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HomeMy WebLinkAboutR31 EDAECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ann B. Harris, Director SUBJECT: TENANT IMPROVEMENTS FOR DAY Business Recruit, Retention & Revitalization CARE CENTER DATE: July 23, I999 O'031NAL RI -------- - - - - - - -- - - - - - ------ - ------ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - .. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SynopS - lS - of Previous - Commission /Council /Comm- - - ittee - Action(s)- : On June 10, 1999, the Redevelopment Committee recommended that this item be forwarded to the Community Development Commission for approval. Recommended Motion(s): (Community Development Commission) MOTION: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO APPROVING A LOAN OF COMMUNITY REINVESTMENT FUNDS TO FINANCE TENANT IMPROVEMENTS AT PROPOSED DAY CARE CENTER (CHILDREN OF CALTRANS EMPLOYEES)IN DOWNTOWN SAN BERNARDINO (265 NORTH "D" STREET) Contact Person(s): Gary Van Osdel/ Ann Harris Phone: 5081 Project Area(s) Central City Ward(s): One (1) Supporting Data Attached: ❑x Staff Report ❑x Resolution(s) ❑x Agreement(s) /Contract(s) ❑ Map(s) ❑ Letter/Memo FUNDING REQUIREMENTS Amount: $ 50,000 Source: CRA Funds Budget Authority: Requested SIGNATURE: qnnGary n s el, Executive rector rris, Director Ec omic Development Agency Business Recruit, Retent & Revital - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Commission /Council Notes: ABH:lag:99 -08 -02 Day Care Center COMMISSION MEETING AGENDA Meeting Date: 08/02/1999 Agenda Item Number: �3i ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Tenant Improvements for the Day Care Center BACKGROUND In 1992, when the State Building was being considered, the State was looking for a site and provider for a day care center. In June 1997, the State issued an RFQ and from that process awarded Phillip Cothran the contract to provide day care for the downtown workers. The State is providing $300,000 in funding for equipment for the facility. Since June of 1997, they have been looking for a suitable site that meets the State's requirements as well as all the licensing agencies requirements. They have found a site located at 265 North "D" Street which meets all the requirements of all the agencies and have signed a lease with the property owner, Jordan Grinker. The property will need extensive alterations to accommodate the day care center and to provide a playground on the roof. The owner of this property has experienced a high vacancy rate and has lost several State agencies that moved to the new State Building. Therefore, he does not have the reserves necessary to do the tenant improvements and thus is requesting a loan of $50,000 to complete the necessary building alterations and tenant improvements to accommodate the day care. The loan will be paid back by the tenant at the rate of $1000 a month which is included in the lease. If approved, the loan will be funded with Community Reinvestment funds of $50,000 at 9% interest. This is an eligible use of these restricted funds. RECOMMENDATION That the Community Development Commission adopt the attached Resolution. Ann B. Harris, Director Business Recruitment, Retention & Revitalization ABH:lag:99 -08 -02 Day Care Center COMMISSION MEETING AGENDA Meeting Date: 08/02/1999 Agenda Item Number: C I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 a 27 28 Q3[PV RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO APPROVING A LOAN OF COMMUNITY REINVESTMENT FUNDS TO FINANCE TENANT IMPROVEMENTS AT PROPOSED DAY CARE CENTER (CHILDREN OF CALTRANS EMPLOYEES)IN DOWNTOWN SAN BERNARDINO (265 NORTH "D" STREET) WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency ") is a public body, corporate and politic organized under the laws of the State of California; and WHEREAS, The Jordan and Hilda Grinker Family Trust is the owner ( "Owner ") of that certain property located at 265 North "D" Street, San Bernardino, California (the "Property "); and WHEREAS, the State of California (the "State ") desires to locate in the downtown area of the City of San Bernardino (the "City ") a day care center for the children of CALTRANS employees working in the downtown area of the City (the "Day Care Center "); and WHEREAS, the State believes that the Property is a, suitable site for the Day Care Center; and WHEREAS, the State has entered into a contract with Southern California Private Schools, a California nonprofit corporation (the "Provider ") to operate the Day Care Center; and - 1 - I WHEREAS, the Provider has entered into a lease with the 2 Owner with respect to the Property (the "Lease "); and 3 4 WHEREAS, the State is providing funding for the equipment 5 to be used at the Day Care Center in an approximate total amount of 6 Three Hundred Thousand Dollars ($300,000.00); and 7 8 WHEREAS, the Property needs extensive alterations (the 9 "Tenant Improvements ") to accommodate the Day Care Center; and 10 11 WHEREAS, the Owner has in past years experienced a high 12 vacancy rate with respect to the Property and does not have the 13 financial reserves necessary to effect the Tenant Improvements; and 14 15 WHEREAS, the Lessee cannot operate the Day Care Center 16 unless and until the Tenant Improvements are made; and 17 18 WHEREAS, the Owner and the Lessee desire to borrow Fifty 19 Thousand Dollars ($50,000.00) from the Agency so that the Tenant 20 Improvements can be made; and 21 22 WHEREAS, the Owner and the Lessee are each willing to 23 sign a promissory note evidencing said loan and to accept joint and 24 several liability with respect thereto; and 25 26 WHEREAS, the Owner is willing to secure said loan with a 27 second deed of trust on the Property, subject only to the lien of 28 the Owner's lender with respect to the Property; and - 2 - 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the Owner is willing further to secure said loan with an assignment of leases with respect to the Property, including the Lease; and WHEREAS, the Agency is responsible for, among other things, investing in the revitalization of the downtown area of the City; and WHEREAS, the Agency desires to lend to the Owner and the Lessee from Community Reinvestment Funds available to the Agency the principal amount of Fifty Thousand Dollars ($50,000.00) in order that the Tenant Improvements can be made; and WHEREAS, Community Reinvestment Funds may lawfully be used to make said loan. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION, ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER ASI FOLLOWS: Section 1. Approval of Loan. The Agency hereby approves a loan from Community Reinvestment Funds to the Owner and Lessee in the principal amount of Fifty Thousand Dollars' ($50,000.00) (the "Loan ") on the terms and conditions set forth in a loan agreement substantially in the form attached hereto as Exhibit "A" (the "Loan Agreement ") , with such changes therein as may be agreed to by the Executive Director of the Agency. The Loan - 3 - LM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 shall bear interest at the' rate of nine percent (9 %) per annum, accruing from and after the date that the Loan is funded. The Loan shall be represented by a promissory note substantially in the form attached to the Loan Agreement as Exhibit "B" thereto (the "Promissory Note "). The Promissory Note shall be executed by both the Owner and the Lessee, and the Owner and the Lessee shall be jointly and severally liable for the repayment of the Loan. Section 2. Security for the Loan. The Loan shall be secured by a second deed of trust on the Property, subject only to the lien of Owner's lender with respect to the Property, substantially in the form attached to the Loan Agreement as Exhibit "C" thereto. The Loan shall be further secured by an assignment of leases with respect to the Property, including the Lease, substantially in the form attached to the Loan Agreement as Exhibit' "D" thereto. Section 3. Official Action. The Executive Director, the Secretary and any and all other officers of the Agency are hereby authorized and directed, for and in the name and on behalf) of the Agency, to execute the Loan Agreement and to do any and all things and take any and all actions which they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated herein and in the Loan Agreement. - 4 - i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AW 27 28 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO APPROVING A LOAN OF COMMUNITY REINVESTMENT FUNDS TO FINANCE TENANT IMPROVEMENTS AT PROPOSED DAY CARE CENTER (CHILDREN OF CALTRANS EMPLOYEES) IN DOWNTOWN SAN BERNARDINO (265 NORTH "D" STREET) Section 4. This Resolution shall take effect upon the date of its adoption. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernardino at a meeting thereof, held on the th day of July, 1999, by the following vote, to wit: Commission Members: AYES NAYS ABSTAIN ABSENT ESTRADA LIEN McGINNIS SCHNETZ VACANT ANDERSON MILLER Secretary The foregoing resolution is hereby approved this th day of July, 1999. Approve By: _A Agency Counse Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 1 content: P =\ APPS \WPDATA \SBEO \0001 \DOC \3516.WPD - 5 - �We 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO )ss CITY OF SAN BERNARDINO ) I, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of Community, Development Commission of the City of San Bernardino Resolutions No. is a full, true and correct copy of that now on filed in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Community Development Commission of the City of San Bernardino this day of 1999. Secretary of the Community Development Commission of the City of San Bernardino LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement ") is entered into as of this 1st day of July, 1999, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency ") and The Jordan and Hilda Grinker Family Trust, the owner and lessor ( "Owner ") of that certain property located at 265 North "D" Street, San Bernardino, California and more particularly described in Exhibit "A" hereto (the "Property ") and Southern California Private Schools, a California nonprofit corporation, the lessee ( "Lessee ") of the Property. WHEREAS, the Agency is organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, Pt sea.); and WHEREAS, the Owner and the Lessee have entered into that certain lease dated as of May 15, 1999 (the "Lease ") with respect to the Property; and WHEREAS, the Lessee has entered into a contract with CALTRANS, an agency of the State of California, to provide a day care center for employees of CALTRANS who work in the downtown San Bernardino area (the "Day Care Center "); and WHEREAS, the Lessee intends to operate the Day Care Center on the Property; and WHEREAS, the State of California is providing funding for the equipment to be used at the Day Care Center in an approximate total amount of Three Hundred Thousand Dollars ($300,000.00); and WHEREAS, the Property needs extensive alterations ( "Tenant Improvements ") to accommodate the Day Care Center; and WHEREAS, the Owner has in past years experienced a high vacancy rate with respect to the Property and does not have the financial reserves necessary to effect the Tenant Improvements; and WHEREAS, the Lessee cannot operate the Day Care Center unless and until the Tenant Improvements are made; and WHEREAS, the Owner and the Lessee (who may hereinafter from time to time be referred to collectively as the "Borrower ") desire to borrow Fifty Thousand Dollars ($50,000.00) from the Agency so that the Tenant Improvements can be made; and SBEO /0001/DOC/3512 6/16/99 1130 ct 1 WHEREAS, the Agency is responsible for, among other things, investing in the revitalization of the downtown area of the City of San Bernardino; and WHEREAS, the Agency desires to lend to the Borrower from Community Reinvestment Funds available to the Agency the principal amount of Fifty Thousand Dollars ($50,000.00) in order that the Tenant Improvements can be made. NOW, THEREFORE, in consideration of the premises and for such other good and valuable consideration receipt of which is hereby acknowledged the parties hereto agree as follows: 1. The Loan. The Agency shall make a loan to the Borrower in the principal amount of Fifty Thousand Dollars ($50,000.00) (the "Loan "). The Loan shall bear interest at the rate of nine percent (9 %) per annum, accruing from and after the date that the Loan is funded. Interest shall be calculated on an actual days basis of a year equal to 360 days. The Loan shall be represented by a promissory note substantially in the form attached hereto as Exhibit "B" (the "Note ") executed by the Owner and the Lessee in favor of the Agency and shall be secured by a second deed of trust on the Property substantially in the form attached hereto as Exhibit "C" (the "Second Deed of Trust ") and an assignment of leases and rents with respect to the Property substantially in the form attached hereto as Exhibit "D" ( "Assignment of Leases "). The Loan shall be funded immediately following execution of this Agreement. 2. Joint and Several Liability. The obligations of each of the Owner and the Lessee set forth in this Agreement shall constitute joint and several obligations of the Owner and the Lessee, and the Owner and the Lessee shall be jointly and severally liable for repayment of the Loan under the Note. 3. Use of Funds; Use of Property. The Borrower shall use and apply the proceeds of the Loan solely for the purpose of effecting the Tenant Improvements. For the term of this Agreement, the Borrower shall not put the Property to any use other than the Day Care Center and related uses. SBEO /0001/DOC/3512 6/16/99 1130 ct 2 4. Repayment of the Loan. (a) Monthly Payments. Payments of principal and interest in the amount of One Thousand Dollars ($1,000.00) shall be due monthly on the first day of the month (each, a "Payment Date ") commencing August 1, 1999, and through and including September 1, 2004, with a final payment of Nine Hundred Two Dollars ($902.00) being due on October 1, 2004 (the "Maturity Date "). (b) Late Charges. A late charge of five percent (5o) of the amount due shall be paid by the Borrower with respect to each payment of principal and interest not made by the fifth (5th) day of the month. 5. Security for the Loan. The Loan is secured by the Second Deed of Trust, pursuant to which the Owner grants to the Agency a second lien on the Property, subordinate to the lien of Bank of America NT &SA, and the Assignment of Leases, pursuant to which the Owner assigns to the Agency all of Owner's right, title and interest in any and all existing or future leases, subleases, licenses, concessions or other agreements with respect to the Property, including the Lease. 6. Representations and Warranties; Covenants. (a) This Agreement has been, and the Note will be, duly executed and delivered by the Owner and the Lessee and this Agreement does, and the Note will, constitute valid and binding, joint and several, obligations of the Owner and the Lessee. (b) As of the date hereof, Owner is not in default under any other indebtedness of Owner, and the execution, delivery or performance of Owner of this Agreement and the Note shall not, to the best of Owner's knowledge, contravene any provision of law, statute, rule or regulation of any governmental instrumentality and shall not, to the best of Owner's knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to which Owner is a party or by which Owner is bound or to which Owner may be subject. (c) As of the date hereof, Lessee is not in default under any other indebtedness of Lessee, and the execution, delivery or performance of Lessee of this Agreement and the Note shall not, SBEO /0001/DOC/3512 6/16/99 1130 ct 3 to the best of Lessee's knowledge, contravene any provision of law, statute, rule or regulation of any governmental instrumentality and shall not, to the best of Lessee's knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to which Lessee is a party or by which Lessee is bound or to which Lessee may be subject. (d) The Owner hereby covenants that Owner shall not sell, lease, transfer or convey the Property, or assign the Lease (other than pursuant to the Assignment of Leases), so long as the Note is outstanding, without the prior written consent of the Agency, which consent may be given or withheld by the Agency in its sole discretion. The Owner further covenants that Owner shall not incur, create or suffer the imposition of any indebtedness, other than the indebtedness of the Owner to the Lender, secured in any way by the Property or the Lease so long as the Note is outstanding. (e) The Lessee hereby covenants that Lessee shall not assign its interest in the Lease, or enter into any sublease of the Property, so long as the Note is outstanding, without the prior written consent of the Agency, which consent may be given or withheld by the Agency in its sole discretion. The Lessee further covenants that Lessee shall not incur, create or suffer the imposition of any indebtedness secured in any way by the Lease so long as the Note is outstanding. (f) The Owner and the Lessee hereby covenant that, for the term of this Agreement, the provisions of the Lease shall not be modified, nor shall the Lease be terminated, without the prior written consent of the Agency, which consent may be given or withheld by the Agency in its sole discretion. 7. Events of Default. - (a) By Agency. The following shall constitute a default by the Agency: failure to fund the Loan as provided in Section 1 of this Agreement. (b) By Borrower. Each of the following shall constitute a default by the Borrower: SBEO /0001/DOC/3512 6/16/99 1130 ct 4 R (i) failure by Borrower to make a principal and interest payment on or before a Payment Date or the Maturity Date, as applicable; and (ii) failure by Owner and Lessee, or either of them, to perform or a delay in performing or a failure to comply with any term or provision of this Agreement and such failure or delay or noncompliance is not corrected within thirty (30) days of notice thereof by the Agency. (iii) failure by Owner to perform or a delay in performing or a failure to comply with any term or provision of the Second Deed of Trust and such failure or delay or noncompliance is not corrected within thirty (30) days of notice thereof by the Agency. (iv) failure by Owner to perform or a delay in performing or a failure to comply with any term or provision of the Assignment of Leases and such failure or delay or noncompliance is not corrected within thirty (30) days of notice thereof by the Agency. 