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HomeMy WebLinkAboutR40-Economic Development CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY ORIGINAL FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Public Hearing - Formation of an Auto Center Property and Business Improvement District ("PBID") (Southeast Industrial Park and IVDA Redevelopment Project Areas) DATE: March 31, 2009 SvnoDsis of Previous Commission/CounciVCommittee Action{s): On January 22, 2009, Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend that the Mayor and Common Council and/or the Community Development Commission consider this action for approval. On February 2, 2009, the Mayor and Common Council of the City of San Bernardino ("Council ") voted to approve Resolution No. 2009-24, thereby declaring their intent to form a PBID for the purposes set forth in said Resolution. Recommeuded Motion(s): Open/Close Public Heariug (Mavor aud Common Council) Resolution of the Mayor and Common Council of the City of San Bernardino approving the formation of an Auto Center Property and Business Improvement District ("District"), fixing the boundaries thereof and providing for the levy of assessments and taking other actions in connection therewith (Southeast Industrial Park and IVDA Redevelopment Project Areas) (Communitv Develooment Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing funding equal to $1,218,372 pursuant to the formation of the Auto Center Property and Business Improvement District ("District") and funding the operations and activities of the District (Southeast Industrial Park and IVDA Redevelopment Project Areas) Contact Person(s): Project Area(s): Colin Strange Southeast Industrial Park and IVDA Redevelopment Project Areas Phone: (909) 663-1044 Ward(s): 3,d Supporting Data Attached: "" Staff Report Ii'l Resolution(s) Ii'l Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s) FUNDING REQUIREMENTS: Amount: $ 1,218,372 Source: Southeast Industrial Park Tax Increment Request Budget Authority for 2008-2009 Budget Year Budget Authority: Signature: Emil A. Marzullo, Interim Executive Director ~, -co~~ission/c-ounciiNoies-:-m--mm-"'""ffG'i7;ov-sZy-m-)?3.2-mm--q::Z;--=.-ZFr-----mmm--mmmm--m---m --.... nnnnnnmmm_<_~~~~?)_mmm__m_________mm___m_n_m_________________mm__________________mm_____m PlAgendaslComm Dev Commission\CDC 2009\04-06-09 PBID Formation SR (Final) doc COMMISSION MEETING AGF:NOA Meeting Date: Agenda Item Number: !<- 'I () 1- Z 0.01 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT PUBLIC HEARING - FORMATION OF AN AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT ("PBID") (SOUTHEAST INDUSTRIAL PARK AND IVDA REDEVELOPMENT PROJECT AREAS) BACKGROUND: Thirty-five years ago, the State of California ("California") enacted legislation allowing the formation of districts known as a Business Improvement District ("BID"), later amended in 1994, to allow the formation of a Property and Business Improvement District ("PBID"). The intent of this legislation was to thus provide businesses and property owners with a means to pay for certain business enhancement activities in an area specified by the property owners to be assessed for a specific period of time (usually five years) for a particular purpose, as defined by the BID or PBID, such as enhanced security, maintenance, marketing, etc. Before the assessments can be finalized, the businesses or property owners in the specified area must attain over 50% of the vote in favor of the formation. The BID or PBID will also choose their preferred method of assessment, which could be based upon calculations such as square footage of the building or property or linear footage, etc., prior to the vote. All such details shall be contained in the document referred to as the Engineer's Report which is hereby submitted to the Mayor and Common Council ("Council") for approval upon the formation of this particular PBID by the Council. If the ballot is successful, all businesses or property owners must participate in the PBID who are located within the established boundaries, and the assessment will be levied as a separate line item on their annual County property tax bill. The annual assessment payments as received by the City from distributions made from the County must be remitted by the City to the San Bernardino Auto Center, a non-profit mutual benefit corporation (the "Auto Center Non-Profit"). Such assessment payments as received by the City cannot be used as a substitute for City services currently in place. The ultimate purpose of a PBID is to enhance the level of City services currently in place and not to replace such services. PBIDs have a five-year sunset clause, but can be renewed or amended by ballot, and their borders can also be increased by ballot. There are currently in excess of 80 PBIDs in California with an approximate renewal rate of 90%. The San Bernardino Auto Center (the "Auto Center") has, since its inception, been San Bernardino's premier sales tax producer generating over $3 million for the City in 2004, but declining to an estimated $1.8 million for 2008 (based upon the first three quarters performance). In 2004, there were ten dealerships at the Auto Center offering more than 12 different car makes: Today, three dealerships remain offering only five different makes of cars. In an effort to save what remains of the Auto Center and with the hope of attracting new members to the vacant dealership buildings, the remaining three dealership owners in the Auto Center developed a coalition in order to form a PBID. This proposed PBID would encompass five separate parcels designed to convey special benefits to the properties within the PBID, including marketing efforts to enhance and support the vitality of the auto dealers and help them compete in the regional marketplace. Other aspects P:\AgendasIComm Dev CommissionlCDC 2009\04-06-09 PBID Formation SR (Final),doc COMMISSION MEETING AGENDA Meeting Date: 04106/2009 Agenda Item Number: 1Z.:~'l.- Economic Development Agency Staff Report PBID Formation - SB Auto Center Page 2 of the program with the PBID would include clean and safe programs through higher levels of security measures which will provide a cleaner business environment for the businesses, employees and customers and result in increased commercial activity. By obtaining 100% participation, the five properties included in the PBID estimate that they will raise an additional $243,674 per annum for cooperative marketing and maintenance programs, and that through joint marketing and maintenance activities they will achieve economies of scale over the current individual undertakings. At the Council meeting of February 2, 2009, a petition to form a PBID was filed with the Council who subsequently declared their intent to form the requested PBID subject to the notice requirements as mandated by Article xmD of the State Constitution. The Council further set forth and implemented procedures pursuant to Goverrunent Code Section 53753, which requires a 45-day notice requirement prior to the public hearing on the imposition of an assessment such as that required for the PBID. CURRENT ISSUE: By obtaining 100% participation, the five individual properties included in the PBID estimate that they will raise an additional $243,674 per annum for cooperative marketing and maintenance programs, and that through joint marketing and maintenance activities, they will achieve economies of scale over the current individual undertakings. The final formation of the PBID could not occur sooner than March 18, 2009, which is the 45th day after February 2, 2009. The necessary public hearing on the formation of the PBID has been set for Monday, April 6, 2009, at 4:30 p.m. which was the next available regular meeting date of the Council after the conclusion of the 45-day notice period. Notice of the Public Hearing was published in the San Bernardino Sun newspaper on March 22,2009 and March 29, 2009. In light of the extremely challenging current business climate, and to be able to benefit from the PBID activities immediately rather than wait over a year for the first property tax assessments to be remitted through the County tax collection process, the Agency proposes to advance the amount of the five-year assessment to the Auto Center PBID on an as needed basis upon receipt of invoices to be repaid to the Agency by the Auto Center Non-Profit from the property tax assessments in the ensuing years. The assessments are secured by the properties themselves through the property tax rolls and thus minimizing the risk of repayment of the principal amount to the Agency. The Auto Center Non-Profit Promissory Note and the Indemnification Agreement with the dealers are attached to the Commission Resolution. The PBID formation requires submission of petitions from property owners representing more than 50% of total assessments. In this instance, the petitions amount to 100%. After the formation of the PBID has been approved by the Council, the PBID will be managed by the existing San Bernardino Auto Center, a non-profit mutual benefit corporation. As part of the PBID formation process, Proposition 218 requires a report to be prepared as to any new assessment. Such report in the form of the Engineer's Report has been prepared by KLI Finance, Inc., a licensed engineer, as the engineering consultants responsible for the formation of the Auto Center PBID. The Engineer's Report is attached to the Resolution of Formation of the Council. P:\AgendasIComm Dev CornmissionlCDC 2009\04-06-09 PBID Fonnalion SR (Final).doc COMMISSION MEETING AGENDA Meeting Date: 04/06/2009 Agenda Item Number: J2..?2- Economic Development Agency Staff Report PBID Formation - SB Auto Center Page 3 ENVIRONMENTAL IMP ACT: This action approving the formation of a certain PBID does not meet the definition of a "project" under Section 15378 of the California Environmental Quality Act ("CEQA"). FISCAL IMPACT: There is presently no adverse fiscal impact to the City. All costs associated with the formation of the PBID have been and will continue to be advanced by the Agency. Upon the formation of the PBID by the actions of the Council to approve the Resolution of Formation, a separate action of the Community Development Commission ('Commission") of the City of San Bernardino is proposed to authorize the loan in an amount not to exceed $1,218,372 from Agency funds to be reimbursed over five years by the PBID. The repayment of this loan will be obtained from the PBID assessments to be included on the property tax bill of the three dealerships involving five individual properties. RECOMMENDATION: That the Mayor and Common Council and the Community Development Commission adopt the attached Resolutions. ~~ Emil A. Marzullo, Interim Executive Director P:\Agendas\Comm Dev Commlssion\CDC 2009\04-06-09 PBm Formalion SR (Final) doc COMMISSION MEETING AGENDA Meeting Date: 04/06/2009 Agenda Item Number: ~31--- . " " - .. - ..' '. ",' ," ,.. " .- r ,. J.. ..}.11 '\. '. " l';.,;i: . t' ~ :. j, 'j K' ,;> I 'Jr'. 7' 14. . l' --l. J i. .I '~,. ' ,. To,> ' ,'.... . "It.- .. I, i . . 'I " ,I ." ; .' .' 'J '" , '" " I' J l '~. >i, '. ... ~I~';" tr PUBLIC NOTICE CITY OF SAN BERNARDINO FORMATION OF A PROPERTY AND BUSINESS IMPROVEMENT DISTRICT SAN BERNARDINO AUTO CENTER Notice is hereby given that the Mayor and Common Council of the City of San Bernardino ("Council") will consider a petition to form a Property and Business Improvement District ("PBID") pursuant to the Property and Business Improvement District Law of 1994 by the San Bernardino Auto Center Association (the "Applicant") for the purposes of undertaking additional security patrols, enhanced maintenance measures, increased landscaping features, enhanced marketing activities, improved signage and street lighting, graffiti removal and other similar activities and matters and capital improvements as may be permitted under the PBID law. The Joint Public Hearing will be held on April 6, 2009, at 4:30 p.m. or as soon thereafter as the matter may be heard, in the City Council Chambers located at 300 North "D" Street in the City of San Bernardino ("City"). At the public hearing, the Council shall receive evidence and testimony to initiate proceedings for the formation of the PBID by the Applicant for the area generally bounded by Show Case Drive and Century Avenue on the north, EI Camino Real on the east, Show Case Drive on the south and Auto Plaza Drive on the west, which is generally known and referred to as the "San Bernardino Auto Center." Specifically, the properties, subject to assessment, are Assessor's Parcel Numbers 0141- 251-55; 59; 60; 61; 74 (the "Property"). The City is required to conduct a noticed public hearing on the formation of the PBID for the San Bernardino Auto Center, and subsequently consider and adopt a Resolution of Formation as required pursuant to Section 33625 of the PBID law. NOTICE IS FURTHER GIVEN that any and all persons are invited to appear before the Council and present evidence or testimony concerning the foregoing matters relating to the formation of the San Bernardino Auto Center PBID at the time, date and place set forth herein. The City has reviewed the proposed formation under the California Environmental Quality Act ("CEQA") and has determined that the proposed creation of a PBID is exempt pursuant to Chapter 2.6, Section 21080 of the Public Resources Code, CEQA Statutes, and Section 15061(b)(3), Review For Exemptions, of the CEQA Guidelines. Interested persons may contact Colin Strange, Project Manager, at (909) 663-1044 or bye-mail at cstrange{qlsbrda.org, for additional information relating to the joint public hearing and the proposed formation of the PBID. NOTICE given this 19th dav of March 2009. Notice to the Press: Please publish twice: Once on March 22, 2009 and again on March 29, 2009. Send Proof of Publication to: Colin Strange, Project Manager Economic Development Agency 201 North "E" Street, Suite 301 San Bernardino, CA 9240 I Wasana Chantha From: Sent: To: Subject: 9 lenda_ sobrique@dailyjoumal.com Thursday, March 19, 2009 9:22 AM Wasana Chantha Confirmation of Order 1551219 for FORMATION OF A PROPERTY AND BUSINESS IMPROVEMENT DISTRICT SB AUTO CENTER Dear Customer: The order listed below has been received and processed. If you have any questions regarding this order, please contact your ad coordinator or the phone number listed below. Customer Account Number: 100563 Type of Notice : GPNSB - GOVERNMENT PUBLIC NOTICE-SB Ad Description : FORMATION OF A PROPERTY AND BUSINESS IMPROVEMENT DISTRICT SB AUTO CENTER Our Order Number : 1551219 Newspaper : SAN BERNARDINO COUNTY SUN Publication Date(s) : 03/22/2009,03/29/2009 Thank you for using the Daily Journal Corporation. GLENDA SOBRIQUE DAILY JOURNAL CORPORATION CALIFORNIA NEWSPAPER SERVICE BUREAU 915 E. FIRST ST., LOS ANGELES, CA 90012 Phone: (800) 788 7840 / (213)229-5300 Fax: (800) 540 4089 / (213)229-5481 1 1 2 3 4 5 6 7 8 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING FUNDING EQUAL TO $1,218,372 PURSUANT TO THE FORMATION OF THE AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT ("DISTRICT") AND FUNDING THE OPERATIONS AND ACTIVITIES OF THE DISTRICT (SOUTHEAST INDUSTRIAL PARK AND IVDA REDEVELOPMENT PROJECT AREAS) WHEREAS, the Community Development Commission of the City of San Bernardino (the "Commission") as the governing body of the Redevelopment Agency of the City of San Bernardino 9 (the "Agency") is authorized under Health and Safety Code Section 33000, et seq., to cause the 10 Agency to issue and to make loans to finance certain activities within the City of San Bernardino 11 (the "City"); and 12 13 WHEREAS, the laws of the State of California provide that cities may form a Property and 14 Business Improvement District ("PBID") pursuant to the Property and Business Improvement 15 District Law of 1994 (the "PBID Law") for the purposes of and pursuant to the provisions of the 16 PBm Law; and 17 WHEREAS, the City received a petition from the requisite number of property owners as 18 required by Section 3662 I (a) of the PBID Law requesting that the City initiate proceedings for the 19 formation of the Auto Center Property and Business Improvement District (the "District") for the 20 area generally bounded by Show Case Drive and Century Avenue on the north, EI Camino Real on 21 the east, Show Case Drive on the south and Auto Plaza Drive on the west, which area is generally 22 known and referred to as the "San Bernardino Auto Center"; and 23 24 25 26 27 28 WHEREAS, the City has requested that the Agency assist the City with the financing of the District, and the Commission on behalf of the Agency seeks to assist the City with such financing by providing a loan (the "Loan") to the San Bernardino Auto Center, a non-profit mutual benefit corporation (the "Corporation"), to fund the undertaking of additional security patrols, enhanced security measures, enhanced maintenance measures, increased landscaping features, enhanced marketing activities, improved signage and street lighting, graffiti removal, and other similar I 4-0-0, P:\AgendasIResolutionslResolutionsI2009\04-06-09 PBID Fomatinn CDC Reso (Finaljdoc 1 activities and matters and capital improvements as may be permitted under the PBID Law and all as 2 set further forth in the Management District Plan as accepted and approved by the City; and 3 WHEREAS, the Loan shall be evidenced by a note (the "Note") made by the Corporation to 4 the Agency, and the District assessment shall be recorded against each parcel of the District in the 5 records of San Bernardino County as set forth in the Engineer's Report as approved by the Mayor 6 and Common Council pursuant to a Resolution of Formation as adopted on April 6, 2009; and 7 WHEREAS, as provided for in that certain Auto Center Property and Business Improvement 8 9 10 11 12 13 14 15 16 District Waiver and Indemnification Agreement (the "Indemnification Agreement" in the form as attached hereto as Exhibit "A"), by and among Clifford R. Cummings, a married man ("Clifford Cummings"), Barbara B. Cummings, a married woman ("Barbara Cummings"), TTL, LLC, a California limited liability company ("TTL"), and D.T.M. Land Company, LLC, a California limited liability company ("DTM") (Clifford Cummings, Barbara Cummings, TTL and DTM (collectively referred to as the "PBID Owners") and Agency, the PBID Owners shall indemnify, without limitation, the Agency and the City in connection with the District and the Loan. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 17 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 18 FOLLOWS: 19 Section 1. The Commission hereby finds that the recitals set forth above are true and correct 20 in all respects. 21 Section 2. On April 6, 2009, the Mayor and Common Council of the City of San Bernardino 22 ("Council") conducted a public hearing relating to the formation of the PBID pursuant to the 23 petition and, after the canvass of votes and reported by the City Clerk at said public hearing, duly 24 adopted the Resolution of Formation to provide for the formation of the District and to approve the 25 method levying the assessments upon the properties within the District all as further provided in the 26 Engineer's Report as attached to said Resolution of Formation. 27 Section 3. The Commission hereby acknowledges that the purposes of the District as 28 formed by the City shall include, but not be limited to, the undertaking of additional security patrols, 2 P:\AgendasIResolutionslResolutions\1009\04-06-09 PBID Formation CDC Reso (Final),doc 1 enhanced security measures, increased landscaping features, improved signage and street lighting, 2 graffiti removal, and other similar activities and matters and capital improvements all as may be 3 permitted under the PBID Law and as further set forth in the Management District Plan and the 4 Engineer's Report. The boundaries of the District are generally described as follows: Show Case 5 Drive and Century Avenue on the north, EI Camino Real on the east, Show Case Drive on the south 6 and Auto Plaza Drive on the west, which area is generally known and referred to as the "San 7 Bernardino Auto Center." 8 Section 4. Assessments of the District shall be levied on the real property, and not on the 9 businesses, within the District which assessments shall be due and payable in the same manner as 10 with other real property general taxes, special property taxes and other assessments as provided in 11 Section 36631, et seq., of the PBID Law and in the dollar amounts as set forth in the Engineer's 12 Report. 13 14 15 16 ]7 18 ]9 20 21 22 23 24 Section 5. The Commission hereby approves the Loan to the Agency in accordance with the terms and conditions of the Note with any and all changes approved by the Interim Executive Director of the Agency and Agency Counsel. The Note shall be executed by the Corporation and said Corporation shall provide the governance of the District as required pursuant to Section 36650, et seq., of the PBID Law. The Loan shall be repaid to the Agency, without interest, from the collection of the assessments to be levied against the participating properties within the District on the dates and in the amounts as provided in the Note. The Commission further authorizes and directs the funding of an amount not to exceed $1,218,372 as the Loan to the Corporation for the undertaking of the purposes of the District as set forth in the Management District Plan and the Engineer's Report. Section 6. The Commission hereby approves the Indemnification Agreement in the form as 25 attached to this Resolution as Exhibit "A" together with the form ofthe Promissory Note as attached 26 hereto as Exhibit "B". The Chairman, Interim Executive Director and Secretary are hereby 27 authorized to enter into and execute the Agreement with any changes as may be approved by the 28 Chairman or Interim Executive Director with the concurrence of Agency Counsel. 3 P\Agendas\ResolutionslResolutions\1009\04-06-09 PBm Formation CDC Reso (Final) doc 1 Section 7. The Chairman, Interim Executive Director, Secretary, Agency Counsel and any 2 and all other officers of the Agency are hereby authorized and directed, for and in the name and on 3 behalf of the Agency, to do any and all things and take any and all actions, including execution and 4 delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, 5 instruments of conveyance, warrants and other documents, which they, or any of them, may deem 6 necessary or advisable in order to consummate the transaction contemplated herein. Whenever in 7 this Resolution any officer of the Agency is authorized to execute or countersign any document or 8 take any action, such execution, countersigning or action may be taken on behalf of such officer by 9 any person designated by such officer to act on his or her behalf in the case such officer shall be 10 absent or unavailable. The Commission hereby appoints the Chairman and Interim Executive 11 Director as agents of the Agency for purposes of executing any and all documents and instruments 12 which any officer of the Agency is authorized to execute hereunder. 13 Section 8. The City will rely upon the Corporation to provide the governance of the District 14 as required pursuant to Section 36650, et seq., of the PBID Law, and such Corporation shall provide 15 all reports, take actions and comply with the PBID Law and shall be responsible to implement the 16 Management District Plan to the satisfaction ofthe City. 17 18 19 20 Section 9. The improvements and activities to be provided in the District will be funded by the Loan and the repayment thereof through the levy of the assessments within the District to thus repay the Loan in the dollar amounts representing the assessments to be levied in each year as are set forth as to each property as provided in the Engineer's Report. The revenue from the levy of 21 22 assessments within the District shall not be used to provide improvements or activities outside the 23 24 District or for any purpose other than the purposes specified in the Resolution of Formation for the repayment of the Loan. Section 10. This Resolution shall become effective immediately upon its adoption. 25 26 III 11/ 11/ 27 28 4 P:\AgendasIResolutions\Resolutionsl1009\04-06-09 PBID Fonnalion CDC Reso (Final) doc 1 2 3 4 5 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING FUNDING EQUAL TO $1,218,372 PURSUANT TO THE FORMATION OF THE AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT ("DISTRICT") AND FUNDING THE OPERATIONS AND ACTIVITIES OF THE DISTRICT (SOUTHEAST INDUSTRIAL PARK AND IVDA REDEVELOPMENT PROJECT AREAS) 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a 8 thereof, held on the day of 9 Commission Members: Aves 10 ESTRADA 11 BAXTER 12 BRINKER 13 SHORETT 14 KELLEY 15 JOHNSON 16 MC CAMMACK 17 18 meeting ,2009, by the following vote to wit: Navs Abstain Absent Secretary 19 The foregoing Resolution is hereby approved this 20 21 22 23 day of ,2009. Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino 24 Approved as to Form: 25 By: 26 27 28 ~~ 5 P:\AgendasIResolutions\Resolutionsl2009\04-06-09 PBID Formation CDC Reso (Final),doc 1 2 3 4 5 6 EXHIBIT "A" AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICATION AGREEMENT 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 P\AgendasIResolutionslResolutions\2009\04-06-09 PBID Fonnation CDC Reso (Final)_doc AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICATION AGREEMENT THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of ,2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B. Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a California limited liability company (the "TTL"), the owners of the land where the Mitsubishi/Mazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below) (the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and may collectively be referred to as the "Parties." RECITALS WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion Dealership, TTL, as owner of the land, buildings and improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California, and DTM, as owner of the Nissan Dealership need funds for marketing, public security and safety and enhanced maintenance purposes in connection with the operation of each automobile dealership all of which are located in the City of San Bernardino, County of San Bernardino, State of California. Southern Automotive Marketing, a California corporation ("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and TTL owns the land, buildings and improvements in connection with the Mitsubishi/Mazda Dealership. WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined below), with the assistance and cooperation of the Agency and the City. WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds from the PBID Loan to perform and to provide the PBID Services (as defined below) to the PBID Owners. WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing Assessor (as defined below) from the Annual Assessments Payments (as defined below) collected by the Taxing Assessor from the PBID Owners. I P\Agendas\Agenda Attachmenls\Agenda Allachmcnls\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as defined below) to the Taxing Authority in the manner provided for in this Agreement. WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor. WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III accordance with terms, covenants and conditions of the Note and of this Agreement. WHEREAS, the PBID Owners understand that the Agency and the City shall have no liability or obligation in connection with the following: (i) the creation, the existence, rejection, the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the City for the benefit of the PBID Owners, or anyone of them. NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID Owners and the Agency agree as follows: I. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section I. 2. Definitions. The initially capitalized terms defined herein shall have the meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this Agreement. If one or more initially capitalized terms in this Agreement are not defined in the preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially capitalized term or terms shall have the meaning provided for in the Note. Annual Assessments Payment. The "Annual Assessments Payment" shall mean the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the real estate tax assessor for the County of San Bernardino, State of California (the "Tax Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372, together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which each payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December 10 and April I 0, of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years. 2 P:lAgendas\Agenda Attachments\Agenda Al1achments\Agenda Allachments\Agrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc Annual Assessments Revenues. The "Annual Assessments Revenues" shall collectively mean each PB1D Owner's Proportionate Annual Assessments Payment paid, or to be paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years. Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (1) lump sum or in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including Fiscal Year 2013/2014. Annual Assessments. Each PBID Owner's Proportionate Annual Assessments Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's special benefit received from the identified services and activities performed and provided by the Borrower on behalf of the PBID and their relative cost. These Annual Assessments are assessments for the services and activities performed and provided by the Borrower which confer special benefits upon the real property owned by the PBID Owners in the PBID for which the services and activities are provided. The Annual Assessments are based upon the estimated expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at S Show Case Drive, San Bernardino, California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141- 251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380 for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual Assessments Payment amount will appear as a line item on its annual San Bernardino County real property tax bills. Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a California non-profit mutual benefit corporation, organized under the laws of the State of California, acting for and on behalf of the PBID. The Borrower will run the day-to-day operations of the PBID and will, without limitation, annually review the PBID budgets and file 3 P\AgendaslAgenda Attachments\Agenda AUachmenls\Agenda Allachments\Agrmls-Amend 2009\04-06-09 PSID Formation - Waiver & Indemnification Agreement (Final),doc annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in accordance with the Note. The Borrower shall be controlled by the PBID Owners until the Indebtedness is paid in full to the Agency from the Taxing Assessor. City. The "City" shall mean the City of San Bernardino. County. The "County" shall mean San Bernardino County. Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or any portion thereof, and/or by the underlying real property, or any part thereof or interest therein, in which the Cummings own a fee simple interest or have an interest therein, as amended from time to time. DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter made by a lender to DTM or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan shall also include, without limitation, any loan secured, in whole or in part, by the Nissan Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended from time to time. First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year of the County. Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal Year for the County. Each PBID Owner shall pay its respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the 2013/2014 Fiscal Year, unless the PBID is terminated by the PBID Owners prior to the Maturity Date of the Note. Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax Assessor, and all other fees, charges, sums and amounts (including, without limitation, all attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that have been paid by the PBID Owners, and each of them, to the Tax Assessor, in the manner and subject to the terms, covenants and conditions of the Note and this Agreement. 4 P:\AgendasIAgenda AttachmentslAgenda AttachmentslAgenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Finall_doc Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and conditions of the Note. Late Char!!:e. The "Late Charge" shall mean zero percent (0%) on the payment due and owing by the Borrower to the Agency under the Note, subject to any applicable cure period(s) in the Note. Laws. The "Laws" shall mean all applicable federal, state, municipal and local laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in effect, as amended from time to time. Maturity Date. The "Maturity Date" shall mean April 15, 2014. MitsubishilMazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San Bernardino, State of California and owned by Southern Automotive Marketing, together with vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land, buildings, improvements and personal property owned by TTL now or hereafter used in connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda franchise, whether owned by TTL and/or by Southern Automotive Marketing. Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 735 Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-74 owned by DTM, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the Nissan Dealership and the Nissan franchise. PBID. The "PBID" shall mean the Auto Center Property and Business Improvement District. The PBID is designed to improve and convey special benefits to the PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the PBID, will provide new services and activities, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. The PBID shall be created effective April 15,2009 and shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners. PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The PBID Loan can be disbursed to the Borrower in one (I) or more advances with the last advance 5 P:\Agendas\Agenda Allachments\Agenda Attachments\Agenda AttachmentS\Agrmts-Amend 2009\04_06_09 PBm Formation _ Waiver & Indemnification Agreement (Final)_doc to be made by the Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by the Borrower from the Agency. The PBID Loan is evidenced by the Note and the Borrower shall cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or anyone of them, the principal amount disbursed by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums due and payable under the Note. The PBID Loan shall be paid by the Tax Assessor to the Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the Tax Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms, covenants and conditions of this Note. PHID Owners. The "PBID Owners" shall collectively mean the following owners of the improved real property and auto dealerships located within the PBID: (i) the Cummings who own the Toyota Dealership, (ii) the Cummings who own the Scion Dealership (iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California. PHID Owner's Proportionate Annual Assessments Payment. The PBID Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year. PHID Services. The "PBID Services" shall mean the new services and activities provided by the Borrower to and for the benefit off each PBID Owner in the PBID, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. Principal. The "Principal" shall mean one (I) or more advances made by the Agency to the Borrower during the Term of the Note in a principal amount not to exceed $1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower has no right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the Agency. The Borrower shall pay the Indebtedness in accordance with the Note. Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory, equipment and all other personal property however designated, now or hereafter located at 650 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-61, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the operation of the Scion Dealership and of the Scion franchise. State. The "State" means the State of California. 6 P:\Agendas\Agenda Attachments\Agenda AllachmentslAgenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Forrnation - Waiver & Indemnification Agreement (Final),doc Term. The "Term" shall mean the term of the Note commencing on the date of the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms, covenants and conditions of the Note. Tovota Dealershiu. The Toyota Dealership shall mean the Toyota Dealership and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks, vehicles and all other personal property however designated now or hereafter located at S Show Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-59, including, without limitation, all real and personal property now and hereafter used in connection with or relating to the operation of the Toyota Dealership and/or of the Toyota franchise. TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL Loan shall also include, without limitation, any loan secured, in whole or in part, by the Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has an interest therein, as amended from time to time. 4. Reuresentations, Warranties and Covenants. (a) Each PBlD Owner represents, warrants and covenants to the Agency that: (i) it is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, or in the case of the Cummings are individuals who are competent and who have all requisite power and authority to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery and performance by such PBID Owner of this Agreement has been duly authorized by all necessary action of such PBID Owner and does not and will not (A) contravene the terms of the articles or certificate of incorporation, certificate of organization or bylaws, or other applicable organizational documents, of such PBID Owner, or result in a breach of or constitute a default under any material lease, deed of trust, mortgage, instrument, document, contract or other agreement to which such PBID Owner is a party or by which it or its properties may be bound or affected; or violate any provision of any Law or the like binding on or affecting such PBID Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBID Owner enforceable against each PBID Owner in accordance with its terms, (iv) to the best of the PBID Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted by or is available to the PBID Owners, or anyone of them, against the Agency or against the City, (v) the PBID Owners, and each of them, have requested the Agency and the City to assist the PBID Owners in the creation of the PBID, without the Agency or the City incurring any liability or obligation in connection with the filing, petitioning, creation, existence, administration, termination or expiration of the PBID, (vi) the PBID Owners, and each of them, have requested the Agency and the City to nominate and to appoint the Borrower to administer and to manage the PBID and to perform and to provide the PBID Services to the PBID Owners 7 P\Agendas\Agenda Attachments\Agenda AttachmentslAgenda AttachmentslAgrmts-Amelld 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc located within the PBID, without the Agency or the City incurring any liability or obligation in connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor in accordance with this Agreement and with the Note, (ix) the PBID Services to be performed and provided by the Borrower have not been performed or provided to any PBID Owner by the Agency, by the City, by the Borrower or by any other governmental authority, person or entity, (x) the creation ofthe PBID, the execution of the Note and/or of this Agreement and the performance by the Borrower of the PBID Services shall not constitute an event of default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each PBID Owner shall comply with all applicable Laws. (b) The Cummings represent, warrant and covenant to the Agency that: (i) the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and will continue to own in fee simple the underlying improved real property in connection with the Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the Cummings Loan and the Cummings will not be in default under the Cummings Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the Cummings Loan. (c) DTM represents, warrants and covenants to the Agency that: (i) DTM is the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in default under the DTM Loan and DTM will not be in default under the DTM Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the DTM Loan. (d) TTL represents, warrants and covenants to the Agency that: (i) Southern Automotive Marketing is the owner of the MitsubishilMazda Dealership, (ii) TTL owns, and will continue to own in fee simple the underlying improved real property in connection with the Mitsubishi/Mazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the TTL Loan. The representations and warranties made in this Agreement shall survive the execution, performance, expiration and early termination of this Agreement. 5. Payment ofthe Annual Assessments Payment. (a) Each PBID Owner shall timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by the PBID Owners. 8 P:\AgendasIAgenda AttachmentslAgenda AllachmenlslAgenda AttachmentslAgrmls-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final) doc (b) Each PBID Owner shall timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year, as follows: (i) in one (I) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by such PBID Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest. (c) The PBID Owners, in the aggregate, shall pay to the Tax Assessor the Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with the First Fiscal Year and continuing annually thereafter through and including the 2013/2014 Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The PBID Owners shall pay the Annual Assessments Payment together with any late fees and interest assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal Year, as follows: (i) in one (I) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of $121,837 each due and owing by the PBID Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by the PBID Owners to the Tax Assessor without penalty or interest. (d) The Indebtedness shall be paid by the Tax Assessor to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any one of them, during each Fiscal Year, beginning with the 2009/2010 Fiscal Year and annually thereafter through and including the 2013/2014 Fiscal Year. (e) Within thirty (30) calendar days from receipt by the Tax Assessor of one (I) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. (f) Within thirty (30) calendar days from receipt by the Tax Assessor of an installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of $121,837 each, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. (g) For the Term of the Promissory Note, within thirty (30) calendar days from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the 9 PlAgendas\Agenda AttachmenlslAgenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Fonnation _ Waiver & Indemnification Agreement (Finall_doc PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax Assessor. (h) The Indebtedness shall be paid in accordance with this Note to the Agency at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as is designated by the Agency in a notice to the Borrower given as provided for in this Note. 6. Default. An event of default (a "Default") shall occur whenever: (i) one or more of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more of the PBID Owners breaches any other covenant, promise or obligation in this Agreement and/or in any other instrument, document and/or agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions contemplated in this Agreement, subject to any applicable cure period, (iii) has made a representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it (collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option, declare the Indebtedness under this Note to be immediately due and payable, regardless of the Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any (collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to the Agency the Default Payment Amount from the Annual Assessments Revenues collected from the PBID Owners, or anyone ofthem. 7. Remedies. Upon the occurrence of a Default under this Agreement, and in addition to any other remedies that the Agency and/or the City may have under this Agreement, at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without having any further liability or obligation to the PBID Owners, or to anyone of them, or to the Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy any default under this Agreement, or obtain any other remedy consistent with the purposes of this Agreement and allowed at law and in equity. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, located within the City of San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of California. In the event that any legal action is commenced by the Agency and/or by the City against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at the address provided for in Section 10 of this Agreement for each such PBID Owner, in the manner as required by the laws of the State of California. Unless a remedy is held to be exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative and in addition to any other remedies available to the Agency and/or to the City under this Agreement, at law or in equity. 8. Termination. The Agency and/or the City shall also have the right, but not the obligation, to terminate this Agreement immediately at any time, in the exercise of its sole 10 P:lAgendas\Agenda AttachmentslAgenda AttachmentslAgenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Fonnation - Waiver & Indemnification Agreement (FinaJ)doc discretion, upon written notice from the Agency and/or the City to each PBID Owner of such termination of this Agreement (the "Termination Notice Letter") at the address provided for in this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a later date for the effective date of the termination of this Agreement is provided for in the Termination Notice Letter. Upon the effective date of the termination of this Agreement, the Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of them, or to the Borrower. 9. Indemnification. Each PBID Owner hereby agrees to indemnify, defend, protect and hold harmless the Agency and the City from and against and all actions, causes of actions, claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees, penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional, of any kind or nature, in connection with, relating to, arising from the following: (i) any and all loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles, trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death of any person or persons resulting from the acts or omissions of any PBID Owner, of the Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor, by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any one of them, to pay to the Agency and/or to the City any monetary amounts due under this Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of this Agreement and/or the performance by the Borrower of this PBID Services is an event of default under the Cummings Loan, under the TTL Loan and/or under the DTM Loan (singularly, the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be liable to the Agency and/or to the City for any of the Claims which are caused by the sole negligence or willful acts or omissions of the Agency and/or of the City. This indemnification provision shall survive the execution, the delivery, the performance, the expiration and the termination of this Agreement. II P:lAgendas\Agenda AttachmemslAgenda Attachments\Agenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final)doc 10. General Provisions. 10.1 Authoritv. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. 10.2 Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the governing board for the Agency. 10.3 Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. 10.4 Headinl!s. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. 10.5 Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and VIce versa. 10.6 Entire Al!reement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. 10.8 Successors and Assil!ns. This Agreement shall be binding on and inure to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees, spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners, of anyone of them, may not assign or delegate their right, title and interests in or obligations under this Agreement without the written consent of the Agency which consent shall not be unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and delegate its rights, title, interest and obligations in, to and under this Agreement without obtaining the prior consent of the PBID Owners, or anyone of them. 12 P:\AgendasIAgenda AttachmentslAgenda Attachmenls\Agenda AttachmenulAgrmls.Amend 2009\04-06-09 PBID Fonnatioll' Waiver & Indemnification Agreement (Final).doc 10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver of that remedy. 10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. 10.11 Necessary Actions. Each Party agrees to execute and deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. 10.12 Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. 10.13 Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. 10.14 Third Party Beneficiaries. Except for the City, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions of this Agreement. 10.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. 10.16 Conflicts ofInterest: No Individual Liabilitv. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the Agency shall be personally liable in the event of a breach of this Agreement by the Agency. 10.17 Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day 13 PlAgendaslAgenda ArtachmemslAgenda AttachmentslAgenda Attachments\Agrmts-Amend 2009\04-06-09 PBrn Formation _ Waiver & Indemnification Agreement (Final),doc after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 663-2294 Attn: Interim Executive Director With a copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Phone: (909)-387-1137 Fax: (909) 387-1138 Attn: Timothy J. Sabo To the PBID Owners: Clifford R. Cummings Barbara B. Cummings 735 Show Case Drive N San Bernardino, California 92408 Phone: Fax: TTL,LLC 645 Auto Center Drive San Bernardino, California 92408 Phone: Fax: Attn: D.T.M. Land Company, LLC 735 Show Case Drive S San Bernardino, California 92408 Phone: Fax: Attn: 10.18 Broker. Each Party will defend, indemnify, and hold the other Party hannless from any claim, loss, or liability made or imposed by any other Party claiming a commission or fee in connection with this transaction and arising out of that Party's own conduct. 10.19 Cumulative Remedies. No failure on the part of the Agency to exercise, and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or 14 PIAgendas\Agenda AttachmentslAgenda AllachmenlslAgenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final) doc privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Agency under this Agreement, at law or in equity. 10.20 Governinl!: Law. This Agreement shall be governed and construed III accordance with the laws of the State of California. 15 PlAgendaslAgenda AttachmentslAgenda AttachmentslAgenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Fonnation - Waiver & Indemnification Agreement (Finall.doc IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and Business Improvement District Waiver and Indemnification Agreement as of the date first written above. AGENCY San Bernardino Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Date: Emil A. Marzullo, Interim Executive Director Approved As To Form and Content By: r~~ Agenc 0 sel PBID OWNERS By: Clifford R. Cummings, a married man By: Barbara B. Cummings, a married woman TTL, LLC, a California limited liability company By: Name: Title: D.T.M. Land Company, LLC, a California limited liability company By: Name: Title: 16 p,lAgendas\Agenda Attachrnents\Agenda Attachrnents\Agenda Attachments\Agrmts-Amend 2009\04...06-09 PBID Fonnation' Waiver & Indemnification Agreement (Final) doc 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT "B" FORM OF PROMISSORY NOTE 7 P:\Agendas\Resolutiolls\Resolutions\2009\04-06-09 PBID Fonnation CDC Reso (Final),doc FOURTH DRAFT - 03-30-09 AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT REVENUES PROMISSORY NOTE Date: $1,218,372 San Bernardino, California THE UNDERSIGNED, THE SAN BERNARDINO AUTO CENTER, a California non- profit mutual benefit corporation (the "Borrower") for and on behalf of the AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (the "PBID"), promises to pay to the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), or order, or to the Agent's assignee, the Principal (as defined below), all accrued and unpaid interest at the Interest Rate (as defined below), and all other amounts, charges and fees (including, without limitation, reasonable attorneys' fees, court costs and expenses), in lawful money of the United States, in accordance with and subject to the terms, covenants and conditions ofthis Auto Center Property and Business Improvement District Revenues Promissory Note (the "Note"). I. Definitions. The initially capitalized terms defined herein shall have the following meanings where appearing in this Note. Annual Assessments Pavment. The "Annual Assessments Payment" shall mean the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the real estate tax assessor for the County of San Bernardino, State of California (the "Tax Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's Proportionate Annual Assessments Payment for each Fiscal Year for a period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372, together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (I) lump sum on or before December 10 of each Fiscal Year, but before the last day on which each payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years, or (ii) in two equal payments of $121 ,837 each, on or before December 10 and April 10, of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years. Annual Assessments Revenues. The "Annual Assessments Revenues" shall be each PBID Owner's Proportionate Annual Assessments Payment paid, or to be paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years. Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or interest assessed I P.\AgendaslAgenda Attachments\Exhibits\1009\04-06-09 PBID Fonnation - Promissory Note (Exhibit A) (Final)doc FOURTH DRAFT - 03-30-09 by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion thereof. Each PBID Owner's Proportionate Annual Assessments Payment shall be paid by the PBID Owner to the Tax Assessor in one (1) lump sum or in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including Fiscal Year 2013/2014. Annual Assessments. Each PBID Owner's Proportionate Annual Assessments Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's special benefit received from the identified services and activities by the Borrower on behalf of the PBID and their relative cost. These Annual Assessments are assessments for the services and activities which confer special benefits upon the real property owned by the PBID Owners in the PBID for which the services and activities are provided. The Annual Assessments are based upon the estimated expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership real property located at S Show Case Drive, San Bernardino, California, APN Number 0141-251-55, owned by Clifford R. Cummings and Barbara B. Cummings (collectively, the "Cummings"), (ii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141-251- 59, owned by the Cummings, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Scion Dealership real property located at 650 Auto Center Drive, San Bernardino, California, APN Number 0141-251-61, owned by the Cummings, (iv) $52,380 for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the MitsubishilMazda Dealership real property located at 645 Auto Center Drive, San Bernardino, California, APN Number 0141-251-60 owned by TTL, LLC, a California limited liability company, and (v) $104,644 for each Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Nissan Dealership real property located at 735 Show Case Dr S, San Bernardino, California, APN Number 0141-251-74 owned by D.T.M. Land Company, LLC, a California limited liability company. Each PBID Owner's Proportionate Annual Assessments Payment amount will appear as a line item on its annual San Bernardino County real property tax bills. Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a California non-profit mutual benefit corporation, organized under the laws of the State of California, acting for and on behalf of the PBID. The Borrower will run the day-to-day operations of the PBID and will, without limitation, annually review the PBID budgets and file annual reports with the Agency. City. The "City" shall mean the City of San Bernardino. 2 P:lAgendas\Agenda Attachments\Exhibits\2009\04-06-09 PBID Fonnation _ Promissory Note (Exhibit A) (Final).doc FOURTH DRAFT - 03-30-09 County. The "County" shall mean San Bernardino County. First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year of the County. Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For purposes of this Note, the First Fiscal Year shall mean the 2009/2010 Fiscal Year for the County. The PBID Owners shall pay the PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual Assessments Payment to be paid by the PBID Owners to the Tax Assessor through the 201312014 Fiscal Year, unless the PBID is terminated by the PBID Owners prior to the Maturity Date of this Note. Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax Assessor, and all other fees, charges, sums and amounts (including, without limitation, all attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that have been paid by the PBID Owners to the Tax Assessor, in the manner and subject to the terms, covenants and conditions of this Note. Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and conditions of the Note. Late Chan!:e. The "Late Charge" shall mean zero percent (0%) on the payment due and owing by the PBID to the Agency under this Note, subject to any applicable cure period(s) in this Note. Maturitv Date. The "Maturity Date" shall mean April 15,2014. PHID. The "PBID" shall mean the Auto Center Property and Business Improvement District. The PBID is designed to improve and convey special benefits to the PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the PBID, will provide new services and activities, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and shall expire on April 15" 2014, unless sooner terminated or extended by the PBID Owners. PHID Loan. The "PBID Loan" shall mean the loan made by the Agency to the Borrower for and on behalf of the PBID in an amount not to exceed the Principal. The Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The Loan can be disbursed to the Borrower in one (I) or more advances with the last advance to be made by the Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a revolving loan 3 PlAgendaslAgenda Attachmenls\Exhibils\2009\04-06-09 PSID Fonnation - Promissory Note (Exhibit A) (Final) doc FOURTH DRAFT - 03-30-09 and any amount of the Loan repaid by the Borrower shall not be reborrowed by the Borrower from the Agency. The PBID Loan is evidenced by this Note and the Borrower shall cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or anyone of them, the principal amount disbursed by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums due and payable under this Note. The PBID Loan shall be paid by the Tax Assessor to the Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the Tax Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms, covenants and conditions of this Note. PBID Owners. The "PBID Owners" shall collectively mean the following owners of the improved real property and auto dealerships located within the PBID: (i) the Cummings who own the Toyota Dealership in City of San Bernardino, County of San Bernardino, State of California, APN Numbers 0141-251-55 and 0141-251-59, (ii) the Cummings who own the Scion Dealership in the City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-61, (iii) D.T.M. Land Company, LLC, a California limited liability company, who owns the Nissan Dealership in the City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-74, and (iv) TTL, LLC, a California limited liability company, who owns the land in the City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-60 where the Mitsubishi and Mazda Dealership are located. The Mitsubishi dealership and the Mazda dealership are owned by Southern Automotive Marketing, Inc., a California corporation. PBID Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual Assessments Payment to be paid by a PBID Owner to the Tax Assessor for each Fiscal Year. Principal. The "Principal" shall mean one (I) or more advances made by the Agency to the Borrower during the Term of the Note in a principal amount not to exceed $1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower will have no right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the Agency. State. The "State" means the State of California. Term. The 'Term" shall mean the term of this Note commencing on the date of the execution of this Note and continuing thereafter until the Maturity Date, subject to the terms, covenants and conditions of this Note. 2. Interest. Commencing on the date of this Note, interest shall accrue at the Interest Rate on the outstanding Principal of this Note until the Maturity Date or the date that the Indebtedness is paid in full by under this Note to the Agency, whichever occurs last. Interest shall be computed based on a 365/366 day year and the actual number of days elapsed. 4 P:lAgendas\Agenda Attachments\Exhibiu\2009\04-06_09 PBID Formation - Promissory NOle (Exhibit A) (Final) doc FOURTH DRAFT - 03-30-09 3. Payment ofthe Indebtedness. (a) The Indebtedness shall be paid by the Tax Assessor to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBIO Owners, or any one of them, during each Fiscal Year, beginning with the 2009/20 I 0 Fiscal Year and annually thereafter through and including the 2013/2014 Fiscal Year. (b) Within thirty (30) calendar days from receipt by the Tax Assessor of one (I) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments Revenues in the amount of $243,674, or any lesser amount thereof, the Tax Assessor shall pay to the Agency such Annual Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. ( c) Within thirty (30) calendar days from receipt by the Tax Assessor of an installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of $121,837 each, or any lesser amount thereof, the Tax Assessor shall pay to the Agency each such installment, or any lesser amount, collected by the Tax Assessor from the PBIO Owners, or any one of them, for that Fiscal Year. (d) For the Term of this Promissory Note, within thirty (30) calendar days from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the PBIO Owners, or anyone of them, together with late fees and interest assessed by the Tax Assessor. (e) The Indebtedness shall be paid in accordance with this Note to the Agency at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as is designated by the Agency in a notice to the Borrower given as provided for in this Note. 4. Representations and Warranties. The Borrower represents and warrants to the Agency that: (i) the Borrower is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, and has all requisite power and authority to execute, deliver and perform its obligations under this Note, (ii) the execution, delivery and performance by the Borrower of this Note has been duly authorized by all necessary action of the Borrower and does not and will not (A) contravene the terms of the articles or certificate of incorporation, or bylaws, or other applicable organizational documents, of the Borrower, or result in a breach of or constitute a default under any material lease, instrument, contract or other agreement to which the Borrower is a party or by which it or its properties may be bound or affected; or violate any provision of any law, rule, regulation, order, judgment, decree or the like binding on or affecting the Borrower, (iii) this Note is the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their terms, and (iv) to the best of the Borrower's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted by or is available to the Borrower against the Agency. 5 P:\AgendasIAgenda AttachmentslExhibits\2009\04-06-09 PBID Formalion - Promissory Note (Exhibit A) (Final) doc FOURTH DRAFT - 03-30-09 5. Prepayment. This Note may be prepaid by the Borrower, at any time, in whole or in part, without premium or penalty, as long as any principal prepayment is accompanied by a payment of interest accrued to the date of prepayment on the amount prepaid, if any, and any and all late charges or other amounts then owed by the Borrower hereunder, if any. 6. Application of Payments. Each payment under this Note shall be credited first to: (i) any late charges and interest thereon, (ii) all accrued and unpaid interest, if any, and then to (iii) Principal then due and payable under this Note. 7. Conditions Precedent. The Agency shall have no duty or obligation to execute, deliver or perform under this Note until all conditions precedent provided for in this Note have been fully performed and satisfied by or for the Borrower (or have been expressly waived in writing by the Agency). 8. Notice. Any notice required to be provided in this Note shall be given in writing and shall be sent (i) for personal delivery by a delivery service that provides a record of the date of delivery, the individual to whom delivery was made, and the address where delivery was made; (ii) by first-class certified United States mail, postage prepaid, return receipt requested; or (iii) by a nationally recognized overnight courier service, marked for next day business delivery. All notices shall be addressed to the party to whom such notice is to be given at the address stated below or to such other address as a party may designate by written notice to the other. All notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of delivery; (c) if sent by certified mail, the second day on which regular United States mail delivery service is provided after the day of mailing or, if sent by overnight delivery service, on the next day on which such service makes next-business day deliveries after the day of sending. The address for the Borrower and for the Agency shall be as follows, subject to any written notice of a change of address by one party to the other: Address For the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attention: Interim Executive Director Telephone: (909) 663-1044 Fax: (909) 888-9413 With a copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Attention: Timothy 1. Sabo Telephone: (909) 387-1130 Fax: (909) 387-1138 6 P\AgendaslAgenda AttachmentslExhibitsI2009\04-06-09 PBID Fonnation _ Promissory Note (Exhibit A) (Final),doc FOURTH DRAFT - 03-30-09 Address For Borrower: San Bernardino Auto Center 10832 C Lemon Drive PMB 120 Yorba Linda, California 92886 Attention: Cathleen McCarthy Telephone: (714) 878-4848 9. Default. Subject to Section 7 of this Note, and any applicable cure period(s) provided for in this Note, a default shall occur whenever the Borrower (a) fails to pay to the Agency any sum due under this Note when it becomes due and payable, (b) breaches any other covenant, promise or obligation in this Note or any other instrument, document and/or agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in connection with, the transaction contemplated in this Note, (c) has made a representation or warranty to the Agency that is or becomes false, (d) the Agency is not timely paid from the Tax Assessor the Annual Assessments Payments collected by the Tax Assessor from the PBID Owners, or anyone of them, (e) one or more of the PBro Owner's fails to pay to the Tax Assessor its PBro Owner's Proportionate Annual Assessments Payment, or any portion thereof; or (f) the PBro is terminated (collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option, declare the Indebtedness under this Note to be immediately due and payable, regardless of the Maturity Date, subject any cure periods provided for in this Note, if any (collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to the Agency the Default Payment Amount from the Annual Assessments Revenues collected from the PBro Owners, or anyone of them. 10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or personal property of any nature whatsoever. The Indebtedness under this Note shall be paid by the Tax Assessor only from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or anyone of them. 11. Modification. This Note may not be modified, amended, waived or extended, changed, discharged or terminated orally or by any act on the part of the Agency or of the Borrower, but only by an agreement in writing signed by the Agency and the Borrower. 12. Headinl!s. The headings of this Note are for purposes of reference only and shall not limit or otherwise affect the meaning thereof. 13. Interoretation. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or entity may in the context require. 14. Governinl! Law. This Note shall be governed by and construed in accordance with the laws of the State of California. 15. No Waiver: Cumulative Remedies. No failure on the part of the Agency to exercise, and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other 7 P:\AgendasIAgenda AtlachmentslExhibits\2009\04.06-09 PBID Fonnation - Promissory Note (Exhibit A) (Final) doc FOURTH DRAFT - 03-30-09 right, remedy, power or privilege. The rights and remedies under this Note are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Agency under this Note, at law or in equity. 16. Entire Al!:reement. This Note contains the entire agreement of the Borrower with respect to the subject matter hereof. 17. Severability. Whenever possible, each provision of this Note shall be interpreted in such marmer as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Note shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Note, or the validity or effectiveness of such provision in any other jurisdiction. 18. Judicial Proceedinl!:s and Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Note, then as between the Agency and the Borrower, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City Attorney for the City and members of his office in enforcing this Note shall be considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State of California. 19. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Agency in the enforcement of this Note shall be added to the amounts due under this Note. 20. Assil!:nment. This Note may be assigned by the Agency but not by the Borrower, without the prior written consent of the Agency which consent may be given or withheld by the Agency in it sole and absolute discretion. No consented to assignment by the Borrower shall relieve the Borrower from any of its obligations or liabilities hereunder. The terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the successors and assigns of Agency and the Borrower. END OF PAGE 8 P:\Agendas\Agenda Attachmenls\Exhibits\2009\04-06-09 PBID Formation _ Promissory Note (Exhibit A) (Final),doc FOURTH DRAFT - 03-30-09 IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and Business Improvement District Revenues Promissory Note as of the date first written above. BORROWER San Bernardino Auto Center, a California non-profit mutual benefit corporation By: Name: Title: 9 P:lAgendas\Agenda Attachments\Exhibils\1009\04-06-09 PBID formation - Promissory Note (Exhibit A) (Final) doc AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICATION AGREEMENT THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICA nON AGREEMENT (this "Agreement"), dated as of ,2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B. Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a California limited liability company (the "TTL"), the owners of the land where the Mitsubishi/Mazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below) (the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and may collectively be referred to as the "Parties." RECITALS WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion Dealership, TTL, as owner ofthe land, buildings and improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California, and DTM, as owner of the Nissan Dealership need funds for marketing, public security and safety and enhanced maintenance purposes in connection with the operation of each automobile dealership all of which are located in the City of San Bernardino, County of San Bernardino, State of California. Southern Automotive Marketing, a California corporation ("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and TTL owns the land, buildings and improvements in connection with the Mitsubishi/Mazda Dealership. WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined below), with the assistance and cooperation of the Agency and the City. WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds from the PBID Loan to perform and to provide the PBID Services (as defined below) to the PBID Owners. WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing Assessor (as defined below) from the Annual Assessments Payments (as defined below) collected by the Taxing Assessor from the PBID Owners. P:\Agendas\Agenda Attachments\Agenda Attachmcllts\Agenda Altachmcots\Agrmts-Amend 2009\04-06--09 PBm Formation - Waiver & Indemnification Agreement (Final),doc WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as defined below) to the Taxing Authority in the manner provided for in this Agreement. WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor. WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III accordance with terms, covenants and conditions of the Note and of this Agreement. WHEREAS, the PBID Owners understand that the Agency and the City shall have no liability or obligation in connection with the following: (i) the creation, the existence, rejection, the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the City for the benefit of the PBID Owners, or anyone of them. NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID Owners and the Agency agree as follows: I. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section 1. 2. Definitions. The initially capitalized terms defined herein shall have the meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this Agreement. If one or more initially capitalized terms in this Agreement are not defined in the preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially capitalized term or terms shall have the meaning provided for in the Note. Annual Assessments Payment. The "Annual Assessments Payment" shall mean the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the real estate tax assessor for the County of San Bernardino, State of California (the "Tax Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372, together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which each payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December 10 and April I 0, of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years. 2 P:\Agendas\Agenda Attachmerrts\Agenda Attachments\Agenda Anachments\AgTmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final)doc Annual Assessments Revenues. The "Annual Assessments Revenues" shall collectively mean each PBID Owner's Proportionate Annual Assessments Payment paid, or to be paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years. Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (I) lump sum or in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including Fiscal Year 2013/2014. Annual Assessments. Each PBID Owner's Proportionate Annual Assessments Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's special benefit received from the identified services and activities performed and provided by the Borrower on behalf of the PBID and their relative cost. These Annual Assessments are assessments for the services and activities performed and provided by the Borrower which confer special benefits upon the real property owned by the PBID Owners in the PBID for which the services and activities are provided. The Annual Assessments are based upon the estimated expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at S Show Case Drive, San Bernardino, California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141- 251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380 for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual Assessments Payment amount will appear as a line item on its annual San Bernardino County real property tax bills. Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a California non-profit mutual benefit corporation, organized under the laws of the State of California, acting for and on behalf of the PBID. The Borrower will run the day-to-day operations of the PBID and will, without limitation, annually review the PBID budgets and file 3 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Ameod 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final) doc annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in accordance with the Note. The Borrower shall be controlled by the PBID Owners until the Indebtedness is paid in full to the Agency from the Taxing Assessor. City. The "City" shall mean the City of San Bernardino. County. The "County" shall mean San Bernardino County. Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or any portion thereof, and/or by the underlying real property, or any part thereof or interest therein, in which the Cummings own a fee simple interest or have an interest therein, as amended from time to time. DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter made by a lender to DTM or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan shall also include, without limitation, any loan secured, in whole or in part, by the Nissan Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended from time to time. First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year of the County. Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal Year for the County. Each PBID Owner shall pay its respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the 2013/2014 Fiscal Year, unless the PBID is terminated by the PBID Owners prior to the Maturity Date of the Note. Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax Assessor, and all other fees, charges, sums and amounts (including, without limitation, all attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that have been paid by the PBID Owners, and each of them, to the Tax Assessor, in the manner and subject to the terms, covenants and conditions of the Note and this Agreement. 4 P:\Agendas\Agenda AttaclunentslAgeooa AttachmentslAgenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation _ Waiver & Indemnification Agreement (Final).doc Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and conditions of the Note. Late Chare:e. The "Late Charge" shall mean zero percent (0%) on the payment due and owing by the Borrower to the Agency under the Note, subject to any applicable cure period(s) in the Note. Laws. The "Laws" shall mean all applicable federal, state, municipal and local laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in effect, as amended from time to time. Maturity Date. The "Maturity Date" shall mean April 15, 2014. MitsubishiIMazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San Bernardino, State of California and owned by Southern Automotive Marketing, together with vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land, buildings, improvements and personal property owned by TTL now or hereafter used in connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda franchise, whether owned by TTL and/or by Southern Automotive Marketing. Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 735 Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-74 owned by DTM, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the Nissan Dealership and the Nissan franchise. PBID. The "PBID" shall mean the Auto Center Property and Business Improvement District. The PBID is designed to improve and convey special benefits to the PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the PBID, will provide new services and activities, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners. PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The PBID Loan can be disbursed to the Borrower in one (1) or more advances with the last advance 5 P:\Agendasl.Agenda Attachments\Agenda Attaehments\Agenda AttachmentslAgrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final)_doc to be made by the Agency to the Borrower no later than April 15, 2013. The PBID Loan is not a revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by the Borrower from the Agency. The PBID Loan is evidenced by the Note and the Borrower shall cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or anyone of them, the principal amount disbursed by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums due and payable under the Note. The PBID Loan shall be paid by the Tax Assessor to the Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the Tax Assessor from the PBID Owners, or anyone of them, in the manner and subject to the terms, covenants and conditions of this Note. PBID Owners. The "PBID Owners" shall collectively mean the following owners of the improved real property and auto dealerships located within the PBID: (i) the Cummings who own the Toyota Dealership, (ii) the Cummings who own the Scion Dealership (iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California. PBID Owner's Proportionate Annual Assessments Payment. The PBID Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year. PBID Services. The "PBID Services" shall mean the new services and activities provided by the Borrower to and for the benefit off each PBID Owner in the PBID, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. Principal. The "Principal" shall mean one (I) or more advances made by the Agency to the Borrower during the Term of the Note in a principal amount not to exceed $1,218,372, in the aggregate. The PBID Loan is not a revolving loan and the Borrower has no right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the Agency. The Borrower shall pay the Indebtedness in accordance with the Note. Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory, equipment and all other personal property however designated, now or hereafter located at 650 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-61, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the operation of the Scion Dealership and of the Scion franchise. State. The "State" means the State of California. 6 PlAgendaslAgenda AttachmentslAgenda AttachmentslAgenda Attachments\Agrmts-Arnend 2009\04-06-09 PBID Formation _ Waiver & Indemnification Agreemelll (FinaJ).doc Term. The "Term" shall mean the term of the Note commencing on the date of the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms, covenants and conditions of the Note. Tovota Dealership. The Toyota Dealership shall mean the Toyota Dealership and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks, vehicles and all other personal property however designated now or hereafter located at S Show Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-59, including, without limitation, all real and personal property now and hereafter used in connection with or relating to the operation of the Toyota Dealership and/or of the Toyota franchise. TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL Loan shall also include, without limitation, any loan secured, in whole or in part, by the Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has an interest therein, as amended from time to time. 4. Representations, Warranties and Covenants. (a) Each PBID Owner represents, warrants and covenants to the Agency that: (i) it is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, or in the case of the Cummings are individuals who are competent and who have all requisite power and authority to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery and performance by such PBID Owner of this Agreement has been duly authorized by all necessary action of such PBID Owner and does not and will not (A) contravene the terms of the articles or certificate of incorporation, certificate of organization or bylaws, or other applicable organizational documents, of such PBID Owner, or result in a breach of or constitute a default under any material lease, deed of trust, mortgage, instrument, document, contract or other agreement to which such PBID Owner is a party or by which it or its properties may be bound or affected; or violate any provision of any Law or the like binding on or affecting such PBID Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBID Owner enforceable against each PBID Owner in accordance with its terms, (iv) to the best of the PBID Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted by or is available to the PBID Owners, or anyone of them, against the Agency or against the City, (v) the PBID Owners, and each of them, have requested the Agency and the City to assist the PBID Owners in the creation of the PBID, without the Agency or the City incurring any liability or obligation in connection with the filing, petitioning, creation, existence, administration, termination or expiration of the PBID, (vi) the PBID Owners, and each of them, have requested the Agency and the City to nominate and to appoint the Borrower to administer and to manage the PBID and to perform and to provide the PBID Services to the PBID Owners 7 P:\Agendas\Agenda Attachments\Agenda Attachmenls\Agenda AttlIchmenls\Agrmts-AmemI2009\04-.06_09 PBID Formation. Waiver & Indemnification Agreement (Final)_doc located within the PBID, without the Agency or the City incurring any liability or obligation in connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor in accordance with this Agreement and with the Note, (ix) the PBID Services to be performed and provided by the Borrower have not been performed or provided to any PBID Owner by the Agency, by the City, by the Borrower or by any other governmental authority, person or entity, (x) the creation of the PBID, the execution of the Note and/or of this Agreement and the performance by the Borrower of the PBID Services shall not constitute an event of default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each PBID Owner shall comply with all applicable Laws. (b) The Cummings represent, warrant and covenant to the Agency that: (i) the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and will continue to own in fee simple the underlying improved real property in connection with the Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the Cummings Loan and the Cummings will not be in default under the Cummings Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the Cummings Loan. (c) DTM represents, warrants and covenants to the Agency that: (i) DTM is the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in default under the DTM Loan and DTM will not be in default under the DTM Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the DTM Loan. (d) TTL represents, warrants and covenants to the Agency that: (i) Southern Automotive Marketing is the owner ofthe Mitsubishi/Mazda Dealership, (ii) TTL owns, and will continue to own in fee simple the underlying improved real property in connection with the MitsubishilMazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the TTL Loan. The representations and warranties made in this Agreement shall survive the execution, performance, expiration and early termination ofthis Agreement. 5. Payment of the Annual Assessments Payment. (a) Each PBID Owner shall timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by the PBID Owners. 8 P:\Agendas\Agenda Attachmenls\Agenda Attachments\Agenda Attacbments\Agrmls-Amend 2009\04-06_09 PBm Formation. Waiver & Indemnification Agreement (Final)_doc (b) Each PBro Owner shall timely pay its PBro Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by each PBro Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by such PBro Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBro Owner to the Tax Assessor without penalty or interest. (c) The PBro Owners, in the aggregate, shall pay to the Tax Assessor the Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with the First Fiscal Year and continuing annually thereafter through and including the 2013/2014 Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The PBro Owners shall pay the Annual Assessments Payment together with any late fees and interest assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of$121,837 each due and owing by the PBro Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by the PBro Owners to the Tax Assessor without penalty or interest. (d) The Indebtedness shall be paid by the Tax Assessor to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any one of them, during each Fiscal Year, beginning with the 2009/20 I 0 Fiscal Year and annually thereafter through and including the 2013/2014 Fiscal Year. (e) Within thirty (30) calendar days from receipt by the Tax Assessor of one (1) lump sum payment from the PBro Owners, or anyone of them, of the Annual Assessments Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. (f) Within thirty (30) calendar days from receipt by the Tax Assessor of an installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of $121,837 each, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone ofthem, for that Fiscal Year. (g) For the Term of the Promissory Note, within thirty (30) calendar days from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the 9 P:\Agendas\Agenda Anachments\Ageoda Attachments\Agenda Attachments\Agrrnts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax Assessor. (h) The Indebtedness shall be paid in accordance with this Note to the Agency at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as is designated by the Agency in a notice to the Borrower given as provided for in this Note. 6. Default. An event of default (a "Default") shall occur whenever: (i) one or more of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more of the PBID Owners breaches any other covenant, promise or obligation in this Agreement and/or in any other instrument, document and/or agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions contemplated in this Agreement, subject to any applicable cure period, (iii) has made a representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it (collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option, declare the Indebtedness under this Note to be immediately due and payable, regardless of the Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any (collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to the Agency the Default Payment Amount from the Annual Assessments Revenues collected from the PBID Owners, or anyone ofthem. 7. Remedies. Upon the occurrence of a Default under this Agreement, and in addition to any other remedies that the Agency and/or the City may have under this Agreement, at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without having any further liability or obligation to the PBID Owners, or to anyone of them, or to the Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy any default under this Agreement, or obtain any other remedy consistent with the purposes of this Agreement and allowed at law and in equity. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, located within the City of San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of California. In the event that any legal action is commenced by the Agency and/or by the City against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at the address provided for in Section 10 of this Agreement for each such PBID Owner, in the manner as required by the laws of the State of California. Unless a remedy is held to be exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative and in addition to any other remedies available to the Agency and/or to the City under this Agreement, at law or in equity. 8. Termination. The Agency and/or the City shall also have the right, but not the obligation, to terminate this Agreement immediately at any time, in the exercise of its sole 10 P:\Agendas\Agenda AttachrnentslAgcnda Altachments\Agenda Anachrnents\Agrmts-Amend 2009\04-06-09 PBlD Formation - Waiver & Indemnification Agreement (Final).doc discretion, upon written notice from the Agency and/or the City to each PBID Owner of such termination of this Agreement (the "Termination Notice Letter") at the address provided for in this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a later date for the effective date of the termination of this Agreement is provided for in the Termination Notice Letter. Upon the effective date of the termination of this Agreement, the Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of them, or to the Borrower. 9. Indemnification. Each PBID Owner hereby agrees to indemnify, defend, protect and hold harmless the Agency and the City from and against and all actions, causes of actions, claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees, penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional, of any kind or nature, in connection with, relating to, arising from the following: (i) any and all loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles, trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death of any person or persons resulting from the acts or omissions of any PBID Owner, of the Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor, by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any one of them, to pay to the Agency and/or to the City any monetary amounts due under this Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of this Agreement and/or the performance by the Borrower of this PBID Services is an event of default under the Cummings Loan, under the TTL Loan and/or under the DTM Loan (singularly, the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be liable to the Agency and/or to the City for any of the Claims which are caused by the sole negligence or willful acts or omissions of the Agency and/or of the City. This indemnification provision shall survive the execution, the delivery, the performance, the expiration and the termination of this Agreement. 11 P:\AgendaslAgenda AttachmentslAgenda AttachmentslAgenda AttachmentslAgrmts.Amend 2009\04-06-09 PBID Formation _ Waiver & Indemnification Agreement (Final)doc 10. General Provisions. 10.1 Authoritv. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. 10.2 Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the governing board for the Agency. 10.3 Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. lOA HeadiDl.!:s. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. 10.5 Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. 10.6 Entire Aereement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. 10.8 Successors and Assiens. This Agreement shall be binding on and inure to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees, spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners, of anyone of them, may not assign or delegate their right, title and interests in or obligations under this Agreement without the written consent of the Agency which consent shall not be unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and delegate its rights, title, interest and obligations in, to and under this Agreement without obtaining the prior consent of the PBID Owners, or anyone of them. 12 P:\Agendas\Agenda Attaclunenu\Agenda Attachmellts\Agenda Attachments\Agrmts-Arnend 2009\04-06-09 PBID Formation _ Waiver & Indemnification Agreement (Final)_do<; 10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver of that remedy. 10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. 10.11 Necessary Actions. Each Party agrees to execute and deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. 10.12 Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. 10.13 Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. 10.14 Third Party Beneficiaries. Except for the City, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions of this Agreement. 10.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. 10.16 Conflicts of Interest; No Individual Liabilitv. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the Agency shall be personally liable in the event of a breach of this Agreement by the Agency. 10.17 Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day 13 P:lAgendas\Agenda AttachmentslAgenda AttadunentslAgenda Anachments\Agrmts-Amend 2009\04-06-09 PSlD Formation - Waiver & Indemnification Agreement (Finaljdoc after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 663-2294 Attn: Interim Executive Director With a copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Phone: (909)-387-1137 Fax: (909) 387-1138 Attn: Timothy J. Sabo To the PBm Owners: Clifford R. Cummings Barbara B. Cummings 735 Show Case Drive N San Bernardino, California 92408 Phone: Fax: TTL, LLC 645 Auto Center Drive San Bernardino, California 92408 Phone: Fax: Attn: D.T.M. Land Company, LLC 735 Show Case Drive S San Bernardino, California 92408 Phone: Fax: Attn: 10.18 Broker. Each Party will defend, indemnify, and hold the other Party harmless from any claim, loss, or liability made or imposed by any other Party claiming a commission or fee in connection with this transaction and arising out of that Party's own conduct. 10.19 Cumulative Remedies. No failure on the part of the Agency to exercise, and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or 14 P:\Agendas\Agenda Attachments\Agenda Attll.clunenlslAgenda Attachmenls\Agrmts-Amend 2009\04-{)6-09 pem Formation - Waiver & Indemnification Agreement (Final).doc privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Agency under this Agreement, at law or in equity. 10.20 Governinl!: Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. 15 P:\Agendll.S\Agenrla Attachrnents\Agenda Attachmcnts\Agenda Attachments'Agrmts-Amend 2009\04.06--09 PBID Formation.. Waiver & Indemnification Agreement (Final).do<: IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and Business Improvement District Waiver and Indemnification Agreement as of the date first written above. AGENCY San Bernardino Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Date: Emil A. Marzullo, Interim Executive Director Approved As To Form and Content By: ~YiL Agency o~~el PBm OWNERS By: Clifford R. Cummings, a married man By: Barbara B. Cummings, a married woman TTL, LLC, a California limited liability company By: Name: Title: D.T.M. Land Company, LLC, a California limited liability company By: Name: Title: 16 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Fonnation - Waiver & Indemnification Agreement (Final) doc AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICATION AGREEMENT THIS AUTO CENTER PROPERTY AND BUSINESS IMPROVEMENT DISTRICT WAIVER AND INDEMNIFICA nON AGREEMENT (this "Agreement"), dated as of , 2009, is entered into by and between Clifford R. Cummings, a married man, and Barbara B. Cummings, a married woman (collectively, the "Cummings"), the owners of the Toyota Dealership (as defined below) and the Scion Dealership (as defined below), TTL, LLC, a California limited liability company (the "TTL"), the owners of the land where the MitsubishiIMazda Dealership (as defined below), and D.T.M. Land Company, LLC, a California limited liability company (the "DTM"), the owners of the Nissan Dealership (as defined below) (the Cummings, TTL and DTM shall singularly be referred to as a "PBID Owner" and shall collectively be referred to as the "PBID Owners") and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"). In this Agreement, the Agency or the PBID Owners, or anyone of them, may singularly be referred to as a "Party" and may collectively be referred to as the "Parties." RECITALS WHEREAS, the Cummings, as owner of the Toyota Dealership and of the Scion Dealership, TTL, as owner of the land, buildings and improvements where the MitsubishilMazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California, and DTM, as owner of the Nissan Dealership need funds for marketing, public security and safety and enhanced maintenance purposes in connection with the operation of each automobile dealership all of which are located in the City of San Bernardino, County of San Bernardino, State of California. Southern Automotive Marketing, a California corporation ("Southern Automotive Marketing") owns and operates the Mitsubishi/Mazda Dealership and TTL owns the land, buildings and improvements in connection with the MitsubishilMazda Dealership. WHEREAS, the PBID Owners (as defined below) desire to create the PBID (as defined below), with the assistance and cooperation of the Agency and the City. WHEREAS, the PBID Owners intend the Borrower (as defined below) to manage and to administer the day-to-day business operations and affairs of the PBID for the benefit of the PBID Owners, to obtain the PBID Loan (as defined below) from the Agency, and to use the proceeds from the PBID Loan to perform and to provide the PBID Services (as defined below) to the PBID Owners. WHEREAS, the Borrower shall at all times be controlled by the PBID Owners, and each of them, until the Indebtedness (as defined below) has been paid to the Agency by the Taxing Assessor (as defined below) from the Annual Assessments Payments (as defined below) collected by the Taxing Assessor from the PBID Owners. I P:lAgendas\Agendll Attachments\Agenda Attachments\Agcnda AuachmentslAgnnts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final),doc WHEREAS, the PBID Owners agree to pay each Annual Assessments Payment (as defined below) to the Taxing Authority in the manner provided for in this Agreement. WHEREAS, the Indebtedness under the Note (as defined below) shall be repaid only from the Annual Assessments Payments paid by the PBID Owners to the Taxing Assessor. WHEREAS, the Agency is willing to make the PBID Loan to the Borrower III accordance with terms, covenants and conditions of the Note and of this Agreement. WHEREAS, the PBID Owners understand that the Agency and the City shall have no liability or obligation in connection with the following: (i) the creation, the existence, rejection, the administration, the maintenance, the expiration and/or the termination of the PBID; (ii) the PBID, or (iii) the performance of the PBID Services by the Borrower, by the Agency or by the City for the benefit of the PBID Owners, or anyone ofthem. NOW THEREFORE, in consideration of the foregoing Recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the PBID Owners and the Agency agree as follows: I. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section I. 2. Definitions. The initially capitalized terms defined herein shall have the meanings provided for in the preamble of this Agreement, in the Recitals or in Section 2 of this Agreement. If one or more initially capitalized terms in this Agreement are not defined in the preamble to this Agreement, in the Recitals or in Section 2 of this Agreement, the initially capitalized term or terms shall have the meaning provided for in the Note. Annual Assessments Payment. The "Annual Assessments Payment" shall mean the amount of $243,674, in the aggregate, together with any late fees or interest assessed by the real estate tax assessor for the County of San Bernardino, State of California (the "Tax Assessor") to be paid by the PBID Owners from each of their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for each Fiscal Year for a period of five (5) consecutive Fiscal Years, in the aggregate amount not to exceed $1,218,372, together with any late fees or interest assessed by the Tax Assessor. The PBID Owners shall timely pay their respective PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, as follows: (i) in one (I) lump sum on or before December 10 of each Fiscal Year, but before the last day on which each payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years, or (ii) in two equal payments of$121,837 each, on or before December 10 and April 1 0, of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest, for a period of five (5) consecutive Fiscal Years. 2 P:\Agendas'lAgenda Attachments\Agenda Attachments\Agenda A!tlIchments\AgTrnts-Amend 2009\04-06-09 paID Formation - Waiver & Indemnification Agreement (Final) doc ( Annual Assessments Revenues. The "Annual Assessments Revenues" shall collectively mean each PBID Owner's Proportionate Annual Assessments Payment paid, or to be paid, to the Tax Assessor, each Fiscal Year for a period of five (5) consecutive Fiscal Years. Each Annual Assessments Revenues paid by the PBID Owners to the Tax Assessor shall be in the amount of $243,674, together with any late fees or interest assessed by the Tax Assessor, for each Fiscal Year and in the aggregate amount of $1,218,372, together with any late fees or interest assessed by the Tax Assessor, for five (5) consecutive Fiscal Years. The Annual Assessments Revenues collected by the Tax Assessor, and no other taxes, assessments, revenues or amounts, shall be used to pay to the Agency the Annual Assessments Payment, or any portion thereof, in accordance with the Note. Each PBID Owner's Proportionate Annual Assessments Payment shall be paid by the respective PBID Owner to the Tax Assessor in one (I) lump sum or in two (2) equal installments commencing with the 2009/2010 Fiscal Year through and including Fiscal Year 2013/2014. Annual Assessments. Each PBID Owner's Proportionate Annual Assessments Payment is calculated by the City and/or by the Tax Assessor based upon each PBID Owner's special benefit received from the identified services and activities performed and provided by the Borrower on behalf of the PBID and their relative cost. These Annual Assessments are assessments for the services and activities performed and provided by the Borrower which confer special benefits upon the real property owned by the PBID Owners in the PBID for which the services and activities are provided. The Annual Assessments are based upon the estimated expenses the PBID Owners in the PBID will pay for these services. Each PBID Owner's Proportionate Annual Assessments Payment in the PBID is as follows: (i) $17,330 for each Fiscal Year, in the aggregate amount not to exceed $86,650 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at S Show Case Drive, San Bernardino, California, APN Number 0141-251-55, (ii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Toyota Dealership and the underlying real property located at 735 Show Case Dr N, San Bernardino, California, APN Number 0141- 251-59, (iii) $34,660 for each Fiscal Year, in the aggregate amount not to exceed $173,301 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Scion Dealership and the underlying real property, (iv) $52,380 for each Fiscal Year, in the aggregate amount not to exceed $261,898 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Mitsubishi/Mazda Dealership and the underlying real property, and (v) $104,644 for each Fiscal Year, in the aggregate amount not to exceed $523,222 for five (5) consecutive Fiscal Years, together with late fees and interest charged by the Tax Assessor, assessed against the Nissan Dealership and the underlying real property. Each PBID Owner's Proportionate Annual Assessments Payment amount will appear as a line item on its annual San Bernardino County real property tax bills. Borrower. The "Borrower" shall mean the San Bernardino Auto Center, a California non-profit mutual benefit corporation, organized under the laws of the State of California, acting for and on behalf of the PBID. The Borrower will run the day-to-day operations of the PBID and will, without limitation, annually review the PBID budgets and file 3 P:\Agendas\Agenda AttachmentslAgenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation - Waiver & IndemnifiClltion Agreement (Final).doc annual reports with the Agency. The Borrower shall pay the Indebtedness to the Agency in accordance with the Note. The Borrower shall be controlled by the PBIO Owners until the Indebtedness is paid in full to the Agency from the Taxing Assessor. City. The "City" shall mean the City of San Bernardino. County. The "County" shall mean San Bernardino County. Cumminl!:s Loan. The "Cummings Loan" shall mean one or more loans now or hereafter made by a lender to the Cummings or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by the Cummings. The Cummings Loan shall also include, without limitation, any loan secured, in whole or in part, by the Toyota Dealership, or any portion thereof, by the Scion Dealership, or any portion thereof, and/or by the underlying real property, or any part thereof or interest therein, in which the Cummings own a fee simple interest or have an interest therein, as amended from time to time. DTM Loan. The "DTM Loan" shall mean one or more loans now or hereafter made by a lender to DTM or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by DTM. The DTM Loan shall also include, without limitation, any loan secured, in whole or in part, by the Nissan Dealership, or any part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which DTM owns a fee simple interest or has an interest therein, as amended from time to time. First Fiscal Year. The "First Fiscal Year" shall mean the 2009/2010 Fiscal Year ofthe County. Fiscal Year. The "Fiscal Year" shall mean a fiscal year for the County. For purposes of this Agreement and the Note, the First Fiscal Year shall mean the 2009/2010 Fiscal Year for the County. Each PBIO Owner shall pay its respective PBIO Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the 2009/2010 Fiscal Year and for a period of four (4) consecutive Fiscal Years thereafter with each such Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor through the 2013/2014 Fiscal Year, unless the PBIO is terminated by the PBIO Owners prior to the Maturity Date of the Note. Indebtedness. The "Indebtedness" shall mean the Principal, all accrued and unpaid interest at the Interest Rate, any and all late fees and interest assessed by the Tax Assessor, and all other fees, charges, sums and amounts (including, without limitation, all attorneys' fees, court costs and expenses) due and payable by the Borrower to the Agency under the Note. The Indebtedness shall be repaid only from the Annual Assessments Revenues that have been paid by the PBIO Owners, and each of them, to the Tax Assessor, in the manner and subject to the terms, covenants and conditions of the Note and this Agreement. 4 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation _ Waiver & Indemnification Agreement (Final),doc Interest Rate. The "Interest Rate" shall mean zero percent (0%) per annum and shall accrue on the outstanding principal balance of the Note subject to the terms, covenants and conditions of the Note. Late Chan!e. The "Late Charge" shall mean zero percent (0%) on the payment due and owing by the Borrower to the Agency under the Note, subject to any applicable cure period(s) in the Note. Laws. The "Laws" shall mean all applicable federal, state, municipal and local laws, statutes, codes, ordinances, regulations, rules, orders and judgments, now or hereafter in effect, as amended from time to time. Maturity Date. The "Maturity Date" shall mean April 15, 2014. Mitsubishi/Mazda Dealership. The "Mitsubishi/Mazda Dealership" shall mean the Mitsubishi/Mazda Dealership located in the City of San Bernardino, County of San Bernardino, State of California and owned by Southern Automotive Marketing, together with vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 645 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-60, owned by Southern Automotive Marketing. The Mitsubishi/Mazda Dealership shall also include, without limitation, all land, buildings, improvements and personal property owned by TTL now or hereafter used in connection with or relating to the Mitsubishi/Mazda Dealership and/or to the Mitsubishi/Mazda franchise, whether owned by TTL and/or by Southern Automotive Marketing. Nissan Dealership. The "Nissan Dealership" shall mean the Nissan Dealership and all real property, buildings, structures, fixtures, improvements, vehicles, trucks, equipment, inventory and all other personal property however designated, now or hereafter located at 735 Show Case Dr S, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-74 owned by DTM, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the Nissan Dealership and the Nissan franchise. PBID. The "PBID" shall mean the Auto Center Property and Business Improvement District. The PBID is designed to improve and convey special benefits to the PBID Owners within the PBID. The Borrower, for and on behalf of the PBID Owners in the PBID, will provide new services and activities, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBID Owners in the PBID. The PBID shall be created effective April 15, 2009 and shall expire on April 15, 2014, unless sooner terminated or extended by the PBID Owners. PBID Loan. The "PBID Loan" shall mean the loan made by the Agency to the Borrower for and on behalf of the PBID in a principal amount not to exceed the Principal. The Borrower shall use the PBID Loan proceeds to provide public security and safety, enhanced maintenance and marketing activities for the benefit only of the PBID Owners in the PBID. The PBID Loan can be disbursed to the Borrower in one (I) or more advances with the last advance 5 P:\Agendas\Agenda Attacbments\Agenda AttachmentslAgenda AttachmenlslAgnnls-Amend 2009\04-06-09 PBm Formation - Waiver & Indemnification Agreement (Final).doc to be made by the Agency to the Borrower no later than April 15, 2013. The PBm Loan is not a revolving loan and any amount of the Loan repaid by the Borrower shall not be reborrowed by the Borrower from the Agency. The PBm Loan is evidenced by the Note and the Borrower shall cause the Tax Assessor to pay to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBm Owners, or anyone of them, the principal amount disbursed by the Agency to the Borrower, any late fees or interest imposed or assessed by the Tax Assessor in connection with any delinquent PBID Owner's Annual Assessments Payment, any accrued and unpaid interest at the Interest Rate, if any, and any other fees, charges, amounts and/or sums due and payable under the Note. The PBm Loan shall be paid by the Tax Assessor to the Agency only from the Annual Assessments Revenues, or any portion thereof, collected by the Tax Assessor from the PBm Owners, or anyone of them, in the manner and subject to the terms, covenants and conditions of this Note. PBID Owners. The "PBm Owners" shall collectively mean the following owners of the improved real property and auto dealerships located within the PBm: (i) the Cununings who own the Toyota Dealership, (ii) the Cununings who own the Scion Dealership (iii) DTM who owns the Nissan Dealership, and (iv) TTL who owns the land, buildings and improvements where the Mitsubishi/Mazda Dealership is located in the City of San Bernardino, County of San Bernardino, State of California. PBID Owner's Proportionate Annual Assessments Payment. The PBm Owner's Proportionate Annual Assessments Payment shall mean that portion of the Annual Assessments Payment to be paid by each PBID Owner to the Tax Assessor for each Fiscal Year. PBID Services. The "PBm Services" shall mean the new services and activities provided by the Borrower to and for the benefit off each PBm Owner in the PBm, including, without limitation, public security and safety, enhanced maintenance and marketing activities not provided by the Agency or by the City to the PBm Owners in the PBm. Principal. The "Principal" shall mean one (1) or more advances made by the Agency to the Borrower during the Term of the Note in a principal amount not to exceed $1,218,372, in the aggregate. The PBm Loan is not a revolving loan and the Borrower has no right to reborrower any amount of the PBID Loan that has been repaid by the Borrower to the Agency. The Borrower shall pay the Indebtedness in accordance with the Note. Scion Dealership. The "Scion Dealership" shall mean the Scion Dealership and all real property, buildings, structures, improvements, fixtures, vehicles, trucks, inventory, equipment and all other personal property however designated, now or hereafter located at 650 Auto Center Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-61, including, without limitation, all real and personal property now or hereafter used in connection with or relating to the operation of the Scion Dealership and of the Scion franchise. State. The "State" means the State of California. 6 P:\Agendas\Agenda Attachments\Agenda AttllChrnents\Agenda AttachmentslAgrmts-Arnend 2009\04~06"{)9 PSID FormatiOll - Waiver & Indemnification Agreement (Final).doc Term. The 'Term" shall mean the term of the Note commencing on the date of the execution of the Note and continuing thereafter until the Maturity Date, subject to the terms, covenants and conditions of the Note. Tovota Dealership. The Toyota Dealership shall mean the Toyota Dealership and all real property, structures, buildings, improvements, fixtures, equipment, inventory, trucks, vehicles and all other personal property however designated now or hereafter located at S Show Case Drive, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-55, and located at 735 Show Case Dr N, City of San Bernardino, County of San Bernardino, State of California, APN Number 0141-251-59, including, without limitation, all real and personal property now and hereafter used in connection with or relating to the operation of the Toyota Dealership and/or of the Toyota franchise. TTL Loan. The "TTL Loan" shall mean one or more loans now or hereafter made by a lender to TTL, to Southern Automotive Marketing and/or to a corporation, partnership, limited liability company, association, trust, or to any other person or entity controlled, directly or indirectly, by TTL and/or by Southern Automotive Marketing. The TTL Loan shall also include, without limitation, any loan secured, in whole or in part, by the Mitsubishi/Mazda Dealership, or any portion or part thereof, and/or by the underlying real property, or any part thereof or interest therein, in which TTL owns a fee simple interest or has an interest therein, as amended from time to time. 4. Representations, Warranties and Covenants. (a) Each PBm Owner represents, warrants and covenants to the Agency that: (i) it is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, or in the case of the Cummings are individuals who are competent and who have all requisite power and authority to execute, deliver and perform the obligations under this Agreement, (ii) the execution, delivery and performance by such PBm Owner of this Agreement has been duly authorized by all necessary action of such PBID Owner and does not and will not (A) contravene the terms of the articles or certificate of incorporation, certificate of organization or bylaws, or other applicable organizational documents, of such PBID Owner, or result in a breach of or constitute a default under any material lease, deed of trust, mortgage, instrument, document, contract or other agreement to which such PBm Owner is a party or by which it or its properties may be bound or affected; or violate any provision of any Law or the like binding on or affecting such PBm Owner, (iii) this Agreement is the legal, valid and binding obligation of each PBm Owner enforceable against each PBm Owner in accordance with its terms, (iv) to the best of the PBm Owner's knowledge, there is no claim, defense, counterclaim or set-off which could be asserted by or is available to the PBm Owners, or anyone of them, against the Agency or against the City, (v) the PBm Owners, and each of them, have requested the Agency and the City to assist the PBm Owners in the creation of the PBm, without the Agency or the City incurring any liability or obligation in connection with the filing, petitioning, creation, existence, administration, termination or expiration of the PBm, (vi) the PBm Owners, and each of them, have requested the Agency and the City to nominate and to appoint the Borrower to administer and to manage the PBm and to perform and to provide the PBm Services to the PBm Owners 7 P:\Agendas\Agenda Attachmenls\Agenda Atlachmenu\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formalion - Waiver & Indemnification Agreement (Final).doc located within the PBID, without the Agency or the City incurring any liability or obligation in connection therewith, (vii) the PBID Owners control and manage the Borrower, (viii) each PBID Owner will timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor in accordance with this Agreement and with the Note, (ix) the PBm Services to be performed and provided by the Borrower have not been performed or provided to any PBID Owner by the Agency, by the City, by the Borrower or by any other governmental authority, person or entity, (x) the creation of the PBID, the execution of the Note and/or of this Agreement and the performance by the Borrower of the PBID Services shall not constitute an event of default under the Cummings Loan, under the TTL Loan or under the DTM Loan and (xi) each PBID Owner shall comply with all applicable Laws. (b) The Cummings represent, warrant and covenant to the Agency that: (i) the Cummings own the Toyota Dealership and the Scion Dealership, (ii) the Cummings own, and will continue to own in fee simple the underlying improved real property in connection with the Toyota Dealership and with the Scion Dealership, (iii) the Cummings are not in default under the Cummings Loan and the Cummings will not be in default under the Cummings Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the Cummings Loan. (c) DTM represents, warrants and covenants to the Agency that: (i) DTM is the owner of the Nissan Dealership, (ii) DTM owns, and will continue to own in fee simple the underlying improved real property in connection with the Nissan Dealership, (iii) DTM is not in default under the DTM Loan and DTM will not be in default under the DTM Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the DTM Loan. (d) TTL represents, warrants and covenants to the Agency that: (i) Southern Automotive Marketing is the owner of the Mitsubishi/Mazda Dealership, (ii) TTL owns, and will continue to own in fee simple the underlying improved real property in connection with the Mitsubishi/Mazda Dealership, (iii) TTL and/or Southern Automotive Marketing is not in default under the TTL Loan and TTL and/or Southern Automotive Marketing will not be in default under the TTL Loan while the Indebtedness remains unpaid, and (iv) the transactions contemplated by the Note and this Agreement do not violate, and will not constitute an event of default under, the TTL Loan. The representations and warranties made in this Agreement shall survive the execution, performance, expiration and early termination of this Agreement. 