HomeMy WebLinkAboutR26 EDASABO & GREEN
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
SUITE 206
201 NORTH 'E" STREET
SAN BERNARDINO, CALIFORNIA 92401
(909) 383 -9373
Fax Number (909) 383 -9378
FAX COVER SHEET
Date: December 11, 1998
To: Anne E. Klowkow
From: David Gondek
Telephone Number: (949) 553 -1313
Number of Pages Including this Cover: 1
If you do not receive all pages or to
request confirmation, please contact: carol
Dear Ms. Klowkow:
ORI U �o 7p',L
File No. SBEO /0001
Fax: (949) 553 -8354
Our office and the office of City Attorney for the City of San Bernardino have some
questiions and concerns relating to the most recent drafts of the GMAC Subordination
Agreements which we need to address with you in order to complete our review. I
understand that you have been unexpectedly called away from your office today. Please
contact Dave Gondek at (909) 383 -9378 (or (626) 915 -0323 Saturday) when you return to
discuss.
Entered into Record at f
CntincillCmyDevCms Mtg:
—A
re Aye ncia 9tenl
City ClerkICDC Secy
City of San Bernardino
This facsimile is intended only for the use of the person or entity to which it is addressed. It may contain information that is privileged or
confidential. If you have received this facsimile in error, please notify us immediately. 1 Z —2./ _ ��
COPY
1998
MDAL -San Bernardino Associates. TIC
300 Continental Boule%-ard, Suite 350
El Segundo. CA 90245
Attention: Mr. Jason Kamm
PERNiA.NENT LOAN
CObtMiTMtEr'T LETTER
Ladies and Gentlemen:
+2411-98 DRAFT
Subject to the terms and conditions hereinafter set forth, the Rcdcvelopment Agency of the
City of San Bernardino ("Lender i agrees to make a first lien mortgage loan (the "Loan ") in the
principal amount and to the bormwcr (the "Borrower ") described on e e hczety. The Loan
will be evidenced and secured by the documents listed in Sc e 2 attached hereto (collectively,
the "Loan Documents'. Which shall (among other things) create a first- priority lien upon the
property and the buildings and improvemer is to be constructed thereon, (tbe "Mortgaged Piopert)'�
sbown on Schedule I currently owned or to be purchased by Borrower.
All capitalized terms that are used in this Perznaneot Loan Commitment Letter (the
"Commitment Letter's are defined herein.
1. B,s�owlcr. Borrower shall be MDA -San Bernardino Associates. LLC. or any assignee
permitted under the Disposttton and Development Agreement dated October 29,1996 (thc "DDA'�
between Lender and Borrower.
2. Financing Terms.
2.1 p;:�ZSIpal &Mount: The principal amount of the Loan, (the 'Loan Amount ") is the
amount set forth or §chIdWe I for the Load.
21 TILtm3IJ RAtg: The interest rate for the Loa" (tl a "interest Rate') will be fixed for the
term of the Loan and will equal the surd of (1) 300 basis points (the "Spread") and (19 the yyeld for
the benchmark ten (10) year United States Treasury note (the "Treasury yield7l as published in The
5WA300012- 1016008 RED
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NIDA -San Bernardino Associates, LLC
December 16. 1998
Page 2
Wall Street Journal or any successor publication based on the average of the bid and ask price for
such. note. Borrower may request that the Interest Rate on the Loan be priced and established on arty
business day after the conditions in paragraphs 2.a. through c. of the Attachment to Schedule 1
(Special Conditions) have been complied with. Upon telephonic request of Borrower (acting
through Jason Kamm or a successor appointed by Borrower) to establish the Interest Ratc, bender
shall quote estimates for the Interest Rate based on the Treasury Yield within one (1) buaincss da
y
after Borrowers request. Borrower will have the option to accept the Interest Rate as quoted by
Lender. If Borrower wishes to accept the Interest Rate as quoted by Lender, then Borrower shall
accept same by telephone by the close of business on the next business day. Lender shall complete
and transmit to Borrowerby telecopy a confirmation notice (the "Confirmation Notiee'7 in the Form
of Exhibit "A" attached hereto. Borrower shall execute and deliver the Confirmation iv'otice to
Lender within three (3) business days after receipt by Borrower. Lender shall thereupon execute the
Confirmation Notice and transmit a fully executed copy thereof by telecopy to Borrower. If
however, Borrower declines to accept the quoted Interest Rate then Borrower may subsequently
request an Interest Rate quote; rop vided, however, the terms and conditions applicable thereto have
been complied with.
2.3 Closing Date: Unless ex`ended by Lender and Borrower. the Clo3irg Oate shall occur
within thr" (3) business days after the pricing date. as described above.
2.4 InteTe st: Interest on the Note shall be computed on the basis of a three hundred sixty
(360) day year and payable for each full month or portion thereof on the basis of the actual number
of days elapsed as set forth in the Note and shall be payable monthly in arrears.
2.5 �,rrat„rity Hate Favmmts azzd tiriortiPtion: The T oan will matttre on the date (the
-'N1am:rtty Date ") which is the 10th anniversary of the firxt day of the ftrat Hill caterdar rr±anth
irrmediately following the Closing Date. The Loam Amount with respect to the Loan and interest
thercan shall be payable in egla.al monthly installments of principal and interest (based or a 20 -year
amortization schedule) on the dates set forth in the Note, with a final balloon payment of the
remaining unpaid Loan Amount (togetherwith all accrued and unpaid interest and all other amounts,
if any, due under the Loan Documents) on the Maturity Date.
3. t pan Dociaments• Security for Loa*t.
The Load shall be secured by the following documents (the "Security Documents')
(a) The Security Iststrument, w1+iel, shall constitvte a first priority deed of trust
encumbering the Mortgaged Property identified on LctS4—ule–1 relating to such Loan:
566A30004 z -1 o4 Boca Rpo
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MDA -San Bernardino Associates, LLC
December 16, 1998
Page 3
(b) The Assignment of Rents, which shall constitute = assignment of leases, rents,
profits, permits, licenses and contracts relating to the Mortgaged ProPertY
(c) The Pledge Agreement, which shall constitute a pledgt of all escrow sad reserve
accounts relating to the Mortgaged Property:
(d) The Assignment of Management Agreement which shall assign the rights and
benefits under any management agreement for the Mortgaged Property; and
(e) The Security Instrument, which shall also constitute a first priority sccu.ritY interest
in all fixtures, equipment and personal property owned by Borrower and now or hereafta? -,lied
to the Mortgaged Property or used its or pettalling to the management, maintenance or Ogerntiar+ of
the Mortgaged Property, and the improvements thereon. including any replacements and additions
thereto, and any and all other future and existing collateral in which a security interest is granted
under the related security agreement (collectively. the "Collateral" for such Loan).
4_ Cos
4.1 Place Date: The Closing of the Loan shall take plact at Lcnder's counsel's
offices in San Bernardino. California on a date (the "Closing Date', which shall be within three (3)
business days after the pricing date but in no event later than the Termination Date (defined below),
unless such Closing Date is extended in writing by Lender and Borrower. No broker. agent, or other
person is authorized to represent Lender in any way in connection with this transaction, except
Lender's authorized officers and Lender's counsel.
4._Z Cotina Conditiona: Lender's obligation to find anti close the )roan shall be
conditioned upon, and subject to, satisfaetion of each of the following conditions:
(a) All Loan Documents shall be executed by the party or parties thereto. All
Loan Documents shall be in substantially the form of Lender's loan documents for the $7,000,000
loa=f being made by Lender to Borrower concurrently with entering into this Corru-nitment.
(b) All of the temss, covenants and conditions of this Commitment Letter on the
part: of Borrower to be fulfillcd or performed shall have been fulfilled and performed to the
reasonable satisfaction of Lender.
(c) Except as approved in writing by Lender.
$664300012•10I6008.RV
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1MA -San Bernardino Associates, LLC
December 16, 1998
Page 4
(i) no portion of the related Collateral shall have been damaged and not
repaired to Lender's reasonable satisfaction, or shall have been taken in condemnation or other
similar proceedings, or any such proceedings shall be pending;
(ii) no material change in the structure or physical condition of any portion
of the related Mortgaged Property has occurred;
(iii) neither Hour nor any Significant Loan. Party (as defined below)
or oi$cers or principals of any of the foregoing, shall be the subject of any bankruptcy,
reorganization or insolvency proceeding:
(iv) no default shall have occurred and be continuing in the performance
of any obligation ofBorrower or the Significant Loan Parties in the instruments evidencing. securing
or guaranteeing any other loan Which default has not been cured within any applicable notice and
cure periods provided:
(v) no asbestos, toxic waste, oil or petroleum spillage or other Hazardous
Substances (as defined in the Security Documents) or condition shall exist on the related tilvrtgaged
Property. whicb substance or condition first nose or oecuurad after Borrower obtained fec title to
the Mortgaged Property:
(vi) Lender shall have reasonably approved a site inspection;
(vii) the income and expenses of the related Collateral, and any other
features of the transaction contemplated hereby, shall be as represented in this Commitment Letter
or any other docurnents dtUvcred to, or communications with, Lcndcr in order to induce Lender to
make the Loan;
(viii) a material adverse change in the financial condition of Borrower or
the Significant Loam Parties shall have not occurred since the date of the financial data and
documentation relating to such person; or entities fumished to Lender;
(ix) there shall exist no other fact, event or disclosure in cannect ion with
the Loan that reasonably can be expected to cause the Loan to become delinquent or materially and
adversely affect the Loan or the related Collateral; and
(x) All of the information provided by Borrower or the Significant Loan
Parties in connection with the Loan was Mstentlly tMe *rid correct on the dates provided and did
not omit any information necessary to render complete and atcuratc in all material respects the
58SA300012- 101e0o8 RED
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MUA, -San Bernardino Associates, LLC
December 16, 1998
Page 5
information provided, and such information will be accurate and complete in all material respects
on the Closing Date, except as Borrower has otherwise disclosed in writing to Lender.
(d) Minimum occupancy of the Mortgaged Property at Closing shall be 100 %,
and occupancy shall not have dccl ned nor tenancy mater al?y or adversely changed txiOr to the
Closing Date. all as determined by Lender in its reasonable discretion.
(e) Any and all amounts rcquircd to be paid by Borrower on orbefore the Closing
Date in accordance with the Loan closing settlement statement (including. without lisnitatim
amounts specified by Lender on Schedu as initial deposits for the escrow and reserve accounts
required to be maintaincd) shall have been paid to Lender no later than the Closing Date.
5. Brokers.
Lender shall be under no obligation for payment of any brokerage commission or fee of any
kind with respect to this Commitment Letter and, by its acceptance of this Commitment setter,
Bon•ower agrees to pay the fees and commissions of any broker rctai-ned by or on its behalf, and
Borrower agrees to indemnify, save harmless and defend Lender from and against any and all claims
for brokers' or finders' fees and commissions in connection with the negotiation, execution and
consummation of the related Loan and this Commitment Letter. including Lender's counsel's fees
and expenses relating to such claims.
Borrower shall pay, and shall be jointly and severally responsible for paying, the followirg
fees and expenses at the clos : the rewonablc fees and disbursements ofLendet's 00u,"301 riot to
exceed 52.500 for preparing the Loan Documents, title insurance premiums, survey charges,
mortgage and documentary stamp taxes, if any, note intangible taxes, if any, and all escrow,
recording and filing fees, expenses and taxes. To the extent incurred, the foregoing expenses shall
be paid by Borrower whether or not the Loan is closed.
t• i • MR-W91
Lender represents and warrants that it is duly authorized to deliver this Commitment Letter
to Borrower and to make the Loan as and whm and under the conditions. required herein, without
the necessity for any further consents, approvals, hearings, authorizations or actions. this
Commitment Letter is authorized by Lender pursuant to official action of its governing board, the
Ccn=unity Development Commission of the City of San 8emudino tpkcn on 5eptember 29,1998,
and such authorization is not subject to appeal rcvycstion or chslcne d�rode
563A300012.101600I. REO
9ZO -d OV90 d 959 -1 L39O- E55 -OlE i3Nsvu'9d39N3347 -mood InIS:l1 33 -91 -Z1
-M-DA-San Bernardino Associates, LLC
Decamber 16, 1998
Page 6
of Civil Proc u_*e 860 et ASS, 21- othezwlse (or if subject to appeal. r�rvc,SAM of chap e, all
"' c having been£rledj
applicable notice and appeal periods have passed without MY appee�
efl . Lender represents that it has (or will have as of the closing) sufficient funds to make the
Loan to Borrower.
miscellaneous.
8.1 T v Law: This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of California.
8.2 wa'v : The provisions of this Commitment Letter cannot be waived or modified
unless such waiver or modification is in writing and signed by the party, against Whom such waiver
or modification is sought to be enforced. ?his Commitment Letter is for the benefit only of the
Parties hereto and no third party shall have any interest herein or in the proceeds of the Loam. Thin
Commitment Letter sets forth the entire agreement between Borrower and Lender with respect to
the Loan and all other prior or contemporaneous agreements shall be deemed to nave merged
her,uth and to be superseded by this Commitment Letter.
8.? lion- Agsisrability. This Commitment setter is issued at Borrower's request and»
reliance upon Borrower's representations. Neither this Co=,mitrment Letter rot' the proceeds of the
Loan are assignable by Borrower to any other person or corporation without Leader's prier written
consent, except to an assignee of Borrower permitted under Section 3.05 of the DDA.
8.4 Publicity: In the event the Loan is closed, Lender shall have the right to issue press
releases, advertisements and other promotional materials describing in general terms or in detail
Lcndcr's participation "n Such transaction.
8.5 Sall Of LRan By Lender. Borrower acknowledges that, following the closing of the
Loan, the Loan may be sold by Lender, and in conncetion with such sale, Lender may assign to the
purchaser or purchasers of the Loan all of Lender's right. title and interest in, to and under the Loan
and Loan Documents.
9. Teanin;!tion Date,
Once effective, this Commitment Letter terminates, and shall be of no further force and
effect, on the date which is eighteen (18) months after the Closing Date of the "Construction Loan"
(as defimcd in the Special Conditions below), as it may be extended in writing by Lender (the
5e8A30001 z• 1015000. R ED
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MDA -San Bernardino Associates, L.LC
December 16, 1998
Page 7
"Termination Date). Time shall be of the esaettcc with respect to Borrower's and Lender's
obligations under this Commitment Letter.
V07 truly yours.
LENDER
Redevelopment Agency of the
City of San Bernardino
By:
Its:
By:
Its:
Approved as to Form and Content
Special Legal Counsel for the Redevelopment
Agency of the City of San Bernardino
3WA=012- +01eooa RED
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MDA -Sari Bernardito Associates, LLC
December 16, 1998
Page 8
►! .j: 4.
Borrower (for itself and each permitted successor and assign) shall have until
, 1998 to accept this Commitment Letter by execution and return of a copy of
the foregoing Commitment Letter. Borrower further agrees (for itself and each permitted successor
and assign) that the Loan which Lender has agreed to make to Boger in the foregoing
Commitment Letter, if accepted by Borrower, shall be on the terms and conditions set forth therein.
Borrower's acceptance of this Commitment Letter shill not be construed to create any obligation on
Bon°ower to take or accept the Loan, which shall be at Borrower's sole discretion.
