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HomeMy WebLinkAboutR30-Economic Development CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY f""""~ r.....\ :' \ ,,_A ',. .'- ~ {'''.... r, F. i 'J FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Maya Cinemas North America, Inc. Redevelopment Project Stndy and Exclusive Right to Negotiate Agreement - 20-Plex Theater located at 450 North "E" Street and for Vacant Agency Property (Central City North Redevelopment Project Area) DATE: October 14,2008 SvnoDsis of Previous Commission/Council/Committee Action{s): On October 9, 2008, Redevelopment Committee Members Estrada, Johnson and Baxter unanimously voted to recommend that the Community Development Commission consider this action for approval. ____n_n_n_.n____n_n__________n___n ________nnn_________n____n______nn_n___________n_n__ ________n_un _________n___u_______________n__ Recommended Motion(s): (Communitv Deve.DDmen! Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute the Redevelopment Project Study and Exclusive Right to Negotiate Agreement with Maya Cinemas North America, Inc. ("Developer") (Central City North Redevelopment Project Area) Project Area(s): Don Gee Central City North Redevelopment Project Area Phone: (909) 663-1044 Contact Person(s): Ward(s): Supporting Data Attached: [;] Staff Report [;] Resolution(s) [;] Agreement(s)/Contract(s) [;] Map(s) 0 Lelter(s) FUNDING REQUIREMENTS: Amount: $ -0- Source: N/A Budget Authority: N/A Signature: Fiscal Review: 6u ~CUQ ~{j~!t/ Barbara Lindseth, Administrative Services Director Commission/Council Notes: ....~s;jm(i~(i1iCY)A..=:~7 , P\Ag:endas\Comm Dev Commi"ion\CDC 2008\10"20-08 Maya Cinemas FltI'\ SR. doc COMMISSION MEETING AGENDA Meeting Date: 10/20/2008 Agenda Item Number: R 30 (0-2/)..08 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT MAY A CINEMAS NORTH AMERICA, INC. REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT - 20-PLEX THEATER LOCATED AT 450 NORTH "E" STREET AND FOR VACANT AGENCY PROPERTY (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) BACKGROUND: At the July 24, 2008 Redevelopment Committee meeting, Maya Cinemas ("Maya") made a power-point presentation of their proposal to revitalize the CinemaS tar Multi-plex Luxury Theaters ("CinemaStar") and their proposal to develop the vacant Redevelopment Agency property ("Agency Property")in front of the theater. Maya conducted a brief presentation about their company and their theatre developments, introduced and discussed some concepts and possibilities to revitalize and renew the current theatrc operations and facilities, and their proposal to purchase the building and property currently leased to CinemaS tar and purchase and develop the Agency Property in a manner befitting its prominence and key location in Downtown. After the presentation, Agency Staff was authorized to initiate discussions with Maya to develop an Exclusive Right to Negotiate Agreement ("ERN") leading to a Disposition and Development Agreement ("DDA,,) for the building and property currently leased to CinemaStar and the Agency Property. As a separate matter, CinemaS tar would bring to the Agency a request for assignment of the lease to Maya once their transaction was completed, clearing the way for one or several agreements with the Agency to redevelop the properties depicted as Phase I and Phase II on Exhibit "A" attached. CURRENT ISSUE: After two months with no completed lease assignment request in-hand from CinemaS tar, and without any payment of the 14 months of forbearance rent totaling approximately $574,000, the Agency chose not to extend the forbearance period any longer and put CinemaS tar on notice informing them of this fact and requesting immediate payment of the accrued back rent amount. CinemaS tar subsequently ceased operations on Sunday, September 28, 2008, and to-date have not informed Agency or City staff of any plans or intentions with regards to turning over the keys to the premises. As operations have ceased, the Agency has sent CinemaS tar an immediate termination notice but have not received any response, to date. The Agency Attorney has been brought in to determine the Agency's leasc rights as landlord and will be addressing this matter in the future as well as what further remedies are available to the Agency in order to regain possession of the building at the earliest opportunity and return the premises to a productive use that is beneficial to the community. Maya has affirmed their interest and commitment to purchase the building and property as well as the Agency Property and have requested that the Agency consider entering into an ERN so that they may engage its architects, engineers, and other such contractors to prepare and perform its due diligence, inspection and renovation of the premises and property as soon as possible. P\i\~endas\Comm [)cv Commiss;onlCDC 2()O~\IO-2()-()8 Maya Cinemas ER~ SR. doc COMMISSION MEETING AGENDA Meeting Date: 10/20/2008 Agenda Item Number: Economic Development Agency Staff Report Maya Cinemas ERN Page 2 Although Maya has extensive plans for the building which involves a total retrofit, upgrading of the seating, new digital projection equipment, the introduction of an I-Max screen and realignment of the lobby area, they are also desirous of opening the theater as quickly as possible in order to capitalize on the lucrative holiday season which is about to commence. Although the timetable will be exceedingly tight, Maya estimates that if they are able to gain possession by November I, 2008, they will be in a position to commence operations with a limited number of screens in time for the December Holiday film season, which will ensure continuity downtown for the multi-plex theater operation. ENVIRONMENTAL IMP ACT: None. FISCAL IMP ACT: None. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. h-u- Emil A. Marzullo, Interi P:\Agendas\Comm Dev Commission\CDC 2008\10-20-08 Maya Cinemas ERN SR.doc COMMISSION MEETING AGENDA Meeting Date: t 0120/2008 Agenda Item Number: - - - e @ .c W w .c - @ ... CJ) CJ) 0 ;:: ~ @ ~ <( <( .- C") 0 LL 8 LL ::I: ::I: l:L l:L IIFII Street I @ @ 8@ @ @ <t -I'~ '\ co 9@ '<t C\J C") \.."-/ @ @ @ @ - CD CD ... - CJ) EXHIBIT IAI @ @ @ ~ II Ell Street @e - CD CD ... - CJ) ~ co 0 @ , '<t C") ~/ @ @ @ @ - Q) Q) '- - en EXHIBIT 'A' ~ @ ~ '<t L() C\I , ~ '<t , '<t C") C") ~ ~ @ @ ~ II Ell Street @e - Q) Q) '- - en - - - 8 @ J: W W J: - @ '- en en - ::1 @ - ~ @ < < .- C") 0 LL 8 LL J: J: Q. Q. IIFII Street I @ @ 8@ @ @ <t 1 2 3 4 5 6 7 8 9 RESOLUTION NO. ( RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT WITH MAYA CINEMAS NORTH AMERICA INC. ("DEVELOPER") (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") owns certain property in the Central City North Redevelopment Project Area as generally depicted in 10 Exhibit "A" attached to the Agreement (as hereinafter defined) consisting of a 104,900 square foot 11 20-plex movie theatre building commonly known as CinemaStar (the "CinemaStar Property") and 12 four vacant parcels to the south of the building totaling 59,636 square feet (the "Vacant Property"); 13 14 15 and WHEREAS, the Agency and the Developer are interested in exploring the development feasibility of both the CimemaStar Property together with the development of the Vacant Property 16 so as to foster the community economic development goals and objectives of the City of San 17 Bernardino ("City") as it relates to the redevelopment for the Central City North Redevelopment 18 Project Area; and 19 20 WHEREAS, the Developer is qualified to assist the Agency to undertake the development feasibility for a coordinated and economically sustainable commercial, retail and entertainment 21 related development project on the Agency Property, which will require specific study, evaluation 22 and planning by the City and the Agency, as applicable, of appropriate and feasible community 23 development program and financing alternatives; and 24 25 WHEREAS, in accordance with the provisions of the California Environmental Quality Act ("CEQA"), the Redevelopment Project Study and Exclusive Right to Negotiate Agreement (the 26 "Agreement") in the form as attached to this Resolution as Exhibit "B" and the approval, execution 27 and delivery thereof is exempt from the provisions of CEQA. 28 1 P:\Agendas\Resolutions\Resolulions\2008\IO-20-0B Maya Cinemas ERN CDC Reso.doc 1 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 2 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 3 FOLLOWS: 4 Section 1. The Community Development Commission of the City of San Bernardino 5 ("Commission") hereby approves the Agreement by and between the Agency and the Developer in 6 the form as attached hereto as Exhibit "B" and as presented to the Commission upon adoption of 7 this Resolution, and the Commission hereby authorizes the Interim Executive Director of the 8 Agency to execute the Agreement on behalf of the Agency together with such technical and 9 conforming changes as may be recommended by the Interim Executive Director of the Agency and 10 approved by the Agency Counsel. 