HomeMy WebLinkAboutRESOLUTION TRUST CORPORATION - CHARTER SERVICE CORPORATION - 1994-10-03 HB CITY OF HUNTINGTON BEACH
INTERDEPARTMENTAL COMMUNICATION
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TO: CONNIE BROCKWAY, City Clerk
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FROM: GAIL HUTTON, City Attorney Qo�r,,
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DATE: October 9, 2001 r
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SUBJECT: RLS 2001-0760. Development a:501 Main Street o
("Town Square Retail Project")
We are writing you at the request of Mr. Gus Duran, Housing and Redevelopment Manager, in
the City's Economic Development Department.
On October 28, 1994, 501 Main, Inc., a California corporation ("501 Main, Inc."), executed a
$799.000 promissory note in favor of Charter Service Corporation ("CSC"), a wholly-owned
subsidiary of the Resolution Trust Corporation, as receiver for Charter Savings Bank;
concerning the property at 501 Main Street. There are several attachments to this note,
including a Rider to Note, Assignment of Leases, Rider to the Assignment of Leases, and
Environmental Indemnity.
The $779,000.00 note is secured by a deed of trust of the same date, wherein, under the trust
deed, 501 Main, Inc. is the trustor; Commonwealth Land Title Co. is the trustee, and CSC is the
beneficiary.
On November 1, 1994, CSC and the Redevelopment Agency of the City of Huntington Beach
("Redevelopment Agency) entered into a `Real Estate Loan Participation Agreement"
("Participation Agreement") pursuant to which the Redevelopment Agency was given an
ownership interest in 66% (or ($514,140,00) of the $779,000.00 face amount of the note. CSC
was given an ownership interest in the remaining 34% of the note's face amount. The
Participation Agreement was an outgrowth of a 19.39 owner-participation agreement between
the Redevelopment Agency and Mola Development Corporation (the project's original
developer), CSC's predecessor-in-interest.
Pursuant to the Participation Agreement, both the $799,000.00 note, executed by 501 Main,
Inc., and the deed of trust, were assigned to the Redevelopment Agency.
I believe that your department has in its possession the original of the $779.000.00 note, deed
of trust, and other supporting documents mentioned in this memorandum.
It is the intent of 501 Main, Inc. to completely pay off the note on October 27, 2001; and the
Redevelopment Agency is due to receive full payment of the outstanding principal.
d%k-101 memo/(3rockw2y RIS 01-0760
r
Connie Brockway
October 9, 2001
Page 2
This memorandum represents the consent and recommendation of this office that you release
directly to Mr. Duran the originals of the note, deed of trust, and other supporting documents
described in this memorandum, so that he can, in turn, release them to 501 Main, Inc. when he
is in receipt of the monies represented by the payoff of the note.
Please feel free to contact Special Counsel Robert J. Wheeler of this office should you have
r any questions.
A
GAIL HUTTON
City Attorney
lab
c: David Biggs, Economic Development Director
Gus Duran, Housing and Redevelopment Manager
tw/0lmcm&Srockw-ay Rl S 01-0760
TO: David Biggs,Economic Development Director
FROM: Connie Brockway, City Clerk
SUBJECT: RTC-Town Square Documents
DATE: March 1, 1996
Your department has advised the City Clerk's office that this Loan Participation Agreement is
being handled by the Finance Department and Economic Development and all is in correct
order.
By this memorandum I am notifying you that the City Clerks Office is removing this file from
the City Clerk's pending file and placing it in the vault as complete.
I have attached previous correspondence on the subject for your response.
cc: Stephen Kohler, Economic Development Department
Attachment: City Clerk's Note to File
96-027cbmem
City of Huntington Beach
P.G.BOx 190 CILEFORNU 9261E
from dut of* CONNIE BROCKWAY
CITY CLERK
• (714)531!-5227
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CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON NEA(K
TO: Stephen Kohler, Project Manager, Economic Development Department
FROM: Connie Brockway, City Clerk �$
SUBJECT: RTC-Townsquare Documents
DATE: 1/16/96
We have copied the complete file on the RTC Loan Participation Agreement approved
October 3, 1994. Pursuant to our telephone conversation you will be using this material
to work with Keith Bohr, former city employee, regarding the list of documents Mr. Bohr
was to provide the City prior to leaving city employment.
Please read the memo the City Clerk's office sent to Ray Silver, then Acting Economic
Development Director, requesting his department's attention to this file. I would
appreciate receiving a date when I may expect to hear from you regarding this file.
cc:. David Biggs, Director of Economic Development
Dan Villeila, City Treasurer
Bob Franz, Deputy City Administrator
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J� X4 CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
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TO: Stephen ohler, Project Mantiger, Economic Development Department
FROM: Connie Brockway, City Clerk 66
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SUBJECT. RTC-Townsquare Documents -
DATE: 1116196
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We have copied the complete file on the RTC Loan Participation Agreement approved
October 3, 1994. Pursuant to our telephone conversation you will be using this material
to work with Keith Bohr, former city employee, regarding the list of documents Mr. Bohr
was to provide the City prior to eaving ci employment.
Please read the memo the City Clerk's office sent to Ray Silver, then Acting Economic
Development Director, requesting his department's attention to this file. I would
appreciate receiving a date when I may expect to hear from you regarding this file.
cc:. David Biggs, Director of Economic Development
Dan Villelia, City Treasurer
Bob Franz, Deputy City Administrator
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CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
MVNTINGTON BEACH
TO: Ray Silver,Assistant City Administrator
FROM: Connie Brockway, City Clerk C6
SUBJECT: Resolution Trust Corporation loan Participation Agreement Approved
10/3/94
DATE: July 27, 1995
i
The provisions of the Loan Participation Agreement requires the Agent(City)to hold Original
Loan Documents.
Following approval of the RTC Agreement in October, 1994 the City Clerk's Office requested
the Title Policy, Settlement Statement and Insurance Policy. These documents, together with
others that Keith Bohr provided,were received last week and will be placed in the City Clerk's
vault with the Loan Participation Agreement
Two additional documents were brought to us last week by the CityTreasurers'Office with a
request for direction. As Keith Bohr has left city employment,we are transmitting to you his
original memo along with documentation added by the City Treasurer so you can assign
someone to service the loan. With your permission we are retaining the "Capital Improvement
Escrow Agreement'as it appears to be the original document. Attached is a copy of this
agreement for your records.
Keith informed us that in the year 2001 many of the original loan documents must be returned
to the buyer. We requested a list identifying these particular documents and Keith informed us
he would provide the list to us before he left, however, this was last Wednesday and I don't
think Keith had time to complete the list before he left on Friday. We would appreciate it if you
would assign a staff member to prepare the list so in the year 2001 staff will know which
documents to return to the buyer. Also,would you assign a staff member to monitor the
agreement to ensure that their required insurance remains up to date and to address any other
concerns Economic Development staff would be aware needs monitoring.
Please respond as soon as possible to my concerns.
Thank you
cc: Don Watson, City Treasurer
956mem'93.105kw
APPROVEDB ' 3'n'COUNCIL°
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19&
REQUEST FOR REDEVELOPMENT AGE crr cLr.K k
CITY COUNCIL ACTION
Date OCTOBER 3, 1994
Submitted to: Chairperson and Members of the Redevelopment Agency/
Honorable Mayor and Members of the City Council
Submitted by: AIL HUTTON, Agency Counsel
Prepared by: GAIL HUTTON, Agency Counsel
Subject: Approve (1)The Loan Participation Agreement with RTC;
(2) Sale of the Town Square Retail Center Located at
501 Main Street(Main-Pier Redevelopment Project Area)
Consistent with Council Policy? [X] Yes [ ] New Policy or Exception
Statement of Issue Recommendation Analysis, Funding Source Altema•.ive Actions Attachments
le
Statement of Issue:
The Agency entered into an Owner Participation Agreement with Mola
Development for the development of the Town Square project, and as a result
acquired a two-thirds ownership interest in the commercial portion of the project.
This property was placed in escrow by RTC to be sold to a third party. The
transaction requires the Agency to reconvey its interest, under a deed of trust,
and the Loan Participation Agreement is designed to preserve the Agency's
rights to all proceeds of the sale and allow such sale to close on October 21,
1994.
Recommended Action:
1) Approve the sale of the Agency's interest in 501 Main Street (Town
Square) to 501 Main, Inc., a California corporation in the amount of
$820,000, with financing in the amount of$779,000 to be provided by the
Agency and the Resolution Trust Corporation (RTC).
2) Approve the attached Loan Participation Agreement("LPA") (Attachment
3). Authorize and direct the Executive Director to execute.
1
3) Approve a Deed in Full Reconveyance, conveying the Agency's two-thirds
interest in the Town Square commercial portion to Charter Service
Corporation. Authorize and direct the chairperson to execute and the
clerk to attest such deed.
4) Authorize and direct the Executive Director to execute all appropriate
escrow documents as needed to close escrow, so long as approved as to
form by the Agency counsel.
5) Authorize expenditure of up to $10,000 for 50% of closing costs.
(Estimated at$7,800.)
Analysis:
On June 6, 1988, the Redevelopment Agency entered into an Owner
Participation Agreement (OPA)with Mola Development for the development of a
mixed use project known as Town Square. The project consists of 73 stacked
condominiums, 16 townhomes and 10,000 square feet of retail. The project is
located within the Main-Pier Redevelopment Project Area and is bordered by
Main and Sixth streets and Orange Avenue. Construction commenced in
December of 1988, the condominiums and the shell of the retail were allegedly
completed in May of 1990.