BORROWER
,LiDA -San Bernardino Associates. LLC.
a Delaware limited liability company
By: MDA Investors `o. 1, L.L.C.,
a Delaware limited liability company
Managing Member
By: MJL Associates,
a California limited partnership
Managing Member
By: 'NUL Tnvestments, Inc..
a California corporation
General Partner
By:
By: Steen A. Berlinger
Its: vice President
ese"o 12- ,vreooe.aeo
920 -d 09/90 d 959 -1 1990455 -OIE 43NSVI'UHN33a9 -=i m' -SS :tI flE -9t -Zt
Name of Borrower:
Name of Mortgaged Property:
Square Footage:
Address of Mortgaged Property:
Loan Amount:
Loan Fcc:
Tcrm:
Amortization Schedule:
Required Deposits into Tax and
Insurance Escrow Account
(initial and monthly):
Required Deposits into
Replacement Reserve:
Required Deposit into Tenant
Improvement and Leasing
Commission Reserve:
568A30001 2 -10I WO&REO
SCHEDULEI
NIDA -San Bernardino Associates, LLC
City of San Bernardino - Downtown Theater Project
Approximately 80,000 square feet
San Bernardino. California
53,600,000.00
1% of Loan Amount payable at Loan closing ifs 291Y if
Loan closing occurs.
10 years
20 years
Initial amount (as reasonably determined by Lender as of
the Closing Date) sufficient to pay all property, taxes and
insurance premiums relating to the Collateral Which have
accrued as of the Closing jute (assuming that all such taxes
will be paid 30 days prior to the due date thereaf and
irsurance prernt=s Will be paid ;to less than 45 day% prior to
the expiration date of the rclalted imu*ance policy or poucics):
and a monthly deposit of 1 /12 of the annual sums due.
51,000.00 per month (or such lesser amount as maybe agreed
to by Lender and Borrower)
5360.000.00 at closing (or such lesser amount as maybe
agreed to by Lender and Borrower)
VZO -d OVO I' d 959 -1 2990 -ESS-O t9 43ASM' UHN33a9 -MCI I WESS: t l 98 -9 t -Z l
ATTAMMENT TO
SCHEDULE 1
1. A second decd of trust which shall be a HUD 108 Loan in an amount not to exceed
57.000,000 and a third deed of trust securing the debt to the Redevelopment Agency of the City of
San Bernardino in the amount of 51,32-x,575 shall be allowed on the Mart aged Property.
2. The Improvements are to be constructed by the Borrower and a portion of the eost of
construction are to be funded by GMACCM pursuant to the terms of a Commitment for Constriction
Loan ("Construction Loan -) which has been accepted by the Borrower. Funding of this permanent
Loan, shall be subject to the following:
(a) CincmaStar has taken occupancy and is open for business in the entire Premises;
(b) CinemaStar is paying tent pursuant to the terms of its ,ease, dated December
20,1996, as amended, for in initial tert:i of twarty -five (25) yc" with tw9 (2) r've (S) yeax
extension options:
(c) CinemaStar shall have executed and delivered a Subordination Non- Disturbance and
Attomment Agreement reasonably acceptable to Lender;
(d) A Ccrtiflcate of Occupancy shall have been issued certifying that construction has
been completed and the improvements accepted for occupancy;
(e) All licenses, permits, utility agreements and other contractual arrangements necessary
to operate the Property shall be valid and in effect;
M There shall be no material adverse change in the financial condition of the tenant.
Cinemastar;
(g) Borrower shall have complied with all of the material terms and conditions of the
$7.000,000 loan by Lender to Borrower (or cured any defaults within the applicable cure period);
and
(g,) Borrower will be required to furmish an opinion of counsel as to authority ofBorrower
and the Significant Loan Parties and the validity and enforceability of the Loan documents and other
matters reasonably required by Lender.
5684300012 -101 e0va.Reo
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The following individuals andlor entities will constitute Significant Loan Panties as defiacd in the
Loan Documents:
MDA Investors No. 1, LLC
NON7E OF THE FOREGOING SPECIAL CONDITIONS SHALL LD41T. OR BE N LIEU OF.
Ate' OTHER REQL7MMENTS AND CONDITIONS iPO5ED UPON BORRO`NERUNDER
Ti�IS CONIMiIMENT LETTER- UNLESS SPECIFICALLY AND EXPRESSLY PROVIDED SO
THE CONTRARY IN THE APPLICABLE PROVISION OF 7AESE SPECIAL CONDSTIONS,
86W 0M 12 -104 8M6.1tED
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Attachment to
sCHEDULE 1 - Reserves
If in the undecwtting process certain repairs, improvements or remedial work are identired
i
in the architectural and engineering report or the environmental report or if Borrower has scheduled
certain repairs or improvements ("Required Reoairs'7, then Borrower will be required to osc-ow
funds for such repairs at closing in an amount equal to 125% of the estimated cost of the Requited
Repairs, which escrowed funds will serve as additional collateral for the Loan.
Escrowed funds will be disbursed upon satisfactory completion of the Required Repairs
(unless an Event of Default otherwisc exists). Ali Required Rcpairs must be corr+pleted within 1;
months following closing (or by any earlier date provided in this Commattn"t Letter or the
agreement), in a workmanlike fashion, in compliance with applicable laws and insurance policies,
and free and clear of all liens.
2. Replace -em! Reserve Ageernent
Borrower will be required to fund at closing and;cplenish periodically a replacernent reserve
to cover costs of repairs and replacements ( "Replacements "), including structural repairs. to maintain
the Nfortgaged Property to the same standard as comparable rental properties of similar size, ap
tenancy and location (other than repairs or replacemcnts that constitute Required Repairs). may
include certain Replacements identified during Lender's undcrwritingprocess. Such escrowed funds
will serve as additional collateral for the Loan.
3. Tenant Truptovernent and Leasirac CommissioA Reserve AstremeAt
If in the underwriting process cortain tenant improvements and leasing c0r uni"'ons ar!
anticipated to be incurred, then Borrower will be required to escrow flmds for such tenant
improvc:rrcnts and leasing commissions at closing and during the term of the Loan in an amount to
be determined by Lender, which escrowed funds will serve as additional collateral for the Loan_
Escrowed Hinds for tenant improvements will be disbursed upon satisfactory completion of
tenant improvements previously approvedby Lender and escrowed funds for leasehold commissions
will be disbursed upon receipt by Lender of satisfactory evidence that the obligations of the leasing
agent have beat fully performed with respect to an agreer:rent previously approved by Lender. in
both cases unless an Event of Default otherwise exists.
568d3oo0 t 2 -� 0 � 60}8. � EO
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NiDjk -San Bernardino Associates, LLC
December 16. 1998
Pagc: 13
ATI'ACHyiENT TO
5CHEDULE 1
The following summarizes certain of the terms of the Note, the Security Instrument and
certain other Loan Documents which Borrower (or the Significant Loan Parties. as applicable) will
be expected to execute and deliver, or cause to be executed and delivered, to Lender, The summary
does not purport to be complete and is qualified in its entirety by the terms and conditions set forth
in the Commitment Letter and the final documents and instr,=cnts evidencing each Loam.
The dote
�
efeasancg:
• Except as provided below, Borrower shall have no right to prepay the loan. Commencing
on the earlier of (1) two y � t} c loan. is sold into a securitization or (2) tb-me years after
closing of the Ioan, Voluntary Treasury Defeasance is pernitted. Subject to meeting all standard
h
a d
terms, conditions and requirements, Borrower shall be pernitted to pay to :ender e:ieasa':ce
deposit (in an amount sufficient to defease the loan as determined by Lcndcr in accordance with the
tens of the Loan Documents). The defeasance deposit must be an amount sufficient to purchase
direct, noti- callable U.S. obligations that provide for payments at least equal to the amount of each
monthly installment under the Note for the remainder of the Loan term. In the event of a Bor_wer
default or other event that shall result in an acceleration of the Loan Documents or Bor -over is
otherwise required to involuntarily prepay ir, full the outstanding Loen amount, the Borrower shall
pay the create- of (;c)' Yield maintenance" (under Lender's standard yield ;nairterianee forrrnula as
set forth in the Loan Documents) or (y) 1% of'the principal amount being repaid. Payment in {v1l
only will be permitted without penalty or defeasance during the last six (6) months of the Loan term.
The Security Inst�j t Assignment of teases and cnts
Lens: Transfers: Debt:
• Borrower may rot sell, convey, mortgage, grant bazgain, rncutttber, pl�ge, assi� or
otherwise transfer theiort3aged Property or any part trereof without e Cr 's prior written
consent: provided. however, that a single transfer of the Mortgaged Property will be permitted
subj ect to Lender's prior written consent, not to be unreasonably withheld, and payment of a 1% fee
based on the unpaid principal balance of the Loan. Burrower, and if Borrower is a limited
partnership or a limited liability company. the single purpose general manager or managing member
of, Borrower, may not incur any debt, sceured of unsecured, direct or contingent OneludiAs
guaranteeing any obligation) other than the Loan and trade payable$ incurred by Borrower i_r the
S6W040z 2-101 SOOSAFD
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1DA -San Bernardino Associates, LLC
December 16, 1998
Page 14
ordinary course of business, provided same are paid when due.
• No more than d9% of the beneficial interests in Borrower. or if Borrower is a limited
partnership or limited liability company, no beneficial interests in Borrower's sole general partner
or managina member (and no interest in certain of Borrower's components' sole general partners
and managing members, if applicable), may be transferred or pledged without the prior written
consent of Lendcr. (Occurrence of any of the foregoing shall be included within the meaning of
"pledge" and "transfer" in the immediately pr- ceding bullet -point hereof,)
Limited Recourse Obli¢ation:
• Subject to the following two paragraphs, Borrower generally will not be personally liable
under the Note, and Lender will be required to look to the Mortgaged Property and all other
collateral securing the Loan to satisfy Borrower's obligations to repay the Loan.
Borrower and each of the Significant Loan Parties will, however, be personalty liable to
Lender on a joint and several basis for all losses Lender incurs due to certain matters more
particularly described in the SecurityDocurnents, including (i) i?aud or intentional misr- pt*eseTtation
by Bo owcr or any other person or entity in connection with the execution and deli1 cry of the vote,
the Security Instrument or the other Security Documents; (ii) Borrower's misapplication or
misappropriation of rents or tenant security deposits received by Borrower after the occurrence and
during the continuance of an event of default under the Security Documents ("Event of DefaulfJ -.
(iii) Borrower's misapplication or misappropriation of tenant security deposits or rents collected in
advance; (iv) the misapplication or misappropriation of insurance proceeds or condemnation awards
after the occurrence and during the continuance of an Evcnt oMefault; (v) any fees or commissions
paid by Borrower after the occurrence and during the continuance of an Event of Default to any
principal, affiliate, general partner or managing member of Borrvwcr, the Significant Loan Fwtics
or any guarantors of the Loan in violation of the terms of the Note, the Security tnstrasnent or the
other Security Documents; (vi) gross negligence, or criminal Acts perpetrated by it resulting in
forfeiture, seizure or loss of any part of the Security; (vii) any failure by Borrower or the Significant
Loan Patties to comply with the terms a-id provisions of the Security Documents regarding
environmental matter; (viii) any breach by Borrower, or if Borrower is a limited patnership or a
limited liability company, by the single purpose general pa -tner or managing member of Borrower.
of the separateness provisions of the Security instrument; (ix) all fees and expenses of Lender (and
the trustee under the deed of trust. if applicable), in connection with.he administration of the Loan,
preparation and enforcement of the Security Documents, protection of Lender's interest in the
Collateral and collection of any amounts payable under the Security Documents, or (x) any sale,
con.veyanec, mortgage, grant, bargain, encumbrance, pledge, assignment or transfer of the
k+toTtSAted property. within the roaming (which also includes the trwsfer9 of pledges of certain
beneficial interests in Borrower) of the xppdckle provisions o` the Security Instr+- _r"Pit (as
568A30001 z- 1015008-ago
IZ7 -d II /St d 951-: 199 - ESS -7te �3�51'9'7a39N33a7 -wo�� !z %g:II 88 -91 -Z1
MDA -San Bernardino Associates, LLC
December 16, 1998
Page 15
described, in part. above), without the prior written consent of Lender.
in addition. Lender's agreement not to pursue recourse liability against Borrower or the
Significant Loan Parties shall become null and void in the event M the Mortgaged Property or any
part thereof shall become an assets in (A) a voluntary bankruptcy or insolvency procccdL
kr g. or (B)
an involuntary bankruptcy or insolvency proceeding commenced by any person or entity (other than
Lender) which is not di smissed within ninety (90) days of the filing, or (ii) Borrower. any Significant
Loan Party or any guarantor of the Loan fails to comply with the terms and provisions of the
Security Documents regarding the delivery of certain financial reports and runt rolls within thirty
(30) days after written notice from Lender to Borrower (which notice shall be a second notice given
after the expiration of any notice of default for such failure given pursuant to the Security
Instniment).
Rev -o 1as Reouireml ts:
• Borrower, its affiliates and the Significant Loan Parties will furnish to Lender certified:
quarterly rent rolls, operating statements, and balance sheets; annual balance sheet and profit snd
loss statements of Borrower and the Significant Loan Parties, rent rolls, and operating budgets; and
such other financial and management statements and information, including monthly operating
statements and rent rolls, quarterly management reports, and accountings of security deposits, as
Lender reasonably requests.
Gmera1 Indemnitv:
• Borrower (but not the Significant Loan Parties) will indemnify Lender and its alIlliates for
all losses, costs and other liabilities asserted against or imposed on Lender or any affiliate arising
from the Loan, the Loan Documents, the Collateral, Borrower's nonperfoitnance, activities at the
Mortgaged Property, and related matters.
uara
• The Significant Loan Parties, on a joint and several basis, shall deliver to Lender a guaranty
with respect to (i) the payment andperformance of Borrower's recourse obligations under the Loan.
and (ii) all costs of enforcernent of such guaranty.
Assi=mertt of -Management Awteernent and Subordination of Manag ment Pees
�orrower The property manager for the Mortgaged Property shall be satisfactory to Letldcr. and
may not replace any #uch property manager without bender's prior consent. Borrower
shall execute and deliver, and shall cause the properly manager, ar!d arty fepiacemem s themog to
execute and deliver, to Lender an Assignmetlt of Management Agreernertt and Subord11300*+ of
5884300012-1016009. RED
lzi—a 77 /?i d 954 —'_ 1947— sSs -71E �3ASn'9'U'HN33a ^ —WOJd W °95:11 98 -91 —Z1
MDA -San Bernardino Associates. LLC
December 16,1998
Pages 16
Management Fees and replacements of such document. as applicable, on Lender's current and
th=.. current form as the case may be.
568AJOOCI Z -t 016008.RE0
VZ0 -i 0Y /LIA 959 -i 1990- E55 -OlE 43NSnlD'U38N33U -moJi me95:l1 88 -91 -Z1
MDR -San Bernardino Associates, LLC
December 16, 1998
Page 17
SCREDULE 2
1. Promissory Note secured by a first lien Deed of Trust (the "Note';
2. Deed of Trust, Security A reemeat, Assignment of Rents and Fixture Filing (the "Security
Tnstn=ent');
3. Assignment of Leases. Rents and Contracts ( "Assignment of Leaseel
4. Assignment of Management Agreement and Subordination of Management Fees
( "Assignment of Management Agreement';
S. Escrow and Reserve Account Pledge Agreement (the "Pledge Agreement': and
6. Form UCC -1 Financing Statemmt ( "Ucc -1 ").
56WO0012- ICIWCS RED
M —d Ob/9l d 999 -1 2999— @99 —OLE b�ISii ?9'7b39N33b9 —mood wras:11 98-91 —Z1
FORM OF CONFIRMATION NOTICE
Date: '199
Borrower/Mortgagor Name:
Mortgaged Property Name:
Mortgaged Property Address:
Commitment Letter Date: -199
The undersigned Borrower hereby acknowledges and agrees. With respect to the Mortgage Loan
secured by the Mortgaged Property identified above. to the following terms:
Loan Amount: 53,600,000
Interest Ratc: per armurn
Closing Date.
