HomeMy WebLinkAboutR40-Economic Development
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
ORIGINAL
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Public Hearing - Formation of an Auto Center
Property and Business Improvement District
("PBID") (Southeast Industrial Park and
IVDA Redevelopment Project Areas)
DATE:
March 31, 2009
SvnoDsis of Previous Commission/CounciVCommittee Action{s):
On January 22, 2009, Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend that
the Mayor and Common Council and/or the Community Development Commission consider this action for approval.
On February 2, 2009, the Mayor and Common Council of the City of San Bernardino ("Council ") voted to approve Resolution
No. 2009-24, thereby declaring their intent to form a PBID for the purposes set forth in said Resolution.
Recommeuded Motion(s):
Open/Close Public Heariug
(Mavor aud Common Council)
Resolution of the Mayor and Common Council of the City of San Bernardino approving the formation of an Auto
Center Property and Business Improvement District ("District"), fixing the boundaries thereof and providing for the
levy of assessments and taking other actions in connection therewith (Southeast Industrial Park and IVDA
Redevelopment Project Areas)
(Communitv Develooment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing
funding equal to $1,218,372 pursuant to the formation of the Auto Center Property and Business Improvement District
("District") and funding the operations and activities of the District (Southeast Industrial Park and IVDA
Redevelopment Project Areas)
Contact Person(s):
Project Area(s):
Colin Strange
Southeast Industrial Park and IVDA
Redevelopment Project Areas
Phone:
(909) 663-1044
Ward(s):
3,d
Supporting Data Attached:
"" Staff Report Ii'l Resolution(s) Ii'l Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s)
FUNDING REQUIREMENTS:
Amount:
$
1,218,372
Source:
Southeast Industrial Park Tax Increment
Request Budget Authority for 2008-2009 Budget
Year
Budget Authority:
Signature:
Emil A. Marzullo, Interim Executive Director
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PlAgendaslComm Dev Commission\CDC 2009\04-06-09 PBID Formation SR (Final) doc COMMISSION MEETING AGF:NOA
Meeting Date:
Agenda Item Number: !<- 'I ()
1- Z 0.01
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
PUBLIC HEARING - FORMATION OF AN AUTO CENTER
PROPERTY AND BUSINESS IMPROVEMENT DISTRICT ("PBID")
(SOUTHEAST INDUSTRIAL PARK AND IVDA REDEVELOPMENT PROJECT AREAS)
BACKGROUND:
Thirty-five years ago, the State of California ("California") enacted legislation allowing the formation of
districts known as a Business Improvement District ("BID"), later amended in 1994, to allow the
formation of a Property and Business Improvement District ("PBID"). The intent of this legislation was
to thus provide businesses and property owners with a means to pay for certain business enhancement
activities in an area specified by the property owners to be assessed for a specific period of time (usually
five years) for a particular purpose, as defined by the BID or PBID, such as enhanced security,
maintenance, marketing, etc. Before the assessments can be finalized, the businesses or property owners
in the specified area must attain over 50% of the vote in favor of the formation. The BID or PBID will
also choose their preferred method of assessment, which could be based upon calculations such as square
footage of the building or property or linear footage, etc., prior to the vote. All such details shall be
contained in the document referred to as the Engineer's Report which is hereby submitted to the Mayor
and Common Council ("Council") for approval upon the formation of this particular PBID by the
Council.
If the ballot is successful, all businesses or property owners must participate in the PBID who are located
within the established boundaries, and the assessment will be levied as a separate line item on their annual
County property tax bill. The annual assessment payments as received by the City from distributions
made from the County must be remitted by the City to the San Bernardino Auto Center, a non-profit
mutual benefit corporation (the "Auto Center Non-Profit"). Such assessment payments as received by the
City cannot be used as a substitute for City services currently in place. The ultimate purpose of a PBID is
to enhance the level of City services currently in place and not to replace such services. PBIDs have a
five-year sunset clause, but can be renewed or amended by ballot, and their borders can also be increased
by ballot. There are currently in excess of 80 PBIDs in California with an approximate renewal rate of
90%.
The San Bernardino Auto Center (the "Auto Center") has, since its inception, been San Bernardino's
premier sales tax producer generating over $3 million for the City in 2004, but declining to an estimated
$1.8 million for 2008 (based upon the first three quarters performance). In 2004, there were ten
dealerships at the Auto Center offering more than 12 different car makes: Today, three dealerships
remain offering only five different makes of cars.
In an effort to save what remains of the Auto Center and with the hope of attracting new members to the
vacant dealership buildings, the remaining three dealership owners in the Auto Center developed a
coalition in order to form a PBID. This proposed PBID would encompass five separate parcels designed
to convey special benefits to the properties within the PBID, including marketing efforts to enhance and
support the vitality of the auto dealers and help them compete in the regional marketplace. Other aspects
P:\AgendasIComm Dev CommissionlCDC 2009\04-06-09 PBID Formation SR (Final),doc
COMMISSION MEETING AGENDA
Meeting Date: 04106/2009
Agenda Item Number: 1Z.:~'l.-
Economic Development Agency Staff Report
PBID Formation - SB Auto Center
Page 2
of the program with the PBID would include clean and safe programs through higher levels of security
measures which will provide a cleaner business environment for the businesses, employees and customers
and result in increased commercial activity.
By obtaining 100% participation, the five properties included in the PBID estimate that they will raise an
additional $243,674 per annum for cooperative marketing and maintenance programs, and that through
joint marketing and maintenance activities they will achieve economies of scale over the current
individual undertakings. At the Council meeting of February 2, 2009, a petition to form a PBID was filed
with the Council who subsequently declared their intent to form the requested PBID subject to the notice
requirements as mandated by Article xmD of the State Constitution. The Council further set forth and
implemented procedures pursuant to Goverrunent Code Section 53753, which requires a 45-day notice
requirement prior to the public hearing on the imposition of an assessment such as that required for the
PBID.
CURRENT ISSUE:
By obtaining 100% participation, the five individual properties included in the PBID estimate that they
will raise an additional $243,674 per annum for cooperative marketing and maintenance programs, and
that through joint marketing and maintenance activities, they will achieve economies of scale over the
current individual undertakings. The final formation of the PBID could not occur sooner than March 18,
2009, which is the 45th day after February 2, 2009. The necessary public hearing on the formation of the
PBID has been set for Monday, April 6, 2009, at 4:30 p.m. which was the next available regular meeting
date of the Council after the conclusion of the 45-day notice period. Notice of the Public Hearing was
published in the San Bernardino Sun newspaper on March 22,2009 and March 29, 2009.
In light of the extremely challenging current business climate, and to be able to benefit from the PBID
activities immediately rather than wait over a year for the first property tax assessments to be remitted
through the County tax collection process, the Agency proposes to advance the amount of the five-year
assessment to the Auto Center PBID on an as needed basis upon receipt of invoices to be repaid to the
Agency by the Auto Center Non-Profit from the property tax assessments in the ensuing years. The
assessments are secured by the properties themselves through the property tax rolls and thus minimizing
the risk of repayment of the principal amount to the Agency. The Auto Center Non-Profit Promissory
Note and the Indemnification Agreement with the dealers are attached to the Commission Resolution.
The PBID formation requires submission of petitions from property owners representing more than 50%
of total assessments. In this instance, the petitions amount to 100%. After the formation of the PBID has
been approved by the Council, the PBID will be managed by the existing San Bernardino Auto Center, a
non-profit mutual benefit corporation.
As part of the PBID formation process, Proposition 218 requires a report to be prepared as to any new
assessment. Such report in the form of the Engineer's Report has been prepared by KLI Finance, Inc., a
licensed engineer, as the engineering consultants responsible for the formation of the Auto Center PBID.
The Engineer's Report is attached to the Resolution of Formation of the Council.
P:\AgendasIComm Dev CornmissionlCDC 2009\04-06-09 PBID Fonnalion SR (Final).doc
COMMISSION MEETING AGENDA
Meeting Date: 04/06/2009
Agenda Item Number: J2..?2-
Economic Development Agency Staff Report
PBID Formation - SB Auto Center
Page 3
ENVIRONMENTAL IMP ACT:
This action approving the formation of a certain PBID does not meet the definition of a "project" under
Section 15378 of the California Environmental Quality Act ("CEQA").
FISCAL IMPACT:
There is presently no adverse fiscal impact to the City. All costs associated with the formation of the
PBID have been and will continue to be advanced by the Agency. Upon the formation of the PBID by the
actions of the Council to approve the Resolution of Formation, a separate action of the Community
Development Commission ('Commission") of the City of San Bernardino is proposed to authorize the
loan in an amount not to exceed $1,218,372 from Agency funds to be reimbursed over five years by the
PBID. The repayment of this loan will be obtained from the PBID assessments to be included on the
property tax bill of the three dealerships involving five individual properties.
RECOMMENDATION:
That the Mayor and Common Council and the Community Development Commission adopt the attached
Resolutions.
~~
Emil A. Marzullo, Interim Executive Director
P:\Agendas\Comm Dev Commlssion\CDC 2009\04-06-09 PBm Formalion SR (Final) doc
COMMISSION MEETING AGENDA
Meeting Date: 04/06/2009
Agenda Item Number: ~31---
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PUBLIC NOTICE
CITY OF SAN BERNARDINO
FORMATION OF A PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
SAN BERNARDINO AUTO CENTER
Notice is hereby given that the Mayor and Common Council of the City of San Bernardino
("Council") will consider a petition to form a Property and Business Improvement District
("PBID") pursuant to the Property and Business Improvement District Law of 1994 by the San
Bernardino Auto Center Association (the "Applicant") for the purposes of undertaking additional
security patrols, enhanced maintenance measures, increased landscaping features, enhanced
marketing activities, improved signage and street lighting, graffiti removal and other similar
activities and matters and capital improvements as may be permitted under the PBID law. The Joint
Public Hearing will be held on April 6, 2009, at 4:30 p.m. or as soon thereafter as the matter may be
heard, in the City Council Chambers located at 300 North "D" Street in the City of San Bernardino
("City").
At the public hearing, the Council shall receive evidence and testimony to initiate proceedings for
the formation of the PBID by the Applicant for the area generally bounded by Show Case Drive and
Century Avenue on the north, EI Camino Real on the east, Show Case Drive on the south and Auto
Plaza Drive on the west, which is generally known and referred to as the "San Bernardino Auto
Center." Specifically, the properties, subject to assessment, are Assessor's Parcel Numbers 0141-
251-55; 59; 60; 61; 74 (the "Property"). The City is required to conduct a noticed public hearing on
the formation of the PBID for the San Bernardino Auto Center, and subsequently consider and
adopt a Resolution of Formation as required pursuant to Section 33625 of the PBID law.
NOTICE IS FURTHER GIVEN that any and all persons are invited to appear before the Council
and present evidence or testimony concerning the foregoing matters relating to the formation of the
San Bernardino Auto Center PBID at the time, date and place set forth herein.
The City has reviewed the proposed formation under the California Environmental Quality Act
("CEQA") and has determined that the proposed creation of a PBID is exempt pursuant to Chapter
2.6, Section 21080 of the Public Resources Code, CEQA Statutes, and Section 15061(b)(3), Review
For Exemptions, of the CEQA Guidelines.
Interested persons may contact Colin Strange, Project Manager, at (909) 663-1044 or bye-mail at
cstrange{qlsbrda.org, for additional information relating to the joint public hearing and the proposed
formation of the PBID.
NOTICE given this 19th dav of March 2009.
Notice to the Press: Please publish twice: Once on March 22, 2009 and again on March 29, 2009.
Send Proof of Publication to: Colin Strange, Project Manager
Economic Development Agency
201 North "E" Street, Suite 301
San Bernardino, CA 9240 I
Wasana Chantha
From:
Sent:
To:
Subject:
9 lenda_ sobrique@dailyjoumal.com
Thursday, March 19, 2009 9:22 AM
Wasana Chantha
Confirmation of Order 1551219 for FORMATION OF A PROPERTY AND BUSINESS
IMPROVEMENT DISTRICT SB AUTO CENTER
Dear Customer:
The order listed below has been received and processed. If you have any questions regarding this order,
please contact your ad coordinator or the phone number listed below.
Customer Account Number: 100563
Type of Notice : GPNSB - GOVERNMENT PUBLIC NOTICE-SB
Ad Description : FORMATION OF A PROPERTY AND BUSINESS IMPROVEMENT
DISTRICT SB AUTO CENTER
Our Order Number : 1551219
Newspaper : SAN BERNARDINO COUNTY SUN
Publication Date(s) : 03/22/2009,03/29/2009
Thank you for using the Daily Journal Corporation.