Subsequent to the approval of the OPA, Mola Development transferred its
interest in the project to its subsidiary Charter Service Corporation. In June of
1990 Charter Service Corporation was seized by federal regulators and is now
under the control of the Resolution Trust Corporation (RTC).
In August of 1993, the Town Square retail center was included in a nationally
advertised sealed bid offering with an asking price of$1,350,000, wherein
buyers would be required to provide their own financing. The bids received were
substantially below the asking price. The Agency and the RTC mutually agreed
that the bids received would not be accepted. Cushman & Wakefield, a
commercial broker was hired to continue to market the center.
A new appraisal was prepared on September 30, 1993, valuing the center at
$1,100,000. It was decided by staff that the best way to maximize the value
received for the center was to offer to provide (seller) financing to a suitable
buyer making an acceptable offer.
According to the Redevelopment Director, three offers were received in excess
of 70% of the $1,100,000 threshold, two at $800,000. On January 14, 1994, the
subject offer was received from Mr. Shoul J. Levy (501 Main Inc.), in the amount
of$820,000, along with a nonrefundable deposit of$25,000, which is part of the
$41,000 down payment.
2
In order to close escrow, the Agency must approve a Deed in Full
Reconveyance as to Agency's two-thirds interest in Town Square. Such deed
shall not be released unless the Agency receives and retains its sixty-six percent
(66%) interest in all "net proceeds" of the sale as that term has been defined in
the OPA.
Previously, because of our dispute with RTC, an escrow account would have
been established for receipt of all "net proceeds" of sale, per the OPA, including
but not limited to: the non-refundable deposit, down payment, and any and all
loan payments, until further agreement or determination on the disposition of
such proceeds occurred. RTC's attorney, Richard Yang, and the Agency's
attorneys have resolved the dispute. We presented the terms of the proposed
agreement in closed session as reflected in Attachment 4. The Loan
Participation Agreement incorporates all such terms as approved in closed
session.
Funding Source:
Main-Pier Fund Balance.
Altemative Actions:
Deny the recommended action and terminate the sale.
Attachments:
1} Staff Report dated .tune 6, 1988.
2) Deed in Full Reconveyance.
3) Recommended Loan Participation Agreement.
4) Terms of Settlement.
3
11W
REQUEST cOR CITY COUNCIL ,
REDEVELOPMENT AGENCY ACTIC,1`14 RH28-25
Date June 6, 1988
ibmttted to Honorable Mayor/Chairman and City Council/Redevelopment Agency Members
ibmttted by Paul E Cook, City Administrator/Executive Director
spared by Douglas N La Belle, Deputy City Administrator/Community Development
iblect OWNER PARTICIPATION AGREEMENT-MOLA DEVELOPMENT
CORPORATION
,)nsistent with Council Policy? [ ] Yes ( ] New Policy or Exception -
Statement of Issue, Recommendation,Analysts, Funding Source,Alternative Actions,Attachments
STATEMENT OF ISSUE.
Under California Redevelopment Law, the Redevelopment Agency is authorized to
provide certain kinds of assistance directed at supporting and promoting private sector
investments in Redevelopment Project Areas Mola Development Corporation is
requesting Agency assistance in the development of a mixed use project consisting of
sixteen(16) townhomes, seventy-three (73) condominium units and ten thousand(10,000)
square feet of retail/commercial located within Town Square subarea of the Main-Pier
Redevelopment Project Area
The attached agreement provides limited support for the proposed project by the Agency
by allowing for the subordination of an Agency owned parcel during the project's
construction. Also, this agreement establishes a limit to which Mola Development
Corporation would be obligated to expend funds for necessary offsite public
improvements, and provides for the Agency to purchase a property located adjacent to the
proposed development site owned by Mola Development Corporation
This agreement is consistent with the established redevelopment goals for the Main-Pier
Project Area, as well as authorizing provisions of State Law
RECOMMENDATION
Staff recommends that the following separate actions be taken
1 Conduct a joint public hearing on the Owner Participation Agreement, and
2 Adopt appropriate resolutions between the City Council /Agency and Mola
Development Corporation
ANALYSIS
Approval of the attacned Owner Participation Agreement would
1 Commit the Redevelopment Agency to subordinating the Agency-owned parcel
within the proposed development site (valued at $2,200,000) during the project's
construction,
2 Require that the Agency acquire an adjacent parcel owned by Mola Development
Corporation (valued at $300 000)
a
3 Commit the Agency to reimbursing Mola Development Corporation for certain
{ offsite public improvement costs exceeding $300,000, and -
4 Commit the Agency to coordinating the purchase of-a "third party" parcel within
the proposed development site -
For these commitments, the Redevelopment Agency will be paid $2,500,000 from
proceeds of project sales for its land, plus a percentage from both residential and
commercial sale profits estimated to be up to an additional $500,000 -
Upon completion, the project's total assessed value is estimated to be $16,000,000 —
$18,000,000 The Agency's projected tax increment is estimated to net between
$140,0004160,000 annually
ALTERNATIVE ACTIONS
1 Continue action in the Owner Participation Agreement and related documents to
allow for additional review time
2 Direct staff to further negotiate specific points of the agreement with the developer
FUNDING
Possible payback from future tax increment to developer if offsite public improvements
exceed$300,000
ATTACHMENTS
1 Health and Safety Code 33433 Report
2 Owner Participation Agreement
3 Keyser Marston letter of May 19, 1988
4 Keyser Marston Reuse Analysis of April, 1988
5 Redevelopment Agency Resolutions
6 City Council Resolutions
PEC/DLB/CPS 1p
3803h
5
' RECORDING REQUESTED )
AS AN ACCOMMODATION BY )AND WHEN RECORDED MAIL TO: }
COMMONWEALTH LAND TIT1:.E ) -
INSURANCE COMPANY ) -_-
801 North Brand Boulevard,-12th Floor -
Glendale, California 91203 } -
Attn: Bonnie Fish, Escrow Officer -
_ Escrow No. }
Title No. )
I-
[spaco above this line for recorder's use]
DEED IN FULL RECONVEYANCE
Pursuant to that certain D eed of Trust and Assignment of Rents,originally executed by MOLA DEVELOPMENT
CORPORATION, a California corporation, predecessor-in-interest to CHARTER SERVICE CORPORATION,
a California corporation, as Trustor, and recorded in the Official Records of Orange County, California, on
Ianuary 18, 1989,as Instrument.No. 89-033715(the "Deed of Trust")and having received, from the owner and
holder of the obligations under such Deed of Trust a request to reconvey, the REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, as duly appointed Trustee
pursuant to the Substitution of Trustee recorded in the Official Records of orange County,California on January
4, 1990 as Instrument No. 90-006489;DOES IEEREBY RECONVEY, without warranty, to the person or
persons legally entitled thereto, the estate now held by the Trustee, as described on Exhibit"A" attached hereto
and incorporated herein by this reference.
Dated:
ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,
a public body, corporate and politic
B y: By:
Connie Broc k'ay Name: Linda Mculten-Patterson
Agency Clerk ode• Chairperson
APPROVED AS TO FOR-1: �'-
STATE OF CALIFORNIA ) Arthur DeLaLoza
) ss Deputy City Attorney
COUNTY OF ORANGE )
On , 1994, before me,
a Notary Public is and for said County, personally appeared personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s)on the instrument the person(s), or the entity upon
behalf of which the persons(s) acted, executed the instrument.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public in and for said County (SEAL)
��acr�y
OFFICE OF
CITY ATTORNEY
P.O. Box 190
2000 Main Street Telephone
Gat!Hutton Huntington Beach, California 92648 C" 536-5555
Ory'rtornq Fax (714)374-1590
VIA FAX-ONLY
September 12, 1994
Richard P. Yang, Esq.
Quan, Cohen, Kurahashi, Yang, Scholtz & Hirano
777 South Figueroa Street, 38th Floor
Los Angeles, CA 90017-2513
RE: Town Square Commercial Proposed Negotiations Settlement
Dear Mr. Yang:
This will confirm our discussion on Friday, September 9, 1994,wherein we agreed o
recommend a resolution to our respective clients' positions as follows:
1. Recital D at page 2, of the proposed Loan Participation Agreement ("LPAI,
refers to$344,201.49 as"disputed costs".
Approximately$309,000, of such costs have been referred to as "tenant
improvements". The agency and the RTC would each be responsible for 50%
of such costs,to wit: $154,500 each, in settlment of that portion of the"disputed
costs
2. The balance of the"disputed costs", $35,000 in`leasing commissions"should
be treated as a reduction in net operating income ("N.O.I.') and thus each party
will be responsible for$17.500 as their share of the expense.
3. The$15,600 deficit in closing costs shall be shared at$7,800 each.
4. The net operating income previously reflected in the Loan Particpation
Agreement at page 2, recital"D"at$91,835.50 shall be increased to$104.000
and shared equally after deduction of the above mentioned (item 2)"leasing
commission'.
The Agency shall accordingly receive a check in the sum of$34,500 within 30
days of execution of the Loan Participation Agreement or close of escrow
whichever is earlier.
G:5L5 0 119/1 2/93
Richard P. Yang, Esq.