8. Remedies. (a) Upon a default by the Agency, (i)the Borrower shall be released from any further obligation under this Agreement or the Note and (ii) the Borrower may seek appropriate legal or equitable relief. (b) Upon a default by the Borrower, the Agency may, at its option, (i) declare all sums due under the Note immediately due and payable; (ii) institute suit for the foreclosure of the Second Deed of Trust or deliver to the trustee under the Second Deed of Trust a written declaration of default by Borrower and of election to cause the Property to be sold, all as provided in the Second Deed of Trust; (iii) immediately begin to collect rent from the Lessee and enter, take possession of, manage and operate the Property or any part thereof pursuant to the Assignment of Leases; (iv) institute any proceeding at law or in equity to enforce the obligations and covenants of the Borrower under this Agreement, the Note, the Second Deed of Trust and the Assignment of Leases. (c) In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the Agency shall be SBEO /0001 /DOC /3512 6/16/99 1130 ct 5 entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due the Agency under the Note. 9. Assignment. The Agency shall be entitled to assign its rights and obligations under this Agreement upon consent by the Borrower to such assignment, which consent shall not unreasonably be withheld. The Borrower shall not be entitled to, and shall not, assign its rights and obligations under this Agreement. 10. Term. This Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Note. 11. Notices. Notices shall be presented in person or by certified or registered United States mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery service to the address noted below. Notice presented by United States mail shall be deemed effective the second business day after deposit with the United States Postal Service. This Section shall not prevent giving notice by personal service or telephonically verified fax transmission, which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. TO THE AGENCY: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Ann Harris Telephone: (909) 384 -5081 Facsimile: (909) 384 -5216 with a copy to: Sabo & Green A Professional Corporation 201 North "E" Street, Suite 300 San Bernardino, California 92401 Attn: Timothy J. Sabo, Esq. Telephone: (909) 383 -9373 Facsimile: (909) 383 -9378 SBEO /0001/DOC/3512 6/16/99 1130 ct 6 TO THE OWNER: Jordan and Hilda Grinker Family Trust 10590 Dunleer Drive Los Angeles, California 90064 (310) 837 -3915 Attn: Jordan Grinker Trustee TO THE LESSEE: Southern Schools 8253 Sie Fontana, Attn: 12. Governing Law. California Private Family rra Avenue California 92335 Phillip Cothran President This Agreement shall be governed by the laws of the State of California. 13. Entire Agreement. This Agreement constitutes the entire agreement between the parties and may not be amended without the prior written consent of the parties hereto. This Agreement supersedes. all prior negotiation, discussions and previous agreements between the parties concerning the subject matter herein. The parties intend this Agreement to be the final expression of their agreement with respect to the terms herein and a complete and exclusive statement of such terms. No modification, amendment or waiver of any term herein shall be binding unless executed in writing by the parties hereto. 14. Amendment. This Agreement may be amended as deemed necessary by written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the Agency. 15. Severability. SBEO /0001/DOC/3512 6/16/99 1130 ct 7 Each and every section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the extent permitted by law. 16. Representation by Counsel. Each of the Owner and the Lessee hereby represents and warrants to the Agency that each has had the opportunity to obtain counsel on his behalf in connection with the Loan, this Agreement, the Note and, in the case of the Owner, the Second Deed of Trust and the Assignment of Leases, and each of the Owner and the Lessee further represents and warrants that he has not, in connection with the Loan, this Agreement, the Note, the Second Deed of Trust and the Assignment of Leases relied on the advice of Agency Special Counsel or the City Attorney of the City of San Bernardino. SBEO /0001/DOC/3512 6/16/99 1130 ct 8 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above. (SEAL) ATTEST: S r eft ary Approved as to Form and Leg Content: By: 1 -d- 7-g5 gency Special Counsel SBEO /0001/DOC/3512 6/16/99 1130 ct E REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: _ Title. THE JORDAN AND HILDA GRINKE FAMILY T UST B� .✓' ordan Grinker, Trustee 13y: Hilda Grinker, Trustee SOUTHERN CALIFORNIA PRIVATE SCHOOLS, a California nonprofit corporation l njA�� • - :- EXHIBIT "A" LEGAL DESCRIPTION SCHEDULE A The estate or interest in the land hereinafter described or referred to covered by this report is:' A Fee Title to said estate or interest at the date hereof is vested in: JORDAN GRINKER.AND HILDA GRINKER, TRUSTEES OF THE JORDAN AND HILDA GRINKER FAMILY TRUST EXECUTED NOVEMBER 18, 1988 The land referred to in this report is situated in the County of SAN BERNARDINO, City of SAN BERNARDINO, State of California, and is described as follows: PARCEL 2 OF PARCEL MAP NO. 9996, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 122 OF PARCEL MAPS, PAGES 52 AND 53, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXHIBIT "B" PROMISSORY NOTE SECURED BY SECOND DEED OF TRUST AND BY ASSIGNMENT OF LEASES $50,000.00 Place: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, CA 92401 Attn: Development Director Date: July 1, 1999 Maturity Date: October 1, 2004 FOR VALUE RECEIVED, the undersigned promise to pay to Redevelopment Agency of the City of San Bernardino (the "Agency ") or its successors, the sum of Fifty Thousand Dollars ($50,000.00). 1. Payments of principal and interest in the amount of One Thousand Dollars ($1,000.00) shall be due monthly on the first day of the month commencing August 1, 1999, and through and including September 1, 2004, with a final payment of Nine Hundred Two Dollars ($902.00) being due on October 1, 2004. 2. This Note shall bear interest from July 1, 1999 at the rate of nine percent (9 %) per annum. 3. A late charge of five percent (5 %) of the amount due shall be paid by the undersigned with respect to each payment of principal and interest not made by the fifth (5th) day of the month. 4. In the event the property which is subject to the second deed-of trust securing this Note (the "Second Deed of Trust ") is sold, leased, transferred or conveyed, or is subject to a refinancing, the outstanding principal balance of this Note shall be deemed immediately due and payable in full. 5. A failure to pay any sum provided for in this Note when due, or a material breach of this Note, the Second Deed of Trust or the assignment of leases and rents executed and delivered in connection with this Note (the "Assignment of Leases ") shall constitute a breach hereof and shall entitle the Agency to declare Exh. "B" - 1 All payments due under this Note shall be made in lawful money of the United States at the principal office of the Agency, 201 North "E" Street, Suite 301, San Bernardino, California 92401, or at such other place as may from time to time be designated by the Agency in writing. In no event shall the interest and late charge payable hereunder exceed the maximum amount of interest permitted under the usury laws of the State of California. If suit is instituted by the Agency to recover on this Note, the undersigned agrees to pay all costs of such collection including reasonable attorney's fees and court costs. THIS NOTE is secured by the Second Deed of Trust of even date herewith and by the Assignment of Leases of even date herewith, each duly filed for record in the office of the County Recorder of the County of San Bernardino, State of California. DEMAND, protest and notice of demand and protest are hereby waived and the undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. Exh. "B" - 2 all sums due hereunder immediately due and payable and to pursue all remedies available under this Note, the Second Deed of Trust and the Assignment of Leases. 