HomeMy WebLinkAboutCDC/2008-47
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RESOLUTION NO. CDC/2008-47
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
10 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 underutiIized land; and
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WHEREAS, the Co=unity Development Commission of the City of San Bernardino (the
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"Commission") is the governing board of the Agency; and
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WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
and charter city, duIy organized and existing pursuant to the provisions of the Constitution of the
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State of California; and
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19 WHEREAS, the Agency owns certain real property consisting of a 20 screen multi-plex
20 Cinema Building, (the "Phase I Property") on Exhibit "A" as attached, as well as the Phase II
21 Property and Phase III Property as per Exhibit "A" attached; and
22 WHEREAS, the Phase I Property is located at the northwest corner of 4th Street and "E"
23 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 Phase 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
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CDC/2008-47
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
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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
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include an I-Max screen and digital projection equipment as identified in the Agreement; and
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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 known 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 III 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 of the Agreement; and
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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
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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,
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CDC/2008-47
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 21080 of the Public Resources
3 Code, CEQA Statutes, and Section 15061(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
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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
8 Developer as set forth in the Agreement.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
Section 1.
On November 17, 2008, 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, 2008 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.
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Section 2,
The Commission hereby receives and approves the Report and the other
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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.
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
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the Phase II Property and the Phase III Property to the Developer in accordance with the
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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
screen muiti-plex cinema building which is determined at its highest and best use in accordance
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CDC/2008-47
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 $715,000 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.
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CDC/2008-47
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
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Development Commission of the City of San Bernardino at a i oint regular
meeting
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thereof, held on the 15th day of December
10 Commission Members:
11 ESTRADA
12 BAXTER
13 BRINKER
14 DEM{y VACANT
15 KELLEY
16 JOHNSON
17 MC CAMMACK
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20 The foregoing Resolution is hereby approved this Itf'II day of December
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25 Approved as to Form:
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27 By: ~~
Agency Coun I
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, 2008, by the following vote to wit:
Aves
Navs
Abstain
Absent
-X--
X
--X....-
X
X
X
7~-
Secretary
,2008.
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2008
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
MAYA CINEMAS NORTH AMERICA, INC.
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 1.05.
Section 1.06.
ARTICLE II
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 2.1 O.
Section 2. I I.
Section 2.12.
Section 2.13.
Section 2.14_
Section 2.15.
Section 2.16.
Section 2.17.
Section 2. I 8.
Section 2.19.
Section 2.20.
Section 2.2 I.
Section 2.22.
Section 2.23.
Section 2.24.
Section 2.25.
TABLE OF CONTENTS
Page
Purpose of Agreement....................................................................................... 1
The Project.................... ....... ............................................................................. 1
Parties to the Agreement................._................................................................. I
Defined Tenns .......................... ........ ................................................. ...,........... 2
Restrictions Against Change in Ownership, Management and Control of the
Developer and Assignment of Agreement........................................................ 9
Benefit to Project Area......,....... .............................. .................'.......,................ 9
DISPOSITION OF THE PROPERTy.............................................................. 9
Purchase and Sale of the Property.................................................................... 9
Phase I Property Deposit, the Phase II Property Deposit and the Phase III
Property Deposit .............. ..........._.. .......... ................ ........................... ............ 10
Opening and Closing of Escrow ...................._................................_............... 12
Escrow Instructions........ ................................................................................ 14
Conveyance of TitIe to the Phase I Property, to the Phase II Property and to
the Phase III Property...................................................................................... 14
Additional Closing Obligations of the Agency............................................... 15
Closing Obligations of the Developer............................................................. 16
Inspections and Review .................................................................................. 17
Due Diligence Investigation of the Phase I Property, the Phase II Property and
the Phase III Property By the Developer ........................................................ 19
Due Diligence Certificate ............................................................................... 20
Books and Records .........................................'............................................... 21
Condition of the Property and the Developer's Release................................. 21
Review and Approval of Condition of TitIe by the Developer....................... 23
Survey. .............. ... ......._........................................,.. ...... .................................. 23
Extension of Due Diligence Period..................................._............................. 24
Developer's Conditions Precedent to Close Escrow for the Phase I Property,
for the Phase II Property or the Phase III Property......................................... 24
Agency's Conditions Precedent to Close Escrow For the Phase I Property, for
the Phase II Property and for the Phase III Property ....._................................ 26
Distribution of Documents to the Developer .................................................. 28
Satisfaction of Conditions.. .................................., ............._. ........................... 28
RESERVED .................................................................................................... 28
Prorations, Closing Costs, Possession ............................................................ 28
RESERVED ......................,............................................................................. 30
Breach by the Developer of Article II Liquidated Damages Payable by the
Developer to the Agency ................................................................................ 30
Representations and Warranties........ ........................................ .............. ........ 30
Damage, Destruction and Condemnation .......................................................35
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ARTICLE III
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
ARTICLE IV
Section 4.01.
