfaction has been waived by the Developer) and this Agreement is terminated; or (iv) the Phase III Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with respect to the Phase III Property prior to the Close of Escrow, and the Developer elects to terminate this Agreement pursuant to Section 2.25. 4815-3938-7650.2815-3938-7650.2 11 P:\Agendas\Agenda AttacIunents\Agenda Attaclunems\Agcnda Attachments\Agrmts-Amend 2008\11.17-03 Maya Cinema - Dispt>>:ition and Development Apcemcnt. FINAL.doc Section 2.03. Opening and Closing of Escrow. (a) The transfer and sale of the Phase I Property, the Phase II Property and/or the Phase III Property shall take place through the Escrow to be administered by Title Insurance Company or such other escrow or title insurance company mutually agreed upon by the Developer and the Agency (the "Escrow Holder"). The Escrow shall be deemed open upon the receipt by the Escrow Holder of a fully executed copy of this Agreement and the Phase I Property Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) Subject to any extensions of time granted pursuant to Section 2.15 hereof, in the event that the Developer has not delivered its Phase I Property Due Diligence Certificate to the Agency and the Escrow Holder within thirty (30) calendar days from the opening date of the Escrow for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Phase I Property Deposit shall be returned by the Escrow Holder to the Developer (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. (c) Provided that the Developer has delivered the Phase I Property Due Diligence Certificate within the period of time authorized in Section 2.10, then the Closing Date of the Escrow shall occur within twenty (20) calendar days thereafter, unless the Close of Escrow is extended (a) unilaterally by the Developer pursuant to Section 2.16 or (b) to a date that is more than twenty (20) calendar days thereafter by mutual agreement of the Agency and the Developer. (d) Upon receipt by the Agency from the Developer of the Notice to acquire the Phase II Property, the Escrow shall be deemed open on the date that the Escrow Holder is in receipt of a copy of the Notice, is in receipt of the Phase II Property Deposit and is in receipt of a fully executed copy of the Agreement. Upon receipt by the Agency from the Developer of the Notice to acquire the Phase III Property, the Escrow shall be deemed open on the date that the Escrow Holder is in receipt of a copy of the Notice, is in receipt of the Phase III Property Deposit and is in receipt of a fully executed copy of the Agreement. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (e) Subject to any extensions of time granted pursuant to Section 2.15 hereof, in the event that the Developer has not delivered its Phase II Property Due Diligence Certificate and/or its Phase III Property Due Diligence Certificate to the Agency and the Escrow Holder within one twenty (120) calendar days from the Opening of Escrow for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Phase II Property Deposit and/or the Phase III Property Deposit shall be returned by the Escrow Holder to the Developer (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. 4815-3938-7650.2815-3938-7650.2 12 P:\Agendas\Agenda Attaclunents\Agenda Attachmcnts\Agcnda Attachments\Asnnts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc (f) Provided that the Developer has delivered to the Agency the Phase II Property Due Diligence Certificate and/or the Phase III Property Due Diligence Certificate within the period of time authorized in Section 2.10, then the Closing Date of the Escrow shall occur within twenty (20) calendar days thereafter, unless the Close of Escrow is extended (a) unilaterally by the Developer pursuant to Section 2.16 or (b) to a date that is more than twenty (20) calendar days thereafter by mutual agreement of the Agency and the Developer. The words "Close of Escrow", "Closing Date" and "Closing" shall mean and refer to the date when: (i) the Escrow Holder is in receipt of the Escrow documents from the parties, (ii) the Escrow Holder is in a position to comply with the fmal written escrow closing instructions from the parties, (iii) the Escrow Holder is in a position to cause the Agency Grant Deed in connection with the Phase I Property, and/or in connection with the Phase II Property and/or with the Phase III Property, in the event the Developer exercises the right to acquire the Phase II Property and/or the Phase III Property pursuant to this Agreement, as appropriate, to be recorded in the official records of the County, (iv) the Escrow Holder is in a position in connection with the Escrow relating to the Phase I Property to record the Notice of Agreement in the Official Records of the County Recorder's Office for the County of San Bernardino, State of California, (v) the Escrow Holder has received all required monies and all instruments, agreements, documents, certificates and estoppels, as executed and acknowledged, in recordable form where applicable, to Close the Escrow, (vi) the Escrow Holder has received an executed seller and buyer's closing statement from the Developer and from the Agency, and (vii) the Escrow Holder is in a position to deliver to the Developer the Phase I Property Title Policy, the Phase II Property Title Policy and/or the Phase III Property Title Policy, as appropriate, to be delivered to the Developer. (g) Notwithstanding anything else contained in this Agreement and in any Exhibit to the contrary, the Close of Escrow for the transfer of the Phase 1 Property from the Agency to the Developer must occur not later than July 1, 2009. In the event the Close of Escrow has not occurred by said date, the Agency shall be entitled to exercise all rights and remedies as set forth in this Agreement and in Article V subject to notice of default from the Agency to the Developer without any right to cure such default by the Developer after said date. Section 2.04. Escrow Instructions. This Agreement also constitutes escrow instructions of the parties to the Escrow Holder. Additionally, the Developer and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder, the Escrow Holder shall forthwith return all monies (as provided in this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. 4815-3938-7650.2815-3938.7650.2 13 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL.doc Section 2.05. Convevance of Title to the Phase I Prooertv. to the Phase II Prooertv and to the Phase III Prooertv. On or before 12:00 noon on the business day preceding the Closing Date for the Escrow the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "E" (the "Agency Grant Deed") duly executed and ackuowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free right, title and interest of the Agency in the Phase I Property, in the Phase II Property and/or in the Phase III Property to the Developer. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of San Bernardino County, State of California, if and when the Escrow Holder holds the various instruments of the parties as set forth herein and can obtain for the Developer a CLTA owner's coverage policy of title insurance ("Title Policy") issued by Chicago Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Phase I Property Purchase Price for the Phase I Property Title Policy, in an amount equal to the Phase II Property Purchase Price for the Phase II Property Title Policy, and/or in an amount equal to the Phase III Property Purchase Price for the Phase III Property, as appropriate, together with such endorsements to the policy as may be reasonably requested by the Developer, insuring that the title to the Phase I Property, to the Phase II Property and/or to the Phase III Property is vested in fee title in the Developer and is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests and monetary liens and/or encumbrances and subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions encumbering or affecting the parcel map or subdivision map for the Phase I Property, the Phase II Property and/or the Phase III Property, as appropriate; (4) the effect of any conditions imposed by the City as part of the development plan approvals for the Phase I Property Project, for the Phase II Property Project and/or for the Phase III Property Project, or any part thereof, accepted by the Developer in its sole discretion; (5) the provisions of the Agency Grant Deed; (6) the applicable provisions of this Agreement and the Notice of Agreement; (7) the HUD Loan, or any other deed of trust, mortgage or security interest encumbering the Phase I Property, the Phase II Property and/or the Phase III Property; (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow; 4815-3938-7650.2815-3938-7650.2 14 P:\Agendas\Agenda Attachments\Asenda Attachmcnts\Agenda A1tachmcnts\Agrmts-Amend 2008\11-17..os Maya Cinema. Disposition and Development Agreement. FINAL.doc (9) the effect of the Redevelopment Plan for the Project Area. Section 2.06. Additional Closing Obligations of the Agencv. On or before 12:00 noon on the business day preceding the Closing Date for the Escrow(and unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Developer) copies of the following documents and other items: (1) a certificate of non-foreign status executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) all soils, seismic, geologic, drainage, and environmental reports, and surveys, with respect to the Phase I Property, the Phase II Property and/or the Phase III Property, if any, which the Agency has in its possession and/or control to the extent that originals of such items have not been delivered previously by the Agency to the Developer pursuant to Section 2.08 below; (3) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (4) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; (5) any other documents, instruments, funds and records required to be delivered to the Developer under the terms of this Agreement which have not been previously delivered; (6) one (I) original of the Notice of Agreement, as executed and ackuowledged by the Agency (in connection with the Escrow relating to the Phase I Property); (7) one (1) original of the Scope of Development and one (I) original of the Schedule of Performance, as executed by the Agency and by the Developer; (8) One (1) original of the Agency Grant Deed, as executed and notarized by the Agency, in connection with the Phase I Property, with the Phase II Property and/or with the Phase III Property; and 4815-3938-7650.2815-3938-7650.2 15 P:\Agenda,\Agenda Attaehments\Agenda Attachments\Agenda Attaclunents\Agrmta-Amend 2008\11-11-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc Section 2.07. Closing Obligations of the Develooer. On or before 12:00 noon on the business day preceding the Closing Date for the Escrow, the Developer shall deliver to the Escrow Holder copies of the following documents and other items: (1) an ackuowledgment and acceptance of the Agency Grant Deed, duly executed and ackuowledged by the Developer; (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Developer; (3) one (1) original of the Notice of Agreement, as executed and ackuowledged by the Developer (in connection with the Escrow relating to the Phase I Property); (4) evidence of the existence, organization and authority of the Developer and of the authority of persons executing documents on behalf of the Developer reasonably satisfactory to the Escrow Holder and the Title Company; (5) evidence of fmancing reasonably satisfactory to the Agency Interim Executive Director to provide for the purchase of the Phase I Property, of the Phase II Property and/or of the Phase III Property, as appropriate, and to provide for the construction, the development, the installation and the completion of the Phase I Property Project, of the Phase II Property Project and/or of the Phase III Property Project, as appropriate; (6) the Notice from the Developer to the Agency; (7) one (1) original of the Scope of Development and one (1) original of the Schedule of Performance, as executed by the Agency and by the Developer; (8) One (1) original of the Agency Grant Deed, as executed and notarized by the Developer, accepting the conveyance from the Agency to the Developer in connection with the Phase I Property, with the Phase II Property and/or with the Phase III Property; and (9) any other documents, instruments or funds required to be delivered by the Developer under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close the Escrow, which have not previously been delivered. 4815-3938-7650.2815-3938-7650.2 16 P;\Agcndu\AgeOOa Attachments\Agenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya CillClll4 . Disposition and Development Ageemcnt . FINAL.doc: -.';.c=~.,,,.._. Section 2.08. Insoections and Review. (a) Due Diligence Items. Within five (5) business days after the execution of this Agreement, or within five (5) business days after delivery by the Developer to the Agency of the Notice in connection with the Phase II Property and/or with the Phase III Property, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Developer: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys including, but not limited to, any Property Environmental Site Assessments, surveys, relating to the Phase I Property, to the Phase II Property and/or to the Phase III Property, if any, in the possession or the control of the Agency. (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Phase I Property, the Phase II Property and/or the Phase III Property within the Agency's possession or control. (3) disclosure of any legal matters affecting the use, occupancy or condition of the Phase I Property, the Phase II Property and/or the Phase III Property within the kuowledge of the Agency. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any govermnent authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, at, in, above, under, from or about the Phase I Property, the Phase II Property and/or the Phase III Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also kuown as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the 4815-3938.7650.2815-3938-7650.2 17 P:\Agcndas\Agenda Attachments\Agenda Attachments\Agenda Attachmems\Agrmts-Amcnd 2008\11.17-08 Maya Cinema - Disposition and Development Agreement. FINAL.do<: Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law , statute, ordinance, or regulation now in effect or later enacted, as amended from time to time, that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, at, in, above, under, from or about the Phase I Property, the Phase II Property and! or the Phase III Property, or the regulation or protection of the enviromnent, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any other enviromnentallaw; and those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (1) a petroleum or refmed petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, 4815-3938-7650.2815-3938-7650.2 18 P:\Agendas\Apnda Attachments\Agenda Attachments\Agenda Attachments\Agmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc (5) a flarmnable explosive, (6) a radioactive material, (7) lead or lead-containing materials. Section 2.09. Due Diligence Investigation of the Phase I Prooertv. the Phase II Prooertv and the Phase III Prooertv Bv the Develooer. (a) Within thirty (30) calendar days from and after the Opening of Escrow in connection with the Phase I Property or within one hundred and twenty (120) calendar days from and after the Opening of Escrow in connection with the Phase II Property and!or with the Phase III Property, and subject to the extensions of time set forth below in Section 2.15, the Developer shall have the right to examine, inspect and investigate the Property Phase I Property, the Phase II Property and!or the Phase III Property (the "Due Diligence Period") to determine whether the condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property is acceptable to the Developer and to obtain such development project approvals from the City for the improvement of the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project, as the Developer may require in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permit the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Phase I Property, of the Phase II Property and!or of the Phase III Property as the Developer deems prudent with respect to the physical condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on either the Phase I Property, the Phase II Property and!or the Phase III Property may be conducted by the Developer and!or its agents during any normal business hours upon twenty-four (24) hours prior notice to the Agency, which notice will include a reasonable description of any investigation work or tests to be conducted by the Developer on the Phase I Property, on the Phase II Property and!or on the Phase III Property. Upon the Agency's request, the Developer will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Phase I Property, of the Phase II Property and!or of the Phase III Property. The Developer may submit an application to the City and any other regulatory agency with jurisdiction for any and all necessary development project approvals for the Project. The Agency hereby consents to the submission of such development project approval applications by the Developer. (e) The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Phase I Property, of the Phase II Property 4815-3938-7650.2815-3938-7650.2 19 P:\Agendas\Apnda Attachments\Agenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17"()8 Maya Cinema - Disposition and Development Agreement -FINAL.doc and!or of the Phase III Property. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and!or inspections. The Developer shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation including the cost of submitting any development project approval application as relates to the Phase I Property Project, to the Phase II Property Project and!or to the Phase III Property Project to any regulatory jurisdiction. The costs of such investigations and!or inspections associated with the conduct of all such Due Diligence investigation are or may be included in the Budget. Section 2.10. Due Diligence Certificate. Within thirty (30) calendar days following the Opening of Escrow in connection with the Phase I Property or within one hundred twenty (120) calendar days following the Opening of Escrow in connection with the Phase II Property and!or with the Phase III Property, the Developer shall complete its investigation of the Phase I Property, the Phase II Property and!ofthe Phase III Property (subject to any extensions of time as provided in Section 2.15 and deliver a due diligence certificate signed by the Developer (the "Due Diligence Certificate") to the Escrow Holder which either: (i) indicates that the Developer accepts the condition of the Phase I Property, the Phase II Property and!or the Phase III Property, or; (ii) contains a description of the matters or exceptions relating to the condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property which the Developer was not able to accept or resolve to its satisfaction during the Due Diligence Period. In the event that there are matters that the Developer is unable to accept or resolve, such matters shall be deemed conditions to Closing for the benefit of the Developer and the Closing Date shall automatically be deemed extended for such period as maybe necessary to resolve such matters. Section 2.11. Books and Records. As part of the Developer's due investigations during the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency to examine all books and records which relate to either the Phase I Property, to the Phase II Property and!or to the Phase III Property in the possession of the Agency and!or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Phase I Property, to the Phase II Property and!or to the Phase III Property which is in the possession or control of the Agency. Section 2.12. Condition of the Prooertv and the Develooer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Phase I Property, the Phase II Property and!or the Phase III Property during the Due Diligence Period. The Developer shall accept the delivery of possession to the Phase I Property and the Phase II Property on the Close of Escrow in an "AS IS", "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Developer shall have conducted and completed (or waived the completion) of all of its 4815-3938-7650.2815-3938-7650.2 20 P:\Agendu\Agenda Attachments\Agenda Attachments\Agenda Attachmentll\Agrmts-Amend 2008\11-17-03 Maya Cinema - Disposition and Development Agreement - FINAL.doc independent investigation of the condition of the Phase I Property, the Phase II Property and!or the Phase III Property, which the Developer may believe to be indicated. The Developer hereby acknowledges that it shall rely solely upon its own investigation of the Property I Property, the Phase II Property and!or the Phase III Property and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Phase I Property, the Phase II Property and the Phase III Property. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Phase I Property, the Phase II Property and!or the Phase III Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Phase I Property, the Phase II Property and!or the Phase III Property presently complies with enviromnentallaws or whether the Phase I Property, the Phase II Property and!or the Phase III Property contains any hazardous substance, as these terms are defined in Section 2.08 (b) hereof. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property, including information and reports prepared by or on behalf of the City of San Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its successors and assigns, waives and release the Agency and its successors and assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property, the condition of the soils, the suitability of the soils for the improvement of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project, as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, at, on, above, under, from or about the Phase I Property, the Phase II Property and!or the Phase III Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other enviromnentallaws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: 4815-3938-7650.2815-3938-7650.2 21 P:\Agendas\Agenda Anachments\Asenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." The undersigned, being aware of this code section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of the Developer:_ The provisions of this Section 2.12 shall survive the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property. Section 2.13. Review and Aooroval of Condition of Title bv the Develooer. (a) Within fifteen (15) calendar days following the Opening of Escrow, the Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CLTA coverage policy of title insurance issued by the Title Company describing the state of title of the Phase I Property, the Phase III Property and!or the Phase III Property, together with (i) copies of all exceptions specified therein and with all easements plotted and (ii) a survey prepared in compliance with ALTAlASCM standards and in a form acceptable to the Title Company for the deletion of the standard survey exception in the Phase I Property Title Policy, the Phase II Property Title Policy and!or the Phase III Title Policy relating to boundaries, without the addition of further exceptions unless the same are acceptable to the Developer in its sole and absolute discretion (the "Preliminary Title Report"). The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Preliminary Title Report for the Phase I Property, the Phase II Property and!or for the Phase III Property (the "Developer's Objection Notice") prior to the expiration of the Due Diligence Period in connection with the Escrow. The Developer may condition its approval on the Agency's cure of any matters objected to by the Developer. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the either the Phase I Property, the Phase II Property and!or the Phase III Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer. Upon the issuance of any amendment or supplement to the Phase I Property Preliminary Title Report, to the Phase II Property Preliminary Title Report and!or to the Phase III Property Preliminary Title Report, whichever is the case, which adds additional exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period for the 4815-3938-7650.2815-3938-7650.2 22 P:\Agendas\Agenda Attachments\Agenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL.doc Escrow or ten (10) calendar days from receipt of the amendment or supplement) and the Escrow shall be deemed extended by the amount of time necessary to allow such review and approval in the time and manner set forth above. Section 2.14. Survev. The Developer may at its sole cost and separate expense obtain a survey of the Phase I Property, of the Phase II Property and!or of the Phase III Property prepared by a land surveyor duly licensed by the State of California and in compliance with ALTAI ASCM standards (the "Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without the addition of further exceptions unless the same are acceptable to the Developer in its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period in connection with the Phase I Property, with the Phase II Property and!or in connection with the Phase III Property to complete and examine the Survey and to notify Agency in writing of any objections the Developer has to the Survey (the "Developer's Survey Objection Notice"). The Agency shall have a period of five (5) calendar days after receipt of the Developer's Survey Objection Notice in which to deliver written notice to the Developer (the "Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow for the Phase I Property, for the Phase II Property and!or for the Phase III Property or (ii) decline to remove such items. If the Agency notifies the Developer of its intention to not remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) calendar days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Phase I Property, the Phase II Property and!or the Phase III Property, subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall accept the Phase I Property, the Phase II Property and!or the Phase III Property at the Close of Escrow for the Phase I Property, for the Phase II Property and!or for the Phase III Property, subject to such objectionable items. Prior to the Closing, the Survey shall be recertified to the Developer and the Title Company. The Survey will be performed at the Developer's sole cost and expense. Section 2.15. Extension of Due Diligence Period. (a) In the event the Agency fails to provide to the Developer the documents and other information required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence Period for such information shall be extended by one (1) day for each day of the delay by the Agency to permit the Developer to perform an adequate due diligence review not to exceed thirty (30) calendar days in connection with the Phase I Property or one hundred twenty (120) calendar days in connection with the Phase II Property and!or with the Phase III Property. The Developer will use its best efforts to notify the Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Sections 2.08 and 2.11. (b) In the event that the Interim Executive Director makes a fmding that the Developer has undertaken substantial work to complete its investigation of either the Phase I Property, the Phase II Property and!or the Phase III Property, the Interim Executive Director shall upon the written request of the Developer, authorize an extension of the Due Diligence Period for an additional sixty (60) calendar days upon written notice to the Agency on or before the end of the Due Diligence Period in connection with the Escrow. 4815-3938-7650.2815-3938-7650.2 23 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda AttadulleIlts\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc Section 2.16. Develooer's Conditions Precedent to Close Escrow for the Phase I Prooertv. for the Phase II Prooertv or the Phase III Prooertv. The Developer's obligation to complete the purchase of the Phase I Property, of the Phase II Property and!or of the Phase III Property and to Close the Escrow(s) thereto shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow for either the Phase I Property, the Phase II Property and!or for the Phase III Property: (1) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (1) only, a representation that is limited to the Agency's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Developer's approval of the Phase I Property Preliminary Title Report, the Phase II Property Preliminary Title Report and!or the Phase III Property Preliminary Title Report within the time period specified in Sections 2.13 and cure of objectionable items by the Agency; (3) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Phase I Property, of the Phase II Property and!or of the Phase III Property made by the Developer and!or its designees pursuant to Sections 2.08 and 2.09 herein on or before the expiration of the Due Diligence Period in connection with the Escrow, or such later date if such Due Diligence Period is extended pursuant to Section 2.15 or any other provision hereof. The Developer shall be deemed to have disapproved such Due Diligence Items unless they are approved (conditionally or otherwise) on or before 5:00 p.m. on the day of the Due Diligence Period in connection with the Escrow, or such later date if such Due Diligence Period is extended pursuant to Section 2.15 or any other provision hereof; (4) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.24(a) hereof; (5) the Title Company has committed to issue the Title Policy in connection with the Phase I Property, with the Phase II Property and!or in connection with the Phase III Property, whichever applies, in favor of the Developer in the form described in Section 2.05; (6) the Developer has received the Scope of Development and the Schedule of Performance, as executed by the Agency; and 4815-3938-7650.2815-3938-7650.2 24 P:\Agendas\Agenda Att:achmellts\Agenda Atlachments\Agenda Attachments\Apmts-Amend 2008\11-11-08 Maya Cinema - Disposition and Development Agreemem - FINAL.doc (7) the Developer has received purchase money and construction financing to enable the Developer to purchase, to construct, to develop and to install the Improvements in connection with the Phase I Property, with the Phase II Property and!or with the Phase III Property. (8) In connection with the Complaint (as defined below) all of the following conditions must be met: (i) the Superior Court (as defmed below) must have rendered a final and non-appealable judgment or order in favor of the Agency, and (ii) the Agency must have the absolute and unconditional right to own, occupy and possess the Phase I Property, and (iii) the lease (the "Lease") between the Agency, as successor landlord, and CinemaStar Luxury Theaters, Inc., a Delaware corporation, as successor tenant ("CinemaStar") for the use and occupancy by CinemaStar of the Phase I Property must be terminated pursuant to the following: (1) a written termination agreement between the Agency, as successor landlord, and CinemaStar, as successor tenant, wherein the Lease is mutually terminated, or pursuant to (2) a fmal and non-appealable judgment from a court of last resort, wherein the Lease is terminated by such court. Section 2.17. Agencv's Conditions Precedent to Close Escrow For the Phase I Prooertv and for the Phase II Prooertv. The Agency's obligation to convey the Property Phase I Property, the Phase II Property and!or the Phase III Property to the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) the Developer has accepted the condition of either the Phase I Property, the Phase II Property and!or the Phase III Property and submitted its Phase I Property Due Diligence Certification, the Phase II Property Due Diligence Certification and!or its Phase III Property Due Diligence Certification to the Escrow Holder within the time period set forth in Section 2.03 of this Agreement, as such time period may be extended pursuant to Section 2.15 or any other provision hereof; (2) the Developer has accepted the condition of title of each of the Phase I Property, of the Phase II Property and!or of the Phase III Property on or before the date set forth in Section 2.13; (3) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; (4) the Developer shall be satisfied (or waive satisfaction) of each of the conditions precedent set forth in Section 2.16); 4815-3938-7650.2815-3938-7650.2 25 P:\Agendas\Agenda AttacIuncnts\Agenda Attachmcnts\Agenda Attachments\Agrmts-Amend 2008\11-17.03 Maya Cinema - Disposition and Development Agreement -FINAL.doe (5) The Developer shall have executed the documents contemplated in Section 2.02(b) hereof in such form as to allow the recordation of the Agency Grant Deed and the Notice of Agreement in the Official Records of the County Recorder's Office for the County of San Bernardino, shall have deposited the Phase I Property Purchase Price, the Phase I Property Deposit and all other amounts due and owing by the Developer in connection with this Agreement and the Closing of the Escrow relating to the Phase I Property, and shall have executed and acknowledged, if required, all other instruments, documents, agreements, certificates and estoppels, as required by the Agency or the Escrow Holder to close the Escrow relating to the Phase I Property; (6) The Developer shall have executed the documents contemplated in Section 2.02(b) hereof in such form as to allow the recordation of the Agency Grant Deed in the Official Records of the County Recorder's Office for the County of San Bernardino, State of California, shall have deposited the Phase II Property Purchase Price, the Phase II Property Deposit and all other amounts due and owing by the Developer in connection with this Agreement and the Closing of the Escrow in connection with the Phase II Property, and shall have executed and acknowledged, if required, all other instruments, documents, agreements, certificates and estoppels, as required by the Agency or by the Escrow Holder to close the Escrow relating to the Phase II Property; (7) The Developer shall have executed the documents contemplated in Section 2.02(b) hereof in such form as to allow the recordation of the Agency Grant Deed in the Official Records of the County Recorder's Office for the County of San Bernardino, State of California, shall have deposited the Phase III Property Purchase Price, the Phase III Property Deposit and all other amounts due and owing by the Developer in connection with this Agreement and the Closing of the Escrow in connection with the Phase III Property, and shall have executed and acknowledged, if required, all other instruments, documents, agreements, certificates and estoppels, as required by the Agency or by the Escrow Holder to close the Escrow relating to the Phase III Property; (8) the Escrow Holder is in a condition to close the Escrow in connection with the Phase I Property fifty (50) calendar following the Opening of Escrow or one hundred fifty (150) calendar days following the Opening of the Escrow in connection with the Escrow relating to the Phase II Property and!or the Phase III Property, subject to the provisions of Section 2.15 and 2.25; and (9) The Developer must have deposited the Scope of Development and the Schedule of Performance, as executed by the Developer. 4815-3938-7650.2815-3938-7650.2 26 P:\Agcndu\Agenda Attachments\Agenda Attacbments\Agenda Attaclunents\Agrmts-Amend 2008\il-17"()8 Maya Cinema - Disposition and Development Agreement - FINAL.doc: (9) Except for the HUD Loan Assumption (as defmed below) which has been approved by the Agency, the Agency must have reasonably approved the following: (i) the 108 HUD Loan (as defined below) and all other loans, institutional lenders and!or financings to enable the Developer to purchase the Phase I Property, the Phase II Property and!or the Phase III Property, and to construct, to develop, to install and to complete the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project, as appropriate, (ii) the Developer must have executed and acknowledged, where required, in recordable form for recordation in the Official Records of the County of San Bernardino, State of California, all agreements, documents, and instruments evidencing, securing, guaranteeing and!or relating to the Financing (as defined below), as amended from time to time (singularly and collectively, the "Financing Loan Documents") or (iii) the assumption by the Developer of the HUD Loan (the "HUD Loan Assumption") and all other loans, institutional lenders and!or fmancings to enable the Developer to purchase the Phase I Property and to construct, to develop, to install and to complete the Phase I Property Project (the matters identified in Section 2.17(9)(i), in Section 2.17(9)(ii) and in Section 2.17(9)(iii) shall singularly and collectively be referred to as the "Financing") (10) In connection with the Complaint (as defined below) all of the following conditions must be met: (i) the Superior Court (as defmed below) must have rendered a final and non-appealable judgment or order in favor of the Agency, and (ii) the Agency must have the absolute and unconditional right to own, occupy and possess the Phase I Property, and (iii) the lease (the "Lease") between the Agency, as successor landlord, and CinemaStar Luxury Theaters, Inc., a Delaware corporation, as successor tenant ("CinemaStar") for the use and occupancy by CinemaStar of the Phase I Property must be terminated pursuant to the following: (1) a written termination agreement between the Agency, as successor landlord, and CinemaStar, as successor tenant, wherein the Lease is mutually terminated, or pursuant to (2) a fmal and non-appealable judgment from a court oflast resort, wherein the Lease is terminated by such court. Section 2.18. Distribution of Documents to the Develooer. After the Closing Date by Escrow Holder, the Escrow Holder shall deliver to the Developer within the (3) business days following the Closing Date in connection with the Escrow for the Phase I Property, the Phase II Property and!or for the Phase III Property , a conformed copy of the Agency Grant Deed in connection with the transfer of the Phase I Property, of the Phase II Property or in connection with the transfer of the Phase III Property, whichever applies, as recorded, and the policy of title insurance issued by the Title Company in favor of the Developer. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of 4815-3938-7650.2815-3938-7650.2 27 P:\Agendas\Agenda Attaclunents\Agenda Attachments\Agenda AttachmCllt,\Agrmt..Amend 2008\11.17-03 Maya Cinema - Disposition and Development Agreement. FINAL.do<: any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. RESERVED. Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for either the Phase I Property, the Phase II Property and!or the Phase III Property shall be prorated by the parties to the applicable Closing Date on the basis of a three hundred sixty-five (365) day year on the basis that the Agency is responsible for (i) all such taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defmed below) and (ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. on the Closing Date, whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Closing Date, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Developer upon demand have no responsibility for any costs at the Closing Date for either the Phase I Property, the Phase II Property and!or the Phase III Property, and shall not be responsible for any real or personal property taxes payable following the Closing Date applicable to any period of time prior to the Closing Date as a result of any change in the tax assessment by reason of reassessment, changes in use of the Phase I Property, of the Phase II Property and!or of the Phase III Property, changes in ownership, errors by the Assessor or otherwise. (b) The Developer shall be entitled to exclusive possession of the Phase I Property, the Phase II Property and!or of the Phase III Property immediately upon the Close of the Escrow. (c) The Agency shall pay one hundred percent (100%) of the cost of the premium for the Title Policy equal to the cost of a CL T A owner's coverage policy of title insurance on the Property Phase I Property for coverage in the amount of the Phase I Property Purchase Price, on the Phase II Property for coverage in the amount of the Phase II Property Purchase Price and!or on the Phase III Property for coverage in the amount of the Phase III Property Purchase Price together with all title charges reasonably requested by the Developer to remove disapproved items shown on the Phase I Property Preliminary Title Report, the Phase II Property Preliminary Title Report and!or on the Phase III Property Preliminary Title Report pursuant to Sections 2.13 and 2.14 above) but subject to Section 2.05 above. The Developer shall pay one-half (l/2) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the Close of Escrow. 4815-3938-7650.2815-3938-7650.2 28 P:\Agenda3~nda Attaclunents\Agcnda Attachments\Agenda Attaclunents\AsJmts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc The Developer shall be responsible for paying the difference in cost between a CLTA policy of title insurance and the cost of an AL T A extended owner's policy of title insurance that is to be delivered to the Developer at the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property in addition to the cost of all title endorsements, plus one-half (1/2) of the cost of recording the Agency Grant Deed and the Notice of Agreement in connection with the Escrow relating to the Phase I Property, together with one-half (1/2) of the cost of the customary and reasonable escrow fees charged by the Escrow Holder in connection with the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property. Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the manner customary in San Bernardino County, California. No later than three (3) business days prior to the Closing Date in connection with the Escrow, the Escrow Holder shall prepare for approval by the Developer and the Agency a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, and pay-off amounts for the release and reconveyance of all liens secured by the Phase I Property, the Phase II Property and!or the Phase III Property, and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. RESERVED. Section 2.23. Breach bv the Develooer of Article II LiQuidated Damages Pavable bv the Develooer to the Agencv. IN THE EVENT THAT THE DEVELOPER COMMITS A MATERIAL BREACH, WHICH REMAINS UNCURED OR WHICH DEVELOPER HAS FAILED TO COMMENCE TO CURE, OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW IN CONNECTION WITH THE PHASE I PROPERTY, THE PHASE II PROPERTY OR THE PHASE III PROPERTY, WHICHEVER APPLIES, OR FAILS TO CLOSE ESCROW IN CONNECTION WITH THE PHASE I PROPERTY, THE PHASE II PROPERTY OR THE PHASE III PROPERTY, WHICHEVER APPLIES, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER HAVE AGREED THAT SUCH DAMAGES SHALL BE IN THE AMOUNT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) AS LIQUIDATED DAMAGES IN CONNECTION WITH THE ESCROW RELATING TO THE PHASE I PROPERTY OR TEN THOUSAND DOLLARS ($10,000) IN CONNECTION WITH THE ESCROW RELATING TO THE PHASE II PROPERTY AND/OR TO THE PHASE III PROPERTY, WHICHEVER IS APPLICABLE. DAMAGES OF SUCH SUMS SHALL BE PAID TO THE AGENCY IN THE EVENT OF DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE 4815-3938-7650.2815-3938-7650.2 29 P:\Agendas\Agenda Attachments\Agenda AttacIunenu\Agenda Attachments\Agrmts-Amend 2008\11-17-03 Maya Cinema - Disposition and Development Agreement. FINAL.doc AGENCY WAIVES ANY AND ALL RIGHTS WHICH THAT THE AGENCY WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of the Developer Initials of the Agency's Section 2.24. Reoresentations and Warranties. (a) Warranties and Reoresentations bv the Agencv. The Agency hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Developer and the acquisition by the Developer of the Phase I Property, the Phase II Property and!or the Phase III Property, whichever applies, will be made in material reliance by the Developer on such covenants, representations and warranties: (1) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects at the Closing as though they were made at the time of Closing. (2) Due Organization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. (3) Requisite Action. The Agency has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (4) Enforceability of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, be valid and enforceable against the Agency in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by the Agency. 4815-3938-7650.2815-3938-7650.2 30 P:\Asendas\Agenda Attachmeats\Aienda Attachments\Agenda. Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Dispolition and Development Agreement - FINAL.doc (5) Title. Prior to the Closing for either the Phase I Property, the Phase II Property and!or the Phase III Property, the Agency will be the owner of (and the Developer will acquire hereunder) the entire right, title and interest in the Phase I Property, in the Phase II Property and!or in the Phase III Property to effectively vest in the Developer good and marketable fee simple title either to the Phase I Property, to the Phase II Property and!or to the Phase III Property, that the Developer will acquire the Phase I Property, the Phase II Property and!or the Phase III Property free and clear of all liens, encumbrances, claims, rights, demands, easements, leases or other possessory interests, agreements, covenants, conditions, and restrictions of any kind or character (including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title retention agreement, deeds of trust, security agreements and pledges and mechanics lien) except: (i) the matters described in Section 2.05, and (ii) the exceptions to title approved by the Buyer pursuant to Section 2.13. (6) No Litigation. Except for that certain Complaint for Unlawful Detainer filed by the Agency against CinemaStar Luxury Theaters, Inc., with the Superior Court for the County of San Bernardino, State of California on October 20, 2008, Case Number UDSS 805892 (the "Complaint"), there are no pending or, to the best of the Agency's knowledge, threatened claims, actions, allegations or lawsuits of any kind, whether for personal injury, property damage, property taxes or otherwise, that could materially and adversely affect the value or use of the Phase I Property, the Phase II Property and!or the Phase III Property or prohibit the sale thereof, nor to the best of the Agency's knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Phase I Property, the Phase II Property and!or the Phase III Property or the transactions contemplated hereby. (7) Ooeration and Condition Pending Closing. Between the date of this Agreement and the Close of Escrow, the Agency will continue to manage, operate and maintain the Phase I Property, the Phase II Property and!or the Phase III Property in the same manner as existed prior to the execution of this Agreement. (8) Contracts. There are no contracts or agreements to which the Agency is a party relating to the operation, maintenance, development, improvement or ownership of either of the Phase I Property, the Phase II Property and!or the Phase III Property which will survive the Close of Escrow except as may be set forth in the Agency Grant Deed in connection with the transfer of the Phase I Property, of the Phase II Property and!or of the Phase III Property. 4815-3938-7650.2815-3938-7650.2 31 P:\Agendas\AsernJa Attachm.ents\Agenda Attachm.entll\AseDdl Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Asreement - FINAL.doc (9) Develooment of Proiect. Although the Agency makes no representation or warranty that either the Phase I Property, the Phase II Property and!or the Phase III Property is suitable for the development or operation of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project, the Agency has no present knowledge of any condition of the Phase I Property, of the Phase II Property and!or of the Phase III Property which would prevent its development in accordance with the Scope of Development. (10) Soecial Studies Zone. The Phase I Property, the Phase II Property and! or the Phase III Property, whichever applies, is not located within a designated earthquake fault zone pursuant to California Public Resources Code Section 2621.9 and a designated area that is particularly susceptible to ground shaking, liquefaction, landslides or other ground failure during an earthquake pursuant to California Public Resources Code Section 2694. (11) The Agencv's Knowledge. For purposes of this Section 2.24, the terms "to the best of the Agency's knowledge" or "to the Agency's knowledge" shall mean the actual knowledge of Interim Executive Director Emil A. Marzullo. (12) Financing. The Agency has not consented to any Financing (except for the approval by the Agency of the assumption by the Developer of the HUD Loan) and, to the best knowledge of the Agency, HUD has not consented to the HUD Loan Assumption by the Developer nor has HUD consented to the making of any 108 HUD Loan to the Developer and!or to the Agency to enable the Developer to Purchase the Phase I Property, the Phase II Property and!or the Phase III Property and!or to construct, to develop, to install and to complete the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing Date of the Escrow and whether or not such representation or warranty was based upon the Agency's knowledge and!or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. All representations and warranties contained in this Section 2.24(a) are true and correct on the date hereof and on the Closing Date of the Escrow and the Agency's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow. (b) Warranties and Reoresentations bv the Develooer. The Developer makes the following representations, covenants and warranties and acknowledges that the execution of this 4815-3938-7650.2815-3938-7650.2 32 P;\Agcndu\Agenda Attacluncnts\Agenda Attachments\Agenda Attacbments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc Agreement by the Agency made in material reliance by the Agency on such covenants, representations and warranties: (1) The Developer is a duly organized and validly existing Delaware corporation. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consurmnate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant that such persons have the power, right and authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consurmnation of the transactions contemplated hereby, and no consent of any other party is required. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) Neither the execution of this Agreement nor the consurmnation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or govemmental body applicable to the Developer or to the Phase I Property, to the Phase II Property and!or to the Phase III Property. (5) The Developer shall notify the Agency in writing of any default under any Financing, under the Financing Loan Documents, under the Construction Financing (as defined below) and!or under the Permanent Financing (as defmed below). Further, in the event the Developer obtains a 108 HUD Loan or the HUD Loan Assumption to enable the Developer to purchase the Phase I Property and!or to construct, to develop, to install and to complete the Phase I Property Project, the Developer, without limitation, shall do the following: (i) the Developer shall cause an unconditional letter of credit in the amount of $450,000 to be issued by Wells Fargo Bank, by Bank of American or by such other commercial lender reasonably acceptable to the Agency, in favor of the Agency, which letter of credit shall have a minimum term of forty-two (42) months or the Developer shall deliver a cash deposit in the amount of $450,000 to the Agency to be held by the Agency as security for the obligations and liabilities of the 108 HUD Loan or the HUD Loan Assumption, (ii) the 4815-3938-7650.2815-3938-7650.2 33 P:\Agendas\Agenda Artacbments\Agenda Attachments\Agenda Attacbments\Agnnts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc Developer shall fully discharge and payoff the 108 HUD Loan at the of the third year of such loan, and (iii) the Agency, without limitation, shall be permitted to draw against the Letter of Credit or the Cash Deposit, in its entirety, and to apply the proceeds of the Letter of Credit (as defmed below) or the Cash Deposit (as defined below), as appropriate, against the 108 HUD Loan in the event the Developer does not fully discharge and payoff the 108 HUD Loan at the end of the third year of such loan. All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Closing Date of the Escrow and the Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing of the Escrow. Section 2.25. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession of either the Phase I Property, the Phase II Property and!or the Phase III Property to the Developer at the Close of Escrow, the risk ofloss or damage to the Phase I Property, to the Phase II Property and!or to the Phase III Property shall remain upon the Agency. If either the Phase I Property, the Phase II Property and!or the Phase III Property suffers damages as a result of any casualty prior to the Close of Escrow which may materially diminish its value, then the Agency shall give written notice thereof to the Developer promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept either the Phase I Property, the Phase II Property and!or the Phase III Property in its damaged condition or (ii) the Developer may terminate this Agreement and recover the Phase I Property Deposit (or portion thereof), the Phase II Property Deposit (or portion thereof) and!or the Phase III Property Deposit (or portion thereof), as set forth in Section 2.02. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days of its receipt of notice from the Agency. In the event that, prior to the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Phase I Property, the Phase II Property and!or the Phase III Property, the Agency shall give prompt written notice thereof to the Developer, and the Developer shall have the option either: (i) to elect not to acquire the Phase I Property, the Phase II Property and!or the Phase III Property terminate this Agreement and recover the Phase I Property Deposit (or portion thereof), the Phase II Property Deposit (or portion thereof) and!or the Phase III Property Deposit (or portion thereof), as set forth in Section 2.02; or (ii) the Developer may complete the acquisition of the Phase I Property, the Phase II Property and!or the Phase III Property under this Agreement, in which case the Developer shall be entitled to all the proceeds of such taking; provided however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow, without the Developer's prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days of its receipt of notice from the Agency. 4815-3938-7650.2815-3938-7650.2 34 P:\Agendas\Apnda Attachments\Agenda Attac/unents\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc ARTICLE III DEVELOPMENT OF THE PROJECT Section 3.01. Develooment of the Proiect bv the Develooer.. (a) Scooe of Develooment; Schedule of Performance. It is the intent of the parties that promptly following the Close of Escrow for the Phase I Property, the Developer shall commence the construction and development of the Phase I Property Project, subject to applicable City approvals. In connection with the Phase I Property Project, the Developer shall, without limitation, design, construct, develop, install, assemble, attach and complete the Phase I Property Improvements located at, on or in connection with the Phase I Property in accordance with the terms, covenants and conditions of this Agreement (the "Phase I Property Construction"). The scope of the Phase I Property Construction shall be described, in detail, in the Scope of Development. Further, prior to the Close of Escrow for the Phase II Property and!or for the Phase III Property following the exercise by the Developer of its right to purchase the Phase II Property and!or the Phase III Property, pursuant to the terms, covenants and conditions of this Agreement: (i) the Developer and the Agency shall determine the scope of the construction, development and improvements to be made and completed by the Developer in connection with the Phase II Property (the "Phase II Property Construction" and!or with the Phase III Property (the "Phase III Property Construction"), and (ii) the Developer and the Agency shall describe, in detail, the Phase II Property Construction and!or the Phase III Property Construction in the Scope of Development. (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the Phase I Property, of the Phase II Property and!or of the Phase III Property. The Developer acknowledges that any change in the plans for the development of the Phase I Property as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No action by the Agency or by the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any City requirements which are applicable to the Phase I Property, to the Phase II Property and!or to the Phase III Property or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Phase I Property, to the Phase II Property and!or to the Phase III Property except by modification or variance approved by the City consistent with this Agreement. (c) The Scope of Development for the Phase I Property Project is hereby approved by the Agency upon its execution of this Agreement. The Phase I Property Project shall be developed and completed by the Developer in conformance with this Agreement and the approved Scope of Development for the Phase I Property, all applicable Laws, and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. Prior to the Close of Escrow for the Phase II Property and!or the Phase III Property, in the event the Developer elects to purchase the Phase II Property and!or the Phase III Property in accordance with the terms, covenants and conditions of this Agreement, the Agency and the Developer shall determine the Scope of Development to be constructed and completed by the Developer at, on or in connection with the Phase II Property and!or the Phase 4815-3938-7650.2815-3938-7650.2 35 P:\Agendas\Agenda Attachments\Agcnda Attactunents\Agenda Attaclunents\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc III Property. After the Close of Escrow for the Phase II Property and!or for the Phase III Property, the Developer shall promptly construct, develop and complete the Phase II Property Project and!or the Phase III Property Project in conformance with the approved Scope of Development, all applicable Laws, and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. Subject to Section 3.05(c) of this Agreement, the construction of the Phase II Property Project must be completed within three (3) years from the Close of Escrow for the Phase I Property. The Phase III Property Project must be completed within five (5) years from the Close of Escrow for the Phase I Property. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the City Council or the Planning Commission of the City with respect to any approvals of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project required by such other bodies. If any revisions of the Scope of Development as approved by the Agency shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property the Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or to obtain approvals of any such revisions which have been made by the Developer and have thereafter been approved by the Agency. The Agency shall not unreasonably withhold approval of such revisions. (e) Notwithstanding any provision to the contrary in this Agreement, the Developer agrees to accept and comply fully with any and all reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Phase I Property, the Phase II Property and!or the Phase III Property and consistent with this Agreement. (f) The Developer shall cause landscaping plans in connection with development of the Phase I Property, of the Phase II Property and!or of the Phase III Property to be prepared by a licensed landscape architect. The Developer shall prepare and submit to the City for its approval, preliminary and landscaping plans for the Phase I Property, the Phase II Property and!or for the Phase III Property which are consistent with City Code requirements. These plans shall be prepared, submitted and approved within the times respectively established therefor in the Schedule of Performance and shall be consistent with the Scope of Development. (g) The Developer shall prepare and submit to the City development plans, construction drawings and related documents for the development of the Phase I Property, the Phase II Property and!or of the Phase III Property consistent with the Scope of Development. The development plans, construction drawings and related documents shall be in the form of drawings, plans and specifications. Drawings, plans and specifications are hereby defmed as those which contain sufficient detail necessary to obtain a building permit from the City. (h) During the preparation of all drawings and plans in connection with the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of 4815-3938-7650.2815-3938-7650.2 36 P:\Agendas\Asenda Attachmem.\Agenda Attachment8\Agenda Attaehmems\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is reasonably necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right of reasonable architectural review and approval of building exteriors and design of the structures to be constructed on the Phase I Property, on the Phase II Property and!or on the Phase III Property to be constructed for the Phase I Property Project, for the Phase II Property Project and!or for the Phase III Property Project which approval shall not be unreasonably withheld or delayed. The Agency shall also have the right to review all plans, drawings and related documents pertinent to the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property in order to ensure that they are consistent with this Agreement and with the Scope of Development. If the Agency shall determine that plans, drawings or related document are not consistent with this Agreement and with the Scope of Development, it shall notify the Developer in writing of such determination. The Developer, upon receipt of such notice from the Agency, shall promptly revise the applicable plans, drawings or related documents in a manner that addresses the inconsistency with the Scope of Development and shall resubmit such revised plans, drawings or related documents to the Agency no later than thirty (30) calendar days after its receipt of such notice from the Agency. G) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property, as required by the City. Any failure by the City to approve any of such plans or to issue necessary permits for the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property within thirty (30) calendar days of receipt thereof shall constitute an enforced delay hereunder, and the Schedllle of Performance shall be extended by that period of time beyond said thirty (30) calendar day period in which the City approves said plans; provided, however, that in the event that the City disapproves of any of such plans, the Developer shall within thirty (30) calendar days after receipt of such disapproval reasonably revise and resubmit such plans in accordance with the City's requirements and in such form and substance so as to obtain the City's approval thereof. (k) The Agency shall in good faith use its best efforts to cause the City to approve in timely fashion any and all plans, drawings and documents submitted by the Developer which are consistent with the Scope of Development. (1) The Agency shall approve any modified or revised plans, drawings and related documents for the Phase I Property Project, the Phase II Property Project and!or for the Phase III Property Project as long as such plans, drawings and related documents are generally consistent with the Scope of Development and any other plans, which have been approved by the Agency. Upon any disapproval of plans, drawings or related documents, the Agency shall state in writing the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt 4815-3938-7650.2815-3938-7650.2 37 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11.17.08 Maya Cinema. Disposition and Development Agreement. FINAL.doc of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency. (m) If the Developer desires to make any change in the plans, drawings and related documents after their review by the Agency for consistency with the Scope of Development, the Developer shall submit the proposed change in writing to the Agency for its review for consistency with the Scope of Development. The Agency shall notify the Developer in writing of any determination that the change is not consistent with the Scope of Development, within thirty (30) calendar days after submission to the Agency. If the Developer desires to make any change in the plans, drawings and related documents after their approval by the City, the Developer shall submit the proposed change to the City for approval. The Agency shall use its best efforts to cause the City to review and approve or disapprove any such change as provided in Section 3.01(k) hereof. (n) The Developer, upon receipt of a notice of disapproval by the Agency and!or the City, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and!or the City for approval in the manner provided in Section 3.01(1) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction of structures and "minor field changes" without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a structure. Said "minor field changes" shall be defined as those changes from the approved construction drawings, plans and specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this Section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing such "rninor field changes" or in any and all approvals by the City otherwise required for such "minor field changes." (P) The cost of constructing privately owned components of the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project in addition to all off- site public improvements, shall be borne by the Developer which, if any, are required by the City as a condition of approval for the Phase I Property Project, for the Phase II Property Project and!or for the Phase III Property Project. The Developer shall comply with all applicable State laws relative to the payment of prevailing wages with respect to those components of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project which are public improvements or other public infrastructure intended to be dedicated to a governmental agency, including the off-site public improvements, and the Developer shall provide written verification of such compliance to the Agency upon written request from the Agency to the Developer. (q) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval of the development project approvals by the City, 4815-3938-7650.2815-3938-7650.2 38 P:\Agendu\Agenda Attachments\Agenda Attachments\Aacnda Attaclunel1t8\Agrmts-Amend 2008\11-17.08 Maya Cinema - Disposition and Development Agreement. FINAL.doc including the cost and preparation of all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property, as appropriate, hereunder including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and design review documents. (r) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation and securing of permits for utility improvements and connections, which may be required in developing the Phase I Property, the Phase II Property and!or the Phase III Property. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. (s) The Developer shall commence the work of improvements in connection with the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project within sixty (60) calendar days following the issuance of building permits for the Phase I Property Project, for the Phase II Property Project and!or for the Phase III Property Project and thereafter shall diligently prosecute such construction to completion. The Developer shall substantially complete the improvements of the Phase I Property Project no later than July 1, 2009, unless extended by the Agency in its sole and absolute discretion; provided, however, that notwithstanding said stated date the Developer shall have at least one hundred twenty (120) calendar days from the Close of Escrow of the Phase I Property and receipt of all required construction and building permits to complete all such activities. Subject to Section 3.05 (c) of this Agreement, the Developer shall complete the improvements of the Phase II Property Project within three (3) years from the Close of Escrow for the Phase I Property. The Developer shall complete the improvements of the Phase III Property Project no later than five (5) years from the Close of Escrow for the Phase I Property Any and all performance commitments hereunder shall be extended for any times attributable to delays, which are not the fault of the performing party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (t)' Subject to Section 3.05(c) of this Agreement, if the Phase II Property Improvements are not constructed, developed, installed and completed on the Phase II Property within three (3) years from the Close of Escrow for the Phase I Property, the Developer shall have no further right to construct, to develop, to install and to complete the Phase II Property Improvements on the Phase II Property and shall have no right to construct, to develop, to install and to complete the Phase III Property Improvements on the Phase III Property. (u) Upon the issuance of a certificate of occupancy in connection with the office building at the Phase II Property, the Agency shall lease not more than 5,000 square feet of second floor office space for a rental rate not to exceed market rate per square net usable feet per month as a gross rental payment including all required tenant improvements for the Agency based upon the then current market rate for similar properties in the Downtown Area of the City pursuant to a process to determine the then current market rate to be mutually agreed upon by the 4815-3938-7650.2815-3938-7650.2 39 P:\Agendall\Agenda Attachments\Agenda Attachments\Asenda Attacbments\Agnnts-Amend 2008\11-17..Q8 Maya Cinema. Disposition and Development Agreement. FINAL_doc Agency and the Developer. (v) In the event the Developer fails to maintain and repair the Phase II Property and the Phase III Property in as good a condition that existed on the Effective Date of the Agreement, and is in material breach under the License Agreement which remains uncured or which Developer has failed to commence to cure, the Developer shall have no further right to purchase the Phase II Property and! or to purchase the Phase III Property, nor to construct, to develop, to install or to complete the Phase II Property Improvements on the Phase II Property and!or the Phase III Property Improvements on the Phase III Property. Further, the Agency shall have the right to fully or partially draw against the Letter of Credit or draw against the Cash Deposit and shall credit such proceeds against the outstanding principal balance, accrued and unpaid interest, fees, charges and!or penalties then due and owing under the 108 HUD Loan (as defined below) or the HUD Loan Assumption if the Developer has either obtained the 108 HUD Loan or the HUD Loan Assumption to purchase the Phase I Property and to construct, to develop, to install and to complete the Phase I Property Improvements on the Phase I Property, (w) During the period of construction of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project, the Developer shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every four (4) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency, and shall include a reasonable number of construction photographs taken since the last such report submitted by the Developer. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (x) Prior to the commencement of any construction, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of Three Million Dollars ($3,000,000.00) combined single limit, naming the Agency and the City and the elected officials, officers, employees, attorneys and agents of each of them as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000.00) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+: XII in the most current Best's Key Rating Insurance Guide. All said insurance policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and!or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by Agency Counsel consistent with the foregoing. Any and all insurance required 4815-3938-7650.2815-3938-7650.2 40 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attacbmcnts\Agrmts-Amend 2008\11-17-08 Maya Cinema - DilpOllition and Development Agreement - FINAL.doc hereunder shall be maintained and kept in force until the Agency has issued a Certificate of Completion in substantially the form set forth in Exhibit "F" hereof (the "Certificate of Completion") in connection with the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property. The Developer waives subrogation and agrees that the Developer and the Agency are co-insured. The Developer will use its best efforts to cause each insurance carrier obtained by it to waive any subrogation claim. (y) The Developer for itself and its successors and assigns agrees that in the construction of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding the foregoing, the Developer will use its best efforts to offer employment opportunities to local residents and will seek to acquire goods and services from local vendors. (z) The Developer shall carry out its construction of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project in conformity with all applicable Laws, including, without limitation, all applicable state labor standards, requirements and prevailing wage laws. (aa) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits which may be required for such construction, development or work by the City or any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good faith with the Developer in the Developer's efforts to obtain from the City or any other appropriate govemmental agency any and all such permits and, upon applicable to the development of the Phase I Property, of the Phase II Property and!or of the Phase III Property. (bb) Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Phase I Property, to the Phase II Property and!or to the Phase III Property without the payment of charges or fees, during normal construction hours during the period of construction of the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project for the purpose of verifying compliance by the Developer within the terms of this Agreement. Such officers, employees, agents or representatives of the Agency shall be those persons who are so identified by the Interim Executive Director. Any and all officers, employees, agents or representatives of the Agency who enter the Phase I Property, the Phase II Property and!or the Phase III Property pursuant hereto shall identify themselves at the job site office upon their entrance on to the Phase I Property, the Phase II Property and!or the Phase III Property, and shall at all times be accompanied by a representative of the Developer while on the Phase I Property, the Phase II Property and!or the Phase III Property; provided, however, that the Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours upon reasonable notice from the Agency. The Agency shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Agency and!or the City of this right of access, other than injury, property damage or liability relating to the negligence of the Developer or its officers, agents or employees. 4815-3938.7650.2815-3938-7650.2 41 P:\Agendas\Agenda Attachments\Aplda Attachmcntll\Agenda Attachments\Agrmt!l-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINALdlx: (cc) The Agency shall inspect relevant portions of the construction site prior to issuing any written statements reflecting adversely on the Developer's compliance with the terms and conditions of this Agreement pertaining to development of the Phase I Property, the Phase II Property and! or the Phase III Property. Section 3.02. [RESERVED Section 3.03. Taxes and Assessments. The Developer shall pay prior to delinquency all real property taxes and assessments assessed and levied on or against the Phase I Property, the Phase II Property and!or the Phase III Property subsequent to the Close of Escrow for the Phase I Property, for the Phase II Property and!or for the Phase III Property. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. Section 3.04. Change in Ownershio. Management and Control of the Develooer Assigmnent and Transfer.. (a) As used in this Section 3.04, the term "Transfer" means: (1) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, by the Developer or an entity controlled by it of more than a 49% interest (or series of such sales, assignments and the like which in the aggregate exceed a disposition of more than a 49% interest) with respect to its interest in this Agreement, the Phase I Property, the Phase II Property and!or the Phase III Property or the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project, or any part thereof or any interest therein or of the improvements constructed thereon, or any contract or agreement to do any of the same; or (2) Any merger, consolidation, sale or lease of all or substantially all of the assets of the Developer or an entity controlled by it (or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest). (b) This Agreement is entered into solely for the purpose of the development of the Phase I Property Project on the Phase I Property, the Phase II Property Project on the Phase II Property and!or of the Phase III Property Project on the Phase III Property, by the Developer in accordance with the terms hereof. The Developer recognizes that the qualifications and identity of the Developer are of particular concern to the Agency, in view of: (1) the importance of the development of the Phase I Property, the Phase II Property and! or the Phase III Property to the general welfare of the community; and 4815-3938-7650.2815-3938-7650.2 42 P:\Agendas\Agenda Attacluncnts\Agenda Attaclunents\Agenda Attaclunents\Agrmts-Amend 2008\11-17"()8 Maya Cinema - Disposition and Development Agreement - FINAL.doc (2) the fact that a Transfer is for all practical purposes a transfer or disposition of the responsibilities of the Developer, as applicable, with respect to the development of the Phase I Property Project on the Phase I Property, the Phase II Property Project on the Phase II Property and!or of the Phase III Property Project on the Phase III Property. The Developer further recognizes and acknowledges that it is because of the qualifications and identity of the Developer that the Agency is entering into this Agreement with the Developer, and, as a consequence, Transfers are permitted only as provided in this Agreement. (c) The limitations on a Transfer as set forth in this Section 3.04 shall apply until such time as a Certificate of Completion is approved by the Agency and filed for recordation as provided in Section 3.07. Except as expressly permitted in this Agreement, the Developer represents and agrees that it has not made nor shall it create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the Agency until such time as a Certificate of Completion has been recorded. After the date of recordation of a Certificate of Completion, certain other provisions of this Agreement shall nonetheless be applicable to subsequent conveyances of interest in the Phase I Property, the Phase II Property and!or the Phase III Property, or portions thereof, as provided in Article IV of this Agreement. Any Transfer made in contravention of this Section 3.04 shall be voidable at the election of the Agency and shall then be deemed to be a default under this Agreement. (d) The following types of a Transfer shall be permitted and approved by the Agency and are referred to herein as a "Permitted Transfer": (1) Any Transfer by the Developer creating a security interest in all or part of the Phase I Property, of the Phase II Property and!or of the Phase III Property for the acquisition of the Phase I Property, of the Phase II Property and!or of the Phase III Property or any fmancing for the construction and improvement of the all or part of the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project (singularly and collectively, a "Security Financing Interest"); (2) Any Transfer directly resulting from the foreclosure of a Security Financing Interest created by the Developer in all or part of the Phase I Property, the Phase II Property and!or of the Phase III Property or the granting of a deed in lieu of foreclosure of a Security Financing Interest; (3) Any Transfer of stock or equity of the Developer, which does not change management, or operational control of the Phase I Property or of the Phase I Property Project, and!or the Phase II Property and!or of the Phase II Property Project and!or the Phase III Property and!or of the Phase III Property Proj ect; (4) Any Transfer of any interest m the Developer, irrespective of the 4815-3938-7650.2815-3938-7650.2 43 P:\Agendas\Agcnda Attachmcllt$\Agenda Attachrnents~nda Attachmcnts\Agnnts-Amend 2008\II-i7-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc percentage of ownership to any entity in which the Developer owns a controlling interest. (e) Provided the particular transaction satisfies the applicable provisions of Section 3.04(d), the Developer is not required to give the Agency advance notice of such a Permitted Transfer. The Agency may, in its reasonable discretion, approve in writing any other Transfer as requested by the Developer, provided such proposed transferee can demonstrate successful and satisfactory experience in the ownership, operation, and management of an operation similar to the Phase I Property Project, to the Phase II Property Project and!or the Phase III Property Project. Any such transferee for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the Agency under this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such other Transfer; and the approval or disapproval of the Agency shall be provided to the Developer, in writing within thirty (30) calendar days of receipt by the Agency of the request therefore, and the Agency approval of a transfer shall not be unreasonably withheld or delayed. (f) Following the issuance of a Certificate of Completion in connection with the Phase I Property, the Phase II Property and!or the Phase III Property, the Developer shall be released by the Agency from any liability under this Agreement which may arise from a default of a successor in interest occurring after the date of such a Transfer; provided, however that the covenants of the Developer as set forth in Article IV of this Agreement shall run with the land for the term as provided in Article IV. Section 3.05. Security Financing; Right of Holders. The Developer will have the obligation to obtain conventional fmancing, to obtain 108 HUD Loan fmancing or to use its own equity funds to purchase the Phase I Property and to construct, to develop, to install and to complete the Phase I Property Improvements on the Phase I Property pursuant to this Agreement. The Developer will have the obligation to obtain conventional fmancing or to use its own equity funds: (i) to purchase the Phase II Property and to construct, to develop, to install and to complete the Phase II Property Improvements on the Phase II Property, pursuant to this Agreement, and!or (ii) to purchase the Phase III Property and to construct, to develop, to install and to complete the Phase III Property Improvements on the Phase III Property, pursuant to this Agreement. The Agency shall use best efforts to cooperate with the Developer to obtain the 108 HUD loan or to obtain any other conventional loan fmancing. The Agency has not approved the 108 HUD Loan, any other conventional loan financing or the HUD underwriting criteria in connection with the purchase of the Phase I Property and the construction, the development, the installation and the completion of the Phase I Property Improvements on the Phase I Property. The Agency has not represented, warranted or covenanted to the Developer that HUD has approved the 108 HUD Loan or that the Agency has approved the terms of the 108 HUD Loan (which terms must be reasonably approved by the Agency as a condition precedent to the Close of Escrow). Further, the Agency has not represented, warranted or covenanted to the Developer that the terms of the 108 HUD Loan from HUD to the Developer will be acceptable to the Agency. 4815-3938-7650.2815-3938-7650.2 44 P:\Agendas\Agenda Attaehments\Agenda Attachments\Agenda Attachments\Asfmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc (a) In the event the Developer procures and obtains from HUD a 108 HUD loan (the "108 HUD Loan") to enable the Developer to purchase the Phase I Property and to construct, to develop, to install and to complete the Phase I Property Improvements on the Phase I Property, the Developer shall comply with the following terms, covenants and conditions: (1) the 108 HUD Loan shall have a term of seven (7) years. (2) the Developer shall remit to the Agency quarterly sinking fund payments equal to (i) $45,000 per quarter ($180,000 per year) for the second year, commencing as of the end of the fIrst quarter of the second year (i.e., the end of the 15th month after the date of the 108 HUD Loan and (ii) $90,000 per quarter ($360,000 per year) for the third year, and (iii) $112,500 per quarter ($450,000 per year) for years four (4) through seven (7) in the event the Developer fails or is unable to refinance the 108 HUD Loan at the end of the third year. (3) The Agency shall have the right to obtain a twenty (20)-year 108 HUD loan with interest only for three (3) years and amortized principal and interest for the remaining seventeen (17) years. If the twenty (20) year option is either selected by the Agency or is required by HUD, then the Developer must pay to the Agency the defeasance penalty for any prepayment after the three (3) year date and prior to the ten (10)-year call protection date for the twenty (20)-year 108 HUD loan. Any monetary savings resulting from such defeasance based upon the then current interest rate market for Federal Treasury securities will accrue to the Developer. (4) The Developer shall deposit with the Agency: (i) an irrevocable letter of credit in the amount of $450,000 in favor of the Agency issued by the Bank of America, by Wells Fargo Bank or by any comparable commercial bank reasonably acceptable to the Agency (the "Letter of Credit") which Letter of Credit shall have a term of forty-two (42) months from the date of the 108 HUD Loan, or (ii) a cash deposit to the Agency in the amount of $450,000 to secure the obligations and liabilities of the Developer under the 108 HUD Loan (the "Cash Deposit"). If the Developer does not or is unable to refmance the 108 HUD Loan at the end of the third year of the 108 HUD Loan, in whole or in part, if, subject to Section 3.05(c) of this Agreement, the Developer has not completed the construction, the development, the installation and the completion of the Phase II Property Improvements on the Phase II Property within three(3) years from the Close of Escrow for the Phase I Property, if the Developer is in material default under the License Agreement or if any other material default which remains uncured or which Developer has not commenced to cure under this Agreement has occurred: (A) the Agency shall have the right to fully or partially draw against the Letter of Credit and to use such proceeds to pay and to offset against the outstanding principal, accrued and unpaid interest, fees, charges and!or penalties then due and payable in connection with the 108 HUD Loan or the HUD Loan Assumption, or (B) the Agency shall have the right to fully or partially draw against the Cash Deposit and to use such proceeds to pay and to offset against the outstanding principal, accrued and unpaid interest, fees, charges and!or penalties then due and payable in connection with the 108 HUD Loan or the HUD Loan Assumption. (5) The Developer shall deposit $2,600,000 to the Escrow Holder one (1) business day prior to the Close of Escrow in connection with the purchase of the Phase I 4815-3938-7650.2815-3938-7650.2 45 P:\Agendas\Apnda AttacIunents\Agenda Attachments\Agenda Attachments\Agrmts-Arnend 200s\11-17'()8 Maya Cinema. DispoJition and Development Agreement - FINAL.doc Property representing the equity contribution of the Developer or such greater amount as may be required by HUD for the consummation of either the 108 HUD Loan or the HUD Loan Assumption. (6) The Developer and the Agency shall execute the License Agreement. Pursuant to this Agreement and the License Agreement, the Developer, without limitation, shall have the right of access to the Phase II Property and to the Phase III Property during the term provided for in the License Agreement. The Developer, without limitation, and at its sole cost and expense, shall have the duty and obligation to maintain and repair the Phase II Property and!or the Phase III Property during the term of the License Agreement in at least as good a condition as existed on the Effective Date of this Agreement. In the event of a material default which remains uncured or which Developer has not commenced to cure under the License Agreement, the Agency shall have the right to partially or fully draw against the Letter of Credit or to partially or fully draw against the Cash Deposit to payor reimburse the Agency for all direct and verifiable costs and expenses actually paid or incurred by the Agency to maintain and repair the Phase II Property and!or the Phase III Property. (7) If the Developer pays off the 108 HUD Loan or the HUD Loan Assumption on or prior to the end of the third year of the 108 HUD Loan or the end of the third (3rd) year after the HUD Loan Assumption and provided no material default remains uncured or which Developer has not commenced to cure under this Agreement, the Agency will consider using new market tax credits and!or 108 HUD financing for the purchase by the Developer from the Agency of the Phase II Property and the construction, the development, the installation and the completion of the Phase II Property Improvements at the Phase II Property and!or for the purchase of the Phase III Property and the construction, the development, the installation and the completion of the Phase III Property Improvements at the Phase III Property. (b) If the Developer elects not to utilize a new 108 HUD Loan or the Agency or HUD do not approve a new 108 HUD Loan, the Agency will allow the Developer to assume the existing HUD Loan with its current principal balance of $4,600,000 as of the Effective Date of this Agreement. Should the Developer assume the HUD Loan, the Developer shall procure additional conventional financing, or use its own funds, to construct, develop, install and complete the Phase I Property Improvements as provided for in the Budget. Should the Developer assume the HUD Loan and procure additional conventional financing, or use its own funds, to construct, develop, install and complete the Phase III Property Improvements as, the Agency agrees to subordinate the HUD Loan to such additional conventional financing as obtained by the Developer. (c) Notwithstanding anything to the contrary in this DDA, if the Developer does not obtain a 108 HUD Loan or the HUD Loan Assumption, regardless of the reason, or if the Developer elects not to use the 108 HUD Loan or the HUD Loan Assumption financing alternatives, then the Developer shall have no obligation (i) to purchase the Phase II Property and!or the Phase III Property and!or (ii) to construct, to develop, to install and!or to complete the Phase II Property Improvements and!or the Phase III Property Improvements within the three- year or five-year period otherwise applicable for such Phase II Property or the Phase III Property. The Developer, however, will have the right to purchase the Phase II Property and!or the Phase 4815-3938-7650.2815-3938-7650.2 46 P:\Agendas\Agenda Attachments\Agenda Attaclunent8\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL. doc III Property and to construct, develop, install and complete the Phase II Property Improvements and!or the Phase III Property Improvements within five (5) years from the purchase by the Developer from the Agency of the Phase I Property. (d) Notwithstanding any provision of Section 3.04 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the construction and improvement of the Phase I Property and!or the fmancing of the purchase, construction and improvement of the Phase II Property and!or of the Phase III Property (singularly and collectively, the "Construction Financing") and one or more mortgages, deeds of trust, or other forms of lien required for any reasonable financing that takes out the construction financing (singularly and collectively, the "Permanent Financing") is permitted. The Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for Construction Financing or for Permanent Financing. The Developer shall not enter into any such conveyance for Permanent Financing without the prior written approval of the Agency, which approval shall not be unreasonably withheld, delayed or conditioned and which the Agency shall grant if any such conveyance is given to a commercially responsible financial or lending institution including, without limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and like similar entities and financial institutions. ( e) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created with respect to the Phase I Property, the Phase II Property and!or to the Phase III Property whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. (t) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. (g) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the improvement of the Phase I Property, the Phase II Property and!or of the Phase III Property or to guarantee such construction or completion. (h) Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in the completion of construction of the improvements, or any breach or default of any other obligations which, if not cured by the Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the Phase I Property, the Phase II Property and!or the Phase III Property, the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, to commence the cure or remedy of any such default and to diligently and continuously proceed with such cure or remedy, within one hundred twenty (120) calendar days after the receipt of the notice; and to add 4815-3938-7650.2815-3938-7650.2 47 P:\Agendas\Agenda Attacbment3\Agenda Attachmcnts\Agcnda Attachments\Agnnts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc:: the cost thereof to the security interest debt and the lien of its security interest. If such default shall be a default which can only be remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within one hundred twenty (120) calendar days after obtaining possession; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within such one hundred twenty (120) calendar day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) or to operate the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project without first having expressly assumed the Developer's obligations by written agreement satisfactory to the Agency. The holder in that event must submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder that undertakes and completes construction of the improvements on the Phase I Property, the Phase II Property and!or on the Phase III Property in accordance herewith shall be entitled, upon written request made to the Agency, to be issued the Certificate of Completion by the Agency. (i) In any case where, one hundred eighty (180) calendar days after default by the Developer the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Phase I Property, or any portion thereof, upon the Phase II Property, or any portion thereof, and!or upon the Phase III Property, or any portion thereof, has not exercised the option to construct the applicable portions of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project or to operate the Phase I Property, the Phase II Property Project and!or the Phase III Property Project following completion of construction, or has exercised the option but has not proceeded diligently and continuously with construction or operation of the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project as the case may be, the Agency may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between holder and the Developer. If the ownership of the Phase I Property, the Phase II Property and!or of the Phase III Property has vested in the holder, the Agency may at its option (but does not have an obligation to) seek a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (1) The unpaid mortgage, deed of trust or other security interest debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between the holder and the Developer, at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings.) 4815-3938-7650.2815-3938-7650.2 48 P:\Agcndas\Agcnda