6. The undersigned acknowledge that the obligations evidenced by this Note constitute joint and several obligations of the undersigned. All payments due under this Note shall be made in lawful money of the United States at the principal office of the Agency, 201 North "E" Street, Suite 301, San Bernardino, California 92401, or at such other place as may from time to time be designated by the Agency in writing. In no event shall the interest and late charge payable hereunder exceed the maximum amount of interest permitted under the usury laws of the State of California. If suit is instituted by the Agency to recover on this Note, the undersigned agrees to pay all costs of such collection including reasonable attorney's fees and court costs. THIS NOTE is secured by the Second Deed of Trust of even date herewith and by the Assignment of Leases of even date herewith, each duly filed for record in the office of the County Recorder of the County of San Bernardino, State of California. DEMAND, protest and notice of demand and protest are hereby waived and the undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. Exh. "B" - 2 D IN WITNESS WHEREOF, this Note has been duly executed by the undersigned, as of its date. JORDAN AND HILDA GRINKER FAMILY TRUST I= Trustee SOUTHERN CALIFORNIA PRIVATE SCHOOLS, a California nonprofit corporation By: President By: Secretary Exh. "B" - 3 EXHIBIT "C" Second Deed of Trust RECORDING REQUESTED BY: REDEVELOPMENT AGENCY OF THE ) CITY OF SAN BERNARDINO ) AND WHEN RECORDED MAIL TO: ) REDEVELOPMENT AGENCY OF THE ) CITY OF SAN BERNARDINO ) 201 North "E" Street, Suite 301 ) San Bernardino, California 92401 ) Attn:Director,Business Recruitment,) Retention and Revitalization ) (Space Above for Recorder's Use) DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING This Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing is dated as of July 1, 1999, and is made `�✓ by The Jordan and Hilda Grinker Family Trust, hereinafter called " Trustor," whose address is 10590 Dunleer Drive, Los Angeles, California 90064, to Lawyers Title Company, hereinafter referred to as "Trustee ", whose business address is 1845 Business Center Drive, Suite 200, San Bernardino, California 92408, in favor of REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, hereinafter referred to as "Beneficiary ", whose business address is 201 North "E" Street, Suite 301, San Bernardino, California 92401. r N THE RIGHTS AND REMEDIES OF BENEFICIARY SET FORTH HEREIN SHALL BE SUBJECT AND SUBORDINATE TO THE RIGHTS OF BANK OF AMERICA, NT &SA, UNDER THAT CERTAIN DEED OF TRUST AND ASSIGNMENT OF RENTS DATED AS OF , 199 (THE "FIRST DEED OF TRUST ") , EXECUTED BY TRUSTOR. Trustor irrevocably grants, transfers, and assigns to Trustee in trust, with power of sale, the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way and appurtenances and all other rights, royalties and profits relating to the real property, including and without limitation all minerals, oil, gas, geothermal and similar matters, Exh. "C" - 1 located in the City of San Bernardino, County of San Bernardino, State of California: [TO COME] together with the rents, issues and profits thereof, subject however to the right reserved by Trustor in Paragraph B -17 hereof to collect and apply such rents, issues and profits, prior to any default hereunder; for the purpose of securing performance in a timely manner of all of Trustor's obligations under that certain Loan Agreement dated as of July 1, 1999, by and between the Trustor and the Beneficiary, payment of the indebtedness evidenced by a Promissory Note executed by Trustor and by Philip Cothran, the lessee of Trustor, in the principal sum of Fifty Thousand Dollars ($50,000.00), payable to Beneficiary, and all of Trustor's obligations under that certain Assignment of Leases and Rents dated as of July 1, 1999, each executed in connection with this Second Deed of Trust. A. To protect the security of this Second Deed of Trust, Trustor agrees: i. To maintain the property in good condition and repair; not to remove or demolish any building or improvement thereon; to complete promptly in workmanlike manner any improvement hereafter constructed thereon and to restore promptly in workmanlike manner any improvement thereon that is damaged or destroyed, and to pay when due all costs incurred therefor or in connection therewith; to comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the property; not to commit or permit any waste thereof or any act upon the property in violation of law or of covenants, conditions or restrictions affecting the property. ii. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and also, if at any time Beneficiary or Trustee is a party to or appears in any such action or proceeding, or in any action or proceeding to enforce any obligation hereby secured, to pay all costs and expenses paid or incurred by them or either of them in connection therewith, including, but not limited to, cost of evidence of title and attorneys' fees in a reasonable sum. Exh. "C" - 2 iii. To pay (a) at least ten (10) days before delinquency, all taxes and assessments affecting the property, all assessment upon water company stock, and all rents, assessments and charges for water appurtenant to or used in connection with the property; (b) when due, all encumbrances, charges and liens, with interest, on the property or any part thereof, which appear to be prior or superior hereto; and (c) all costs, fees and expenses of this trust. iv. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee (but without obligation to do so, and with or without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof) may (a) make or do the same in such manner and to such extent as either deems necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the property for such purpose; (b) appear in or commence any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien that, in the judgment of either, appears to be superior hereto; and in exercising any such power, Beneficiary or Trustee may incur necessary expenses, including reasonable attorneys' fees. V. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with interest from date of expenditure at the annual rate of two percentage points over Bank of America's published prime rate. B. It is mutually agreed that: 1. Any award of damages made in connection with the condemnation for public use of or injury to the property or any part thereof is hereby assigned and shall be paid to Beneficiary, who may apply or release such moneys received therefor upon any indebtedness secured hereby in such order as Beneficiary determines, or at the option of Beneficiary the entire amount so received or any part thereof may be released to Trustor. Such application or release shall not cure or waive, any default or Exh. "C" - 3 notice of default hereunder or invalidate any act done pursuant to such notice. 2. The acceptance than the amount then due shall only and shall not constitute a to pay the entire sum then due require prompt payment of all The acceptance of payment of a date will not waive the right prompt payment when due of all by Beneficiary of any payment less be deemed an acceptance on account waiver of the obligation of Trustor or of Beneficiary's right either to ums then due or to declare default. ay sum secured hereby after its due of Beneficiary either to require other sums so secured or to declare default for failure so to pay. No waiver of any default shall be a waiver of any preceding or succeeding default of any kind. 3. At any time or from time to time, without liability therefor and with or without notice, upon written request of Beneficiary and presentation of this deed and the secured note for endorsement, and without effecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this deed upon the remainder of the property, Trustee may reconvey any part of the property, consent to the making of any map or plat thereof, join in granting any easement or join in any extension agreement or any agreement subordinating the lien or charge thereof. 4. Upon written request of Beneficiary stating that all sums secured hereby have been paid, surrender of this deed and the note to Trustee for cancellation and retention, and payment of its fees, Trustee shall reconvey, without warranty the property then held hereunder. The recitals in such reconveyance shall be conclusive proof of the truthfulness thereof. The grantee may be designated in such reconveyance as "the person or persons legally entitled thereto." 5. Trustor may give such notice to Beneficiary at any time before there is a Trustee's sale of the property. At any time Trustor is in default in payments to be made to Beneficiary hereunder, any amounts paid to and received by Beneficiary for execution of releases pursuant to the terms of this paragraph after notice of default and election to sell has been recorded shall not, unless the requirements of Section 2924c of the Civil Code are fully met by or on behalf of Trustor, waive the right of Beneficiary to continue its plans to have the property sold, nor shall they have any effect on the exercise by Beneficiary of the acceleration privilege contained herein, except to entitle the person effecting such payment to the release of the property for which the release amount was paid, and insofar as Beneficiary is concerned, to constitute a credit against the secured debt. Exh. "C" - 4 6. If Trustor or any subsequent owner of the property covered hereby shall occupy the property, or any part thereof, after any default in payment of any amount secured by this Second Deed of Trust, Trustor or such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental for the premises so occupied. On failure to pay such reasonable rental, Trustor or such owner may be removed from the premises by summary dispossession proceedings or by any other appropriate action or proceeding. 