Section 4.02_
Section 4.03.
Section 4.04.
ARTICLE V
Section 5.01.
Section 5.02.
Section 5.03.
Section 5.04.
Section 5.05.
Section 5.06.
ARTICLE VI
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.1 I.
Section 6. I 2.
DEVELOPMENT OF THE PROJECT .......................................................... 35
Development of the Project by Developer...................................................... 35
RESERVED ....................................................................................................43
Taxes and Assessments ................................................................................... 43
Change in Ownership, Management and Control of the Developer--
Assignment and Transfer ................................................................................ 43
Security Financing; Right of Holders ............................................................. 45
Right of the Agency to Satisfy Other Liens on the Property after Conveyance
of Title................................................................................. ............................ 5 I
Certificate of Completion ............................................................................... 51
Right to Purchase the Phase II Property and/or the Phase III Property.......... 53
USE OF THE SITE......................................................................................... 53
Uses.............. ............... .................................................................................... 53
Maintenance of the Property ........................................................................... 54
Obligation to Refrain from Discrimination..................................................... 54
Form of Nondiscrimination and Nonsegregation Clauses .............................. 55
DEFAULTS, REMEDIES AND TERMINATION........................................ 56
Defaults - General ...........................................................................................56
Legal Actions ....................... ........................................................................... 58
Rights and Rernedies are Cumulative............................................................. 59
Damages; Specific Performance ..................................................................... 59
RESERVED .................................................................................................... 59
Agency Rights of Termination Following Close of Escrow........................... 59
GENERAL PROVISIONS ............................................................................. 60
Notices, Demands and Communications Between the Parties ....................... 60
Conflict of Interest .... ..... .................................................................. ............... 61
Warranty Against Payment of Consideration for Agreement......................... 61
Nonliability of Agency Officials and Employees ........................................... 62
Enforced Delay: Extension of Time ofPerformance.......................-..-........... 62
Inspection of Books and Records ................................................................... 63
Approvals .... ..............__....... ............................................................................. 63
Real Estate Commissions...................... ............................................ .............. 63
Indemnification .... ,.... ................................................._........................ ............ 63
Release of Developer from Liability............................................................... 64
Attorneys' F ees ............................................................................................... 64
Effect.................................................................... ... ........................................ 64
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ARTICLE VII ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH GRANT
DEED; WAIVERS AND AMENDMENTS.............................................._.... 65
Section 7.01. Entire Agreement; Counterparts ..................................................................... 65
Section 7.02. No Merger; Waivers and Amendments .......................................................... 65
ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND
RECORDATION ............................................................................................65
Section 8.01. Execution and Recordation............................................................................. 65
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
1lI
2008
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND MAYA CINEMAS NORTH AMERICA, INC.
THIS 2008 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is
entered into as of December 15, 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 MAY A CINEMAS NORTH AMERICA, INC., a
Delaware corporation (the "Developer"). The Agency and the Developer hereby agree as
follows:
Section 1.01. PlllJlose 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 defined 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 tenus, 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 defined below).
Section 1.02. The Project. 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 Al!feement.
(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.
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(b) The Developer is a Delaware corporation. The principal office and mailing
address of the Developer for purposes ofthis 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-210
Los Angeles, California 90017
Telephone: (213) 542-4420
with a copy to:
Maya Entertainment Group, Inc.