Attachments\Agenda Attacbmcnt8\Agenda Attachments\Aarmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL.doc (2) All expenses, if any, incurred by the holder with respect to foreclosure. (3) The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent ownership or management of the Phase I Property, of the Phase II Property and!or of the Phase III Property such as insurance premiums and real estate taxes. (4) The cost of any improvements made by such holder. (5) An amount equivalent to the interest that would have accrued on the aggregate on such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. (6) After expiration of the aforesaid one hundred eighty (180) calendar day period, the holder of any mortgage, deed of trust or other security affected by the option created by this Section, may demand, in writing, that the Agency act pursuant to the option granted hereby. If the Agency fails to exercise the right herein granted within sixty (60) calendar days from the date of such written demand, the Agency shall be conclusively deemed to have waived such right of purchase of the or the mortgage, deed of trust or other security interest. G) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Phase I Property, or any portion thereof, to the Phase II Property, or any portion thereof, and!or to the Phase III Property, or any portion thereof, where the holder has not exercised its option to complete the development or to operate the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project, the Agency may cure the default but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all direct and verifiable costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.0S(k) upon the Phase I Property, or any portion thereof, upon the Phase II Property, or any portion thereof, and!or upon the Phase III Property, or any portion thereof, to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments executed by the Developer for the purpose of obtaining the funds to construct and improve the Property or for the purpose of obtaining the Permanent Financing as authorized herein. Section 3.06. Right of the Agencv to Satisfy Other Liens on the Prooertv after Convevance of Title. After the conveyance of title to the Phase I Property, to the Phase II Property and!or to the Phase III Property by the Agency to the Developer and after the Developer has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances on the Phase I Property, on the Phase II Property and!or on the Phase III Property the Agency shall after one hundred twenty (120) calendar days prior written notice to the Developer have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this 4815-3938-7650.2815-3938-7650.2 49 P:\Agendas\Agenda Attachments\Agenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Developmcm Agreemcm - FINAL.doc Agreement shall require the Developer to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Phase I Property, or any portion thereof, the Phase II Property, or any portion thereof, and!or the Phase III Property, or any portion thereof, to forfeiture or sale. Section 3.07. Certificate of Como let ion. (a) Following the written request therefore by the Developer and the completion of construction of each phase of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project excluding any normal and minor building "punch-list" items to be completed by the Developer, the Agency shall furnish the Developer with a Certificate of Completion for the Phase I Property, for the Phase II Property and!or for the Phase III Property in the form set forth in Exhibit "F" which Exhibit is attached hereto and incorporated herein by this reference. (b) The Agency shall not unreasonably withhold the issuance of a Certificate of Completion in connection with the Phase I Property Project, with the Phase II Property Project and!or with the Phase III Property Project. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination of satisfactory completion of construction of the applicable phase of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project. After the recordation of the Certificate of Completion in connection with the Phase I Property Project, with the Phase II Property Project and!or with the Phase III Property Project, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Phase I Property identified in the Certificate of Completion, in the Phase II Property identified in the Certificate of Completion or in the Phase III Property identified in the Certificate of Completion shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant deed or other instrument of transfer which grant deed or other instrument of transfer shall include the provisions of Section 4.01 through 4.04, inclusive, of this Agreement. (c) Any Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County where the Phase I Property, the Phase II Property and!or the Phase III Property is located. (d) If the Agency refuses or fails to furnish a Certificate of Completion in connection with the Phase I Property Project, with the Phase II Property Project and!or with the Phase III Property Project after written request from the Developer, the Agency shall, within fifteen (15) calendar days of the written request or within three (3) calendar business days after the next regular meeting of the Agency, whichever date occurs later, provide to the Developer a written statement setting forth the reasons with respect to the Agency's refusal or failure to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain a Certificate of Completion in connection with the Phase I Property Project, with the Phase II Property Project and!or with the Phase III Property Project. If the reason for such refusal is confmed to the immediate unavailability of specific items or 4815-3938-7650.2815-3938-7650.2 so P:\Agendas\Agenda Attachments\Asenda Attachmentsl.Agenda Attaclunents\Agrmts-Amend 2008\11-17.()8 Maya Cinema - Disposition and Development Agreement - FINAL,doc materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its Certificate of Completion in connection with the Phase I Property Project, with the Phase II Property Project and!or with the Phase III Property Project upon the posting of a bond or irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and obtained by the Developer in an amount representing a fair value of the work not yet completed as reasonably determined by the Agency. If the Agency shall have failed to provide such written statement within the foregoing period, the Developer shall be deemed conclusively and without further action of the Agency to have satisfied the requirements of this Agreement with respect to the Phase I Property, to the Phase II Property and!or to the Phase III Property as if a Certificate of Completion had been issued therefore. (e) A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to fmance the improvements described herein, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants or conditions subsequent contained in the Agency Grant Deed. Section 3.08. Right to Purchase the Phase II Prooertv and!or the Phase III Prooertv. Upon prior written notice from the Developer to the Agency, the Developer may exercise the right to purchase the Phase II Property at the Phase II Property Purchase Price and!or the Phase III Property at the Phase III Property Purchase Price, subject to the terms, covenants and conditions of this Agreement provided: (i) The Developer is not in default, which remains uncured or which Developer has failed to commence to cure, under this Agreement, under any Financing, under the Financing Loan Documents, under the Construction Financing, under the Permanent Financing and!under the Security Financing Interest and (ii) the right is exercised by the Developer within Three Hundred and Sixty Five (365) Days from the Effective Date of this Agreement and the applicable Close of Escrow for the Phase II Property and the Phase II Property shall occur with the time periods required by this Agreement. The right to purchase the Phase II Property and!or the Phase III Property is personal to the Developer and may not be sold, transferred, conveyed, assigned, encumbered or pledged by the Developer to any person or entity without the prior written consent of the Agency which consent shall not be unreasonably withheld, delayed or conditioned. ARTICLE IV USE OF THE SITE Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors and assigns, that upon completion of the development of the Phase I Property Project, of the Phase II Property Project and!or of the Phase III Property Project that the portion of the Phase I Property, the Phase II Property and!or the Phase III Property that is to be improved as a commercial, restaurant, office and!or retail center or as may otherwise be permitted by the applicable City zoning and 4815-3938-7650.2815-3938-7650.2 51 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc City Development Code requirements and shall be used solely for such purposes. The covenant of this Section 4.01 (a) shall run with the land as set forth in the Agency Grant Deed. (b) The Developer further covenants and agrees for itself, its successors and assigns, that the Phase I Property, the Phase II Property and!or the Phase III Property shall be improved and developed in accordance with this Agreement, the Scope of Development and!or the Schedule of Performance. The Developer covenants to develop the Phase I Property, the Phase II Property and the Phase III Property in conformity with all applicable Laws. The covenants of this Section 4.01(b) shall also run with the land until the date on which: (i) the Certificate of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of the Agency Grant Deed in connection with the Phase I Property, (ii) the Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of recordation of the Agency Grant Deed in connection with the Phase II Property, or (iii) the Certificate of Completion in connection with the Phase III Property is recorded or the fifth (5th) anniversary date of recordation of the Agency Grant Deed in connection with the Phase III Property. (c) Neither the Developer, nor its assigns or successors, shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Phase I Property, or any portion thereof, the Phase II Property, or any portion thereof, and!or the Phase III Property, or any portion thereof, to any entity or party, or for any use of the Phase I Property, the Phase II Property and!or the Phase III Property that is partially or wholly exempt from the payment of real property taxes pertinent to the Phase I Property, or any portion thereof, to the Phase II Property, or any portion thereof, and!or to the Phase III Property, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. The covenant of this Section 4.01(c) shall run with the land for the term as set forth in the Agency Grant Deed in connection with the Phase I Property, the Phase II Property and!or the Phase III Property. Section 4.02. Maintenance of the Prooertv. The Developer covenants and agrees for itself, its successors and assigns, to maintain: (i) the Phase I Property consistent with the maintenance level of a first class multiple screen movie theater or as shall be reasonably required by other commercial, restaurant, office and!or retail centers in the metropolitan areas of the City, (ii) the Phase II Property and!or the Phase III Property in a fust class condition as commercial, restaurant, office and!or retail center. The Developer covenants and agrees that for itself, its successors and assigns, to maintain the Phase I Property, the Phase II Property and!or the Phase III Property in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with the Agreement, the Scope of Development and!or the Schedule of Performance. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Phase I Property, the Phase II Property and!or the Phase III Property and undertake, such maintenance activities. In such event, the Developer (or such successor as may then own the Phase I Property, the Phase II Property and!or the Phase III Property) shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant Deed for the Phase I Property, the Phase II Property 4815-3938-7650.2815-3938-7650.2 52 P:\Agendas\Agenda Att:achm.ents\Agenda Attachments\Agenda Attacluncnts\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Asreement - FINAL.doc and!or for the Phase III Property. The covenant of this Section 4.02 shall run with the land for the term as set forth in the Agency Grant Deed for the Phase I Property, for the Phase II Property and!or for the term as set forth in the Agency Grant Deed for the Phase III Property. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Phase I Property, or any part thereof, the Phase II Property, or any part thereof, and to the Phase III Property, or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Phase I Property, or any part thereof, the Phase II Property, or any part thereof, and the Phase III Property, or any part thereof; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the Phase I Property, or any part thereof, the Phase II Property, or any part thereof, and the Phase III Property, or any part thereof. The covenant of this Section 4.03 shall run with the land for the term as set forth in the Agency Grant Deed for the Phase I Property, for the Phase II Property and for the term as set forth in the Agency Grant Deed for the Phase III Property. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Phase I Property, or any part thereof, to the Phase II Property, or any part thereof, and to the Phase III Property, or any part thereof, that the Developer, such successors and such assigns, shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Phase I Property, or any part thereof, the Phase II Property, or any part thereof, and the Phase III Property, or any part thereof, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That 4815-3938-7650.2815-3938-7650.2 53 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Att.achmentll\Agrmts-Amend 2008\11-17-03 Maya Cinema - Disposition and Development Agreement - FINAL.doc there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." (3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 4.04 shall run with the land in perpetuity. ARTICLE V DEFAULTS, REMEDIES AND TERMINATION Section 5.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property, and subject to the extensions of time set forth in Section 6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. Further, a default under this Agreement shall occur whenever: (i) the Developer fails to comply with the terms, covenants and conditions of the Financing, the Financing Loan Documents, the Construction Financing, the Permanent Financing and!or under any Security Financing Interest, or (ii) any representation or warranty made by the Developer or by the Agency under this Agreement or by the Developer under the Financing, the Financing Loan Documents, the Construction Financing, the Permanent 4815-3938-7650.2815-3938-7650.2 54 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attacbments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL,doc Financing and!or under the Security Financing Interest is or becomes false and true; provided, however, that if Developer commences to cure, correct or remedy a curable default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in any Financing, the Financing Loan Documents, the Construction Financing, the Permanent Financing and!or under the Security Financing Interest then within said time limits), Developer shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. (e) Any failure or refusal by the Developer to repay the 108 HUD Loan or the HUD Loan Assumption at the end of the seven-year term of the 108 HUD Loan or at the end of seven (7) years from and after the HUD Loan Assumption shall be a default under this Agreement, without any further notice by the Agency to the Developer and the Developer will: (i) deliver a deed in lieu of foreclosure to the Agency, (ii) immediately terminate its occupancy and possession of the Phase I Property and!or of the Phase I Property Improvements, (iii) transfer to the Agency by bill of sale all equipment and fixtures that are subject to the lien of the 108 HUD Loan or the HUD Loan Assumption, and (iv) quit claim to the Agency all right, title and interest of the Developer in the undeveloped pads located at the Phase I Property. After a default by the Developer, the Developer and the Agency may consider a lease for the Phase I Property and for the Phase I Property Improvements after the end of either of the above referenced seven-year terms of the 108 HUD Loan or the HUD Loan Assumption but neither the Developer nor the Agency will be obligated to lease, occupy or operate the Phase I Property and!or the Phase I Property Improvements unless mutually agreed upon in the sole and absolute discretion of the Agency and of the Developer. (f) Upon a default by the Developer of the seven-year refmancing and failure by the Developer to repay the 108 HUD Loan or the HUD Loan Assumption, as applicable, this Agreement will be terminated immediately upon notice from the Agency to the Developer. The Developer shall remain liable to the Agency for all reasonable attorneys' fees, court costs and all other fees, costs and expenses required to defend any actions of the Developer or any other challenges to the termination by the Agency of this Agreement. (g) If the Developer has constructed buildings on one (1) or more of the pads located at the Phase II Property and!or at the Phase III Property and a certificate of occupancy was issued prior to a termination of this Agreement, the Developer shall retain title to such pads at the Phase II Property and!or on the Phase III Property for which a certificate of occupancy was issued prior 4815-3938-7650.2815-3938-7650.2 55 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Anaclunents\Agrmts-Amcnd 2008\1 ).17-08 Maya CinellUl - Disposition and Development Apeement. FINAL. doc to any termination of this Agreement. If the Developer commences construction on one (1) or more of the pads at the Phase II Property and!or at the Phase III Property prior to the termination but has not received a certificate of occupancy by the termination date of this Agreement, the Agency shall have the right to repurchase the pads at the Phase II Property and!or at the Phase III Property at zero land cost. The Agency shall additionally assume any construction loan in connection with such pads located at the Phase II Property and!or at the Phase III Property and the Agency shall have no further obligation to make any additional payments to the Developer for the Developer's invested equity in such Phase II Property Project and!or in such Phase III Property Proj ect. (b) A default shall be deemed to have occurred in the event the Developer has not completed the Phase I Improvements or the Phase IA Improvements on or before July 1, 2009,except as otherwise provided pursuant to Section 3.01(s), and has not received certificates of occupancy or other final City approvals for the completion of such intended construction by said date in the event neither a new 108 HUD Loan or a HUD Loan Assumption has been undertaken to finance in whole or in part the costs of the construction for the Phase I Improvements and the Phase IA Improvements. The Agency shall be entitled at its option to terminate this Agreement and!or pursue all other rights and remedies as set forth in this Agreement. (i) A default shall be deemed to have occurred for failure of the Developer to comply with the provisions of Section 2.03(g), regardless of whether the Phase I Improvements and!or the Phase IA Improvements have been completed by said date, in the event a Close of Escrow for the Phase I Property has not occurred on or before July 1,2009, upon notice of default being delivered after said date by the Agency to the Developer without any right to cure such default by the Developer after July 1, 2009. The Agency shall be entitled at its option to terminate this Agreement and!or pursue all other rights and remedies as set forth in this Agreement. Section 5.