7. If default is made in payment of any indebtedness or in performance of any agreement hereby secured, then Beneficiary, with or without notice to Trustor, may declare all sums secured hereby immediately due and payable by instituting suit for the recovery thereof or for the foreclosure of this deed, or by delivering to Trustee a written declaration of default and demand for sale, as well as a written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be filed for record. If such declaration is delivered to Trustee, Beneficiary shall also deposit with Trustee this deed, the secured note, and all documents evidencing expenditures secured hereby. 8. Should Trustor, without the consent in writing of Beneficiary, voluntarily sell, transfer or convey his interest in the property or any part thereof, or if by operation of law, it be sold, transferred or conveyed, then Beneficiary may, at its option, declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future or successive transactions. 9. After the time then required by law has elapsed after recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, with or without demand on Trustor, shall sell the property at the time and place fixed in the notice of sale, either as a whole or in separate parcels and in such order as Trustee determines, at public auction, to the highest bidder, for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone from time to time sale of all or any portion of the property by public announcement at the time and place of sale originally fixed or at the last preceding postponed time. Trustee shall deliver to the purchaser its deed conveying the property sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor, Trustee, Beneficiary or any other person may purchase at the sale. Exh. "C" - 5 V 10. After deducting all costs, fees and expenses of Trustee and of this trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of (a) all sums expended under the terms hereof and not theretofore repaid, with accrued interest at two percentage points over Bank of America's published prime rate per annum, and (b) all other sums then secured hereby in such order as Beneficiary, in the exercise of its sole discretion, directs. The remainder, if any, shall be paid to the person or persons legally entitled thereto. 11. Before Trustee's sale, Beneficiary may rescind such notices of default and of election to cause the property to be sold by delivering to Trustee a written notice of rescission, which notice, when recorded, shall cancel any prior declaration of default, demand for sale and acceleration of maturity. The exercise of such a right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to deliver to Trustee other declarations of default and demands for sale or notices of default and of election to cause the property to be sold, or otherwise affect any provision of the secured note or of this deed or any of the rights, obligations or remedies of Beneficiary or Trustee hereunder. 12. The restrictions pertaining to the property will automatically terminate if title to the mortgaged property is transferred by foreclosure or deed -in -lieu of foreclosure, or if the mortgage is assigned to the Secretary of the Department of Housing and Urban Development. 13. Beneficiary may, from time to time as provided by statute, or by a writing signed and acknowledged by him and recorded in the office of the county recorder of the county in which the land or such party thereof as is then affected by this Second Deed of Trust is situated, appoint another trustee in stead and of Trustee herein named; and thereupon, the Trustee herein named shall be discharged, and the trustee so appointed shall be substituted as Trustee hereunder with the same effect as if originally named Trustee herein. 14. If two or more persons are designated as Trustee herein, any or all powers granted herein to Trustee may be exercised by any of such persons if the other person or persons is unable, for any reason, to act. Any recital of such inability in any instrument executed by any of such persons shall be conclusive against Trustor, his heirs and assigns. Exh. "C" - 6 15. All leases now or hereafter affecting the property are hereby assigned and transferred to Beneficiary by Trustor. Trustor hereby covenants that none of such leases will be modified or terminated without the written consent of Beneficiary. 16. When requested to do so, Trustor shall give such further written assignments of rents, royalties, issues and profits; of all security for the performance of leases; and of all money payable under any option to purchase, and shall give executed originals of all leases, now or hereafter on or affecting the property. 17. Trustor reserves the right, prior to any default in payment of any indebtedness or performance of any obligation secured hereby, to collect all such rents, royalties, issues and profits, as but not before they become due. Upon any such default, Trustor's right to collect such moneys shall cease, not only as to amounts accruing thereafter, but also as to amounts then accrued and unpaid. In the event of default, Beneficiary, with or without notice and without regard to the adequacy of security for the indebtedness hereby secured, either in person or by agent, or by a receiver to be appointed by the court, (a) may enter upon and take possession of the property at any time and manage and control it in Beneficiary's discretion, and (b) with or without taking possession, may sue for or otherwise collect the rents, issues and profits thereof, whether past due or coming due thereafter, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, upon any obligation secured hereby and in such order as Beneficiary determines. None of the aforesaid acts shall cure or waive any default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall not be required to act diligently in the care or management of the property or in collecting any rents, royalties or other profits that it is hereby authorized to collect, and shall be accountable only for sums actually received. 18. This instrument shall constitute a security agreement to the extent any of the property constitutes fixtures, and Beneficiary shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. The mailing addresses of Trustor (debtor) and Beneficiary (secured party), from which information concerning the security interest granted by this Second Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Second Deed of Trust. 19. Without affecting the liability of Trustor or of any other party now or hereafter bound by the terms hereof, from time Exh. "C" - 7 r� 1 to time and with or without notice, may release any person now or hereafter liable for performance of such obligation, and may extend the time for payment or performance, accept additional security, and alter, substitute or release any security. 20. In any judicial action brought to foreclose this deed or to enforce any right of Beneficiary or of Trustee hereunder, Trustor shall pay to Beneficiary and to Trustee attorneys' fees in a reasonable sum, to be fixed by the court. 21. No remedy hereby given to Beneficiary or Trustee is exclusive of any other remedy hereunder or under any present or future law. 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this deed is hereby waived, to the full extent permissible by law. 23. In the event of default in the payment of any indebtedness secured hereby, and if such indebtedness is secured at any time by any other instrument, Beneficiary shall not be obligated to resort to any security in any particular order; and the exercise by Beneficiary of any right or remedy with respect to any security shall not be a waiver of or limitation on the right of Beneficiary to exercise, at any time or from time to time thereafter, any right or remedy with respect to this deed. 24. Beneficiary may collect a "late charge" not to exceed an amount equal to five percent (5 %) on the amount past due and remaining unpaid on any installment that is not paid within five (5) days from the due date thereof, to cover the extra expense involved in handling delinquent payments. 25. This deed applies to, inures to the benefit of and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, successors in interest, and assigns. The term "Beneficiary" means the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this deed, whenever the context so requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural, and all obligations of each Trustor hereunder are joint and several. 