GLENDA SOBRIQUE
DAILY JOURNAL CORPORATION
CALIFORNIA NEWSPAPER SERVICE BUREAU
915 E. FIRST ST., LOS ANGELES, CA 90012
Phone: (800) 788 7840 / (213)229-5300
Fax: (800) 540 4089 / (213)229-5481
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
FUNDING EQUAL TO $1,218,372 PURSUANT TO THE FORMATION OF
THE AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT
DISTRICT ("DISTRICT") AND FUNDING THE OPERATIONS AND
ACTIVITIES OF THE DISTRICT (SOUTHEAST INDUSTRIAL PARK AND
IVDA REDEVELOPMENT PROJECT AREAS)
WHEREAS, the Community Development Commission of the City of San Bernardino (the
"Commission") as the governing body of the Redevelopment Agency of the City of San Bernardino
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(the "Agency") is authorized under Health and Safety Code Section 33000, et seq., to cause the
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Agency to issue and to make loans to finance certain activities within the City of San Bernardino
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(the "City"); and
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13 WHEREAS, the laws of the State of California provide that cities may form a Property and
14 Business Improvement District ("PBID") pursuant to the Property and Business Improvement
15 District Law of 1994 (the "PBID Law") for the purposes of and pursuant to the provisions of the
16 PBm Law; and
17
WHEREAS, the City received a petition from the requisite number of property owners as
18 required by Section 3662 I (a) of the PBID Law requesting that the City initiate proceedings for the
19 formation of the Auto Center Property and Business Improvement District (the "District") for the
20 area generally bounded by Show Case Drive and Century Avenue on the north, EI Camino Real on
21 the east, Show Case Drive on the south and Auto Plaza Drive on the west, which area is generally
22 known and referred to as the "San Bernardino Auto Center"; and
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WHEREAS, the City has requested that the Agency assist the City with the financing of the
District, and the Commission on behalf of the Agency seeks to assist the City with such financing
by providing a loan (the "Loan") to the San Bernardino Auto Center, a non-profit mutual benefit
corporation (the "Corporation"), to fund the undertaking of additional security patrols, enhanced
security measures, enhanced maintenance measures, increased landscaping features, enhanced
marketing activities, improved signage and street lighting, graffiti removal, and other similar
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4-0-0,
P:\AgendasIResolutionslResolutionsI2009\04-06-09 PBID Fomatinn CDC Reso (Finaljdoc
1 activities and matters and capital improvements as may be permitted under the PBID Law and all as
2 set further forth in the Management District Plan as accepted and approved by the City; and
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WHEREAS, the Loan shall be evidenced by a note (the "Note") made by the Corporation to
4 the Agency, and the District assessment shall be recorded against each parcel of the District in the
5 records of San Bernardino County as set forth in the Engineer's Report as approved by the Mayor
6 and Common Council pursuant to a Resolution of Formation as adopted on April 6, 2009; and
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WHEREAS, as provided for in that certain Auto Center Property and Business Improvement
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District Waiver and Indemnification Agreement (the "Indemnification Agreement" in the form as
attached hereto as Exhibit "A"), by and among Clifford R. Cummings, a married man ("Clifford
Cummings"), Barbara B. Cummings, a married woman ("Barbara Cummings"), TTL, LLC, a
California limited liability company ("TTL"), and D.T.M. Land Company, LLC, a California
limited liability company ("DTM") (Clifford Cummings, Barbara Cummings, TTL and DTM
(collectively referred to as the "PBID Owners") and Agency, the PBID Owners shall indemnify,
without limitation, the Agency and the City in connection with the District and the Loan.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
17 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
18 FOLLOWS:
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Section 1. The Commission hereby finds that the recitals set forth above are true and correct
20 in all respects.
21 Section 2. On April 6, 2009, the Mayor and Common Council of the City of San Bernardino
22 ("Council") conducted a public hearing relating to the formation of the PBID pursuant to the
23 petition and, after the canvass of votes and reported by the City Clerk at said public hearing, duly
24 adopted the Resolution of Formation to provide for the formation of the District and to approve the
25 method levying the assessments upon the properties within the District all as further provided in the
26 Engineer's Report as attached to said Resolution of Formation.
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Section 3. The Commission hereby acknowledges that the purposes of the District as
28 formed by the City shall include, but not be limited to, the undertaking of additional security patrols,
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P:\AgendasIResolutionslResolutions\1009\04-06-09 PBID Formation CDC Reso (Final),doc
1 enhanced security measures, increased landscaping features, improved signage and street lighting,
2 graffiti removal, and other similar activities and matters and capital improvements all as may be
3 permitted under the PBID Law and as further set forth in the Management District Plan and the
4 Engineer's Report. The boundaries of the District are generally described as follows: Show Case
5 Drive and Century Avenue on the north, EI Camino Real on the east, Show Case Drive on the south
6 and Auto Plaza Drive on the west, which area is generally known and referred to as the "San
7 Bernardino Auto Center."
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Section 4. Assessments of the District shall be levied on the real property, and not on the
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businesses, within the District which assessments shall be due and payable in the same manner as
10 with other real property general taxes, special property taxes and other assessments as provided in
11 Section 36631, et seq., of the PBID Law and in the dollar amounts as set forth in the Engineer's
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Report.
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Section 5. The Commission hereby approves the Loan to the Agency in accordance with the
terms and conditions of the Note with any and all changes approved by the Interim Executive
Director of the Agency and Agency Counsel. The Note shall be executed by the Corporation and
said Corporation shall provide the governance of the District as required pursuant to Section 36650,
et seq., of the PBID Law. The Loan shall be repaid to the Agency, without interest, from the
collection of the assessments to be levied against the participating properties within the District on
the dates and in the amounts as provided in the Note. The Commission further authorizes and
directs the funding of an amount not to exceed $1,218,372 as the Loan to the Corporation for the
undertaking of the purposes of the District as set forth in the Management District Plan and the
Engineer's Report.
Section 6. The Commission hereby approves the Indemnification Agreement in the form as
25 attached to this Resolution as Exhibit "A" together with the form ofthe Promissory Note as attached
26 hereto as Exhibit "B". The Chairman, Interim Executive Director and Secretary are hereby
27 authorized to enter into and execute the Agreement with any changes as may be approved by the
28 Chairman or Interim Executive Director with the concurrence of Agency Counsel.
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P\Agendas\ResolutionslResolutions\1009\04-06-09 PBm Formation CDC Reso (Final) doc
1 Section 7. The Chairman, Interim Executive Director, Secretary, Agency Counsel and any
2 and all other officers of the Agency are hereby authorized and directed, for and in the name and on
3 behalf of the Agency, to do any and all things and take any and all actions, including execution and
4 delivery of any and all assignments, certificates, requisitions, agreements, notices, consents,
5 instruments of conveyance, warrants and other documents, which they, or any of them, may deem
6 necessary or advisable in order to consummate the transaction contemplated herein. Whenever in
7 this Resolution any officer of the Agency is authorized to execute or countersign any document or
8 take any action, such execution, countersigning or action may be taken on behalf of such officer by
9 any person designated by such officer to act on his or her behalf in the case such officer shall be
10 absent or unavailable. The Commission hereby appoints the Chairman and Interim Executive
11 Director as agents of the Agency for purposes of executing any and all documents and instruments
12 which any officer of the Agency is authorized to execute hereunder.
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Section 8. The City will rely upon the Corporation to provide the governance of the District
14 as required pursuant to Section 36650, et seq., of the PBID Law, and such Corporation shall provide
15 all reports, take actions and comply with the PBID Law and shall be responsible to implement the
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Management District Plan to the satisfaction ofthe City.
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Section 9. The improvements and activities to be provided in the District will be funded by
the Loan and the repayment thereof through the levy of the assessments within the District to thus
repay the Loan in the dollar amounts representing the assessments to be levied in each year as are
set forth as to each property as provided in the Engineer's Report. The revenue from the levy of
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assessments within the District shall not be used to provide improvements or activities outside the
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District or for any purpose other than the purposes specified in the Resolution of Formation for the
repayment of the Loan.
Section 10. This Resolution shall become effective immediately upon its adoption.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING
FUNDING EQUAL TO $1,218,372 PURSUANT TO THE FORMATION OF
THE AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT
DISTRICT ("DISTRICT") AND FUNDING THE OPERATIONS AND
ACTIVITIES OF THE DISTRICT (SOUTHEAST INDUSTRIAL PARK AND
IVDA REDEVELOPMENT PROJECT AREAS)
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
8 thereof, held on the day of
9 Commission Members: Aves
10 ESTRADA
11 BAXTER
12 BRINKER
13 SHORETT
14 KELLEY
15 JOHNSON
16 MC CAMMACK
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meeting
,2009, by the following vote to wit:
Navs
Abstain
Absent
Secretary
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The foregoing Resolution is hereby approved this
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day of
,2009.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
24 Approved as to Form:
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By:
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P:\AgendasIResolutions\Resolutionsl2009\04-06-09 PBID Formation CDC Reso (Final),doc
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EXHIBIT "A"
AUTO CENTER PROPERTY AND BUSINESS
IMPROVEMENT DISTRICT WAIVER AND
INDEMNIFICATION AGREEMENT
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P\AgendasIResolutionslResolutions\2009\04-06-09 PBID Fonnation CDC Reso (Final)_doc
AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER
AND INDEMNIFICATION AGREEMENT
THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
WAIVER AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of
,2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B.
Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota
Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a
California limited liability company (the "TTL"), the owners of the land where the
Mitsubishi/Mazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California
limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below)
(the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall
collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of
San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the
Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and
may collectively be referred to as the "Parties."
RECITALS
WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion
Dealership, TTL, as owner of the land, buildings and improvements where the Mitsubishi/Mazda
Dealership is located in the City of San Bernardino, County of San Bernardino, State of
California, and DTM, as owner of the Nissan Dealership need funds for marketing, public
security and safety and enhanced maintenance purposes in connection with the operation of each
automobile dealership all of which are located in the City of San Bernardino, County of San
Bernardino, State of California. Southern Automotive Marketing, a California corporation
("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and
TTL owns the land, buildings and improvements in connection with the Mitsubishi/Mazda
Dealership.
WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined
below), with the assistance and cooperation of the Agency and the City.
WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to
administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID
Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds
from the PBID Loan to perform and to provide the PBID Services (as defined below) to the
PBID Owners.
WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each
of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing
Assessor (as defined below) from the Annual Assessments Payments (as defined below)
collected by the Taxing Assessor from the PBID Owners.
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P\Agendas\Agenda Attachmenls\Agenda Allachmcnls\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc
WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as
defined below) to the Taxing Authority in the manner provided for in this Agreement.
WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only
from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor.
WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III
accordance with terms, covenants and conditions of the Note and of this Agreement.
WHEREAS, the PBID Owners understand that the Agency and the City shall have no
liability or obligation in connection with the following: (i) the creation, the existence, rejection,
the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the
PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the
City for the benefit of the PBID Owners, or anyone of them.
NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID
Owners and the Agency agree as follows:
I. Recitals. The matters set forth in the Recitals of this Agreement are true and
correct, are material inducements that caused the Parties to execute and to deliver this
Agreement, and are incorporated herein by this reference as if fully set forth in this Section I.
2. Definitions. The initially capitalized terms defined herein shall have the
meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this
Agreement. If one or more initially capitalized terms in this Agreement are not defined in the
preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially
capitalized term or terms shall have the meaning provided for in the Note.
Annual Assessments Payment. The "Annual Assessments Payment" shall mean
the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the
real estate tax assessor for the County of San Bernardino, State of California (the "Tax
Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's
Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a
period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372,
together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall
timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the
Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (1) lump sum on or
before December 10 of each Fiscal Year, but before the last day on which each payment may be
paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5)
consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December
10 and April I 0, of each Fiscal Year, but before the last day on which each payment may be paid
by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of
five (5) consecutive Fiscal Years.
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Annual Assessments Revenues. The "Annual Assessments Revenues" shall
collectively mean each PB1D Owner's Proportionate Annual Assessments Payment paid, or to be
paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years.
Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in
the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for
each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or
interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual
Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues
or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion
thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments
Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (1) lump sum or
in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including
Fiscal Year 2013/2014.
Annual Assessments. Each PBID Owner's Proportionate Annual Assessments
Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's
special benefit received from the identified services and activities performed and provided by the
Borrower on behalf of the PBID and their relative cost. These Annual Assessments are
assessments for the services and activities performed and provided by the Borrower which confer
special benefits upon the real property owned by the PBID Owners in the PBID for which the
services and activities are provided. The Annual Assessments are based upon the estimated
expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's
Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each
Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years,
together with late fees and interest charged by the Tax Assessor, assessed against the Toyota
Dealership and the underlying real property located at S Show Case Drive, San Bernardino,
California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate
amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and
interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying
real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141-
251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for
five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax
Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380
for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive
Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against
the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each
Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal
Years, together with late fees and interest charged by the Tax Assessor, assessed against the
Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual
Assessments Payment amount will appear as a line item on its annual San Bernardino County
real property tax bills.
Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a
California non-profit mutual benefit corporation, organized under the laws of the State of
California, acting for and on behalf of the PBID. The Borrower will run the day-to-day
operations of the PBID and will, without limitation, annually review the PBID budgets and file
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annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in
accordance with the Note. The Borrower shall be controlled by the PBID Owners until the
Indebtedness is paid in full to the Agency from the Taxing Assessor.