Attn.: Jose Martinez, Jr., General Counsel
1201 West 5th Street, Suite T-2IO
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 tirne 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 Irnprovements. 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.
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"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.
"Executive Director" or "Interirn Executive Director" shall mean the person who is then
appointed and acting as the chief executive officer of the Agency and who is authorized to
exercise all administrative and executive functions on behalf of the Agency.
"HUD I 08 Loan" means and refers to the loan made by HUD in favor of the City which
HUD 108 Loan is secured by a deed of trust (the "HUD Deed of Trust" encumbering the Phase I
Property (but excluding the Phase IA Property) and a pledge of current and future CDBG funds
of the City as required by HUD. Such pledge of CDBG funds is not released by the sale of the
Phase I Property, assumption of the HUD 108 Loan, or any other action taken pursuant to this
Agreement. The outstanding principal balance of the HUD 108 Loan as of the Effective Date of
this Agreement is $4,600,000. Any modification to the HUD 108 Loan, including, but not
limited to, an assumption of the existing HUD 108 Loan or the undertaking of a New HUD Loan
(as defined in Section 3.05), requires an independent action of the City of San Bernardino.
Conditions or covenants appearing herein concerning actions to be taken by the Agency with
respect to the HUD 108 Loan and the New HUD Loan (as defined in Section 3.05) are in
addition to and separate and apart from the actions of the City. The Developer is hereby placed
on notice that it shall not act in reliance on any representations as may appear to be contained
herein, or as made by any persons, whether or not a party to this Agreement, concerning whether
the City will initiate an action for modification of the HUD 108 Loan or approval of a New HUD
Loan (as defined in Section 3.05) or as to the outcome of such action as may be initiated.
"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.
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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.
"Notice of Agreement" means and refers to the Notice of Agreement, dated of even date
of this Agreement, as executed and acknowledged 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 erms, covenants and conditions of this Agreement. The Phase I Property
Deposit is in the amoun of $1 00,000, receipt of which is hereby acknowledged by the Agency.
"Phase I Prope y Due Diligence Certificate" means and refers to the Phase I Property
Due Diligence Certifica e to be provided by the Developer to the Agency in accordance with this
Agreement.
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"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 IA Property
Improvements. The Phase I Property Improvements must be constructed, developed, installed
and completed by July I, 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.
"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 IA 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 IA 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 developrnent of the Phase II Property
and of the Phase III Property.
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"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.
"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 I 1,000 square foot food, office, retail and/or commercial
building adjacent to the California Theatre (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(d) 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.
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"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.
"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.
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"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 tenns, 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.
"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.
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Section 1.05. Restrictions Against Change in Ownership. Management and Control of
the Developer and Assil!lllIlent 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 rnay 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
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 Pronerty.
(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
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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 defined) by the Developer with the approval of HUD, (ii) the repayment of the
existing $4,600,000 principal balance of the presently outstanding HUD 108 Loan with the
proceeds of any other Financing or the New HUD Loan (as hereafter defined), if approved by
HUD, and (iii) regardless of whether (i) or (ii) as immediately set forth are applicable, the
additional compliance with all other requirements as set forth in Section 3.05 hereof.
(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 Pronertv 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 tenns, 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
Phase III Property Purchase Price shall be delivered to the Escrow Officer on behalf of the
Agency.
Section 2.02. Phase I Propertv Denosit. the Phase II Propertv Denosit and the Phase III
ProperlY 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 defined) 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 I
Property, the Phase I Property Deposit shall be applied as a credit to the Phase I Property
Purchase Pri ceo
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(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 tenninated; or
(iii) the conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2. I 6 are not satisfied by the
Agency or other entities, as appropriate (unless satisfaction has been
waived by the Developer), and this Agreement is tenninated; or
(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
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(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 conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (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 conditions precedent to the obligation of the Developer to proceed
with the Close of Escrow described in Section 2.16 are not satisfied by the
Agency or other entities, as appropriate (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.
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 Chicago 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.
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(b) Subject to any extensions of time pursuant to Section 2. I 5 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. I 0, then the Closing Date of the
Escrow shall occur within twenty (20) calendar days thereafter, unless the Close of Escrow is
extended (a) 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 oftime pursuant to Section 2. I 5 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.