26. Trustee accepts this trust when this deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or Exh. "C" - 8 proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. Trustor requests that a copy of notice of default and of any notice of sale hereunder shall be mailed to Trustor at the address set forth immediately below. The Jordan and Hilda Grinker Family Trust 10590 Dunleer Drive Los Angeles, California 90064 Executed at San Bernardino, California, on the date first above written. TRUSTOR THE JORDAN AND HILDA GRINKER FAMILY TRUST By: By: Exh. "C" - 9 Jordan Grinker, Trustee Hilda Grinker, Trustee k4woor ) STATE OF CALIFORNIA ) ss. COUNTY OF SAN BERNARDINO ) On r 1999, before me, personally appeared Jordan Grinker and Hilda Grinker, personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. (Seal) Signature Exh. "C" - 10 EXHIBIT "D" ASSIGNMENT OF LEASES AND RENTS RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, California 92401 Attention:Director, Business Recruiting, Retention and Revitalization k . This Assignment of Leases and Rents ( "Assignment ") is dated as of July 1, 1999, and is made by The Jordan and Hilda Grinker Family Trust (the "Assignor "), whose address is 10590 Dunleer Drive, Los Angeles, California 90064 in favor of REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ( "'Agency "), whose business address is 201 North "E" Street, Suite 301, San Bernardino, California 92401. WHEREAS, Agency has agreed to make a loan in an original principal amount not to exceed Fifty Thousand Dollars ($50,000.00) (the "Loan ") to Assignor and to Southern California Private Schools, a California nonprofit corporation, the lessee (the "Lessee ") under that certain lease dated May 15, 1999 (the "Private Schools Lease ") pursuant to which Assignor, as landlord, has leased to Lessee the premises located at 265 North "D" Street, San Bernardino, California and more particularly described in Exhibit "A" hereto (the "Property "), for the purpose of effecting tenant improvements with respect to the Property to make it suitable for the operation of a day care center. The Loan is being made pursuant to that certain Loan Agreement dated as of July 1, 1999 (the "Loan Agreement ") by and between Assignor and the Agency. The Loan is evidenced by a Promissory Note dated concurrently herewith in the original principal amount of the Loan (the "Note "), which Exh. "D" - 1 Note is secured by (i) this Assignment and (ii) a Second Deed of Trust With Assignment of Rents (the "Second Deed of Trust ") dated concurrently herewith and encumbering the Property together with all improvements now or hereafter constructed thereon. WHEREAS, execution and delivery of this Assignment to Agency is a condition of Agency making the Loan. NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor hereby agrees as follows: 1. Assignment. For value received, Assignor hereby absolutely and irrevocably conveys, transfers and assigns to Agency: (a) All of Assignor's right, title and interest in any and all existing or future leases, including the Private Schools Lease, subleases, licenses, concessions or other agreements which demise or grant a possessory interest in or the right to use all or a portion of the Property (collectively, the "Leases "), together with all extensions, replacements and renewals of the Leases and all guarantees of and security for the obligation of any and all tenants (collectively, and including the Lessee, the "Tenants ") under the Leases. (b) All of Assignor's right, title and interest to collect and receive all of the rents, income, and profits now due or which may become due or to which Assignor may now or hereafter become entitled or which Assignor may make demand or claim for, arising or issuing from or out of the Leases or from or out of the Property or any part thereof, including but not limited to minimum rents, additional rents, percentage rents, parking or common area maintenance contributions, tax and insurance contributions, deficiency rents and liquidated damages following default in any Lease, and all proceeds payable under any policy of insurance covering loss of rents resulting from untenantability caused by destruction or damage to the Property, together with any and all rights and claims of any kind which Assignor may have against any Tenant under the Leases or any subtenants or occupants of the Property (all such monies, rights and claims described in this paragraph hereinafter referred to as "Rents "). The foregoing assignment, transfer and conveyance is intended to be and constitutes a present and absolute assignment, transfer and conveyance by Assignor to Agency. Exh. "D" - 2 2. Obligations Secured. This Assignment is given for the purpose of securing: (a) Payment of all sums, with interest thereon, becoming due and payable to Agency under the provisions hereof or under the provisions of the Note, the Loan Agreement or the Second Deed of Trust (and renewals, modifications, changes or extensions thereof); and (b) Payment of additional sums and interest thereon which may hereafter be loaned by Agency to Assignor, when evidenced by a promissory note or notes reciting that same are secured by this Assignment and the Second Deed of Trust; and (c) Performance and observance of each of Assignor's obligations, covenants, conditions and warranties to Agency contained herein, in the Note, in the Loan Agreement and in the Second Deed of Trust. 3. Covenants of Assianor. To protect the security of this Assignment, Assignor covenants and agrees: (a) To perform each of its obligations under the Leases; at its sole cost and expense, to use commercially (� reasonable efforts to enforce or secure the performance by 1t Tenants of each obligation under the Leases; and not to waive or release any Tenant of or from its obligations. Assignor assigns to Agency all Assignor's right and power to modify in any material respect the terms of the Leases subject to Assignor's rights hereinafter set forth. Any attempt on the part of Assignor to exercise any such right without the written consent of Agency, shall be a breach of the terms hereof. (b) To defend at Assignor's sole cost any action in any manner connected with the Leases or the obligations thereunder, and to pay all costs of Agency, including attorney's fees in a reasonable sum, in any such action in which Agency may appear. (c) If Assignor fails to do any act as herein provided, the Agency, but without obligation so to do and without notice to Assignor, and without releasing Assignor from any obligation hereof, may take action in such manner and to such extent as Agency may deem necessary to protect the security described herein. These actions include specifically, without limiting Agency's general powers, the defense of any action purporting to affect the security Exh. "D" - 3 described herein or the rights or powers of Agency, and also the performance of each obligation of Assignor set forth in the Leases. In exercising such powers, Agency may employ attorneys and other agents, and pay necessary costs and reasonable attorneys' fees. Assignor agrees to give prompt notice to Agency of any default of any Tenant and of any notice of default on the part of the Assignor with respect to the Leases received from a Tenant, together with an accurate and complete copy thereof. (d) To pay immediately to Agency upon demand all sums expended by Agency under the authority hereof, including reasonable attorneys' fees and costs, together with interest thereon at the then applicable interest rate payable on the Note and such sums shall be added to Assignor's indebtedness and shall be secured hereby and by the Second Deed of Trust. 4. Assignor's Warranties. Assignor represents and warrants to Agency that: (a) Assignor has not executed any other or prior assignment of the Leases or the Rents accruing thereunder which shall be in effect on or after the funding of the Loan (b) Assignor has not performed any act or executed any instrument which might prevent Agency from operating under any of the terms and conditions of the Leases, or which would limit Agency in such operation, or accepted Rent for any period subsequent to the current one (1) month period for which Rent has already become due and payable; (c) no default by any of the Tenants or Assignor now exists under the Leases except as set forth in writing to Agency; (d) Assignor has not executed or granted any modification whatever of the Leases, and the Leases are in full force and effect according to the terms and conditions thereof; (d) Assignor has good right, title and interest in and to the Leases and Rents hereby assigned and the right to assign the same, and that no other person or entity has any right, title or interest therein; and (f) Assignor has duly and timely performed all of the terms, covenants, conditions and warranties set forth in the Leases which are to be kept, observed and performed by Assignor. 