11 Section 2. The Commission hereby finds and determines that the approval, execution 12 and delivery of the Agreement is exempt from CEQA. 13 Section 3. This Resolution shall take effect from and after its date of adoption by this 14 Commission. 15 1// 16 1// 17 /1/ 18 1// 19 1// 20 /1/ 21 /1/ 22 1// 23 1// 24 1// 25 /1/ 26 1// 27 1// 28 1// 2 P:\Agendas\Resolutions\Resolutions\2008\10-20..0S Maya Cinemas ERN COC Reso.doc 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT WITH MAYA CINEMAS NORTH AMERICA INe. ("DEVELOPER") (CENTRAL CITY NORTH REDEVELOPMENT PROJECT AREA) 2 3 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a meeting 8 thereof, held on the day of 9 Commission Members: Aves 10 ESTRADA 11 BAXTER 12 BRINKER 13 DERRY 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 , 2008, by the following vote to wit: Absent Abstain Navs 18 Secretary 19 day of ,2008. The foregoing Resolution is hereby approved this 20 21 22 Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino 23 24 Approved as to Form: 25 26 By: 27 28 \/~~ Agency Coun 3 P:\Agendas\Resolulions\Rcsolutions\2008\1G-2M8 Maya Cinemas ERN CDC Reso.doc 7~ co 0 @ , '<:t \;:'j @ @ @ @ - Q) Q) ... - en EXHIBIT IAI @ ~ @ '<:t C\I , '<:t M ~ @ @ ~ II Ell Street @e @ @ - Q) Q) ... - en @ @ - - - (0 @ .c: w W .J: - @ ... en en @ == ~ @ ~ <( <( .- M 0 LL 8 LL :I: :I: D. D. IIFII Street I @ @ 8@ @ @ (t EXHIBIT "A" Study Area 112/024846-0001 738788.06 alO!l6/08 -18- -r~ CXl 0 @ , <t C") .\~ @ @) @ @ @ @ - Q) Q) a.. - en J: = .- LL @ EXHIBIT IAI @ @ @ II Ell Street @ @ @ (0 8 @ @ ~ C") @ IIFII Street @ 8@ @ @ @ ~ - Q) Q) a.. - en J: - a.. j o LL - - - w w en en <( <( :I: :I: c.. c.. II.... .......................... .....,':......... (t EXHIBIT "B-1" Description of the Phase I Proiect Improvements to the 20-plex Theater Structure 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 112/024846-0001 738788.06a10/16/08 -19- EXHIBIT "B-2" Description of the Phase II Proiect Improvements to the Vacant Parcels Adiacent to the 20-plex Theater Structure . Construction of a two story retail/restaurant building of approximately 11,000 square foot adjacent to the California Theatre with potential linkage into the California Theatre itself from the second story so incorporating the California Theatre into the restauranUretail/entertainment area from its current south facing aspect. . Construction of a single story retail/restaurant pad of approximately 12,000 square foot on the southwest comer of 4th Street and "E" Street. . Construction of a retaillrestaurant 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 comer of 4th Street and "E" Street. 112/024846-0001 738788.06 alO/16/08 -20- (? OJ If? ~ EXHIBIT "8" ~ Redevelopment Proiect Studv and Exclusive Ril!:ht to Neeotiate Al!:reement REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT MAYA CINEMAS NORTH AMERICA, INC. (DOWNTOWN SAN BERNARDINO THEATER ACQUISITION) THIS REDEVELOPMENT PROJECT STUDY AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT is dated as of October 20,2008 (this "Agreement"), and is entered into by and between Maya Cinemas North America, Inc. (the "Developer"), a Delaware corporation, authorized to do business in the State of California, and the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, in light of the facts set forth in the following recital paragraphs: RECITALS A. The Agency desires to encourage and effectuate the redevelopment of certain real property, located within the Central City North Redevelopment Project Area (the "Project Area") of the City of San Bernardino (the "City"). B. The Agency is the fee owner of approximately 59,636 square feet of land and an approximately 104,900 square foot 20-plex cinema theater generally known as the "Cinema Star Theater Complex" located at 450 North "E" Street, San Bernardino (collectively, the "Property" and sometimes hereinafter referred to as the "Study Area" and as further set forth on Exhibit "A" as attached hereto and incorporated herein by reference), which consists of both improved land and vacant land at the northwest comer of the intersection of 4th Street and "E" Street within the Project Area and within the Downtown Area of the City. C. The Developer is the owner and operator of other similar downtown theaters (either operating or presently under construction) in the State of California and has experience in the development, management and operation oftheaters similar to the Agency-owned Cinema Star Theater Complex. D. The Cinema Star Theater Complex has been closed for business operations since on or about September 29, 2008, and the Agency has sent a notice of termination of the tenant's rights of possession as a holdover tenant under the prior lease agreement on October 2, 2008. The Developer seeks to acquire the right of possession to the Property the together with the fee ownership of the land and buildings comprising the Property from the Agency. The Developer thereafter intends to remodel and renovate the Cinema Star Theater Complex for a partial re-opening presently estimated for December, 2008, undertake renovations and remodeling efforts and subsequently re-brand the theater under a new operating entity for marketing purposes as part of the Phase I Project as herein described presently estimated for March, 2008. Thereafter, a Phase II Project will consist of the development of the vacant land portion ofthe Property as herein identified for compatible downtown uses in support of the Agency owned California Theatre and the Downtown Area, in general. The Phase I Project is further described in Exhibit "B-1" and the Phase II Project is further described in Exhibit "B-2" as said exhibits are attached hereto and incorporated herein by reference. - 1 - P:\Agendas\Agenda Calendars\Agenda Altlchments\Agrmts-Amend 2008110-20-08 Maya Cinemas Final ERN.doc E. The Agency is prepared to consider and study specific proposals and plans to facilitate the development of the Study Area so as to foster the community economic development goals and objectives of the Agency for the Project Area. F. The Developer is qualified to assist the Agency to undertake the study of specific proposals and plans for a coordinated and economically sustainable redevelopment project within the Study Area which will require specific study, evaluation and planning by the City and the Agency, as applicable, of appropriate and feasible community redevelopment program alternatives. G. The Developer and the Agency believe it is appropriate for the Developer to undertake certain redevelopment studies and to incur certain costs as part of a program for the study of feasible redevelopment programs for the Study Area in anticipation of the acquisition of the Property by the Developer from the Agency, subject to the terms and conditions as set forth below. COVENANTS IN CONSIDERATION OF THE FOREGOING RECITALS, WHICH ARE INCORPORATED INTO THIS AGREEMENT BY THIS REFERENCE AND THE MUTUAL COVENANTS AND PROMISES SET FORTH HEREIN, THE DEVELOPER AND THE AGENCY HEREBY AGREE, AS FOLLOWS: 1. Develooer Acknowledl!ments and Term of Al!reement. a. The Developer hereby acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by the Agency or an acceptance by the Agency of any offer or proposal from the Developer to convey any interest in the Property to the Developer. Any studies relating to the Study Area and to the Project (as defined below) that may hereafter be undertaken by the Developer, in its sole discretion, shall be the sole responsibility and property of the Developer and shall not be deemed to be undertaken for the benefit of the Agency and the City. b. The qualifications and identity of the Developer and its principals are of particular importance