MDA -San Bernardino Associates, LLC,
a Delaware limited liability company
By: MDA Investors No. 1. L.I.-C.,
a Delaware limited liability company
Managing Member
By: MJL Associates,
a California limited partnership
Managing Member
By: MJL Investments, Inc..
IL California corporation
General Partner
By:
By: Steen A. Bcrlinger
Its: vice President
56U300012-1019008-AR-0
VZO -d 011/31'd 959 -: 2990- ESS -OIE 43Nsn9'U39N33b9 -WC1i wtas:il 98 -91- ?t
Cai1�F'IRMED:
LENDER
City of San Bernardino
RV:
Name:
Title:__,_
568d3000t2- 1016008.R�p
9Z0 —d 09 /OZ'd 959 -1 1490 —ESS -Old
a�5(110'Oa39N3?a0 —�o,d ong5 :tt 98 -9[ —Zl
This redlined drag, generated by CompareRite Mvf) - The Instant Redlines, shows the
differences between -
original document : N_ NGGDOCSI\56843N00012\1016008.02
and revised document: N:\GGDOCS1\56RA3\00012Nlol6008.O3
Comp=Pjte found 5 change(s) in the text
Dclrtions appear as Strikethrough text
Additions appear as Double Underline text
36WO0012 -1 D I SM&R ED
VZ0 -1 01 /1Z'd 959 -i 1890- E55 -01E HASM MN3?b9 -mold x°-65 :11 96 -41-Z1
NTDA -San Bernardino Associates, LLC
300 Continental Boulevard, Suite 360
El Segundo, CA 90245
Attention:lir. Jason Kamm
1998
PEwN AlYEPi'T LOAN
COMMTTMENT LETTER
12.15.98 DRAFT
Ladies and Gentlemen:
Subject to the terms and conditions hemirafter set,, orth, the Redevelopment Agency of the
City of San Bernardino ("Lender's agrees to make a M "rst iien mortgage load (the "Loan's itt the
principal amount and to the borrower (the' PorrowefI described on lchegWlel hereto. The Loan
will be evidenced and secured by the documents listed in Schedule 2 attached hereto (collectively,
the "Loan DocumentO. which shall (among other bungs) create a first- priority lien upon the
property and the buildings and improvements to be constructed thereon, (the `Mortgaged Propert)r'?
shown on Schedule I currently owned or to be purchased by Borrower.
All capitalized terms that are used in this Pem=ent Loan Commitment Letter (the
"Commitment Letter'l are defined herein.
1. 13orrower: Borrower shall be MDA -San Bernardino Associates, LLC, or any assignee
permitted under the Disposition and Development Agreement dated October 29,1996 (the "DDA')
between Lender and Borrower.
2.1 P_ rincipa.l Amount: The principal amount of the Loan (the 'loan A.rnount ") is the
amount set forth on 5ch for the Loan.
2.2 t ate- The intcrost rate for the Loam (the "Interest Rate') will be fixed for the
term of the Loan and will equal the sum of (i) 300 basis points (the "Spread ") ar+d (ii) the Yield for
the benchmarkten (10) year United States Treasury note (the "Treasury yield'j as published in ?he
SGSA30o012- 1016008.2
M -d 07 /ZZ "d 959 -1 1990 - 655 -01E a?�Si119'9a ?9N3 :d7 -mo�j 059:11 98 -91 -Z1
MDA -San Bernardino Associates, LLC
December 16, 1998
Page 2
Wall Street Journal or any successor publication based on the average of the bid and ask price for
such note. Borrower may request that the Interest Rate on the Loan be priced and established on any
business day after the conditions in paragraphs 2.a through e. of the Attachmetzt to Schedule 1
(Special Conditions) have been complied with. Upon telephonic request of Borrower (acting
through Jason Kamm or a successor appointed by Borrower) to establish the Interest Rate, Lender
shall quote estimates for the Interest Rate based on the Treasury Yield within one (1) busireas day
after Borrower's request. Borrower will have the option to accept the Interest Rate as quoted by
Under. if Borrower wishes to accept the Interest Rate as quoted by Lender, then Borrower shall
accept same by telephone by the close of business on the next business day. Lender shall complete
and transmit to Borrower by telecopy a confirmation notice (the "Confirtnation Notice's in the form
of Exhibit "A" attached hereto. Borrower shall execute acid deliver the Confirmation Notice to
Lender within three (3) business days after rcccipt by Borrower. Lender shall thereupon execute the
Confirmation Notice and transmit a fully executed copy thereof by telecopy to Borrower. If
however, Borrower declines to accept the quoted Interest Rate then Borrower may subsequently
request an Interest Rate quote; ro�Odded, however, the terms and conditions applicable thereto'nave
been complied with.
2.3 Closing Date: Unless extended by Lender and Borrower, the Closing Date shall occur
within three (3) business days after the pricing date, as described above.
2.4 lnt_ e�est: Interest on the Note shall be computed on the basis of a three huxdred six►
(360) day year, and payable for each full month or portion thereof on the basis of the actual number
of days elapsed as set forth in the Note and shall be payable monthly in arrears.
2.5 Xaturity Date Payments and AoZ14 aat;.oxt: The Loan will mature on the date (the
":Maturity Date") which is the 10th amsversary of the first day of tye first full calendar =vrth
immediately following the Closing Date. The Loan Amount with respect to the Lena and interest
thereon shall be payable in equal monthly installments of principal and interest (based on a 20 -year
amortization schedule) on the dates set forth in the Note, with a final balloon payment of the
remaining unpaid Loan Amount (tcgetherwith all accrued and unpaid interest and all other amounts,
if any, due under the Loan Documents) on the Maturity Datc.
. ...
The Loan shall be secured by the following documents (the "Security Documents':
(4) The Security Instrument, whiela shall eonstitutc a f1rst priority deed of trust
encumbering the Mortgaged Property identified on 55hedule I relating to such Loan.
Shc,�3000�2- �0�8008.3
>?0 - -� 39 /EZ d 333 -1 L390 —M -01. 43NSfl Old" UR7 —m01i WE35:11 85-91 —Z1
MDA -San Bernardino Associates. LLC
December 16, 1998
Page 3
(b) The Assignment of Rents, which shall constitute an assignment of leases, rents,
profits, permits, licenses and contracts relating to the Mortgaged Property;
(c) The Pledge Agreement, which shall constitute a pledge of all escrow and reserve
accounts relating to the Mortgaged Property;
(d) The Assignment of :Management Agreement, which shall assign the rights and
benefits under any management agreement for the Mortgaged Property: and
(e) The Security Instrument, which shall also constitute a first priority security interest
in all fixtures, equipment and personal property owned by Borrower and now or herealfier afl3xed
to the Mortgaged Property or used in or pertaining to the management, maintenance or operation of
the Mortgaged Property, and the improvements thereon, including any replacements and additions
thereto, and any and all other future and existing callatcral in which a security interest is granted
udder the related security agreement (collectively, the "Collateral" for such Loan).
4. C vs
4.1 Place and Date: The Closing of the Loan shall take plac at Lender's counsel's
offices in San Bernardino, California on a date (the "Closing Date"), which shall be within three (3)
business days after the pricing date but in no event later than the Termination Date (defined below),
unless such Closing Date is extended in writing by Lender and Borrower. No broker, agent, or other
person is authorized to represent Lender in any way in connection with this transaction, except
Lender's authorized officers and Lender's counsel,
4.2 Closing Conditi_orts: Lender's obligation to lurid and close the Loan shall be
conditioned upon, and subject to, satisfaction of each of the following conditions:
(a) All Loan Documents shall be executed by the party or parties thereto. All
Loam Documents shall be in substantially the form of Lender's loan documents for the 571,000.000
loan being made by Lender to Borrower concurrently with entering into this Co==itMCnt.
(b) All of the terms, covenants and conditions of this Commitment Letter on the
part of Borrower to be fulfilled or performed shall have been fulfilled and performed to the
reasonable satisfaction of Lender.
(c) y-xcept as approved in writing by Lender:
568x300012 - 1016008.3
9Zo -� 01/1Z d 959 -1 199o- M-ot°. 43M10141- SUR9 -W011 mdoo :Zt 98-9l -Zl
MDA -San Bernardino Associates, LLC
December 16, 1998
Page 4
(i) no portion of the related Collateral shall have beer+ damaged and not
repaired to Lender's reasonable satisfaction, or shall have been taken in ccndernnativn or other
similar proceedings, or any such proceedings shall be pending;
(ii) no material change in the structure orphysical condition of anyportivn
of the related Mortgaged Property has occurred:
(iii) neither Borrower nor &try Significant Loan Patty (as defined below)
or officers or principals of any of the foregoing, shall be the subject of any bankruptcy,
reorganization or insolvency proceeding;
(iv) no default shall have occurred and be continuing in the perfotTnance
of any obligation ofBorrower orthe Significant Loan Parties in the instruments evidencing, securing
or guaranteeing any other loan which default has not been cured within any applicable notice and
cure periods provided:
(v) no asbestos, toxic waste, oil or petroleum spillage or other Hazardous
Substances (as defined in the Security Documents) or condition_ shall exist on the related Mortgaged
Property, which substance or condition first arose or occurred after Borrower obtained fee title to
the Mortgaged Property;
(vi) Lender shall have reasonably approved a site inspection;
(vii) the income and expenses of the related Collateral, and any other
features of the transaction contemplated hereby. shall be as represented in this Commitment Letter
or any other documents delivered to, or communications with. Lender in order to induce Lender to
make the Loan:
(viii) a material adverse chmSc it the flnanncial condition of 3crmwer or
die Significant Loan Parties $hall have not occurred since the date of the financial data and
documentation relating to such persons or Entities f u- nished to Lender;
(ix) there shall exist no other fact, event or disclosure in connection with
the Loan that reasonably can be expected to cause the Loan to become delinquent or materially and
adversely affect the Loan or the related Collateral: and
(x) All of the information provided by Borrower or the Significant Loan
Parties in connection with the Loan was mateHally true and correct on the dates provided and did
not omit any information necessary to render complete and accurate in all material respects the
568a3M012- I0+6000.3
VU -: Ol /SZ d 953-1 2330- Q- Sz -at! 13NSn19'U!SN23N9 -W0Jd Wdo0:Z1 88 -91 -Z1
MDA -San Bernardino Associates, LLC
December 16, 1998
Page 5
information provided, and such information will be accurate and complete in all material respects
on the Closing Date, except as Borrower has otherwise disclosed in writing to Lender.
(d) Minimum occupancy of the Mortgaged Property at Closing shall be 1001
and occupancy shall not have declined nor tenancy materially or adversely changed prior to the
Closing Date. all as determined by Lender in its reasonable discretion.
(e) Any and all amounts required to be paid by Borrower on or before the Closing
Date in accordance with the Load closing settlement statement (including, without limitation,
amounts specified by Lender on ith24-MI61 as initial deposits for the escrow and reserve 4ccounts
required to be maintained) shall have been paid to Lander no later than the Clostrrg Date.
Brokers.
Lender shall be under no obligation for payment of any brokerage commission or f-e of any
kind with respect to this Commitment Letter and, by its acceptance of this Commitment better,
Borrower agrees to pay the fccs and cnrmrliRsions of any brok" reraincd by or on its behalf, and
Borrower agrees to indemnify, save harmless Ind defend Lender from and against any and all claims
fat brokers' or finders' fees and commissions in co2lnection with the negotiation, execution and
consummation of the related Loan and this Commitment Letter, including Lender's counsel's fees
and expenses relating to such claims.
6. Few Costs and Bxt7er15es.
Borrower shall pay. and shall be jointly anal severally respoasibte for paying, the fhllowit S
fees and expenses at the closing: the reasonable fccs and disbursements of Lender's counsel not to
exceed S2,500 for preparing the Loan Documents, title insurance premiums, survey charges,
mortgage and documentary stamp taxes, if any. note intangible taxes. if any, and all escrow.
recording and filing fees, expenses and taxes. To the extent incur -ed, the foregoing expenses shall
be paid by Borrower whether or not the Loan is closed.
y. • •
Lender represents and warrants that it is duly authorized to deliver this Commitment Letter
to Borrower and to make the Loan as and when, and under the conditions. required herein:, without
the necessity for any further consents, approvals, hearings, authorizations or actions: this
Commitment Letter is authorized by sender pursuant to official action of its governing board, the
Community Devclopm ent Commission of the City of San Bemardino takers on September 29, 1998,
and such authorization is not subject to appeal, rrroceon or challenge under Code of Civil
sesaaoo012- 101WCa.3
M -i VI/V, d 993 -. L99O- E55 -01E a +sm�'9b?SN ? ?�9 -mc�d ad10 :Z1 88 -91 -Z1
MDA -San Bernardino Associates. LLC
December 16, 1998
Page 6
Procedure 860, et seq. or otherwise (or if subject to I peaL revocation or challenge, all applicable
notice and appeal periods have passed without any such sut (m having been ud"m). Lender
rrpresents that it has (or will have as of the closing) sufficient funds to make the Loan to Borrower.
S. � Usce Uanms.
8.1 CToverning, _Law: This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of California.
8.2 waiver: The provisions of this Commitment Letter cannot be waived or modified
unless such waiver or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced. This Commitment Letter is for the benefit only of the
parties hereto and no third party shall have any interest herein or in the proceeds of the Loan. This
Commitment Letter sets forth the entire agreement between Borrower and Lender with respect to
the Loan and all other prior or contemporaneous aEreerrer_ts shall be deemed to have merged
hertwith and to be superseded by this Commitment Letter.
8.3 Non -A�si age bilit. This Commitment Letter is issued at Borro�vex's request and in
reliance upon Borrower's representations. `either this CommitM t Letter nor the proceeds of the
Loan are assignable by Borrower to any other person or corporation
with Lender's prior Mitten
consent, except to an assignee of Borrower permitted under Section 3.05 of the DDA.
8.4 In the event tl,e boon is closed, Lender shall have the right to issue press
releases, advertisements and other promotional matorials describing in Several terr,�ts or . c4 i l
Lender's participation in such transaction.
F
8.5 Sale Of LQM15Y Lender. Borrower acknowledges that, following the closing of the
Loan. the Loan may be sold by Lender, and in conneetiott with such sale, Lender may assign to the
purchaser or purchasers of the Loan all of Lender's right. title and interest in, to and under the Loan
a.nd Loans Documents.
9. J,ertnin�ation Date.
Once effective, this Commitment Letter terminates, and shall be of no furthcr force wid
effect. on the date whieh is eighteen (I S) Months after the Closing Date of the "Construction Lett",
(as defined in the Special Conditions below). as it may be extended in writing by Lender (the
MU300012- 10160ca 3
9?U -d O7/ -'Z d 3 :? -:
MDA -S= Bernardino Associates, tLC
December 16,1998
Page: 7
"Termination Date"). Time shall be of the essence with respect to Borrower's and Leader's
obligations under this Commitment Letter .
very truly yours,
LENDER
Redevelopment Agency of the
City of Sant Bernardino
Bv:
Its:
By:
Tts:
AprMved as to Form and Content
Special Legal Counsel for the Redevelopment
Agency of the City of San Bcrriatdino
M8A300012-4 01 W04 a
iZ0 -I WSZ, a 999 -1 1990 -999 -018 HNSVI' UMNMI -2013 MdZO: Z I 96 -91 -Z 1
MDA -San Bernardino Associates, LLC
December 16, 1998
Page 8
Borrower (for itself and each permitted successor and aaaign) shill have until
_ , 1998 to accept this Commitment Letter by execution and return of a copy of
the foregoing Commitmett Letter. Borrower further agrees (for itself and each permitted successor
and assign) that the Loan which Lender has agreed to make to Borrower in the foregoing
Commitment Letter, if accepted by Borrower, shall be on the terms and conditions set forth therein.