(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. I 0, then the Closing Date of the Escrow shall occur within
twenty (20) calendar days thereafter, unless the Close of Escrow is extended (a) 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
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Escrow Holder is in a position to comply with the final 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 frorn 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,
Section 2.05. Convevance of Title to the Phase I Propertv. to the Phase II Propertv and
to the Phase III Propertv. 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 acknowledged 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
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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:
(I) 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 108 Loan or the New HUD Loan, as applicable, or any other
deed oftrust, 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;
(9) the effect of the Redevelopment Plan for the Project Area.
Section 2.06. Additional Closinl! Obligations of the Al!encv. 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:
(I) 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;
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(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 (1) original of the Notice of Agreement, as executed and
acknowledged 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
(9) One (1) original of the License Agreement, in connection with Escrow
relating to the Phase I Property.
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 acknowledgment and acceptance of the Agency Grant Deed, duly
executed and acknowledged by the Developer;
(2) two (2) duplicate original copies of the Closing Statement, duly executed
by the Developer;
(3) one (I) original of the Notice of Agreement, as executed and
acknowledged by the Developer (in connection with the Escrow relating to
the Phase I Property);
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(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) documentation of present commitment of financial resources as
determined to be satisfactory by the Agency 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 (as previously defined in Section 2.02(b) hereof) 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.
Section 2_08. Inspections and Review.
(a) Due Dilig:ence 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 lirnited 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.
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(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 knowledge 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 government 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 known
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 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
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of the environment, 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, HMTA, or under any
other environmental law; 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 refined petroleum product,
(2) asbestos,
(3) polychlorinated biphenyl,
(4) designated as a hazardous substance pursuant to 33 USC Section
1321 orIisted pursuant to 33 USC Section 13 17,
(5) a flammable explosive,
(6) a radioactive material,
(7) lead or lead-containing materials.
Section 2.09. Due Diligence Investi~ation of the Phase I Propertv. the Phase II Propertv
and the Phase III PropertY Bv the Developer.
(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 oftime 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
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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
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 2.1 O. 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:
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(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 Property and the Developer'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
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 environmental laws 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
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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 environmental laws.
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, ifknown 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:
"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.
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Section 2.13. Review and ADDroval of Condition of Title bv the Developer.
(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
CL T A coverage policy of title insurance issued by the Title Company describing the state of title
of the Phase I Property, the Phase II 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
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. Survey. 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
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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 which shall then give the Agency the right to
terminate the Escrow for failure of the Developer to comply with the provisions of Section
2. 17(b). If the Agency notifies the Developer of its intention to not remove the objectionable
items and to thereupon terminate the Escrow for failure of the condition as set forth in Section
2.17(b), 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 (I) 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 finding 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.
Section 2.16. DeveloDer's Conditions Precedent to Close Escrow for the Phase I
ProDertV. for the Phase II ProDertv or the Phase III ProDertv. 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;
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(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
(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 defined 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
("CinemaS tar") for the use and occupancy by CinemaStar of the Phase I
Property must be terminated pursuant to the following: (I) a written
termination agreement between the Agency, as successor landlord, and
CinemaS tar, as successor tenant, wherein the Lease is mutually
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terminated, or pursuant to (2) a final and non-appealable judgment from a
court oflast resort, wherein the Lease is terminated by such court.
Section 2.17. Agencv's Conditions Precedent to Close Escrow For the Phase I Propertv.