to the Agency. The Agency relied on these qualifications and identity in entering into this Agreement with the Developer. Accordingly, except as expressly set forth hereinbelow, during the term of this Agreement, the Developer shall not transfer or assign all or any of the Developer's rights or obligations set forth in this Agreement (hereinafter, collectively, a "Transfer") and no voluntary or involuntary successor-in-interest of the Developer shall acquire any rights or power under this Agreement except pursuant to an assignment approved in writing by the Interim Executive Director of the Agency such approval not to be unreasonably withheld, delayed or conditioned. For purposes of this Agreement, a Transfer shall include both (i) a transfer on a cumulative basis of more than twenty- five percent (25%) of the beneficial ownership interest in the Developer, and (ii) a transfer of the management and control of the Developer to any third party other than to an Affiliate of the Developer. As used herein, the term "Affiliate" means any entity that is either a parent, co-venturer or subsidiary of the Developer and/or any entity in which the Developer or such parent or subsidiary owns a controlling interest and exercises management control. The Interim Executive Director of the Agency shall approve or disapprove any requested Transfer requiring Agency approval within ten (10) business days after receipt of a written request for approval from the Developer, together with such documentation as may be reasonably required by the Interim Executive Director of the Agency, to evaluate the proposed transaction and the proposed assignee's or transferee's experience and qualifications, including the proposed assignment and assumption agreement by which the assignee -2- P:\AgendaslAgenda CalendarslAgenda AttachmentslAgrmts-Amend 2008\10-20-08 Maya Cinemas final ERN.doc expressly agrees to assume all rights and obligations of the Developer under this Agreement arising after the effective date of the assignment, and in which the assignee or transferee agrees to assume, or the Developer expressly remains responsible for, all performance and obligations of the Developer arising prior to the effective date of the Transfer. The assignment and assumption agreement shall be in a form reasonably acceptable to the Agency's legal counsel. No later than the date the Transfer becomes effective, the Developer shall deliver to the Agency the fully executed assignment and assumption agreement. c. Notwithstanding any other provision set forth in this Agreement to the contrary, the Agency's approval of a Transfer by the Developer shall not be required in connection with any of the following transactions: (1) Transfers resulting from the death or mental or physical incapacity of an individual who is principal of the Developer; (2) the approval and execution by the Developer of one or more purchase/sale agreements, leases and other similar agreements, including without limitation any co-venture agreements with third parties, that are not inconsistent with the Developer's ultimate development of the Project (as defined below), and with the understandings that no such agreement shall be deemed to limit or restrict the Agency's or the City's discretion with respect to the terms and conditions of any of the Development Entitlements referred to in Section 2 or the terms and conditions to be set forth in the Project DDA referred to in Section 7 of this Agreement, and any such agreement that pertains to all or any portion of the Property shall not be binding upon the Agency, the City or the Property until the Project DDA is approved and executed by all parties and then subject to such terms and conditions that may be set forth in the Project DDA; (3) the granting of such temporary or permanent easements or permits as may be requested by the City or other governmental agencies or utility companies with jurisdiction over the Study Area or as may be necessary and appropriate to facilitate development of the Project within the Study Area; and (4) Transfers for financing purposes. d. This Agreement shall automatically terminate, without further notice or action, and be of no further force or effect twelve (12) months following the Effective Date, unless prior to that time: (I) the parties execute the Project DDA, as described below, which will include, without limitation, other relevant community redevelopment covenants acceptable to the Agency and such other terms and conditions mutually acceptable to the parties, in which case this Agreement shall terminate on the effective date of the Project DDA; or (2) the parties each agree at their sole discretion to extend the term of this Agreement in writing to a specific date not to exceed twelve (12) months beyond the initial term of this Agreement, subject to the Interim Executive Director of the Agency first making a finding based upon written documentation and other facts presented to verify that satisfactory progress is being made to -3- P\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\10-20-08 Maya Cinemas Final ERN,doc complete the activities to be performed by the Developer set forth in Section 3; for purposes of implementing this extension provision to the term of this Agreement by and on behalf of the Agency, and subject to said finding to be made by the Interim Executive Director of the Agency, (i) the Interim Executive Director of the Agency is hereby authorized to administratively approve in writing one (I) extension of not to exceed six (6) months in duration, and (ii) the governing body of the Agency shall be required to approve any extensions in excess of six (6) months but not to exceed the aforesaid twelve (12) months; or (3) a party terminates this Agreement as provided under Section 19 or Section 20, as applicable. 2. The Proiect. Subject to the terms and conditions of this Agreement, the negotiation and execution of a mutually satisfactory Project DDA as referred to in Sections 3.f. and 7, the approval by the City, the Agency and other governmental agencies with jurisdiction over the Study Area of the general plan amendment, zone change and other discretionary permits and approvals that are needed to accommodate the development contemplated by the Phase II Project under this Agreement (collectively, the "Development Entitlements"), the City's or the Agency's completion of the environmental review process and certification of CEQA documentation for the development of the Study Area pursuant to the California Environmental Quality Act ("CEQA") and compliance with all other applicable state and local laws, ordinances and regulations for such development, the Developer shall take all reasonable actions required or necessary for determining the feasibility of the acquisition and redevelopment of the Property and undertaking a renovation, remodeling and re-branding of the Cinema Star Theater Complex after the temporary closure thereof for purposes of undertaking such construction related activities (collectively, the "Phase I Project" as further set forth on Exhibit "B-1") and the projected development of an office, retail and restaurant and entertainment center upon the vacant land portions of the Property presently consisting, but not limited to retailers, book stores, restaurants, nationally recognized coffee shops and other retail uses with approximately 50,000 to 60,000 square feet of gross building area, plus related lighting, landscaping and related improvements (collectively, the "Phase II Project" as further set forth on Exhibit "B-2")(the Phase I Project and the Phase II Project are sometimes collectively referred to as the "Project" as the context of its usage may warrant). As of the Effective Date of this Agreement, and subject to the satisfaction of all of the conditions and contingencies referred to above and in this Agreement, the parties anticipate, but do not represent and warrant, that the Project will include an I-Max Theater, expansion of office to be made available for use and occupancy for the California Theatre at fair market value, and additional restaurant and nationally recognized coffee shops within the immediate vicinity of the California Theatre and the Downtown Area. The Developer may modify the description of the Project at any time; provided, however, that substantial modifications of the Project shall: (I) be subject to the written acceptance and written approval of the Agency such approval not to be unreasonably withheld, delayed or conditioned; and (2) depending on the nature of such a modification, a suitable modification of any applicable development permit and CEQA application and approval and the Project Study referred to below may also be required. -4- P:\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amern;l 2008\10-20-08 Maya Cinemll5 Final ERN doc The Agency may request that the Developer consider modifications to the description of the Project from time-to-time; provided, however, that the Developer shall not be required to incur any additional costs as result of such Agency modification requests. Each such modification shall be subject to the approval of the Developer, which shall not be unreasonably withheld. 