Borrower's acceptance of this Commitment Letter shall not be construed to create nay obligation on
Borrower to take or accept the Loan, which shall be at Borrower's sole discretion.
BORROWER
MDA -San Bernardtro Associates. LLC.
a Delaware limited liability company
By: MDA Investors No. 1, L.L.C..
a Delaware limited liability company
Managing Member
By: MIL Associates.
a California limited partnership
Managing Member
B,v: MIL Investments, inc.,
a California corporation
General Partner
By:
By: Steven A. Berlinger
Its: Vice President
MUMIZAo1W08 s
M -d 0b /8Z*d 959-1 1990- ESS -OIE 42XSn1DIH6N3UD-MG I I mdZO:ZI 98 -9I -ZI
SCHEDULE 1
Name of Borrower: MDA -San BcmmUno Associates. LLC
Vamc of Mortgaged Ptvperty: City of San Bemardino - Dowatvwn ?heater Project
Square Footage_ Approximately 80,000 square feat
Address of Mortgaged Property: San Bernardino. California
Loan Amount: 53,600.000.00
Loan Fee: 1 % of Loan Amount payable at Loan closing U-Md--z v tf
Loan closing occurs.
TWIT : 10 years
Amortization Schedule: 20 years
Required Deposits into Tax and initial unount (as reasonably determined by Lorder as of
Insurance Escrow Accourt the Closing hate) sufficient to pay all property taxes and
(initial and monthly): insurance premiums relating to the Collateral which have
accrued as of the Closing Date (assuming that all such taxes
will be paid 30 days prior to the due date thereof and
insurance premiums will be paid no less than 43 days prior to
the expiation date of the related insurance policy or policies);
and a monthly dcpcsit of 1 /12 of the annual Sums dua.
Required Deposits into
Replacement Reserve: 51,000.00 per month (or such lesser amount as may be agreed
to by Lender and Borrower)
Requitcd Deposit into Tenapt
jmprove�ont and Leaning
Commission Reserve: 5360 m
,000.40 at closing (or such lesser aourt as may be
agreed to by Lender and Borrower)
388A300012.1016008.3
M -d OVOE'd 959 -1 L890- ESS -71E a3NSn19'N3SN33b9 -mo1d Wd73: Z1 88 -91 -?t
ATTACHMENT TO
SCHEDULE 1
riot 1. A second deed of trust whicb shall the debt two t c Redevelopment Agency f the Ci
$7.000,000 and a third deed of trust securing he
San Bernardino in the amount of S 1.324,575 shall be allowed on the Mortgaged Property.
Z. The Improvements are to be constructed by the Borrower and a portion of the cost of
construction are to be funded by GMACCM pursuant to the terms of a Commitment for Ccm*truetion
Loan ("Construction Loan's Which bas been accepted by the Borrower. Funding of this permanent
Loan shall be subject to the following:
(a) CinemaStar has taken occupancy and is open for business in the entire Premises;
(b) CirnemaStar is paying rent pursuant to the terms of its Lease. dated December
20.1996. as amended, for an initial term of twenty -five (25) years with two (2) five (5) year
extension options;
(c) Cinema5tar shall have executed and delivered a Subordination Non- Disturbance and
Attornment Ageement reasonably acceptable to Lender;
(d) A Certificate of Occupancy shall nave been issued certifying that construction has
been completed and the irn=vcments accepted for occupancy;
(e) All licenses. permits, utility agteernents and other contractual arrangements necessary
to operate the Property shall be valid and in effect;
M There shall be no material adverse change in the financial condition of the tenant.
Cin,emastar;
(g) Borrower shall have complied with all of the material terms and conditions of the
S7.000,0Q0 load by Lender to Borrower (or cured any defaults within the applicable tun- period);
and
(h) Borrowerwillberequiredtofurnishanopinionofcounsclalto authority oMorrowcr
and the Significant Loan Parties 3rd the validity and enforceability cf the Loat% documents and other
matters reasonably required by Lender.
94BA300012- 1016008.3
VZ0 —i 01/! E d 954 -1 1990 —M -0 t, a3Nsn19' U39N3T.dn —WCJ i mdEa: Z [
The fbllowirg individuals and/or entities will constitute Significant Loan Parties as defined in the
Loan Documents:
MDA Investors No. 1, LLC
NONE OF THE FOREGOING SPECIAL CONDITIONS SHALL LIMIT, OR BE IN LIEU Of,
ARTY' OTHER REQUTRE�IENTS AND CONDITIONS DYTOSED UPON BORROWER UNDER
TMS C0NDvnTj%4ENT LETTER, UNLESS SPECIFICALLY AND EXPRESSLY PROVXDED TO
THE CONTRARY IN THE APPLICABLE PROVISION OF THESE SPECIAL CON'DITION'S.
MW00012.101 OU
M -4 0 U-j 959 -1 1890- E5s-atE a sn�s'9a:9N??a7 -mo�j mdH0:ZI 98 -9t -Zt
Attachment to
sMDULE 1- Reserves
?f in the underwriting process certain repairs, improvements or remedial work are identified
in the architectural and engineering report or the enviro=ental report or if Borrower has scheduled
certain repairs or improvements ("Rea Reaaizs'i, then Borrower will be required to escrow
funds for such repairs at closing in an amount equal to 125% of the estimated cost of the Required
Repairs, which escrowed funds will serve as additional collateral for the Loan.
Escrowed Rinds will be disbursed upon satisfactory completion of the Required Repairs
(unless an Event of Default otherwise exists). All Required Repairs must be Completed within 12
months following closing (or by any earlier date provided in this Commitment Lcttor or the
agrcement), in a workmanlike fashion, in compliance with applicable laws and insurance policies,
and free and clear of all liens.
2. Replacement Reserve Agreement
Borrower will be required to fund at closing and replenish periodically a replacement reserve
to cover costs ofrepairs and replace relents (" Replacements" ), including structural repairs. to maintn n
the Mortgaged Property to the same standard as comparable rental properties of similar size, age,
tenancy and location (other than repairs or replacements that constitute Required Repairs); may
include certain Replacements identified during Lender's underwriting process. Such escrowed funds
will serve as additional collateral for the Loan.
3. 7r£nant jznj(, vement and Leas e C0=iSs or 3eserve Astreement
If in the underwriting process certain tenant improVcmcnts and leasing cornrnissions are
anticipated to be incurred, then Borrower will be required to escrow funds for such tenant
improvements and leasing commissions at closing and during the term of the Loan in an amount to
be determined by Lender. which escrowed funds will serve as additional collateral for the Loan.
E3ergwed funds for tenant lsrtprovernen #.s will be disbursed upon 54tisfUtpry completion Of
tenant improvements previously approved by Lander and escrowed fiends for lessehold comy"issi"..3
will be disbursed upon receipt by Lender of satisfactory evidence that the obligations of the leasing
agent have been fully performed with respect to an agreement previously approved by Lender, in
both cases unless an Event of Default otherwise exists.
5MAX00 12- 1019008 3
VM -: p7 /E: d 959 -! 1990- P_SS -QlE �! ?�Sfi ?9'7a ?LN? ?2�n_ma�j m�SJ :Z! BB-9l -Zl
MDA, -San Be=ardino Associates, LLC
December 16. 1998
Page 13
ATTAC -M ENT TO
SCI EDIME 1
OF C UTIAZi LOAN TERMIS
The following summarizes certain of the terms of the Note, the Security Instrume>at and
certain other Loan Documents which Borrower (or the Significant Loan Parties, as applicable) will
be expected to execute and deliver, or cause to be executed and delivered, to Lender. The summary
does not purport to be complete and is qualified in its entirety by the terms u+d conditions set forth
in the COMM- itment Letter and the final documents and ibstrument3 evidencing sash Loan,
The 'N'
Defeasance:
• B
Except as provided below, r- n
Borrower shall have no right to prcpav the loan. Corencing
on the earlier of (1) two years after the loan is sold into a securitization or (2) three years after
closing of the loan, Voluntary Treasury Defeasarce is pe*niit`ed. Subject' meeting X11 standard
terms, conditions and requirements, BcrrcWer 3.hali be permitted to pay to lender a elefeas =ee
deposit (in an amount sufficient to defease the loan as determined by Lender in accordance with th-
terms of the Loan Documents). The defeasance deposit must be an amount sufficient to purchase
direct, non - callable U.S. obligations that provide for payments at least equal to the amount of each
monthly installment under the Note for the remainder of the Loan term. In the event of a Borro�%er
default or other event that shall result in an acceleration of the Loan Documents or Borrower is
otherwise required to involuntarily pTepay in full the outstanding Loan amount, the Borrower shall
pay the greater of (x) `Yell maintenance" (under Lender's standard yield maintenance formula as
sct (orth in the ,e Loan Dvctiments) or (y) 1', of the principal arnourit being repaid_ PaNTm in fa 11
only will be permitted without penalty or defeasarce during the last six (6) months of the Loan terra.
Tbe Secs*ity Instrummt� ssimment of Leases and Rents
Liens; Transfers, Debt:
• Borrower may not sell convey, mortgage, grant, bargain. encumber, pledge, assign or
otherwise transFer the Mortgaged Property or any part thereof without Lender's prior written
consent; provided. however, that a single transfer of the Mortgaged Property will be permitted
suhj ect to Lender's prior written consent, not to be unreasonably withheld, and payment of a 1% fee
based on the unpaid principal balance of the Loar. Borrower. and if Borrow ^ -r is a limited
partnership or a limited liability company, the single purpose general manager ormanaginvr►ember
of Borrower, many not incur any debt. seeiued o* untecurcd, direct at contingent (incluft -T
guaranteeing any obligation) other thin the Loan and trade payablcs incurred by Bon wtr in the
5eBA3C001 2.1016N5.3
M -i OVIE d 959 -! Z99O- £5: -J1£ 43NSt1?9'U39N3:X -W0Jd yd£O:Z1 39 -91 -Z1
NIDA -Sari. Bernardino Associates, TLC
December 16. 1998
Page 14
ordinary course of business, provided same an paid when due.
No more than 49% of the beneficial interests in Borrower, Or if Berrov�'cr is a limitod
partnership or limited liability company, no beneficial interests in Borrowe'r's sole general paler
or managing member (and no interest in certain of Borrowers components' sole general partners
and managing members, if applicable), may be transferred or pledged without the prior u tten
consent of Lender. (Occurrence of any of the foregoing shall be included within the meaain� of
"pledge" and "transfer" in the immediately preceditig bullet -point hereof.)
Limited 8cc Obligation:
• Subject to the follou7ng two parag
graphs. Borrower generally %Nil, not be personally liable
under the Note, and Lender will be required to look to the Mortgaged Property and all other
collateral securing the Loan to satisfy Borrower's obligations to repay the Loan.
Borrower and each of the Significant Loan Pales will, hawemr. be Personally liable to
Lender on a joint and several basis for all losses Lender incurs due to certain *natters more
particularly described in the Security Documents. including (1) fraud or intentional misrepresentation
by Borrower or any other person or entity in connection with the execution and delivery of the Note,
the Security Instnuncnt or the other Security Documents: (ii) Borro -•er's misapplication or
misappropZation of rents or tenant security deposit- received by Borrcwer after the occurrrnce a-lid
during the continuance of an erent of default under the Security Docu-*ncnts ( "Event of Default');
(iii) Borrower's misapplication or .misappropriation of tenant sccu^ity deposits o * rents collected in
advance; (iv) the misapplication ormisappropriation ofinsuranceproceeds or condeMnatior aIA-a7ees
after the occumnce and during the continuance of an Event of Default; (v) any `ees or commissions
paid by Borrower after the occurrence and during the continuance of an Event of Default to any
principal, &Mliate. general parincr or managing member of Borrower, the Sicniztcant Loam Partiaa
of any guarantors of the Loan in violation of the terms of the Note, the Security Instrument or the
other Security Documents: (vi) gross negligence, or criminal acts perpetrated by it resulting in
forfeiture, seizure or toss of aay part of the Security: (vii) any failure by Borrower or the Significant
Loan Parties to comply with the terms and provisions of the Security Documents regarding
environmental matters; (viii) any breach by Borrower, or if Borrower is a limited partnership or a
limited liability company, by the single purpose general partner or managing me.nber ofBorro -er,
of the separateness provisions of the Security Instrument: (ix) all fees and expenses of Lender (and
the trustee under the deed of trust, if applicable), in connection with the administration of the Loan.
preparation and cnforcemtnt of the Security Documents. protection of Lender's interest in the
Collater*J and collection of any amounts payable under the Security Documents; or (x) any sale,
conveyance, mortgage. grant, bargain, encumbrance, pledge. assignment or transfer of the
Mortgged Property. %Jtbin the meaning (a►r!t{eb also includes the transfers or pledges of eartain
beneficial interests in Borrower) of the applicable provisions of the Security Instument (as
5s8A=12.101 ap0E.3
Itb -i 09 /5E'J 959 -1 1890 -ESS -DIE S3YSf11D'9E39N332l9 -WJi ddVD :21 ES -91 -21
MDA. San Bernardino Associates, LLC
December 16, 1998
Page 15
described. in part_ above), without the prior Written consent of Lender.
;,ignificant In addition, Lender's agreement not to pursue recourse liability against Borrower or the
Loan Parties shall become null and void in the event W the Mortgaged Property or any
part thereof shall become an assets in (A) a voluntary bankruptcy or insolvency proceeding. or (B)
an involuntary bankruptcy or insolvency proceeding cornmenced by any Person er entity (other t1+an
Lender) Which is not dismissed within ninety (90) days of the filing, or (ii) Borrower, arY Significant
'Loan Party or any guarantor of the Loan fails to comply with the terms and provisions of the
.Security Documents regarding the delivery of certain financial reports and rent rolls within thirty
(30) days after written notice from Lender to Borrower (which notice shall be a second notice given
after the expiration of any notice of default for such failure given pursuant to the Security
Instrument).
Repotting R2quirements:
• Borrower, its affiliates and the Significant Loan Parties will famish to Lender certified:
quarterly rent rolls, operating statements, and balance sheets; annual balance sheet and pm ff t and
loss statements of Borrower and the Signif rent cant Loan Parties, rolls, and operating budgets; and
such other financial and management statements and information, including mcrithly operating
statements and rent rolls, quarterly management reports, and accountings of security deposits, as
Lender reasonably requests.
Gcncral LndpinnitV:
• Borrower (but not the Significant Loan Parties) will indemnify Lender and its aMliates for
all losses, costs and other liabilities asserted against or imposed on Lender or any af$liate arising
from the Loan, the Loan Documents, the Collateral, Borrower's nonperformance, activities at the
Mortgaged Property, and related matters.
gran
• The Significant Loan Parties. on a joint and several basis, shall deliver to Lender a guaranty
with respect to (i) the payment and performance ofBorrvw -r's recourse obligations under 'he Loan,
and (ii) all costs of enforcement of such guaranty.
Assianzztent of Management eetnent and Subordination of ylanaaement Fccs
•
The property manager for the Mortgaged Property shall be satisfactory to Lender, and
Hotrawer may not replace any such property manager without Lender's prior consent. Borrower
shall execute and deliver, and shall cause the property m=Scr, and arty replacements thereof, to
execute and deliver, to Lender an Assignment of Management Agreement and Subordination of
6694.300012.' 01 6008.3
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MDA -San Bernudim Associates, LLC
December 16, 1998
Page '16
Management fees and replacements of such document, as applicable' on Lender's =rc& and then-
=re nit, form, as the case may be.