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Interim Executive Director or the Chair of the Agency, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on Moctesuma 4815-3938-7650.2815-3938-7650.2 56 P:\Agendas\Agenda Attaehmems\Apida Attachments\Agenda Attachments\Agrmts-Amend 2003\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc Esparza at the address set forth in Section 1.03(b) (or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property, the rights and remedies of the parties as set forth in this Article V following the Close of Escrow for the Phase I Property, the Phase II Property and!or the Phase III Property are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damages: Soecific Performance. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of the notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for default) after the service of written notice of such a default, then the non-defaulting party shall be entitled to maintain an action for damages or an action for specific performance in addition to such other remedies as it may have at law or in equity; provided, however, that in the event of a breach by the Developer of its obligations under Article II of this Agreement prior to the Close of Escrow for either the Phase I Property, the Phase II Property and!or the Phase III Property, the Agency shall not be entitled to bring an action against the Developer for specific performance and shall be entitled only to the liquidated damages set forth in Section 2.23 hereof. Section 5.05. RESERVED. Section 5.06. Agencv Rights of Termination Following Close of Escrow. (a) Unless otherwise permitted pursuant to the terms of this Agreement and subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon ninety (90) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer in breach of this Agreement assigns or attempts to assign this Agreement, or any right therein, or attempts to make any total or partial sale, lease or leaseback, transfer or conveyance of the Property either the Phase I Property, the Phase II Property and!or the Phase III Property and the Developer does not correct such violation within sixty (60) calendar days from the date of receipt of such notice. (b) Subject to written notice of default, which shall specify the Developer's default and the action required to commence cure of same and upon ninety (90) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer: (i) does not within the time 4815 -3938-7650 .2815-3938-7650.2 57 P:\Agendas~ Attaclunents\Agenda Attachmenu\Agenda Attaehments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc limits set forth in this Agreement or as specifically provided in the Schedule of Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise, submit development plans, construction drawings and related documents acceptable to the Planning Department and Building Division of the City for plan check purposes and in order to obtain building permits for the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project together with applicable fees therefore, all prepared to the minimum acceptable standards as required by the Planning Department and Building Division of the City for commencement of formal review of such documents and as required by this Agreement, or (ii) does not carry out its other responsibilities under this Agreement or in accordance with any modification or variance, precise plan, design review and other enviromnental or governmental approvals and such default is not cured or the Developer does not commence and diligently and continuously proceed with such cure within sixty (60) calendar days after the date of receipt of written demand therefore from the Agency. (c) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon ninety (90) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if upon satisfaction of all conditions precedent and concurrent therefore under this Agreement, the Developer does not take title to either the Phase I Property, the Phase II Property and!or the Phase III Property under tender of conveyance by the Agency, and such breach is not cured within sixty (60) calendar days after the date of receipt by the Developer of written demand therefore from the Agency. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices_ Demands and Communications Between the Parties. (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar business days after it is placed in the United States mail as heretofore provided. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows provided copies to other than the Developer shall be informational only and delivery of such informational or courtesy copies shall not be required to perfect delivery of any notices pursuant to this Agreement: 4815-3938-7650.2815-3938-7650.2 58 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17..08 Maya Cinema - Disposition and Development Agreement - FINAL.doc To the Developer: Maya Cinemas North America, Inc. Attn.: Moctesuma Esparza, Chief Executive Officer 1201 West 5111 Street, Suite T-2l0 Los Angeles, California 90017 Telephone: (213) 542-4420 with copy to: Maya Entertaimnent Group, Inc. Attn.: Jose Martinez, Jr., General Counsel 1201 West 5111 Street, Suite T-21O Los Angeles, California 90017 Telephone: (213) 542-4420 To the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn.: Interim Executive Director Telephone: (909) 663-1044 Fax: (909) 888-9413 with copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Attn.: Timothy J. Sabo Telephone: (909)387-1130 Fax: (909)387-1138 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Phase I Property, the Phase II Property and!or the Phase III Property shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. Section 6.04. Nonliability of Agencv Officials and Emolovees. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to 4815 -3938-7650.2815-3938-7650.2 59 P:\Agendas\Agcnda Attaclunents\Agenda Attachments\Agenda Attachments\Aarmts-Arnend 2003\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL.doc the Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delav: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure including, without limitation, events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity. An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided, however, that the party seeking to invoke such force majeure provision has duly given written notice to the other party within ten (10) calendar days of the date that the force majeure event has occurred specifying (i) the date from which the enforced delay shall commence and the actual or the expected final date, as applicable, for which an enforced delay extension of time of performance is then being sought, and (ii) the detailed description of the particular circumstances, events, facts or occurrences which have give rise to the force majeure. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Phase I Property, the Phase II Property and!or the Phase III Property, whichever applies, or to satisfy any other condition of this Agreement relating to the redevelopment of the Phase I Property, of the Phase II Property and!or of the Phase III Property, whichever applies, shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Insoection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the Phase I Property, to the Phase II Property and!or to the Phase III Property, whichever applies, and!or the development thereof as necessary for the Agency, in its reasonable discretion, to enforce its rights under this Agreement; provided, however, the Agency shall not have the right to review the financial records of the Developer. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of the 4815-3938-7650.2815-3938-7650.2 60 P:\Agendas\Agenda Attaclunents\Agenda Anachments\Agcnda Attaehmcms\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Phase I Property, to the Phase II Property and!or to the Phase III Property and!or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Aoorovals. (a) Approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Interim Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any other real estate commissions, brokerage fees or finder fees which may arise from or related to this Agreement. Section 6.09. Indemnification. The Developer agrees to indemnify, defend with legal counsel reasonably acceptable to the Agency, protect and hold the City and the Agency, and their directors, officers, members, managers, consultants, contractors, employees, agents and attorneys, and the successors and assigns of each of them (collectively, the "Agency Parties" which defined term shall also include the Agency), harmless from and against all actions, causes of action, claims, demands, liabilities, damages, judgments, costs, expenses and fees (including, without limitation, reasonable attorneys' fees and court costs), now or hereafter arising from or related to a: (i) any act or omission of the Developer, and!or of any of the Developer's directors, officers, members, managers, consultants, contractors, employees and agents, and the successors and!or assigns of each of them (collectively, the "Developer Parties" which defined term shall also include the Developer), in performing, or failing to perform, its obligations hereunder, (ii) any default by the Developer under this Agreement, subject to any applicable cure period, (iii) any violation by the Developer Parties of any applicable Law, including, without limitation, the violation of any applicable Enviromnental Law, relating to, in connection with, without limitation, the Phase I Property, the Phase II Property and!or the Phase III Property or the maintenance and!or operation of one (1) or more businesses now or hereafter conducted on or at the Property, or any part thereof, (iv) the discharge or presence of, or the threat of discharge or presence of, one (1) or more hazardous substances located at, in, on, above, below, from, and!or about the Phase I Property, the Phase II Property and! or the Phase III Property, or (v) any warranty or representation made in this Agreement that becomes false and untrue. The Agency agrees to indemnify, defend, protect and hold the Developer Parties harmless from and against all damages, judgments, costs, expenses and fees (including, without limitation, reasonable attorneys' fees and court costs) (collectively, the "Developer Party Claims"), now or hereafter, arising from or related to any act or omission of the Agency in performing its obligations hereunder; provided, however, the Agency shall have no liability under this Section 6.09 should one (1) or more of the Developer Party Claims result directly or indirectly from the gross 4815-3938-7650.2815-3938-7650.2 61 P:\Agendas\Agenda Attaclunents\Agenda Atm1hmenb\Agenda AttachmeDts\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc negligence or wrongful conduct of the Developer Parties, or anyone of them. This indemnity provision shall survive the execution, delivery, performance and early termination of this Agreement. Section 6.1 O. Release of the Develooer from Liabilitv. Notwithstanding any provision herein to the contrary, the Developer shall be relieved of any and all liability for the obligations of the Developer hereunder with regard to the Phase I Property Project, the Phase II Property Project and!or the Phase III Property Project when the Certificate of Completion for the Phase I Property Project, the Phase II Property Project and!or for the Phase III Project has been issued by the Agency hereunder with respect thereto, other than any covenants and obligations contained in the grant deed by which the Phase I Property, the Phase II Property and!or the Phase III Property is conveyed to the Developer. Section 6.11. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to Section 5.02 hereof, or is made a party to any action or proceeding brought by the Escrow Holder, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section 5.02 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of this Section. Section 6.12. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. ARTICLE VII ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH AGENCY GRANT DEED; WAIVERS AND AMENDMENTS Section 7.01. Entire Agreement: Counteroarts. (a) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Phase I Property, of the Phase II Property and!or of the Phase III Property and the development thereof. This Agreement cancels and supersedes the following agreements: (i) the Redevelopment Project Study and Exclusive Right to Negotiate Agreement, dated as of October 20, 2008, by and between the Agency and the Developer and (ii) the Temporary License Agreement, dated as of October 20, 2008, by and between the Agency and the Developer. 4815-3938-7650.2815-3938-7650.2 62 P:\Agendas\Ascnda Attaehmcnts\Agcnda Attachments\Agenda Attachments\Agnnts-Amend 2008\11-17-08 Maya Cinema. - Disposition and Development Agreement. FINAL.doc (b) This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. Section 7.02. No Merger; Waivers and Amendments. (a) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the Agency Grant Deed conveying title to the Phase I Property, to the Phase II Property and!or to the Phase III Property and this Agreement shall continue in full force and effect before and after such conveyance. (b) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION Section 8.01. Execution and Recordation. (a) Following its execution by the Developer and prompt delivery thereafter to the Agency, this Agreement shall be subject to the review and approval by the governing board of the Agency in its sole and absolute discretion within forty-five (45) calendar days after the date of signature by the Developer. In the event that the Agency has not approved, executed and delivered this Agreement to the Developer within the foregoing period, then no provision of this Agreement shall be of any force or effect for any purpose. The date of this Agreement shall be the date when this Agreement shall have been approved by the Agency. (b) The Developer and the Agency agree to permit recordation of this Agreement, or the Notice of Agreement, concurrently upon the Close of Escrow for the Phase I Property in the Office of the County Recorder for San Bernardino County. III III III III III III III III 4815 -3938-7 650.2815-3938-7650.2 63 P:\Asendas\Asenda Attachments\Apmda Attacbments\Agenda Attachments\Agnnts-Amend 2008\11.17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /[///TI1MtA, J. [/a&, Agency Counsel DEVELOPER Maya Cinemas North America, Inc., a Delaware corporation Dated: By: Name: Title: [ALL SIGNATIJRES MUST BE NOTARIZED] 4815-3938-7650.2815-3938-7650.2 64 P:\Agendas\Agenda Attacbmentsl.,Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Asreemem . FINAL.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /f//fFlmotAy J. f/aI" Agency Counsel DEVELOPER Maya Cinemas North America, Inc., a Delaware corporation Dated: By: Name: Title: [ALL SIGNATURES MUST BE NOTARIZED] 4815-3938-7650.2815-3938-7650.2 64 P:\AgerIdu\Agenda Attachments\Aplda Attachments\AgeDda Attacbmcnts\Agrmtl-Amend 2008\11.17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doe IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /[//fTf1MtAy $ [/040 Agency Counsel DEVELOPER Maya Cinemas North America, Inc., a Delaware corporation Dated: By: Name: Title: [ALL SIGNATURES MUST BE NOTARIZED] 4815-3938-7650.2815-3938-7650.2 64 P:\Agendu\Asenda Attachments\Agenda Attaclunents\AgeDda Attachments\Agnntt-Amend 2008\11-11.fJ8 Maya Cinema - Disposition and Development Agreement - FINAL. doc EXHIBIT "A-I" LEGAL DESCRIPTION OF PHASE I PROPERTY The land referred to in the Agreement is situated in the County of San Bernardino, State of California, and is described as follows: Parcels 1 of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County And Phase IA to be determined 4815-3938-7650.2815-3938-7650.2 P:\Agcndas\Agenda Attacbments\Agenda Attachments\Agcnda Attaclunents\Agrmts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doe EXHIBIT "A-2" LEGAL DESCRIPTION OF PHASE IA-I PROPERTY To Be Provided when available 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agcnda Attachments\Apnda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-174J8 Maya Cinema. Disposition and Development Agreement - FINAL.doc EXHIBIT A-3 LEGAL DESCRIPTION OF PHASE II PROPERTY To Be Provided when available 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attadunents\Agenda A1tachments\Agenda Attachments\Agrmts-Amend 2008\11.17-08 Maya Cinema - Disposition and Development Agrccmcnt - FINAL.doc EXHIBIT A-4 LEGAL DESCRIPTION OF PHASE III PROPERTY To Be Provided when available 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda AttachmeDts\Apnda Attachments\Agenda Attachmenlll\Agrmts-Amend 2008\11-17-03 Maya Cinema. Disposition and Development Agreement. FINAL.doc EXlllBIT "B" BUDGET See Schedule of Performance "EXHIBIT C" for Details PHASE I Fixtures Fittings and Equipment Building Repairs and Code Compliance Upgrades (To include Lobby extension and I-Max equipment) Soft Costs Total Phase I PHASE I A Public gathering place and!or fountain TOTAL PHASE I AND PHASE IA PHASE II To be determined at time of construction. PHASE III To be determined at time of construction. $ 2,172,650 $1,264,500 $3,795,000 $ 895,000 $8,127,150 $1,200,000 $9.327.150 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaclunents\Agend1 Artachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement. FINAL,doc EXHIBIT "C" SCOPE OF DEVELOPMENT PHASE I FF&E IMPROVEMENTS: . Projection and Sound Equipment . Carpet - Lobby & Auditoriums . Seats - 4,158 Chairs . Lobby Tile and Base . Wall Coverings . Auditorium Wall Carpet . Masking-Screens . Lighting . Concession Equipment . Box Office System . Poster Cases . Aisle Lighting . Acoustical Wall Panels . Security Cameras . Flat Screens . Menu Boards BUILDING REPAIRS & CODE COMPLIANCE: . HV AC Repair . Roof Repair . Concession Counters Repair . Restroom Stalls & Upgrades . Misc. Tile Repairs . Paint Exterior and Interior . Step Stairways Correction to Comply with Code ADA Correction UPGRADES: . New Concession Stand in Front of the Theater . Demo Concession & New Game Room . New Blade Signs . Lobby Extension . Retrofit Screen #9 to IMAX Configuration . 3D Digital Projectors . Digital Projector . IMAX Licenses and Projector 4815-3938-76502815-3938-7650.2 P:\Agendas\Agenda Attachments\Agenda Artachments\Agenda Attachmcnts\Agnnts-Amend 2003\11-17-08 Maya Cinema - Di8~ition and Development Agreement - FINAL. doc EXHIBIT "C" (Continued) PHASE IA . Construction of a public gathering place to the front of the theatre which could consist of a water feature and or public art and or amphitheatre with the intention of creating a signature gathering place. PHASE II AND PHASE III Improvements to the Vacant Parcels Adjacent to the 20-plex Theater Structure . Construction of a two story retail/restaurant building of approximately 11,000 square foot adjacent to the California Theatre with potential linkage into the California Theatre itself from the second story so incorporating the California Theatre into the restaurant/retail/entertaimnent area from its current south facing aspect. . Construction of a single story retail/restaurant pad of approximately 12,000 square foot on the southwest corner of 4th Street and "E" Street. . Construction of a retail/restaurant pad of approximately 7,500 square foot adjacent to the main theater building to the south on "E" Street. . Development of the Common Area linking 4th Street, "E" Street and the parking lot to the west with hardscape, landscaping and a common area amphitheater situated at the convergence of the pathways. . Installation of a water feature at the corner of 4th Street and "E" Street. 