3. Nel!otjatjon Period. Proiect Study and Project Study Costs. a. The rights and duties of the parties established by this Agreement shall commence following the approval of this Agreement by the governing body of the Agency and after such time as this Agreement has been fully executed by the parties within the period of time authorized in Section 17 (such date being the "Effective Date") and continue for twelve (12) months from the Effective Date unless such date shall have been first extended as authorized under Section l.d.(2). Such time period during which this Agreement shall be in effect (including any extensions of time approved by the Agency) is referred to as the "Negotiation Period". b. Within one hundred and eighty (180) calendar days following the Effective Date, the Developer shall submit to Agency a site plan for the vacant land portion of the Study Area and a feasibility study for the redevelopment project proposed by the Developer (the "Project Study") and a more detailed description of the renovation, remodeling and re-branding of the Cinema Star Theater Complex. The Project Study shall include, without limitation, the following information: (i) projections of the total estimated cost of the Project and the amount of debt and equity to be contributed by the Developer to the Project; and (ii) projections of the type, amount and source of any financial assistance that the Developer may propose to have the Agency contribute to the Project. The Agency may at its discretion and at its sole cost and expense retain the services of a firm of community redevelopment and planning and environmental consultants to assist in the preparation and review ofthe various investigations, surveys and reports appropriate in connection with the Project Study and the Project proposed by the Developer. c. The Agency shall, on a best efforts basis during the course of the Project Study, consider the specific terms and conditions of any monetary redevelopment assistance which the Developer may propose to include in the Project DDA. In this regard, the Agency and the Developer acknowledge that prior to the Effective Date of this Agreement the Agency has obtained a fair market value appraisal of the Cinema Star Theater Complex and the real property comprising the Phase II Project that shall serve as the basis for further negotiations of the terms and conditions of any Project DDA as may be considered by the parties. d. During the course of the Project Study, the Developer shall pay for all of its costs associated with the Project Study, including but not limited to, the expenses of third party consultants and appraisers who are engaged by the Developer under written contract to undertake one or more elements of the Project Study (collectively, the "Project Study Costs"); provided, however, that Developer shall not be required to pay for any third party consultants engaged by the Agency pursuant to Section 3.b., above. Furthermore, the Project Study Costs that are the Developer's responsibility do not include any third party costs incurred by the Agency in connection with the Agency's review ofthe Developer's submittals or the Agency's independent performance of any study or document as part of the Project Study. In addition, each party shall bear its own legal fees and overhead and administrative costs in connection with the preparation and review ofthe Project Study. -5- P:\Agendas\Agenda Calendars\Agenda AllacbmentslAgrmts-Amend 2008\!Q..2o.Q8 Maya Cinemas Final ERN,doc e. All third party consultants retained by the Agency to prepare any study or document as part of the Project Study shall be subject to the sole control and direction of the Agency. The work product of any such person shall be the property of the Agency and the Agency shall have the right to use and republish such work product for any purpose; provided, however, that to the limited extent the Developer provides the Agency with copies of architectural and engineering plans or drawings, the Developer does not thereby transfer to the Agency the ownership rights with respect thereto or the rights to reuse or republish the same and the Developer does not waive any legal rights it might have with respect to such work product and the Agency's use and republishing of such work product in the absence of this Agreement. f. The Developer shall inform the Agency in writing whether, based on the information set forth in the Project Study to be submitted to the Agency pursuant to Section 3.b., the Developer believes the Project is feasible. Thereafter, assuming the Developer has determined the Project is feasible, the Developer and the Agency may proceed to negotiate the final form of an agreement which will specifY the specific business terms upon which the Property will be conveyed to the Developer in phases and the Project will be developed (the "Project DDA"), subject to the understandings that (i) the Agency reserves the right, in its sole and absolute discretion, to approve or disapprove the Project DDA and the Agency does not preapprove or precommit to any particular terms to be included in the Project DDA; (ii) the Project DDA will not constitute City or Agency approval of the Project, which shall not occur until such later date that the Development Entitlements are approved and all applicable CEQA approvals are issued; and (iii) in no event will the Project DDA provide for or allow the conveyance to the Developer of the vacant land portion of the Property for the Phase II Project prior to the issuance of all of the Development Entitlements and the City's or the Agency's approval of the necessary process for approving the Phase II Project consistent with CEQA and the Project DDA. g. Within ten (10) calendar days from receipt of any information from the Developer as provided in this Section 3, the Interim Executive Director of the Agency shall determine whether such information is satisfactory. If the specific item of information is unsatisfactory to the Interim Executive Director ofthe Agency, he shall notifY the Developer in writing of the reason or reasons that the information is unsatisfactory. If the Interim Executive Director of the Agency does not make a determination regarding any item of information submitted by the Developer under this Section 3 within ten (10) calendar days from receipt of such information, the information shall be deemed submitted in acceptable form by the Agency. The determinations to be made by the Interim Executive Director of the Agency under this subsection shall in no way bind or constitute the approval of the Agency regarding, without limitation, plans, specifications, engineering, architecture, uses, tenants, the Project, the Development Entitlements, the Project's satisfaction of the requirements of CEQA or the Project DDA. 4. Oblil!ations ofthe DeveloDer. During the Negotiation Period, the Developer shall proceed diligently and in good faith to perform the following: a. consider the redevelopment of the Project, including, without limitation, both the Phase I Project and the Phase II Project, the selection of tenants and the design of improvement elements as appropriate for the Project; and b. at the option of the Developer, undertake to retain an additional qualified MAl appraiser knowledgeable as to the appraisal of theater facilities to complete a second fair market value appraisal of the Property if deemed warranted by the Developer; and -6- P:\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\]0-20-08 Maya Cinemas Final ERN,do<: c. identifY the re-branding that is required