5. Aareement of Assignor and Agency. It is mutually agreed that: (a) So long as there is no (i) uncured default by Assignor in the payment of any principal or interest due under the Note; (ii) uncured default in the performance or observance of any of the terms of the Note, the Loan Agreement, the Second Deed of Trust or any other security instruments executed in connection with the Note, the Loan Agreement, this Assignment and the Second Deed of Trust; or (iii) uncured default in the performance of any Exh. "D" - 4 obligation, covenant or agreement herein or in the Leases, Assignor shall have a license to collect Ripon, but not prior to accrual, all rents, issues and profits coming due pursuant to the Leases and to hold the same as a trust fund (without any obligation for an accounting or segregation of such trust fund by Assignor) to be applied prior to default as follows: First, to the payment of taxes and assessments upon the Property before any penalty or interest is due thereon; Second, to the cost of insurance, maintenance, repairs and any other payments as required by the terms of the Loan Agreement, Second Deed of Trust of this Assignment; Third, to satisfaction of all obligations under the Leases; Fourth, to the payment of interest, principal, and any other sums becoming due under the Note, the Second Deed of Trust and this Assignment; and Fifth, for Assignor's remaining purposes. (b) As used in the Section 5, "uncured default" means any event of default by Assignor and failure to cure after notice and within any applicable cure period under the Note, the Loan Agreement, the Second Deed of Trust, this Assignment, the Leases or any other security document executed in connection with the Note or the Loan Agreement. (c) Upon the occurrence and continuance of any default, as described in Paragraph 5(a) hereinabove, the license of Assignor to collect the Rents shall automatically terminate without notice to or demand on Assignor and Agency may (i) declare all sums secured hereby immediately due and payable; (ii) at its option, without notice either in person or by agent, with or without bringing any action, or by a receiver to be appointed by a court, and in addition to all other remedies available to Assignee under this Assignment, the Loan Agreement or the Second Deed of Trust and any applicable law (including, without limitation Section 2938 of the California Civil code) or in equity, enter, take possession of, manage and operate the Property or any part thereof; (iii) make, cancel, enforce or modify the Leases; (iv) obtain and evict any Tenants, and fix or modify Rents; (v) do any acts which Agency deems proper to protect the security hereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive all Rents or payments due under the Leases, including those past due and unpaid, and apply Exh. "D" - 5 the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Agency may determine. Notwithstanding Section 2938(e)(3) of the California Civil Code, the entering and taking possession of the Property, the collection of such Rents and payments, and the application thereof as aforesaid, shall not cure or waive any default or waive, modify, or affect notice of default under the Loan Agreement, the Second Deed of Trust or this Assignment, or invalidate any act done pursuant to such notice. Further, from and after the automatic termination of Assignor's license to collect Rents, and notwithstanding anything to the contrary contained herein or in Section 2938(c) of the California Civil Code: (i) all Rents then in Assignor's possession, together with all Rents collected or distributed in violation hereof, and all Rents collected or distributed after the default or Event of Default (or attributable to the period after the default or Event of Default), shall be deemed held solely in trust for the benefit of Agency, (ii) Assignor shall immediately deliver or cause to be delivered to Agency all such Rents; all Rents then due under the Leases and thereafter accruing shall upon Agency's written request, be payable by lessees directly to Agency; and (iii) this Assignment shall constitute a direction to and full authority to the Tenants to pay all Rents to the Agency, upon Agency's written request, and without proof of the default or Event of Default relied upon. The Tenants are hereby irrevocably authorized to rely upon and comply with any notice or demand by Agency for the payment to Agency of any rental or other sums which may be or thereafter become due under the Leases, or for the performance of any Tenants' undertakings under the Leases and shall have no right or duty to inquire as to whether any default or Event of Default under the Second Deed of Trust or the Note has actually occurred or is then existing. If, pursuant to Section 2938(g) of the California Civil Code, Assignor or any other assignee of the Rents makes written demand upon Agency to pay the reasonable costs of protecting and preserving the Property (a "2938(g) Demand "), for payment of items such as taxes and insurance and compliance with building codes, if any, as specified in such section (collectively, "Preservation Costs ") , then such Preservation Costs shall be deemed to consist only of the following and only to the extent of Rents actually received by Agency: (i) delinquent real property taxes with respect to the Property only to the extent that such amounts subject the Property to an imminent tax sale pursuant to applicable law; (ii) property damage insurance, and liability insurance in such amounts, with such insurers and pursuant to such terms as Agency shall have previously approved for Assignor prior to the default or Event of Default; provided, however, that Agency shall not be required to Exh. "D" - 6 purchase any rental interruption insurance or earthquake insurance, and (iii) the reasonable cost of compliance with building codes only to the extent the applicable governmental building authority makes a written demand to Agency to comply therewith. Notwithstanding anything to the contrary contained herein, Agency may (pursuant to such 2938(g) Demand or otherwise), but shall not be obligated to, pay out of such Rents actually received any other reasonable costs which Agency believes, in its sole discretion, is necessary for the protection and preservation of the Property (it being the intent of Assignor and Agency that nothing contained herein shall be deemed to impair, define or limit Agency's rights or remedies pursuant to the Second Deed of Trust, including, but not limited to, the right of Agency to protect and preserve the security for the Second Deed of Trust in the Event of Default thereunder). (d) Any default by Assignor in the performance of any obligation herein contained and acceleration of the indebtedness secured hereby shall constitute a default under the terms of the Second Deed of Trust entitling Agency to all of its rights and remedies thereunder, including specifically the right to declare a default thereunder and to elect to sell the property secured by the Second Deed of Trust, or, subject and subordinate to the rights of superior trust deed holders, foreclose the Second Deed of Trust as provided by law. (e) Agency shall not be obligated to perform nor does it hereby undertake to perform any obligation under the Leases or this Assignment, and Assignor does hereby indemnify against and hold Agency harmless from any liability, loss or damage under the Leases or this Assignment and all claims which may be asserted against it by persons other than Assignor by reason of any alleged obligation to perform any of the terms in the Leases; should Agency incur any such liability, loss or damage under the Leases or this Assignment, or in the defense of any such claims, the amount thereof, including costs and actual attorney's fees, shall be secured hereby and by the Second Deed of Trust, and Assignor shall reimburse Agency therefor immediately upon demand, and upon failure of Assignor so to do Agency may declare all sums secured hereby immediately due and payable. (f) Until all indebtedness secured hereby has been paid in full, any subsequent Leases shall be deemed to be assigned to Agency hereby, upon the terms and conditions herein contained, and Assignor agrees to execute all instruments necessary therefor. (g) Upon the payment in full of all indebtedness secured hereby, as evidenced by the reconveyance of the Second Deed of Exh. "D" - 7 Trust, this Assignment shall automatically terminate and shall be of no effect. In such an event, Agency agrees to execute any document reasonably necessary to release its interest hereunder, all at no cost to Agency. The affidavit of any officer of Agency showing any part of said indebtedness to remain unpaid shall be conclusive evidence of the validity, effectiveness and continuing force of this Assignment, and any person may and is hereby authorized to rely thereon. (h) This Assignment inures to the benefit of, and binds, all parties hereto, their heirs, administrators, executors, successors and assigns. In this Assignment, whenever the context so requires, the masculine gender includes feminine and neuter, and the singular number includes plural, and conversely. All obligations of each Assignor hereunder are joint and