Quan, Cohen, Kurahashi, Yang, Scholtz& Hirano
September 12, 1994
Page 2
5. The agency's portion of the $154,500 mentioned in item 1 above, shall be paid
to RTC from the loan payments received from the buyer(501 Main Inc.) fully
amortized over seven (7) years at the same interest rate paid by the buyer(9%)
per annum or approximately$2,486 per month for 84 months. (i trust a cash
payment would be acceptable to RTC).
6. The previous 2/3 and 1/3 share shall be adjusted to 66%Agency 34% RTC
after verification of exact controlling documentation.
7. Three conditions precedent to all of the above are:
a. Verification that the "disputed costs' have not been previously
reimbursed.
b. Verification that"disputed costs" are supported by"appropriate
documentation'.
C. Confirmation that the N.O.I. mentioned at item 4, has not been
previously reduced by leasing commissions mentioned in item 2.
8. The agendized Loan Participation Agreement shall be amended as follows:
i
a. All future expenses of collection shall be shared on the same percentage
basis as reflected in item 6, above, to wit: 66%134%.
b. All references to the O.P.A. shall specify the section number.
C. Arbitration of future disputes under the Loan Participation Agreement
shall be binding.
d. The city attorneylagency council shall approve of attomey's fees
provisions at her sole discretion but consider the same in good faith.
Although not discussed, all other claims shall be waived by the parties and each party
shall pay its own attorney's fees and costs.
c:5\501\9112/94
Richard P. Yang, Esq.
Quan, Cohen, Kurahashi, Yang, Schoitz& Hirano
September 12, 1994
Page 3
If this is not consistent with your understanding of our conversation, please advise
immediately by return fax. If O.K., please sign below and return by fax.
Very truly yours,
ARTHUR DELALOZA
Deputy City Attorney
f
ADLTg
cc: Michael Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
Gail Hutton, City Attorney
Barbara Kaiser, Deputy City Administrator
RICHARD P. YANG
G:5150119/12/94
Attachment 4
TERMS OF SALE
SALE PRICE $820,000
LESS NON-REFUNDABLE DEPOSIT - 25,000
$795,000
LESS BALANCE OF $41,000 _ 16.000
DOWN PAYMENT $779,000
AMOUNT TO BE FINANCED
THROUGH LOAN PARTICIPATION
AGREEMENT $779,000
J
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i
IJj X4 CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNDW6ra+KA"
To: REDEVELOPMENT AGENCY CHAIRPERSON AND
BOARDMEMBERS
From: GAIL HUTTON, City Attorney
Date: October 3, 1994
Subject: RTCIAGENCY LOAN PARTICIPATION AGREEMENT
AGENDA ITEM F-Z, OCTOBER 3, 2994 MEETING
Attached are pages 1, 2, 4, 11, 14, 17, 18, 19, and 23, wherein typographical
and insignificant changes have been made as follows:
1) Pages 1 and 2: Amend 'Agent/City" to read 'Agent1RDA'.
2) Page 4: No bold type in last sentence of Recital I. Delete'Conditions
Precedent" in middle of page since they have been satisfied by the
settlement.
3) Page 11: Change nano to'and" in Section 7.2. Change
"respectively' to 'respective'.
4) Page 14: Section 11.1 change members" to'member'.
5) Pages 17 and 18: Change 'Respective" to'respective'.
6) Page 19: Insert'clo The Resolution Trust Corporation' at signature
block.
7) Page 23: Enlarge Attachment'2' signature blocks.
l�
GAIL HUTTON
City Attorney
Attachment as noted
REAL-ESTATE LOAN PARTICIPATION AGREEMENT
THIS AGREEMENT is made this day of ,
1994 by and between CHARTER SERVICE CORPORATION, a California
corporation ("CHARTER"), a wholly-owned subsidiary of THE RESOLUTION
TRUST CORPORATION a United States corporation in its capacity as
Receiver for CHARTER FEDERAL SAVINGS AND LOAN ASSOCIATION ( RTC"
or RTC/-CHARTER"), as participant-lender (collectively, Participant") and,
THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a
municipal corporation and/or body politic as agent lender collectively
1 AGENT/RDA'), with respect to the following facts
Recitals
A Agent and MOLA Development Corpo/prously
nia corporation
( MOLA ) as predecessor-in-interest to CHAR entered into that
certain Owner's Participation Agreement recot January 18 1989
('OPA') pursuant to which the parties to the Ohat certain real
Property commonly known as 501 Main Streetach California
92648 ('Property') Under the OPA Agent/ A and MOLA agreed to certain
terms relating to expenses costs and pro eds relative to the Property
B Pursuant to formulations pre abed in the OPA the parties agree that
the Agent/RDA s share of"Net Pro eds equals 66% and the
Participant/Charter's share there f equals 34%
C By that certain con yancing instrument dated December 8 1989 (and
recorded November 4 19� ) MOLA transferred its interest in and to the
Property to CHARTER hich holds such interest to this date pursuant to and
subject to the OPA S bsequent to its acquisition CHARTER s records show
that it expended an advanced certain sums in developing, building and selling
the Property and as received revenues and other proceeds from the leasing
and other opera ons in and upon the Property for which such expenses were
incurred Acc} ding to CHARTER s files the sum of $309,065 59 ( Charter
Expenses ) as been so expended above and over the proceeds of the original
constructio loan from Sumitomo Bank In addition leasing commissions in the
sum of$ ,135 90 ( Charter Commissions ) have been incurred in such
activitie Out of such operations CHARTER has realized as of July 31 1994
the su of $103,942 in net operating income ( NOI ) exclusive of the foregoing
Expe lses and Commissions and the NOI is expected to increase through the
close of the subject transactions Under the terms of the OPA Agent is entitled
to payment of 50% of the NOI (presently the estimated sum of$51,971 00) and
1
Participant has agreed to remit such sum to Agent, pursuant to the terms and
conditions set forth herein.
D. In order to compromise and settle the mutual disputes between them
over the Charter Expenses and Commissions and to allow the P&S Transaction
(defined and referenced below)to close timely, and strictly in reliance upon and
accordance with the provisions of Sections 1542 of seq. of the California
Evidence Code and Rule 408 of the Federal Rules of Evidence, the parties have
i L agMpd that Aaent/RDA's share of both of such items shall be fifty percent(50%)
thereof. Specifically, Agent/RDA agrees to reimburse Participant/Charter for its
half of such Expenses in the sum of 1154,532.80, in the form of a fully-a ortized
repayment over a seven (7)-year term, with interest at the rate of nine rcent
(9%)per annum, or approximately$2,485 per month for eighty-fou ) months.
That will coincide with the corresponding term of the Loan by C er(defined
below) arising out of the P&S Transaction. Agent shall be a ed to pay
Participant either in cash or out of its portion of the Loan ayments received
from the Buyer/Borrower (defined below). And, again part of such
settle menticompromise, Agent/RDA agrees to pay ' alf of the Charter
Commissions in the sum of$17,567.95. That s will be treated as an Project
operating expense and thus offset against a deducted from Agent's share of
the NOI due from Agent (presently, $51,97 , thereby leaving approximately the
net sum of$34,403.05 which shall be p ' by Participant to Agent within thirty
(30) days of the close of escrow for t P&S Transaction.
E. The parties expressly a owledge and agree that their mutual and
separate agreements over the afters described in these Recitals are the result
of compromise and settleme , which they are willing to make in order to permit
the pending P&S Transac i n to be closed and consummated according to its
terms. Neither the signi2ga of this Agreement nor any statement herein shall
constitute or be deemed as any admission by either party, and nothing in this
Agreement shaVbemissible as evidence or otherwise used by either party
against the othy, except in any proceeding brought by one party against
the other to enfe terms hereof. Furthermore, should the P&S Transaction
fail to close at II and/or the Project remain in the ownership of Charter and not
be conveyed nto the Buyer/nominee thereunder, then this Agreement shall be
considered.Aull and void and of no force or effect, and the parties shall retain all
rights andrremain subject to all obligations in place or accrued prior to the
execution of this Agreement. Thereafter, the Escrowholder is hereby instructed
to return all monies and documents deposited previously in the P&S Transaction
escrow to the party who originally deposited or lodged the same pursuant to this
Agreement.
F. RTC acting as seller, and 501 MAIN, INC., a California corporation, as
buyer ("Buyer") have entered into that certain Purchase and Sale Agreement,
dated March 29, 1994 ("Purchase Agreemenr), under which Buyer has agreed
2
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the name of Agent, as the "agent lender for and on behalf of Participant,
pursuant to the terms and conditions of this Agreement, and subject to the
retained and equitable rights, titles and interests of Participant in the underlying
Loan and the repayments and/or collection proceeds thereof. The parties
acknowledge that the Loan and such repaymentslcollections shall be governed
by this Agreement and apportioned between Agent and Participant according to
the Agent and Participant Interests, respectively, which are taken from the 2)
Calculations provided in Section 209 of the OPA.
J. The parties desire to memorialize the foregoing elements o e P&S
Transaction and Loan, including both Agent's and Participant's i rests in the
Loan, as well as in the security therefor and the documents re ed thereto, and
to set forth the respective rights and obligations of the part' under this
Agreement, against the background of the OPA.
Agreements.
NOW, THEREFORE, in consideration of t covenants, terms and conditions
contained herein, including the foregoing R itals, the parties hereby agree as
follows:
1. Definitions. following terms or expressions shall have the
specific meanings listed below
1.1. "A ent's Ce ificate" shall mean the certificate to be issued to
Agent substantially in the orm attached hereto and incorporated by reference
herein as Attachment"1 .