in the market to better identify the location and availability of the Property to movie goers in the Inland Empire and to derive a branding that is significantly different from the Cinema Star Theater Complex; and d. apply for and obtain such financing commitments during the Negotiation Period that will enable a successful implementation of the Project DDA (including financing of a phased project) if and when such has been approved by the parties each at their sole discretion; and e. review and provide the Project Study information described in Section 3 and, if acceptable to the Developer, submit an executed copy of the final form of the Project DDA to the Interim Executive Director of the Agency on or before the end of the Negotiation Period (or such later date corresponding to an authorized extension of the Negotiation Period); and f. consult with the Agency on a regular basis and keep the Agency advised on the progress of the Developer in completing its obligations under this Agreement on quarterly written reports to be submitted to the Interim Executive Director every ninety (90) calendar days from and after the Effective Date. In addition to the foregoing, during the Negotiation Period, the Developer shall have the right but not the obligation to file a formal application with the City for approval of one or more of the Development Entitlements for the Project and to initiate the process under CEQA for preparing an initial study or other required CEQA documents to enable the City and the Agency to independently evaluate the environmental impacts of the Project, a reasonable range of feasible alternatives to the Project, and feasible mitigation measures that may reduce potentially significant environmental impacts of the Project to an acceptable level, all in accordance with CEQA. In the event that the Developer elects to file any such application and/or initiate the CEQA review process during the Negotiation Period and prior to the parties' approval and execution of a Project DDA, the Agency shall cooperate reasonably with the Developer in such regard, subject to the understandings that (i) the Agency does not precommit to support or approve any of the Development Entitlements or the Project CEQA documentation, it being understood that the Agency reserves whatever discretionary authority it would otherwise have with respect to such matters in the absence of this Agreement; (ii) the Agency's approval of the Project DDA prior to issuance of the Development Entitlements and certification of the CEQA documentation shall not constitute an approval of or precommitment with respect to the Project; and (iii) the Project DDA will include provisions that the conveyance of that portion of the vacant land comprising the Property for the Phase II Project to the Developer and the Developer's right to develop the Phase II Project will be conditional and contingent upon the City's and the Agency's approval of the Project, the Development Entitlements and the CEQA documents at a later date. 5. Al!encv Not to Nel!otiate with Others. a. The Agency currently deems the acquisition of the Property by the Developer from the Agency, and the disposition of the Property by the Agency to the Developer, and redevelopment of the Study Area for a feasible Project to be appropriate for further review and consideration, and the Developer appears to be qualified to undertake the task of planning the details for the potential acquisition of the Property and development of the Study Area. b. During the Negotiation Period, the Agency shall not negotiate with any other person or entity regarding either the disposition of the Property or the redevelopment of all or any portion of the Project. The term "negotiate", as used herein, shall be deemed to preclude the Agency from approving any other offer or proposal from a third party to either acquire from the Agency any interest in the -7- P\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\10-20-08 Maya Cinemas Final ERN_doc Study Area (in whole or in part) or development of the Project in the Study Area, and from discussing other redevelopment proposals for the Study Area with third persons or entities... Nothing contained herein shall preclude the Agency from negotiating with and pursuing legal remedies against the prior tenant and operator of the Cinema Star Theater Complex provided that such remedies do not infringe upon Developer's rights herein. c. Notwithstanding any other provision of this Agreement, during the Negotiation Period, the Agency shall not be precluded from furnishing to persons or entities unrelated to the Developer information in the possession of the Agency relating to the redevelopment of any other land owned or controlled by the City or the Agency outside but in close proximity to the Study Area. Subject to its obligations set forth in Section S.b. above, the Agency may also provide any other information in its possession that would customarily be furnished to persons requesting information from the Agency regarding the Study Area and other Agency public information concerning its activities, goals and matters of a similar nature, or as required by law to be disclosed upon request. 6. Al!:encv Coooeration. During the Negotiation Period, the Agency shall: a. at the request of Developer, use its best efforts to assemble written materials and documents relating to the Property that are in the possession ofthe Agency; b. use its best efforts to provide appropriate and timely comments to the Developer with respect to one or more conceptual development plans, as may be proposed by the Developer for the Project, and the redevelopment of the Study Area, including, but not limited to, conceptual plans or studies of vacation, realignment or abandonment of public property and facilities, the installation and improvement of public improvements, any formal Development Entitlement applications that may be filed by the Developer during the Negotiation Period, and any environmental evaluation of the Project that may be undertaken during the Negotiation Period under CEQA; provided, however, that the Agency reserves its discretion and authority with regard to support and approval of such matters as set forth in the last paragraph of Section 4 above; c. use its best efforts to provide the Developer with access to the Property during the Negotiation Period consistent with the rights of the present tenant as the same may exist beyond the Effective Date, for the purpose of conducting customary due diligence investigations and observations thereon, including environmental investigations of the subsurface or any structure thereon, but excluding any destructive testing, subject to the terms and conditions of a separate environmental investigation and inspection license agreement to be agreed upon by the Agency and the Developer, at some later date, if applicable, and subject to access being granted by the current tenant of the Property; in addition, the Agency agrees to grant the Developer access to the Property for purposes of undertaking remodeling and renovations of the Cinema Star Theater Complex in preparation for a partial re-opening of said theaters during December, 2008, and the form of such license agreement is attached hereto as Exhibit "COO; except as may be provided in the DDA, the Agency shall have no reimbursement obligations to the Developer whatsoever for work performed on the Property pursuant to such license agreement and the Developer shall not cause, either directly or indirectly, any liens or stop work notices to be issued with respect to the Property; and d. use its best efforts to provide the Developer with information or copies of all reports, studies and other information in the City's or the Agency's possession relative to the Property and the -8- P:\Agendas\Agendll CalendarslAgenda AttachmenlslAgrmts-Arnend 2008\10_20.08 Maya Cinemas Final ERN.doc status of the current building plans, Conditional Use Permits, occupancy certificates and other City approvals with respect to the building structure and the Property; and e. use its best efforts to coordinate the location of additional parking and the feasibility of providing commitments for the continued use of on-street and off-street public parking in the vicinity of the Property; and f. use its best efforts to address security issues within the Downtown Area and in particular security issues related to the vicinity of the Property during the primary hours of the operation of the theater portion of the Property; and g. use its best efforts to identify the parking and other security requirements and the location and number of public parking spaces and other parking spaces as may be committed to and/or available to the users of the Property and the type of security, hours of operation and numbers of security personnel required in furtherance ofthe re-branding of the theater portion of the Property. 