for the Phase II Property and for the Phase III Propertv. 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:
(I) 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);
(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
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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;
(9) The Developer must have deposited the Scope of Development and the
Schedule of Performance, as executed by the Developer;
(10) Except for the HUD Loan Assumption (as defined below) which has been
approved by the Agency, the Agency must have reasonably approved the
following: (i) the HUD 108 Loan 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 108 Loan (the "HUD Loan
Assumption") and all other loans, institutional lenders and/or financings 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
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matters identified in Section 2.17(10)(i), in Section 2.17(10)(ii) and in
Section 2.17(1O)(iii) shall singularly and collectively be referred to as the
"Financing"); and
(II) In connection with the Complaint (as defined below) all of the following
conditions must be met: (i) the Superior Court (as defined 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: (I) a written
termination agreement between the Agency, as successor landlord, and
CinemaS tar, as successor tenant, wherein the Lease is mutually
terminated, or pursuant to (2) a final 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 Developer. After the Closing Date by
Escrow Holder, the Escrow Holder shall deliver to the Developer within three (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
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 as to items that
are intended to be performed by the other party, but any such waiver as to performance by the
other party 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 defined below) and (ii) that portion of such taxes
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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 for any taxes that were due and payable by the Agency, or were paid by the Developer
upon the Closing Date for taxes assessed and which were due and payable by the Agency, during
the period of Agency ownership of the Phase I Property, the Phase II Property and/or the Phase
III Property. The Agency shall have no responsibility for the payment of 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.
The Developer shall be responsible for paying the difference in cost between a CL T A
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.
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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 Developer of Article II liQuidated Damages Payable bv the
Developer 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
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. ReDresentations and Warranties.
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(a) Warranties and Rt;presentations by 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:
(I) 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) Enforceabilitv 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.
(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,
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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. I 3.
(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) Operation 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.
(9) DeveloDment ofProiect. 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) S\>ecial Studies Zone. The Phase I Property, the Phase II Property and/ or
the Phase III Property, whichever applies, is not located within a
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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 108 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 New 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 Representations bv the DeveloDer. The Developer makes the
following representations, covenants and warranties and acknowledges that the execution of this
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 eXlstmg 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 consummate 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.
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(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 consummation 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 consummation 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
governmental 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
defined below). Further, in the event the Developer obtains a New 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) on or prior to the date of the closing of the New
HUD Loan or the HUD Loan Assumption, 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 New HUD Loan or the HUD Loan Assumption, (ii) the
Developer shall fully discharge and payoff either the HUD 108 Loan or
the New HUD Loan, as applicable, 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 defined below) or the Cash Deposit (as
defined below), as appropriate, against the HUD 108 Loan or the New
HUD Loan, as applicable, in the event the Developer does not fully
discharge and payoff the HUD 108 Loan or the New HUD Loan, as
applicable, at the end of the third year of such loan.
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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.
ARTICLE III
DEVELOPMENT OF THE PROJECT
Section 3.01. DeveloDment of the Proiect by the Developer.
(a) Scope of DeveloDment; 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
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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 is generally described 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 as to the minimum requirements thereof subject
to the final development and building permit approvals to be obtained by the Developer from the
City prior to the Close of Escrow and approval by the Agency of the final Scope of Development
prior to the Close of Escrow. 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 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
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the Developer and the Agency. Subject to Section 3.05(d) 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 1 Property.
(d) The approval of the Scope of Development by the Agency hereunder shall not be
binding upon the City Councilor 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 conditions of approval applicable to all
permits and other governmental actions imposed by the City and all other governmental agencies
and regulatory agencies 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 defined 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
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.
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(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 uilleasonably 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.
(j) 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 Schedule 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.
(I) 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
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.
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(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 3.0 I (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
"minor 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,
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
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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 I,
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. The Developer recognizes and
agrees to submit the required applications to the City in preparation for the receipt of all
construction and building permits to timely commence and complete the Phase I Property Project
by the time limits required herein. 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(d) 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) Prior to the issuance of a certificate of occupancy in connection with the office
building at the Phase II Property, the Agency will consider at its discretion whether to 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
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and all other terms of such lease to be mutually agreed upon by the Agency and the Developer
each at their sole discretion.
(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 New HUD Loan (as defined below)
or the HUD Loan Assumption if the Developer has either obtained the New 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
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approved by Agency Counsel consistent with the foregoing. Any and all insurance required
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 governmental agency any and all such permits and, upon applicable to the
development ofthe Phase I Property, ofthe 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.