368d3000 17-1016M&3
VZO -d OVIS d 959 -1 1890- £S5 -Ot£ UASV1 'HNNTRD -meld WdSO:Zt 88 -9t -Zt
MDA -San Bernardino Associates, LLC
December 16,1998
Page 17
SCHEDULE 2
Promissory Note secured by a first lice Deed of gust (the "Note);
2. Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security
Instrument -):
.3. Assignment of Leases. Rents and Contracts ( "Assigcsnent of Leasesi
4. Assignment of Management Agreement Ind Subordination of Management Fees
("Assignment of Management Agfeement'j:
.5. Escrow and Reserve Account Pledge Agreement (the "Pledge Agrecmetlt'l and
6. Form UCC -1 Financing Statement C'UCC -1 ").
-"8& 00012.101 WO 3
YZO -d Ob /9E'd 959 -1 L89O -M -11E HNSn15'9d:9N3RU - =Jd md9O:Zl 98 -91 -Zt
FOR1Vi OF CONFIRMATION NOTICE
Date: —.199—
Bormwer/Mortgagor Name:
"gaged Property Name:
1Y angaged ptvperty Address:
Commitment Letter Date:
199_
The undersigned Borrower hereby acknowledges and agrees, with respect to the Mortgage Loan
secured by the Mortgaged Property identified above, to the following terms:
Loans Amount:
Interest Rate:
Closing Date:
56WW012- 1016008 3
53,600,000
% per annum
MDA -San Bemaxiino Associates, LLC,
a Delawm linitcd liability company
By: MDA Investors No. 1, L.L.C.,
a Delaware limited liability company
Managing Member
ay: MJL Associates,
a California limited partnership
Managing Member
By: MJL Investments, Inc.,
a California corporation
Central Partner
By:
$y; Steven A. 13erlinger
tts: Vice Pros {dent
vza -i 01/8E "d 959 -1 1890- ESS -01£ d3NSn15'U39N3R5 -W01i mago:ZI 85-9l -Zt
CONTTRMED:
LENDER
City of San Bernardino
By:_
Name:
Title:
WU30001 2. 101600 &3
iZ0 -d OVIV* d SS9 -1 1990- ESS -OtE 43NSnI5'U3SN3R5 - =J3 md40:Z1 98-9l -ZL
DATE:
FROM:
PHONE 3 t)MHER:
NO. OF PAGES:
FAX NUMBER:
December 16, 1998
Richard A. Kale
(310) 201 -7424
39 (including fax cover sheet)
(310) 553 -0687
File Number: 56843 -00012
RECIPIENT
FiRWBUSINESS
FAX PHONE NUMBER
PHONE
David Gendek /'
u
Szabo & Green
949 383 -9373
909 383 -93'18
HARD CO*Y To FOLLOW" Y": a vo: ■
Jason Kamm
mdtropollum Develaprmt
310 41e-8711
310 416 -1100
HARD COPY To FOLLOW- Ye•: 'i vo: 6
DOCUMM —NT TITLE:
RE:
ADDMONAL MORNIAT[ON:
12/16/98 blackJmed draft and clean draft of
Permanent Loan Commitment Letter
MDA -San Bemardino
IF YOU DO NOT RECEM ALL PAGES, PLEASE CALL (310) 553 -3630, EXT. 6691
C0NFWENTL4LrrY VOTE: The Information contained in this facsirrule is confidential miormatioa intended only
fer. the use of the indmdual or entity named above and may be locally pnvilcged. If the reader of ti+is rnessagc is not
the to"ded recipient, you ve hereby notified that MY disscrr=tiott, distribution or copy of skis Ncsinwe is strictly
prohibited. If you have received this fitcsirnile is+ erro, . your courtesy wM i e trTmisted in eelephonia8 us collect, to
inform uu of the mudv%ction and returr=S the oriWjkl facsimile to as st the address below by mail. Thank you.
1900 Avenue of the Stars ■ Suite 200-
1 ■Los Angeles, CalifOrma 90067 •Phone: 310 353 -3610
>Z3 -i �y /!� d 959 -: 1990- E55-7t °, asm�'9�?flN3?an_mo�j meZr,:tl 98 -9t -?!
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
ALLEN, MATKINS, LECK, GAMBLE
& MALLORY LLP
18400 Von Karman, Fourth Floor
Irvine, California 92612 -1597
Attention: Anne E. Klokow, Esq.
NNWYA
(Space Above For Recorder's Use)
SUBORDINATION AND INTERCREDITOR AGREEMENT
(Construction Loan)
NOTICE: THIS SUBORDINATION AND INTERCREDITOR AGREEMENT
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY
BECOM]NI G SUBJECT TO AND OF LOWER PRIORITY THAIN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This SUBORDINATION AND INTERCREDITOR AGREEMENT
( "Agreement ") is dated as of December 10, 1998, by and among MDA -SAN BERNARDINO
ASSOCIATES, L.L.C., a Delaware limited liability company ( "Borrower "), GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation ( "Senior Lender ")
and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a body
corporate and politic ( "Junior Lender ").
RECITALS:
A. Concurrently herewith, Borrower is the owner of approximately 137,000
square feet of unimproved real property located at the northwest corner of the intersection of 4th
Street and E Street in the City of San Bernardino, San Bernardino County, California
( "Property "), which is referred to in the DDA (defined below) as the Theater Parcel and the
Common Area Parcel as more particularly described in Exhibit "A" attached hereto and
incorporated herein by this reference.
B. Senior Lender is making a loan ( "Senior Loan") to Borrower pursuant to a
Construction Loan Agreement of even date herewith ( "Senior Loan Agreement ") to pay for part
of the cost of constructing an 80,000 square foot, twenty (20) screen theater and related
improvements and facilities as more particularly described in the Senior Loan Agreement (the
"Theater Proiect ") whose sole tenant shall be CinemaStar Luxury Theater, Inc. ( "Tenant "). The
Senior Loan is further evidenced by a Promissory Note of even date therewith in the original
principal amount of Three Million Six Hundred Thousand and No /100 Dollars ($3,600,000)
( "Senior Note "), which is secured by, among other things, (i) a Deed of Trust, Security
Agreement, Assignment of Leases and Rents and Fixture Filing ( "Senior Deed of Trust ") dated of
even date therewith; (ii) an Assignment of Leases and Rents, assigning to Senior Lender all leases
affecting the Property, including the Multi -Plex Theater Lease dated December 20, 1996, as
amended, between Borrower, as landlord, and Tenant ( "CinemaStar Lease "), and all rents derived
from all such leases ( "Senior Lease Assignment "); (iii) an Assignment of Developer's Rights
under Agency Development Agreements assigning, among other things, to Senior Lender all of
Borrower's rights under that certain Disposition and Development Agreement dated October 29,
1996 ( "DDA ") ( "Senior Agency Assignment "), and consent thereto executed by Junior Lender
and the Agency; and (iv) an Assignment of Letter of Credit ( "the Senior Letter of Credit
Ass�nment ") executed by Borrower and Tenant in favor of Senior Lender, assigning to Lender
two letters of credit in the amount of $2,000,000 and $275,000, respectively (collectively the
"Tenant Letters of Credit ") issued by Tenant under the CinemaStar Lease. The Senior Loan is
also secured by a Completion Guaranty ( "Senior Completion Guaranty ") from HFG Associates
LLC, a Delaware limited liability company ( "Guarantor ") of even date herewith. The Senior Loan
Agreement, the Senior Note, the Senior Deed of Trust, the Senior Lease Assignment, the Senior
Agency Assignment, the Senior Letter of Credit Assignment, the Senior Completion Guaranty and
all other documents governing, evidencing or securing the Senior Loan are hereinafter collectively
referred to as the "Senior Loan Documents ".
C. Concurrently herewith, Junior Lender is making a loan ( "Second Loan") to
Borrower pursuant to that certain 1998 Community Development Block Grant Program
Section 108 Project Development Loan Agreement ( "Second Loan Agreement ") dated as of
December 10, 1998 for payment of certain costs associated with the development, construction,
improvement and financing of the Theater Project. The Second Loan is evidenced by a
Promissory Note of even date herewith in the original principal amount of Seven Million Dollars
($7,000,000) ( "Second Note ") which is secured by a Deed of Trust and Assignment of Rents
( "Second Deed of Trust ") of even date herewith and recorded substantially concurrently herewith,
creating a second lien against the Property in favor of Junior Lender (subject and subordinate to
the rights of Senior Lender under the Senior Loan Documents). The Second Loan Agreement,
the Second Note and the Second Deed of Trust, together with all other documents governing,
evidencing or securing the Second Loan are hereinafter collectively referred to as the "Second
Loan Documents ".
D. Junior Lender has also covenanted under the DDA to provide a Theater
Project development cost contribution in the amount of One 'Million Three Hundred Twenty -Four
Thousand Five Hundred Seventy -Five Dollars ($1,324,575) (the "Agency Contribution Loan")
which is evidenced by a promissory note of even date herewith of Borrower delivered to Junior
Lender (the "Third Loan ") which is secured by a third priority deed of trust recorded substantially
concurrently herewith, encumbering the Property (the "Third Deed of Trust "). The Third Note
and the Third Deed of Trust, together with all other documents governing, evidencing or securing
the Agency Contribution Loan are hereinafter collectively referred to as the "Third Loan
Documents ". The Second Deed of Trust and the Third Deed of Trust are collectively hereinafter
referred to as the "Junior Deeds of Trust ".
-2-
nroQ ^ :-in !i _�1_oR /amm
E. It is a condition precedent to Borrower's obtaining the Senior Loan that
(a) the Senior Deed of Trust constitutes a first position lien against the Property and is prior and
superior to the Second Deed of Trust and the Third Deed of Trust (and all indebtedness secured
thereby) and to any right or interest Junior Lender has in, to or against the Property or the
Borrower, under any contracts or agreements affecting the Property or any part thereof except as
may be provided in that certain Declaration of Covenants, Conditions and Restrictions dated
' 1998 recorded against the Property substantially concurrently herewith
( "CC &Rs ") and that certain Parking Agreement dated as of December 10, 1998 between
Borrower and Junior Lender recorded against the Property and certain other property upon which
the Parking Spaces (as defined in the Parking Agreement) are located substantially concurrently
herewith ( "Parking_ Agreement "), and (b) Junior Lender and Borrower agree that all indebtedness
and obligations now or hereafter secured by the Senior Deed of Trust shall be fully paid and
performed prior to payment of any indebtedness evidenced by the Junior Note and the Third Note
or otherwise secured by the Junior Deed of Trust or the Third Deed of Trust, respectively, except
as expressly provided in Paragraph 1(f) hereinbelow.
F. Concurrently herewith, Senior Lender, Junior Lender, Borrower and First
American Title Insurance Company ( "Fiscal Agent ") are entering into a Fiscal Agent Construction
Loan Disbursement Control Agreement ( "Fiscal Agent Agreement ") to coordinate disbursement
of the proceeds of the Senior Loan, the Second Loan, the Agency Contribution Loan and the
Developer Contribution to pay for the cost of constructing the Theater Project.
AGREEMENT:
NOW, THEREFORE, in order to induce Senior Lender to make the Senior Loan
and advances as provided in the Senior Loan Documents, the parties hereto hereby agree as
follows:
Subordination of Debt. Junior Lender agrees as follows:
(a) All indebtedness evidenced by the Second Note, or otherwise now
or hereafter secured by the Second Deed of Trust, and any amendments or extensions
thereof (collectively, the "Second Indebtedness ") and all indebtedness evidenced by the
Third Note, or otherwise now or hereafter secured by the Third Deed of Trust, and any
amendments or extensions thereof (collectively, the "Third Indebtedness ") shall be and
hereby is subordinated and the payment therefor is deferred to any and all rights, claims,
demands, indebtedness, action or causes of action of any nature whatsoever that Senior
Lender may now or hereafter. have against Borrower or the Property or any present or
future claim or indebtedness, judgment or decree against Borrower or the Property arising
out of or relating to the Senior Note, the Senior Loan or otherwise secured by the Senior
Deed of Trust arising under the Senior Loan Agreement (collectively, the "Senior
Indebtedness "), except as expressly provided in subparagraph (f) below. The Second
Indebtedness and the Third Indebtedness are hereinafter referred to as the "Junior
Indebtedness ".
-3-
(b) If Junior Lender shall commence, prosecute or participate in any
suit, action or proceeding against Borrower in contravention of the terms of this
Agreement, Senior Lender may interpose as a defense the making of this Subordination
Agreement and Senior Lender may intervene and interpose such defense or plea in Senior
Lender's name or in the name of the Borrower. If Junior Lender shall attempt to enforce
any chattel or real estate mortgages or any lien instruments or encumbrances, including,
without limitation, the Junior Deed of Trust in contravention with the terms of this
Agreement, Senior Lender may by virtue of this Subordination Agreement restrain the
enforcement thereof in Senior Lender's name or in the name of Borrower. If Junior
Lender obtains any payments, monies, or other assets in excess of the amounts to which
Junior Lender is entitled pursuant to this Agreement as a result of any administrative, legal
or equitable action, or otherwise, Junior Lender shall immediately pay, deliver, and assign
to Senior Lender any such excess payments, monies, or other assets for application to the
Senior Indebtedness (and while held by Junior Lender, all such payments, monies or other
assets so received shall be held in trust by Junior Lender for the benefit of Senior Lender).
(c) Borrower agrees that it will not, so long as any of the Senior
Indebtedness remains unpaid, without Senior Lender's prior written consent, pay to Junior
Lender any sum on account of the Junior Indebtedness (whether it be principal, interest or
otherwise), except as expressly provided in subparagraph (f) below.
(d) Senior Lender may grant extensions of the time of payment or
performance to and make compromises and settlements with Borrower in connection with
the Senior Loan without the consent of and without affecting the agreements of Junior
Lender or Borrower hereunder, provided, however, that notwithstanding any other
provision of this Agreement to the contrary, the maximum principal amount of the Senior
Indebtedness shall not exceed the sum of Three Million Six Hundred Thousand Dollars
($3,600,000) plus any and all accrued and unpaid interest owing on the Senior Loan plus
any charges, fees, expenses, prepayment premiums and other amounts due and owing
under the Senior Loan Documents and any and all additional advances, whether obligatory
or optional, made by Senior Lender in connection with the development, construction,
improvement, use, or ownership of the Theater Project and /or the Property or which in
Senior Lender's reasonable judgment is necessary or desirable to protect and/or preserve
Senior Lender's security interest in the Property such as by way of example but not by
way of limitation, payment of property taxes assessed against the Property.
(e) This Subordination Agreement shall continue in full force and effect
until Senior Lender shall have been paid in full on all indebtedness owing under, arising
out of or relating to the Senior Loan.
(f) Notwithstanding anything to the contrary contained herein, so long
as no Event of Default exists under the Senior Loan Documents, Junior Lender shall be
entitled to receive scheduled payments of principal and interest as and when due under the
Second Note and Third Note, but only after payment of all normal and necessary
operating expenses for the Property and all installment and other payments and deposits
due under the Senior Loan Documents.
-4-
OC 982540.105/AEK/G323 5 -0 31 /12- 1 4-98/ arum
(g) Junior Lender shall promptly also provide Senior Lender with
copies of any notices of default ( "Junior Default Notice ") with respect to either the
Second Loan or the Agency Contribution Loan (collectively, the "Junior Loans ") sent to
Borrower. Junior Lender acknowledges that so long as either of the Junior Loans is
secured by a deed of trust or other lien or mortgage encumbering any property which is
collateral for the Senior Loan, then a default by Borrower under the Second Loan
Documents or the Third Loan Documents, as applicable (which is not cured within any
applicable grace periods) ( "Junior Default ") shall constitute an Event of Default under the
Senior Loan Documents.