1.2. "A a Interest" shall mean the transferred and participating
rights, titles and in rests in and to the Loan and Loan Documents being
retained by, confi ed unto and held by Agent in the percentage and for the
consideration s forth in Article 2 hereof and pursuant to the OPA.
1.3. "Business_Da ' shall mean a day on which Agent and Participant
are both op n for the transaction of usual and customary business operations.
1.4. "Loan Document(sl shall mean the following Loan documents to
be pro used out of the PSIS Transaction:
1.4.1. Seiler-Financing Addendum to Purchase and Sale
Agreement;
4
7. Collection and Enforcement of Loan.
7.1. Loan Payments. Agent shall use its reasonable efforts to
collect the interest, principal and other indebtedness due and payable under the
Loan and Loan Documents and shall take all steps reasonable necessary or
proper to enforce the terms and conditions thereof. Agent may retain its p on
thereof, based upon its Agent Interest, and shall account for and trans . o
Participant, directly or as otherwise instructed thereby, the latter's pr ortionate
share of principal, interest or other proceeds actually received by ent on
account of the Loan, based upon the Participation Interest, and bject to and in
accordance with the provisions hereof.
7.2. Reimbursement of Expenses. Agent sh use its reasonable
efforts to recover from Borrower all fees, expenses, ch es and other amounts
which are the Borrower's obligations under the Note Loan Documents. Upon
demand and not later than thirty (30) Business Day thereafter, Participant will
3) reimburse Agent for its share of any and all costs xpenses and disbursements,
including its Loan-servicing fees and related co s and expenses, which may be
incurred or made by Agent under the Note an Loan Documents, and/or in any
action, judicial or otherwise, which may be u dertaken by Agent to collect the
same, for which Agent has not been reimb sed at any time by Borrower. To the
extent such amounts are unpaid, Agent all be entitled to deduct the same from
and to reimburse Agent out of Borrowe payments under the Loan, which are
actually received by Agent, proportio rely based upon the respective 3)
Participant and Agent Interests, prio to any distributions to Participant of its
share of Loan receipts.
7.3. Limits on Ex en ures. Any one
expenditure or
contractual commitment, inclu ng without limitation further advances under the
Loan, foreclosure or litigation sts, repairs and maintenance, property
management fees or others' ilar expenditures, exceeding one percent (1%) of
the original Loan principal, r the annual aggregate of such expenditures or
commitments exceeding fi a per (5%) of the original Loan principal, shall be
documented and provide in writing to Participant. Expenses including the
foregoing incurred in co nection with enforcement shall be allocated to all
outstanding amounts u der the Loan proportionately based upon the respective
Participant and Agent terests. In addition, costs and expenses of collection,
including reasonable r court-approved attomeys'fees and legal costs, shall be
reimbursed to Agent Participant on the same basis.
7.4. Ratable Distribution. Agent's actual receipt of payments of
principal, interest, expenses, default interest, late charges and other costs and
charges from Borrower.or other persons under the Loan, not otherwise
described herein, shall be allocated and distributed proportionately, in
19
occasioned by the exercise of such discretion made in good faith or in
reasonable reliance upon the advice of legal counsel.
10.2. Property-Management Fees. If Agent shall acquire the
Property or other collateral as a result of its enforcement under the Loan
Documents, Agent (or a property-management firm/entity hired by it) shall
manage, utilize, maintain and/or dispose of the same, by way of lease, sale,
hypothecation or otherwise, nominally in its own name to the extent of its Agent
Interest therein, and subject to Participant equitable, beneficial ownership
thereof and title thereto to the extent of its Participant Interest therein, aKrocee
deemed appropriate in Agent's discretion. Any and all income, rentals ds
or other funds or property actually received by Agent, and all expe s, costs,
fees and other charges reasonable and necessarily incurred by ent in
carrying out its activities under this Paragraph shall be shared emitted and/or
borne proportionately between Agent and Participant, based pon their
respective Agent and Participant Interests. In performing a foregoing actions,
Agent or any third-party property manager retained by it r such purposes, shall
be entitled to retain and receive as a management fee excluding expenses) a
sum not to exceed five percent (5%) of such rentals d income, in addition to
reimbursement of advanced or incurred fees, cost and expenses. To the extent
unreimbursed out of the Property, Participant sh I pay over the same to Agent,
upon written notice and request therefor, simil y as other fees and expenses
are reimbursable to Agent under this Agree nt.
11. Assignment of Interes
11.1. Aaa:iDnability& Tran erabilit . Each party may assign,
transfer, encumber, hypothecate convey its rights, titles and/or interest in and
to its respective ParticipatioNAg t interest under this Agreement and the Loan,
without any prior consent or ap royal of the other party required, to any third
party, including to a Federal ome Loan Bank or Federal Reserve Bank, of
which the transferor or assi or is a member, for the purpose of securing _ 4
advances made by the lat r Bank. Written notice of any such assignment, —�
transfer and/or hypothe ion shall be given promptly to the other party.
11.2. No Tra sfer of Servicin Duties. Notwithstanding the
foregoing, Agent sha not assign transfer or otherwise dispose of a material
portion of its Loan-s suiting and administrativelmanagement duties and
obligations (excep o a parent, subsidiary or other affiliated entity)without the
prior written cons t of Participant, which consent shall be unreasonably
Withheld, limited r conditioned, as referenced in and governed under Article 9,
above.
14
purchase/repurchase. Nothing hereunder shall be construed as creating or
imposing any obligation to so purchase/repurchase such interest.
15. General Provisions.
15.1 Notices. Notices required or permitted hereunder shall
be deemed properly given, served and delivered if sent by facsimile or other
immediately confirmable electronic transmission, by personal delivery or by the
United States mail, certified or registered mail, postage and fees fully prepaid,
with return receipt requested. Such notice shall be effective as of the date of the
facsimile transmission or receipt for personal delivery, or if mailed, then three (3)
Business Days after the date of the U.S. Postal Service post-mark. Any notice
sent by mail shall be addressed to Agent or Participant at the respective address
set forth in the signature block for that party, below. Any party may char ge its
address by giving notice to the other party in the manner provided herein.
15.2 Assignments &Transfers. Except as othe ise provided
herein, neither party shall assign, transfer or otherwise disp a of its rights or
interests under this Agreement, voluntarily or involuntaril ithout the prior
written consent of the other party which shall not be un asonably limited,
conditioned or withheld. Subject to the provisions he of, this Agreement shall
be binding upon and inure to the benefit of the pa ' s and their respective 5
successors, transferees and assigns.
15.3 Goveminq Law, Constru ion. This Agreement shall be
governed by and construed in accordanceytith the law of the State of California,
unless preempted by federal law, includip6 the applicable provisions of the
Financial Institutions Refo/ee
ve = nd Enforcement Act of 1989, Pub. L.
No. 101-73, 103 Stat. 183 e gust 9, 1989). Whenever the context
requires, all words used in ar shall be construed as used in the plural,
and vice versa, and each II include any other gender. The captions of
the paragraphs of this Agrre for convenience only and do not define or
limit any terms or provisioninvalidity or unenforceability of any one or
more of the provisions of tment shall in noway affect any other
provision, and the invalid orceable provision shall be severed herefrom
and the remaining provisionued without the severed provision.
15.4 Cou a arts. This Agreement may be signed in
multiple counterparts, a of which shall constitute an original Agreement and
all of which together sh I constitute one and the same, single Agreement when
each of the parties has signed counterpart hereof.
15.5 Incumbency Representations. Each party hereby
represents and warrants unto the other party, as follows:
17
15.5.1 It is a separate, duly incorporated entity in good
standing in the jurisdiction(s) of its incorporation and where it carries on its
business;
15.5.2 It has the authority and is duly authorized by its
board of directors of other governing body to enter into this Agreement;
15.5.3 The respective officer(s) executing this Agreement
on behalf of the parties each has the authority and capacity to executthis
Agreement;
15.5.4 When so executed, this Agree Z' entsha6ll be fully
binding upon each party according to the terms a/d" bility,
dbons hereof, and
15.5.5 There is no material infirmity or
impairment in the ability and power of any of the. or their respective 5)
signatories to enter into this Agreement or to execute its provisions.
15.6 Integrated Instrument This Agreement constitutes the
entire agreement of the parties with resp ct to the matters contained herein and
supersedes all prior agreements, written or oral, between the parties with
reference to the subject matters of th tAgreement. No other agreements, oral or
written, prior or contemporaneous, exist between the parties as to such matters,
except as set forth herein and the 6PA.
15.7 Survival of• epresentations. All representations,
warranties, covenants and agreements of the parties herein or in the
attachments and exhibits hereto shall survive and continue after the execution
and delivery of this Agree ent.
15.8 No aiver of Prior Breach/Default. Neither a waiver by
any party of any right f interest under this Agreement nor its consent to a
default or breach by y other party shall imply or be deemed to be any waiver
of or consent to any - ther right, interest, breach or default, whether prior or
subsequent, by suc other party.