7. Nel!:otiation of Proiect DDA. It is the intent of the parties that the Developer and the Agency will negotiate the final terms and conditions of a proposed Project DDA between the date that the Developer submits the site plan and Project Study for the Project to the Agency pursuant to Section 3.b. of this Agreement at the end of the Negotiation Period. Notwithstanding such commitment of the Agency to negotiate the terms and conditions of the final Project DDA, nothing contained herein commits the Agency Staff to recoriunend approval of any final form of a Project DDA presented for consideration by the Community Development Commission (the "Commission"), nor shall the Commission be committed to approve any final form of a Project DDA by reason of the execution of this Agreement or by reason of any other actions of the Agency, the Agency Staff or the Commission prior to the conducting of a noticed public hearing on the consideration of the Project DDA in the manner as required by law. Should the Agency and the Developer execute and deliver a Project DDA, the parties anticipate as of the Effective Date of this Agreement that the Project DDA will or may include, without limitation, the following terms, provisions and covenants: (I) that the purchase price for the Property will be the fair market value of the Property determined not more than six (6) months prior to the anticipated transfer of the Property to the Developer (in accordance with and pursuant to the Project DDA);and (2) such provisions specifying the phasing of the Phase I Project and the Phase II Project and the conditions for the close of escrow for the theater portion of the Property and the vacant land portion of the Property, and such detail as is deemed necessary by the Agency to determine that the re-branding of the theater is reasonable based on the circumstances and the economics of the transaction; and (3) such provisions for Agency financial assistance for on-site, Property and off-site public improvements to which the Agency and the Developer may mutually agree, as referred to in Section 3.c. of this Agreement, and subject to the understanding that the Agency does not precommit to any financial assistance pursuant to this Agreement that may be included in the Project DDA; and -9- P:\Agendas\Agenda Calendars\Agenda AttachrnentslAgrmts-Amend 2008110-20-08 Maya Cinemas Final ERN,doc (4) an acknowledgment that the Agency's approval of the Project DDA does not constitute the Agency's or the City's approval of the Project for purposes of CEQA and that the conveyance of the Property to the Developer and the Developer's right and obligation to develop the Project in the Study Area will be conditional and contingent upon the issuance of all of the Development Entitlements and certification of the CEQA documentation; and (5) a provision that the ERN Fee, plus interest earnings, if any, payable pursuant to Section 30 of this Agreement shall be credited in full toward the Developer's purchase price for the Property except for such portion of the ERN Fee that may be used and applied for the purposes as stated therein. 8. Consideration for this Aereement and Reservation of Riehts. In consideration for the Agency entering into this Agreement, the Developer will undertake its obligations under this Agreement and provide the Agency with copies of all studies and reports and other information generated by the Developer or its consultants regarding the Project to be used only in connection with this Agreement; provided, however, that nothing set forth in this Agreement shall obligate the Developer to provide the Agency with information relating to confidential contract negotiations with prospective tenants or other end users or any other confidential financial or business information that is not reasonably required by the Agency to perform its obligations as set forth in this Agreement. The parties agree that, if this Agreement terminates for any reason, or the Agency fails to extend the Negotiation Period, or the Project DDA is not finally approved by the Agency, for any reason, neither party shall have any further obligation to the other under this Agreement regarding the disposition, acquisition, reuse, redevelopment or development of the Study Area. 9. Plan nine and Desien: Related Acknowledements of the Parties. Certain development standards and design controls for the Project may be established between the Developer and the Agency in negotiation of or in the final form of the Project DDA, but it is understood by both parties that the Project must conform to the City's development, design and architectural standards. The Agency shall fully cooperate with the Developer's professional associates in providing information and non-monetary assistance in connection with the Developer's preparation of drawings, plans, and specifications. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project itself by either the Agency or the City. 10. Developer Financial Disclosures. Subject to its reserved rights set forth in Section 8 hereinabove, the Developer acknowledges that it may be requested to make certain confidential financial disclosures to the Agency, its staff or legal counsel, as part of the financial due diligence investigations of the Agency relating to the potential disposition of the Property to the Developer or development of the Project. The parties recognize that such financial disclosures may contain sensitive information relating to other business transactions of the Developer, that the disclosure of such information to third parties could impose commercially unreasonable and/or anti-competitive burdens on the Developer and, correspondingly, diminish the value or fiscal benefit that may accrue to the Agency upon the disposition of the Property to the Developer, if terms for such disposition are mutually agreed upon. Accordingly, the Agency agrees to maintain the confidentiality of any business records described in Govemment Code Section 6254.15, as may be provided by the Developer to the Agency or its consultants, as permitted by law. -10- P:\Agendas\Agenda Clllenda~\Agenda Attach.ments\Agrmts-Amend 2008\10-20-08 Maya Cinemas Final ERN doc The Agency shall advise the Developer of any Public Records Act requests for such business records, and the proposed response of the Agency thereto, a reasonable time prior to the Agency's delivery of such response and, if the Agency proposes to disclose any such business records, the Agency shall first agree to confer with the Developer to consider any objections that the Developer may have to such disclosure. II. DeveloDer Acquires No Interest in the ProDertv. The Developer hereby acknowledges that it has not acquired and will not acquire, by virtue of the terms of this Agreement, including any license agreement issued to the Developer pursuant to this Agreement, any legal or equitable interest in the Property or any other property rights of any nature. From and after the termination date of this Agreement and provided that there is no Project DDA then in effect, the Agency Staff may elect to work in cooperation with the Developer to continue to process to obtain the Project DDA. The Agency will not be required to expend funds for any third party costs or for other consultants or legal counsel unless agreed in advance to be reimbursed by the Developer to the Agency. 12. Nondiscrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in undertaking its obligations under this Agreement. 