(h) Senior Lender shall promptly provide Junior Lender with copies of
any notice of default with respect to the Senior Loan sent to Borrower. Junior Lender
shall have the right, but not the obligation, to cure any default by Borrower to Senior
Lender under the Senior Loan within the time and manner afforded Borrower under the
Senior Loan Documents.
(i) If at any time prior to the full repayment of the Senior Loan, a
Purchasing Event occurs (as defined hereinbelow), Junior Lender shall have the right to
purchase the Senior Loan from Senior Lender for a purchase price payable in cash or
immediately available funds equal to the total amount of the Senior Indebtedness and
otherwise on terms and conditions acceptable to Senior Lender by (i) delivering written
notice of Junior Lender's exercise of such right to purchase the Senior Loan ( "Exercise
Notice ") within (A) thirty (30) days after the recordation date of the Senior Notice of
Default (defined below), where the Purchasing Event is a Senior Default or (B) five (5)
business days following delivery of a copy of the Senior Loan Modification to Junior
Lender where the Purchasing Event is a Senior Loan Modification and (ii) by executing
and delivering to Lender within thirty(30) days following the date of the Exercise Notice a
purchase agreement with Senior Lender ( "Loan Purchase Agreement ") in a form
acceptable to Senior Lender and which shall include without limitation (A) an assignment
of all of Senior Lender's right, title and interest in the Senior Loan, and each of the Senior
Loan Documents to Junior Lender, which shall include but not be limited to delivering to
Junior Lender (1) the original Senior Note, endorsed to Junior Lender without recourse
and without warranty or representation of any kind and (2) the original Tenant Letter of
Credit (to the extent not previously drawn upon) to be held and drawn upon by the Junior
Lender in accordance with the terms of the Senior Letter of Credit Assignment and (B) a
full release of Senior Lender executed by Borrower and Junior Lender, in a form
acceptable to Senior Lender, releasing Senior Lender from all liability relating to the
Senior Loan, the Senior Loan Documents and the Property ( "Claim "), or if Junior Lender
is unable to obtain such a release from Borrower despite using commercially diligent
efforts, then in lieu of such release from the Borrower, Junior Lender will indemnify and
defend and hold Senior Lender harmless from any claims, damages, losses, expenses
(including attorneys' fees) incurred or to be incurred by Senior Lender as a result of any
Claim which indemnity shall be secured by collateral with a fair market value of not less
than $12,000,000 and acceptable to Lender in its reasonable discretion. The closing of the
Loan Purchase Agreement shall occur no later than seventy (70) days following the date
of the Election Notice and in no event shall any of the rights granted to Junior Lender
-5-
hereunder delay, impair or affect in any way Senior Lender's rights and remedies under the
Senior Loan Documents or in any way delay any foreclosure sale pending as a result of a
Senior Default. Senior Lender and Junior Lender mutually agree to execute,
acknowledge, exchange and deliver such agreements or other instruments in recordable
form as may be necessary or appropriate to carry out the purpose and intent of this
subparagraph (i). Nothing contained herein shall limit, delay or impair Senior Lender's
right to pursue all of its rights and remedies under the Senior Loan Documents, including
without limitation, seeking the appointment of a receiver for the Property and completing
its foreclosure sale against the Property nor shall any provision contained herein affect or
impair the enforceability or validity of any Senior Loan Modification (defined below)
whether or not Junior Lender exercises its right to purchase the Senior Loan Documents
as herein provided. The failure to deliver a copy of any Senior Loan Modification to
Junior Lender shall not invalidate, or affect the enforceability or validity of, any such
Senior Loan Modification. As used herein the term "Purchasing Event" shall mean either
(A) an Event of Default ( "Senior Default ") occurs under the Senior Loan Documents and
Senior Lender commences foreclosure proceedings against the Property by recording a
notice of default ( "Senior Notice of Default ") against the Property and neither Borrower
nor Junior Lender has yet fully reinstated the Senior Loan, or (B) if Senior Lender and
Borrower enter into a material modification of the Senior Loan Documents ( "Senior Loan
Modification ") which is not consented to by the Junior Lender and which constitute an
Event of Default under the HUD Section 108 Loan Agreement (as defined in the Second
Loan Agreement) as evidenced by a written notice of default from HUD (as defined in the
Second Loan Agreement) to Junior Lender which has not been waived by HUD and there
is no Senior Default then outstanding. Junior Lender's right to purchase the Senior Loan
under this Subsection (i) are personal to the Redevelopment Agency of the City of San
Bernardino ( "Agency ") and may not be transferred or assigned by the Agency without the
prior written consent of Senior Lender which may be withheld in Senior Lender's sole and
absolute discretion, provided however the Agency may assign its rights under this
subsection (i) to HUD.
0) Junior Lender acknowledges and agrees that, until Senior Loan has
been paid in full and all of the obligations of Borrower to Senior Lender under the Senior
Loan Documents have been paid and performed in full, Junior Lender shall not without the
prior written consent of Senior Lender, which consent may be given or withheld in Senior
Lender's sole and absolute discretion (i) commence, or join with any other creditor in
commencing, any bankruptcy, reorganization or insolvency proceeding with respect to
Borrower or the Property; (ii) seek or obtain a receiver for the Borrower or the Property,
substitute or replace any property manager for the Property or conduct any invasive
testing at the Property; (iii) take any action that would terminate any leases or other rights
held or granted by third parties with respect to the Property. Upon the occurrence of a
Junior Default, Junior Lender shall have the right to commence any action or proceeding
to foreclose (either judicial or nonjudicial) against the Property and to otherwise pursue
j any rights and remedies Junior Lender might have available against the Property or against
j Borrower or any guarantor of the Junior Loans (except as may be otherwise expressly
prohibited in this Agreement) (collectively, "Junior Lender's Remedies "); provided that
-6-
before exercising any of Junior Lender's Remedies (other than delivering to Borrower a
Junior Default Notice) Junior Lender shall first deliver to Senior Lender not less than
fifteen (15) days prior written notice of Junior Lender's intent to do so together with a
copy of the Junior Default Notice, specifying the nature of the Junior Default. The failure
of Senior Lender to take any action under the Senior Loan Documents within such 15 day
period shall not be deemed or construed as a waiver of any of Senior Lender's rights or
remedies under the Senior Loan Documents including without limitation, the right to
declare an Event of Default under the Senior Loan Documents as a result of the Junior
Default.
2. Subordination of Security Interest.
(a) Junior Lender hereby intentionally, unconditionally and absolutely
subordinates the lien or charge of the Junior Deeds of Trust (and all present and future
indebtedness and obligations secured thereby, including, without limitation, the
indebtedness evidenced by the Junior Notes) and the Junior Indebtedness, and all other
present and future rights, privileges, and interests of Junior Lender in and to the Property
pursuant to the Junior Loan Documents or under the DDA, to the lien or charge of the
Senior Deed of Trust and all rights, privileges and interests of Senior Lender in and to the
Property pursuant to the Senior Loan Documents (and subject to Paragraph 1(d) above,
any renewals, extensions, modifications, or amendments thereof), and all present and
future Senior Indebtedness secured thereby, shall unconditionally be and remain at all
times a lien or charge on the Property prior and superior to the lien or charge of the Junior
Deeds of Trust (and all present and future indebtedness and obligations secured thereby,
including, without limitation, the indebtedness evidenced by the Junior Notes) and all
other rights, privileges, and interests of Junior Lender in and to the Property.
(b) Notwithstanding anything to the contrary contained in the Junior
Notes, Junior Deeds of Trust or any other document or agreement between Junior Lender
and Borrower, but subject to the limitations set forth in paragraph 1(d) above. Junior
Lender hereby consents and agrees that Senior Lender may, at any time and from time to
time, extend, renew, waive, accelerate, or otherwise change any of the terms or provisions
of the Senior Loan Documents, including without limitation, increase the principal amount
of the. Senior Loan (subject to Paragraph 1(d) above), change the rate of interest or the
time and manner for principal and interest payments, and release or reconvey any security
for the Senior Loan subject to Junior Lender's right to purchase the Senior Loan
Documents in the event of a Senior Loan Modification as provided in Paragraph 1(i)
above. Any such supplement, modification, amendment, extension, renewal, waiver,
acceleration, or change to any of the terms or provisions of the Senior Loan Documents
shall not affect this Subordination Agreement. Nothing contained herein shall obligate
Senior Lender to confirm or insure that any advances made under the Senior Loan have in
fact been used to improve, maintain, preserve or otherwise benefit the Property.
3. Disbursement of Senior Loan Proceeds. Junior Lender acknowledges and
agrees that any application or use by Borrower of any disbursements of the proceeds from the
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OC�R2�30.10� /a FK�C3 �3 � �- 031 /12- 14- 9� /amm
Senior Loan for any improper or unpermitted purposes shall not defeat the subordination and
other agreements herein made, in whole or in part.
4. Bankruptcy; No Payments to Junior Lender.
(a) During (i) the continuance of a default under the Senior Loan
Documents, or (ii) in the event of any liquidation or dissolution of Borrower, or of any
execution sale, receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or other similar proceeding relative to Borrower or the Property
(collectively, a "Bankruptcy Event "), the Junior Lender shall not be entitled to receive or
retain any further payment or prepayment made after such Bankruptcy Event under the
Junior Loans (including, without limitation, the Permitted Payments) and all amounts due
under the Senior Loan or secured by the Senior Deed of Trust shall be first paid in full
before any payment is made under either of the Junior Loans. In the event such a payment
is nevertheless received by Junior Lender, such amounts immediately shall be paid over to
Senior Lender for application in payment of the Senior Loan. For the purposes of this
Agreement, the Senior Loan shall not be deemed paid or satisfied in full until such time
that any preference period applicable to any payment received by Senior Lender has run
and such payment is therefore not subject to disgorgement. In connection with any
Bankruptcy Event or any proceedings relating thereto ( "Bankruptcy Proceeding "), Junior
Lender agrees that, unless and until it has obtained Senior Lender's prior written consent
(which consent may be given or withheld in Senior Lender's sole and absolute discretion),
Junior Lender shall take no action that may impair, affect or otherwise alter in any way
Senior Lender's interests or claims in such Bankruptcy Proceeding including, without
limitation, in connection with any vote to accept a plan of reorganization which is not
acceptable to Senior Lender, in its sole discretion, any cash collateral or adequate
protection issues, any trustee appointment issues, any plan exclusivity issues, any claim
subordination issues (as between Senior Lender and any of Borrower's creditors, including
Junior Lender), any motion to dismiss, any claim voting entitlements (excluding Junior
Lender's claim) or any other matters pertaining to the extent, validity or priority of Senior
Lender's liens, rights and entitlements. Notwithstanding the foregoing, Junior Lender may
file a claim in the Bankruptcy Proceeding subject to the foregoing restrictions and
limitations.
(b) From and after the occurrence of a Bankruptcy Event, any and all
distributions, claims, awards or other amounts paid or payable to Junior Lender under the
Junior Loan Documents or otherwise shall be paid first to Senior Lender, and Senior
Lender shall apply such amounts to the full and prior payment of the Senior Loan as
originally written, provided, however, that the balance of such amounts, after paying the
Senior Loan as originally written in full, shall be paid to Junior Lender for application
against the Junior Loans. Junior Lender further agrees to execute and deliver to Senior
Lender such assignments or other instruments as may be required by Senior Lender in
order to enable Senior Lender to collect any and all such payments or disbursements
jotherwise payable to Junior Lender.
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OC982540
Notwithstanding the occurrence of a Bankruptcy Event, Junior Lender shall be
entitled to receive the Permitted Payments at such time, if ever, all pending Bankruptcy
Proceedings have been dismissed, there are no Bankruptcy Events then continuing and the Senior
Loan has been fully reinstated within the time and in the manner permitted under applicable
California law, including, without limitation, payment of all amounts due and owing under the
Senior Loan Documents, and cure of all defaults under the Senior Loan to the satisfaction of
Senior Lender.
5. Further Assurances. So long as the Senior Deed of Trust shall remain a
Hen upon the Property or any part thereof, Junior Lender shall execute, acknowledge and deliver,
upon Senior Lender's demand, at any time or from time to time, any and all further
subordinations, agreements or other instruments in recordable form as Senior Lender may
reasonably require for carrying out the purpose and intent of the covenants contained herein.
6. Entire Agreement. This Agreement shall be the entire agreement with
regard to the subordination of the Junior Loan Documents to the lien or charge of the Senior
Loan Documents, and shall supersede and cancel any prior agreements as to such subordination,
including, without, limitation, those provisions (if any) contained in the Senior Loan Documents or
in the Junior Loan Documents which provide for the subordination of any further encumbrances
to the lien of the Senior Loan Documents. As between Senior Lender and Junior Lender, to the
extent of any conflict between the terms hereof and the terms of the Senior Loan Documents or
the Junior Loan Documents, the terms hereof shall control.
7. Junior Lender's Covenants and Representations, Cure of Default. Junior
Lender hereby further confirms to and covenants with Senior Lender as follows:
(a) Junior Lender has delivered to Senior Lender true and complete
copies of the Junior Loan Documents and the DDA, and such documents have not been
amended, modified or supplemented in any way.
(b) Junior Lender has received and reviewed the Senior Loan
Documents.
(c) Junior Lender shall not enter into any agreement to amend or
modify any of the Junior Loan Documents or the DDA without notice to, and the prior
written consent of, Senior Lender (which consent shall not be unreasonably withheld).
(d) Notwithstanding any provision of the Junior Loan Documents to
the contrary, Senior Lender shall be entitled to rely upon Borrower's execution of any
amendment, modification, consent or writing concerning or relating to the Senior Loan as
conclusive evidence of Borrower's duly authorized execution and delivery thereof.
8. Notices. All notices expressly provided hereunder to be given shall be in
writing and shall be (1) hand- delivered, effective upon receipt, (ii) sent by United States Express
Mail or by private overnight courier, effective upon receipt, or (iii) served by certified mail. Any
such notice or demand served by certified mail, return receipt requested, shall be deposited in the
-9-
United States mail, with postage thereon fully prepaid and addressed to the parry so to be served
at its address above stated or at such other address of which said party shall have theretofore
notified in writing, as provided above, the parry giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery as shown by the
addressee's return receipt or the expiration of three (3) business days after the date of mailing,
whichever is the earlier in time. Notices to be served hereunder shall be addressed to the
appropriate address set forth hereinbelow, or at such other place as Senior Lender or Junior
Lender may from time to time designate in writing by ten (10) days prior written notice thereof.
Notices to Borrower shall be addressed as follows:
MDA -San Bernardino Associates
300 Continental Boulevard, Suite 360
El Segundo, California 90245
Attention: Mr. Jason Kamm
Notices to Senior Lender shall be addressed as follows:
GMAC Commercial Mortgage Corporation
100 South Wacker Drive, Suite 400
Chicago, Illinois 60606
Attention: Phillip J. Keel
Notices to Junior Lender shall be addressed as follows:
Redevelopment Agency of the City of San Bernardino
201 North E Street, Third Floor
San Bernardino, California 92401 -1507
Attention: Development Director
9. Governing Law. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of California.
10. Counterparts. This Agreement may be signed in multiple counterparts with
the same effect as if all signatories had executed the same instrument. The parties hereto agree
that a signature to this Agreement produced by facsimile transmission is valid and is as effective as
an original signature.
11. Attorney Fees and Costs. If any party hereto brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the Prevailing Party, as
hereinafter defined, in any such proceeding, action or appeal thereon, shall be entitled to
reasonable attorneys' fees and costs. Such fees and costs shall be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is pursued to decision or
judgment. The term "Prevailing Party" shall include, without limitation, a parry who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise, settlement,
judgment or the abandonment by the other parry of its claim or defense. The attorneys' fee and
cost award shall be such as to fully reimburse all attorneys' fees and costs reasonably incurred.