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Apnda Attachments\Agenda Attachment!\Agenda Attaehmems\Agrmts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL.doc EXHIBIT "D" SCHEDULE OF PERFORMANCE Three (3) months from date Finance Commitment is issued: (i) Relocation of all concession booths, (ii) Provide access to the Phase I Property in compliance with the Americans With Disabilities Act (the "ADA"), (iii) Modifications to the risers in each theater to assure conformity, (iv) Replacement of all seating, (v) Installation of digital project and sound systems. Six (6) months from date Finance Commitment is issued: (i) Remodeling and re-branding of the theater, (ii) Establishment of the I-Max theater, (iii) Expansion of the entry area into a public access lobby, Nine (9) months from date Finance Commitment is issued: (i) Removal and relocation of the ticket booth, (ii) Installation of water feature (Phase lA) 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachmcnts\Agenda Attaclunents\Agenda Attachments\Agrmts-Amend 2008\11-17..(18 Maya Cinema. Disposition and Development Agreement - FINAL.doe EXHIBIT "E" AGENCY GRANT DEED 4815-3938-7650.2815-3938-7650.2 P:\Agendu\Agcnda Attadunents\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11.17-08 Maya Cinema. DillpOlition and Development Agreement - FINAL.doc RECORDING REQUESTED BY AND AFTER RECORDING MAIL TO: Maya Cinemas North America, Inc. 1201 West 5th Street, Suite T-21O Los Angeles, California 90017 Attn.: Exempt from Recording Fee pursuant to Gov't Code Section 27383 ) ) ) ) ) ) ) ) ) ) (Space Above for Recorder's Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic of the State of California (the "Grantor") hereby grants to MAYA CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Grantee"), all of its right, title and interest in and to the real property legally described in Exhibit "A" and by this reference incorporated herein (the "Property"). 1. The Property is conveyed subject to that certain 2008 Disposition and Development Agreement, dated as of , 2008 (the "Agreement"), by and between the Grantor, as seller, and the Grantee, as buyer. The provisions of the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set forth at length herein. Capitalized terms shall have the meaning provided for in the Agreement unless otherwise specifically defmed in this Agency Grant Deed. 2. The Grantee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property. All deeds, leases or contracts made relative to the Property shall contain the following nondiscrimination clauses: (a) In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaehments\Agenda Attachmenh:\Agenda Attachments\Agrmts-Amend 2008\11-17.08 Maya Cinema. Disposition and Development Agreement - FINAL.doc practice or practices of discrimination or segregation with reference to the selection, locations, number, use or occupancy oftenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agency Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the Agreement; provided, however, that any successor of Grantee to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 4. The covenants contained in this Agency Grant Deed against discrimination and segregation shall remain in effect in perpetuity. S. The Grantor covenants and agrees for itself, its successors and assigns, that upon completion of the development of the Phase I Property Project, the Phase II Property Project and!or of the Phase III Property Project that the portion of the Phase I Property, of the Phase II Property and!or of the Phase 1II Property that is to be improved as a commercial, restaurant, office and!or retail center shall be used solely for such purposes or as may otherwise be permitted by the applicable City zoning and City Development Code requirements. The covenants of this Section 5 shall also run with the land until the date on which: (i) the Certificate of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase II Property and!or (iii) the Certificate of Completion in connection with the Phase 1II Property is 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachmenu\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement -FINAL_doc recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase III Property. 6. The Grantor further covenants and agrees for itself, its successors and assigns, that the Phase I Property, the Phase II Property and!or the Phase III Property shall be improved and developed in accordance with the Agreement, the Scope of Development and the Schedule of Performance. The Grantor covenants to develop the Phase I Property, the Phase II Property and!or the Phase III Property in conformity with all applicable Laws. The covenants of this Section 6 shall also run with the land until the date on which: (i) the Certificate of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase II Property and!or (iii) the Certificate of Completion in connection with the Phase III Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase III Property. 7. Neither the Grantor, nor its assigns or successors, shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Phase I Property, or any portion thereof, the Phase II Property, or any portion thereof, or the Phase III Property, or any portion thereof, to any entity or party, or for any use of the Phase I Property, or any portion thereof, of the Phase II Property, or any portion thereof, and!or for of the Phase III Property, or any portion thereof, that is partially or wholly exempt from the payment of real property taxes pertinent to the Phase I Property, or any portion thereof, the Phase II Property, or any portion thereof, or to the Phase III Property, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. The covenants of this Section 7 shall also run with the land until the date on which: (i) the Certificate of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase I Property, or (ii) the Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase II Property and!or (iii) the Certificate of Completion in connection with the Phase III Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase III Property . 8. The Grantor covenants and agrees for itself, its successors and assigns, to maintain the Phase I Property consistent with the maintenance level of a first class multiple screen movie theater or as shall be reasonably required by other commercial or retail centers in the metropolitan areas of the City, and to maintain the Phase II Property and!or the Phase III Property as a first class commercial, restaurant, office and!or retail center. The Grantor covenants and agrees that for itself, its successors and assigns, to maintain the Phase I Property, the Phase II Property and!or the Phase III Property in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with this Agreement, the Scope of Development and the Schedule of Performance. In the event the Grantor, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Phase I Property, the Phase II Property and! or the Phase III Property and undertake, such 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc maintenance activities. In such event, the Grantor (or such successor as may then own the Phase I Property, the Phase II Property and!or the Phase III Property shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant Deed for the Phase I Property, the Phase II Property and!or for the Phase III Property. The covenants of this Section 8 shall also run with the land until the date on which: (i) the Certificate of Completion in connection with the Phase I Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase I Property, (ii) the Certificate of Completion in connection with the Phase II Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase II Property and!or (iii) the Certificate of Completion in connection with the Phase III Property is recorded or the fifth (5th) anniversary date of recordation of this Agency Grant Deed in connection with the Phase III Property. 9. The covenants contained in this Agency Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors. END OF PAGE 4815-3938-7650.2815-3938-7650.2 P:\Agendas\AgeDda Attachments\Agenda Attaclunent5\Agenda Attachments\Asnnts-Amcnd 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FINAL,doc IN WITNESS WHEREOF, the Grantor and the Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of , 2008. GRANTOR: Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /rI/fTl1III1il, $- rlJo Agency Counsel 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Asenda Attacbmellt8\Agenda Attachments\Agenda Attachments\Asfmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FlNAL.doc IN WITNESS WHEREOF, the Grantor and the Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of ,2008. GRANTOR: Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /fI/ffinwlly $. flo&, Agency Counsel 4815-3938-76502815-3938-7650.2 P:\Agendu\Agenda Attachments\Age Attachments\Agenda Attachmcnts\Agnnts-Amend 2008\11-17..(18 Maya Cinema. Dilp05iti.on and Development Agreement. fn\I'AL.doc IN WITNESS WHEREOF, the Grantor and the Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of , 2008. GRANTOR: Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /[//fTl11wfly J. [/aJo Agency Counsel 4815-3938-7650.2815-3938-7650.2 P:\Ageodu\AseDda Attacbments\ApD Attachments\Asenda Attachments\AgrJDts-Amend 2008\11-17-01 Maya Cinema - DiJposition and Development Agreement - FINAL.doc ACCEPTANCE OF AGENCY GRANT DEED THE PROVISIONS OF THIS AGENCY GRANT DEED ARE HEREBY APPROVED AND ACCEPTED. GRANTEE: Maya Cinemas North America, Inc., a Delaware corporation By: Name: Title: NOTARY ACKNOWLEDGMENT State of California ) ) SS. County of ) On before me, a Notary Public, personally appeared , who 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(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public Place Notary Seal Above 4815-3938-7650.2815-3938-7650.2 P:\Agenda3\Agenda Attachmems\Asenda Attaclunents\Asenda Attacbments\Agnnq..Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc NOTARY ACKNOWLEDGMENT State of California County of ) ) SS. ) On before me, a Notary Public, personally appeared , who 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 hislher/their signature( s) on the instrument the person( s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public Place Notary Seal Above 4815-3938-7650.2815-3938-7650.2 P:\AgeDdas\AseDda A1tachmcnts\Agenda Attachmcnts\Agenda Attachments\Agrmts-Amend 2008\11-17-f>8 Maya Cinema - DiapositioD and Development Agreement - FINAL.doc EXHIBIT "A" Legal Description for Agency Grant Deed LEGAL DESCRIPTION OF PHASE I PROPERTY The land referred to in the Agreement is situated in the County of San Bernardino, State of California, and is described as foUows: Parcels 1 of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County And Phase IA to be determined 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachm.ents\Agenda Attachmenta\Agenda Attaclunents\A&fmu-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Asreemem - FINAL.doe EXHIBIT "F" CERTIFICATE OF COMPLETION 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachments\Apnd& Attachments\Agcnda Attaclnnents\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL_doc CERTIFICATE OF COMPLETION WHEN RECORDED, MAIL TO: (Space Above Line For Use By Recorder) CERTIFICATE OF COMPLETION I , the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") hereby certify as follows: Section 1. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated ,200-, by and between the Agency and Maya Cinemas North America, Inc., a Delaware corporation (the "Developer"), on Assessor's Parcel Number and Assessor's Parcel Number (the "Property") more fully described in Exhibit "A" attached hereto and incorporated herein by this reference has been completed in accordance with the provisions of said Agreement. A Notice of Agreement has been recorded with the County Recorder's Office for the County of San Bernardino, State of California, on , as Instrument Number Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns to construct and develop the Project (as defined in the Agreement), of the following items: r excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the Project and its use and occupancy of the Property, whether or not said improvements are on the Property or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Property and the dates for the beginning and completion of construction of improvements thereon under the Agreement. The Certificate of Completion shall not affect the rights of the Agency to enforce any covenant in the Agency Grant Deed pursuant to which the Property was conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency of the City of San Bernardino located at 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attachments\Asenda Attacbments\Agenda Attachmema\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL,doc Section 3. The Property to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. DATED AND ISSUED this day of ,200_. Redevelopment Agency of the City of San Bernardino By: Emil A. Marzullo, Interim Executive Director NOTARY ACKNOWLEDGMENT State of California County of ) ) SS. ) On before me, a Notary Public, personally appeared , who 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 hislher/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public Place Notary Seal Above 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaclunents\Agenda Attachments\Agcnda Attac:hments\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL,doc EXHIBIT "A" Legal Description of the Property for Certificate of Completion LEGAL DESCRIPTION OF PHASE I PROPERTY The land referred to in the Agreement is situated in the County of San Bernardino, State of California, and is described as foUows: Parcels 1 of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County And Phase IA to be determined 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaclunents\Agenda Attachments\Agenda Attachments\Agrmts-Amcnd 2008\11.17-08 Maya Cinema - DUposition and Development Agreement. FINAL.doc EXHIBIT "G" NOTICE OF AGREEMENT 4815-3938-7650.2815-3938-7650.2 P:~\Agenda Attachmenta\Agenda Attachmcnts\Agenda Attachmcnts\Agrmts-Amend 2008\11.17-08 Maya Cinema - Disposition and Development Agreement. FlNAL.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Exempt from Recording Fee per Government Code Section 27383 (Space above for Recorder's Use) NOTICE OF AGREEMENT The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and MAYA CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Developer") are parties to that certain 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement"), dated as of , --' 200_, for reference purposes only, by and between the Agency and the Developer. Said Agreement contains obligations, covenants and restrictions affecting certain real property (the "Property") which is legally described on Exhibit "A" attached hereto and incorporated herein by this reference. The Agreement is a public record of the Agency and is available for inspection and copying at the Agency's offices located at 201 North "E" Street, Suite 301, San Bernardino, California. Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /fI/fTlmotAy $- flJo Agency Counsel 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaehments\Agenda Attacbmcnts\Agenda Attaclunents\Agrmts-Amend 2llO8\ll.17"()8 Maya Cinema - Disposition and Development Agreement. FINAL.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Exempt from Recording Fee per Government Code Section 27383 (Space above for Recorder's Use) NOTICE OF AGREEMENT The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and MAYA CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Developer") are parties to that certain 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement"), dated as of , --' 200_, for reference purposes only, by and between the Agency and the Developer. Said Agreement contains obligations, covenants and restrictions affecting certain real property (the "Property") which is legally described on Exhibit "A" attached hereto and incorporated herein by this reference. The Agreement is a public record of the Agency and is available for inspection and copying at the Agency's offices located at 201 North "E" Street, Suite 301, San Bernardino, California. Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: /fI/fFlmotAy $- flaJo Agency Counsel 4815-3938-7650.2815-3938-7650.2 P:\ApDdas\Agenda Attachments\Agenda Attacbments\Agenda Attachments\Agnnts.Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement. FDiAL.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Exempt from Recording Fee per Government Code Section 27383 (Space above for Recorder's Use) NOTICE OF AGREEMENT The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and MAYA CINEMAS NORTH AMERICA, INC., a Delaware corporation (the "Developer") are parties to that certain 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement"), dated as of , -' 200-, for reference purposes only, by and between the Agency and the Developer. Said Agreement contains obligations, covenants and restrictions affecting certain real property (the "Property") which is legally described on Exhibit "A" attached hereto and incorporated herein by this reference. The Agreement is a public record of the Agency and is available for inspection and copying at the Agency's offices located at 201 North "E" Street, Suite 301, San Bernardino, California. Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: I [fl fFlnuJtAy J. [fa&, Agency Counsel 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda A1tacluncnb\Agcnda Attacbments\Asenda AttachmcutB\Agrmts-Amend 2008\11-17-08 Maya Cinema. Disposition and Development Agreement - FINAL.doc NOTARY ACKNOWLEDGMENT State of California County of ) ) SS. ) On before me, a Notary Public, personally appeared , who 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 hislher/their authorized capacity(ies), and that by hislher/their signature( s) on the instrument the person( s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public Place Notary Seal Above 4815-3938-7650.2815-3938-7650.2 P:\Agendas\Agenda Attaclunents\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement _ FINAL.doc EXlDBIT "A" Legal Description of Property LEGAL DESCRIPTION OF PHASE I PROPERTY The land referred to in the Agreement is situated in the County of San Bernardino, State of California, and is described as foUows: Parcels 1 of Parcel Map No. 15038, in the County of San Bernardino, State of California, as per plat recorded in book 186 of parcel maps, Page(s) 14 and 15, records of said County And Phase IA to be determined 4815-3938-7650.2815-3938-7650.2 P:\Agendu\Agenda Attachments\Agenda Attachments\Agenda Attachmcnts\Agnnts-Amend 2008\11-17-08 Maya Cinema - Disposition and Development Agreement - FINAL.doc