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(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 III Ownership. Management and Control of the Developer --
Assignment 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:
(I) 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
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(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 ofthis 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":
(I) 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 financing 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;
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(4) Any Transfer of any interest in the Developer, irrespective of the
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 pursuant to terms of the final Certificate of Completion to be issued by
the Agency for said properties 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. Securitv Financing: Right of Holders. The Developer will have the
obligation to obtain conventional financing, to obtain financing pursuant to a new HUD Section
108 loan (the "New HUD Loan") 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 financing 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 New HUD Loan or to obtain any other conventional loan
financing. The Agency has not approved the New 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 New HUD Loan or that the Agency has
approved the terms of the New 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 New HUD Loan
from HUD to the Developer will be acceptable to the Agency.
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(a) In the event the Developer procures and obtains from HUD a New 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:
(I) the New 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
New 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 New HUD Loan at the end of the third year.
(3) As an alternative to the seven-year term of the New HUD Loan term set
forth in (I) above, the Agency shall have the sole right to obtain a twenty (20)-year New 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
reqnired 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 New 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 New 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 New HUD Loan (the "Cash
Deposit"). If the Developer does not or is unable to refinance the New HUD Loan at the end of
the third year of the New HUD Loan, in whole or in part, if, subject to Section 3.05(d) 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 New 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 New HUD Loan or the HUD Loan Assumption.
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(5) The Developer shall deposit $2,600,000 to the Escrow Holder one (I)
business day prior to the Close of Escrow in connection with the purchase of the Phase I
Property representing the equity contribution of the Developer or such greater amount as may be
required by HUD for the consummation of either the New 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 New HUD Loan or the HUD Loan
Assumption on or prior to the end of the third year of the New 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 Section 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) In the event the Developer elects, with the approval of HUD, to assume the
existing HUD J08 Loan or to seek the issuance of a New HUD Loan, a condition precedent to
either alternative shall be the execution and delivery by and between the Developer and the
Agency of the "Section 108 Loan Covenant Agreement" that includes the following items and as
such Section 108 Loan Covenant Agreement shall be subject to approval by the Developer and
the Agency each at their sole and absolute discretion:
(I) the right of the Agency and its staff and consultants to conduct periodic
site inspections of the Phase I Property of the public areas at anytime and of the other areas upon
reasonable written or verbal notice to the Developer;
(2) the right of the Agency to review all records, accounting books and
operating records of the Developer as to the line item payments being made as to all operating
costs of the Phase I Property;
(3) the right of the Agency to review the dollar amounts of all reserve and
replacement figures for the normal repair, replacement and improvements of the Phase I Property
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and all components of the theater operations, including, concessions, projection and sound
equipment, seating, floor coverings and other fixtures, furnishings and equipment; and
(4) the Developer shall submit an annual summary on or before January 15 of
each calendar year demonstrating for the prior calendar year the financial operations of the
theater including gross revenues and all line item expenditures.
The Section 108 Loan Covenant Agreement shall also provide the Agency with the right
to make recommendations to the Developer in the event an independent consultant retained by
the Agency determines in its professional judgment that the Developer is not operating the
theater in a manner that is consistent with industry standards.
Any default by the Developer pursuant to the Section 108 Loan Covenant Agreement
shall be a default under this Agreement and shall entitle the Agency to seek remedies as provided
herein. The Section 108 Loan Covenant Agreement shall no longer be outstanding upon
payment in whole of the either the HUD 108 Loan or the New HUD Loan, as applicable, or in
the event the Close the Escrow occurs without the requirement for either of said HUD 108 Loan
or the New HUD Loan as a financing condition of the Close or Escrow.
(c) If the Developer elects not to utilize a New HUD Loan or the Agency or HUD do
not approve a New HUD Loan, the Agency will allow the Developer to assume the existing
HUD 108 Loan with its current principal balance of $4,600,000 as of the Effective Date of this
Agreement. Should the Developer assume the HUD 108 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 108 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 use its best efforts to request that the City subordinate the HUD 108 Loan
to such additional conventional financing as obtained by the Developer.
(d) Notwithstanding anything to the contrary in this Agreement, if the Developer does
not obtain a New HUD Loan or the HUD Loan Assumption, regardless of the reason, or if the
Developer elects not to use the New 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
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.
(e) 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 financing of the purchase,
construction and improvement of the Phase II Property and/or of the Phase III Property
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(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.
(f) 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.
(g) 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.
(h) 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.
(i) 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
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
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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.