-10-
OC982540.105/- AEK/G323; -03 P1
The reasonable costs, salary and expenses of the City Attorney, and the members of his office, in
enforcing this Agreement on behalf of the Agency shall be considered as "attorneys' fees" for
purposes of this Paragraph.
12. No Third Party Beneficiaries. This Agreement shall be for the benefit of
Senior Lender and Junior Lender, this Agreement shall not benefit Borrower, Borrower shall have
no rights hereunder, and there shall be no third party beneficiaries, intended or otherwise, of this
Agreement, and no parry hereunder shall be liable to any person not a party hereto for any
obligations provided herein.
13. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Senior Lender and Junior Lender and their respective successors and assigns.
14. No Marshaling of Assets. Junior Lender hereby waives any right to require
Senior Lender to marshall the assets and/or liabilities of Borrower.
15. Future Subordination of Junior Loans to Permanent Senior Financing.
Junior Lender acknowledges that Borrower intends to obtain a permanent loan to repay the
Senior Loan from either Senior Lender ( "Permanent Senior Loan") pursuant to that certain
commitment letter dated October --,, 1998, or from Junior Lender pursuant to a permanent loan
commitment letter dated as of December 10, 1998. If Borrower elects to obtain the Permanent
Senior Loan then prior to the funding of the Permanent Senior Loan, Junior Lender and Borrower
agree to execute and deliver a subordination agreement, in recordable form subordinating the
Junior Loans to the Permanent Senior Loan which shall be in substantially the form attached
hereto as Exhibit "B" together with such changes as Senior Lender may reasonably require.
///
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OC982540.10;/AEK/G3235 -031 /12- 14- 98 /amm
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first set forth above.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY
SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE -
EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE
PROPERTY BUT SUBJECT TO THE LIMITATIONS SET FORTH IN
PARAGRAPH 1(d) above
"Borrower" MDA -SAN BERNARDINO ASSOCIATES,
L.L.C., a Delaware limited liability company
By:MDA Investors No. 1, L.L.C.,
a Delaware limited liability Company
Its: Managing Member
By: MJL Associates,
a California limited partnership
Its: Managing Member
By: MJL Investments, Inc.,
a California corporation
Its: General Partner
By:
Name:
Title:
[SIGNATURES CONTINUED]
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OC982540.105/AEK/G323 5-03 1 /12- 14 -98 /a=
"Senior Lender" GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
By:
Name:
Title:
[SIGNATURES CONTINUED]
i
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'OC982540.105/AEK/G3235 -031/12- 14- 98 /amm
"Junior Lender" REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO,
a body corporate and politic
Approved as to Form:
SABO & GREEN
e
Agency Special Counsel
By:
Name:
Chair of the Community Development
Commission of the City of San Bernardino
LM
Name:
Agency Secretary
Name:
Executive Director
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OC982540.105/AEK/G323 5 -031 /12- 14- 98 /amm
STATE OF )
ss.
COUNTY OF )
On , before me, a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
STATE OF
COUNTY OF
WITNESS my hand and official seal.
Notary Public in and for said State
) ss.
On , before me,
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
-15-
OC982540.105/AEK/G3235 -031/12- 14- 98 /amm
STATE OF )
ss.
COUNTY OF
On , before me, , a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
STATE OF
COUNTY OF
WITNESS my hand and official seal.
[elm
Notary Public in and for said State
) ss.
before me,
a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
-16-
OC 982540.105/AEK/G3235 -031/12- 14 -98 /a=
STATE OF )
ss.
COUNTY OF )
On , before me, , a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
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OC982540.105/AEK/G3235 -031 /12- 14- 98 /amm
LEGAL DESCRIPTION
PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 186 OF PARCEL MAPS, PAGE(S) 14 AND 15, RECORDS OF SAID COUNTY.
OC 982540.105/AEK/G323 5-031/12-14-98/an-Lm
RECORDING REQUESTED BY
AND WHEN RECORDED MAEL TO:
ALLEN, MATKNS, LECK, GAMBLE
& MALLORY LLP
18400 Von Karman, Fourth Floor
Irvine, California 92612 -1597
Attention: Anne E. Klokow, Esq.
(Space Above For Recorder's Use)
SUBORDINATION AND INTERCREDITOR AGREEMENT
(Permanent Loan)
NOTICE: THIS SUBORDNATION AND INTERCREDITOR AGREEMENT
RESULTS N YOUR SECURITY INTEREST N THE PROPERTY
BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This SUBORDINATION AND INTERCREDITOR AGREEMENT
( "Agreement ") is dated as of by and among MDA -SAN
BERNARDNO ASSOCIATES, L.L.C., a Delaware limited liability company ( "Borrower "),
GMAC COMVERCIAL MORTGAGE CORPORATION, a California corporation ( "Senior
Lender ") and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDNO, a
body corporate and politic ( "Junior Lender ").
RECITALS:
A. Concurrently herewith, Borrower is the owner of approximately 137,000
square feet of unimproved real property located at the northwest corner of the intersection of 4th
Street and E Street in the City of San Bernardino, San Bernardino County, California
( "Pro e "), which is referred to in the DDA (defined below) as the Theater Parcel and the
Common Area Parcel as more particularly described in Exhibit "A" attached hereto and
incorporated herein by this reference.
B. Senior Lender is making a loan ( "Senior Loan") to Borrower for the
purpose of repaying in full a construction loan made by Senior Lender to Borrower for the
construction of an 80,000 square foot, twenty (20) screen theater and related improvements and
facilities as more particularly described in the Senior Loan Agreement (the "Theater Project ")
whose sole tenant is CinemaStar Luxury Theater, Inc. ( "Tenant "). The Senior Loan is evidenced
by a Promissory Note of even date therewith in the original principal amount of Three Million
Six hundred Thousand and No /100 Dollars ($3,600,000.00) ( "Senior Note "), which is secured
by, among other things, (i) a first lien Deed of Trust, Security Agreement, Assignment of Leases
EXHIBIT "B"
OC 982 540.10 5 /AEK/G323 5 -031 / 12- 14- 98 /amm
and Rents and Fixture Filing ( "Senior Deed of Trust ") dated of even date therewith; and (ii) an
Assignment of Leases and Rents, assigning to Senior Lender all leases affecting the Property,
including the Multi -Plex Theater Lease dated December 20, 1996, as amended, between
Borrower, as landlord, and Tenant ( "CinemaStar Lease "), and all rents derived from all such
leases ( "Senior Lease Assignment "). The Senior Loan is also secured by a Completion Guaranty
( "Senior Completion Guaranty ") from MDA Investors No. 1 L.L.C., a Delaware limited liability
company ( "Guarantor ") of even date herewith. The Senior Note, the Senior Deed of Trust, the
Senior Lease Assignment, the Senior Completion Guaranty and all other documents governing,
evidencing or securing the Senior Loan are hereinafter collectively referred to as the "Senior Loan
Documents ".
C. Junior Lender previously made a loan ( "Second Loan ") to Borrower
pursuant to that certain 1998 Community Development Block Grant Program Section 108 Project
Development Loan Agreement ( "Second Loan Agreement ") dated as of December 10, 1998 for
payment of certain costs associated with the development, construction, improvement and
financing of the Theater Project. The Second Loan is evidenced by a Promissory Note dated
December 1998 executed by Borrower in favor of Junior Lender in the original principal
amount of Seven Million and No /100 Dollars ($7,000,000.00) ( "Second Note ") which is secured
by a Deed of Trust and Assignment of Rents ( "Second Deed of Trust ") recorded in the Official
Records on December 1998 as Instrument No. , creating a second lien against the
Property in favor of Junior Lender (subject and subordinate to the rights of Senior Lender under
the Senior Loan Documents). The Second Loan Agreement, the Second Note and the Second
Deed of Trust, together with all other documents governing, evidencing or securing the Second
Loan are hereinafter collectively referred to as the "Second Loan Documents ".
D. Junior Lender has also made a loan in the amount of One Million Three
Hundred Twenty -Four Thousand Five Hundred Seventy -Five and No /100 Dollars
(S 1, 324,575.00) (the "Agency Contribution Loan") which is evidenced by a promissory note
dated December 1998 executed by Borrower in favor of Junior Lender ( "Third Note ") which
is secured by a third priority deed of trust recorded on December , 1998 as Instrument
No. , encumbering the Property ( "Third Deed of Trust "). The Third Note and
the Third Deed of Trust, together with all other documents governing, evidencing or securing the
Agency Contribution Loan are hereinafter collectively referred to as the "Third Loan Documents"
The Second Deed of Trust and the Third Deed of Trust are collectively hereinafter referred to as
the "Junior Deeds of Trust ".
E. It is a condition precedent to Borrower's obtaining the Senior Loan that
(a) the Senior Deed of Trust constitutes a first position lien against the Property and is prior and
superior to the Second Deed of Trust and the Third Deed of Trust (and all indebtedness secured
thereby) and to any right or interest Junior Lender has in, to or against the Property or the
Borrower, under any contracts or agreements affecting the Property, or any part thereof, except
as may be provided in that certain Declaration of Covenants, Conditions and Restrictions dated
December , 1998 and recorded against the Property on December , 1998 as Instrument
No. in the Official Records ( "CC &Rs ") and that certain Parking Agreement
dated December , 1998 between Borrower and Junior Lender recorded against the Property
and certain other property upon which the Parking Spaces (as defined in the Parking Agreement)
are located on December , 1998 as Instrument No. in the Official Records
( "Parking Agreement "), and (b) Junior Lender and Borrower agree that all indebtedness and
B -2-
OC9825-40.105/AEK/G3235 -031 /12 -1 4- 98 /amm
obligations now or hereafter secured by the Senior Deed of Trust shall be fully paid and
performed prior to payment of any indebtedness evidenced by the Second Note and the Third
Note or otherwise secured by the Second Deed of Trust or the Third Deed of Trust, respectively,
except as expressly provided in Paragraph 1(f) hereinbelow.
AGREEMENT:
NOW, THEREFORE, in order to induce Senior Lender to make the Senior Loan
and advances as provided in the Senior Loan Documents, the parties hereto hereby agree as
follows:
1. Subordination of Debt. Junior Lender agrees as follows:
(a) All indebtedness evidenced by the Second Note, or otherwise now
or hereafter secured by the Second Deed of Trust, and any amendments or extensions
thereof (collectively, the "Second Indebtedness ") and all indebtedness evidenced by the
Third Note, or otherwise now or hereafter secured by the Third Deed of Trust, and any
amendments or extensions thereof (collectively, the "Third Indebtedness ") shall be and
hereby is subordinated and the payment therefor is deferred to any and all rights, claims,
demands, indebtedness, action or causes of action of any nature whatsoever that Senior
Lender may now or hereafter have against Borrower or the Property or any present or
future claim or indebtedness, judgment or decree against Borrower or the Property arising
out of or relating to the Senior Note, the Senior Loan or otherwise secured by the Senior
Deed of Trust arising under the Senior Loan Agreement (collectively, the "Senior
Indebtedness "), except as expressly provided in subparagraph (f) below. The Second
Indebtedness and the Third Indebtedness are hereinafter referred to as the "Junior
Indebtedness."
(b) If Junior Lender shall commence, prosecute or participate in any
suit, action or proceeding against Borrower in contravention of the terms of this
Agreement, Senior Lender may interpose as a defense the making of this Agreement and
Senior Lender may intervene and interpose such defense or plea in Senior Lender's name
or in the name of the Borrower. If Junior Lender shall attempt to enforce any chattel or
real estate mortgages or any lien instruments or encumbrances, including, without
limitation, the Junior Deeds of Trust in contravention with the terms of this Agreement,
Senior Lender may, by virtue of this Agreement, restrain the enforcement thereof in Senior
Lender's name or in the name of Borrower. If Junior Lender obtains any payments,
monies, or other assets in excess of the amounts to which Junior Lender is entitled
pursuant to this Agreement, as a result of any administrative, legal or equitable action, or
otherwise, Junior Lender shall immediately pay, deliver, and assign to Senior Lender any
such excess payments, monies, or other assets for application to the Senior Indebtedness
(and while held by Junior Lender, all such payments, monies or other assets so received
shall be held in trust by Junior Lender for the benefit of Senior Lender).
(c) Borrower agrees that it will not, so long as any of the Senior
Indebtedness remains unpaid, without Senior Lender's prior written consent, pay to Junior
B -3-
OC 982-5 40.10 5 /AEK/G323 5-0 31 / 12- 14- 98 /amm
Lender any sum on account of the Junior Indebtedness (whether it be principal, interest or
otherwise), except as expressly provided in subparagraph (f) below.
(d) Senior Lender may grant extensions of the time of payment or
performance to, and make compromises and settlements with, Borrower in connection
with the Senior Loan without the consent of and without affecting the agreements of
Junior Lender or Borrower hereunder, provided, however, that notwithstanding any other
provision of this Agreement to the contrary, the maximum principal amount of the Senior
Indebtedness shall not exceed the original principal balance of the Senior Loan plus any
and all accrued and unpaid interest owing on the Senior Loan plus any charges, fees,
expenses, prepayment premiums and other amounts due and owing under the Senior Loan
Documents and any and all additional advances, whether obligatory or optional, which, in
Senior Lender's reasonable judgment, are necessary or desirable to protect and/or preserve
Senior Lender's security interest in the Property such as, by way of example but not by
way of limitation, payment of property taxes assessed against the Property.
(e) This Agreement shall continue in full force and effect until Senior _
Lender shall have been paid in full on all indebtedness owing under, arising out of or
relating to the Senior Loan.
(f) Notwithstanding anything to the contrary contained herein, so long
as no Event of Default (as defined in the Senior Deed of Trust) exists under the Senior
Loan Documents, Junior Lender shall be entitled to receive scheduled payments of
principal and interest as and when due under the Second Note and Third Note, but only
after payment of all normal and necessary operating expenses for the Property and all
installment and other payments and deposits due under the Senior Loan Documents
( "Permitted Payments ").
(g) Junior Lender shall also promptly provide Senior Lender with
copies of any notices of default ( "Junior Default Notice ") with respect to either the
Second Loan or the Agency Contribution Loan (collectively, the "Junior Loans ") sent to
Borrower. Junior Lender acknowledges that so long as either of the Junior Loans is
secured by a deed of trust or other lien or mortgage encumbering any property which is
collateral for the Senior Loan, then a default by Borrower under the Second Loan
Documents or the Third Loan Documents, as applicable (which is not cured within any
applicable grace periods) ( "Junior Default ") shall constitute an Event of Default under the
Senior Loan Documents.
(h) Senior Lender shall promptly provide Junior Lender with copies of
any notice of default with respect to the Senior Loan sent to Borrower. Junior Lender
shall have the right, but not the obligation, to cure any default by Borrower to Senior
Lender under the Senior Loan within the time and manner afforded Borrower under the
Senior Loan Documents.