City. The "City" shall mean the City of San Bernardino.
County. The "County" shall mean San Bernardino County.
Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or
hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability
company, association, trust, or to any other person or entity controlled, directly or indirectly, by
the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in
whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or
any portion thereof, and/or by the underlying real property, or any part thereof or interest therein,
in which the Cummings own a fee simple interest or have an interest therein, as amended from
time to time.
DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter
made by a lender to DTM or to a corporation, partnership, limited liability company, association,
trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan
shall also include, without limitation, any loan secured, in whole or in part, by the Nissan
Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or
interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended
from time to time.
First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year
of the County.
Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For
purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal
Year for the County. Each PBID Owner shall pay its respective PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year
and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the
2013/2014 Fiscal Year, unless the PBID is terminated by the PBID Owners prior to the Maturity
Date of the Note.
Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and
unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax
Assessor, and all other fees, charges, sums and amounts (including, without limitation, all
attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under
the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that
have been paid by the PBID Owners, and each of them, to the Tax Assessor, in the manner and
subject to the terms, covenants and conditions of the Note and this Agreement.
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Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and
shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and
conditions of the Note.
Late Char!!:e. The "Late Charge" shall mean zero percent (0%) on the payment
due and owing by the Borrower to the Agency under the Note, subject to any applicable cure
period(s) in the Note.
Laws. The "Laws" shall mean all applicable federal, state, municipal and local
laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in
effect, as amended from time to time.
Maturity Date. The "Maturity Date" shall mean April 15, 2014.
MitsubishilMazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean
the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San
Bernardino, State of California and owned by Southern Automotive Marketing, together with
vehicles, trucks, equipment, inventory and all other personal property however designated, now
or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San
Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive
Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land,
buildings, improvements and personal property owned by TTL now or hereafter used in
connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda
franchise, whether owned by TTL and/or by Southern Automotive Marketing.
Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership
and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment,
inventory and all other personal property however designated, now or hereafter located at 735
Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-74 owned by DTM, including, without limitation, all real and personal
property now or hereafter used in connection with or relating to the Nissan Dealership and the
Nissan franchise.
PBID. The "PBID" shall mean the Auto Center Property and Business
Improvement District. The PBID is designed to improve and convey special benefits to the
PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the
PBID, will provide new services and activities, including, without limitation, public security and
safety, enhanced maintenance and marketing activities not provided by the Agency or by the
City to the PBID Owners in the PBID. The PBID shall be created effective April 15,2009 and
shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners.
PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the
Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The
Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced
maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The
PBID Loan can be disbursed to the Borrower in one (I) or more advances with the last advance
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to be made by the Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a
revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by
the Borrower from the Agency. The PBID Loan is evidenced by the Note and the Borrower shall
cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected
by the Tax Assessor from the PBID Owners, or anyone of them, the principal amount disbursed
by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor
in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued
and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums
due and payable under the Note. The PBID Loan shall be paid by the Tax Assessor to the
Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the
Tax Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms,
covenants and conditions of this Note.
PHID Owners. The "PBID Owners" shall collectively mean the following
owners of the improved real property and auto dealerships located within the PBID: (i) the
Cummings who own the Toyota Dealership, (ii) the Cummings who own the Scion Dealership
(iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and
improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino,
County of San Bernardino, State of California.
PHID Owner's Proportionate Annual Assessments Payment. The PBID
Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year.
PHID Services. The "PBID Services" shall mean the new services and activities
provided by the Borrower to and for the benefit off each PBID Owner in the PBID, including,
without limitation, public security and safety, enhanced maintenance and marketing activities not
provided by the Agency or by the City to the PBID Owners in the PBID.
Principal. The "Principal" shall mean one (I) or more advances made by the
Agency to the Borrower during the Term of the Note in a principal amount not to exceed
$1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower has no
right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the
Agency. The Borrower shall pay the Indebtedness in accordance with the Note.
Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and
all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory,
equipment and all other personal property however designated, now or hereafter located at 650
Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-61, including, without limitation, all real and personal property now or
hereafter used in connection with or relating to the operation of the Scion Dealership and of the
Scion franchise.
State. The "State" means the State of California.
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Term. The "Term" shall mean the term of the Note commencing on the date of
the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms,
covenants and conditions of the Note.
Tovota Dealershiu. The Toyota Dealership shall mean the Toyota Dealership
and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks,
vehicles and all other personal property however designated now or hereafter located at S Show
Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of
San Bernardino, State of California, APN Number 0141-251-59, including, without limitation,
all real and personal property now and hereafter used in connection with or relating to the
operation of the Toyota Dealership and/or of the Toyota franchise.
TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter
made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation,
partnership, limited liability company, association, trust, or to any other person or entity
controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL
Loan shall also include, without limitation, any loan secured, in whole or in part, by the
Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real
property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has
an interest therein, as amended from time to time.
4. Reuresentations, Warranties and Covenants.
(a) Each PBlD Owner represents, warrants and covenants to the Agency that:
(i) it is duly organized or formed, as the case may be, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement, or in the case of
the Cummings are individuals who are competent and who have all requisite power and authority
to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery
and performance by such PBID Owner of this Agreement has been duly authorized by all
necessary action of such PBID Owner and does not and will not (A) contravene the terms of the
articles or certificate of incorporation, certificate of organization or bylaws, or other applicable
organizational documents, of such PBID Owner, or result in a breach of or constitute a default
under any material lease, deed of trust, mortgage, instrument, document, contract or other
agreement to which such PBID Owner is a party or by which it or its properties may be bound or
affected; or violate any provision of any Law or the like binding on or affecting such PBID
Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBID Owner
enforceable against each PBID Owner in accordance with its terms, (iv) to the best of the PBID
Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted
by or is available to the PBID Owners, or anyone of them, against the Agency or against the
City, (v) the PBID Owners, and each of them, have requested the Agency and the City to assist
the PBID Owners in the creation of the PBID, without the Agency or the City incurring any
liability or obligation in connection with the filing, petitioning, creation, existence,
administration, termination or expiration of the PBID, (vi) the PBID Owners, and each of them,
have requested the Agency and the City to nominate and to appoint the Borrower to administer
and to manage the PBID and to perform and to provide the PBID Services to the PBID Owners
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located within the PBID, without the Agency or the City incurring any liability or obligation in
connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID
Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax
Assessor in accordance with this Agreement and with the Note, (ix) the PBID Services to be
performed and provided by the Borrower have not been performed or provided to any PBID
Owner by the Agency, by the City, by the Borrower or by any other governmental authority,
person or entity, (x) the creation ofthe PBID, the execution of the Note and/or of this Agreement
and the performance by the Borrower of the PBID Services shall not constitute an event of
default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each
PBID Owner shall comply with all applicable Laws.
(b) The Cummings represent, warrant and covenant to the Agency that: (i)
the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and
will continue to own in fee simple the underlying improved real property in connection with the
Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the
Cummings Loan and the Cummings will not be in default under the Cummings Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the Cummings Loan.
(c) DTM represents, warrants and covenants to the Agency that: (i) DTM is
the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the
underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in
default under the DTM Loan and DTM will not be in default under the DTM Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the DTM Loan.
(d) TTL represents, warrants and covenants to the Agency that: (i) Southern
Automotive Marketing is the owner of the MitsubishilMazda Dealership, (ii) TTL owns, and will
continue to own in fee simple the underlying improved real property in connection with the
Mitsubishi/Mazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default
under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default
under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions
contemplated by the Note and this Agreement do not violate, and will not constitute an event of
default under, the TTL Loan.
The representations and warranties made in this Agreement shall survive the
execution, performance, expiration and early termination of this Agreement.
5. Payment ofthe Annual Assessments Payment.
(a) Each PBID Owner shall timely pay its PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and
continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by
the PBID Owners.
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(b) Each PBID Owner shall timely pay its PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year, as follows: (i) in one (I) lump sum on or before
December 10 of each Fiscal Year, but before the last day on which such payment may be paid by
each PBID Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal
payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by
such PBID Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by each respective PBID
Owner to the Tax Assessor without penalty or interest.
(c) The PBID Owners, in the aggregate, shall pay to the Tax Assessor the
Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with
the First Fiscal Year and continuing annually thereafter through and including the 2013/2014
Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The
PBID Owners shall pay the Annual Assessments Payment together with any late fees and interest
assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal
Year, as follows: (i) in one (I) lump sum on or before December 10 of each Fiscal Year, but
before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor
without penalty or interest, or (ii) in two (2) equal payments of $121,837 each due and owing by
the PBID Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by the PBID Owners to the
Tax Assessor without penalty or interest.
(d) The Indebtedness shall be paid by the Tax Assessor to the Agency from
the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any
one of them, during each Fiscal Year, beginning with the 2009/2010 Fiscal Year and annually
thereafter through and including the 2013/2014 Fiscal Year.
(e) Within thirty (30) calendar days from receipt by the Tax Assessor of one
(I) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments
Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges
and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual
Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID
Owners, or anyone of them, for that Fiscal Year.
(f) Within thirty (30) calendar days from receipt by the Tax Assessor of an
installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of
$121,837 each, or any lesser amount thereof, together with all late charges and interest assessed
by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any
lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that
Fiscal Year.
(g) For the Term of the Promissory Note, within thirty (30) calendar days
from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any
lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the
Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the
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PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax
Assessor.
(h) The Indebtedness shall be paid in accordance with this Note to the Agency
at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as
is designated by the Agency in a notice to the Borrower given as provided for in this Note.
6. Default. An event of default (a "Default") shall occur whenever: (i) one or more
of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment
to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with
and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more
of the PBID Owners breaches any other covenant, promise or obligation in this Agreement
and/or in any other instrument, document and/or agreement, now or hereafter, evidencing,
securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions
contemplated in this Agreement, subject to any applicable cure period, (iii) has made a
representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency
is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax
Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is
insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of
creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it
(collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option,
declare the Indebtedness under this Note to be immediately due and payable, regardless of the
Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any
(collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to
the Agency the Default Payment Amount from the Annual Assessments Revenues collected from
the PBID Owners, or anyone ofthem.
7. Remedies. Upon the occurrence of a Default under this Agreement, and in
addition to any other remedies that the Agency and/or the City may have under this Agreement,
at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without
having any further liability or obligation to the PBID Owners, or to anyone of them, or to the
Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy
any default under this Agreement, or obtain any other remedy consistent with the purposes of
this Agreement and allowed at law and in equity. Such legal actions must be instituted in the
Superior Court of the County of San Bernardino, State of California, located within the City of
San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of
California. In the event that any legal action is commenced by the Agency and/or by the City
against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any
one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at
the address provided for in Section 10 of this Agreement for each such PBID Owner, in the
manner as required by the laws of the State of California. Unless a remedy is held to be
exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative
and in addition to any other remedies available to the Agency and/or to the City under this
Agreement, at law or in equity.
8. Termination. The Agency and/or the City shall also have the right, but not the
obligation, to terminate this Agreement immediately at any time, in the exercise of its sole
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discretion, upon written notice from the Agency and/or the City to each PBID Owner of such
termination of this Agreement (the "Termination Notice Letter") at the address provided for in
this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a
later date for the effective date of the termination of this Agreement is provided for in the
Termination Notice Letter. Upon the effective date of the termination of this Agreement, the
Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of
them, or to the Borrower.
9. Indemnification. Each PBID Owner hereby agrees to indemnify, defend, protect
and hold harmless the Agency and the City from and against and all actions, causes of actions,
claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees,
penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and
expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional,
of any kind or nature, in connection with, relating to, arising from the following: (i) any and all
loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan
Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any
buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles,
trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter
located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death
of any person or persons resulting from the acts or omissions of any PBID Owner, of the
Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the
Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of
the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by
the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand
from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion
thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but
which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor,
by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental
authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any
one of them, to pay to the Agency and/or to the City any monetary amounts due under this
Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert
witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement
is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the
default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the
failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this
Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of
this Agreement and/or the performance by the Borrower of this PBID Services is an event of
default under the Cummings Loan, under the TTL Loan and/or under the DTM Loan (singularly,
the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be
liable to the Agency and/or to the City for any of the Claims which are caused by the sole
negligence or willful acts or omissions of the Agency and/or of the City. This indemnification
provision shall survive the execution, the delivery, the performance, the expiration and the
termination of this Agreement.
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10. General Provisions.
10.1 Authoritv. Each signatory of this Agreement represents that such
signatory is duly authorized to execute this Agreement on behalf of the Party for which such
signatory executes this Agreement. Each Party represents that it has the appropriate legal
authority to enter into this Agreement and to perform all obligations under this Agreement.
10.2 Amendment. This Agreement may be amended or modified only by a
written agreement executed by each of the Parties to this Agreement which amendment or
modification must be approved by the governing board for the Agency.
10.3 Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except for its conflicts of law
rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought
and maintained to the extent allowed by law in the County of San Bernardino, State of
California.