G) 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:
(I) 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).
(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 becorne part of the
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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.
(k) 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 3.05(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 ProDertv 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
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 ofCoffiDletion.
(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"
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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 ofCornpletion 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 the later of (i)
forty-five (45) calendar days after Agency receipt of the written request or (ii) within three (3)
business days after the second regular meeting as conducted by the Agency for which an agenda
item may by timely submitted for such regular meeting agenda, 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 confined to the immediate unavailability of specific
items or materials for construction or landscaping at a pri<;e 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
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Completion had been issued therefore. For purposes of this subsection (d), it shall be considered
reasonable if the Agency response as to the failure or refusal to issue a Certificate of Completion
is based upon deficiencies or lack of compliance by the Developer with the building plans and
site plans as approved by the Development Services Department of the City.
(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 finance 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 Propertv and/or the Phase III ProDertV.
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 frotu 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
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
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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 (5")
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 Property. 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 first class condition as commercial,
restaurant, office and/or retail center all as shall be determined by the Agency at its sole
discretion. 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 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
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any part thereof, that there shall be no discrimination against or segregation of any person, or
group of persons, on account of age, disability, sex, marital status, race, color, religion, creed,
national origin or ancestry, including all other protected classes of persons and groups of persons
as may be considered as such by any local, State or Federal law and as shall be required pursuant
to Health & Safety Code Section 33435 and Section 33436, 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 age, disability, sex, marital status,
race, color, religion, creed, ancestry or national origin of any person, including all other
protected classes of persons and groups of persons as may be considered as such by any local,
State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435
and Section 33436. 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 age, disability, race, color, creed, religion, sex,
marital status, national origin, or ancestry, including all other protected
classes of persons and groups of persons as may be considered as such by
any local, State or Federal law and as shall be required pursuant to Health
& Safety Code Section 33435 and Section 33436, 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
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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 age, disability, race, color, creed, religion,
sex, marital status, national origin, or ancestry, including all other
protected classes of persons and groups of persons as may be considered
as such by any local, State or Federal law and as shall be required pursuant
to Health & Safety Code Section 33435 and Section 33436, 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 age, disability, race, color,
creed, religion, sex, marital status, national origin, or ancestry, including
all other protected classes of persons and groups of persons as may be
considered as such by any local, State or Federal law and as shall be
required pursuant to Health & Safety Code Section 33435 and Section
33436, 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
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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
Financing and/or under the Security Financing Interest is or becomes false; 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 New HUD Loan or the HUD
Loan Assumption at the end of the seven-year term of the New 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 New 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. The Developer
recognizes that HUD may require as a condition to obtaining either the New HUD Loan or the
JUD Loan Assumption, that the documents specified in items (i) and (iii) of the immediately
preceding sentence be delivered to the Agency or to an escrow holder in an executed and undated
form in the event such default should occur. 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 New 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.
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(t) Upon a default by the Developer of the seven-year refinancing and failure by the
Developer to repay the New HUD Loan or the HUD Loan Assumption, as applicable, this
Agreement will be terminated inunediately 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 (I) 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
to any termination of this Agreement. If the Developer commences construction on one (I) 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 Project.
(h) 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 I, 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 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 I, 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.
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(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
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: Specific 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. Agency 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
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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
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 environmental 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
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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:
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: (2\3) 542-4420
with copy to:
Maya Entertainment Group, Inc.
Attn.: Jose Martinez, Jr., General Counsel
1201 West 5th Street, Suite T-2l0
Los Angeles, California 90017
Telephone: (2\3) 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) 888-94 \3
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. Warrantv 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
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rnoney 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. Nonliabilitv of Agency Officials and Emplovees. 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
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, or any delay
caused by a third party, including, without limitation, independent vendors and suppliers, whose
performance is not within the control of the Developer. 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; provided, however, that the provisions of this Section shall not apply to (i) the
final date for the Close of Escrow of July I, 2009, pursuant to Sections 2.03(g) and 5.01(i), (ii)
the date of three (3) years from and after the Close of Escrow and the assumption of the existing
HUD 108 Loan or the issuance of the New HUD Loan, as applicable, as provided in Section
3.05(d) (iii) the date that is seven (7) years from the Close of Escrow and the assumption of the
existing HUD 108 Loan or the issuance of the New HUD Loan, as applicable, as provided in
Sections 3.05(a)(I) and 5.01(f).