13. ComDliance with Law. The Developer acknowledges that the Project DDA, if mutually agreeable terms are established, is likely to require the Developer (among other things) to carry out the construction of certain improvements in conformity with all applicable laws, including all applicable planning and zoning laws, and environmental planning and safety laws. The parties agree that it is their intention as of the Effective Date of this Agreement that in order to assure the feasibility of the Project, they will cooperate in an effort to cause the Project DDA to be structured in such a manner that any public financial assistance does not result in the Project being classified as a "public work" for purposes of California prevailing wage law requirements except to the extent that prevailing wages may have to be paid with respect to public improvements paid for in whole or in part with Agency funds. 14. Required ADDrovals. No Project DDA between the parties shall have any force or effect nor shall the Agency be deemed to be a party to any agreement for the disposition of real or personal property to the Developer, until the terms and conditions of the Project DDA are considered and approved by the governing body of the Agency, following the conclusion of a public hearing, as required by law. 15. Press Releases. The Developer agrees to discuss any press releases it may propose relating to the Study Area with the Interim Executive Director of the Agency or his designee, prior to publication, to assure accuracy and consistency ofthe information. -11- P:\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\]0-20-08 Maya Cinemas Final ERN,doc 16. Notice. All notices required hereunder shall be presented either (i) in person or (ii) by fax and confirmed by First Class certified or registered United States mail with return receipt requested. Notice shall be deemed confirmed by United States mail effective the second business day after deposit with the United States Postal Service. Notice by personal service shall be deemed effective upon delivery. Either party may change its address for receipt of notice by notifying the other party in writing. Notice shall be deemed to have been completed when the notices have been properly delivered as provided in this Section regardless of whether notice has been delivered to any other person entitled to receive a copy of such notice. Failure to provide notice to any person listed herein to receive a copy of notices shall not defeat or render as incomplete any notice as delivered to the other party that is a signatory to this Agreement. TO DEVELOPER: Maya Cinemas North America, Inc. Attn.: Moctesuma Esparza, Chief Executive Officer 1201 West 5th Street, Suite T-21O Los Angeles, California 90017 (213) 542-4420 WITH A COPY TO: Maya Entertainment Group, Inc. Attn.: Jose Martinez, Jr., General Counsel 1201 West 5th Street, Suite T-210 Los Angeles, California 90017 (213) 542-4420 TO AGENCY: Redevelopment Agency of the City of San Bernardino Attn.: Emil A. Marzullo, Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 (909) 663-1044 17. AcceDtance of A2reement bv the DeveloDer. The Developer shall acknowledge its acceptance of this Agreement by delivering three (3) counterpart executed copies of this Agreement prior to the date of consideration and approval of this Agreement by the Commission. As further set forth in Section 3a. hereof, the Effective Date of this Agreement shall be deemed to have occurred upon the final approval by the Commission and the execution of this Agreement by both the Developer and the Interim Executive Director of the Agency. 18. Authoritv. Each signatory to this Agreement represents and warrants that he or she has the authority to execute this Agreement on behalf of the principal whom he or she purports to represent. 19. DDtional Termination bv DeveloDer or bv A2encv. a. The Developer may, in its sole and absolute discretion, exercise an election to terminate this Agreement provided that the Developer gives at least a twenty-one (21) calendar day advance written notice to the Agency. If the Developer terminates this Agreement, it shall not be entitled to a -12- P:\Agendll.s\Agenda CalendarslAgenda Allachments\Agrrnts-Amend 2008110-20-08 Maya Cinemas Final ERN_doc refund of any portion of the ERN Fee, plus interest earnings, if any, referred to in Section 30, it shall remain responsible for performance of its indemnity obligations set forth in Section 22 with respect to any acts or omissions of the Developer occurring prior to the effective date of the termination, and otherwise, neither party shall have any further rights or obligations to the other party hereunder. b. The Agency may not exercise an election to suspend the Project or to terminate this Agreement other than as provided in Section 20 hereof. 20. Defaults and Breach - General. Failure or delay by either party to perform any material term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if the party who is otherwise claimed to be in default by the other party commences to cure, correct or remedy the alleged default within five (5) business days after receipt of written notice specifYing such default and shall in fact complete such cure, correction or remedy, with reasonable diligence, such party shall not be deemed to be in default hereunder. The party, which may claim that a default has occurred, shall give written notice of default to the party in default, specifYing the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured party shall have no right to exercise any remedy for a default as set forth herein without delivering the written default notice as specified herein. Any failure to delay by a 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 rights or remedies associated with such a default. In the event of an uncured material breach, the party who is not in default shall be entitled to seek any appropriate remedy by initiating legal proceedings; provided, however, that, other than with respect to a Developer default in failing to perform its indemnity obligations set forth in Section 22, (i) the Agency shall not be entitled to specific performance or other equitable or injunctive relief against the Developer for a default by the Developer hereunder and (ii) the Agency's sole damages remedy shall be to retain the Developer's entire ERN Fee, plus interest earnings, if any, referred to in Section 30 as liquidated damages. In the event that a material breach has occurred and the non-performing party has not cured such breach within the period of time provided for in this Section 20, the party who is not then in default may terminate this Agreement by serving the other party with a written notice of termination, and thereafter, the Agreement shall terminate on the date specified in such notice, which date shall not be earlier than the later of (i) ten (10) calendar days following the date of service of the notice of termination on the other party or (ii) the date otherwise specified in such notice. 21. Attornevs' Fees. If any party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by a third party, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. As between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such -13- P:\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\10-20.08 Maya Cinemas Final ERN,doc action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. In the event the City becomes a party to any such action or proceeding or otherwise pursuant to Section 22 hereof, the words "reasonable attorneys' fees" in the case of the Agency shall include the salaries, costs and overhead of lawyers employed in the Office of the City Attorney of the City of San Bernardino. 22. Indemnification. Each party agrees to indemnify, protect, defend (and hold the other, and their officers, employees and agents, harmless from and against, without limitation, all actions, causes of action, claims, demands, damages, judgments, costs, expenses and penalties (including, without limitation, attorneys' fees, court costs, consultant fees and costs, and all attorneys' fees and court costs incurred in connection with all appeals), to the extent arising from or related to any uncured default by the other party hereunder or any intentional misconduct or negligent act or omission of the other party , its agents, employees and/or independent contractors (and the successors and/or assigns of each of them) in performing, omitting, or failing to perform, in its obligations hereunder (collectively, the "Claims"); provided, however, that (i) the foregoing indemnity obligation shall not apply to the extent any Claims arise out of any default by the other party in performing its obligations set forth in this Agreement or to the extent the other party has engaged in any intentional misconduct or is guilty of gross negligence and (ii) the foregoing indemnity obligation shall not cover any Claim for exemplary or punitive damages unless the other party is guilty of malice. The party claiming default shall give the other party written notice of the occurrence of any Claim for which it seeks indemnity under this Section as promptly as practicable following such party's knowledge of the occurrence of such matter and the other party shall reasonably cooperate with the other in the defense of any such Claim. This indemnity provision shall survive the execution, delivery, expiration and/or termination of this Agreement and shall apply to the City in the same manner as it shall be applicable to the Agency. 