several. (i) Notices shall be presented in person or by certified or registered United States mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery service to the address noted below. Notice presented by United States mail shall be deemed effective the second business day after deposit with the United States Postal Service. This subsection shall not prevent giving notice by personal service or telephonically verified fax transmission, which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. Agency: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street Third Floor San Bernardino, California 92410 Attention: Director, Business Recruitment, Retention and Revitalization Telecopier No.: (909) 888 -9413 Assignor: The Jordan and Hilda Grinker Family Trust 10590 Dunleer Drive Los Angeles, California 90064 Attention: Jordan Grinker, Trustee (j) Agency may take or release other security, may release any party primarily or secondarily liable for any indebtedness secured hereby, may grant extensions, renewals or indulgences with respect to such indebtedness, and may apply any Exh. "D" - 8 other security held by it to the satisfaction of such indebtedness without prejudice to any of its rights hereunder. It is further agreed that nothing herein contained and no act done or omitted by Agency pursuant to the powers and rights granted to Agency herein shall be deemed to be a waiver by Agency of the rights and remedies possessed by Agency under the terms hereof. The right of Agency to collect said indebtedness and to enforce any other security therefor owned by Agency may be exercised either prior to, simultaneously with, or subsequent to any action taken by Agency hereunder. (k) Assignor further covenants and agrees that it shall not, without the prior written consent of Agency: (1) Receive or collect any Rents (excluding security deposits, which security deposits shall not exceed two (2) months rent) from any present or future Tenant of the Property or any part thereof for a period of more than one (1) month in advance (whether in cash or by promissory note), pledge, transfer, mortgage, grant and security interest in, or otherwise further encumber or assign future payments of Rents. (2) Waive, forgive, excuse, condone, discount, set off, compromise, or in any manner release or discharge any Tenant under any Lease of and from any obligations, covenants, conditions and agreements by such Tenant to be kept, observed and performed, including the obligation to pay the Rents thereunder in the manner and at the place and time specified therein. (3) Cancel, terminate or consent to any surrender of any Lease, nor commence any action or any summary proceedings for dispossession of a Tenant under any Lease, nor exercise any right of repossession of the Property provided in any Lease. (4) Materially modify, alter, amend or otherwise change any Lease. Assignor shall submit to Agency for Agency's prior approval of the final written form of any material amendment or modification to an existing lease by certified mail or overnight delivery. Agency shall specify the grounds for any disapproval made by Agency and shall also specify such terms and conditions under which the Agency would approve such proposed amendment or modification. Exh. "D" - 9 Assignor shall not enter into a new lease or consent to an assignment or sublease of any existing lease which permits any use of the Property which is prohibited by the Loan Agreement. Within five (5) days after executing a new lease or an amendment or modification to an existing lease, Assignor shall deliver an executed copy thereof to Agency certifying that such copy is a true, correct and complete copy of such new lease or amendment or modification. (1) This Assignment constitutes an irrevocable direction and authorization to all Tenants to pay all rents and other amounts to Agency upon demand from Agency without the necessity of any further consent or other action by Assignor. (m) Assignor hereby agrees to indemnify and hold Agency harmless from any and all liability, loss, damage or expense (including actual attorneys' fees and costs) which Agency may incur under or by reason of: (i) any reasonable action taken by Agency to protect its security hereunder or (ii) defense of any and all claims and demands whatsoever which may be asserted against Agency arising out of the Leases, including but not limited to, any claims by any Tenants of credit for rental for any period under any Lease more than one (1) month in advance of the due date thereof and security deposits paid to and received by Assignor, but not delivered to Agency. Should Agency incur any such liability, loss, damage or expense, the amount thereof, including reasonable attorney's fees, with interest thereon at the then applicable interest rate on the Note, shall be payable by Assignor immediately upon demand, and shall be secured hereby and by the Second Deed of Trust. (n) Agency's failure to avail itself of any of the rights and remedies set forth in this Assignment for any period of time or at any time shall not be construed or deemed to be a waiver of any such right or remedy, and nothing herein contained nor anything done or omitted to be done by Agency pursuant hereto shall be deemed a waiver by Agency of any of its rights and remedies under the Note, the Loan Agreement and the Second Deed of Trust or of the benefit of the laws of the State in which the Property is situated. The rights of Agency to collect the said indebtedness, to enforce any other security therefor, or to enforce any other right or remedy hereunder may be exercised by Agency, either prior to, simultaneously with, or subsequent to, any such other action hereinbefore described, and shall not be deemed an election of remedies. Exh. "D" - 10 (o) No action taken by Agency in enforcing its rights under this Assignment shall result in the imposition of personal liability on any of the members, directors, shareholders and officers, as applicable, of Assignor, or an Assignor itself or its constituent members. (p) If any provision of this Assignment or the application therefor to any entity, person or circumstance shall be invalid or unenforceable to any extent, then the remainder of this Assignment and the application of such provisions to other entities, persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. (q) No variations, modifications or changes herein or hereof shall be binding unless set forth in a document duly executed by Assignor and the Agency. (r) This Assignment shall be governed by and construed in accordance with California law. 6. Reconveyance. The reconveyance of the Second Deed of Trust by Agency shall operate as a release of Assignor's obligations hereunder. Executed at San Bernardino, California, on the date first above written. ASSIGNOR THE JORDAN AND HILDA GRINKER FAMILY TRUST By: Jordan Grinker, Trustee By: Hilda Grinker, Trustee r 1%"0-1 Exh . "D" - 11 4 STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN BERNARDINO ) On 1999, before me, personally appeared Jordan Grinker and Hilda Grinker, personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Signature C� Exh. "D" - 12 (Seal) ACKNOWLEDGMENT OF ASSIGNMENT Southern California Private Schools, a California nonprofit corporation ( "Lessee" in that certain Assignment of Leases and Rents dated as of July 1, 1999 (the "Assignment "), by and between The Jordan and Hilda Grinker Trust as assignor ( "Assignor ") and Redevelopment Agency of the City of San Bernardino as assignee ( "Agency ")) hereby acknowledges the Assignment and warrants that there has been no prior assignment of the Lease by and between the Assignor and Lessee (the "Lease ") of which Lessee has notice. Lessee hereby warrants that the Lease is a valid, enforceable agreement and the Assignor is not in default thereunder. Lessee agrees that upon the occurrence of an uncured default (as that term is defined in the Assignment) by Assignor and Agency's determination to exercise the rights of Assignor under the Lease, Lessee shall recognize the Agency as its Landlord under the Lease. THIS ACKNOWLEDGMENT OF ASSIGNMENT IS DATED AS OF July 1, 1999. ACCEPTED AND AGREED TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO LESSEE: Southern Schools, a corporation California Private California nonprofit By: President By: Secretary By: Exh. "D" - 13 CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: August 4, 1999 TO: Gary Van Osdel, Executive Director FROM: Melanie Miller, Senior Secretary RE: Transmitting Documents for Signature Attached are the following original documents: Resolution CDC 1999 -27 Resolution CDC 1999 -28 Please obtain signatures where indicated on all copies. Please return everything to the City Clerk's Office as soon as possible to my attention. I will forward to you a file copy when fully executed. If you have any questions, please do not hesitate to contact me at ext. 23212. Thank you. Rachel Clark City Clerk �e By: Melanie Miller �d Senior Secretary A e1 I hereby acknowledge receipt of the above mentioned documents. Signed: Date: F ZI/ — F