(i) Junior Lender shall have a one -time right to purchase the Senior
Loan from Senior Lender for a purchase price payable in cash in an amount equal to one
hundred two percent (102 %) of the total amount of the Senior Indebtedness as of the date
of the purchase ( "Loan Purchase ") and otherwise on terms and conditions acceptable to
Senior Lender by (i) delivering to Senior Lender written notice of Junior Lender's exercise
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of such right to purchase the Senior Loan ( "Exercise Notice ") within five (5) days of the
closing date of the Senior Loan as evidenced by the recordation of the Senior Deed of
Trust ( "Loan Closing Date ") and (ii) executing and delivering to Senior Lender a loan
purchase agreement ( "Loan Purchase Agreement ") in a form acceptable to Senior Lender
and which shall include, without limitation, (A) an assignment of all of Senior Lender's
right, title and interest in the Senior Loan, and each of the Senior Loan Documents to
Junior Lender, which shall include delivering to Junior Lender the original Senior Note,
endorsed to Junior Lender without recourse and without warranty or representation of any
kind and (B) a full release of Senior Lender executed by Borrower and the Junior Lender,
in a form acceptable to Senior Lender, releasing Senior Lender from all liability relating to
the Senior Loan, the Senior Loan Documents and the Property ( "Claim "), or if Junior
Lender is unable to obtain such a release from Borrower despite using commercially
diligent efforts, then in lieu of such release from the Borrower, Junior Lender will
indemnify and defend and hold Senior Lender harmless from any claims, damages, losses,
expenses (including attorneys' fees) incurred or to be incurred by Senior Lender as a result
of any Claim which indemnity shall be secured by collateral with a fair market value of not
less than $12,000,000 and acceptable to Lender in its reasonable discretion. The Loan
Purchase shall close within ten (10) days following the Loan Closing Date, by delivering
to Senior Lender the cash purchase price, the Loan Purchase Agreement and such other
documents as are reasonably necessary, in Senior Lender's judgment, to consummate the
Loan Purchase. In the event the Loan Purchase fails to close for any reason within such
ten -day period, then Junior Lender shall have no further right to purchase the Senior Loan.
Junior Lender's right to purchase the Senior Loan under this Subsection (1) is personal to
the Redevelopment Agency of the City of San Bernardino ( "Agency ") and may not be
transferred or assigned by the Agency without the prior written consent of Senior Lender
which may be withheld in Senior Lender's sole and absolute discretion, provided however
the Agency may assign its rights under this subsection (i) to HUD. Time is of the essence
with respect to each provision of this Agreement, including without limitation, the outside
date provided herein for completing the Loan Purchase.
(j) Junior Lender acknowledges and agrees that, until Senior Loan has
been paid in full and all of the obligations of Borrower to Senior Lender under the Senior
Loan Documents have been paid and performed in full, Junior Lender shall not, without
the prior written consent of Senior Lender, which consent may be given or withheld in
Senior Lender's sole and absolute discretion: (1) commence any action or proceeding to
foreclose (either judicial or nonjudicial) against the Property; (ii) exercise any power of
sale under the Junior Deeds of Trust; (iii) accept a deed in lieu of foreclosure for the
Property, or any portion thereof; (iv) commence, or join with any other creditor in
commencing, any bankruptcy, reorganization or insolvency proceeding with respect to
Borrower or the Property; (v) seek or obtain a receiver for the Borrower or the Property,
substitute or replace any property manager for the Property or conduct any invasive
testing at the Property; (vi) take any action that would terminate any leases or other rights
held or granted by third parties with respect to the Property; (vii) take any other
enforcement action or pursue any rights or remedies Junior Lender might have available
against the Property, or any part or portion thereof, or against any guarantor of the Junior
Loans, or against the Borrower; (viii) take any action to cause a bankruptcy of Borrower
to be filed; (ix) join in any bankruptcy initiated by the Borrower, or (x) make any claim in
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such bankruptcy which would, in any way, interfere with or diminish the security interest
of Senior Lender.
2. Subordination of Security Interest.
(a) Junior Lender hereby intentionally, unconditionally and absolutely
subordinates the lien or charge of the Junior Deeds of Trust (and all present and future
indebtedness and obligations secured thereby, including, without limitation, the
indebtedness evidenced by the Junior Notes) and the Junior Indebtedness, and all other
present and future rights, privileges, and interests of Junior Lender in and to the Property
pursuant to the Junior Loan Documents or under that certain Disposition and
Development Agreement between Borrower and Junior Lender, dated October 29, 1996
( "DDA "), to the lien or charge of the Senior Deed of Trust and all rights, privileges and
interests of Senior Lender in and to the Property pursuant to the Senior Loan Documents
(and subject to Paragraph 1(d) above, any renewals, extensions, modifications, or
amendments thereof), and all present and future Senior Indebtedness secured thereby shall
unconditionally be and remain at all times a lien or charge on the Property prior and
superior to the lien or charge of the Junior Deeds of Trust (and all present and future
indebtedness and obligations secured thereby, including, without limitation, the
indebtedness evidenced by the Junior Notes) and all other fights, privileges, and interests
of Junior Lender in and to the Property.
(b) Notwithstanding anything to the contrary contained in the Junior
Notes, Junior Deeds of Trust or any other document or agreement between Junior Lender
and Borrower, but subject to the limitations set forth in paragraph 1(d) above. Junior,
Lender hereby consents and agrees that Senior Lender may, at any time and from time to
time, extend, renew, waive, accelerate, or otherwise change any of the terms or provisions
of the Senior Loan Documents, including, without limitation, increase the principal
amount of the Senior Loan (subject to Paragraph 1(d) above), change the rate of interest
or the time and manner for principal and interest payments, and release or reconvey any
security for the Senior Loan. Any such supplement, modification, amendment, extension,
renewal, waiver, acceleration, or change to any of the terms or provisions of the Senior
Loan Documents shall not affect this Agreement. Nothing contained herein shall obligate
Senior Lender to confirm or insure that any advances made under the Senior Loan have in
fact been used to improve, maintain, preserve or otherwise benefit the Property.
3.. Disbursement of Senior Loan Proceeds. Junior Lender acknowledges and
agrees that any application or use by Borrower of any disbursements of the proceeds from the
Senior Loan for any improper or unpermitted purposes shall not defeat the subordination and
other agreements herein made, in whole or in part.
4.. Bankruptcy: No Payments to Junior Lender.
(a) During (1) the continuance of a default under the Senior Loan
Documents, or (ii) in the event of any liquidation or dissolution of Borrower, or of any
execution sale, receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or other similar proceeding relative to Borrower or the Property
(collectively, a "Bankruptcy Event "), the Junior Lender shall not be entitled to receive or
retain any further payment or prepayment made after such Bankruptcy Event under the
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Junior Loans (including, without limitation, the Permitted Payments) and all amounts due
under the Senior Loan, or secured by the Senior Deed of Trust, shall be first paid in full
before any payment is made under either of the Junior Loans. In the event such a payment
is nevertheless received by Junior Lender, such amounts immediately shall be paid over to
Senior Lender for application in payment of the Senior Loan. For the purposes of this
Agreement, the Senior Loan shall not be deemed paid or satisfied in full until such time
that any preference period applicable to any payment received by Senior Lender has run
and such payment is therefore not subject to disgorgement. In connection with any
Bankruptcy Event or any proceedings relating thereto ( "Bankruptcy Proceeding "), Junior
Lender agrees that, unless and until it has obtained Senior Lender's prior written consent
(which consent may be given or withheld in Senior Lender's sole and absolute discretion),
Junior Lender shall take no action that may impair, affect or otherwise alter in any way
Senior Lender's interests or claims in such Bankruptcy Proceeding including, without
limitation, in connection with any vote to accept a plan of reorganization which is not
acceptable to Senior Lender, in its sole discretion, any cash collateral or adequate
protection issues, any trustee appointment issues, any plan exclusivity issues, any claim
subordination issues (as between Senior Lender and any of Borrower's creditors, including
Junior Lender), any motion to dismiss, any claim voting entitlements (excluding Junior
Lender's claim) or any other matters pertaining to the extent, validity or priority of Senior
Lender's liens, rights and entitlements. Notwithstanding the foregoing, Junior Lender may
file a claim in the Bankruptcy Proceeding subject to the foregoing restrictions and
limitations.
(b) From and after the occurrence of a Bankruptcy Event, any and all
distributions, claims, awards or other amounts paid or payable to Junior Lender under the
Junior Loan Documents or otherwise shall be paid first to Senior Lender, and Senior
Lender shall apply such amounts to the full and prior payment of the Senior Loan as
originally written, provided, however, that the balance of such amounts, after paying the
Senior Loan, as originally written, in full, shall be paid to Junior Lender for application
against the Junior Loans. Junior Lender further agrees to execute and deliver to Senior
Lender such assignments or other instruments as may be required by Senior Lender in
order to enable Senior Lender to collect any and all such payments or disbursements
otherwise payable to Junior Lender.
Notwithstanding the occurrence of a Bankruptcy Event, Junior Lender shall be
entitled to receive the Permitted Payments at such time, if ever, all pending Bankruptcy
Proceedings have been dismissed, there are no Bankruptcy Events then continuing and the Senior
Loan has been fully reinstated within the time and in the manner permitted under applicable
California law, including, without limitation, payment of all amounts due and owing under the
Senior Loan Documents, and cure of all defaults under the Senior Loan to the satisfaction of
Senior Lender.
5. Further Assurances. So long as the Senior Deed of Trust shall remain a
lien upon the Property, or any part thereof, Junior Lender shall execute, acknowledge and deliver,
upon Senior Lender's demand, at any time or from time to time, any and all further
subordinations, agreements or other instruments in recordable form as Senior Lender may
reasonably require for carrying out the purpose and intent of the covenants contained herein.
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6. Entire Agreement. This Agreement shall be the entire agreement with
regard to the subordination of the Junior Loan Documents to the lien or charge of the Senior
Loan Documents, and shall supersede and cancel any prior agreements as to such subordination,
including, without limitation, those provisions (if any) contained in the Senior Loan Documents or
in the Junior Loan Documents which provide for the subordination of any further encumbrances
to the lien of the Senior Loan Documents. As between Senior Lender and Junior Lender, to the
extent of any conflict between the terms hereof and the terms of the Senior Loan Documents or
the Junior Loan Documents, the terms hereof shall control.
7. Junior Lender's Covenants and Representations, Cure of Default. Junior
Lender hereby further confirms to, and covenants with, Senior Lender as follows:
(a) Junior Lender has delivered to Senior Lender true and complete
copies of the Junior Loan Documents and the DDA, and such documents have not been
amended, modified or supplemented in any way.
(b) Junior Lender has received and reviewed the Senior Loan
Documents.
(c) Junior Lender shall not enter into any agreement to amend or
modify any of the Junior Loan Documents or the DDA without notice to, and the prior
written consent of, Senior Lender (which consent shall not unreasonably be withheld).
(d) Execution of this Agreement by the Junior Lender constitutes its
written consent to the encumbrance of the Property by the Senior Loan as contemplated in
Section 3.07 of the DDA.
(e) Notwithstanding any provision of the Junior Loan Documents to
the contrary, Senior Lender shall be entitled to rely upon Borrower's execution of any
amendment, modification, consent or writing concerning or relating to the Senior Loan as
conclusive evidence of Borrower's duly authorized execution and delivery thereof.
8. Notices. All notices expressly provided hereunder to be given shall be in
writing and shall be (i) hand- delivered, effective upon receipt, (ii) sent by United States Express
Mail or by private overnight courier, effective upon receipt, or (iii) served by certified mail. Any
such notice of demand served by certified mail, return receipt requested, shall be deposited in the
United States mail, with postage thereon fully prepaid and addressed to the party so to be served
at its address stated below or at such other address of which said party shall have theretofore
notified in writing, as provided above, the party giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery as shown by the
addressee's return receipt or the expiration of three (3) business days after the date of mailing,
whichever is the earlier in time. Notices to be served hereunder shall be addressed to the
appropriate address set forth hereinbelow, or at such other place as Senior Lender or Junior
Lender may from time to time designate in writing by ten (10) days prior written notice thereof.
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Notices to Borrower shall be addressed as follows:
MDA -San Bernardino Associates
300 Continental Boulevard, Suite 360
El Segundo, California 90245
Attention: Mr. Jason Kamm
Notices to Senior Lender shall be addressed as follows:
GMAC Commercial Mortgage Corporation
100 South Wacker Drive, Suite 400
Chicago, Illinois 60606
Attention: Phillip J. Keel
Notices to Junior Lender shall be addressed as follows:
Redevelopment Agency of the City of San Bernardino
201 North E Street, Third Floor
San Bernardino, California 92401 -1507
Attention: Development Director
9. Governing Law. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of California.
10. Counterparts. This Agreement may be signed in multiple counterparts with
the same effect as if all signatories had executed the same instrument. The parties hereto agree
that a signature to this Agreement produced by facsimile transmission is valid and is as effective as
an original signature.
11. Attorneys' Fees and Costs. If any party hereto brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the Prevailing Party, as
hereinafter defined, in any such proceeding, action or appeal thereon, shall be entitled to
reasonable attorneys' fees and costs. Such fees and costs shall be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is pursued to decision or
judgment. The term "Prevailing Party" shall include, without limitation, a parry who substantially
obtains or defeats the relief sought, as the case may be, whether by compromise, settlement,
judgment or the abandonment by the other party of its claim or defense. The attorneys' fee and
cost award shall be such as to fully reimburse all attorneys' fees and costs reasonably incurred.
The reasonable costs, salary and expenses of the City Attorney, and the members of his office, in
enforcing this Agreement on behalf of the Agency shall be considered as "attorneys' fees" for
purposes of this Paragraph.
12. No Third Party Beneficiaries. This Agreement shall be for the benefit of
Senior Lender and Junior Lender, this Agreement shall not benefit Borrower, Borrower shall have
no rights hereunder, and there shall be no third party beneficiaries, intended or otherwise, of this
Agreement and no party hereunder shall be liable to any person not a party hereto for any
obligations provided herein.
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13. Successors and Assigns. This Agreement shall be binding upon, and inure
to the benefit of, Senior Lender and Junior Lender and their respective successors and assigns.
14. No Marshaling of Assets. Junior Lender hereby waives any right to require
Senior Lender to marshall the assets and/or liabilities of Borrower.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first set forth above.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY
SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE
EXPENDED FOR PURPOSES OTHER THAiN IlVIPROVEMENT OF THE
PROPERTY, BUT SUBJECT TO THE LIMITATIONS SET FORTH IN
PARAGRAPH 1(d) ABOVE.
[THE REMAINDER OF THIS.PAGE LEFT INTENTIONALLY BLANK]
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"Borrower" MDA -SAN BERNARDINO ASSOCIATES,
L.L.C., a Delaware limited liability company
By:MDA Investors No. 1, L.L.C.,
a Delaware limited liability Company
Its: Managing Member
By: MJL Associates,
a California limited partnership
Its: Managing Member
By: MJL Investments, Inc.,
a California corporation
Its: General Partner
[SIGNATURES CONTINUED]
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Name:
Title:
"Senior Lender" GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
Lm
[SIGNATURES CONTINUED]
Name:
Title:
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"Junior Lender" REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO,
a body corporate and politic
Un
Name:
Chair of the Community Development
Commission of the City of San Bernardino
By:
Name:
Agency Secretary
By:
Name:
Executive Director
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COUNTY OF
STATE OF
) ss.
On , before me, , a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
STATE OF
COUNTY OF
WITNESS my hand and official seal.
Notary Public in and for said State
) ss.
On , before me,
a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
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STATE OF
ss.
COUNTY OF
19711
before me, , a
Notary Public in and for said state, personally appeared personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
STATE OF
COUNTY OF
WITNESS my hand and official seal.
Notary Public in and for said State
) ss.
On , before me, , a
Notary Public in and for said state, personally appeared , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his /her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
- WITNESS my hand and official seal.
Notary Public in and for said State
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STATE OF
COUNTY OF
On
) ss.
before me,
a
Notary Public in and for said state, personally appeared ' personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he /she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
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LEGAL DESCRIPTION
PARCELS 1 AND 2 OF PARCEL MAP NO. 15038, IN THE CITY OF SAN BERNARDINO,
COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED
IN BOOK 186 OF PARCEL MAPS, PAGE(S) 14 AND 15, RECORDS OF SAID COUNTY.
OC 992540.105/AEK/G3235 -031 / 12- 14- 98 /amm
u: