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HomeMy WebLinkAboutR1- Mayor's Office ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: Mayor's Office SUBJECT: ISUZU/SUZUKI AUTO DEALERSHIP DATE: September 19, 1995 ------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On July 10, 1995,the Community Development Commission continued this item until July 24, 1995. On July 24, 1995,the Community Development Commission authorized Agency staff,consultants and SKMG to continue developing the agreement and other necessary documents needed for the relocation of the Isuzu and Suzuki franchises,and to continue the matter until August 7, 1995. On August 7, 1995 the Community Development Commission continued this item until August 14, 1995. On August 14, 1995 the item was continued until August 21, 1995. On September 18, 1995 the item was continued until September 21, 1995. ------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission approve the Agency assistance in the form of a$500,000 rehabilitation loan guarantee and a$500,000 economic development loan from Main Street to Don Turpin Pontiac, all as described in the attached staff report on this subject dated September 20, 1995, and authorize the execution of all necessary documents. Mayor's Office ------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Barbara J.Lindseth/Lou Shepard Phone: 5081 Project Area(s): N/A Ward(s): N/A Supporting Data Attached: Staff Report; FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A ------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------ BJL:LS:Iag:08-14-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: _ R m =/ Res 9"5-'3 �/ 1/-01 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ------------------------------------------------------------------------------------------------------------------ Isuzu/Suzuki Auto Dealership BACKGROUND Agency staff received a proposal from Don Turpin Pontiac, d.b.a. Redlands Nissan(Turpin)to relocate the Isuzu and Suzuki dealerships into the San Bernardino Auto Plaza. They propose to take a ten(10) year lease of the former Friedlander Acura property which was built in 1988 and has been vacant since 1990. The portion of the San Bernardino Auto Center within which the Friedlander building is located is not within the City's Southeast Industrial Park Redevelopment Project Area but is within the redevelopment project area of the Inland Valley Development Agency (IVDA). The IVDA has approved in concept on June 22, 1995, granting the necessary redevelopment powers to the Agency to provide the requested financial assistance by the Agency to the Redlands Nissan dealership. The approval by the IVDA was conditioned upon the IVDA not incurring any financial liability or pledging any tax increment revenues of the IVDA to accomplish any assistance program within the San Bernardino Auto Center. IVDA has been requested to adopt a resolution formalizing its action of June 22, 1995, and adopted the necessary resolution on August 9, 1995. REQUEST FOR FINANCIAL ASSISTANCE Turpin has requested two (2) forms of financial assistance: 1. A$500,000 loan for rehabilitation of the Acura facilities, and 2. An additional $500,000 loan for economic development purposes. Amendments to the Community Redevelopment Law enacted in 1993 and effective in 1994 as a result of AB 1290 have placed additional limitations on the manner in which redevelopment agencies conduct business and provide financial incentives to projects. Although AB 1290 precludes the grant or loan of financial assistance to the development of new auto dealership facilities, the Friedlander building has previously been constructed and is presently blighted and in need of substantial rehabilitation. Assistance may be provided by the Agency under these circumstances for the rehabilitation of the Friedlander building either through the direct loan of the Agency for this purpose or through a guaranty of a loan from a commercial bank to the Redlands Nissan dealership. The Friedlander building requires approximately $500,000 of building improvements to make this building habitable and adequate for the relocation needs of the Isuzu and Suzuki franchises. ------------------------------------------------------------------------------------------------------------------ BJL:LS:lag:08-14-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: 1 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number-2- -------------------------------------------------------------------------------------------------------------------- The dealership has also requested an additional $500,000 of loan assistance in a form that would be (i) in compliance with the legal requirements of AB 1290 and (ii) available for expenditure by Turpin for the operations of the Isuzu/Suzuki vehicle lines during the start-up phase at the San Bernardino Auto Center. The Agency has retained the redevelopment and real estate consulting firm of Sedway, Kotin, Mouchly Group (SKMG)based upon prior Commission approval to assist legal counsel, consultants and staff in the structuring of the entire transaction for both compliance with AB 1290 and to render an opinion as to the risk, if any, to the Agency in undertaking the transaction as may finally be negotiated and structured between the Agency and Turpin. THE STRUCTURE OF LOAN ASSISTANCE A. Economic Development Loan SKMG has suggested the following loan structure for the economic development loan: I • Agency grants $500,000 to Main Street Development Corporation (MSDC) i • MSDC approves a$500,000 economic development loan to Turpin subject to conditions. • Revenue from the loan repayment is used for ordinary budget activities of MSDC reviewed and approved by the Commission through the customary annual budget process. A more complete description of the transactions follows: The Agency proposes to grant $500,000 to Main Street for purposes of economic development. Main Street will loan that money to Turpin which will move the Isuzu and Suzuki Auto Dealerships to the site of the former Friedlander Acura store in the San Bernardino Auto Plaza. ------------------------------------------------------------------------------------------------------------------ BJL:LS:lag:08-14-0Lcdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number-3- -------------------------------------------------------------------------------------------------------------------- Repayment of the loan is scheduled to be made by Turpin from the net income of the Isuzu/Suzuki dealership operations in accordance with a formula which allocates the first $20,000 per month toward the accumulation of Isuzu/Suzuki working capital. Thereafter, net income would all be used to repay the Main Street loan. After the accumulation of $1,000,000 in working capital, all available net income would be paid to Main Street until the loan has been paid off. Interest will be charged by MSDC for the loan at an interest rate equivalent to the interest rate paid by the Agency. Up to 50% of sales tax received by the City will be credited toward the payment of interest. Any difference between the interest accrued and the 50% sales tax credit will be paid in cash by Turpin within 90 days of the close of the Turpin final year (August 1 - July 31). Any amount of the 50% not applied to sales tax will be credited toward the loan principal outstanding. ' A definition of net income has been provided by the Agency's auditors -Rogers, Anderson, Malody and Scott. There will be a right to audit the dealership books. The use of the loan proceeds will be restricted to Isuzu and Suzuki and may not be used for Nissan. The use of the loan is restricted to the purchase of used cars for resale, parts inventory, equipment, furniture and fixtures, advertising and similar business expenses for the Isuzu and Suzuki operations. The purpose of the economic development loan is to increase employment in San Bernardino and to strengthen the employment base at the San Bernardino Auto Plaza. As a condition of this loan, Turpin will be required to employ a minimum of twenty-seven (27) new positions within ninety(90) days of opening and to maintain that twenty-seven (27) positions as an average level of employment at the Isuzu/Suzuki store during the period of time any loan funds are outstanding and unpaid to MSDC. Table 1 represents the probable employment list of positions that would be created as a result of this proposal. ------------------------------------------------------------------------------------------------------------------ BJL:LS:1ag:08-14-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: _ ECONOMIC DEVELOPMEN AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number-4- ------------------------------------------------------------------------------------------------------------------- TABLE 1 ISUZU/SUZUKI DEALERSHIP Employment List Job Classification Number of Positions Annual SalaEy Range Lot Person 2 $10,000 - $12,000 Sales Person 7 $9,600 - $18,000 Clerical 2 $19,000 - $24,000 Parts Person 3 $13,500 - $19,500 Service Writer 1 $30,000 - $34,000 Mechanic 4 $19,000 - $31,500 Managers 4 $45,000 - $56,000 Parts& Service Sales Finance Business Source: Dealer Note: The Dealer reports that this is the opening day employment list. An additional four positions ($16,000 to $36,000)would be employed upon opening of the body and paint shop. If a third car line is added to the dealership, employment could double. B. Rehabilitation Loan The Agency will guarantee a loan of$500,000 for rehabilitation of the Friedlander Acura facility in the San Bernardino Auto Plaza subject to the condition that Turpin provides a copy of the written consent of the property owner to the rehabilitation of the Acura facility. The loan guarantee will be for a repayment period not to exceed ten(10)years at terms and conditions approved by the Commission. The Agency's guarantee will be subject to termination earlier than ten(10)years provided that Turpin's cash flows and debt to equity ratio meet objective criteria established by the bank for underwriting the remaining principal amount of the loan. ------------------------------------------------------------------------------------------------------------------ BJL:LS:lag:08-14-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: _�_ ECONOMIC DEVELOPMEN 1 AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number -5- ---------------------------------------------------------------------------------------------------------------------- This loan will be repaid by Turpin to the bank at approximately $6,800 per month out of dealership operating expenses. LOAN SECURITY The proposal to assist in this project was initially structured to be financed by means of a CDBG Section 108 loan. Because of the delays inherent in that process, Turpin requested that it be accomplished through the Agency's conventional process. Scott Rodde of the National Development Council, consultant to the Agency, completed a detailed financial analysis of the credit history of both Don Turpin Pontiac and Rita Turpin's personal financial position. These analysis included a review of financial statements through May 31, 1995 and income tax returns for 1992, 1993 and 1994. Mr. Rodde's conclusion was: "The proposed financing presents the City with an opportunity to restart an auto retailing location which has been vacant for five years. Over the past twelve months the borrower has stopped its revenue slide and gained control of its expenses. The company's capital base has suffered but has been bolstered by owner injections of capital. The real property and business assets offered to the City to protect the City interest are substantial and potentially liquid. Finally, the landlord's commitment to the project is positive." Mr. Rodde recommended approval of the Section 108 financing which was not significantly different than this proposal. Both the MSDC loan and the rehabilitation loan guarantee will have the same security described as follows: 1. A uniform Commercial Code (UCC)Filing on Turpin. 2. The corporate guarantee of Don Turpin Pontiac. 3. The personal guarantee of Rita Turpin, sole owner of Don Turpin Pontiac. ------------------------------------------------------------------------------------------------------------------ BJL:LS:lag:08-14-0Lcdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: _� ECONOMIC DEVELOPMEN i. AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number -6- -------------------------------------------------------------------------------------------------------------------- Staff has confirmed by means of appraisals made of the real property owned by Rita Turpin and statements of account from the lenders for that property that there is an unencumbered collateral value of$455,333. In addition, staff has examined an IRS form 1065, Schedule K-1 Partner& Share of Income for commercial property listed in Ms. Turpin's personal financial statement and confirmed that there is substantial annual income from that property. Together these assets provide security in an amount greater than the $500,000 loan. Turpin has provided a letter from Michael L. Cox, CPA, placing a value of$1,744,500 upon the adjusted net worth of Redlands Nissan. This letter was reviewed by Donald L. Rogers, CPA, of the firm Rogers, Anderson, Malody& Scott, auditors for the Agency. Mr. Rogers is agreeable to this opinion of value provided that the loans from ownership are subordinated to the Agency's financing by means of an agreement prepared by Agency Counsel. PROJECTED SALES SKMG reviewed the business plan prepared by the dealer, analyzed the dealers projected volume and made a more conservative independent projection of volume. TABLE 2 1996 1997 1998 PROJECTIONS Dealer SKMG Dealer SKMG Dealer SKMG Isuzu 196 180 318 200 402 220 Suzuki 54 60 132 80 168 100 SUBTOTAL NEW UNITS 250 240 450 280 570 320 Used Cars 341 150 408 180 408 240 TOTAL UNITS 581 390 858 460 978 560 TOTAL SALES VOLUME $8,200,000 $6,150,000 $12,500,000 $7,000,000 $14,700,000 $8,300,000 ------------------------------------------------------------------------------------------------------------------ BJL:LS:1ag:08-14-0I.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: ECONOMIC DEVELOPMEI'r AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number-7- ---------------------------------------------------------------------------------------------------------------------- PROJECTED REVENUE TO THE CITY Based upon the above projected sales volumes, the sales tax revenues to the City have been calculated in the following table. Tax increment would go to IVDA with the twenty percent (20%)Housing Set-aside transferred to the Agency. SALES TAX PROJECTIONS 1996 1997 1998 Original Dealer Projection $82,000 $125,000 $147,000 SKMG Projection $61,000 $70,000 $83,000 Staff has had the opportunity to review these sales projections in more depth since the Commission meeting held August 14, 1995. As a result, staff believes that the earlier analysis of projected sales prepared by Turpin and confirmed by Scott Rodde for the proposed Section 108 financing to be more a reliable opinion because it included a more in depth analysis of all of the factors related to the proposed Isuzu/Suzuki dealerships. Mr. Rodde stated: "However, the company projects a clear ability to service its projected debt based on four factors. First, the San Bernardino location is a freeway auto mall where Isuzu and Suzuki will be the low price point franchises. This translates into a good location and a good product market fit. Second, the lease agreement with the landlord calls for rent of$10,000 per month. this represents a rental rate of approximately one half the market rate, fixed for 10 years. Third, the Isuzu and Suzuki franchises are significantly expanding their product lines. Isuzu's two vehicle line will be expanded by three vehicles to include the GM S-10 class pick up, a deluxe Trooper and a Honda van at a$5,000 discounted price. Suzuki plans to add a truck, a lower price and higher price car to its four vehicle line. The manufacturers reportedly predict that the combination of the auto center location and the expanded product line will push San Bernardino Isuzu/Suzuki to much higher sales levels. Finally, Ossko's experience in the used car business supports the sales levels for used vehicles." ------------------------------------------------------------------------------------------------------------------ BJL:LS:1ag:08-14-0Ledc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: _ ECONOMIC DEVELOPME1,_ AGENCY STAFF REPORT Isuzu/Suzuki Auto Dealership August 8, 1995 Page Number-8- ----------------------------------------------------------------------------------------------------------------------- Table 3 is a projection of the net revenue from the Isuzu/Suzuki dealerships based upon the conservative projections of the SKMG report. It projects a pay-off in the eighth year of operation. TABLE 3 PROJECTED PAY-OFF OF$500,000 MAIN STREET LOAN NET WORKING SALES TAX LOAN LOAN YEAR REVENUE CAPICI`AL CREDIT REPAYMENT BALANCE; 1 $(411,445) -0- -0- -0- $500,000 2 $116,316 $116,316 -0- -0- $500,000 3 $263,292 $240,000 $2,612 $23,292 $468,096 4 $286,823 $240,000 $18,150 $46,823 $403,123 5 $323,426 $240,000 $28,896 $83,426 $290,801 6 $364,944 $240,000 $41,014 $124,944 $124,843 7 $411,936 $240,000 $54,689 $70,154 -0- 'Projected from sales estimates of SKMG 'Distributions are based upon a proposed formula which allocates the first$20,000 of net income to a working capital fiord retained by Turpin and allocates all other net income to Main Street. RECOMMENDATION Staff recommends that the Commission approve the Agency assistance in the form of a$500,000 rehabilitation loan guarantee and a$500,000 economic development loan from Main Street to Don Turpin Pontiac, all as described in the attached staff report on this subject dated September 21, 1995, and direct staff and legal counsel to prepare the implementing agreements for execution. Mayor's Office ------------------------------------------------------------------------------------------------------------------ BJL:LS:1ag:08-14-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/20/1995 Agenda Item Number: L ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO MEMORANDUM ------------------------------------------------------------------------------------------------------------------ TO: Members of the Mayor and Common Council Board of Directors, Main Street FROM: TOM MINOR Mayor SUBJECT: ISUZU/SUZUKI AUTO DEALERSHIP DATE: September 21, 1995 cc: File ---------------------------------------------------------------------------------------------------------------------- BACKGROUND On September 20, 1995, the Community Development Commission approved certain actions related to the relocation of the Isuzu and Suzuki Dealerships to the San Bernardino Auto Plaza. Certain actions must be approved by the City Council and by the Board of Directors of Main Street to complete the formal process for implementation of the action taken in September 20, 1995. An additional implementation action is also needed to facilitate the transaction and clarify funding of the grant by the Agency to Main Street and the loan from Main Street to Don Turpin Pontiac (Turpin). The Main Street loan should not be made until the Rehabilitation loan has been funded by the bank and a Certificate of Occupancy has been issued by Building Inspection. This will enable the Agency to arrange for the Main Street grant. TOM MINOR, Mayor City of San Bernardino ------------------------------------------------------------------------------------------------------------------ LS:lmp:mem z , DQCUMENT DI TR1R»TFn -- VV ✓1- The Loan Agreement between Main Street and Don Turpin Pontiac (in back-up) 2. Promissory Note with personal guaranty by Rita Turpin (in back-up, information only) ✓3. Security Agreement between Don Turpin Pontiac and Main Street (in back-up) 4. UCC-1 (assets, inventory and equipment) (in back-up, information only) 5. UCC-1 (fixtures and franchise) (not in back-up, distributed separately, information only) Y ✓6. Assignment Agreement of lease from Don Turpin to Main Street (in back-up) ✓7. Grant Agreement between Agency and Main Street (in back-up) 8. Deed of Trust on Lake Arrowhead property (in back-up, information only) 9. Deed of Trust on Indian Wells property (in back up, information only) ✓10. Loan Guaranty Agreement whereby Agency guarantees Valley Bank loan to Don Turpin Pontiac (in back up) rp 11. Personal Guaranty Agreement whereby Rita Turpin guarantees Agency's Loan Guaranty (in back up, information only) 12. Guaranty Agreement whereby Don Turpin Pontiac guarantees Agenc 's Loa (in back up, information only) Y n Guaranty ✓13. Owners Participation Agreement (in back up) ✓14. Resolution of the Mayor and Common Council making findings (not in back up, distributed separately) ✓15. Resolution of the Community Development Commission making findings not up, distributed separately) g ( m back 16. Comparison of Previous Automobile Dealership Projects (not in back up, distributed separately, information only) 17• Copy of a letter from Tom Lauren, County Department of Economic and Community Development, dated September 15, 1995 (not in back-up, distributed separately, information only) COMPARISON. .tF n �0 AUTOMnRrr F TJFAI FRCUm PROiF('T4 ck er haw To ota 1991 1. Agency leased old site for 2 years at$7,500 per month(not to exceed$180,000). � 2 Monthly payment to Inland Empire Toyota to relocate to Corona of$10,000 for 35 months n $350,000). 20% late penalty, (not to exceed 3. 20 year commitment to remain in San Bernardino. Center Chevrolet�993) 1. Agency loan guarantee of$1,200,000. 2. Agency to reimburse company up to $200,000 of the debt service on the loan (for any year in which the increased sales tax to the city reaches $30,000, city reimburses company in the amount of$28,571.43, u to maximum). p the 3. 20 year commitment to remain on the site. 4. Deed of Trust on the site. I Holidav Oldsmobile (19941 i 1. $351,000 loan at 8%. 2. 10% of the note will be forgiven each year that the company remains in operation within the ci and Produces sales tax revenues. ty p duces 3. 10 year commitment to remain in San Bernardino. 4. Deed of Trust on the site. Isu?u/&zu_ki(1995) I. $500,000 loan guarantee b Agency.enc g y. Agency's guarantee, guaranteed by Rita Turpin and by Don Turpin Pontiac 2. $500,000 loan from Main Street 3. Assignment of lease on site 4. 3rd Deed of Trust on residential property in bake Arrowhead. 5. 3rd Deed of Trust on residential property in Indian Wells. 6. Assignment of partnership interest in Redlands Land Investment Company. 7. UCC-1 on assets, equipment and inventory. 8. UCC-1 on fixtures, including the franchises. 9. Personal guarantee of Rita Turpin to repay the loan. 10. Agreement to assign Option to purchase the site if obtained. 11. Agreement for Deed of Trust on site if site acquired. 12. 10 year commitment to remain in San Bernardino. SEP-19-1995 1G:41 FROM SAUL & ASSOCIATES TO 3845238 P.02 AND COMMONITY PEVfLOPMOT 474 V"a FNt!!S"a • $an ,CA 19-OW • f90f3►$67-"73 THdMAS A.LA M rut Nos. - Havlifto MW Sal come, owl�cm Dery (Mi 3974418 aim September I "C �9 5 Po"Fax Now 7M To ktf-"M Honorable Tom. Mi or, Mayor City of San Bern rdinoY7- ' 300 forth D Stre t �i0� San Bernard no, 92402 # i Dean Mayor Minor This lette is' in response to your Office' s request for clarification on the status and issues relating to the County' s BUM loan o Don. Turpin Pontiac (dba Redlands Nissan, Don Turpin Tsuzu and rnui in .SuZuki�-also referred to as "borrower"' •i n thie letter) . his s a performing loan and is meeting all of the covenants, a and conditions cont�ino in the loan agreement. It i$ my undo standir_g that the City of San Bernardino is considering ass' sting this business to relocate portions of the dealerships to t e City and requires clar*ficati.on on the terms and conditions stipu aced in the loam agreeaeent with the County., i Attached tc Lhi letter in a Copy of ouT loan agreement with the borrower, along with a subsequent amendment to that loan agraemsnt and Board cf S1he rvi sors? actions app�coving both documents.; For clarification, amendment changes have been redlined op the original to n aement. The final loan amount was $420, 000 Kira n down from o r C unity Development Block! Grant (CABG) funded :e all business f aneg program (referred to as the Buser program) . This federally FLmded program is designed to spur Job creation and/or r@tenticn within the County by providing affordable financing o c1i.glble businesses located in the unincorporated portion 0 th County, and cities within the County ; that participat in ur Urban County CDB� prpgram. All loans in the BusEx grog am a e fully secured and 'are lconditioned upon federal and loco r. quirementa, primary among which is : job development /ret htion. This particular loan enabled the botrower to retain 0 jots that would have been lost ff the dealership had to be clo$ d duc to the unavailability of working capital. You have quired as to the affect the proposed relocation of partians of the ca}erehi.p would hove on ',the borrcwer' s ability to meet the job set ntion zequirements of the loan agreement. Afticle M. Number 32 cf the attached agream nt stipulates the employee retention equi cmer-ts of this loan. k : s SEP-19-1995 16:42 FROM SAUL & ASSOCIATES TO 3845238 P.03 i Letter to M2 yor = Minor September V , 1915 Page 2 After reviewing the agreement and consulting federal CDBG regulations we ave concluded that a$ 10nq as a minimum of fifty (50) full-time itions are retained in the County, with a miriimui of twalve (' 2) o these remaining at the present site in the !City of Redlands the requirements won1d be met. I hope this letter provides you with the ',info=ation you require. If you have any questJone, co mnents or re!ire further infor= ion, please call me et (909) 387-4594 or -Snxter Williams, ECD Deputy Director 8t {909 387-^4575. i I Sincerely, , DEPARTMENT F EC IC' AND COMMUNITY DEVZLOPMENT ! I i THOMAS a. URl Director TRL:jc Attachments' i ' I i � I I i I �*KEHD*t+ 1 LOAN AGREEMENT 2 3 THIS LOAN AGREEMENT (the "Agreement") is entered into this day of , 1995, by and between Main Street, Inc. ("Main Street") and Don Turpin Pontiac, Inc., a California 4 corporation ("Turpin"). 5 RECITALS 6 A. Turpin currently owns and operates the Nissan, Isuzu, and Suzuki automobile franchises in the City of Redlands, California, and seeks to relocate the Isuzu and Suzuki automobile franchises 7 (hereinafter referred to as the "San Bernardino Dealership") to that parcel of real property in the San Bernardino Auto Plaza legally described in Exhibit "A" attached hereto and incorporated herein by this 8 reference (the "Property"). 9 B. Turpin has entered into a ten (10) year lease for the Property where Turpin intends to develop a facility for the San Bernardino Dealership and seeks assistance from Main Street for its business 10 operations. 11 C. Main Street was established to provide assistance to business owners throughout the City of San Bernardino, California (the "City"), for purposes of stimulating economic development and has 12 determined that, in addition to revitalizing the Property, its assistance to Turpin shall benefit the City by 13 creating employment opportunities, increasing sales tax revenues, and stimulating the local economy. E. Main Street desires to lend and Turpin seeks to borrow funds from Main Street to assist 14 Turpin in the development of its business at its new facility upon the terms and conditions set forth herein. 15 16 NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows: 1. Main Street Loan. Subject to the conditions and restrictions set forth herein, Main Street 17 shall loan to Turpin Five Hundred Thousand Dollars ($500,000) (the "Main Street Loan"). 18 2. Use of Funds. Turpin understands and agrees that all funds advanced by Main Street hereunder shall be used solely for purposes of development of the Isuzu and Suzuki franchises on the 19 Property, which shall include expenditures for: (i) automobile parts, (ii) furniture and fixtures, (iii) the cost of equipment and supplies necessary to manage and operate the San Bernardino Dealership, (v) used 20 cars for resale, (vi) advertising for the San Bernardino Dealership, and (vii) any other operating expenses for the San Bernardino Dealership, in addition to the above. Turpin further agrees that the proceeds of 21 the Main Street Loan shall not be used for any other purpose. 22 23 3. Disbursement of Main Street Loan Proceeds. As needed Turpin shall submit to Main Street a requisition for fund order the loan limited to the various categories of Use of Funds outlined 24 in Paragraph 2 above. Withii: ,ix'y (60) days thereafter full written documentation for such use shall be provided to Main Street. Such funds shall be disbursed within one (1) business day of submission of the 25 requisition. 26 4. Repayment of Loan Proceeds. Concurrent herewith, Turpin shall execute and deliver to 27 Main Street a promissory note in favor of Main Street as holder, in the amount of the Main Street Loan, 28 DAB/js [Turpin.agr] 1 September 19, 1995 I at an interest rate equal to the prime rate less .625% per annum, in the form of Exhibit "C" attached hereto and incorporated herein by this reference (the "Note"). The balance of all unpaid principal and 2 accrued interest shall be forgiven upon completion of the San Bernardino Dealership remaining in the City of San Bernardino for the ten year period ending on , 2005 (tenth anniversary of the 3 Promissory Note) (the "Maturity Date"), except that the balance of all unpaid interest and principal shall be forgiven at such time if Turpin in not in default of any term or provision of this Agreement. 4 A. Principal. Payment of principal shall be due annually if "net income" generated by 5 the San Bernardino Dealership exceed an average of Twenty Thousand Dollars ($20,000) a month calculated over the preceding twelve (12) month period commencing August 1 and continuing until July 6 31 the following year (the "Turpin Fiscal Year") for each year of outstanding indebtedness until the entire amount of the Main Street Loan is fully repaid. Payment of principal shall be due forty-five (45) days 7 after the end of the Turpin Fiscal year. 8 "Net Income" means all gross income of the San Bernardino Dealership on an accrual basis reduced by all ordinary and necessary expenses as defined by generally accepted accounting principles, 9 except that net income shall be determined before the following expenses: 10 1. Salaries to Rita Turpin in excess of One Hundred Twenty Thousand Dollars ($120,000), annually, and to the Executive Manager of the San Bernardino Dealership in excess of One Hundred 11 Twenty Thousand Dollars ($120,000), annually. 12 2. Other payments to officers of Turpin or stockholders in Turpin, their families, the executives of Turpin ("Related Parties"), and any other corporations or partnerships controlled by the 13 Related Parties. 14 3. Depreciation on automobiles owned by Related Parties. 15 4. Pension Plan contributions for the benefit of Related Parties. 16 5. Elective expenses for country club memberships, dues and seminars for Related Parties, and travel and entertainment costs for Related Parties in excess of Six Thousand Dollars ($6,000), 17 annually. 18 If the San Bernardino Dealership produce Net Income exceeding a monthly average of Twenty Thousand Dollars ($20,000) for the preceding Turpin Fiscal Year, Turpin shall pay to Main Street one 19 hundred percent (100%) of all such Net Income generated which shall be credited first to any accrued but unpaid interest and then to principal. After $1,000,000 cumulative net income has been 20 retained by Dealership, then 100% of the excess of the average monthly net income over Ten Thousand Dollars ($10,000) shall be payed to Main Street to be credited first to any accrued but unpaid interest and 21 then to principal. Turpin shall not be required to pay principal in any year that Net Income does not exceed an average of Twenty Thousand Dollars ($20,000) per month, calculated over the preceding 22 Turpin Fiscal Year. 23 Net Income shall be determined by an analysis performed by a certified public accountant, at Turpin's sole cost and expense. Turpin shall be required to submit a copy of such analysis to Main Street 24 annually, within forty-five (45) days of the close of the Turpin Fiscal Year. Upon request, Main Street shall have the right to inspect the books and financial records of Turpin for purposes of performing an 25 audit during the term of any outstanding indebtedness to Main Street, at the sole cost and expense of Main Street. The books and financial records pertaining to the use of funds disbursed to Turpin pursuant to this 26 Agreement shall be retained by Turpin for a period of five (5) years from the date hereof or for a longer 27 periods as required by law. The cost of reproduction of any financial records shall be borne by Main 28 DAB/js [Turpin.agr] 2 September 19, 1995 I Street. 2 B. Interest. Interest shall accrue on the principal balance advanced. Fifty percent (50%) of sales tax received by the City which is generated by the San Bernardino Dealership for the 3 preceding Turpin Fiscal year shall be credited towards interest due ("Sales Tax Credit"). 4 In the event that the Sales Tax Credit is insufficient to fully pay the interest on the Main Street Loan, Turpin shall be required to pay to Main Street the difference between the amount of annual interest 5 due and the Sales Tax Credit for that year. The amount by which actual sales tax revenue exceeds the Sales Tax Credit in any one (1) year shall be applied towards the payment of principal and shall not be 6 applied towards the payment of interest for any subsequent year. 7 Within thirty (30) days of the end of the Turpin Fiscal Year, Turpin shall submit to Main Street copies of sales tax returns for the San Bernardino Dealership ("Sales Tax Returns") from the California 8 State Board of Equalization for the preceding Turpin Fiscal Year. Payments of interest, if any, are due after application of the Sales Tax Credit, within forty-five (45) days of the end of the Turpin Fiscal Year. 9 C. Security for Note. The Note shall be secured by (i) the unlimited personal guarantee 10 of Rita Turpin, (ii) the corporate guarantee of Turpin, and (iii) an assignment of the leasehold interest in the Property to Turpin. 11 Rita Turpin shall provide a personal guarantee substantially in the form of Exhibit "D" attached 12 hereto and incorporated herein by this reference, which shall be secured by (i) a third deed of trust on the Property commonly known as 46-605 Quail Run Lane, Indian Wells, California, as legally described 13 in Exhibit "E" attached hereto and incorporated herein by this reference, subordinate to a first deed of trust in favor of a private lender in an amount not to exceed Four Hundred Sixty-Two Thousand Three 14 Hundred Twenty-Five Dollars ($462,325) and a second deed of trust in favor of the County of San Bernardino in an amount not to exceed Four Hundred Twenty Thousand Dollars ($420,000) and (ii) a 15 third deed of trust on the property commonly known as 1031 Black Oaks, Lake Arrowhead, California, as legally described in Exhibit "F." attached hereto and incorporated herein by this reference, subordinate 16 to a first deed of trust in favor of a private lender in an amount not to exceed Four Hundred Sixteen Thousand Six Hundred Eleven Dollars ($416,611) and a second deed of trust in favor of the County of 17 San Bernardino in an amount not to exceed Four Hundred Twenty Thousand Dollars ($420,000). 18 The Note shall further be secured by: (i) a security agreement between Turpin and Main Street (the "Security Agreement") and (ii) UCC-1 Financing Statement filed concurrent herewith by Main Street 19 with the Secretary of State of the State of California, in all of the assets of Turpin, including the assets now owned or hereinafter acquired, subordinate only to all existing and future security interests held for 20 flooring financing of the San Bernardino Dealership, including Chrysler Credit Corp., Citicorp North America, Inc. and Orix Credit Alliance, which may change from time to time, but senior to all other 21 security interests in the assets of Turpin. The form of Security Agreement and UCC-1 Financing Statement to be executed are attached hereto as Exhibits "G" and "H" respectively, and incorporated 22 herein by this reference. Additionally, Turpin shall execute a Fixture Financing Statement in the form 23 of Exhibit "I" attached hereto and incorporated herein by this reference. As further consideration for the financial assistance of Main Street, Turpin shall execute and 24 deliver an Assignment Agreement substantially in the form attached hereto as Exhibit "J" and incorporated herein by this reference (the "Assignment Agreement"). Pursuant to such Assignment 25 Agreement, Turpin shall assign to Main Street its leasehold interest in the Property pursuant to that certain lease dated August 24, 1995, by and between Turpin and Elizabeth M. Friedlander, Trustee, 26 Elizabeth M. Friedlander Trust, dated February 27, 1995 (the "Lease") and agrees that its leasehold 27 interest shall not be assigned to any third party for the term of outstanding indebtedness to Main Street. 28 DAB/js [Turpin.agrl 3 September 19, 1995 I Turpin further agrees not to terminate its Lease or take any action which would result in termination of the Lease. The assignment of rights to Main Street shall only become effective upon default of this 2 Agreement. Iin the event of default, Main Street shall assume all rights of Turpin under the Lease, which rights the Agency may exercise at its option. 3 Pursuant to the Assignment Agreement, Turpin shall further assign any and all of its rights, if any, 4 to acquire the Property to Main Street. In the event that Turpin acquires the Property, Turpin shall give Main Street a deed of trust on the Property superior to all other liens, subordinate only to a first deed of 5 trust on the Property securing the proceeds of a loan used by Turpin to acquire the Property, in an amount and on such terms as approved by Main Street in its sole discretion, which shall not be unreasonably 6 withheld. 7 Should Turpin acquire Property and provide Main Street a deed of trust on the Property superior to all other liens, subordinate only to a first deed of trust on the Property, as provided in this agreement, 8 Main Street shall release other security held by it pursuant to this agreement, of approximately equally value as agreed by the parties. 9 When Two Hundred Fifty Thousand Dollars ($250,000) of the principal of the loan has been paid 10 or credited, Turpin shall be entitled, upon written request, to a release of approximately Fifty percent (50%) of the security held by Main Street pursuant to this agreement. The parties shall agree as to which 11 security shall be released, and in what amounts. 12 5. Covenants for Economic Development. The purpose of the Main Street Loan to Turpin is to promote economic development in the City and increase employment opportunities. Turpin hereby 13 agrees to remain in business as an automobile dealer of Isuzu and Suzuki vehicles on the Property for a period of ten (10) years from the date of opening of the San Bernardino Dealership and shall employ a 14 minimum of twenty-seven (27) persons on the Property within ninety (90) days of opening. To the extent that the number of full time jobs created drops below an average of twenty-seven (27) or its equivalent, 15 calculated over any twelve month period during the term of outstanding indebtedness to Main Street, the obligation of Main Street to continue to provide moneys from the Main Street Loan shall be terminated 16 immediately and all rights to any unpaid or future proceeds shall be forfeited by Turpin. Failure to maintain the requisite number of positions shall constitute a default hereunder. 17 6. Indemnification. Turpin shall defend, indemnify, and hold harmless Main Street and its 18 respective officers, agents, employees and representatives from and against any and all loss, liability, claim, demand or judgment for injury of any type claimed including legal costs and attorney's fees, 19 arising from or related in any manner to the Property or performance of this Agreement. 20 7. Default. Any one of the following events shall constitute a default hereunder regardless of: (i) the reason for such Default and (ii) whether such Default is voluntary, involuntary or by operation 21 of law pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body superior to the Agency: 22 A. Failure or delay to perform any term or provision of this Agreement or breach and 23 continuance of such default for a period of thirty (30) calendar days after Main Street has given notice to Turpin specifying the default and requiring such default to be remedied and stating that such notice is 24 a "notice of default". Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving notice of default. 25 Failure or delay in giving such notice shall not constitute a waiver of default. 26 B. The entry of a decree or order by a court having jurisdiction adjudging Turpin a bankrupt 27 or insolvent or approving, as property filed, a petition seeking reorganization, or relief under the Federal 28 DAB/js [Turpin.agrl 4 September 19, 1995 I Bankruptcy Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official, or ordering the winding up or liquidation of its affairs, and 2 the continuance of any such decree or order unstayed and in effect for a period of thirty (30) calendar days. 3 C. The institution by Turpin of proceedings to be adjudged bankrupt or insolvent or the 4 consent by Turpin to the institution of bankruptcy or insolvency proceedings against it, or the filing by Turpin of a petition, answer or consent seeking reorganization or relief under the Federal Bankruptcy Act 5 or any other applicable federal or state law, or the consent by Turpin to the filing of any such petition or appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official, or the 6 making of an assignment by Turpin for the benefit of its creditors, or the admission by Turpin in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Turpin 7 in furtherance of any such action. 8 D. The cessation of operations of two Franchises for the sale of new automobiles under the San Bernardino Dealership and within the City of San Bernardino at any time prior to ten (10) years from 9 the date of opening the San Bernardino Dealership until such time as the Main Street Loan is fully repaid. 10 E. Failure to maintain an average of twenty-seven(27) full time jobs or the equivalent, on the Property calculated over any twelve (12) month period during the term of outstanding indebtedness of the 11 Main Street Loan. 12 F. Default of that certain Owner Participation Agreement dated 1995, and recorded on_ 1995, executed by the Redevelopment Agency of the City of San Bernardino and Turpin (the 13 "OPA"), providing for the rehabilitation of the Property pursuant to the guarantee of Main Street for the Loan to be provided by Valley Bank or another lending institution. A default of any term or provision 14 of the OPA shall constitute a default hereunder, and vice versa, subject to all rights and remedies available to Main Street as provided herein. 15 8. Remedies. 16 A. Reimbursement to Agency. In the event that Turpin fails to perform any of its obligations 17 hereunder, including the obligation not to relocate from the City of San Bernardino for a period of ten (10) years from the date of opening the San Bernardino Dealership, Turpin shall, at the option of Main 18 Street and upon demand by Main Street to Turpin, immediately pay the balance then due on the Main Street Loan. 19 B. Cumulative Remedies. As a further and cumulative remedy, Turpin agrees that Main 20 Street, its successors, and assigns may: (i) institute any proceeding at law or in equity to enforce any covenants and obligations herein contained, (ii) enjoin the threatened or attempted violation by Turpin, 21 their legal representatives, successors, tenants, and assigns, and (iii) collect damages from the aforesaid who violate the covenants and obligations contained herein. 22 The remedies set forth herein shall be in addition to any and all other remedies available to Main 23 Street under this Agreement or as a matter of law. The parties acknowledge and agree that Main Street may exercise any apd all legal and equitable remedies available under the laws of the State of California. 24 Upon written demand of Main Street, Turpin agrees to pay all costs, fees and expenses of Main 25 Street incurred in connection with enforcement by Main Street in seeking any of the remedies legally available to Main Street, including but not limited to reasonable attorneys' fees, court costs and any costs 26 attributable to staff time. 27 28 DAB/js [Turpin.agrl 5 September 19, 1995 I C. Default by Main Street. Should Main Street fail to advance funds as provided in this agreement, or should it fail to reduce the loan balance and credit interest as required by this agreement, 2 or should it fail to report said balance to Turpin within ninety (90) days of a written request therefor, Main Street shall be in default. In addition to any other remedies that Turpin shall have at law or in 3 equity, including specific performance, Turpin shall have the right to deduct ten percent (10%) (APR) from the unpaid balance calculated for the period of the default. 4 5 9. Further Assurances. Turpin shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as Main Street shall from time to time find 6 necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Main Street Loan. 7 10. Notice. Notices shall be presented in person or by certified or registered United States 8 mail, return receipt requested, postage prepaid or by overnight delivery made by a nationally recognized delivery service to the addresses noted below. Notice presented by United States mail shall be deemed 9 effective the second business day after deposit with the United States Postal Service. This Section shall not prevent giving notice by personal service or telephonically verified fax transmission, which shall be 10 deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. 11 TO TURPIN: Don Turpin Pontiac, Inc. 12 1655 Industrial Park Ave., Redlands, CA 92374 13 TO MAIN STREET: Main Street, Inc. 14 201 North "E" Street, Suite 104 San Bernardino, California 92401 15 Attention: Ann Harris, Executive Director 16 11. Governing Law. This Agreement shall be governed by the laws of the State of California. 17 12. Entire Agreement. This Agreement constitutes the entire agreement between the parties and may not be amended without the prior written consent of the parties hereto. This Agreement 18 supersedes all prior negotiation, discussions and previous agreements between the parties concerning the subject matter herein. The parties intend this Agreement to be the final expression of their agreement 19 with respect to the terms herein and a complete and exclusive statement of such terms. No modification, 20 amendment or waiver of any term herein shall be binding unless executed in writing by the parties hereto. 13. Amendment. This Agreement may be amended as deemed necessary by written 21 instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding, and legally enforceable only if in written form and executed by the parties hereto 22 after the same have been duly approved and authorized for execution. 23 14 Main Street May Assign. Main Street may, at its option, assign its right to receive payment and apply credits from the sales tax generated by the Dealership for the Main Street Loan 24 repayment without obtaining the consent of Turpin. 25 15. TuMin Assignment Prohibited. In no event shall Turpin assign or transfer any portion of this Agreement without the prior express written consent of Main Street, which consent may not be 26 unreasonably withheld. This section shall not affect or diminish the right of Main Street to assign all or 27 any portion of its rights to the Main Street Loan proceeds hereunder. 28 DAB/js [Turpin.agr] 6 September 19, 1995 1 16. SeverabilitX Each and every section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application 2 thereof shall, be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable shall 3 not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the extent permitted by law. 4 17. Nondiscrimination. Turpin covenants for itself its successors and assigns, that it shall not 5 discriminate against any applicant for employment or any person or group of persons in performing this Agreement on account of race, color, creed, religion, sex, marital status, national origin or ancestry. 6 IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date first 7 written above. 8 San Bernardino Downtown Main Street, Inc. ' 9 10 By: Ann Harris 11 Executive Director 12 (SEAL) 13 14 Don Turpin Pontiac, Inc. 15 16 By: 17 18 By: 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.agr] 7 September 19, 1995 1 EXHIBIT "A" 2 LEGAL DESCRIPTION OF THE PROPERTY 3 4 This Loan Agreement relates to and affects that real property commonly known as 730 Showcase Drive, San Bernardino, California, and more particularly described as approximately the north one-half 5 of the property described as follows: Parcel 6 of Parcel Map No. 9713 as per plat thereof recorded in Book 106 of Parcel Maps, Pages 91-93, records of the County Recorder of San Bernardino. 6 7 8 9 EXHIBIT "B" 10 REQUISITION 11 [Form To Be Inserted] 12 13 14 15 EXHIBIT "C" 16 PROMISSORY NOTE 17 18 19 20 2 1 EXHIBIT "D" 22 PERSONAL GUARANTEE OF RITA TURPIN 23 [To Be Inserted] 24 25 26 27 28 DAB/js [Turpin.agr] 8 September 19, 1995 1 EXHIBIT "E" 2 LEGAL DESCRIPTION OF TURPIN PROPERTY 3 INDIAN WELLS 4 That certain property located in the City of San Bernardino, County of San Bernardino, State of California, more particularly described as Lot 34 of Tract 17294-1, recorded in the Official Records of 5 the County Recorder of the County of Riverside, California, aka: 46-605 Quail Run Lane, Indian Wells, California. 6 7 8 EXHIBIT "F" 9 LEGAL DESCRIPTION OF TURPIN PROPERTY 10 LAKE ARROWHEAD 11 That certain property located in the City of San Bernardino, County of San Bernardino, State of California, more particularly described as Lot 21 of Tract 10608-1, MB 183/79-84, recorded in the 12 Official Records of the County Recorder of the County of San Bernardino, California, aka: 1031 Black Oaks, Lake Arrowhead, California. 13 14 15 16 17 18 EXHIBIT "G" 19 SECURITY AGREEMENT 20 [To Be Inserted] 21 22 23 24 25 26 27 28 DAB/js [Turpin.agr] September 19, 1995 ® 1 1 2 3 EXHIBIT "H" 4 UCC-1 FINANCING STATEMENT 5 [To Be Inserted] 6 7 8 9 EXHIBIT "I" 10 FIXTURE FINANCING STATEMENT 11 [To Be Inserted] 12 13 14 15 16 EXHIBIT "J" 17 ASSIGNMENT AGREEMENT 18 [To Be Inserted] 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.agrj September 19, 1995 I RECORDING REQUESTED BY: 2 ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 3 4 AND WHEN RECORDED RETURN TO: 5 AGENCY ADMINISTRATOR ECONOMIC DEVELOPMENT AGENCY 6 OF THE CITY OF SAN BERNARDINO 201 North "E" Street, Third Floor 7 San Bernardino, California 92401-1507 8 (Space Above for Recorder's Use) 9 10 ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 11 OWNER PARTICIPATION AGREEMENT 12 DON TURPIN PONTIAC, INC. 13 By and Between 14 ECONOMIC DEVELOPMENT AGENCY OF 15 THE CITY OF SAN BERNARDINO 16 and 17 DON TURPIN PONTIAC, INC., 18 a California Corporation 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.OPA] September 19, 1995 I TABLE OF CONTENTS 2 Page 3 I. [100] SUBJECT OF AGREEMENT 4 A. [101] Purpose of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 B. [102] The Redevelopment Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 C. [103] The Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 D. [104] Parties to the Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 6 1. [105] The Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 7 2. [106] The Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3. [107] Prohibition Against Change in Ownership, 8 Management and Control of Participant . . . . . . .. . . . . . . . . 2 4. [108] Benefit to Project Area . . . . . . . . . . . . . . . . . . . . . . . . . . .3 9 II. [200] AGENCY ASSISTANCE 10 A. [201] Loan Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 11 B. [202] Agency Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 12 III. [300] IMPROVEMENT OF THE SITE 13 A. [301] Improvement by Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 14 1. [302] Scope of Development. . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. [303] Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 15 3. [304] Construction Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4. [305] Bodily Injury and Property Damage Insurance . . . . . . . . . . .5 16 5. [306] City and Other Governmental Agency Permits . . . . . . . . . . 6 6. [307] Rights of Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 17 7. [308] Local, State and Federal Laws . . . . . . . . . . . . . . . . . . . . . .6 18 8. [309] Antidiscrimination During Construction . . . . . . . . . . . . . . . 7 B. [310] Taxes, Assessments, Encumbrances and Liens . . . . . . . . . . . . . . . . 7 19 C. [311] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon and Assignment of Agreement . . . . . . . . . . 7 20 D. [312] Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 21 1. [313] Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 22 2. [314] [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 E. [315] Mortgage, Deed of Trust, Sale and 23 Lease-Back Financing; Rights of Holders. . . . . . . . . . . . . . . . . . . . 8 24 1. [316] No Encumbrances Except Mortgages, Deeds of Trust or Sale and Lease-Back 25 For Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 26 F. [317] Right of Agency to Satisfy Other Liens On The Site 8 27 28 DAB/js [Turpin.OPA] i September 19, 1995 1 G. [318] Loan Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 H. [319] Certificate of Completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2 IV. [400] USES OF SITE A. [401] Uses - Covenants Running With the Land . . . . . . . . . . . . . . . . . . . 9 4 B. [402] Maintenance of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 C. [403] Effect of Violation of the Terms and 5 Provisions of this Agreement After Completion Of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6 V. [500] GENERAL PROVISIONS 7 A. [501] Notices, Demands and Communications 8 Between the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 B. [502] Conflicts of Interest; Nonliability . . . . . . . . . . . . . . . . . . . . . . . . 12 9 C. [503] Enforced Delay; Extension of Times of Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 10 D. [504] Inspection of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . 13 11 VI. [600] DEFAULTS AND REMEDIES 12 A. [601] Defaults - - General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 B. [602] Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 13 1. [603] Institution of Legal Actions . . . . . . . . . . . . . . . . . . . . . . . 14 14 2. [604] Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3. [605] Acceptance of Service of Process . . . . . . . . . . . . . . . . . . 14 15 C. [606] Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . .15 16 D. [607] Inaction Not a Waiver of Default. . . . . . . . . . . . . . . . . . . . . . . . .15 E. [608] Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 17 1. [609] Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 18 VII. [700] SPECIAL PROVISIONS 19 A. [701] Submission of Documents to 20 Agency for Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 B. [702] Successors in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 21 VIII. [800] ENTIRE AGREEMENT, WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . .16 22 XI. [900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY 23 24 A. [901] Time for Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 25 26 27 28 DAB/js [Turpin.OPA] ii September 19, 1995 I ATTACHMENT NO. 1- LEGAL DESCRIPTION OF THE SITE 2 ATTACHMENT NO. 2 - GUARANTEE AGREEMENT 3 ATTACHMENT NO. 3 - SCOPE OF DEVELOPMENT 4 ATTACHMENT NO. 4 - SCHEDULE OF PERFORMANCE 5 ATTACHMENT NO. 5 - CERTIFICATE OF COMPLETION 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.OPA1 iii September 19, 1995 1 OWNER PARTICIPATION AGREEMENT 2 THIS AGREEMENT IS ENTERED INTO this day of 1995, by and 3 between the ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (the 4 "Agency"), and DON TURPIN PONTIAC, INC., a California corporation (the "Participant"). Agency 5 and Participant hereby agree as follows: 6 I. [100] SUBJECT OF AGREEMENT 7 A. [101] Purpose of Agreement 8 The purpose of this Agreement is to effectuate the Redevelopment Plan for the Southeast Industrial 9 Park Redevelopment Project (the "Redevelopment Plan") by providing for Agency assistance to 10 Participant in connection with the improvement of the Site, as hereinafter defined, which is located in 11 proximity to the Southeast Industrial Park Redevelopment Project Area (the Project Area") and which 12 improvements will provide for economic development which will directly benefit the Project Area. The 13 completion of the improvements on the Site pursuant to this Agreement is in the vital and best interests 14 of the City of San Bernardino California (the "City") and the health, safety and welfare of its residents 15 16 and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Redevelopment Plan has been undertaken. 17 B. [102] The Redevelopment Plan 18 19 The Redevelopment Plan was approved by Ordinance of the Common Council of the City of San 20 Bernardino; said Ordinance and the Redevelopment Plan as so approved are incorporated herein by 21 reference. The Redevelopment Plan provides for the undertaking of redevelopment activities. C. [103] The Site 22 23 The Site is that certain real property generally located at 730 Showcase Drive, in the City of San 24 Bernardino and as more fully described in the "Legal Description of the Site", which is attached hereto 25 as Attachment No. 1 and is incorporated herein by this reference. D. [104] Parties to the Agreement 26 1. [105] The Agency 27 28 DAB/js [Turpin.OPA] September 19, 1995 I The Agency is a public body, corporate and politic, exercising governmental functions and powers 2 and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of 3 California (Health and Safety Code Section 33020, et seq.) The principal office of the Agency is located 4 at 201 North "E" Street, San Bernardino, California 92401-1507. 5 "Agency", as used in this Agreement, includes the Community Development Commission of the 6 City of San Bernardino, the Economic Development Agency of the City of San Bernardino, the 7 Redevelopment Agency of the City of San Bernardino, and any assignee of or successor to their rights, 8 powers and responsibilities. 9 2. [106] The Participant 10 The principal office and mailing address of the Participant for purposes of this Agreement is 1655 11 Industrial Park Ave., Redlands, CA 92374. 12 3. [107] Prohibition Against Change in Ownership Management and Control of the 13 Participant 14 The qualifications and identity of the Participant particular concern to the Agency. It is because 15 of those qualifications and identity that the Agency has entered into this Agreement with the Participant. 16 No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers 17 under this Agreement except as expressly set forth herein. 18 The Participant shall not assign all or any part of this Agreement or any rights hereunder without 19 the prior written approval of the Agency, which approval the Agency may not unreasonably withhold. 20 In the event of such transfer or assignment: (1) the assignee shall expressly assume the obligations of the 21 Participant pursuant to this Agreement in writing satisfactory to the Agency; (2) the original Participant 22 shall remain fully responsible for the performance and liable for the obligations of the Participant pursuant 23 to this Agreement; and (3) any guarantees provided to assure the performance of the Participant's 24 obligations under this Agreement shall remain in full force and effect. 25 In the absence of specific written agreement by the Agency, no such transfer, assignment or 26 approval by the Agency shall be deemed to relieve the Participant or any other party from any obligation 27 28 DAB/js [Turpin.OPA] 2 September 19, 1995 I under this Agreement. 2 All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure 3 to the benefit of the Participant and the permitted successors and assigns of the Participant. Whenever 4 the term "Participant" is used herein, such term shall include any other permitted successors and assigns 5 as herein provided. 6 The restrictions of this Section 107 shall terminate and be of no further force and effect upon the 7 later of(1) repayment in full of the loan to which the Guaranty (as hereinafter defined) applies or (ii) the 8 provision to the Participant of all funds representing the Agency Reimbursement (as hereinafter defined). 9 4. [108] Benefit to Project Area 10 Agency has determined that the development of the Site in accordance with this Agreement will 11 eliminate blight and provide a benefit to the Project Area through an increase in tax increment revenues, 12 the increase in sales tax revenues and creation of approximately twenty (20) new jobs. 13 II. [200] AGENCY ASSISTANCE 14 A. [201] Loan Guaranty 15 Agency agrees to guaranty (the guaranty") repayment by Participant of a certain loan in favor of 16 Valley Bank or such other lender as the Agency may approve in writing, which loan is to be in a principal 17 amount equal to Five Hundred Thousand Dollars ($500,000.00) (hereinafter referred to as the "Participant 18 Loan"). The proceeds of the Participant Loan are to be used by Participant to cause the establishment 19 of an auto dealership business on the Site which establishment shall include the remodeling of sales areas 20 and the improvement and expansion of service areas (the "Project"). The Guaranty shall be reflected 21 in a certain Guaranty Agreement in favor of the lender, as provided in Section 312 hereof, and shall be 22 in a form substantially similar to Attachment No. 2 attached hereto and incorporated herein by 23 reference. In consideration for the Agency's provision of the Guaranty, the Participant shall cause the 24 completion of the Project in accordance with the Schedule of Performance (See Section 304). 25 The Agency's obligation with respect to the execution and provision of the Guaranty shall become 26 binding only upon receipt by the Participant of all necessary entitlements and permits as provided in 27 28 DAB/js [Turpin.OPA] 3 September 19, 1995 I Section 306 hereof, and at such time as the Agency has received an executed original of this Agreement. 2 B. [202] Agency Reimbursement 3 In addition to the provision of the Guaranty, and to the extent the Participant is not otherwise in 4 default under the terms of the Participant Loan, the Agency further agrees, subject to the conditions as 5 hereinafter set forth, to reimburse the Participant for a portion of the debt service of the Participant Loan 6 (the"Agency Reimbursement"). The Agency Reimbursement shall be provided in the manner as 7 hereinafter follows: Fifty percent (50%) of the City's share of the sales tax generated by the automobile 8 dealerships shall be credited, first to the payment of the interest due on the loan, and, if there be any 9 excess, then to the principal. 10 III. [300] IMPROVEMENT OF THE SITE 11 A. [301] Improvement by Participant 12 Participant and Agency agree that the central purpose of this Agreement is to provide for the 13 establishment of an auto dealership on the existing site in order to increase business and sales volumes 14 related to the Site which will result in additional sales, service and related areas as described in the Scope 15 of Development (see Section 302). The Project shall enable the Participant to create additional 16 employment opportunities in the Project Area through the provision of approximately twenty (20) 17 additional jobs on the Site. 18 1. [302] Scope of Development 19 The Site shall be developed by Participant as provided in the "Scope of Development", which is 20 attached hereto as Attachment No. 3 and is incorporated herein and in a manner consistent with the 21 provisions of the Redevelopment Plan. 22 2. [303] Cost of Construction 23 The cost of constructing the Project shall be borne solely by Participant. The Agency shall have 24 no obligations, other than as expressly set forth herein, with respect to the funding of the Project. 25 3. [304] Construction Schedule 26 Upon execution of this Agreement, Participant will promptly begin and diligently prosecute to 27 28 DAB/js [Turpin.OPAI 4 September 19, 1995 I completion the construction of the Project. Participant shall begin and complete all construction and 2 development of the Project within the times specified in the "Schedule of Performance" which is attached 3 hereto as Attachment No. 4 and incorporated herein. Participant shall strictly conform to all time 4 requirements and limitations set forth in this Agreement. 5 4. [305] Bodily Injury, and Property Damage Insurance 6 Participant shall defend, assume all responsibility for and hold the Agency, the City and their 7 respective officers, agents and employees, harmless from all claims or suits for, and damages to, property 8 and injuries to persons, including accidental death (including attorneys' fees and costs), which may be 9 caused by any of Participant's activities under this Agreement, whether such activities or performance 10 thereof be by the Participant or anyone directly or indirectly employed or contracted with by Participant 11 and whether such damage shall accrue or be discovered before or after termination of this Agreement. 12 Participant shall take out and maintain a comprehensive liability and property damage policy in the 13 amount of One Million Dollars ($1,000,000) combined single limit, including contractual public liability, 14 and shall protect City and Agency from claims for damages arising out of Participant's activities under 15 this Agreement as described hereinabove, until two (2) years after the later of(1) the expiration of the 16 Guaranty or (2) the completion of the Agency Reimbursement payments, whichever is later. 17 Participant shall furnish a certificate of insurance countersigned by an authorized agent of the 18 insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance 19 coverage. This countersigned certificate shall name the City and Agency and their respective officers, 20 agents, and employees as additional insureds under the policy. The certificate by the insurance carrier 21 shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any 22 material change, cancellation or termination of the coverage at least thirty (30) days in advance of the 23 effective date of any such material change, cancellation or termination. Coverage provided hereunder 24 by Panicipant shall be primary insurance and not contributing with any insurance maintained by Agency 25 or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of 26 insurance hall contain a waiver of subrogation for the benefit of the City and Agency. 27 28 DAB/js [Turpin.OPA] 5 September 19, 1995 I Participant shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that 2 any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant 3 to this Agreement carries workers' compensation insurance as required by law. 4 5. [306] City and Other Government Agency Permits 5 Prior to the provision of the Guaranty and the triggering of any obligation of the Agency to 6 provide the Agency Reimbursement or commencement of the Project or other construction or 7 development of any buildings, structures or other works of improvement upon the Site, Participant shall, 8 at its own expense, secure or cause to be secured any and all permits for all necessary on-site and off-site 9 improvements which may be required by the City or any other governmental agency having jurisdiction 10 over such construction, development or work. 11 Nothing contained in this Agreement shall be deemed to be an approval by the City of any 12 application or permit required to be obtained by Participant from the City. 13 6. [307] Rights of Access 14 For the purpose of assuring compliance with this Agreement, representatives of Agency and the 15 City shall have the right of access to the Site, without charges or fees, at normal construction hours 16 during the period of work for the purposes of this Agreement, including, but not limited to, the inspection 17 of the work being performed in constructing the improvements, so long as they comply with all safety 18 rules. Such representatives of Agency or of the City shall be those who are so identified in writing by 19 the Executive Director of Agency. Agency shall hold the Participant harmless from any bodily injury 20 or related damages arising out of the activities of Agency and the City as referred to in this Section 307 21 and resulting from the gross negligence or willful misconduct of the City or Agency. This Section 307 22 shall not be deemed to diminish or limit any rights which the City or Agency may have by operation of 23 law irrespective of this Agreement. 24 7. [308] Local. State and Federal Laws 25 Participant shall carry out the Project and all related activities on the Site in conformity with all 26 applicable laws, including all applicable federal and state labor standards; provided, however, Participant 27 28 DAB/js [Turpin.OPA] 6 'September 19, 1995 1 and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest 2 any such laws, rules or standards. Participant and its contractors and sub-contractors shall pay prevailing 3 wages to all employees with respect to the Project. 4 8. [309] Antidiscrimination During Construction 5 Participant, for itself and successors and assigns, agrees that in the construction of the 6 improvements provided for in this Agreement, Participant shall not discriminate against any employee 7 or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, 8 national origin or ancestry. 9 B. [310] Taxes. Assessments. Encumbrances and Liens 10 Prior to expiration of the Guaranty or the provision of the Agency Reimbursement, whichever is 11 later, Participant shall not place or allow to be placed on the Site or any part thereof any mortgage, trust 12 deed, encumbrance or lien without the express prior written consent of the Agency. Such written consent 13 shall not be unreasonably withheld to the extent the Participant is seeking construction or permanent 14 financing related to the Project. 15 C. [311] Prohibition Against Transfer of the Site the Buildings or Structures thereon and 16 Assignment of Agreement 17 Prior to expiration of the Guaranty or the provision of the Agency Reimbursement, whichever is 18 later, Participant shall not, except as permitted by this Agreement, without the prior written approval of 19 Agency, make any total or partial sale, transfer, conveyance, assignment or lease of the whole or any 20 part of the Site or of the buildings or structures on the Site. This prohibition shall not be deemed to 21 prevent a transfer expressly permitted pursuant to Section 107 of this Agreement, or the granting of 22 temporary or permanent easements or permits to facilitate the development of the Site. In addition, 23 Participant agrees that for a period of ten (10) years from the date hereof, the Participant shall not move 24 or relocate its business operations, presently located on the Site, to any location which is outside of the 25 boundaries of the City of San Bernardino without the express prior written consent of the Agency, which 26 consent shall be given only at the Agency's sole discretion. 27 28 DAB/js [Turpin.OPA] 7 September 19, 1995 1 D. [312] Guaranty 2 1. [313] Guaranty 3 The Agency shall execute the Guaranty in substantially the form as attached hereto as Attachment 4 No. 2, which Guaranty shall be in favor of the lender described therein. The Agency's 5 obligation to guaranty the loan to the Participant for the purposes of completing the Project shall be 6 limited to an amount equal to Five Hundred Thousand Dollars ($500,000.00). 7 2. [314] [Reserved] 8 E. [315] Mortgage Deed of Trust. Sale and Lease-Back Financing Rights of Holders 9 1. [316] No Encumbrances Except Mortgages. Deeds of Trust or Sale and Lease-Back 10 for Development 11 Participant shall not enter into any conveyance or lien for financing without the prior written 12 approval of Agency, which approval Agency agrees to give if any such conveyance or lien for financing 13 is related to the Project and is given to a bank, savings and loan association, or other similar lending 14 institution and the terms of said financing are reasonably acceptable to Agency. The form of approval 15 by Agency shall be in writing which references this Section 316, executed by the Executive Director of 16 the Agency. In the event that the Agency fails to accept or reject such lender in writing within fifteen 17 (15) days after written notice thereof is received by the Agency, such lender shall be deemed approved. 18 F. [317] Right of Agency to Satisfy Other Liens on The Site 19 Prior to the completion of the Project, and after Participant has had written notice and 20 has failed after a reasonable time, but in any event not less than fifteen (15) days, to challenge, 21 cure, adequately bond against, or satisfy any liens or encumbrances on the Site which are not otherwise 22 permitted under this Agreement, Agency shall have the right but not the obligation to satisfy any such 23 liens or encumbrances and to seek indemnification therefor from the Participant. 24 G. [318] Loan Payment 25 Regardless of Participant's ability to complete construction of the Project, Participant agrees 26 to repay the Participant Loan applicable to the funding of the Project in full at such times and as provided 27 28 DAB/js [Turpin.OPA] 8 September 19, 1995 I in the applicable Participant Loan documents and in no event later than within ten (10) years of the date 2 of execution of this Agreement. A failure to do so within thirty (30) days of Agency's written demand 3 shall constitute a material breach of this Agreement and shall entitle Agency to declare Participant in 4 default, and to exercise any remedies available under this Agreement, or at law or in equity. 5 H. [319] Certificate of Completion. 6 The Agency, its successors and assigns agree that upon the full compliance by the Participant with 7 the terms of this Agreement which pertain to the construction of the Project upon the Site, and following 8 completion of the Project, the receipt by the Agency of a written request from the Participant for a 9 Certificate of Completion and notification that the Project is completed, the Agency shall provide 10 promptly and furnish to the Participant a Certificate of Completion, substantially in the form as attached 11 hereto as Attachment 5, certifying that the construction of the Project, as required pursuant to this 12 Agreement, has been completed to the satisfaction of the Agency, its successors and assigns. Said 13 Certificate of Completion may be executed by the Executive Director of the Agency without further 14 formal approval by the Community Development Commission. 15 IV. [400] USES OF SITE 16 A. [401] Uses - Covenants Running With the Land 17 Participant covenants and agrees for itself, its successors, its assigns, and every successor in 18 interest to the Site or any part thereof, that for a period of ten (10) years commencing on the date of the 19 issuance by City of the Certificate of Occupancy for the Project, the Site will continue to be devoted to 20 uses as an auto dealership so long as such uses are still economically feasible under commercially 21 reasonable standards. 22 The foregoing covenant shall run with the land for ten (10) years commencing on the date that the 23 City issues the Certificate of Occupancy for the Project as provided in Section 319 hereof. 24 The Participant further covenants and warrants that Participant shall develop improvements on the 25 Site in accordance with the Scope of Development. Participant covenants to develop the Site in 26 conformity with all applicable laws. The covenants of this paragraph shall run with the land. 27 28 DAB/js [Turpin.OPA] 9 September 19, 1995 d I Participant covenants by and for itself and any successors in interest that there shall be no 2 discrimination against or segregation of any person or group of persons on account of race, color, 3 creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, 4 sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Participant itself or any 5 person claiming under or through it establish or permit any such practice or practices of discrimination 6 or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, 7 subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. 8 All deeds, leases or contracts pertaining to the Site shall contain or be subject to substantially the 9 following nondiscrimination or non-segregation clauses: 10 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, 11 executors, administrators and assigns, and all persons claiming under or through them, that there shall 12 be no discrimination against or segregation of, any person or group of persons on account of race, color, 13 creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, 14 transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself 15 or herself or any person claiming under or through him or her, establish or permit any such practice or 16 practices of discrimination or segregation with reference to the selection, location, number, use or 17 occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The 18 foregoing covenants shall run with the land." 19 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, 20 executors, administrators and assigns, and all persons claiming under or through him or her, that this 21 lease is made and accepted upon and subject to the following conditions: `There shall be no 22 discrimination against or segregation of any person or group of persons on account of race, color, creed, 23 religion, sex, marital status, handicap, age, ancestry or national origin in the leasing, subleasing, 24 transferring, use, occupancy, tenure or enjoyment sale, lease, sublease, transfer, use, occupancy, tenure 25 or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming 26 under or through him or her, establish or permit any such practices or practices of discrimination or 27 28 DAB/js [Turpin.OPAI 10 September 19, 1995 I segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, 2 sublessees, subtenants or vendees."' 3 3. In contracts: "There shall be no discrimination against or segregation of, any person, or 4 group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry 5 or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the 6 premises, nor shall the transferee himself or herself or any person claiming under or through him or her, 7 establish or permit any such practice or practices of discrimination or segregation with reference to the 8 selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees 9 of the premises." 10 B. [402] Maintenance of the Site 11 Participant shall maintain the Site and shall keep the Site free from any accumulation of debris or 12 waste materials. 13 Participant further agrees to maintain the Site in a neat and attractive manner so as not to, in the 14 reasonable determination of an appropriate officer of the City, be a public nuisance, or be detrimental to 15 the health, safety and welfare of the public, or impair value of property within one thousand (1,000) feet 16 of the Site, and agrees that in the event Participant fails to do so, Agency may enter upon the Site for the 17 purposes of performing necessary and desirable maintenance, that Participant will be responsible for the 18 cost of any such maintenance undertaken by Agency, which shall be paid within thirty (30) days after 19 receipt by Participant of written demand therefor. In addition, the Participant agrees that to the extent 20 it is in violation of the provisions of this Section 402, the Agency shall have a right to place a lien against 21 the Site in an amount necessary to cover its costs associated with such violation. 22 C. [403] Effect of Violation of the Terms and Provisions of this Agreement After_ 23 Completion of Construction 24 The covenants established in this Agreement shall, without regard to technical classification 25 and designation, be binding for the benefit and in favor of Agency, its successors and assigns, as to those 26 covenants which are for its benefit. The covenants contained in this Agreement shall remain in effect 27 28 DAB/js [Turpin.OPA] 11 September 19, 1995 I until the termination date of the Redevelopment Plan unless an earlier date is specified in this Agreement. 2 The covenants against racial discrimination shall remain in perpetuity. 3 Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the 4 covenants running with the land, for and in its own rights and for the purposes of protecting the interests 5 of the community and other parties, public or private, in whose favor and for whose benefit this 6 Agreement and the covenants running with the land have been provided. The Agreement and the 7 covenants shall run in favor of the Agency, without regard to whether Agency has been, remains or is 8 an owner of any land or interest therein in the Site. Agency shall have the right, if the Agreement or 9 covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law 10 or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other 11 beneficiaries of this Agreement and covenants may be entitled. 12 V. [500] GENERAL PROVISIONS 13 A. [501] Notices. Demands and Communications Between the Parties 14 Written notices, demands and communications between Agency and Participant shall be 15 sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or 16 dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal 17 offices of Agency and Participant. Such written notices, demands and communications may be sent in 18 the same manner to such other addresses as such party may from time to time designate by mail as 19 provided in this Section 501. 20 Any written notice, demand or communication shall be deemed received immediately if delivered 21 by hand and shall be deemed received on the tenth day from the date it is postmarked if delivered by 22 registered or certified mail. 23 B. [502] Conflicts of Interest: Nonliability 24 No member, official or employee of Agency or the City shall have any personal interest, direct 25 or indirect, in this Agreement. No member, official or employee shall participate in any decision relating 26 to the Agreement which affects his personal interests or the interests of any corporation, partnership or 27 28 DAB/js [Turpin.OPA] 12 September 19, 1995 I association in which he is directly or indirectly interested. No member, official or employee of Agency 2 or the City shall be personally liable to Participant, or any successor in interest, in the event of any 3 default or breach by Agency or Participant, or for any amount which may become due to Participant or 4 its successor or on any obligations under the terms of this Agreement. 5 Participant represents and warrants that it has not paid or given, and shall not pay or give, any 6 third party any money or other consideration for obtaining this Agreement. 7 C. [503] Enforced Delay: Extension of Times of Performance 8 In addition to specific provisions of this Agreement, performance by either party hereunder shall 9 not be deemed to be in default, and all performance and other dates specified in this Agreement shall be 10 extended, where delays or defaults are due to: war; insurrections; floods; earthquakes; fires; casualties; 11 acts of God; acts of the public enemy; freight embargoes; governmental restrictions or priority; litigation; 12 unusually severe weather; acts or omissions of another party; acts or failures to act of the City or any 13 other public or governmental agency or entity (other than the acts or failures to act of Agency which shall 14 not excuse performance by Agency); or any other causes beyond the control or without the fault of the 15 party claiming an extension of time to perform. Notwithstanding anything to the contrary in this 16 Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall 17 commence to run from the time of the commencement of the cause, if notice by the party claiming such 18 extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of 19 performance under this Agreement may also be extended in writing by the mutual agreement of Agency 20 and Participant. 21 Participant is not entitled pursuant to this Section 503 to an extension of time to perform because 22 of past, present, or future difficulty in obtaining suitable temporary or permanent financing for the Site. 23 D. [504] Inspection of Books and Records 24 Agency has the right at all reasonable times to inspect the books and records of Participant 25 pertaining to the Site as pertinent to the purposes of this Agreement. Participant has the right at all 26 reasonable times to inspect the public records of Agency pertaining to the Site as pertinent to the purposes 27 28 DAB/js [Turpin.OPA] 13 September 19, 1995 I of the Agreement. 2 VI. [600] DEFAULTS AND REMEDIES 3 A. [601] Defaults - - General 4 Subject to the extensions of time set forth in Section 503, failure or delay by any party to 5 perform any term or provision of this Agreement constitutes a default under this Agreement. The party 6 who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and 7 shall complete such cure, correction or remedy with diligence. 8 The injured party shall give written notice of default to the party in default, specifying the default 9 complained of by the injured party. Except as required to protect against further damages, the injured 10 party may not institute proceedings against the party in default until thirty (30) days after giving such 11 notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it 12 change the time of default. 13 B. [602] Legal Actions 14 1. [603] Institution of Legal Actions 15 In addition to any other rights or remedies hereunder, Agency or Participant may institute legal 16 action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other 17 remedy consistent with the purpose of this Agreement. Any legal actions initiated pursuant to this 18 Agreement or otherwise with respect to this subject matter must be instituted in the Superior Court of the 19 County of San Bernardino, State of California, or in an appropriate municipal court in that county. 20 2. [604] Applicable Law 21 The laws of the State of California shall govern the interpretation and enforcement of this 22 Agreement. 23 3. [605] Acceptance of Service of Process 24 In the event that any legal action is commenced by any party against another party, service of 25 process on such party shall be made by personal service upon such party or in such other manner as may 26 be provided by law, and shall be valid whether made within or without the State of California. 27 28 DAB/js [Turpin.OPA] 14 September 19, 1995 I C. [606] Rights and Remedies are Cumulative 2 Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are 3 cumulative, and the exercise by a party of one or more of such rights or remedies shall not preclude the 4 exercise by it, at the same or different times, of any other rights or remedies for the same default or any 5 other default by any other party. 6 D. [607] Inaction Not a Waiver of Default 7 Any failures or delays by any party in asserting any of its right and remedies as to any default 8 shall not operate as a waiver of any default or of any such rights or remedies, or deprive any party of its 9 right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert 10 or enforce any such rights or remedies. 11 E. [608] Remedies 12 1. [609] Damages 13 If either Participant or Agency defaults with regard to any of the provisions of this Agreement, 14 the non-defaulting party shall serve written notice of such default upon the defaulting party. If the 15 default is not cured or if a cure has not been commenced and is being diligently pursued to completion 16 by the defaulting party within thirty (30) days after service of the notice of default, the defaulting party 17 shall be liable to the other for any damages caused by such default, and the non-defaulting party shall 18 have the right to seek specific performance and such other remedies as are available in law or equity. 19 VII. [700] SPECIAL PROVISIONS 20 A. [701] Submission of Documents to Agency for Approval 21 Whenever this Agreement requires Participant to submit any document to Agency for approval, 22 which shall be deemed approved if not acted on by Agency within the specified time, said document shall 23 be accompanied by a letter stating that it is being submitted and will be deemed approved unless rejected 24 by Agency within the stated time. If there is not a time specified herein for such Agency action, 25 Participant may submit a letter requiring Agency approval or rejection of documents within thirty (30) 26 days after submission to Agency or such documents shall be deemed approved. 27 28 DAB/js [Turpin.OPA] 15 September 19, 1995 I B. [702] Successors in Interest 2 The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be 3 binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of 4 Participant and Agency. 5 VIII. [800] ENTIRE AGREEMENT, WAIVERS 6 This Agreement is executed in four (4) duplicate originals, each of which is deemed to be an 7 original. This Agreement includes Attachments 1 through 6, which together with this Agreement 8 constitute the entire understanding and agreement of the parties. 9 No private entity shall be deemed to be a third party beneficiary with respect to any provisions 10 of this Agreement. 11 This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, 12 and supersedes all negotiations or previous agreements among the parties or their predecessors in 13 interest with respect to all or any part of the subject matter hereof. 14 All waivers of the provisions of this Agreement must be in writing by the appropriate authorities 15 of the Agency and Participant, and all amendments hereto must be in writing by the appropriate 16 authorities of Agency and Participant, except that the Executive Director of Agency may agree to non- 17 substantive changes hereto with concurrence by Agency Counsel. 18 Each individual signing below represents and warrants that he has the authority to execute this 19 Agreement on behalf of and bind the party he purports to represent. 20 IX. [900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY 21 A. [901] Time for Acceptance 22 This Agreement, when executed by Participant and delivered to Agency, must be authorized, 23 executed and delivered by Agency on or before thirty (30) days after signing and delivery of this 24 Agreement by Participant or this Agreement shall be void, except to the extent that Participant shall 25 consent in writing to a further extension of time for the authorization, execution and delivery of this 26 Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency 27 28 DAB/js [Turpin.OPA] 16 September 19, 1995 1 as evidenced by the date first above shown. 2 3 IN WITNESS WHEREOF, Agency and Participant have executed this Agreement on the day and 4 date first above shown. 5 6 "Agency" 7 ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 8 9 by Tom Minor, Chairman 10 11 APPROVED AS TO PROGRAM: 12 by 13 14 APPROVED AS TO FORM AND LEGAL CONTENT: 15 16 By: Agency Counsel 17 "Participant" 18 DON TURPIN PONTIAC, INC., A CALIFORNIA CORPORATION 19 By 20 21 By 22 23 24 25 26 27 28 DAB/js [Turpin.OPA] 17 September 19, 1995 0 1 2 ATTACHMENT NO. 1 3 LEGAL DESCRIPTION OF THE SITE 4 This Owners Participation Agreement relates to and affects that real property commonly known 5 as 730 Showcase Drive, San Bernardino, California, and more particularly described as approximately the north one-half of the property described as follows: Parcel 6 of Parcel Map No. 9713 as per plat 6 thereof recorded in Book 106 of Parcel Maps, Pages 91-93, records of the County Recorder of San Bernardino. 7 8 9 10 ATTACHMENT NO. 2 11 GUARANTEE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.OPAI September 19, 1995 1 2 ATTACHMENT NO. 3 3 SCOPE OF DEVELOPMENT 4 I. GENERAL DESCRIPTION The Site is specifically 'described in the Legal Description (Attachment No. 1) pursuant to 5 Section 103 of this Agreement. 6 II. DEVELOPMENT Participant shall develop the Site by remodeling and constructing improvements to the existing 7 structures on the Site in order to establish auto dealerships and related business operations (the "Project"). 8 The Participant shall commence and complete the Project by the respective times established 9 therefor in the Schedule of Performance (Attachment No. 4). 10 III. DEVELOPMENT STANDARDS 11 The Project shall be developed in accordance with applicable building and safety codes. 12 IV. DEMOLITION AND SOILS 13 Participant assumes all responsibility for surface and subsurface conditions at the Site, and the suitability of the Site for the Project. If the surface and subsurface conditions are not entirely suitable 14 for such development and use, Participant shall at its cost take all actions necessary to render the Site entirely suitable for such development. Participant has undertaken all investigation of the Site it has 15 deemed necessary and has not received or relied upon any representations of Agency, the City, or their respective officers, agents and employees. Participant shall undertake at its cost all work required in 16 connection with the development of the Project. 17 18 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.OPA1 September 19, 1995 1 2 ATTACHMENT NO. 4 3 SCHEDULE OF PERFORMANCE 4 1. Execution of Agreement by Agency. Not later than thirty (30) days after the date of 5 Agency shall approve and execute this execution and submission of two (2) copies of Agreement, and shall deliver one (1) copy this Agreement to Agency by Participant 6 thereof to Participant. 7 2. Submit all and receive all necessary Not later than December 1, 1995 8 entitlements. 9 3. Commence Construction of Project. Not later than December 15, 1996 10 11 4. Participant shall complete construction of the Not later than March 1, 1996 Project as evidenced by the issuance of a 12 Certificate of Occupancy. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DAB/js [Turpin.OPA] September 19, 1995 1 ATTACHMENT NO. 5 2 3 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) 4 ) 5 ) 6 ----------------------------------------------------------------------------------------------------------------------------- [Space above for Recorder.] 7 8 CERTIFICATE OF COMPLETION FOR 9 CONSTRUCTION AND DEVELOPMENT 10 WHEREAS, pursuant to that Certain Owner's Participation Agreement entered into between the Agency, and Turpin Pontiac, Inc. ("Participant") dated as of ("the Agreement"), relating 11 to that certain real property described on Exhibit 1, attached hereto and incorporated herein, the Participant is entitled to the issuance of a Certificate of Completion upon the completion of those 12 improvements required by the Agreement to be developed by the Participant (the "Participant Improvements"); and 13 WHEREAS, such certificate shall be conclusive determination of satisfactory completion of the 14 construction required by the Agreement; and 15 WHEREAS, the Agency has conclusively determined that the construction on the above described real property required by the Agreement has been satisfactorily completed; 16 NOW, THEREFORE, 17 1. The Agency does hereby certify that the construction of the Project has been fully and 18 satisfactorily performed and completed. 19 2. Nothing contained in this instrument shall modify in any other way other provisions of the Agreement. All executory obligations of the Participant pursuant to the Agreement shall remain in full 20 force and effect. 21 IN WITNESS WHEREOF, the Agency has executed this certificate this day of 1995. 22 ECONOMIC DEVELOPMENT AGENCY 23 OF THE CITY OF SAN BERNARDINO 24 By: Executive Director 25 26 27 28 DAB/js [Turpin.OPA] September 19, 1995 I LOAN GUARANTY AGREEMENT 2 THIS AGREEMENT made and entered into this day of , 1995, by 3 and between THE ECONOMIC DEVELOPMENT AGENCY OF T CITY OF SAN BERNARDINO, CALIFORNIA, a public agency corporate and politic (the "Agency"), as guarantor to VALLEY BANK, 4 a California corporation ("Lender"), on the obligation of DON TURPIN PONTIAC, INC., a California corporation ("Debtor"), 5 1. The Agency hereby guarantees to Lender, on the terms and conditions set forth hereinafter, 6 the obligation of Debtor, as more specifically described hereinafter. This Guaranty is subject to the provisions and conditions contained herein. 7 2. The Agency's obligations to Lender are solely with respect to the debt incurred by Debtor by 8 way of the promissory note entered into by and between Lender and Debtor, a true and correct copy of which is attached to this Guaranty as Exhibit "A" (the "Debt"). The Agency's obligation hereunder shall 9 not extend to any other obligation of Debtor to Lender, or any third party, whatsoever. 10 3. The amount of the Agency's obligations to Lender shall not exceed Five Hundred Thousand Dollars ($500,000.00), less any payments made on account thereof by Debtor or any other party. Any 11 obligation of the Agency hereunder shall cease upon payment in full of all principal and interest due under said note, regardless of the source of said payment. 12 4. The obligations of the Agency under this guaranty do not extend to any prior, 13 contemporaneous or future debt owed by Debtor to Lender. 14 5. Lender may not, without the prior written consent of the Agency, enter into any modification, amendment, waiver or other change in the terms, amount or conditions of the Debt, nor renew, extend, 15 postpone or accelerate the time for payment or otherwise change the terms of the Debt, nor release any security held therefor. 16 6. Lender covenants that it will diligently exercise all rights accorded to it under the terms of 17 Exhibit "A" or any collateral or security agreements held by Lender in connection therewith. 18 7. Lender expressly waives any right to seek to obtain in any manner whatsoever any asset of the Agency which may be in the possession of the Lender at any time, and agrees solely to exercise its rights 19 under this agreement in accordance with the terms hereof. 20 8. In the event of any default by Debtor under the terms of the Debt, Lender agrees to provide the Agency with notice thereof within thirty (30) days of the event of said default, so as to enable the 21 Agency to contact the Debtor and seek to obtain compliance by the Debtor with the terms of the Debt. Lender further agrees to provide reasonable notice, which shall not be less than forty-five (45) days, prior 22 to taking any action to declare a default under the terms of the Debt, accelerate the indebtedness referenced thereby, act upon any security held by Lender with respect to said indebtedness, or otherwise 23 enforce any rights against the Debtor or the Agency. 24 9. The Agency reserves all rights of subrogation or indemnification against the Debtor with respect to any and all sums which may be paid by the Agency on behalf of the Debtor under the terms 25 of this agreement. After any and all conditions precedent hereunder to the Agency's obligations hereunder have been satisfied, Lender may make written demand upon the Agency for payment of any 26 unpaid portion thereof in full within sixty (60) days of receipt of such written demand. 27 28 DAB/tbm [Valley.agr] 1 September 19, 1995 1 10. Notwithstanding any other provision of this Guaranty to the contrary, the total obligation of the Agency to Lender under the terms hereof shall not exceed the sum stated in Section 2 above. 2 11. The Agency may not terminate its obligations under the provisions of this Guaranty until such 3 time as the Debt has been paid in full or the amount then owed by Agency pursuant hereto has been paid in full. 4 12. To the extent the Lender avails itself of its rights under this Guaranty and is made whole, the 5 Lender shall, upon written request of the Agency, assign any and all of its rights under the Debt to and in favor of the Agency. 6 13. In the event of litigation concerning the terms of this Guaranty, the prevailing party shall be 7 entitled to reasonable attorneys' fees. 8 14. This Guaranty and the respective rights and obligations created hereby are subject and are to be construed according to the laws of the State of California. 9 15. Lender may assign its rights under this Guaranty, subject to providing fifteen (15) days' prior 10 written notice thereof to the Agency. 11 16. The Agency's obligations under this Agreement, notwithstanding any prior execution hereof by any representative of the Agency, are subject to the approval of the Community Development 12 Commission, the legislative body of the Agency. 13 17. If legal action is taken to enforce this guaranty or any provision hereof, the action may be maintained alone, or joined with any action or other proceeding against Debtor, and shall be brought in 14 the Superior Court of the County of San Bernardino, State of California. 15 18. Any notice to be given from one party to another under or pursuant to the terms of this agreement shall be in writing and deposited with the United States Postal Service, postage prepaid, and 16 addressed as follows: 17 To Agency Agency Administrator 201 North "E" Street, Third Floor 18 San Bernardino, CA 92401-1507 19 To Lendor Valley Bank P.O. Box 188 20 Moreno Valley, CA 92556-0188 21 To Debtor Don Turpin Pontiac, Inc. 1655 Industrial Park Ave. 22 Redlands, CA 92374 23 Nothing in this paragraph shall be construed to prevent the giving of notice by personal service. 24 25 26 27 28 DAB/tbm [Valley.agr] 2 I [Economic Development Agency guaranty to Valley Bank] 2 IN WITNESS WHEREOF the parties hereto have entered into this agreement on the day and date first above shown. 3 ECONOMIC DEVELOPMENT AGENCY OF 4 THE CITY OF SAN BERNARDINO 5 By 6 Tom Minor, Chairman 7 Attest: 8 By 9 Secretary 10 APPROVED AS TO FORM 11 AND LEGAL CONTENT 12 13 Agency Counsel 14 ACCEPTED: 15 VALLEY BANK 16 B 17 y 18 By 19 20 21 22 23 24 25 26 27 28 DAB/tbm [Valley.agr] 3 1 PERSONAL GUARANTY AGREEMENT 2 THIS PERSONAL GUARANTY AGREEMENT entered into this day of , 3 1995, by and between RITA TURPIN, an individual ("Turpin"), as guarantor to THE ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA, a public agency 4 corporate and politic ("Agency"), as guarantor of the loan by VALLEY BANK, a California corporation ("Bank") to DON TURPIN PONTIAC, INC., a California corporation ("Borrower"), 5 6 1. For valuable consideration, Turpin unconditionally guarantees and promises to pay to the Agency, or order, on demand, any and all indebtedness of Borrower, as a result of that certain Loan 7 Guaranty Agreement between Agency and Bank dated , 1995 ("Agency Guaranty"). 8 2. The liability of Turpin shall not exceed at any one time the sum of Five Hundred Thousand Dollars ($500,000.00) for principal, in addition to all attorneys fees provided under Section 9 13 of the Agency Guaranty, all interest upon the indebtedness or upon such part thereof together with penalty and interest as set forth in the Owner Participation Agreement by and between the Agency and the 10 Borrower (the "OPA"). 11 3. The obligations hereunder are joint and several, and independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Turpin whether action 12 is brought against Borrower or whether Borrower be joined in any such action or actions; and Turpin waives benefit of any statute of limitations affecting her liability hereunder or the enforcement thereof. 13 4. For further and additional security for this personal guaranty Turpin hereby assigns any 14 and all rights held by her to Agency in that certain partnership known as Redlands Land Investment Company. 15 5. Turpin authorizes Agency, upon written notice or demand and without affecting her 16 liability hereunder, from time to time to (a) renew, compromise, extend, accelerate, or otherwise change the time for payment of, or otherwise change the terms of the indebtedness or any part thereof, including 17 increase or decrease of the rate or rates of interest thereon; (b) take and hold security for the payment of this Personal Guaranty or the indebtedness guaranteed, and exchange, enforce, waive, and release any 18 such security; (c) apply such security and direct the order or manner of sale thereof as Agency in its discretion may determine; and (d) release or substitute any one or more of the endorsers or guarantors. 19 Agency may without notice assign this Personal Guaranty in whole or in part. 20 6. Turpin waives any right to require Agency to (a) proceed against Borrower; (b)proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Agency's power 21 whatsoever. Turpin waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Until all 22 indebtedness of Borrower to Agency shall have been paid in full, even though such indebtedness is in excess of Turpin's liability hereunder, Turpin shall have no right of subrogation, and waives any right to 23 enforce any remedy which Agency now has or may hereafter have against Borrower, and waives any benefit of, and any right to participate in any security now or hereafter held by Agency. Turpin waives 24 all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Personal Guaranty and of the existence, creation, 25 or incurring of new or additional indebtedness. 26 7. No lien or right of set off shall be deemed to have been waived by any act or conduct 27 on the part of Agency, or by any neglect to exercise such right of set off or to enforce such lien, or by any 28 DAB/tbm [Turpingu.agr] 1 September 19, 1995 0 1 delay in so doing; and every right of set off and lien shall continue in full force and effect until such right 2 of set off or lien is specifically waived or released by an instrument in writing executed by Agency. 8. Turpin agrees to pay reasonable attorney's fees and all other costs and expenses which 3 may be incurred by Agency in the enforcement of this Personal Guaranty. 4 9. This Personal Guaranty shall remain in effect until such time as all principal, accrued interest and penalty charges, as applicable, and all other costs, fees and expenses incurred by Agency 5 pursuant to the OPA have been paid in full. At such time as all financial responsibilities of Borrower to Agency have been extinguished, this Personal Guaranty shall be of no force and effect and shall be 6 delivered to Turpin. 7 IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day 8 and date first above shown. 9 RITA TURPIN 10 11 12 13 ACCEPTED BY AGENCY 14 15 THE ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN 16 BERNARDINO 17 By 18 Tom Minor, Chairman 19 ATTEST: 20 by 21 Secretary 22 APPROVED AS TO FORM 23 AND LEGAL CONTENT 24 By 25 Agency Counsel 26 27 28 DAB/tbm [Turpingu.agr] 2 September 19, 1995 1 GUARANTY AGREEMENT 2 THIS GUARANTY AGREEMENT entered into this day of ,.1995, by and 3 between DON TURPIN PONTIAC, INC., a California corporation ("Turpin"),as guarantor to THE ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA, 4 a public agency corporate and politic ("Agency"), as guarantor of the loan by VALLEY BANK, a California corporation ("Bank") to TURPIN, 5 6 1. For valuable consideration, Turpin unconditionally guarantees and promises to pay to the Agency, or order, on demand, any and all indebtedness of Turpin, as a result of that certain Loan 7 Guaranty Agreement between Agency and Bank dated , 1995 ("Agency Guaranty"). 8 2. The liability of Turpin shall not exceed at any one time the sum of Five Hundred Thousand Dollars ($500,000.00) for principal, in addition to all attorneys fees provided under Section 13 9 of the Agency Guaranty, all interest upon the indebtedness or upon such part thereof together with penalty and interest as set forth in the Owner Participation Agreement by and between the Agency and the Turpin 10 (the "OPA"). 11 3. The obligations hereunder are joint and several, and independent of the obligations of Turpin to Bank, and a separate action or actions may be brought and prosecuted against Turpin whether 12 action is brought against Turpin by Bank or whether Turpin be joined in any such action or actions; and Turpin waives benefit of any statute of limitations affecting its liability hereunder or the enforcement 13 thereof. 14 4. Turpin authorizes Agency, upon written notice or demand and without affecting its liability hereunder, from time to time to (a) renew, compromise, extend, accelerate, or otherwise change 15 the time for payment of, or otherwise change the terms of the indebtedness or any part thereof, including increase or decrease of the rate or rates of interest thereon; (b) take and hold security for the payment of 16 this Personal Guaranty or the indebtedness guaranteed, and exchange, enforce, waive, and release any such security; (c) apply such security and direct the order or manner of sale thereof as Agency in its 17 discretion may determine; and (d) release or substitute any one or more of the endorsers or guarantors. 18 Agency may without notice assign this Personal Guaranty in whole or in part. 5. Turpin waives any right to require Agency to (a) proceed against or exhaust any 19 security held from Turpin; or (b) pursue any other remedy in Agency's power whatsoever. Turpin waives any defense arising by reason of any disability or other defense of Turpin or by reason of the cessation 20 from any cause whatsoever of the underlying liability of Turpin. Until all indebtedness of Turpin to Agency shall have been paid in full, even though such indebtedness is in excess of Turpin's liability 21 hereunder, Turpin shall have no right of subrogation, and waives any right to enforce any remedy which Agency now has or may hereafter have against Turpin, and waives any benefit of, and any right to 22 participate in any security now or hereafter held by Agency. Turpin waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices 23 of acceptance of this Guaranty and of the existence, creation, or incurring of new or additional indebtedness. 24 6. No lien or right of set off shall be deemed to have been waived by any act or conduct 25 on the part of Agency, or by any neglect to exercise such right of set off or to enforce such lien, or by any delay in so doing; and every right of set off and lien shall continue in full force and effect until such right 26 of set off or lien is specifically waived or released by an instrument in writing executed by Agency. 27 28 DAB/tbm [Turpinc.agr] 1 September 19, 1995 1 7. Turpin agrees to pay reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in the enforcement of this Guaranty. 2 8. This Guaranty shall remain in effect until such time as all principal, accrued interest 3 and penalty charges, as applicable, and all other costs, fees and expenses incurred by Agency pursuant to the OPA have been paid in full. At such time as all financial responsibilities of Turpin to Agency have 4 been extinguished, this Guaranty shall be of no force and effect and shall be delivered to Turpin. 5 IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day 6 and date first above shown. 7 DON TURPIN PONTIAC, INC. 8 9 By 10 By 11 12 13 ACCEPTED BY AGENCY 14 THE ECONOMIC DEVELOPMENT 15 AGENCY OF THE CITY OF SAN BERNARDINO 16 17 By Tom Minor, Chairman 18 ATTEST: 19 20 by Secretary 21 22 APPROVED AS TO FORM AND LEGAL CONTENT 23 24 By Agency Counsel 25 26 27 28 DAB/tbm [Turpinc.agrl 2 September 19, 1995 1 GRANT AGREEMENT 2 THIS AGREEMENT made and entered into this day of , 1995, by and between THE ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN 3 BERNARDINO, CALIFORNIA, a public agency corporate and politic duly organized and existing pursuant to the Community Redevelopment Law of the State of California ("Agency"), 4 and SAN BERNARDINO DOWNTOWN MAIN STREET, INC., a California non-profit public benefit corporation ("Main Street"), 5 WITNESSETH: 6 WHEREAS, Agency is authorized and empowered by the Community Redevelopment Law 7 (Chapter 1, of Division 24 of the California Health and Safety Code [§33000 et. seq], as amended [the "Law"]), to use its powers to alleviate the effects of blight which, among other things, result 8 in economic dislocation and maladjustment, which become a significant physical, social, and economic burden on the community, and 9 WHEREAS, Main Street is authorized and empowered to improve and upgrade the 10 downtown and other commercial areas of the City of San Bernardino (the "City") through attracting businesses, improving amenities, promoting cultural events, increasing employment, 11 beautifying the area and related actions, and 12 WHEREAS, it is anticipated by the parties that Main Street will be able to beneficially use a grant from the Agency in enhancing the economic revitalization of the downtown and other 13 commercial areas of the City, and 14 WHEREAS, it is anticipated that Main street will be able to generate and promote jobs, increase the City's property tax base, increase the receipt of sales and utility tax to the City, and 15 generate an increased community sense of trust and confidence in the commercial areas of the City, and 16 WHEREAS, the provision of a grant will benefit the City by eliminating blighted 17 conditions within the downtown area and other commercial areas in the City, and will facilitate development and use of such commercial areas in a manner consistent with the goals, objectives 18 and responsibilities of the Agency, and will help encourage growth and revitalization within the City, and 19 WHEREAS, Main Street is an organization exempt from the payment of certain taxes 20 under § 501(c)(3) of the Internal Revenue Code, 21 NOW, THEREFORE, the parties hereto agree as follows: 22 1. Grant Agency hereby agrees to grant to Main Street the sum of Five Hundred Thousand Dollars ($500,000.00) for economic development in the downtown area, and other 23 commercial areas of the City of San Bernardino. Such grant shall be given to Main Street within a reasonable period of time following execution of this agreement, but not later than thirty (30) 24 days thereafter. 25 2. Use of Grant Main Street shall use such funds in the downtown area or in other commercial areas to create jobs, foster business development, increase property values, eliminate 26 or reduce blight, increase sales and utility taxes, increase public confidence and otherwise 27 revitalize said commercial areas. No portion of the funds shall be provided to any tax-exempt 28 DAB/tbm [Grant.agr] 1 September 13, 1995 1 entity without the written consent of the Agency. 2 3. Reports Main Street shall provide monthly reports to Agency on the use of the grant funds. Such reports shall include, but need not be limited to, number of jobs created and assessed 3 value of property rehabilitated. 4 4. Term Main Street agrees that all grant funds shall be expended and accounted for to Agency within one (1) year of the date of this agreement. Should such grant finds not be so 5 expended, any remaining excess shall be returned to Agency forthwith. 6 5. Acts of God The responsibility of Main Street as provided in Section 4 above shall be subject to the following limitations: By reason of acts of God; strikes, lockouts or other industrial 7 disturbances; delays in obtaining materials or labor which are through no fault of Main Street, shortages of materials or labor or acts of public enemies; orders of any kind of the Government 8 of the United States or of the State of California or any department, agency, political subdivision, court or official of any of them, or any civil or military authority; insurrections; riots; epidemics; 9 landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornados; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; 10 breakage or accident to machinery; partial or entire failure of utilities; or any cause or event not reasonably within the control of Main Street, Main Street is unable in whole or in part to carry 11 out any one or more of its agreements or obligations contained in this agreement, Main Street shall, for the time of said delay or such longer period as shall be agreed in writing by the Agency, 12 not be deemed in default pursuant to Section 4 hereof by reason of not carrying out said agreement or agreements or performing said obligation or obligations during the continuance of such 13 inability. Main Street shall make reasonable effort to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of 14 strikes, lockouts and other industrial disturbance shall be entirely within the discretion of the employer, and Main Street shall not be required to make settlement of strikes, lockouts and other 15 industrial disturbances by acceding to demands of the opposing party or parties when such course is in the judgment of Main Street unfavorable to Main Street. 16 6. Remedies In the event Main Street breaches any of its obligations under this 17 agreement, Main Street shall, at the option of the Agency and upon demand by the Agency to Main Street, immediately reimburse to the Agency the amount of the Agency grant. As a further 18 and cumulative remedy, Main Street, for itself, legal representatives, successors and assigns, agrees that Agency, its successors and assigns, shall have the right and power to institute and 19 prosecute any proceeding at law or in equity to enforce any covenants and agreements herein contained and to enjoin the threatened or attempted violation thereof by Main Street, its legal 20 representatives, successors, tenants and assigns and/or collect damages from the aforesaid, whomsoever of which may violate said covenants and agreements; and in addition, Main Street 21 for itself, legal representatives, successors and assigns does hereby grant the Agency such right 22 and power to institute and prosecute such proceedings. The remedies for the benefit of Agency set forth in this Section 6 shall be in addition to 23 any and all other remedies available to the Agency under this agreement or as a matter of law. The parties acknowledge acid agree that the Agency may exercise any and all legal and equitable 24 remedies available to thy; Agency under the laws of the State of California to enable the Agency to exercise the rights of the Agency hereunder and to enforce the provisions of this Agreement 25 including, but not limited to, those which are contained in this Section 6. 26 In the event the Agency breaches any of its covenants or obligations under this agreement, 27 Main Street may exercise all legal and equitable remedies available to it under the laws of the 28 DAB/tbm [Grant.agrl 2 September 13, 1995 1 State of California. 2 7. Notices Any notice to be given under the terms of this agreement from one party to another shall be deposited with the United States Postal Service, First Class postage prepaid, and 3 addressed as follows: 4 To the Agency Agency Administrator Economic Development Agency 5 Of the City of San Bernardino 201 North "E" Street, Third Floor 6 San Bernardino, California 92401-1507 7 To Main Street Executive Director San Bernardino Downtown Main Street, Inc. 8 201 North "E" Street, Second Floor San Bernardino, California 92401 9 Nothing in this paragraph shall be construed to prevent the giving of notice by personal 10 service. 11 8. Applicable Law This agreement shall be construed and enforced in accordance with the laws of the State of California, and any action brought to enforce this agreement or pursuant 12 thereto shall be brought in the Superior Court of the County of San Bernardino or in a competent Municipal Court located in said county. 13 9. Nondiscrimination Main Street agrees that, in addition to the other provisions set forth 14 in this agreement, every conveyance of property, in whole or in part, to the extent as permitted or required pursuant to this agreement, shall, in addition to any other covenants, contain 15 covenants on the part of Main Street, for itself, its successors and assigns, which shall bind Main Street, its successors and assigns and all persons claiming under or through it to effectuate the 16 following: 17 (a) That there shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or 18 ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises to be conveyed, nor shall Main Street or any grantees or any persons claiming under or through 19 Main Street establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, 20 sublessees or vendees in the premises to be conveyed. 21 (b) Such agreements and covenants shall run with the land, and shall inure to the benefit of and be enforceable by the Agency, its successors and assigns. Furthermore, it is intended and 22 agreed that the covenants contained in subsection (a) of this Section 9 shall remain in effect without limitation as to time. 23 10. Successors and Assigns: Assignment The provisions of this agreement shall be binding 24 upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. Main Street shall not assign, transfer or in any manner hypothecate any or all of 25 its rights and obligations under this agreement without the prior written approval and consent of the Agency. 26 27 28 DAB/tbm [Grant.agr] 3 September 13, 1995 10 1 [GRANT AGREEMENT TO MAIN STREET] 2 IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day and date first above shown. 3 ECONOMIC DEVELOPMENT AGENCY 4 OF THE CITY OF SAN BERNARDINO 5 By 6 Tom Minor, Chairman ATTEST: 7 8 by Secretary 9 Approved as to Form and 10 Legal Content 11 by 12 Agency Counsel 13 SAN BERNARDINO DOWNTOWN 14 MAIN STREET, INC. 15 By 16 Ann Harris, Executive Director 17 18 19 20 21 22 23 24 25 26 27 28 DAB/tbm [Grant.agr] 4 September 13, 1995 RECORDING REQUESTED BY AND ) WHEN RECORDED MAIL TO: ) DEED OF TRUST WITH ASSIGNMENT OF RENT Deed of Trust made on , 1995, by RITA TURPIN, hereinafter called "Trustor" , whose address is -------------------------------- , First American Title Insurance Company, hereinafter referred to as "Trustee", whose business address is 323 West Court Street, San Bernardino, California 92401, in favor of SAN BERNARDINO DOWNTOWN MAIN STREET, INC., hereinafter referred to as "Beneficiary", whose business address is 201 North "E" Street, 2nd Floor, San Bernardino, California 92401. Trustor irrevocably grants, transfers, and assigns to Trustee in trust, with power of sale, all that property, including all easements and rights of way used in connection therewith or as a means of access thereto, in the City of San Bernardino, County of San Bernardino, State of California, described as follows: That certain property located in the City of San Bernardino, County of San Bernardino, State of California, more particularly described as Lot 34 of Tract 17294-1, recorded in the Official Records of the County Recorder of the County of Riverside, California, aka: 46-605 Quail Run Lane, Indian Wells, California, together with the rents, issues and profits thereof, subject however to the right reserved by Trustor in Paragraph B-17 hereof to collect and apply such rents, issues and profits, prior to any default hereunder: for the purpose of securing performance in a timely manner of all Trustor's obligations under that certain Promissory Note executed by Trustor in the principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500.000.00), payable to beneficiary or order and each extension thereof, both executed in connection with this Deed of Trust; and performance of each agreement to Trustor incorporated herein by reference or contained herein. A. To protect the security of this Deed of Trust, Trustor agrees: 1. To maintain the property in good condition and repair; not to remove or demolish any building or improvement thereon; to complete promptly in workmanlike manner any DAB/al [QuailRun.DoTj 1 improvement hereafter constructed thereon and to restore promptly in workmanlike manner any improvement thereon that is damaged or destroyed, and to pay when due all costs incurred therefor or in connection therewith; to comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the property; not to commit or permit any waste thereof or any act upon the property in violation of law or of covenants, conditions or restrictions affecting the property. 2. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and also, if at any time Beneficiary or Trustee is a parry to or appears in any such action or proceeding, or in any action or proceeding to enforce any obligation hereby secured, to pay all costs and expenses paid or incurred by them or either of them in connection therewith, including, but not limited to, costs of evidence of title and attorneys' fees in a reasonable sum. 3. To pay (a) at least ten (10) days before delinquency, all taxes and assessments affecting the property, all assessments upon water company stock, and all rents, assessments and charges for water appurtenant to or used in connection with the property; (b) When due, all encumbrances, charges and liens, with interest, on the property or any part thereof, which appear to be prior or superior hereto; and (c) all costs, fees and expenses of this trust. 4. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee (but without obligation to do so, and with or without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof) may (a) make or do the same in such manner and to such extent as either deems necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the property for such purpose; (b) appear in or commence any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien that, in the judgment of either, appears to be superior hereto; and in exercising any such power, Beneficiary or Trustee may incur necessary expenses, including reasonable attorneys' fees. 5. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with interest from date of expenditure at the annual rate of two percentage points over Bank of America's published prime rate. B. It is mutually agreed that: 1. Any award of damages made in connection with the condemnation for public use of or injury to the property or any part thereof is hereby assigned and shall be paid to Beneficiary, who may apply or release such moneys received therefor upon any indebtedness secured hereby in such order as Beneficiary determines, or at the option of Beneficiary the entire amount so received or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. DAB/al [QuailRun.DoT] 2 2. The acceptance by Beneficiary of any payment less than the amount then due shall be deemed an acceptance on account only and shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due or of Beneficiary's right either to require prompt payment of all sums then due or to declare default. The acceptance of payment of any sum secured hereby after its due date will not waive the right of Beneficiary either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. No waiver of any default shall be a waiver of any preceding or succeeding default of any kind. 3. At any time or from time to time, without liability therefor and with or without notice, upon written request of Beneficiary and presentation of this deed and the secured note for endorsement, and without effecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this deed upon the remainder of the property, Trustee may reconvey any part of the property, consent to the making of any map or plat thereof, join in granting any easement or join in any extension agreement or any agreement subordinating the lien or charge thereof. 4. Upon written request of Beneficiary stating that all sums secured hereby have been paid, surrender of this deed and the note to Trustee for cancellation and retention, and payment of its fees, Trustee shall reconvey, without warranty the property then held hereunder. The recitals in such reconveyance shall be conclusive proof of the truthfulness thereof. The grantee may be designated in such reconveyance as "the person or persons legally entitled thereto." 5. Trustor may give such notice to Beneficiary at any time before there is a Trustee's sale of the property. At any time Trustor is in default in payments to be made to Beneficiary hereunder, any amounts paid to and received by Beneficiary for execution of releases pursuant to the terms of this paragraph after notice of default and election to sell has been recorded shall not, unless the requirements of Section 2924c of the Civil Code are fully met by or on behalf of Trustor, waive the right of Beneficiary to continue its plans to have the property sold, nor shall they have any effect on the exercise by Beneficiary of the acceleration privilege contained herein, except to entitle the person effecting such payment to the release of the property for which the release amount was paid, and insofar as Beneficiary is concerned, to constitute a credit against the secured debt. 6. If Trustor or any subsequent owner of the property covered hereby shall occupy the property, or any part thereof, after any default in payment of any amount secured by this deed of trust, Trustor or such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental, Trustor or such owner may be removed from the premises by summary dispossession proceedings or by any other appropriate action or proceeding. 7. If default is made in payment of any indebtedness or in performance of any agreement hereby secured, then Beneficiary, with or without notice to Trustor, may declare all sums secured hereby immediately due and payable by instituting suit for the recovery thereof or for the foreclosure of this deed, or by delivering to Trustee a written declaration of default and demand DAB/al [QuailRun.DoT] 3 A for sale, as well as a written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be filed for record. If such declaration is delivered to Trustee, Beneficiary shall also deposit with Trustee this deed, the secured note, and all documents evidencing expenditures secured hereby. 8. Should Trustor, without the consent in writing of Beneficiary, voluntarily sell, transfer or convey his interest in the property or any part thereof, or if by operation of law, it be sold, transferred or conveyed, then Beneficiary may, at its option, declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future or successive transactions. 9. After the time then required by law has elapsed after recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, with or without demand on Trustor, shall sell the property at the time and place fixed in the notice of sale, either as a whole or in separate parcels and in such order as Trustee determines, at public auction, to the highest bidder, for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone from time to time sale of all or any portion of the property by public announcement at the time and place of sale originally fixed or at the last preceding postponed time. Trustee shall deliver to the purchaser its deed conveying the property sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor, Trustee, Beneficiary or any other person may purchase at the sale. 10. After deducting all costs, fees and expenses of Trustee and of this trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of(a) all sums expended under the terms hereof and not theretofore repaid, with accrued interest at two percentage points over Bank of America's published prime rate per annum, and (b) all other sums then secured hereby in such order as Beneficiary, in the exercise of its sole discretion, directs. The remainder, if any, shall be paid to the person or persons legally entitled thereto. 11. Before Trustee's sale, Beneficiary may rescind such notices of default and of election to cause the property to be sold by delivering to Trustee a written notice of rescission, which notice, when recorded, shall cancel any prior declaration of default, demand for sale and acceleration of maturity. The exercise of such a right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to deliver to Trustee other declarations of default and demands for sale or notices of default and of election to cause the property to be sold, or otherwise affect any provision of the secured note or of this deed or any of the rights, obligations ore remedies of Beneficiary or Trustee hereunder. 12. The restrictions pertaining to the property will automatically terminate if title to the mortgaged property is transferred by foreclosure or deed-in-lieu of foreclosure, or if the mortgage DAB/al [QuailRun.DoTl 4 0 is assigned to the Secretary of the Department of Housing and Urban Development. 13. Beneficiary may, from time to time as provided by statute, or by a writing signed and acknowledged by him and recorded in the office of the county recorder of the county in which the land or such party thereof as is then affected by this deed of trust is situated appoint another trustee in the stead and place of Trustee herein named; and thereupon, the Trustee herein named shall be discharged, and the trustee so appointed shall be substituted as Trustee hereunder with the same effect as if originally named Trustee herein. 14. If two or more persons are designated as Trustee herein, any or all powers granted herein to Trustee may be exercised by any of such persons if the other person or persons is unable, for any reason, to act. Any recital of such inability in any instrument executed by any of such persons shall be conclusive against Trustor, his heirs and assigns. 15. All leases now or hereafter affecting the property are hereby assigned and transferred to Beneficiary by Trustor. Trustor hereby covenants that none of such leases will be modified or terminated without the written consent of Beneficiary. 16. When requested to do so, Trustor shall give such further written assignments of rents, royalties, issues and profits; of all security for the performance of leases; and of all money payable under any option to purchase, and shall give executed originals of all leases, now or hereafter on or affecting the property. 17. Trustor reserves the right, prior to any default in payment of any indebtedness or performance of any obligation secured hereby, to collect all such rents, royalties, issues and profits, as but not before they become due. Upon any such default, Trustor's right to collect such moneys shall cease, not only as to amounts accruing thereafter, but also as to amounts then accrued and unpaid. In the event of default, Beneficiary, with or without notice and without regard to the adequacy of security for the indebtedness hereby secured, either in person or by agent, or by a receiver to be appointed by the court, (a) may enter upon and take possession of the property at any time and manage and control it in Beneficiary's discretion, and (b) with or without taking possession, may sue for or otherwise collect the rents, issues and profits thereof, whether past due or coming due thereafter, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, upon any obligation secured hereby and in such order as Beneficiary determines. None of the aforesaid acts shall cure or waive any default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall not be required to act diligently in the care or management of the property or in collecting any rents, royalties or other profits that it is hereby authorized to collect, and shall be accountable only for sums actually received. 18. Without affecting the liability of Trustor or of any other party now or hereafter bound by the terms hereof, from time to time and with or without notice, may release any person now or hereafter liable for performance of such obligation, and may extend the time for payment or DAB/al [QuailRun.DoT] 5 performance, accept additional security, and alter, substitute or release any security. 19. In any judicial action brought to foreclose this deed or to enforce any right of Beneficiary or of Trustee hereunder, Trustor shall pay to Beneficiary and to Trustee attorneys' fees in a reasonable sum, to be fixed by the court. 20. No remedy hereby given to Beneficiary or Trustee is exclusive of any other remedy hereunder or under any present or future law. 21. The pleading of any statute of limitations as a defense to any and all obligations secured by this deed is hereby waived, to the full extent permissible by law. 22. In the event of default in the payment of any indebtedness secured hereby, and if such indebtedness is secured at any time by any other instrument, Beneficiary shall not be obligated to resort to any security in any particular order; and the exercise by Beneficiary of any right or remedy with respect to any security shall not be a waiver of or limitation on the right of Beneficiary to exercise, at any time or from time to time thereafter, any right or remedy with respect to this deed. 23. Trustor shall, upon request made by Beneficiary, furnish the Beneficiary with annual statements covering the operations of the property. 24. Beneficiary may collect a "late charge" not to exceed an amount equal to four percent (4%) on the amount past due and remaining unpaid on any installment that is not paid within ten (10) days from the due date thereof, to cover the extra expense involved in handling delinquent payments. 25. This deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, successors in interest, and assigns. The term "Beneficiary" means the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this deed, whenever the context so requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural, and all obligations of each Trustor hereunder are joint and several. 26. Trustee accepts this trust when this deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. DAB/al [QuailRun.DoT] 6 Trustor request that a copy of notice of default and of any notice of sale hereunder shall be mailed to him at the address set out opposite his name, immediately below. MAILING ADDRESSES FOR NOTICES: As Trustor: Executed at , California, on the date first above written. By: DAB/al [QuailRun.DoTJ 7 RECORDING REQUESTED BY AND ) WHEN RECORDED MAIL TO: ) DEED OF TRUST WITH ASSIGNMENT OF RENTS Deed of Trust made on , 1995, by RITA TURPIN, hereinafter called "Trustor" , whose address is -------------------------------- , First American Title Insurance Company, hereinafter referred to as "Trustee", whose business address is 323 West Court Street, San Bernardino, California 92401, in favor of SAN BERNARDINO DOWNTOWN MAIN STREET, INC., hereinafter referred to as "Beneficiary", whose business address is 201 North "E" Street, 2nd Floor, San Bernardino, California 92401. Trustor irrevocably grants, transfers, and assigns to Trustee in trust, with power of sale, all that property, including all easements and rights of way used in connection therewith or as a means of access thereto, in the City of San Bernardino, County of San Bernardino, State of California, described as follows: That certain property located in the City of San Bernardino, County of San Bernardino, State of California, more particularly described as Lot 21 of Tract 10608-1, MB 183/79-84, recorded in the Official Records of the County Recorder of the County of San Bernardino, California, aka: 1031 Black Oaks, Lake Arrowhead, California, together with the rents, issues and profits thereof, subject however to the right reserved by Trustor in Paragraph B-17 hereof to collect and apply such rents, issues and profits, prior to any default hereunder: for the purpose of securing performance in a timely manner of all Trustor's obligations under that certain Promissory Note executed by Trustor in the principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500.000.00), payable to beneficiary or order and each extension thereof, both executed in connection with this Deed of Trust; and performance of each agreement to Trustor incorporated herein by reference or contained herein. A. To protect the security of this Deed of Trust, Trustor agrees: 1. To maintain the property in good condition and repair; not to remove or demolish any building or improvement thereon; to complete promptly in workmanlike manner any DAB/al [BlackOak.DoT] 1 0 improvement hereafter constructed thereon and to restore promptly in workmanlike manner any improvement thereon that is damaged or destroyed, and to pay when due all costs incurred therefor or in connection therewith; to comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the property; not to commit or permit any waste thereof or any act upon the property in violation of law or of covenants, conditions or restrictions affecting the property. 2. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and also, if at any time Beneficiary or Trustee is a party to or appears in any such action or proceeding, or in any action or proceeding to enforce any obligation hereby secured, to pay all costs and expenses paid or incurred by them or either of them in connection therewith, including, but not limited to, costs of evidence of title and attorneys' fees in a reasonable sum. 3. To pay (a) at least ten (10) days before delinquency, all taxes and assessments affecting the property, all assessments upon water company stock, and all rents, assessments and charges for water appurtenant to or used in connection with the property; (b) When due, all encumbrances, charges and liens, with interest, on the property or any part thereof, which appear to be prior or superior hereto; and (c) all costs, fees and expenses of this trust. 4. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee (but without obligation to do so, and with or without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof) may (a) make or do the same in such manner and to such extent as either deems necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the property for such purpose; (b) appear in or commence any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien that, in the judgment of either, appears to be superior hereto; and in exercising any such power, Beneficiary or Trustee may incur necessary expenses, including reasonable attorneys' fees. 5. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with interest from date of expenditure at the annual rate of two percentage points over Bank of America's published prime rate. B. It is mutually agreed that: 1. Any award of damages made in connection with the condemnation for public use of or injury to the property or any part thereof is hereby assigned and shall be paid to Beneficiary, who may apply or release such moneys received therefor upon any indebtedness secured hereby in such order as Beneficiary determines, or at the option of Beneficiary the entire amount so received or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. DAB/al 1B1ackOak.DoT] 2 W 2. The acceptance by Beneficiary of any payment less than the amount then due shall be deemed an acceptance on account only and shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due or of Beneficiary's right either to require prompt payment of all sums then due or to declare default. The acceptance of payment of any sum secured hereby after its due date will not waive the right of Beneficiary either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. No waiver of any default shall be a waiver of any preceding or succeeding default of any kind. 3. At any time or from time to time, without liability therefor and with or without notice, upon written request of Beneficiary and presentation of this deed and the secured note for endorsement, and without effecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this deed upon the remainder of the property, Trustee may reconvey any part of the property, consent to the making of any map or plat thereof, join in granting any easement or join in any extension agreement or any agreement subordinating the lien or charge thereof. 4. Upon written request of Beneficiary stating that all sums secured hereby have been paid, surrender of this deed and the note to Trustee for cancellation and retention, and payment of its fees, Trustee shall reconvey, without warranty the property then held hereunder. The recitals in such reconveyance shall be conclusive proof of the truthfulness thereof. The grantee may be designated in such reconveyance as "the person or persons legally entitled thereto." 5. Trustor may give such notice to Beneficiary at any time before there is a Trustee's sale of the property. At any time Trustor is in default in payments to be made to Beneficiary hereunder, any amounts paid to and received by Beneficiary for execution of releases pursuant to the terms of this paragraph after notice of default and election to sell has been recorded shall not, unless the requirements of Section 2924c of the Civil Code are fully met by or on behalf of Trustor, waive the right of Beneficiary to continue its plans to have the property sold, nor shall they have any effect on the exercise by Beneficiary of the acceleration privilege contained herein, except to entitle the person effecting such payment to the release of the property for which the release amount was paid, and insofar as Beneficiary is concerned, to constitute a credit against the secured debt. 6. If Trustor or any subsequent owner of the property covered hereby shall occupy the property, or any part thereof, after any default in payment of any amount secured by this deed of trust, Trustor or such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental, Trustor or such owner may be removed from the premises by summary dispossession proceedings or by any other appropriate action or proceeding. 7. If default is made in payment of any indebtedness or in performance of any agreement hereby secured, then Beneficiary, with or without notice to Trustor, may declare all sums secured hereby immediately due and payable by instituting suit for the recovery thereof or for the foreclosure of this deed, or by delivering to Trustee a written declaration of default and demand DAB/al [B1ackOak.DoT] 3 for sale, as well as a written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be filed for record. If such declaration is delivered to Trustee, Beneficiary shall also deposit with Trustee this deed, the secured note, and all documents evidencing expenditures secured hereby. 8. Should Trustor, without the consent in writing of Beneficiary, voluntarily sell, transfer or convey his interest in the property or any part thereof, or if by operation of law, it be sold, transferred or conveyed, then Beneficiary may, at its option, declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future or successive transactions. 9. After the time then required by law has elapsed after recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, with or without demand on Trustor, shall sell the property at the time and place fixed in the notice of sale, either as a whole or in separate parcels and in such order as Trustee determines, at public auction, to the highest bidder, for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone from time to time sale of all or any portion of the property by public announcement at the time and place of sale originally fixed or at the last preceding postponed time. Trustee shall deliver to the purchaser its deed conveying the property sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor, Trustee, Beneficiary or any other person may purchase at the sale. 10. After deducting all costs, fees and expenses of Trustee and of this trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of(a) all sums expended under the terms hereof and not theretofore repaid, with accrued interest at two percentage points over Bank of America's published prime rate per annum, and (b) all other sums then secured hereby in such order as Beneficiary, in the exercise of its sole discretion, directs. The remainder, if any, shall be paid to the person or persons legally entitled thereto. 11. Before Trustee's sale, Beneficiary may rescind such notices of default and of election to cause the property to be sold by delivering to Trustee a written notice of rescission, which notice, when recorded, shall cancel any prior declaration of default, demand for sale and acceleration of maturity. The exercise of such a right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to deliver to Trustee other declarations of default and demands for sale or rotice_� of default and of election to cause the property to be sold, or otherwise affect any provision of the secured note or of this deed or any of the rights, obligations ore remedies of Beneficiary or Trustee hereunder. 12. The restrictions pertaining to the property will automatically terminate if title to the mortgaged property is transferred by foreclosure or deed-in-lieu of foreclosure, or if the mortgage DAB/al (B1ackOak.DoTl 4 is assigned to the Secretary of the Department of Housing and Urban Development. 13. Beneficiary may, from time to time as provided by statute, or by a writing signed and acknowledged by him and recorded in the office of the county recorder of the county in which the land or such party thereof as is then affected by this deed of trust is situated appoint another trustee in the stead and place of Trustee herein named; and thereupon, the Trustee herein named shall be discharged, and the trustee so appointed shall be substituted as Trustee hereunder with the same effect as if originally named Trustee herein. 14. If two or more persons are designated as Trustee herein, any or all powers granted herein to Trustee may be exercised by any of such persons if the other person or persons is unable, for any reason, to act. Any recital of such inability in any instrument executed by any of such persons shall be conclusive against Trustor, his heirs and assigns. 15. All leases now or hereafter affecting the property are hereby assigned and transferred to Beneficiary by Trustor. Trustor hereby covenants that none of such leases will be modified or terminated without the written consent of Beneficiary. 16. When requested to do so, Trustor shall give such further written assignments of rents, royalties, issues and profits; of all security for the performance of leases; and of all money payable under any option to purchase, and shall give executed originals of all leases, now or hereafter on or affecting the property. 17. Trustor reserves the right, prior to any default in payment of any indebtedness or performance of any obligation secured hereby, to collect all such rents, royalties, issues and profits, as but not before they become due. Upon any such default, Trustor's right to collect such moneys shall cease, not only as to amounts accruing thereafter, but also as to amounts then accrued and unpaid. In the event of default, Beneficiary, with or without notice and without regard to the adequacy of security for the indebtedness hereby secured, either in person or by agent, or by a receiver to be appointed by the court, (a) may enter upon and take possession of the property at any time and manage and control it in Beneficiary's discretion, and (b) with or without taking possession, may sue for or otherwise collect the rents, issues and profits thereof, whether past due or coming due thereafter, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, upon any obligation secured hereby and in such order as Beneficiary determines. None of the aforesaid acts shall cure or waive any default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall not be required to act diligently in the care or management of the property or in collecting any rents, royalties or other profits that it is hereby authorized to collect, and shall be accountable only for sums actually received. 18. Without affecting the liability of Trustor or of any other party now or hereafter bound by the terms hereof, from time to time and with or without notice, may release any person now or hereafter liable for performance of such obligation, and may extend the time for payment or DAB/al [BlackOak.DoT] 5 0 . performance, accept additional security, and alter, substitute or release any security. 19. In any judicial action brought to foreclose this deed or to enforce any right of Beneficiary or of Trustee hereunder, Trustor shall pay to Beneficiary and to Trustee attorneys' fees in a reasonable sum, to be fixed by the court. 20. No remedy hereby given to Beneficiary or Trustee is exclusive of any other remedy hereunder or under any present or future law. 21. The pleading of any statute of limitations as a defense to any and all obligations secured by this deed is hereby waived, to the full extent permissible by law. 22. In the event of default in the payment of any indebtedness secured hereby, and if such indebtedness is secured at any time by any other instrument, Beneficiary shall not be obligated to resort to any security in any particular order; and the exercise by Beneficiary of any right or remedy with respect to any security shall not be a waiver of or limitation on the right of Beneficiary to exercise, at any time or from time to time thereafter, any right or remedy with respect to this deed. 23. Trustor shall, upon request made by Beneficiary, furnish the Beneficiary with annual statements covering the operations of the property. 24. Beneficiary may collect a "late charge" not to exceed an amount equal to four percent (4%) on the amount past due and remaining unpaid on any installment that is not paid within ten (10) days from the due date thereof, to cover the extra expense involved in handling delinquent payments. 25. This deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, successors in interest, and assigns. The term "Beneficiary" means the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this deed, whenever the context so requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural, and all obligations of each Trustor hereunder are joint and several. 26. Trustee accepts this trust when this deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. DAB/al [B1ackOak.DoT] 6 Trustor request that a copy of notice of default and of any notice of sale hereunder shall be mailed to him at the address set out opposite his name, immediately below. MAILING ADDRESSES FOR NOTICES: As Trustor: Executed at , California, on the date first above written. By: DAB/al [BlackOak.DoT] 7 1 PROMISSORY NOTE 2 $ 500,000.00 Date: , 1995 3 4 5 6 FOR VALUE RECEIVED, the undersigned promises to pay to San Bernardino Downtown Main Street, Inc. ("Main Street") or its successors, the principal sum of FIVE 7 HUNDRED THOUSAND DOLLARS ($500,000.00). Payment of the Note shall be made as follows: 8 1. Principal. Payment of principal shall be due annually if "net income" generated by the 9 San Bernardino Auto Dealership ("Dealership"), which is the subject of this loan, exceeds an average of Twenty Thousand Dollars ($20,000) a month calculated over the preceding twelve (12) 10 month period commencing August 1 and continuing until July 31 the following year (the "Turpin Fiscal Year") for each year of outstanding indebtedness until the entire amount of this loan is fully 11 repaid. Payment of principal shall be due forty-five (45) days after the end of the Turpin Fiscal year. 12 "Net Income" means all gross income of the Dealership on an accrual basis reduced 13 by all ordinary and necessary expenses as defined by generally accepted accounting principles, 14 except that net income shall be determined before the following expenses: A. Salaries to Rita Turpin in excess of One Hundred Twenty Thousand Dollars 15 ($120,000), annually, and to the Executive Manager of the San Bernardino Dealership in excess 16 of One Hundred Twenty Thousand Dollars ($120,000), annually. B. Other payments to officers of Don Turpin Pontiac, Inc. ("Turpin") or stockholders 17 in Turpin, their families, the executives of Turpin ("Related Parties"), and any other corporations 18 or partnerships controlled by the Related Parties. 19 C. Depreciation on automobiles owned by Related Parties. D. Pension Plan contributions for the benefit of Related Parties. 20 E. Elective expenses for country club memberships, dues and seminars for Related 21 Parties, and travel and entertainment costs for Related Parties in excess of Six Thousand Dollars 22 ($6,000), annually. If Dealership produces Net Income exceeding a monthly average of Twenty Thousand 23 Dollars ($20,000) for the preceding Turpin Fiscal Year, Turpin shall pay to Main Street one hundred percent (100%) of all such Net Income generated which shall be credited first to any 24 accrued but unpaid interest and then to principal. After $1,000,000 cumulative net income has been retained by Dealership, then 100% of the excess of the average monthly net income over Ten 25 Thousand Dollars ($10,000) shall be paid to Main Street to be credited first to any accrued but unpaid interest and then to principal. Turpin shall not be required to pay rincipal in any year 26 that Net Income does not exceed an average of Twenty Thousand Dollars ($20,000) per month, 27 calculated over the preceding Turpin Fiscal Year. Net Income shall be determined by an analysis performed by a certified public accountant, 28 at Turpin's sole cost and expense. Turpin shall be required to submit a copy of such analysis to Main Street annually, within forty-five (45) days of the close of the Turpin Fiscal Year. Upon DAB/tbm [turpin.ntel 1 September 19, 1995 I request, Main Street shall have the right to inspect the books and financial records of Turpin for purposes of performing an audit during the term of any outstanding indebtedness to Main Street, 2 at the sole cost and expense of Main Street. The books and financial records pertaining to the use of funds disbursed to Turpin pursuant to this Agreement shall be retained by Turpin for a period 3 of five (5) years from the date hereof or for such longer periods as required by law. The cost of reproduction of any financial records shall be borne by Main Street. 4 2. Interest. Interest shall accrue on the principal balance advanced under this 5 loan at the variable rate of prime minus .625% per annum during its term, which reflects Main Street's cost of funds. Fifty percent (50%) of sales tax received by the City which is generated 6 by Dealership for the preceding Turpin Fiscal year shall be credited towards interest due ("Sales Tax Credit"). 7 In the event that the Sales Tax Credit is insufficient to fully pay the interest on the Main 8 Street Loan, Turpin shall be required to pay to Main Street the difference between the amount of annual interest due and the Sales Tax Credit for that year. The amount by which actual sales tax 9 revenue exceeds the Sales Tax Credit in any one (1) year shall be applied towards the payment 10 of principal and shall not be applied towards the payment of interest for any subsequent year. Within thirty (30) days of the end of the Turpin Fiscal Year, Turpin shall submit to Main 11 Street copies of sales tax returns for the San Bernardino Dealership ("Sales Tax Returns") from the California State Board of Equalization for the preceding Turpin Fiscal Year. Payments of 12 interest, if any, are due after application of the Sales Tax Credit, within forty-five (45) days of 13 the end of the Turpin Fiscal Year. 3. Balance The balance of all unpaid principal and accrued interest shall be forgiven 14 upon completion of Dealership's remaining in the City of San Bernardino for the ten year period ending on , 2005 (tenth anniversary of this Note; the "Maturity Date"), provided that 15 the balance of all unpaid interest and principal shall be forgiven at such time only if Turpin is not in default of any term or provision of the Loan Agreement dated , 1995, and this 16 Note. 17 4. Security This Note shall be secured by (i) the unlimited personal guarantee of Rita Turpin, (ii) the corporate guarantee of Turpin, and (iii) an assignment of the leasehold interest in 18 the Property that is the subject of this loan ("Property") to Turpin. 19 The Note shall further be secured by: (i) a security agreement between Turpin and Main Street (the "Security Agreement") and (ii) UCC-1 Financing Statement filed concurrent herewith 20 by Main Street with the Secretary of State of the State of California, in all of the assets of Turpin, includin& the assets now owned or hereinafter acquired, subordinate only to all existing and future 21 security interests held for flooring financing of the San Bernardino Dealership, including Chrysler Credit Corp., Citicorp North America, Inc. and Orix Credit Alliance, which may change from 22 time to time, but senior to all other security interests in the assets of Turpin. 23 As further consideration for this loan and as security therefor, Turpin shall execute and deliver an Assignment Agreement (the "Assignment Agreement") assigning to Main Street its 24 leasehold interest in the Property pursuant to that certain lease dated Augiist 24, 1995, by and between Turpin and Elizabeth M. Friedlander, Trustee, Elizabeth M. Friedlander Trust, dated 25 February 27, 1995 (the "Lease") and agrees that its leasehold interest shall not be assigned to any third party for the term of outstanding indebtedness to Main Street. Turpin further agrees not to 26 terminate its Lease or take any action which would result in termination of the Lease. The assignment of rights to Main Street shall only become effective upon default of this Note. In the 27 event of default, Main Street shall assume all rights of Turpin under the Lease, which rights the 28 Agency may exercise at its option. Pursuant to such Assignment Agreement, Turpin shall further assign any and all of its DAB/tbm [turpin.nte] 2 September 19, 1995 I rights, if any, to acquire the Property to Main Street. In the event that Turpin acquires the Property, Turpin shall_give Main Street a deed of trust on the Property superior to all other liens, 2 subordinate only to a first deed of trust on the Property securing the proceeds of a loan used by Turpin to acquire the Property, in an amount and on such terms as approved by Main Street, 3 which approval shall not be unreasonably withheld. 4 5. Release of Security Should Turpin acquire the Property and provide Main Street a deed of trust on the Property superior to all other liens, subordinate only to a first deed of trust 5 on the Property, as provided in this Note, Main Street shall release other security held by it 6 pursuant to this agreement, of approximately equally value as agreed by the parties. When Two Hundred Fifty Thousand Dollars ($250,000) of the principal of the loan has 7 been paid or credited, Turpin shall be entitled, upon written request, to a release of approximately Fifty percent (50%) of the security held by Main Street pursuant to this agreement. The parties 8 shall agree as to which security shall be released, and in what amounts. 9 6. Breach A failure to pay any sum provided for in this Note when due or a material breach of this Note shall constitute a breach hereof and shall entitle Main Street to declare all 10 sums due hereunder immediately due and payable and to pursue all remedies available under this Note. 11 7. Payments All payments due under this Note shall be made in lawful money of the 12 United States at the principal office of Main Street, 201 North "E" Street, Suite 104, San Bernardino, California 92401, or at such other place as may from time to time be designated 13 by Main Street in writing. 14 8. Prepayment The undersigned reserves the right to prepay at any time all or part of the 15 principal amount of this Note without the payment of penalties or premiums. 9. Late Payments: Interest If this Note is not paid within ten (10) days of the due date, 16 the undersigned shall pay to Main Street a late charge of four (4%) percent on the amount past due and remaining unpaid. If this Note be reduced to judgment, such judgment shall bear the 17 statutory interest rate on judgments. 18 In no event shall the late charge payable hereunder exceed the maximum amount of interest 19 permitted under the usury laws of the State of California. 10. Attorneys Fees If suit is instituted by Main Street to recover on this Note, the 20 undersigned agrees to pay all costs of such collection including reasonable attorney's fees and court costs. 21 11. Waivers DEMAND, protest and notice of demand and protest are hereby waived and 22 the undersigned hereby waives, to the extent authorized by law, any and all homestead and other 23 exemption rights which otherwise would apply to the debt evidenced by this Note. 24 25 26 27 28 DAB/tbm [turpin.nte] 3 September 19, 1995 0 1 [DON TURPIN PONTIAC PROMISORRY NOTE] 2 IN WITNESS WHEREOF, THIS NOTE has been duly executed by the undersigned, as 3 of its date. 4 5 By: 6 7 8 9 GUARANTY OF RITA TURPIN For value received,the undersigned, individually and personally, indorses, guarantees, and 10 promises to pay the above note, all extensions and renewals thereof, and waives (a) resentment, demand, protest, notice of protest, notice of dishonor, and notice of non-payment; (b)the right, if 11 any,to the benefit of, or to direct the application of, any security hypothecated to Main Street,until all indebtedness of Turpin to Main Street, howsoever arising, shall have been paid; (c)the right to 12 require Main Street to proceed against Turpin,or to pursue any other remedy in Main Street's power; and agrees that Main Street may proceed against the undersigned directly and independently of 13 Turpin,and that the cessation of the liability of Turpin for any reason other than full payment,or any extension, forbearance, change of rate of interest, or acceptance, release, or substitution of security, 14 or any impairment or suspension of Main Street's remedies or rights against Turpin, shall not in any 15 way affect the liability of the undersigned under this guaranty. 16 17 Rita Turpin 18 19 20 21 22 23 24 25 26 27 28 DAB/tbm [turpin.ntel 4 September 19, 1995 STATE OF CALIFORNIA WOLCOTTS FORM UCCCAOI(formerly UCC-ICA)(price class 13C) I UNIFORM COMbIERCIAL CODE--FINAN G STATEMENT--FORM UCC-1 (REV. 1 IIIIIIIII II II(III IIII IMPORTANT--Read Instructions on back before completing form 7 677715 82901 3 This FINANCING STATEMENT is presented for filing and will remain effective, with certain exceptions, for five years from the date of filing, pursuant to Section 9403 of the California Uniform Commercial Code. 1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1 A. SOCIAL SECURITY OR FEDERAL TAX NO. Don Tur in Pontiac Inc. 113. MAILING ADDRESS 1C. CITY.STATE 1D. ZI►CODE 2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST—IF AN INDIVIDUAL) 2 SECURITY OR FEDERAL TAX NO. Tur in Rita 20. MAILING ADDRESS 2C. CITY.STATE 2D. ZIP CODE 3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER 4. SECURED PARTY 4A. SOCIAL SEC ITY ND. FEDUTAL TAI ND. NAME Main Street, Inc. OR SANK TRANSIT AND A S A NO. MAILING ADDRESS 201 North IIER Street, Suite 104 CITY San Bernardino STATE CA ZIPcODE9240 S. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO . FEDERAL TAX NO. OR SANK TRANSIT AND A.B.A. NO. NAME MAILING ADDRESS CITY STATE ZI►CODE 6. This FINANCING STATEMENT covers the following types or items of property (include description of real property on which located and owner of record when required by instruction 4). 7B. DEBTOR'S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH 7. CHECK 7A PRODUCTS OF COLLATERAL © 1 INSTRUCTION 5(D) ITEM: 1 IF APPLICABLE I ❑ARE ALSO COVERED (1) a(2) ❑(3) ❑(4) I XI S. CHECK I IF APPLICABLE a DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC 1 8105 (1) (n) I 1 9. DATEI C 10. THIS SPACE FOR USE OF FILING OFFICER O (DATE. TIME. FILE NUMBER . D AND FILING OFFICER) SIGNATURE(S) OF DEBTOR(S) E 1 TYPE OR PRINT NAMES) OF DEBTOR(S) 2 111111- 3 SIGNATURES) OF SECURED PARTY(IES) 4 5 OR PRINT NAME(S) OF SECURED PARTY(IESI 6 .return copy to: 7 NAME e ADDRESS Main Street, Inc. 201 North IIE11 Street, Suite 104 9 CITY San Rernardinn. CA A24n1 EXHIBIT "A" All assets, inventory, and equipment of Don Turpin Pontiac, Inc., wherever located, including but not limited to, automobiles, both new and used, automobile parts, tools, desks, and furniture. a `ti 1 ASSIGNMENT AGREEMENT 2 THIS ASSIGNMENT AGREEMENT entered into this day of 1995, by and between DON TURPIN PONTIAC, INC. a Cali ornia corporation ("Assignor"' 3 and SAN BERNARDINO DOWNTOWN MAIN STREET, INC., a California non-profit public 4 benefit corporation ("Assignee"), 1. Assignment FOR VALUE RECEIVED, the undersigned, Assignor, hereby grants, 5 transfers, and assigns to Assignee, the entire lessor's interest in and to a certain lease of real property commonly known as 730 Showcase Drive, San Bernardino, California, and more 6 particularly described as approximately the north one-half of the property described as follows: Parcel 6 of Parcel Map No. 9713 as per plat thereof recorded in Book 106 of Parcel Maps, Pages 7 91-93, records of the County Recorder of San Bernardino., said lease dated August 24, 1995, for a term from September 1, 1995 to midnight, August 31, 2005, entered into by and between 8 Assignor and Elizabeth M. Friedlander, Trustee, Elizabeth M. Friedlander Trust (said trust dated February 27, 1995), Lessor; together with all rents, income, and profits for the use and 9 occupation of the premises described in the lease and, at the option of Assignee, from all leases 10 upon the premises which may be executed in the future during the term of this assignment. 11 2. Assignment as Security This assignment is made to secure: (a) payment of the principal sum and interest evidenced by a Promissory Note, and 12 any amendments, extensions, or renewals of it, in the original principal sum of Five Hundred Thousand Dollars ($500,000.00) made by Don Turpin Pontiac, Inc. to Main Street, Inc. dated 13 , 1995 ("the note"); 14 (b) performance and discharge of each and every obligation and agreement of 15 Assignor under this assignment or under the note. 16 3. Warranties of Assignor Assignor warrants: 17 (a) that Assignor is the sole owner of the entire lessor's interest in the lease; (b) that the lease is valid and enforceable and has not been altered, modified, or 18 amended in any manner whatsoever; 19 (c) that the lease is not in default under any of the terms, covenants, or conditions of the lease; and 20 21 (d) that no rent reserved in the lease has been assigned or anticipated. 22 4. Obligations of Assignor Assignor agrees: 23 assigned lease;(a) to observe and perform all obligations imposed upon the lessor under the 24 (b) not to collect any rent, income, or profits accruing under the lease or from the 25 premises in advance of the time when they shall become due; (c) not to execute any other assignment of lessor's interest in the lease or 26 assignment of rents accruing under the lease or from the premises; 27 (d) not to modify the terms of the lease or give any consent or exercise any option 28 required or permitted by such terms without the prior written consent of Assignee; (e) not to cancel, terminate, or accept a surrender of the lease, or convey, transfer, or permit a conveyance or transfer of the premises so as to effect directly or indirectly a DAB/tbm [Assgn.lsel 1 September 19, 1995 I termination or diminution of the obligations of the lessee; 2 (f) not to terminate or modify the terms of any guaranty of the lease without the 3 prior written consent of Assignee; and (g) not to consent to any assignment of or subletting under the lease, whether or 4 not in accordance with its terms, without the prior written consent of Assignee. 5 5. Terms and Conditions This assignment is made on the following terms and conditions: 6 (a) Until default by Assignor in payment of the principal, interest, or other indebtedness secured by the note or in performance of any obligation or agreement under the 7 note, this assignment, or the assigned lease, Assignor may collect at the time of, but not before, the date provided for payment, all rents, income, and profits arising under the lease or from the 8 premises and retain, use and enjoy the same. 9 (b) Upon or at any time after such default, Assignee may, at its option, without notice and without regard to the adequacy of the security, either in person or by agent, with or 10 without bringing any action or proceeding, or by a receiver appointed by a court, take possession of the premises described in the lease and hold, manage, lease, and operate the same on such 11 terms and for such period of time as Assignee may deem proper and, with or without taking possession of the premises demand, sue for, or otherwise collect all rents, income, and of the 12 premises, including those past due and unpaid, with full power to make from time to time all such alterations, renovations, repairs, and replacements as may seem proper to Assignee, and apply 13 such rents, income, and profits to payment of all expenses of managing, operating, and maintaining the premises, all expenses incident to taking and retaining possession of the premises, 14 and the principal, interest, and other indebtedness secured by the note, together with all costs and attorneys' fees, in such order of priority as to any of the items mentioned in this paragraph as 15 Assignee in its sole discretion may determine, any statute, law, custom, or use to the contrary notwithstanding. Exercise or nonexercise by Assignee of the options granted in this paragraph, 16 or collection and application of rents, income, and profits, shall not be considered a waiver of any 17 default by Assignor under the note or under the lease or this assignment. (c) Assignee shall not be liable for any loss sustained by Assignor resulting from 18 Assignee's failure to let the premises or from any other act or omission of Assignee in managing the premises unless such loss is caused by the willful misconduct and bad faith of Assignee. Nor 19 shall Assignee be obligated to perform or discharge nor does the Assignee undertake to perform or discharge any obligation, duty, or liability under the lease or under or by reason of this 20 assignment and Assignor agrees to indemnify Assignee for, and to hold Assignee harmless from, any liability, loss, or damage which may be incurred under the lease or under or by reason of this 21 assignment and from any claims and demands which may be asserted against Assignee by reason of any alleged obligations or undertakings to perform or discharge any of the terms, covenants, 22 or agreements contained in the lease. Should Assignee incur any such liability under the lease or under or by reason of this assignment or in defense of any such claims or demands, the amount 23 thereof, including costs, expenses, and reasonable attorneys' fees shall be secured by this assignment, and Assignor shall reimburse Assignee therefor immediately upon demand and upon 24 the failure of Assignor to do so Assignee may, at its option, declare all sums secured by this assignment or by the note immediately due and payable. And it is further understood that this 25 assignment shall not operate to place responsibility for the control, care, management, or repair of the premises upon Assignee; nor shall it operate to make Assignee responsible or liable for any 26 waste committed on the property by the tenants or any other parties, or for any dangerous or defective condition of the premises, or for any negligence in the management, upkeep, repair, or 27 control of the premises. 28 (d) Upon payment in full of the principal, interest, and all other indebtedness secured by this assignment or by the note and deed of trust, this assignment shall cease and be of no further effect but the affidavit, certificate, letter, or statement of Assignee or any officer, DAB/tbm [Assgn.lsel 2 September 19, 1995 I agent, or attorney of Assignee showing any part of the principal, interest, or other indebtedness to remain unpaid shall constitute conclusive evidence of the validity, effectiveness, and continuing 2 force of this assignment and any person may, and is hereby authorized to, rely thereon. Assignor hereby authorizes and directs the lessee named in the lease or any other or future lessee or 3 occupant of the premises upon receipt of written notice from the holder of the note and deed of trust that a default exists thereunder or under this assignment to pay to the holder all rents, 4 income, and profits accruing under the lease or from the premises, and to continue to do so until otherwise notified by the holder. 5 (e) Assignee may take or release other security for payment of the secured 6 principal, interest, or other indebtedness, may release any party rimarily or secondarily liable, and may apply any other security held by it to the satisfaction olthe secured principal, interest, 7 or other indebtedness without prejudice to any rights under this assignment. 8 (f) "Lease" or "the lease" as used in this assignment means the lease hereby assigned and, at the option of the Assignee, any extension or renewal of it and any lease 9 subsequently executed during the term of this assignment covering the premises or any part of them. 10 (g) Nothing contained in this assignment and no act done or omitted by Assignee 11 pursuant to its terms shall be deemed a waiver by Assignee of any rights or remedies under the note and deed of trust, and this assignment is made and accepted without prejudice to any rights 12 or remedies possessed by Assignee under the terms of the note. The right of Assignee to collect the secured principal, interest, and other indebtedness, and to enforce any other security may be 13 exercised by Assignee prior to, simultaneously with, or subsequent to any action taken under this assignment. 14 (h) This assignment, together with the agreements and warranties contained in it, 15 shall inure to the benefit of Assignee and any subsequent holder of the note and shall be binding 16 upon Assignor and any subsequent owner of the premises 6. Option Assignor hereby further assigns any rights or option to acquire the Property 17 which it now has or which it may hereafter obtain. 18 7. Term The term of this agreement shall be coincident with the term of the note and shall 19 expire and be of no further force and effect when the note is fully paid or otherwise satisfied. IN WITNESS WHEREOF the parties hereto have executed this agreement on the day and 20 date first above shown. 21 "Lessee-Assignor" 22 Don Turpin Pontiac, Inc. 23 By 24 2s By 26 "Assignee" 27 San Bernardino Downtown Main Street, Inc. 28 SEAL By (SEAL) Ann Harris, Executive Director DAB/tbm [Assgn.lsel 3 September 19, 1995 1 SECURITY AGREEMENT 2 THIS AGREEMENT made and entered into on this day of 1995 3 by and between DON TURPIN PONTIAC, INC., a oc California poration ("Turpm"), and SAN BERNARDINO DOWNTOWN MAIN STREET, INC., a California non-profit public benifit 4 corporation ("Main Street"), 5 Turpin hereby grants to Main Street a security interest in the following property 6 (hereinafter referred to as "Collateral") situated and described as follows, to wit: 7 1. Property described in Exhibit "A", attached to Form UCC-1 (Assets). 8 2. Property described in Exhibits "A", attached to Form UCC -1 (Fixture Filing). 3. Property described in a Third Deed of Trust relating to 46-605 Quail Run Lane, Indian 9 Wells, California. 10 4. Property described in a Third Deed of Trust relating to 1031 Black Oaks, Lake Arrowhead, California. 11 5. A leasehold interest in the property described in a lease dated August 24, 1995, relating 12 to 730 Showcase Drive, San Bernardino. 13 6. An option to purchase, if any, or if hereafter acquired, in that property commonly known as 730 Showcase Drive, San Bernardino. 14 7. Property known as 730 Showcase Drive, San Bernardino, if Turpin should hereafter 15 acquire title to said property. 16 Said security interest is granted to secure payment and performance of obligations of even date hereof identified as: 17 Promissory Note in the amount of Five Hundred Thousand Dollars 18 ($500,000.00) executed by DON TURPIN PONTIAC, INC., a California corporation, in favor of MAIN STREET, INC., a California non-profit 19 corporation, a copy of which is attached hereto. 20 Default in payment or performance of any of the obligations or default under any agreement evidencing any of the obligations is default under this agreement. Upon such default, 21 Main Street may declare all obligations immediately due and payable and shall have the remedies of a secured party under the Uniform Commercial Code, and any and all other remedies provided 22 for or allowed by law. 23 24 25 26 27 28 DAB/tbm [Secur.agr] 1 September 19, 1995 1 TURPIN/MAIN STREET SECURITY AGREEMENT, PAGE 2 IN WITNESS WHEREOF the parties hereto have executed this agreement on the day and 3 date first above shown. 4 DON TURPIN PONTIAC, INC. 5 6 By 7 By 8 SAN BERNARDINO DOWNTOWN 9 MAIN STREET, INC. 10 (SEAL) By: 11 Ann Harris, Executive Director 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DAB/tbm [Secur.agrl 2 September 19, 1995