23. Governinl!: Law: Venue. The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. Further, the parties to this Agreement hereby agree that any legal actions arising from this Agreement shall be filed in California Superior Court, in the County of San Bernardino, San Bernardino District. 24. Severabilitv. If any term, provision or portion of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision or portion thereof to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 25. No Intent to Create Third Pam Beneficiaries. The parties intend that the rights and obligations under this Agreement shall benefit and burden only the parties hereto, and do not intend to nor shall it create any rights in, or right of action to or for the use or benefit of any third party, including any governmental agency, who is not one of the parties to this Agreement. -14- P:\Agendas\Agcnda Calendan'IAgenda AnachmentslAgrmts-Amend 2008\10-20-08 Maya Cinemas Final ERN,doc 26. Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of the time for performance of any obligation or act to be performed herein shall be deemed to be an extension of the time for performance of any other obligation or act to be performed under this Agreement. 27. Entire Al!reement. This Agreement (including Exhibit "A", Exhibit "B-1", Exhibit "B-2" and Exhibit "c" as attached hereto) is the final expression of, and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the appropriate party or by its agent duly authorized in writing or as otherwise expressly permitted herein. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall constitute a single instrument. 28. Time of Essence. Time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof. Failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a default under this Agreement by the party so failing to perform, which default can be waived by the other party at its sole and complete discretion. 29. Construction. Headings at the beginning of each Section, paragraph and subparagraph are solely for the convenience of the parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to Sections are to this Agreement. Exhibit "A", Exhibit "B-1", Exhibit "B-2" and Exhibit "c" as referred to in this Agreement are attached hereto and incorporated herein by this reference as if fully set forth herein in their entirety. 30. ERN Fee. Concurrently, with the execution and delivery of this Agreement by the undersigned parties on the Effective Date, the Developer has delivered to the Agency a check in the amount of One Hundred Thousand Dollars ($100,000) representing the Exclusive Right to Negotiate Fee (the "ERN Fee"). The parties agree that the ERN Fee may be used at the request of the Developer to offset costs incurred by the Developer pursuant to this Agreement related to the preparation of architectural and engineering drawings, plans and specifications and the undertaking of any physical improvements as may be made to the Property by the Developer during the term of this Agreement and in preparation for the partial re-opening presently estimated for December, 2008, and in accordance with a license agreement in the form as set forth in Exhibit "C". Upon the presentation by the Developer of an eligible expenditure that qualifies for such offset against the ERN Fee, the Developer may submit the invoice to the Agency, and the Agency will disburse the applicable amount of such invoice not to exceed the ERN -15- P:\Agendas\Agenda Calendars\Agenda Attachments\Agrmts-Amend 2008\10.20..08 Maya Cinemas Final ERN.doc Fee that is then available and on deposit with the Agency within five (5) calendar days after receipt. In the event the parties enter into a Project DDA, the parties intend that the Project DDA will provide that the ERN Fee, plus interest earnings, if any, will be credited in full toward the Developer's purchase price for the Property. If the parties do not enter into a Project DDA, the Agency shall be entitled to retain the entire ERN Fee, plus interest earnings, if any, as compensation for removing the Property from consideration by other prospective purchasers and to reimburse the Agency for its costs and expenses incurred for the negotiation and preparation of this Agreement and performing its obligations hereunder. In addition, if the Developer commits an uncured material default under this Agreement the Agency agrees that the amount of the ERN Fee shall be the Agency's sole and exclusive damages and remedy against the Developer except as specifically set forth in Sections 21 and 22 of this Agreement, it being understood and agreed between the Agency and the Developer that it would be extremely difficult or impracticable for the Agency and the Developer to fix the actual amount of damages that the Agency would incur in the event of an uncured Developer default hereunder, that the parties desire to fix and liquidate the amount of such damages in advance in order to eliminate the time, cost and risk involved in prosecuting and defending litigation to determine the amount of actual damages, and that the amount of the ERN Fee, plus interest eamings, if any, is a reasonable estimate as of the Effective Date of this Agreement as to the amount of actual damages that would be incurred by the Agency in such circumstances. 11/ /11 11/ 11/ 11/ 11/ 11/ /11 11/ 11/ 11/ 11/ /11 /11 /11 -16- P:\Agendas\Agenda CalendarslAgenda Attachments\Agrmts-Amend 2008\10-20-08 Maya Cinemas Final ERN.doc IN WITNESS WHEREOF, Maya Cinemas North America, Inc., and the Redevelopment Agency of the City of San Bernardino execute this Redevelopment Project Study and Exclusive Right to Negotiate Agreement on the dates indicated next to each of the signatures of their authorized representatives as they appear below, and this Agreement shall be deemed to be in full force and effect upon the Effective Date. DEVELOPER Maya Cinemas North America, Inc., a Delaware corporation Dated: By: Its: AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: Byl~ Agency Coun I -17- P:\AgendaslAgenda Calendars\Agenda Attachments\Agrmts_Amend 2008\] 0-20.08 Maya Cinemas Final ERN.doc EXHIBIT "A" Studv Area 112/024846-0001 738788.06 a10/16/08 -18- - - - e @ .c w w .c - @ ~ en en - :J @ - ~ @ <C <C .- (') 0 LL 8 LL :I: :I: a. a. UFII Street I @ @ 8@ @ @ (t 7~\ co 9@ v C\I l~J @ @ @ @ EXHIBIT lA' ~ ~ 00 v C\I . V (') ~ @ @ ~ II Ell Street 'S G) ~ - en - G) G) ~ - en @8 EXHIBIT "B-1 " Description of the Phase I Proiect Improvements to the 20-plex Theater Structure 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 112/024846-0001 738788.06aIO/16108 -19- EXHIBIT "B-2" DescriDtion ofthe Phase II Proiect ImDrovements to the Vacant Parcels Adiacent to the 20-Dlex Theater Structure . Construction of a two story retail/restaurant building of approximately 11,000 square foot adjacent to the California Theatre with potential linkage into the California Theatre itself from the second story so incorporating the California Theatre into the restaurant/retail/entertainment area from its current south facing aspect. . Construction of a single story retail/restaurant pad of approximately 12,000 square foot on the southwest corner of 4th Street and "E" Street. . Construction of a retail/restaurant pad of approximately 7,500 square foot adjacent to the main theater building to the south on "E" Street. . Development of the Common Area linking 4th Street, "E" Street and the parking lot to the west with hardscape, landscaping and a common area amphitheater situated at the convergence of the pathways. . Installation of a water feature at the corner of 4th Street and "E" Street. 112/024846-0001 738788.06a10116/08 -20-