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 rnay have provided a basis for entering into this
Agreement and which occur at any time after the execution of this Agreement, are not force
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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. InsDection 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 including 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 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. Ap'provals.
(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) All amendments or modifications to this Agreement whether substantive or those
which are of routine or technical nature, including minor adjustments to the Schedule of
Performance, shall require the official action of the governing body of the Agency to approve
any and all such items.
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
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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 Environmental 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 (I) 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 (I) 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
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 6.10. Release of the Developer 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. Attorneys' 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.
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ARTICLE VII
ENTIRE AGREEMENT; COUNTERPARTS; NO MERGER WITH AGENCY GRANT
DEED; WAIVERS AND AMENDMENTS
Section 7.01. Entire Agreement: Counteq>arts.
(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.
(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.
/1/
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the dates set forth below.
AGENCY
.'..,.....
Dated: IqjlS:/O R
Redevelopment Agency of the
City of San Bernardino,
a public body, corporate and politic
By: ~ ~
EmiIA.~
Interim Executive Director
Approved as to Form and Legal Content:
B,l~
Agency oun
DEVELOPER
Dated:~
[ALL SIGNATURES MUST BE NOTARIZED]
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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:
Parcel I 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 together
with the Phase IA Property to be provided when available.
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EXHIBIT "A-2"
LEGAL DESCRIPTION OF PHASE IA PROPERTY
[To be provided when available]
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EXHIBIT" A-3"
LEGAL DESCRIPTION OF PHASE II PROPERTY
[To be provided when available]
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EXHIBIT "A-4"
LEGAL DESCRIPTION OF PHASE III PROPERTY
[To be provided when available]
1':\Agendu\Ageoda Anachmenls\Agcnda AttaChmmts\AgeDda AuaclJJneDt.s\Apmt$-Amend 2008\12-1S-08 Maya DDA. ANAL (Corl,'d).doc
EXHIBIT "B"
BUDGET
See Schedule of Performance "EXHIBIT C" for Details
PHASE I
Fixtures, Furnishings and Equipment (FF&E)
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
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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
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EXHIBIT "c" (Continued)
PHASEIA
. 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-pIex 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
restaurantlretail/entertainrnent 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 retaiVrestaurant 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.
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EXHIBIT "D"
SCHEDULE OF PERFORMANCE
Three (3) months from date Finance Commitment is issued the following shall be completed:
(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 the following shall be completed:
(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 the following shall be completed:
(i) Removal and relocation of the ticket booth,
(ii) Installation of water feature (Phase lA).
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EXHIBIT "E"
AGENCY GRANT DEED
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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 defined 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: r update foDowin2 at time of deliverv of deed as to then
current compliance with all local. State and Federal laws 1
(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
age, disability, race, color, creed, religion, sex, age, marital status, national origin or ancestry in
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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 practice or practices of discrimination or segregation with reference to the
selection, locations, number, use or occupancy of tenants, 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.
5. 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 III 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
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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.
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
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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
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
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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 ,2009.
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:
Agency Counsel
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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
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 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
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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 rny hand and official seal.
Signature of Notary Public
Place Notary Seal Above
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EXHIBIT "A"
Legal Description for Agency Grant Deed
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcel I 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 the
Phase IA Property to be provided when available.
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EXHIBIT "F'
CERTIFICATE OF COMPLETION
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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:
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
30 I, San Bernardino, California, during regular business hours.
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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 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
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EXHIBIT "A>>
Legal Description of the Property for Certificate of Completion
The land referred to in the Agreement is situated in the County of San Bernardino, State of
California, and is described as follows:
Parcel 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 the Phase IA
Property to be provided when available.
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EXHIBIT "G"
NOTICE OF AGREEMENT
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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 MAY A 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 Bemardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo
Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
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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 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
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EXHIBIT "A"
Legal Description of 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 I, 2, 3, 4, and 5 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 the Phase lA Property to be provided when available.
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