15. Arbitration of Disputes. The parties agree that any
dispute between hem under this Agreement shall be resolved and settled by
binding arbitrate n in Orange County, California, in accordance with the
Commercial or�ther applicable Rules and Regulations of the American
Arbitration Association then in force. The decision of the arbitrator shall be final
and binding upon the parties, both as to law and fact, and shall not be
appealable to any court in any jurisdiction, except where the arbitrator has acted
illegally or in excess of his jurisdiction. Judgment to enforce the arbitrator's
18
award may be entered in any court having jurisdiction over the parties and the
subject matter, as to which the parties expressly consent to personal jurisdiction
in Orange County, California. Until the award and decision of the arbitration
panel have become final, the parties' respective rights and obligations
hereunder shall continue in full force and effect, unless otherwise ordered,
enjoined or abated in such arbitration, or other judicial action which may be
brought to enforce such arbitration award.
IN WITNESS WHEREOF, the parties have executed this Agreement, as
of the date first written above, in Orange County, California, regardless of the
actual date or place of the signing hereof.
Participant: Agent:
CHARTER SERVICE THE REDEVELOPMEN AGENCY
CORPORATION OF THE CITY OF HATINGTON
BEACH
A California Corporation A Municipal Corporation and Body
Politic
By: By:
Name: Name: Michael Ub_eruaga
00
Title: Executive Director
ATTEST:
Agency Clerk
6) do The Resolution Trust Corporation
Legal Division (Attn:�Asst. Gen. Counsel) Agency Counsel
4000 MacArthur Boulevard 2000 Main Street
Newport Beach, CA 92660-2516 Huntington Beach, CA 92648
I
Ref: 501 Main St., Huntington Beach, CA
Loan to 501 Main, Inc.
Telephone No: 7141852-7700 Telephone No: 7141536-5555
Facsimile No: 714/852 7794 Facsimile No: 7141374-1590
f
3
19
r
Attachment*20
PARTICIPATION CERTIFICATE
This will certify that CHARTER SERVICE CORPORATION,a California corporation,by and
through THE RESOLUTION TRUST CORPORATION,as Receiver for CHARTER FEDERAL
SAVINGS AND LOAN ASSOCIATION,and as Participant-Lender of the Loan described In that certain
Real-Estate Loan Participation-Agreement,dated . 1994 ('Agreement , olds and
owns the following-described participant Interest in the real-property secured-loan C nJ to the
Borrower named therein, namely, 501 MAIN. INC.,pursuant to the Agreement,f9irthe consideration
recited below.
Such party's rights and interests in its Participant Interest, as a enced by this Certificate,are
subject to and shall be govemed by the Agreement. Except as oth se provided, all capitalized terms
shall have the same definitions as used in the Agreement. If an s permitted, limited or conditioned,
the sale,transfer,hypothecation and other disposition of this ificate and/or the Participant Interest
evidenced hereby,are subject to the Agreement.
artici ant terest
Original Loan Rrincipal Current Balance cents a Consideration
4f 77%000-oo
-S�9g;9B9 $779,000.0 34.0% $264,860.00
Dated: , 1994
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH
By: 7)
Name:
[sea]] Title:
Acknowledgment and Consent
Receipt of a c py of this Participant Certificate is hereby acknowledged and confirmed.
Dated: , 1994
CHARTER SERVICE CORPORATION
By and Through THE RESOLUTION
TRUST CORPORATION, as Receiver for
CHARTER SAVINGS AND LOAN
ASSOCIATION
By: 7)
Name:
Title:
23
I�flj CITY OF HUNTINGTON -BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON/EACH
TO: Ray Silver,Assistant City Administrator
FROM: Connie Brockway, City Clerk QB
SUBJECT: Resolution Trust Corporation Loan Participation Agreement Approved
1013I94
DATE: July 27, '1995
The provisions of the Loan Participation Agreement requires the Agent(City) to gold Original
Loan Documents.
Following approval of the RTC Agreement in October, 1994 the City Clerk's Office requested
the Title Policy, Settlement Statement and Insurance Policy. These documents, together with
others that Keith Bohr provided,were received last week and will be placed in the City Clerk's
vault with the Loan Participation Agreement.
Two additional documents were brought to us last week by the CityTreasurers'Office with a
request for direction. As Keith Bohr has left city employment,we are transmitting to you his
original memo along with documentation added by the City Treasurer so you can assign
someone to service the loan. With your permission we are retaining the`Capital Improvement
Escrow Agreement"as it appears to be the original document. Attached is a copy of this
agreement for your records.
Keith informed us that in the year 2001 many of the original loan documents must be returned
to the buyer. We requested a list identifying these particular documents and Keith Informed us
he would provide the list to us before he left, however, this was last Wednesday and I don't
think Keith had time to complete the list before he left on Friday. We would appreciate it if you
would assign a staff member to prepare the list so in the year 2001 staff will know which
documents to return to the buyer. Also,would you assign a staff member to monitor the
agreement to ensure that their required insurance remains up to date and to address any other
concerns Economic Development staff would be aware needs monitoring.
Please respond as soon as possible to my concerns.
Thank you
cc: Don Watson, City Treasurer
93cbmenV93-105kw
t
•
CITY OF HUNTINGTON BEACH
INTER DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO Don Watson, City Treasurer
FROM Keith B Bohr, Assistant Project Mana
DATE May 26, 1995
SUBJECT 501 MAIN STREET/TOWN SQUARE RETAIL
CAPITAL IMPROVEMENT ESCROW
AGREEMENT
Don, attached is check number 078632 from Manufactures Bank in the
amount of $93,080 74 This is a draw down a letter of credit totaling
$200,000 to be used for tenant improvements by the new owners of the
501 Main Street Town Square retail center
Please deposit in an account to be immediately draw down upon as we
issue a check in the same amount to 501 Main Street Inc the property
owner
Thank you for your assistance
Keith/memo/watOS26
� Alj��'J
���A
j T
V
TOWN SQUARE CENTER
CAPITAL IMPROVEMENT LOC/50I MAIN INC. ,
.4
EXHIBIT I TO
IRREVOCABLE LETTER OF CREDIT NO. ST202388 v
SIGHT DRAFT
Manufacturers Bank
515 South Figueroa Street
Los Angeles. CA 90071
z �
Attention: Joseph Maya. Assistant Vice President ,2
Date• May 12, 1995 0. 1 3 -i
LL
Pay at sight to: The Redevelopment Agency of the City of Huntington Beach,
a municipal cooporation and/or body politic:
Redevelopment Agency
Attn: Keith B. Bohr
2000 Main Street
Huntington Beach, CA 92648
of the sum of ninety three thousand eighty-dollars &74/100-
------- U.S. Dollars 8 .74
This draft is drawn under your Irrevocable Letter of Credit No. 2023g8, in
favor of and for the benefit of the Beneficiary(or its assignee/transferee)
who is named therein.
Sincerely yours,
To: "Beneficiary"
Manufacturers Bank
International Department By:
515 South Figueroa Street Name: Ray Silver
Los Angeles, CA 90071 Title: AEsistanLChy Administrator/
Attn. Joseph Maya, Assistant V.P. Acting Director of Economic
Development
For: The Redevelopment Agency of
the City of Huntington Beach, a
municipal cooporation and/or
body politic
KeEth/ro++Meq
City of Huntington Beach
2000 MAIN STREET CALIFORNIA 92M
DEPARTMENT OF ECONOMIC DEVELOPMENT
Office of the director 536-5582
Housing 536-5542
Redevelopment 536-5582
Fax (714)375-5087
May 9, 1995
Manufacturer's Bank
International Department
S 15 South Figueroa Street
Los Angeles, CA 90071
Attn: Joseph Maya, Assistant Vice-President
Dear Mr. Maya:
As we have discussed by telephone I have enclosed for processing sight Draft
Exhibit Number I in the amount of S93,080.74 for payment from Original Letter
of Credit Number ST202388.
Thank you for your assistance in this matter. If you have any questions please
call me at (714)374-1529.
Sincerely,
Keith B. Bohr
Assistant Project Manager
KBB:dw
Kekh/Letters/WgBank
TORN SQUARE CENTER
CAPITAL IMPROVEMENT LOC150I MAIN INC.
EXHIBIT I TO
IRREVOCABLE LETTER OF CREDIT NO. ST202388
SIGHT DRAFT
Manufactureres Bank
515 South Figueroa Street
Los Angeles, CA 9Q071
Attention: Joseph Maya.Assistant Vice President
Date: May 8, . 1995
Pay at sight to: Sol Main, Inc. a California Corporation to be delivered at
the following address:
501 Main, Inc.
c/o Shaoul J.Levy
1231717th Helena Drive
Los Angeles, CA 90049
of the sum of ninety-three thousand eighty dollars & 74/100
U.S. Dollars ($93.080.74 ).
This draft is drawn under your Irrevocable Letter of Credit No. ST_ 20z388,
in favor of and for the benefit of the Beneficiary(or its
assignee/transferee)who is named therein.
Sincerely yours,
On: "Beneficiary"
Manufacturer's Bank
International Department By:
515 South Figueroa Street Name: Ray SilSir a
Los Angeles, CA 90071 Title: Assistant City Administrator/
Attn: Joseph Maya, Assistant V.P. Agting Director of Economic
Development
For: Redevelopment Agency of
the City of Huntington Beach
Keldvrownsq
• r CASH RECUT
r�t�G Iola CITY OF hUNTINgm4 tech
2000 MAW STREET
rg 1 UNTINGTON OEACH.CA 9260
Kur+su+c:on Uwcn � 6 r
• DATE J
ISSUING DEPT. TFI.E.
RECEIVED FROAA
LU ADDRESS
a
O
FOR
• � r
V
AhROUPIT RECEIVED..