5. Payment of the Annual Assessments Payment. (a) Each PBID Owner shall timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor commencing with the First Fiscal Year and continuing annually thereafter through the 2013/2014 Fiscal Year, unless sooner terminated by the PBID Owners. 8 P:\Agellllas\Agenda Artachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06_09 paID Formation - Waiver & Indemnification Agreement (Final).doc (b) Each PBID Owner shall timely pay its PBID Owner's Proportionate Annual Assessments Payment to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by each PBID Owner to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of the PBID Owner's Proportionate Annual Assessments Payment due and owing by such PBID Owner for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by each respective PBID Owner to the Tax Assessor without penalty or interest. (c) The PBID Owners, in the aggregate, shall pay to the Tax Assessor the Annual Assessments Payment in the amount of $243,674 for each Fiscal Year commencing with the First Fiscal Year and continuing annually thereafter through and including the 2013/2014 Fiscal Year, together with any other late fees or interest assessed by the Tax Assessor. The PBID Owners shall pay the Annual Assessments Payment together with any late fees and interest assessed by the Tax Assessor to the Tax Assessor for five (5) consecutive Fiscal Years, commencing with the First Fiscal Year and annually thereafter through the 2013/2014 Fiscal Year, as follows: (i) in one (1) lump sum on or before December 10 of each Fiscal Year, but before the last day on which such payment may be paid by the PBID Owners to the Tax Assessor without penalty or interest, or (ii) in two (2) equal payments of$121,837 each due and owing by the PBID Owners for each Fiscal Year, on or before December 10 and April 10 of each Fiscal Year, but before the last day on which each payment may be paid by the PBID Owners to the Tax Assessor without penalty or interest. (d) The Indebtedness shall be paid by the Tax Assessor to the Agency from the Annual Assessments Revenues collected by the Tax Assessor from the PBID Owners, or any one of them, during each Fiscal Year, beginning with the 2009/2010 Fiscal Year and annually thereafter through and including the 2013/2014 Fiscal Year. (e) Within thirty (30) calendar days from receipt by the Tax Assessor of one (1) lump sum payment from the PBID Owners, or anyone of them, of the Annual Assessments Revenues in the amount of $243,674, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency such Annual Assessments Revenues, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. (1) Within thirty (30) calendar days from receipt by the Tax Assessor of an installment of such Annual Assessments Revenues for a given Fiscal Year in the amount of $121,837 each, or any lesser amount thereof, together with all late charges and interest assessed by the Tax Assessor, the Tax Assessor shall pay to the Agency each such installment, or any lesser amount, collected by the Tax Assessor from the PBID Owners, or anyone of them, for that Fiscal Year. (g) For the Term of the Promissory Note, within thirty (30) calendar days from the receipt by the Tax Assessor of any delinquent Annual Assessments Revenues, or any lesser amount, due and payable by one or more PBID Owners, the Tax Assessor shall pay to the Agency such delinquent Annual Assessments Revenues collected by the Tax Assessor from the 9 P:\Agendas\Agenda Attachrnents\Agendll Attachments\Ageooll Attachrnents\Agrmts-Amend 2009\04-06-09 PRID Formation - Waiver & Indemnification Agreement (Final)_doc PBID Owners, or anyone of them, together with late fees and interest assessed by the Tax Assessor. (h) The Indebtedness shall be paid in accordance with this Note to the Agency at 201 North "E" Street, Suite 301, San Bernardino, CA 92401-1507, or at such other address as is designated by the Agency in a notice to the Borrower given as provided for in this Note. 6. Default. An event of default (a "Default") shall occur whenever: (i) one or more of the PBID Owners fails to pay the PBID Owner's Proportionate Annual Assessments Payment to the Taxing Authority, or fails to pay any other sum, amount or payment, in accordance with and as required by this Agreement, subject to any applicable cure period, if any, (ii) one or more of the PBID Owners breaches any other covenant, promise or obligation in this Agreement and/or in any other instrument, document and/or agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating to, or in connection with, the transactions contemplated in this Agreement, subject to any applicable cure period, (iii) has made a representation or warranty to the Agency that is or becomes false or misleading, (iv) the Agency is not timely paid from the Tax Assessor the Annual Assessments Payment collected by the Tax Assessor from the PBID Owners, or anyone of them, (v) one of more of the PBID Owners is insolvent, fails to pay its debts as they come due, makes an assignment for the benefit of creditors, or files a bankruptcy proceeding, or has a bankruptcy proceeding filed against it (collectively, a "Default"). Upon the occurrence of a Default, the Agency may, at its option, declare the Indebtedness under this Note to be immediately due and payable, regardless of the Maturity Date, subject to any cure periods provided for in the Note and this Agreement, if any (collectively, the "Default Payment Amount"), and the Tax Assessor shall immediately pay to the Agency the Default Payment Amount from the Annual Assessments Revenues collected from the PBID Owners, or anyone of them. 7. Remedies. Upon the occurrence of a Default under this Agreement, and in addition to any other remedies that the Agency and/or the City may have under this Agreement, at law or in equity, the Agency and/or the City may: (i) terminate this Agreement, without having any further liability or obligation to the PBID Owners, or to anyone of them, or to the Borrower, (ii) the Agency and/or the City may institute legal action to cure, correct or remedy any default under this Agreement, or obtain any other remedy consistent with the purposes of this Agreement and allowed at law and in equity. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, located within the City of San Bernardino, or in the Federal District Court, Riverside Branch of the Central District of California. In the event that any legal action is commenced by the Agency and/or by the City against the PBID Owners, or anyone of them, service of process on the PBID Owners, or any one of them, shall be made by personal service upon the PBID Owners, or anyone of them, at the address provided for in Section 10 of this Agreement for each such PBID Owner, in the manner as required by the laws of the State of California. Unless a remedy is held to be exclusive in this Agreement, the remedies provided for in this Agreement shall be cumulative and in addition to any other remedies available to the Agency and/or to the City under this Agreement, at law or in equity. 8. Termination. The Agency and/or the City shall also have the right, but not the obligation, to terminate this Agreement immediately at any time, in the exercise of its sole 10 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final).doc discretion, upon written notice from the Agency and/or the City to each PBID Owner of such termination of this Agreement (the "Termination Notice Letter") at the address provided for in this Agreement for each PBID Owner. This Agreement shall immediately terminate unless a later date for the effective date of the termination of this Agreement is provided for in the Termination Notice Letter. Upon the effective date of the termination of this Agreement, the Agency and the City shall have no further duty or obligation to the PBID Owners, or anyone of them, or to the Borrower. 9. Indemnification. Each PBID Owner hereby agrees to indemnifY, defend, protect and hold harmless the Agency and the City from and against and all actions, causes of actions, claims, demands, damages, losses, liabilities, judgments, obligations, proceedings, suits, fees, penalties, fines, costs and expenses (including, without limitation, attorneys' fees, court costs and expert witness fees, now or hereafter existing, known or unknown, conditional or unconditional, of any kind or nature, in connection with, relating to, arising from the following: (i) any and all loss or destruction of or damage to the Toyota Dealership, to the Scion Dealership, to the Nissan Dealership, to the Mitsubishi/Mazda Dealership, to the PBID, or any portion thereof, to any buildings, structures, signs, improvements, fixtures, personal property, inventory, vehicles, trucks, equipment or any other personal property, of any nature whatsoever, now or hereafter located on or within the PBID, or in connection with this Agreement, (ii) any injuries to, or death of any person or persons resulting from the acts or omissions of any PBID Owner, of the Borrower, or of any agent, employee, contractor or subcontractor of any PBID Owner or of the Borrower, or of any other entity or individual, (iii) the acts or omissions of any PBID Owner, of the Borrower and/or of any other entity or individual under this Agreement, (iv) the failure by the PBID Owners, or anyone of them, to payor to remit to the Agency, upon written demand from the Agency to the PBID Owners, of all Annual Assessments Payments, or any portion thereof, that have been paid by the PBID Owners, or anyone of them, to the Tax Assessor, but which have wrongfully been delivered, received or returned by or on behalf of the Tax Assessor, by or on behalf of the City and/or by or on behalf of any other individual, entity or governmental authority, to the PBID Owners, or to anyone of them, or the failure by the PBID Owners, or any one of them, to pay to the Agency and/or to the City any monetary amounts due under this Agreement, including, without limitation, reasonable attorneys' fees, court costs and expert witness fees, (v) any representation or warranty made by any PBID Owner under this Agreement is or becomes false or is or becomes materially misleading when made or thereafter, (vi) the default by any PBID Owner or the Borrower under the Note and/or this Agreement, (vii) the failure by any PBID Owner or the Borrower to comply with all Laws in accordance with this Agreement, (viii) any claims that the creation of the PBID, the execution of the Note and/or of this Agreement and/or the performance by the Borrower of this PBID Services is an event of default under the Cununings Loan, under the TTL Loan and/or under the DTM Loan (singularly, the "Claim" and collectively, the "Claims"); provided, however, the PBID Owner shall not be liable to the Agency and/or to the City for any of the Claims which are caused by the sole negligence or willful acts or omissions of the Agency and/or of the City. This indemnification provision shall survive the execution, the delivery, the performance, the expiration and the termination of this Agreement. II P:lAgendaslAgenda AttachmentslAgenda AttachmentslAgenda Attachments\Agrmts-Arnend 2009\04-06-09 PSID Formation _ Waiver & lndemnification Agreement (Final),doc 10. General Provisions. 10.1 Authoritv. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. 10.2 Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the governing board for the Agency. 10.3 Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. 10.4 Headines. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. 10.5 Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and vice versa. 10.6 Entire Aereement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes any and all prior oral or written agreement, understanding or representation relating to the subject matter of this Agreement. 10.7 Partial Invaliditv. If, after the date of execution of this Agreement, any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable. 10.8 Successors and Assiens. This Agreement shall be binding on and inure to the benefit of the heirs, devisees, administrators, executors, personal representatives, trustees, spouses, successors and assigns of the respective Parties to this Agreement. The PBID Owners, of anyone of them, may not assign or delegate their right, title and interests in or obligations under this Agreement without the written consent of the Agency which consent shall not be unreasonably withheld, delayed or conditioned by the Agency. The Agency may assign and delegate its rights, title, interest and obligations in, to and under this Agreement without obtaining the prior consent of the PBID Owners, or anyone of them. 12 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation - Waiver & Indemnification Agreement (Final).doc 10.9 Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance to enforce one or more of the remedies provided in this Agreement shall not be deemed to be a waiver ofthat remedy. 10.10 Attornevs' Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. 10.11 Necessarv Actions. Each Party agrees to execute and deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. 10.12 Representations and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. 10.13 Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. 10.14 Third Pam Beneficiaries. Except for the City, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The City is not a party to this Agreement but the City shall have the right to enforce this Agreement in the event the Agency does not enforce the terms, covenants and/or conditions of this Agreement. 10.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. 10.16 Conflicts of Interest; No Individual Liabilitv. No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the Agency shall be personally liable in the event of a breach of this Agreement by the Agency. 10.17 Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on: (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the third (3rd) business day 13 P:\Agendlls\Agenda Attachments\Agenda Attachrnents\Agenda Attachments\Agrmts-Arnend 2009\04..06-09 PBID Fonnation _ Waiver & Indemnification Agreement (Final).doc after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows: To the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 663-2294 Attn: Interim Executive Director With a copy to: Lewis Brisbois Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Phone: (909)-387-1137 Fax: (909) 387-1138 Attn: Timothy J. Sabo To the PBID Owners: Clifford R. Cummings Barbara B. Cummings 735 Show Case Drive N San Bernardino, California 92408 Phone: Fax: TTL, LLC 645 Auto Center Drive San Bernardino, California 92408 Phone: Fax: Attn: D.T.M. Land Company, LLC 735 Show Case Drive S San Bernardino, California 92408 Phone: Fax: Attn: 10.18 Broker. Each Party will defend, indemnify, and hold the other Party harmless from any claim, loss, or liability made or imposed by any other Party claiming a commission or fee in connection with this transaction and arising out of that Party's own conduct. 10.19 Cumulative Remedies. No failure on the part of the Agency to exercise, and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or 14 P:\Agendas\Agenda Anachments\Agenda Attaclunellts\Agenda Attachments\Agrmts-Amend 2009\04.06-09 PBlD Formation _ Waiver & Indemnification Agreement (Final)_doc privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Agency under this Agreement, at law or in equity. 10.20 Governine Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. 15 P:lAgendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 paID Formation - Waiver & Indemnification Agreement (Final) doc IN WITNESS WHEREOF, the Borrower has executed this Auto Center Property and Business Improvement District Waiver and Indemnification Agreement as of the date first written above. AGENCY San Bernardino Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Emil A. Marzullo, Interim Executive Director Approved As To Form and Content By: \L~ Agency Couns PBID OWNERS By: Clifford R. Cummings, a married man By: Barbara B. Cummings, a married woman TTL, LLC, a California limited liability company By: Name: Title: D.T.M. Land Company, LLC, a California limited liability company By: Name: Title: 16 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2009\04-06-09 PBID Formation. Waiver & Indemnification Agreement (Final),doc