10.4 Headinl!s. The paragraph headings used in this Agreement are intended
for convenience only and shall not be used in interpreting this Agreement or in determining any
of the rights or obligations of the Parties to this Agreement.
10.5 Construction and Interpretation. This Agreement has been arrived at
through negotiations and each Party has had a full and fair opportunity to revise the terms of this
Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved
against the drafting Party shall not apply in the construction or interpretation of this Agreement.
Further, the singular form shall include the plural, the masculine shall include the feminine, and
VIce versa.
10.6 Entire Al!reement. This Agreement constitutes the entire agreement of
the Parties with respect to the subject matter of this Agreement and supersedes any and all prior
oral or written agreement, understanding or representation relating to the subject matter of this
Agreement.
10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any
provision of this Agreement is held to be illegal, invalid or unenforceable under present or future
laws effective during the term of this Agreement, such provision shall be fully severable.
10.8 Successors and Assil!ns. This Agreement shall be binding on and inure
to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees,
spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners,
of anyone of them, may not assign or delegate their right, title and interests in or obligations
under this Agreement without the written consent of the Agency which consent shall not be
unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and
delegate its rights, title, interest and obligations in, to and under this Agreement without
obtaining the prior consent of the PBID Owners, or anyone of them.
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10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a
continuing waiver or a waiver of any subsequent breach either of the same or of another
provision of this Agreement and forbearance to enforce one or more of the remedies provided in
this Agreement shall not be deemed to be a waiver of that remedy.
10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or
other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees,
court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in
addition to any other relief deemed appropriate by a court of competent jurisdiction.
10.11 Necessary Actions. Each Party agrees to execute and deliver additional
agreements, documents and instruments and to take any additional actions as may be reasonably
required to carry out the purposes of this Agreement.
10.12 Representations and Warranties. Each representation and warranty
contained herein or made pursuant hereto shall be deemed to be material and to have been relied
upon and shall survive the execution, delivery, performance, expiration or termination of this
Agreement.
10.13 Compliance with Laws. In performing their respective obligations under
this Agreement, the Parties shall comply with and conform to all applicable Laws.
10.14 Third Party Beneficiaries. Except for the City, this Agreement shall not
create any right or interest in any non-Party or in any member of the public as a third party
beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce
this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions
of this Agreement.
10.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Conflicts ofInterest: No Individual Liabilitv. No official or employee
of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any
official or employee of the Agency participate in any decision relating to this Agreement which
affects such official's or employee's pecuniary interest in any corporation, partnership, limited
liability company, or association in which such official or employee is directly or indirectly
interested. No official or employee of the Agency shall be personally liable in the event of a
breach of this Agreement by the Agency.
10.17 Notices. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing unless provided otherwise in this
Agreement and shall be deemed to have been duly given and received on: (i) the date of service
if served personally or served by facsimile transmission on the Party to whom notice is to be
given at the address or addresses as provided below, (ii) on the first business day after mailing, if
mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier
service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day
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after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or
certified, postage prepaid, addressed as follows:
To the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 663-2294
Attn: Interim Executive Director
With a copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Phone: (909)-387-1137
Fax: (909) 387-1138
Attn: Timothy J. Sabo
To the PBID Owners:
Clifford R. Cummings
Barbara B. Cummings
735 Show Case Drive N
San Bernardino, California 92408
Phone:
Fax:
TTL,LLC
645 Auto Center Drive
San Bernardino, California 92408
Phone:
Fax:
Attn:
D.T.M. Land Company, LLC
735 Show Case Drive S
San Bernardino, California 92408
Phone:
Fax:
Attn:
10.18 Broker. Each Party will defend, indemnify, and hold the other Party
hannless from any claim, loss, or liability made or imposed by any other Party claiming a
commission or fee in connection with this transaction and arising out of that Party's own
conduct.
10.19 Cumulative Remedies. No failure on the part of the Agency to exercise,
and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or
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privilege preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise be available to the
Agency under this Agreement, at law or in equity.
10.20 Governinl!: Law. This Agreement shall be governed and construed III
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and
Business Improvement District Waiver and Indemnification Agreement as of the date first
written above.
AGENCY
San Bernardino Redevelopment Agency
of the City of San Bernardino,
a public body, corporate and politic
By:
Date:
Emil A. Marzullo, Interim Executive Director
Approved As To Form and Content
By: r~~
Agenc 0 sel
PBID OWNERS
By:
Clifford R. Cummings, a married man
By:
Barbara B. Cummings, a married woman
TTL, LLC,
a California limited liability company
By:
Name:
Title:
D.T.M. Land Company, LLC,
a California limited liability company
By:
Name:
Title:
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EXHIBIT "B"
FORM OF PROMISSORY NOTE
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AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
REVENUES PROMISSORY NOTE
Date:
$1,218,372
San Bernardino, California
THE UNDERSIGNED, THE SAN BERNARDINO AUTO CENTER, a California non-
profit mutual benefit corporation (the "Borrower") for and on behalf of the AUTO CENTER
PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (the "PBID"), promises to pay to
the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body,
corporate and politic (the "Agency"), or order, or to the Agent's assignee, the Principal (as
defined below), all accrued and unpaid interest at the Interest Rate (as defined below), and all
other amounts, charges and fees (including, without limitation, reasonable attorneys' fees, court
costs and expenses), in lawful money of the United States, in accordance with and subject to the
terms, covenants and conditions ofthis Auto Center Property and Business Improvement District
Revenues Promissory Note (the "Note").
I. Definitions. The initially capitalized terms defined herein shall have the following
meanings where appearing in this Note.
Annual Assessments Pavment. The "Annual Assessments Payment" shall mean
the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the
real estate tax assessor for the County of San Bernardino, State of California (the "Tax
Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's
Proportionate Annual Assessments Payment for each Fiscal Year for a period of five (5)
consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372, together with any
late fees or interest assessed by the Tax Assessor. The PBID Owners shall timely pay their
respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for
five (5) consecutive Fiscal Years, as follows: (i) in one (I) lump sum on or before December 10
of each Fiscal Year, but before the last day on which each payment may be paid by each PBID
Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal
Years, or (ii) in two equal payments of $121 ,837 each, on or before December 10 and April 10,
of each Fiscal Year, but before the last day on which each payment may be paid by each
respective PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5)
consecutive Fiscal Years.
Annual Assessments Revenues. The "Annual Assessments Revenues" shall be
each PBID Owner's Proportionate Annual Assessments Payment paid, or to be paid, to the Tax
Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years. Each Annual
Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in the amount of
$243,674, together with any late fees or interest assessed by the Tax Assessor, for each Fiscal
Year and in the aggregate amount of $1,218,372, together with any late fees or interest assessed
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by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual Assessments Revenues
collected by the Tax Assessor, and no other taxes, assessments, revenues or amounts, shall be
used to pay to the Agency the Annual Assessments Payment, or any portion thereof. Each PBID
Owner's Proportionate Annual Assessments Payment shall be paid by the PBID Owner to the
Tax Assessor in one (1) lump sum or in two (2) equal installments commencing with the
2009/2010 Fiscal Year through and including Fiscal Year 2013/2014.
Annual Assessments. Each PBID Owner's Proportionate Annual Assessments
Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's
special benefit received from the identified services and activities by the Borrower on behalf of
the PBID and their relative cost. These Annual Assessments are assessments for the services and
activities which confer special benefits upon the real property owned by the PBID Owners in the
PBID for which the services and activities are provided. The Annual Assessments are based
upon the estimated expenses the PBID Owners in the PBID will pay for these services. Each
PBID Owner's Proportionate Annual Assessments Payment in the PBID is as follows: (i)
$17,330 for each Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5)
consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor,
assessed against the Toyota Dealership real property located at S Show Case Drive, San
Bernardino, California, APN Number 0141-251-55, owned by Clifford R. Cummings and
Barbara B. Cummings (collectively, the "Cummings"), (ii) $34,660 for each Fiscal Year, in the
aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with
late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership real
property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141-251-
59, owned by the Cummings, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to
exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest
charged by the Tax Assessor, assessed against the Scion Dealership real property located at 650
Auto Center Drive, San Bernardino, California, APN Number 0141-251-61, owned by the
Cummings, (iv) $52,380 for each Fiscal Year, in the aggregate amount not to exceed $261,898
for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax
Assessor, assessed against the MitsubishilMazda Dealership real property located at 645 Auto
Center Drive, San Bernardino, California, APN Number 0141-251-60 owned by TTL, LLC, a
California limited liability company, and (v) $104,644 for each Fiscal Year, in the aggregate
amount not to exceed $523,222 for five (5) consecutive Fiscal Years, together with late fees and
interest charged by the Tax Assessor, assessed against the Nissan Dealership real property
located at 735 Show Case Dr S, San Bernardino, California, APN Number 0141-251-74 owned
by D.T.M. Land Company, LLC, a California limited liability company. Each PBID Owner's
Proportionate Annual Assessments Payment amount will appear as a line item on its annual San
Bernardino County real property tax bills.
Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a
California non-profit mutual benefit corporation, organized under the laws of the State of
California, acting for and on behalf of the PBID. The Borrower will run the day-to-day
operations of the PBID and will, without limitation, annually review the PBID budgets and file
annual reports with the Agency.
City. The "City" shall mean the City of San Bernardino.
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County. The "County" shall mean San Bernardino County.
First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year
of the County.
Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For
purposes of this Note, the First Fiscal Year shall mean the 2009/2010 Fiscal Year for the County.
The PBID Owners shall pay the PBID Owner's Proportionate Annual Assessments Payment to
the Tax Assessor commencing with the 2009/2010 Fiscal Year and for a period of four (4)
consecutive Fiscal Years thereafter with each such Annual Assessments Payment to be paid by
the PBID Owners to the Tax Assessor through the 201312014 Fiscal Year, unless the PBID is
terminated by the PBID Owners prior to the Maturity Date of this Note.
Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and
unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax
Assessor, and all other fees, charges, sums and amounts (including, without limitation, all
attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under
the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that
have been paid by the PBID Owners to the Tax Assessor, in the manner and subject to the terms,
covenants and conditions of this Note.
Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and
shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and
conditions of the Note.
Late Chan!:e. The "Late Charge" shall mean zero percent (0%) on the payment
due and owing by the PBID to the Agency under this Note, subject to any applicable cure
period(s) in this Note.
Maturitv Date. The "Maturity Date" shall mean April 15,2014.
PHID. The "PBID" shall mean the Auto Center Property and Business
Improvement District. The PBID is designed to improve and convey special benefits to the
PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the
PBID, will provide new services and activities, including, without limitation, public security and
safety, enhanced maintenance and marketing activities not provided by the Agency or by the
City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and
shall expire on April 15" 2014, unless sooner terminated or extended by the PBID Owners.
PHID Loan. The "PBID Loan" shall mean the loan made by the Agency to the
Borrower for and on behalf of the PBID in an amount not to exceed the Principal. The Borrower
shall use the PBID Loan proceeds to provide public security and safety, enhanced maintenance
and marketing activities for the benefit only of the PBID Owners in the PBID. The Loan can be
disbursed to the Borrower in one (I) or more advances with the last advance to be made by the
Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a revolving loan
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and any amount of the Loan repaid by the Borrower shall not be reborrowed by the Borrower
from the Agency. The PBID Loan is evidenced by this Note and the Borrower shall cause the
Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected by the Tax
Assessor from the PBID Owners, or anyone of them, the principal amount disbursed by the
Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor in
connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued and
unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums due
and payable under this Note. The PBID Loan shall be paid by the Tax Assessor to the Agency
only from the Annual Assessments Revenues, or any portion thereof, collected by the Tax
Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms,
covenants and conditions of this Note.
PBID Owners. The "PBID Owners" shall collectively mean the following
owners of the improved real property and auto dealerships located within the PBID: (i) the
Cummings who own the Toyota Dealership in City of San Bernardino, County of San
Bernardino, State of California, APN Numbers 0141-251-55 and 0141-251-59, (ii) the
Cummings who own the Scion Dealership in the City of San Bernardino, County of San
Bernardino, State of California, APN Number 0141-251-61, (iii) D.T.M. Land Company, LLC, a
California limited liability company, who owns the Nissan Dealership in the City of San
Bernardino, County of San Bernardino, State of California, APN Number 0141-251-74, and (iv)
TTL, LLC, a California limited liability company, who owns the land in the City of San
Bernardino, County of San Bernardino, State of California, APN Number 0141-251-60 where
the Mitsubishi and Mazda Dealership are located. The Mitsubishi dealership and the Mazda
dealership are owned by Southern Automotive Marketing, Inc., a California corporation.
PBID Owner's Proportionate Annual Assessments Payment shall mean that
portion of the Annual Assessments Payment to be paid by a PBID Owner to the Tax Assessor for
each Fiscal Year.
Principal. The "Principal" shall mean one (I) or more advances made by the
Agency to the Borrower during the Term of the Note in a principal amount not to exceed
$1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower will have
no right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the
Agency.
State. The "State" means the State of California.
Term. The 'Term" shall mean the term of this Note commencing on the date of
the execution of this Note and continuing thereafter until the Maturity Date, subject to the terms,
covenants and conditions of this Note.
2. Interest. Commencing on the date of this Note, interest shall accrue at the
Interest Rate on the outstanding Principal of this Note until the Maturity Date or the date that the
Indebtedness is paid in full by under this Note to the Agency, whichever occurs last. Interest
shall be computed based on a 365/366 day year and the actual number of days elapsed.
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3. Payment ofthe Indebtedness.
(a) The Indebtedness shall be paid by the Tax Assessor to the Agency from
the Annual Assessments Revenues collected by the Tax Assessor from the PBIO Owners, or any
one of them, during each Fiscal Year, beginning with the 2009/20 I 0 Fiscal Year and annually
thereafter through and including the 2013/2014 Fiscal Year.
(b) Within thirty (30) calendar days from receipt by the Tax Assessor of one
(I) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments
Revenues in the amount of $243,674, or any lesser amount thereof, the Tax Assessor shall pay to
the Agency such Annual Assessments Revenues, or any lesser amount, collected by the Tax
Assessor from the PBID Owners, or anyone of them, for that Fiscal Year.
( c) Within thirty (30) calendar days from receipt by the Tax Assessor of an
installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of
$121,837 each, or any lesser amount thereof, the Tax Assessor shall pay to the Agency each such
installment, or any lesser amount, collected by the Tax Assessor from the PBIO Owners, or any
one of them, for that Fiscal Year.
(d) For the Term of this Promissory Note, within thirty (30) calendar days
from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any
lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the
Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the
PBIO Owners, or anyone of them, together with late fees and interest assessed by the Tax
Assessor.
(e) The Indebtedness shall be paid in accordance with this Note to the Agency
at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as
is designated by the Agency in a notice to the Borrower given as provided for in this Note.
4. Representations and Warranties. The Borrower represents and warrants to the
Agency that: (i) the Borrower is duly organized or formed, as the case may be, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation, and has
all requisite power and authority to execute, deliver and perform its obligations under this Note,
(ii) the execution, delivery and performance by the Borrower of this Note has been duly
authorized by all necessary action of the Borrower and does not and will not (A) contravene the
terms of the articles or certificate of incorporation, or bylaws, or other applicable organizational
documents, of the Borrower, or result in a breach of or constitute a default under any material
lease, instrument, contract or other agreement to which the Borrower is a party or by which it or
its properties may be bound or affected; or violate any provision of any law, rule, regulation,
order, judgment, decree or the like binding on or affecting the Borrower, (iii) this Note is the
legal, valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with their terms, and (iv) to the best of the Borrower's knowledge, there is no claim,
defense, counterclaim or set-off which could be asserted by or is available to the Borrower
against the Agency.
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5. Prepayment. This Note may be prepaid by the Borrower, at any time, in whole
or in part, without premium or penalty, as long as any principal prepayment is accompanied by a
payment of interest accrued to the date of prepayment on the amount prepaid, if any, and any and
all late charges or other amounts then owed by the Borrower hereunder, if any.
6. Application of Payments. Each payment under this Note shall be credited first
to: (i) any late charges and interest thereon, (ii) all accrued and unpaid interest, if any, and then
to (iii) Principal then due and payable under this Note.
7. Conditions Precedent. The Agency shall have no duty or obligation to execute,
deliver or perform under this Note until all conditions precedent provided for in this Note have
been fully performed and satisfied by or for the Borrower (or have been expressly waived in
writing by the Agency).
8. Notice. Any notice required to be provided in this Note shall be given in writing
and shall be sent (i) for personal delivery by a delivery service that provides a record of the date
of delivery, the individual to whom delivery was made, and the address where delivery was
made; (ii) by first-class certified United States mail, postage prepaid, return receipt requested; or
(iii) by a nationally recognized overnight courier service, marked for next day business delivery.
All notices shall be addressed to the party to whom such notice is to be given at the address
stated below or to such other address as a party may designate by written notice to the other. All
notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of delivery; (c)
if sent by certified mail, the second day on which regular United States mail delivery service is
provided after the day of mailing or, if sent by overnight delivery service, on the next day on
which such service makes next-business day deliveries after the day of sending. The address for
the Borrower and for the Agency shall be as follows, subject to any written notice of a change of
address by one party to the other:
Address For the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Interim Executive Director
Telephone: (909) 663-1044
Fax: (909) 888-9413
With a copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Attention: Timothy 1. Sabo
Telephone: (909) 387-1130
Fax: (909) 387-1138
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FOURTH DRAFT - 03-30-09
Address For Borrower:
San Bernardino Auto Center
10832 C Lemon Drive PMB 120
Yorba Linda, California 92886
Attention: Cathleen McCarthy
Telephone: (714) 878-4848
9. Default. Subject to Section 7 of this Note, and any applicable cure period(s)
provided for in this Note, a default shall occur whenever the Borrower (a) fails to pay to the
Agency any sum due under this Note when it becomes due and payable, (b) breaches any other
covenant, promise or obligation in this Note or any other instrument, document and/or
agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in
connection with, the transaction contemplated in this Note, (c) has made a representation or
warranty to the Agency that is or becomes false, (d) the Agency is not timely paid from the Tax
Assessor the Annual Assessments Payments collected by the Tax Assessor from the PBID
Owners, or anyone of them, (e) one or more of the PBro Owner's fails to pay to the Tax
Assessor its PBro Owner's Proportionate Annual Assessments Payment, or any portion thereof;
or (f) the PBro is terminated (collectively, a "Default"). Upon the occurrence of a Default, the
Agency may, at its option, declare the Indebtedness under this Note to be immediately due and
payable, regardless of the Maturity Date, subject any cure periods provided for in this Note, if
any (collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay
to the Agency the Default Payment Amount from the Annual Assessments Revenues collected
from the PBro Owners, or anyone of them.
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any
real or personal property of any nature whatsoever. The Indebtedness under this Note shall be
paid by the Tax Assessor only from the Annual Assessments Revenues collected by the Tax
Assessor from the PBID Owners, or anyone of them.
11. Modification. This Note may not be modified, amended, waived or extended,
changed, discharged or terminated orally or by any act on the part of the Agency or of the
Borrower, but only by an agreement in writing signed by the Agency and the Borrower.
12. Headinl!s. The headings of this Note are for purposes of reference only and shall
not limit or otherwise affect the meaning thereof.
13. Interoretation. Common nouns and pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular and plural, as the identity of the person or entity may in the
context require.
14. Governinl! Law. This Note shall be governed by and construed in accordance
with the laws of the State of California.
15. No Waiver: Cumulative Remedies. No failure on the part of the Agency to
exercise, and no delay in exercising any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the exercise of any other
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FOURTH DRAFT - 03-30-09
right, remedy, power or privilege. The rights and remedies under this Note are cumulative and
not exclusive of any rights, remedies, powers and privileges that may otherwise be available to
the Agency under this Note, at law or in equity.
16. Entire Al!:reement. This Note contains the entire agreement of the Borrower
with respect to the subject matter hereof.
17. Severability. Whenever possible, each provision of this Note shall be interpreted
in such marmer as to be effective and valid under all applicable laws and regulations. If,
however, any provision of this Note shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to
the minimum requirements of such law or regulation, or, if for any reason it is not deemed so
modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of this Note, or the validity or effectiveness of such
provision in any other jurisdiction.
18. Judicial Proceedinl!:s and Attornevs' Fees. If either party hereto files any action
or brings any action or proceeding against the other arising out of this Note, then as between the
Agency and the Borrower, 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. The costs, salary and expenses of the City Attorney for the City and members of his office
in enforcing this Note shall be considered as "attorneys' fees" for purposes of this Section. Any
such action or proceeding must be commenced in the Superior Court for the County of San
Bernardino, San Bernardino District, State of California.
19. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Agency
in the enforcement of this Note shall be added to the amounts due under this Note.
20. Assil!:nment. This Note may be assigned by the Agency but not by the Borrower,
without the prior written consent of the Agency which consent may be given or withheld by the
Agency in it sole and absolute discretion. No consented to assignment by the Borrower shall
relieve the Borrower from any of its obligations or liabilities hereunder. The terms, covenants
and conditions of this Note shall be binding upon, and inure to the benefit of, the successors and
assigns of Agency and the Borrower.
END OF PAGE
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IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and
Business Improvement District Revenues Promissory Note as of the date first written above.
BORROWER
San Bernardino Auto Center,
a California non-profit mutual benefit corporation
By:
Name:
Title:
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AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER
AND INDEMNIFICATION AGREEMENT
THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
WAIVER AND INDEMNIFICA nON AGREEMENT (this "Agreement"), dated as of
,2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B.
Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota
Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a
California limited liability company (the "TTL"), the owners of the land where the
Mitsubishi/Mazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California
limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below)
(the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall
collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of
San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the
Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and
may collectively be referred to as the "Parties."
RECITALS
WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion
Dealership, TTL, as owner ofthe land, buildings and improvements where the Mitsubishi/Mazda
Dealership is located in the City of San Bernardino, County of San Bernardino, State of
California, and DTM, as owner of the Nissan Dealership need funds for marketing, public
security and safety and enhanced maintenance purposes in connection with the operation of each
automobile dealership all of which are located in the City of San Bernardino, County of San
Bernardino, State of California. Southern Automotive Marketing, a California corporation
("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and
TTL owns the land, buildings and improvements in connection with the Mitsubishi/Mazda
Dealership.
WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined
below), with the assistance and cooperation of the Agency and the City.
WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to
administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID
Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds
from the PBID Loan to perform and to provide the PBID Services (as defined below) to the
PBID Owners.
WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each
of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing
Assessor (as defined below) from the Annual Assessments Payments (as defined below)
collected by the Taxing Assessor from the PBID Owners.
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WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as
defined below) to the Taxing Authority in the manner provided for in this Agreement.
WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only
from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor.
WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III
accordance with terms, covenants and conditions of the Note and of this Agreement.
WHEREAS, the PBID Owners understand that the Agency and the City shall have no
liability or obligation in connection with the following: (i) the creation, the existence, rejection,
the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the
PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the
City for the benefit of the PBID Owners, or anyone of them.
NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID
Owners and the Agency agree as follows:
I. Recitals. The matters set forth in the Recitals of this Agreement are true and
correct, are material inducements that caused the Parties to execute and to deliver this
Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1.
2. Definitions. The initially capitalized terms defined herein shall have the
meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this
Agreement. If one or more initially capitalized terms in this Agreement are not defined in the
preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially
capitalized term or terms shall have the meaning provided for in the Note.
Annual Assessments Payment. The "Annual Assessments Payment" shall mean
the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the
real estate tax assessor for the County of San Bernardino, State of California (the "Tax
Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's
Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a
period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372,
together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall
timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the
Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (1) lump sum on or
before December 10 of each Fiscal Year, but before the last day on which each payment may be
paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5)
consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December
10 and April I 0, of each Fiscal Year, but before the last day on which each payment may be paid
by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of
five (5) consecutive Fiscal Years.
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Annual Assessments Revenues. The "Annual Assessments Revenues" shall
collectively mean each PBID Owner's Proportionate Annual Assessments Payment paid, or to be
paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years.
Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in
the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for
each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or
interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual
Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues
or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion
thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments
Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (I) lump sum or
in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including
Fiscal Year 2013/2014.
Annual Assessments. Each PBID Owner's Proportionate Annual Assessments
Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's
special benefit received from the identified services and activities performed and provided by the
Borrower on behalf of the PBID and their relative cost. These Annual Assessments are
assessments for the services and activities performed and provided by the Borrower which confer
special benefits upon the real property owned by the PBID Owners in the PBID for which the
services and activities are provided. The Annual Assessments are based upon the estimated
expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's
Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each
Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years,
together with late fees and interest charged by the Tax Assessor, assessed against the Toyota
Dealership and the underlying real property located at S Show Case Drive, San Bernardino,
California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate
amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and
interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying
real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141-
251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for
five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax
Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380
for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive
Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against
the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each
Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal
Years, together with late fees and interest charged by the Tax Assessor, assessed against the
Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual
Assessments Payment amount will appear as a line item on its annual San Bernardino County
real property tax bills.
Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a
California non-profit mutual benefit corporation, organized under the laws of the State of
California, acting for and on behalf of the PBID. The Borrower will run the day-to-day
operations of the PBID and will, without limitation, annually review the PBID budgets and file
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annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in
accordance with the Note. The Borrower shall be controlled by the PBID Owners until the
Indebtedness is paid in full to the Agency from the Taxing Assessor.
City. The "City" shall mean the City of San Bernardino.
County. The "County" shall mean San Bernardino County.
Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or
hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability
company, association, trust, or to any other person or entity controlled, directly or indirectly, by
the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in
whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or
any portion thereof, and/or by the underlying real property, or any part thereof or interest therein,
in which the Cummings own a fee simple interest or have an interest therein, as amended from
time to time.
DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter
made by a lender to DTM or to a corporation, partnership, limited liability company, association,
trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan
shall also include, without limitation, any loan secured, in whole or in part, by the Nissan
Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or
interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended
from time to time.
First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year
of the County.
Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For
purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal
Year for the County. Each PBID Owner shall pay its respective PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year
and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the
2013/2014 Fiscal Year, unless the PBID is terminated by the PBID Owners prior to the Maturity
Date of the Note.
Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and
unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax
Assessor, and all other fees, charges, sums and amounts (including, without limitation, all
attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under
the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that
have been paid by the PBID Owners, and each of them, to the Tax Assessor, in the manner and
subject to the terms, covenants and conditions of the Note and this Agreement.
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Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and
shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and
conditions of the Note.
Late Chare:e. The "Late Charge" shall mean zero percent (0%) on the payment
due and owing by the Borrower to the Agency under the Note, subject to any applicable cure
period(s) in the Note.
Laws. The "Laws" shall mean all applicable federal, state, municipal and local
laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in
effect, as amended from time to time.
Maturity Date. The "Maturity Date" shall mean April 15, 2014.
MitsubishiIMazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean
the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San
Bernardino, State of California and owned by Southern Automotive Marketing, together with
vehicles, trucks, equipment, inventory and all other personal property however designated, now
or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San
Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive
Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land,
buildings, improvements and personal property owned by TTL now or hereafter used in
connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda
franchise, whether owned by TTL and/or by Southern Automotive Marketing.
Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership
and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment,
inventory and all other personal property however designated, now or hereafter located at 735
Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-74 owned by DTM, including, without limitation, all real and personal
property now or hereafter used in connection with or relating to the Nissan Dealership and the
Nissan franchise.
PBID. The "PBID" shall mean the Auto Center Property and Business
Improvement District. The PBID is designed to improve and convey special benefits to the
PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the
PBID, will provide new services and activities, including, without limitation, public security and
safety, enhanced maintenance and marketing activities not provided by the Agency or by the
City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and
shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners.
PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the
Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The
Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced
maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The
PBID Loan can be disbursed to the Borrower in one (1) or more advances with the last advance
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to be made by the Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a
revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by
the Borrower from the Agency. The PBID Loan is evidenced by the Note and the Borrower shall
cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected
by the Tax Assessor from the PBID Owners, or anyone of them, the principal amount disbursed
by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor
in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued
and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums
due and payable under the Note. The PBID Loan shall be paid by the Tax Assessor to the
Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the
Tax Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms,
covenants and conditions of this Note.
PBID Owners. The "PBID Owners" shall collectively mean the following
owners of the improved real property and auto dealerships located within the PBID: (i) the
Cummings who own the Toyota Dealership, (ii) the Cummings who own the Scion Dealership
(iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and
improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino,
County of San Bernardino, State of California.
PBID Owner's Proportionate Annual Assessments Payment. The PBID
Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year.
PBID Services. The "PBID Services" shall mean the new services and activities
provided by the Borrower to and for the benefit off each PBID Owner in the PBID, including,
without limitation, public security and safety, enhanced maintenance and marketing activities not
provided by the Agency or by the City to the PBID Owners in the PBID.
Principal. The "Principal" shall mean one (I) or more advances made by the
Agency to the Borrower during the Term of the Note in a principal amount not to exceed
$1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower has no
right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the
Agency. The Borrower shall pay the Indebtedness in accordance with the Note.
Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and
all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory,
equipment and all other personal property however designated, now or hereafter located at 650
Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-61, including, without limitation, all real and personal property now or
hereafter used in connection with or relating to the operation of the Scion Dealership and of the
Scion franchise.
State. The "State" means the State of California.
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Term. The "Term" shall mean the term of the Note commencing on the date of
the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms,
covenants and conditions of the Note.
Tovota Dealership. The Toyota Dealership shall mean the Toyota Dealership
and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks,
vehicles and all other personal property however designated now or hereafter located at S Show
Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of
San Bernardino, State of California, APN Number 0141-251-59, including, without limitation,
all real and personal property now and hereafter used in connection with or relating to the
operation of the Toyota Dealership and/or of the Toyota franchise.
TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter
made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation,
partnership, limited liability company, association, trust, or to any other person or entity
controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL
Loan shall also include, without limitation, any loan secured, in whole or in part, by the
Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real
property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has
an interest therein, as amended from time to time.
4. Representations, Warranties and Covenants.
(a) Each PBID Owner represents, warrants and covenants to the Agency that:
(i) it is duly organized or formed, as the case may be, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement, or in the case of
the Cummings are individuals who are competent and who have all requisite power and authority
to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery
and performance by such PBID Owner of this Agreement has been duly authorized by all
necessary action of such PBID Owner and does not and will not (A) contravene the terms of the
articles or certificate of incorporation, certificate of organization or bylaws, or other applicable
organizational documents, of such PBID Owner, or result in a breach of or constitute a default
under any material lease, deed of trust, mortgage, instrument, document, contract or other
agreement to which such PBID Owner is a party or by which it or its properties may be bound or
affected; or violate any provision of any Law or the like binding on or affecting such PBID
Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBID Owner
enforceable against each PBID Owner in accordance with its terms, (iv) to the best of the PBID
Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted
by or is available to the PBID Owners, or anyone of them, against the Agency or against the
City, (v) the PBID Owners, and each of them, have requested the Agency and the City to assist
the PBID Owners in the creation of the PBID, without the Agency or the City incurring any
liability or obligation in connection with the filing, petitioning, creation, existence,
administration, termination or expiration of the PBID, (vi) the PBID Owners, and each of them,
have requested the Agency and the City to nominate and to appoint the Borrower to administer
and to manage the PBID and to perform and to provide the PBID Services to the PBID Owners
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located within the PBID, without the Agency or the City incurring any liability or obligation in
connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID
Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax
Assessor in accordance with this Agreement and with the Note, (ix) the PBID Services to be
performed and provided by the Borrower have not been performed or provided to any PBID
Owner by the Agency, by the City, by the Borrower or by any other governmental authority,
person or entity, (x) the creation of the PBID, the execution of the Note and/or of this Agreement
and the performance by the Borrower of the PBID Services shall not constitute an event of
default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each
PBID Owner shall comply with all applicable Laws.
(b) The Cummings represent, warrant and covenant to the Agency that: (i)
the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and
will continue to own in fee simple the underlying improved real property in connection with the
Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the
Cummings Loan and the Cummings will not be in default under the Cummings Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the Cummings Loan.
(c) DTM represents, warrants and covenants to the Agency that: (i) DTM is
the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the
underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in
default under the DTM Loan and DTM will not be in default under the DTM Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the DTM Loan.
(d) TTL represents, warrants and covenants to the Agency that: (i) Southern
Automotive Marketing is the owner ofthe Mitsubishi/Mazda Dealership, (ii) TTL owns, and will
continue to own in fee simple the underlying improved real property in connection with the
MitsubishilMazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default
under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default
under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions
contemplated by the Note and this Agreement do not violate, and will not constitute an event of
default under, the TTL Loan.
The representations and warranties made in this Agreement shall survive the
execution, performance, expiration and early termination ofthis Agreement.
5. Payment of the Annual Assessments Payment.
(a) Each PBID Owner shall timely pay its PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and
continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by
the PBID Owners.
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(b) Each PBro Owner shall timely pay its PBro Owner's Proportionate
Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year, as follows: (i) in one (1) lump sum on or before
December 10 of each Fiscal Year, but before the last day on which such payment may be paid by
each PBro Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal
payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by
such PBro Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by each respective PBro
Owner to the Tax Assessor without penalty or interest.
(c) The PBro Owners, in the aggregate, shall pay to the Tax Assessor the
Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with
the First Fiscal Year and continuing annually thereafter through and including the 2013/2014
Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The
PBro Owners shall pay the Annual Assessments Payment together with any late fees and interest
assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal
Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but
before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor
without penalty or interest, or (ii) in two (2) equal payments of$121,837 each due and owing by
the PBro Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by the PBro Owners to the
Tax Assessor without penalty or interest.
(d) The Indebtedness shall be paid by the Tax Assessor to the Agency from
the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any
one of them, during each Fiscal Year, beginning with the 2009/20 I 0 Fiscal Year and annually
thereafter through and including the 2013/2014 Fiscal Year.
(e) Within thirty (30) calendar days from receipt by the Tax Assessor of one
(1) lump sum payment from the PBro Owners, or anyone of them, of the Annual Assessments
Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges
and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual
Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID
Owners, or anyone of them, for that Fiscal Year.
(f) Within thirty (30) calendar days from receipt by the Tax Assessor of an
installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of
$121,837 each, or any lesser amount thereof, together with all late charges and interest assessed
by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any
lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone ofthem, for that
Fiscal Year.
(g) For the Term of the Promissory Note, within thirty (30) calendar days
from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any
lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the
Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the
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PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax
Assessor.
(h) The Indebtedness shall be paid in accordance with this Note to the Agency
at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as
is designated by the Agency in a notice to the Borrower given as provided for in this Note.
6. Default. An event of default (a "Default") shall occur whenever: (i) one or more
of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment
to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with
and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more
of the PBID Owners breaches any other covenant, promise or obligation in this Agreement
and/or in any other instrument, document and/or agreement, now or hereafter, evidencing,
securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions
contemplated in this Agreement, subject to any applicable cure period, (iii) has made a
representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency
is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax
Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is
insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of
creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it
(collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option,
declare the Indebtedness under this Note to be immediately due and payable, regardless of the
Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any
(collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to
the Agency the Default Payment Amount from the Annual Assessments Revenues collected from
the PBID Owners, or anyone ofthem.
7. Remedies. Upon the occurrence of a Default under this Agreement, and in
addition to any other remedies that the Agency and/or the City may have under this Agreement,
at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without
having any further liability or obligation to the PBID Owners, or to anyone of them, or to the
Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy
any default under this Agreement, or obtain any other remedy consistent with the purposes of
this Agreement and allowed at law and in equity. Such legal actions must be instituted in the
Superior Court of the County of San Bernardino, State of California, located within the City of
San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of
California. In the event that any legal action is commenced by the Agency and/or by the City
against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any
one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at
the address provided for in Section 10 of this Agreement for each such PBID Owner, in the
manner as required by the laws of the State of California. Unless a remedy is held to be
exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative
and in addition to any other remedies available to the Agency and/or to the City under this
Agreement, at law or in equity.
8. Termination. The Agency and/or the City shall also have the right, but not the
obligation, to terminate this Agreement immediately at any time, in the exercise of its sole
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discretion, upon written notice from the Agency and/or the City to each PBID Owner of such
termination of this Agreement (the "Termination Notice Letter") at the address provided for in
this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a
later date for the effective date of the termination of this Agreement is provided for in the
Termination Notice Letter. Upon the effective date of the termination of this Agreement, the
Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of
them, or to the Borrower.
9. Indemnification. Each PBID Owner hereby agrees to indemnify, defend, protect
and hold harmless the Agency and the City from and against and all actions, causes of actions,
claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees,
penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and
expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional,
of any kind or nature, in connection with, relating to, arising from the following: (i) any and all
loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan
Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any
buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles,
trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter
located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death
of any person or persons resulting from the acts or omissions of any PBID Owner, of the
Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the
Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of
the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by
the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand
from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion
thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but
which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor,
by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental
authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any
one of them, to pay to the Agency and/or to the City any monetary amounts due under this
Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert
witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement
is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the
default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the
failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this
Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of
this Agreement and/or the performance by the Borrower of this PBID Services is an event of
default under the Cummings Loan, under the TTL Loan and/or under the DTM Loan (singularly,
the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be
liable to the Agency and/or to the City for any of the Claims which are caused by the sole
negligence or willful acts or omissions of the Agency and/or of the City. This indemnification
provision shall survive the execution, the delivery, the performance, the expiration and the
termination of this Agreement.
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10. General Provisions.
10.1 Authoritv. Each signatory of this Agreement represents that such
signatory is duly authorized to execute this Agreement on behalf of the Party for which such
signatory executes this Agreement. Each Party represents that it has the appropriate legal
authority to enter into this Agreement and to perform all obligations under this Agreement.
10.2 Amendment. This Agreement may be amended or modified only by a
written agreement executed by each of the Parties to this Agreement which amendment or
modification must be approved by the governing board for the Agency.
10.3 Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except for its conflicts of law
rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought
and maintained to the extent allowed by law in the County of San Bernardino, State of
California.
lOA HeadiDl.!:s. The paragraph headings used in this Agreement are intended
for convenience only and shall not be used in interpreting this Agreement or in determining any
of the rights or obligations of the Parties to this Agreement.
10.5 Construction and Interpretation. This Agreement has been arrived at
through negotiations and each Party has had a full and fair opportunity to revise the terms of this
Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved
against the drafting Party shall not apply in the construction or interpretation of this Agreement.
Further, the singular form shall include the plural, the masculine shall include the feminine, and
vice versa.
10.6 Entire Aereement. This Agreement constitutes the entire agreement of
the Parties with respect to the subject matter of this Agreement and supersedes any and all prior
oral or written agreement, understanding or representation relating to the subject matter of this
Agreement.
10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any
provision of this Agreement is held to be illegal, invalid or unenforceable under present or future
laws effective during the term of this Agreement, such provision shall be fully severable.
10.8 Successors and Assiens. This Agreement shall be binding on and inure
to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees,
spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners,
of anyone of them, may not assign or delegate their right, title and interests in or obligations
under this Agreement without the written consent of the Agency which consent shall not be
unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and
delegate its rights, title, interest and obligations in, to and under this Agreement without
obtaining the prior consent of the PBID Owners, or anyone of them.
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10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a
continuing waiver or a waiver of any subsequent breach either of the same or of another
provision of this Agreement and forbearance to enforce one or more of the remedies provided in
this Agreement shall not be deemed to be a waiver of that remedy.
10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or
other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees,
court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in
addition to any other relief deemed appropriate by a court of competent jurisdiction.
10.11 Necessary Actions. Each Party agrees to execute and deliver additional
agreements, documents and instruments and to take any additional actions as may be reasonably
required to carry out the purposes of this Agreement.
10.12 Representations and Warranties. Each representation and warranty
contained herein or made pursuant hereto shall be deemed to be material and to have been relied
upon and shall survive the execution, delivery, performance, expiration or termination of this
Agreement.
10.13 Compliance with Laws. In performing their respective obligations under
this Agreement, the Parties shall comply with and conform to all applicable Laws.
10.14 Third Party Beneficiaries. Except for the City, this Agreement shall not
create any right or interest in any non-Party or in any member of the public as a third party
beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce
this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions
of this Agreement.
10.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Conflicts of Interest; No Individual Liabilitv. No official or employee
of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any
official or employee of the Agency participate in any decision relating to this Agreement which
affects such official's or employee's pecuniary interest in any corporation, partnership, limited
liability company, or association in which such official or employee is directly or indirectly
interested. No official or employee of the Agency shall be personally liable in the event of a
breach of this Agreement by the Agency.
10.17 Notices. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing unless provided otherwise in this
Agreement and shall be deemed to have been duly given and received on: (i) the date of service
if served personally or served by facsimile transmission on the Party to whom notice is to be
given at the address or addresses as provided below, (ii) on the first business day after mailing, if
mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier
service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day
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after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or
certified, postage prepaid, addressed as follows:
To the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 663-2294
Attn: Interim Executive Director
With a copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Phone: (909)-387-1137
Fax: (909) 387-1138
Attn: Timothy J. Sabo
To the PBm Owners:
Clifford R. Cummings
Barbara B. Cummings
735 Show Case Drive N
San Bernardino, California 92408
Phone:
Fax:
TTL, LLC
645 Auto Center Drive
San Bernardino, California 92408
Phone:
Fax:
Attn:
D.T.M. Land Company, LLC
735 Show Case Drive S
San Bernardino, California 92408
Phone:
Fax:
Attn:
10.18 Broker. Each Party will defend, indemnify, and hold the other Party
harmless from any claim, loss, or liability made or imposed by any other Party claiming a
commission or fee in connection with this transaction and arising out of that Party's own
conduct.
10.19 Cumulative Remedies. No failure on the part of the Agency to exercise,
and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or
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privilege preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise be available to the
Agency under this Agreement, at law or in equity.
10.20 Governinl!: Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and
Business Improvement District Waiver and Indemnification Agreement as of the date first
written above.
AGENCY
San Bernardino Redevelopment Agency
of the City of San Bernardino,
a public body, corporate and politic
By:
Date:
Emil A. Marzullo, Interim Executive Director
Approved As To Form and Content
By: ~YiL
Agency o~~el
PBm OWNERS
By:
Clifford R. Cummings, a married man
By:
Barbara B. Cummings, a married woman
TTL, LLC,
a California limited liability company
By:
Name:
Title:
D.T.M. Land Company, LLC,
a California limited liability company
By:
Name:
Title:
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AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER
AND INDEMNIFICATION AGREEMENT
THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
WAIVER AND INDEMNIFICA nON AGREEMENT (this "Agreement"), dated as of
, 2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B.
Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota
Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a
California limited liability company (the "TTL"), the owners of the land where the
MitsubishiIMazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California
limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below)
(the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall
collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of
San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the
Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and
may collectively be referred to as the "Parties."
RECITALS
WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion
Dealership, TTL, as owner of the land, buildings and improvements where the MitsubishilMazda
Dealership is located in the City of San Bernardino, County of San Bernardino, State of
California, and DTM, as owner of the Nissan Dealership need funds for marketing, public
security and safety and enhanced maintenance purposes in connection with the operation of each
automobile dealership all of which are located in the City of San Bernardino, County of San
Bernardino, State of California. Southern Automotive Marketing, a California corporation
("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and
TTL owns the land, buildings and improvements in connection with the MitsubishilMazda
Dealership.
WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined
below), with the assistance and cooperation of the Agency and the City.
WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to
administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID
Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds
from the PBID Loan to perform and to provide the PBID Services (as defined below) to the
PBID Owners.
WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each
of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing
Assessor (as defined below) from the Annual Assessments Payments (as defined below)
collected by the Taxing Assessor from the PBID Owners.
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WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as
defined below) to the Taxing Authority in the manner provided for in this Agreement.
WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only
from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor.
WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III
accordance with terms, covenants and conditions of the Note and of this Agreement.
WHEREAS, the PBID Owners understand that the Agency and the City shall have no
liability or obligation in connection with the following: (i) the creation, the existence, rejection,
the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the
PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the
City for the benefit of the PBID Owners, or anyone ofthem.
NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID
Owners and the Agency agree as follows:
I. Recitals. The matters set forth in the Recitals of this Agreement are true and
correct, are material inducements that caused the Parties to execute and to deliver this
Agreement, and are incorporated herein by this reference as if fully set forth in this Section I.
2. Definitions. The initially capitalized terms defined herein shall have the
meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this
Agreement. If one or more initially capitalized terms in this Agreement are not defined in the
preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially
capitalized term or terms shall have the meaning provided for in the Note.
Annual Assessments Payment. The "Annual Assessments Payment" shall mean
the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the
real estate tax assessor for the County of San Bernardino, State of California (the "Tax
Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's
Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a
period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372,
together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall
timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the
Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (I) lump sum on or
before December 10 of each Fiscal Year, but before the last day on which each payment may be
paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5)
consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December
10 and April 1 0, of each Fiscal Year, but before the last day on which each payment may be paid
by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of
five (5) consecutive Fiscal Years.
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(
Annual Assessments Revenues. The "Annual Assessments Revenues" shall
collectively mean each PBID Owner's Proportionate Annual Assessments Payment paid, or to be
paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years.
Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in
the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for
each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or
interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual
Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues
or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion
thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments
Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (I) lump sum or
in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including
Fiscal Year 2013/2014.
Annual Assessments. Each PBID Owner's Proportionate Annual Assessments
Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's
special benefit received from the identified services and activities performed and provided by the
Borrower on behalf of the PBID and their relative cost. These Annual Assessments are
assessments for the services and activities performed and provided by the Borrower which confer
special benefits upon the real property owned by the PBID Owners in the PBID for which the
services and activities are provided. The Annual Assessments are based upon the estimated
expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's
Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each
Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years,
together with late fees and interest charged by the Tax Assessor, assessed against the Toyota
Dealership and the underlying real property located at S Show Case Drive, San Bernardino,
California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate
amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and
interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying
real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141-
251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for
five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax
Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380
for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive
Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against
the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each
Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal
Years, together with late fees and interest charged by the Tax Assessor, assessed against the
Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual
Assessments Payment amount will appear as a line item on its annual San Bernardino County
real property tax bills.
Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a
California non-profit mutual benefit corporation, organized under the laws of the State of
California, acting for and on behalf of the PBID. The Borrower will run the day-to-day
operations of the PBID and will, without limitation, annually review the PBID budgets and file
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annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in
accordance with the Note. The Borrower shall be controlled by the PBIO Owners until the
Indebtedness is paid in full to the Agency from the Taxing Assessor.
City. The "City" shall mean the City of San Bernardino.
County. The "County" shall mean San Bernardino County.
Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or
hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability
company, association, trust, or to any other person or entity controlled, directly or indirectly, by
the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in
whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or
any portion thereof, and/or by the underlying real property, or any part thereof or interest therein,
in which the Cummings own a fee simple interest or have an interest therein, as amended from
time to time.
DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter
made by a lender to DTM or to a corporation, partnership, limited liability company, association,
trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan
shall also include, without limitation, any loan secured, in whole or in part, by the Nissan
Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or
interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended
from time to time.
First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year
ofthe County.
Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For
purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal
Year for the County. Each PBIO Owner shall pay its respective PBIO Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year
and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the
2013/2014 Fiscal Year, unless the PBIO is terminated by the PBIO Owners prior to the Maturity
Date of the Note.
Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and
unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax
Assessor, and all other fees, charges, sums and amounts (including, without limitation, all
attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under
the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that
have been paid by the PBIO Owners, and each of them, to the Tax Assessor, in the manner and
subject to the terms, covenants and conditions of the Note and this Agreement.
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Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and
shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and
conditions of the Note.
Late Chan!e. The "Late Charge" shall mean zero percent (0%) on the payment
due and owing by the Borrower to the Agency under the Note, subject to any applicable cure
period(s) in the Note.
Laws. The "Laws" shall mean all applicable federal, state, municipal and local
laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in
effect, as amended from time to time.
Maturity Date. The "Maturity Date" shall mean April 15, 2014.
Mitsubishi/Mazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean
the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San
Bernardino, State of California and owned by Southern Automotive Marketing, together with
vehicles, trucks, equipment, inventory and all other personal property however designated, now
or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San
Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive
Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land,
buildings, improvements and personal property owned by TTL now or hereafter used in
connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda
franchise, whether owned by TTL and/or by Southern Automotive Marketing.
Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership
and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment,
inventory and all other personal property however designated, now or hereafter located at 735
Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-74 owned by DTM, including, without limitation, all real and personal
property now or hereafter used in connection with or relating to the Nissan Dealership and the
Nissan franchise.
PBID. The "PBID" shall mean the Auto Center Property and Business
Improvement District. The PBID is designed to improve and convey special benefits to the
PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the
PBID, will provide new services and activities, including, without limitation, public security and
safety, enhanced maintenance and marketing activities not provided by the Agency or by the
City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and
shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners.
PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the
Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The
Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced
maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The
PBID Loan can be disbursed to the Borrower in one (I) or more advances with the last advance
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to be made by the Agency to the Borrower no later than April 15, 2013. The PBm Loan is not a
revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by
the Borrower from the Agency. The PBm Loan is evidenced by the Note and the Borrower shall
cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected
by the Tax Assessor from the PBm Owners, or anyone of them, the principal amount disbursed
by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor
in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued
and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums
due and payable under the Note. The PBm Loan shall be paid by the Tax Assessor to the
Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the
Tax Assessor from the PBm Owners, or anyone of them, in the manner and subject to the terms,
covenants and conditions of this Note.
PBID Owners. The "PBm Owners" shall collectively mean the following
owners of the improved real property and auto dealerships located within the PBm: (i) the
Cununings who own the Toyota Dealership, (ii) the Cununings who own the Scion Dealership
(iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and
improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino,
County of San Bernardino, State of California.
PBID Owner's Proportionate Annual Assessments Payment. The PBm
Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual
Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year.
PBID Services. The "PBm Services" shall mean the new services and activities
provided by the Borrower to and for the benefit off each PBm Owner in the PBm, including,
without limitation, public security and safety, enhanced maintenance and marketing activities not
provided by the Agency or by the City to the PBm Owners in the PBm.
Principal. The "Principal" shall mean one (1) or more advances made by the
Agency to the Borrower during the Term of the Note in a principal amount not to exceed
$1,218,372, in the aggregate. The PBm Loan is not a revolving loan and the Borrower has no
right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the
Agency. The Borrower shall pay the Indebtedness in accordance with the Note.
Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and
all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory,
equipment and all other personal property however designated, now or hereafter located at 650
Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-61, including, without limitation, all real and personal property now or
hereafter used in connection with or relating to the operation of the Scion Dealership and of the
Scion franchise.
State. The "State" means the State of California.
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Term. The 'Term" shall mean the term of the Note commencing on the date of
the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms,
covenants and conditions of the Note.
Tovota Dealership. The Toyota Dealership shall mean the Toyota Dealership
and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks,
vehicles and all other personal property however designated now or hereafter located at S Show
Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN
Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of
San Bernardino, State of California, APN Number 0141-251-59, including, without limitation,
all real and personal property now and hereafter used in connection with or relating to the
operation of the Toyota Dealership and/or of the Toyota franchise.
TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter
made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation,
partnership, limited liability company, association, trust, or to any other person or entity
controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL
Loan shall also include, without limitation, any loan secured, in whole or in part, by the
Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real
property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has
an interest therein, as amended from time to time.
4. Representations, Warranties and Covenants.
(a) Each PBm Owner represents, warrants and covenants to the Agency that:
(i) it is duly organized or formed, as the case may be, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement, or in the case of
the Cummings are individuals who are competent and who have all requisite power and authority
to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery
and performance by such PBm Owner of this Agreement has been duly authorized by all
necessary action of such PBID Owner and does not and will not (A) contravene the terms of the
articles or certificate of incorporation, certificate of organization or bylaws, or other applicable
organizational documents, of such PBID Owner, or result in a breach of or constitute a default
under any material lease, deed of trust, mortgage, instrument, document, contract or other
agreement to which such PBm Owner is a party or by which it or its properties may be bound or
affected; or violate any provision of any Law or the like binding on or affecting such PBm
Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBm Owner
enforceable against each PBm Owner in accordance with its terms, (iv) to the best of the PBm
Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted
by or is available to the PBm Owners, or anyone of them, against the Agency or against the
City, (v) the PBm Owners, and each of them, have requested the Agency and the City to assist
the PBm Owners in the creation of the PBm, without the Agency or the City incurring any
liability or obligation in connection with the filing, petitioning, creation, existence,
administration, termination or expiration of the PBm, (vi) the PBm Owners, and each of them,
have requested the Agency and the City to nominate and to appoint the Borrower to administer
and to manage the PBm and to perform and to provide the PBm Services to the PBm Owners
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located within the PBID, without the Agency or the City incurring any liability or obligation in
connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID
Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax
Assessor in accordance with this Agreement and with the Note, (ix) the PBm Services to be
performed and provided by the Borrower have not been performed or provided to any PBID
Owner by the Agency, by the City, by the Borrower or by any other governmental authority,
person or entity, (x) the creation of the PBID, the execution of the Note and/or of this Agreement
and the performance by the Borrower of the PBID Services shall not constitute an event of
default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each
PBID Owner shall comply with all applicable Laws.
(b) The Cummings represent, warrant and covenant to the Agency that: (i)
the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and
will continue to own in fee simple the underlying improved real property in connection with the
Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the
Cummings Loan and the Cummings will not be in default under the Cummings Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the Cummings Loan.
(c) DTM represents, warrants and covenants to the Agency that: (i) DTM is
the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the
underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in
default under the DTM Loan and DTM will not be in default under the DTM Loan while the
Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this
Agreement do not violate, and will not constitute an event of default under, the DTM Loan.
(d) TTL represents, warrants and covenants to the Agency that: (i) Southern
Automotive Marketing is the owner of the Mitsubishi/Mazda Dealership, (ii) TTL owns, and will
continue to own in fee simple the underlying improved real property in connection with the
Mitsubishi/Mazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default
under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default
under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions
contemplated by the Note and this Agreement do not violate, and will not constitute an event of
default under, the TTL Loan.
The representations and warranties made in this Agreement shall survive the
execution, performance, expiration and early termination of this Agreement.
5. Payment of the Annual Assessments Payment.
(a) Each PBID Owner shall timely pay its PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and
continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by
the PBID Owners.
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(b) Each PBID Owner shall timely pay its PBID Owner's Proportionate
Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year, as follows: (i) in one (1) lump sum on or before
December 10 of each Fiscal Year, but before the last day on which such payment may be paid by
each PBID Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal
payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by
such PBID Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by each respective PBID
Owner to the Tax Assessor without penalty or interest.
(c) The PBID Owners, in the aggregate, shall pay to the Tax Assessor the
Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with
the First Fiscal Year and continuing annually thereafter through and including the 2013/2014
Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The
PBID Owners shall pay the Annual Assessments Payment together with any late fees and interest
assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years,
commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal
Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but
before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor
without penalty or interest, or (ii) in two (2) equal payments of$121,837 each due and owing by
the PBID Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal
Year, but before the last day on which each payment may be paid by the PBID Owners to the
Tax Assessor without penalty or interest.
(d) The Indebtedness shall be paid by the Tax Assessor to the Agency from
the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any
one of them, during each Fiscal Year, beginning with the 2009/2010 Fiscal Year and annually
thereafter through and including the 2013/2014 Fiscal Year.
(e) Within thirty (30) calendar days from receipt by the Tax Assessor of one
(1) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments
Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges
and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual
Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID
Owners, or anyone of them, for that Fiscal Year.
(1) Within thirty (30) calendar days from receipt by the Tax Assessor of an
installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of
$121,837 each, or any lesser amount thereof, together with all late charges and interest assessed
by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any
lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that
Fiscal Year.
(g) For the Term of the Promissory Note, within thirty (30) calendar days
from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any
lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the
Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the
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PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax
Assessor.
(h) The Indebtedness shall be paid in accordance with this Note to the Agency
at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as
is designated by the Agency in a notice to the Borrower given as provided for in this Note.
6. Default. An event of default (a "Default") shall occur whenever: (i) one or more
of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment
to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with
and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more
of the PBID Owners breaches any other covenant, promise or obligation in this Agreement
and/or in any other instrument, document and/or agreement, now or hereafter, evidencing,
securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions
contemplated in this Agreement, subject to any applicable cure period, (iii) has made a
representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency
is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax
Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is
insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of
creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it
(collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option,
declare the Indebtedness under this Note to be immediately due and payable, regardless of the
Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any
(collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to
the Agency the Default Payment Amount from the Annual Assessments Revenues collected from
the PBID Owners, or anyone of them.
7. Remedies. Upon the occurrence of a Default under this Agreement, and in
addition to any other remedies that the Agency and/or the City may have under this Agreement,
at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without
having any further liability or obligation to the PBID Owners, or to anyone of them, or to the
Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy
any default under this Agreement, or obtain any other remedy consistent with the purposes of
this Agreement and allowed at law and in equity. Such legal actions must be instituted in the
Superior Court of the County of San Bernardino, State of California, located within the City of
San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of
California. In the event that any legal action is commenced by the Agency and/or by the City
against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any
one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at
the address provided for in Section 10 of this Agreement for each such PBID Owner, in the
manner as required by the laws of the State of California. Unless a remedy is held to be
exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative
and in addition to any other remedies available to the Agency and/or to the City under this
Agreement, at law or in equity.
8. Termination. The Agency and/or the City shall also have the right, but not the
obligation, to terminate this Agreement immediately at any time, in the exercise of its sole
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discretion, upon written notice from the Agency and/or the City to each PBID Owner of such
termination of this Agreement (the "Termination Notice Letter") at the address provided for in
this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a
later date for the effective date of the termination of this Agreement is provided for in the
Termination Notice Letter. Upon the effective date of the termination of this Agreement, the
Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of
them, or to the Borrower.
9. Indemnification. Each PBID Owner hereby agrees to indemnifY, defend, protect
and hold harmless the Agency and the City from and against and all actions, causes of actions,
claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees,
penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and
expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional,
of any kind or nature, in connection with, relating to, arising from the following: (i) any and all
loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan
Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any
buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles,
trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter
located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death
of any person or persons resulting from the acts or omissions of any PBID Owner, of the
Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the
Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of
the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by
the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand
from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion
thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but
which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor,
by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental
authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any
one of them, to pay to the Agency and/or to the City any monetary amounts due under this
Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert
witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement
is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the
default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the
failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this
Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of
this Agreement and/or the performance by the Borrower of this PBID Services is an event of
default under the Cununings Loan, under the TTL Loan and/or under the DTM Loan (singularly,
the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be
liable to the Agency and/or to the City for any of the Claims which are caused by the sole
negligence or willful acts or omissions of the Agency and/or of the City. This indemnification
provision shall survive the execution, the delivery, the performance, the expiration and the
termination of this Agreement.
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10. General Provisions.
10.1 Authoritv. Each signatory of this Agreement represents that such
signatory is duly authorized to execute this Agreement on behalf of the Party for which such
signatory executes this Agreement. Each Party represents that it has the appropriate legal
authority to enter into this Agreement and to perform all obligations under this Agreement.
10.2 Amendment. This Agreement may be amended or modified only by a
written agreement executed by each of the Parties to this Agreement which amendment or
modification must be approved by the governing board for the Agency.
10.3 Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except for its conflicts of law
rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought
and maintained to the extent allowed by law in the County of San Bernardino, State of
California.
10.4 Headines. The paragraph headings used in this Agreement are intended
for convenience only and shall not be used in interpreting this Agreement or in determining any
of the rights or obligations of the Parties to this Agreement.
10.5 Construction and Interpretation. This Agreement has been arrived at
through negotiations and each Party has had a full and fair opportunity to revise the terms of this
Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved
against the drafting Party shall not apply in the construction or interpretation of this Agreement.
Further, the singular form shall include the plural, the masculine shall include the feminine, and
vice versa.
10.6 Entire Aereement. This Agreement constitutes the entire agreement of
the Parties with respect to the subject matter of this Agreement and supersedes any and all prior
oral or written agreement, understanding or representation relating to the subject matter of this
Agreement.
10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any
provision of this Agreement is held to be illegal, invalid or unenforceable under present or future
laws effective during the term of this Agreement, such provision shall be fully severable.
10.8 Successors and Assiens. This Agreement shall be binding on and inure
to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees,
spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners,
of anyone of them, may not assign or delegate their right, title and interests in or obligations
under this Agreement without the written consent of the Agency which consent shall not be
unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and
delegate its rights, title, interest and obligations in, to and under this Agreement without
obtaining the prior consent of the PBID Owners, or anyone of them.
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10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a
continuing waiver or a waiver of any subsequent breach either of the same or of another
provision of this Agreement and forbearance to enforce one or more of the remedies provided in
this Agreement shall not be deemed to be a waiver ofthat remedy.
10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or
other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees,
court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in
addition to any other relief deemed appropriate by a court of competent jurisdiction.
10.11 Necessarv Actions. Each Party agrees to execute and deliver additional
agreements, documents and instruments and to take any additional actions as may be reasonably
required to carry out the purposes of this Agreement.
10.12 Representations and Warranties. Each representation and warranty
contained herein or made pursuant hereto shall be deemed to be material and to have been relied
upon and shall survive the execution, delivery, performance, expiration or termination of this
Agreement.
10.13 Compliance with Laws. In performing their respective obligations under
this Agreement, the Parties shall comply with and conform to all applicable Laws.
10.14 Third Pam Beneficiaries. Except for the City, this Agreement shall not
create any right or interest in any non-Party or in any member of the public as a third party
beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce
this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions
of this Agreement.
10.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Conflicts of Interest; No Individual Liabilitv. No official or employee
of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any
official or employee of the Agency participate in any decision relating to this Agreement which
affects such official's or employee's pecuniary interest in any corporation, partnership, limited
liability company, or association in which such official or employee is directly or indirectly
interested. No official or employee of the Agency shall be personally liable in the event of a
breach of this Agreement by the Agency.
10.17 Notices. All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing unless provided otherwise in this
Agreement and shall be deemed to have been duly given and received on: (i) the date of service
if served personally or served by facsimile transmission on the Party to whom notice is to be
given at the address or addresses as provided below, (ii) on the first business day after mailing, if
mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier
service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day
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after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or
certified, postage prepaid, addressed as follows:
To the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 663-2294
Attn: Interim Executive Director
With a copy to:
Lewis Brisbois Bisgaard & Smith LLP
650 East Hospitality Lane, Suite 600
San Bernardino, California 92408
Phone: (909)-387-1137
Fax: (909) 387-1138
Attn: Timothy J. Sabo
To the PBID Owners:
Clifford R. Cummings
Barbara B. Cummings
735 Show Case Drive N
San Bernardino, California 92408
Phone:
Fax:
TTL, LLC
645 Auto Center Drive
San Bernardino, California 92408
Phone:
Fax:
Attn:
D.T.M. Land Company, LLC
735 Show Case Drive S
San Bernardino, California 92408
Phone:
Fax:
Attn:
10.18 Broker. Each Party will defend, indemnify, and hold the other Party
harmless from any claim, loss, or liability made or imposed by any other Party claiming a
commission or fee in connection with this transaction and arising out of that Party's own
conduct.
10.19 Cumulative Remedies. No failure on the part of the Agency to exercise,
and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or
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privilege preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise be available to the
Agency under this Agreement, at law or in equity.
10.20 Governine Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and
Business Improvement District Waiver and Indemnification Agreement as of the date first
written above.
AGENCY
San Bernardino Redevelopment Agency
of the City of San Bernardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo, Interim Executive Director
Approved As To Form and Content
By: \L~
Agency Couns
PBID OWNERS
By:
Clifford R. Cummings, a married man
By:
Barbara B. Cummings, a married woman
TTL, LLC,
a California limited liability company
By:
Name:
Title:
D.T.M. Land Company, LLC,
a California limited liability company
By:
Name:
Title:
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