❑CAS>i CHECK Ts93,9
' Q
/ W RECEIVED BY
Q.r
a D� = 1
� = O
c� Z
a
' J
: a
.�N . _ EXPENSE
i• FMtAHCE APPROVAL
i I
i
.. TOTAL$
y V/
e W
..a
2146/74 26May95 001/12 $93080.74 RTH83000ED830 C
i .. .
1
H
i
777555
` CUSTOMER COPY
CASH RECEIPT .
TO : Cif'Y of hUNI tNGzON bch
JI 2000 MAIN STREET ,
HUNTINGTON BEACH,CA 92648 '
MUP.M ON MACH ! '
DATE •
ISSUING DEPT. ��� TE 6 t
RECEIVED FROM
r.y i
of ADDRESS t
0
FOR - �/`' r'.• '.�`ti } ��;;a-..`
AMOUNT RECEIVED ❑CASH CHECK
i_.Q • {4 -
LLI RECEIVED BY
c�0 • �• . -
W _
�.�z f ;.
W EXPENSE I.1 Y_r��T'-, ~. . '' Y �•ti .
FINANCE APPROVAL y:a{ti''�MIT.`�`S: i,'� '�;•� • �',
TOTAL i -
ul
3207/124 26.1495 001/12 $106919.26 GTM22504 CASH — s •
V
�•! � , �'.�•15�� •.{• �'�:. _lit v:✓��+� ' •
W.
786174 CUSTOMER COPY
CABLE ADDRESS:MANUBANK MANUFACTURERS BANK
TELEX:NO. 06-74184
P.O.BOX 6000
�iGINAL' LOS ANGELES,CALIFORNIA 90055 DATE JULY 25, 1995
lW ENCLOSE OUR ® CASHIERS CHECK# 078693 ❑ DRAFT#
X❑ IN PAYMENT OF ❑ FOR CREDIT TO ACCOUNT OF UNDER CABLE/AIRMAIL ADVISE
REF STANDBY LC# ST202388 PAYMENT #SB000131
CUSTOMER NAME : 501 MAIN INC. A CALIFORNIA CORP.
BENEF, NAME:THE REDEVELOPMENT AGENCY ******
AMOUNT
THE DEVELOPMENT AGENCY 0
106,919.26
THE CITY OF HUNTINGTON BE ACV
a municipal Corp. INTERNATIONAL OPERATIONS
MAIL 2000 MAIN STREET COPY
TO HUNTINGTON BEACH, CA. 9264V
ATTN: MR. KEITH BOHR LI7 40vw
L J AUTHORIZE IGNATURE
$ A. - - - -
-
r t-.5� '°" ,. � :� - ter- - �.- .* �- - -_� - r- ..•.x • - - r -
�r- _ �a �� x '"`'.:r- r 5- ` 'S� tv � F �i r o- ��K y^ a --..� a � .t �..--,� �y ti--� { - --� _ a - f•
_ 4 - - -�- it: "s ram. 'F �_: F• -•f �• _
lg CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGION/EACH
TO: Don Watson, City Treasur*SGQUAREAIL
FROM: Stephen V. Kohler, Projec
DATE: July 26, 1995
SUBJECT: 501 MAIN STREET/TOW
CAPITAL IMPROVEMENT ESCROW
AGREEMENT
Don, attached is check number 078693 from Manufactures Bank in the
amount of S 106,919.2G. This is a draw down a letter of credit totaling
S200,000 to be used for tenant improvements by the new owners of the
501 Main Street Town Square retail center.
Please deposit in an account to be immediately draw down upon as we
issue a check in the same amount to 501 Main Street Inc. the property
owner.
Thank you for your assistance.
Xelrh/memo/►rat0526
• LOAN PARTICIPATION AGREEMENT BETWEEN
REDEVELOPMENT AGENCYAND RTC
FOR THE SALE OF TOWN SQUARE RETAIL CENTER
(501 MAIN INC.)
Approved Distribution of Monthly Payments for 501 Main Inc.:
$6,610.87 Monthly Payment
758.50 Impound in Account for Property Taxes
RTC's 34% send to:
1,989.80 Resolution Trust Corporation
c/o Midland Loan Services Loan#1900206478
P.O. Box419158
Kansas City, MO 64141-6158
Attn: Payment Processing
RTC's reimbursement of funds previously expended
for Tenant Improvement send to:
2,486.00 RTC in Denver
Attention: Cashiering, Sth Floor
370 17th Street
Denver, CO 80202
Asset #725100084
137 . 7 Redevelopment Agency's -Deposit in Main-Pier
Acct. # R-T14-ID-810-8-01-00
56,610.97
Administration of-Capital Improvement Fscrow Agreement
S200,000.00 Irrevocable Letter of Credit No. ST202388
- 93.080.74 Held By- Manufacturers Bank
$106,919.26 515 South Figueroa Street
P.O. Box 6000
Los Angeles, CA 90071
Attn: Joseph Maya
Assistant Vice-President
Phone: (2I3)489-6200
FAX: (213)489-6439
7 :r y
RIX¢lll
MANUFACTURERS BANK -
�' . .. r - ,
ASUMDIhRYOFSWURA BANK JTD
PO AOX 60D0 • LOS ANGELES.CA 90055 � � F ��`� .. ,, +;� •j
ATTN: LITA CATALDO (INTL.DEPT.)
2ND FLOOR
THE DEVELOPMENT WNCY OF THE CITY OF €UNTING BEACH
A MUNICIPAL CORP..
'. 2000 MAIN STREET
HUNTINGTON BEACH, CA. 92648
�,- .�.�- ..��-.�.r .• ,.x:...d_ ATTN.- KEITH S. BOHR
• yy n!� RETURN RECEIPT
' ` k REQUESTED
..�..�-=.,yyr„W.,.. __r..w�• 3��Ag'r,�Y1 r«•..•r,«awar�.rr+w..w... �.AA.
! fEN 1111I MfillIfII1111111d 11111119111111111111111311111111did
kr k •.a rlr'lP �ik1' �` /� r r'r 5 5 r',
• ,, 'k.��;l r.r�fr r .y orb"•� ,�, ,
i air
a
RES06T(ON TRUST CORPORAT'V�N 0R101 H P-',
CAPITAL IMPROVEMENT ESCROW AGREEMENT
w,► 1 This CAPITAL IMPROVEMENT ESCROW AGREEMENT ('Agreement") is made this 28 day
i of October_, 1994 by and between 501 MAIN.- INC., a California Corporation
3 ("Borrower") and
4 _ HA&UR SERVICE RP $ATION, a California QWration q�w).
5 RECITALS: cr, --
6 A. This Agreement is being executed in connection with Lender's making a mortgage laari'
7 to Borrower in the original principal amount of$ 779,000.00 _,("fin
8 The proceeds of the Loan will be used for the acquisition of a property lm6wn as
9 501 Main Street, nt tinZon Beach. California and located in Qrange Caen 1 California
,., 10 ('$ "), and more particularly described in Exhibit A attach& ' hereto
11 and incorporated herein by reference.
12 B. The Loan is evidenced by a Note (%&") dated October a'It , 199 made by
13 Borrower and is secured by, among other things, a Deed of Trust instrument
14 (' ri y rstcmmtnt"), dated gfmen date with , granting a first lien on the
W 15 Property (the Note, Security Instrument, and all other documents evidencing, governing
16 or securing the Loan, including this Agreement, are collectively referred to as the "10
17 Documents").
18 C. Lender requires as a condition to the making of the Loan that Borrower deposit in
„ry 19 escrow with Lender the Escrow Deposit (as defined below) to be used to make certain
20 Improvements (as defined below)to the Property, all as provided in this Agreement.
21 AGREE?*MNT
22 NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in
23 this Agreement, the receipt and sufficiency of which are acknowledged, Borrower and Lender
24 agree as follows:
25 1. DeRmits to the Capital Improvement Escrow.
26 (a) Borrower agrees to deposit in escrow with Lender or its designee
27 the amount of Two Hundred Thousand and No1100 Dollars
28 - -($200.000.00 ) ("Escrow Deposit")
29 upon execution of this Agreement.
30 (b) Lender shall deposit the Escrow Deposit in an interest bearing
.� 31 escrow account with a depository institution (`Jkmitory
32 Institution") (commercial bank, mutual savings bank, savings &
33 loan association or credit union),- the deposits of which are
34 insured by a Federal agency ("Escrow Aeeount"). The Escrow
35 Deposit, and all other funds from time to time in the Escrow
,a, 36 Account are collectively called "Escrow Funds."
Capital Improvement Escrow Agreement
November 1992
W
Page 1
37 (c) 4,w) Depository Institution shall have �) Sheshunoff rating of 50
30— or better.
• - •39 (d) Lender shall not be responsible for any losses resulting from the
40 investment of Escrow Funds or for obtaining any specific level or
L 41 percentage of earnings on such investment.
42 (e) Any investment earnings on the Escrow Funds shall be added to
43 and become part of the Escrow Funds.
44 (f) In Lender's sole and absolute discretion, Lender may allow the
45 escrow for capital improvements to be funded in whole or in part
46 by an irrevocable letter of credit for the benefit of Lender to be
47 held by Lender, in lieu of cash; provided that such letter of credit
48 be from a financial institution acceptable to Lender and in the
49 form attached as Exhibi In such case, the letter of credit shall
50 be considered part or all, as the case may be, of the Escrow
+y 51 Deposit. If the Escrow Deposit consists of a better of credit,
52 Borrower covenants and agrees to renew or replace said letter of
53 credit (with a letter of credit from a financial institution
54 acceptable to Lender) and to deliver said renewal or replacement
55 letter of credit to Lender no later than thirty (30) days prior to
56 the expiration of any such letter of credit held by Lender as the
57 Escrow Deposit. If Borrower fails to do so, Lender shall have the
58 right, in addition to any other rights and remedies provided in
59 this Agreement, to draw on the letter of credit and deposit such
60 cash funds into an Escrow Account as described above.
rr 61 2. Me 9f-the Escrow Fundl. Except as otherwise provided in this Agreement, the
62 Escrow Funds shall be used only to pay the costs of those capital improvements
63 to the Property listed in Exhibit B to this Agreement (collectively,
64 1mDrovements").
65 3. Agreement,to Complete improvements. Borrower agrees to commence the
w 66 Improvements immediately (or as soon thereafter as weather reasonably shall
67 permit), to diligently pursue the Improvements to completion, and to complete
68 the Improvements no later than the date that is:—A9 months after the
69 closing date of the Loan ("Escrow Period"). Borrower further agrees that all
70 Improvements shall be made in a good and workmanlike manner and shall be
ONO 71 completed free and clear of any mechanic's or materialman's liens and
72 encumbrances. Borrower agrees to pay all costs necessary for completion of the
73 Improvements without regard to the sufficiency of the Escrow Funds.
74 4. Release of Escrow Funds.
"'` 75 4.1 BMesl fQr Release.
76 (a) To the extent the Escrow Funds consist of cash, Lender shall,
77 upon written request from Borrower, and satisfaction of the
78 requirements set forth in this Section 4 and in Section 5 of this
Capital Improvement Escrow Agreement
November 1992
Page 2
72 Agreement, release to Borrowers amounts from the Escrow
80 L Account necessary to reimburse 'Borrower for approved costs of
81 Improvements upon completion or upon partial completion in
82 accordance with Section 4.1(e) below. In no event shall Lender
83 be obligated to release Escrow Funds if a default exists under any
4010 - 84 of the Loan Documents or if an act, event or condition shall have
85 occurred and then be existing that with notice and/or the lapse of
86 time would constitute a default under any of the Loan
87 Documents, or until Borrower has paid in full any fees, costs and
88 expenses then due and payable under this Agreement.
Mid 89 (b) Each request for release from the Escrow Account shall list (i) the
90 specific Improvements) for which the release is requested, (it) the
91 quantity and price of each item purchased, if such
92 Improvement(s) includes the purchase or replacement of specific
93 items (such as appliances), (iii) the price of all materials (grouped
�W 94 by type or category) used in such Improvement(s) other than the
95 purchase or replacement of specific items, and (iv) the cost of all
96 labor or other services involved in the Improvement(s) for which
97 such request for release is made. Borrower shall certify in
98 writing that the portion of the Improvements covered by the
99 requisition has been completed in a good and workmanlike
10 100 manner and in accordance with any plans and specifications
101 previously approved by Lender. With each request, Borrower also
102 shall provide Lender with copies of invoices, previously paid by
103 Borrower, for all items or materials purchased and/or all labor or
104 services purchased and/or provided with respect to such request
IV 105 for release from the Escrow Account.
I06 (c) Unless Lender has agreed to issue joint check(s) in connection
107 with a particular Improvement, Borrower shall pay all invoices in
108 connection with the Improvement(s) with respect to which a
109 release is made prior to submitting a request for release from the
Mr 110 Escrow Account. Lender, at its option, may issue joint checks,
III payable to Borrower and the supplier, materialman, mechanic,
112 subcontractor or other party to whom payment is due in
113 connection with an Improvement.
114 (d) Except as provided in Section 4j(e), each request for
115 reimbursement from the Escrow Account may be made only after
116 completion of the Improvements) for which reimbursement is
117 requested. Borrower shall provide Lender evidence, satisfactory
118 to Lender in its reasonable judgment, of completion. In
119 connection with any Improvement(s) involving construction or
120 any structural repair or improvement, Lender may require
121 Borrower to provide one or more inspections and/or certificates
122 of completion by an appropriate Independent, qualified
123 professional (such as an architect, engineer, or inspector,
124 depending on the nature of the Improvement(s)) selected by
125 Lender.
+W
Capital Improvement Escrow Agreement
November 1992
{ Page 3
aW . • 126 6,-of If(i) the cost of an Improvement exos Sfil_,;O(I— �>
127 ° '""°'h°°°°" °" . (ii) a contractor or contractors performing
128 such Improvement under a written contract require(s) periodic
. 1129 payments, and (iii) Lender has approved in writing in advance
130 such periodic payments, a request for reimbursement from the
131 Escrow Account may be made after completion of a portion of the
132 work under such contract(s), but only if the materials for which
133 the request for reimbursement has been made are on site at the
134 project and are properly secured, or have been installed in the
135 Property and funds remaining in the Escrow Account and
136 designated for such Improvement are, in Lender's judgment,
137 sufficient to complete that Improvement.
138 (f) Borrower shall not make a request for release from the Escrow
139 Account more frequently than once in any month and the total
140 cost of all Improvements in any request shall not be less than
14I
40
142 4.2 Final Release of Escrow Funds. Provided (i) Borrower completes all of
143 the Improvements to the satisfaction of Lender on or before the
144 expiration of the Escrow Period, (ii) there is no default under this
145 Agreement or the other Loan Documents that has not been cured to
10 146 Lender's satisfaction, (iii) Lender has received evidence required by
147 Section 5.3 below that there are no mechanic's or materialmeWs liens that
148 would take priority over the lien of the Security Instrument, and (iv)
149 Lender has received any appropriate cost, architectural and completion
150 certifications required by Lender, Lender shall, to the extent the Escrow
151 Funds consist of cash, apply any remaining Escrow Funds to the
to 152 indebtedness evidenced by the Note, and, to the extent Escrow Funds
153 consist of a letter of credit, Lender shall draw upon the Ietter of credit
154 and apply the proceeds to the indebtedness aforesaid.
155 5. Perfor-mangt of IMr-aLvements.
to 156 5.1 Workmanlike Completion.
157 (a) Lender shall have the right to approve all contracts or work
158 orders with materialmen, mechanics, suppliers, subcontractors,
159 contractors or other parties providing labor or materials in
160 connection with Improvements. Upon Lender's request,Borrower
161 shall conditionally assign any contract or subcontract to Lender.
162 (b) In the event Lender determines that any Improvement has not
163 been begun as agreed in Section 3 above, is not being performed
164 in a workmanlike or timely manner, or has not been completed in
165 a workmanlike manner within the Escrow Period, Lender shall
166 have the option to proceed under existing contracts or to contract
167 with third parties to complete such Improvement in a
168 timely manner or to modify such Improvement so as to render
169 same completed in a workmanlike manner and to apply the
170 Escrow Funds, to the extent they consist of cash, toward the labor
Capital Improvement Escrow Agreement
November 1992
Page 4
171 and materials necessary to mak�,Jcomplete or modify such
f 171 Improvement, and to the extent the Escrow Funds consist of a
173' letter of credit, to draw on such letter of credit to pay for the
• • 174 labor and materials necessary to make, complete or modify such
175 Improvement.
176 (c) In order to facilitate Lender's completion, making or modification
177 of the Improvements under Section 5.1(b) above, Borrower hereby
178 grants Lender a right of entry onto the Property to perform any
179 and all work and labor necessary to make, complete or modify the
180 Improvements and/or employ watchmen to protect the Property
181 from damage. All sums so expended by Lender shall be deemed
182 to have been paid to Borrower and secured by the Security
183 Instrument. For this purpose Borrower constitutes and appoints
184 Lender its true and lawful attorney-in-fact with full power of
185 substitution to make, complete or modify the Improvements in; the
186 name of Borrower, which appointment shall be exercisable by
wy 187 Lender, for the purpose of protecting Lender's security, only upon
188 default by Borrower in any of its obligations under the Loan
189 Documents. Borrower empowers said attorney-in-fact as follows:
190 (i) To use any cash Escrow Funds which may remain
rr 191 unadvanced under this Agreement and to draw on any
192 letter of credit that is part of the Escrow Funds for the
193 purpose of making, completing or modifying the
194 Improvements;
195 (ii) To make such additions, changes and corrections to the
sr 196 Improvements as shall be necessary or desirable to
197 complete or modify the Improvements;
198 (iii) To employ such contractors, subcontractors, agents,
199 architects and inspectors as shall be required for such
40
200 purposes;
201 (iv) To pay, settle or compromise all existing bills and claims
202 which may be liens against the Property, or as may be
203 necessary or desirable for the completion of the
204 Improvements, or for clearance of title;
� 205 (v) To execute all applications and certificates in the name of
206 Borrower which may be required by any of the contract
207 documents;
208 (vi) To prosecute and defend all actions or proceedings in
209 connection with the Property or the rehabilitation and
210 repair of the Property; and
211 (vii) To do any and every act which Borrower might do in its
212 own behalf to fulfill the terms of this Agreement.
to
Capital Improvement Escrow Agreement
November 1992
Page 5
rr 213 It is furt4 understood and agreed that this powPof attorney shall be deemed
•• r 214 to be a power coupled with an interest and not capable of being revolted.
215 Borrower specifically agrees that all powers granted to Lender under this
216 Agreement may be assigned by Lender to its successors or assigns as holder of
217 the Note. Borrower pledges as additional security for the Loan and assigns and
218 quitclaims to Lender all of Borrower's interest in the Escrow Funds for the
219 completion of the Improvements, such assignment to become effective only in
220 case of Borrower's default. In addition, in case of]Borrower's default under this
221 Agreement or any of the Loan Documents, Lender shall be entitled to draw upon
222 any letter of credit constituting the Escrow Funds . and apply the proceeds
223 thereof in any manner it deems reasonable.
w
224 (d) Nothing in this Section 5.1 shall:
225 (i) Make Lender responsible for malting, completing or
226 modifying the Improvements;
227 (ii) Require Lender to expend funds in addition to the Escrow
228 Funds to make, complete or modify any Improvement;
229 (iii) Obligate Lender to proceed with the Improvements; or
rr 230 (iv) Obligate Lender to demand from Borrower additional
231 sums to make, complete or modify any Improvement.
232 5.2 Ins2ections.
233 (a) Borrower shall permit Lender or Lender's representatives
234 (including an independent person such as an engineer, architect
235 or inspector) or third parties making Improvements pursuant to
236 Section 5.1(d) of this Agreement to enter upon the Property
237 during normal business hours (subject to the rights of tenants
238 under their leases) to inspect the progress of any Improvements
239 and all materials being used in connection with such
240 Improvements, to examine all plans and/or shop drawings relating
241 to such Improvements which are or may be kept at the Property
242 and to inspect all books, contracts, subcontracts and records of
243 Borrower with respect to the Property. Borrower agrees to cause
244 all contractors and subcontractors reasonably to cooperate with
245 Lender or Lender's representatives or such other persons
246 described above when making inspections described in this
247 Section 5.2.
248 (b) Lender may inspect the Property in connection with any
�r 249 Improvement prior to releasing funds from the Escrow Account for
250 such Improvement. If the cost of an Improvement equals or exceeds
251 �';: .:..'... ..:..-�..�. :�`:, Lender may inspect the Property
. . ...... :. .
252 prior to releasing funds from the Escrow Fund for such
253 Improvement. Borrower shall pay Lender a reasonable inspection
254 fee not exceeding x >..h <:- plus travel
Capital Improvement Escrow Agreement
November 1992
Page 6
rr
"W ,+ 2S5 costs for each such inspection. In connection with any
256 Improvement involving construction or any structural repair or
:�57 improvement, Lender may require an inspection and/or
258 certificate of completion by an appropriate, Independent and
259 qualified professional (such as an architect, engineer, or
260 inspector, depending on the nature of the Improvement) selected
261 by Lender. Borrower shall pay all fees and expenses charged by
262 such engineer, architect, inspector or other person inspecting the
263 Property, and all other fees, costs and expenses relating to such
264 inspections.
'W 265 5.3 Lien-Frye Com2letion.
266 (a) Borrower covenants and agrees that each of the Improvements
267 and all materials, equipment, fixtures, or any other item
268 comprising a part of any Improvement shall be constructed,
269 installed or completed, as applicable, free and clear of any
270 mechanics', materialman's or other liens except as previously
271 approved in writing by Lender.
272 (b) Prior to each release from the Escrow Account, Borrower shall
273 provide to Lender an endorsement to the title insurance policy
�r 274 insuring Lender's interest in the Property that updates the
275 effective date of the policy to within five (5)days of the date of
276 the advance of Escrow Funds and shows that no mechanics' or
277 materialmen's liens or other liens that have not been bonded off
278 to Lender's satisfaction have intervened since the date of
279 recordation of the Security Instrument and that title to the
280 Property is free and clear of all liens (other than the lien of the
281 Security Instrument or any other liens previously approved in
282 writing by Lender, if any).
283 (c) Lender may require Borrower to obtain from any contractor,
�r 284 subcontractor, or materialman an acknowledgment of payment
295 and release of lien down to the date covered by the last advance
286 of Escrow Funds. Any such acknowledgment and release shall
287 conform to the requirements of local lien law and shall cover all
288 work performed and materials (including equipment and fixtures)
r0 289 furnished for the Property except for any hold back amounts.
290 Lender may also require Borrower to file this Agreement or any
291 other agreement or contract under which Improvements are to be
292 completed in the public records of the jurisdiction in which the
293 Property is located if the effect of such filing will be to relieve
294 the Property from mechanics' and materialmen's liens in
180 295 connection with any such Improvements.
296 5.4 Compliance with ws and Insgrangei n n .
297 (a) All Improvements shall comply with all applicable laws,
W 298 ordinances, rules and regulations of all governmental authorities
Capital Improvement Escrow Agreement
November 1992
it
Page 7
i,. -299 having jurisdiction over the PropWy and applicable insurance
300 requirements, including, without limitation, applicable building
30i codes, special use permits, environmental regulations, and
• 1302 requirements of insurance underwriters.
303 (b) Borrower represents and warrants that, to the best of its
304 knowledge, no permits or approvals from any agency or authority,
305 other than those previously obtained and furnished to Lender, are
306 necessary for the commencement and completion of the
307 Improvements. Borrower shall pay all applicable fees and charges
308 of such agencies or authorities.
w
309 (c) In addition to any insurance required under the Loan Documents,
310 Borrower shall provide or cause to be provided workmen's
311 compensation insurance, builder's risk, and public liability
312 insurance and other insurance required by applicable law in
313 connection with any of the Improvements. All such policies shall
314 be issued by companies approved by Lender and shall be in form
315 and amount satisfactory to Lender. All such policies which can
316 be endorsed with standard mortgagee clauses making loss payable
317 to Lender or its assigns shall be so endorsed. The originals of
318 such policies shall be delivered to Lender.
rr
319 6. "an Documents.
320 6.1 Default Under This Ag er ement. If Borrower (a) at any time prior to the
321 completion of the Improvements abandons or ceases work on the
322 Improvements for a period of more than twenty (20) days, unless such
to 323 cessation results from causes beyond the control of Borrower and
324 Borrower is diligently pursuing the reinstitution of work, (b) fails to
325 complete the Improvements in a good and workmanlike or timely manner
326 within the Escrow Period, (c) allows a mechanics' or materialman's lien
327 to be filed against the Property (unless such mechanics' or materialman's
328 lien is bonded off to the satisfaction of Lender), (d) otherwise fails to
329 comply with the terms of this Agreement and the Security Instrument
330 within ten (10) days of Lender's notice of such non-performance or non-
331 compliance (except for Borrower's obligation to renew a letter of credit
332 that is part of the Escrow Deposit as required under Section.IM for
333 which no notice or cure period shall be permitted), or (e) otherwise
MN 334 defaults under any of the Loan Documents, any such failure shall be a
335 default under this Agreement, and Lender, at its option, may hold and
336 apply any cash Escrow Funds as provided in Section 6.2 of this
337 Agreement and may draw on any letter of credit that is part of the
338 Escrow Funds and deposit the proceeds thereof into the Escrow Account.
339 6.2 Default Under the Loan Documents.
340 (a) The cash funds held in the Escrow Account are pledged as
341 additional security for the indebtedness evidenced by the Note
w
Capital Improvement Escrow Agreement
November 1992
Page 8
,W
342 and secured by the Security Instrum&v) If Borrower defaults on
? M any payment due under the Note or under any covenant in the
344 Security Instrument, or under any term or provision of this
345 Agreement or of any other Loan Document, then Lender, in its
346 sole and absolute discretion, may draw on any letter of credit that
347 is part of the Escrow Funds and deposit the proceeds thereof into
348 the Escrow Account and apply in any order it deems advisable (i)
349 the funds in the Escrow Account or any portion of such funds to
350 payment of the indebtedness evidenced by the Note or any unpaid
351 fees, costs or expenses that Borrower is required to pay under this
352 Agreement or any of the other Loan Documents, provided,
353 however, that such application of funds shall not cure or be
354 deemed to cure any default; (ii) the funds in the Escrow Account
355 to reimburse Lender for any losses or expenses (including. without
356 limitation, legal fees) suffered or incurred.by Lender as a result
357 of such default; (iii)the funds in the Escrow Account to make or
358 complete the Improvements as provided in Section 5; or (iv) the
w• 359 funds in the Escrow Account in connection with exercising all
360 rights and remedies available to Lender at law or in equity or
361 under this Agreement or any of the other Loan Documents.
362 (b) Nothing in this Agreement shall obligate Lender to apply all or
�r 363 any portion of the Escrow Funds on account of any default by
364 Borrower or to repayment of the indebtedness evidenced by the
365 Note.
366 6.3 Borrower's Other Obligations. Nothing contained in this Agreement shall
367 in any manner whatsoever alter, impair or affect the obligations of
,rr 368 Borrower, or relieve Borrower of any of its obligations to make payments
369 and perform all of its other obligations required under the Loan
370 Documents.
371 7. Remedies Cumulative. None of the rights and remedies conferred upon or
�r 372 reserved to Lender under this Agreement are intended to be exclusive of any
373 other rights, and each and every right shall be cumulative and concurrent,
374 and may be enforced separately, successively or together, and may be exercised
375 from time to time as often as may be deemed necessary by Lender.
376 8. Additional Documents. Upon completion of all or any portion of the
V40 377 Improvements and upon Lender's request, Borrower shall execute and deliver to
378 Lender a security agreement and financing statement or similar instrument(s),
379 in form substantially like those executed in connection with Lender's making the
380 Loan to Borrower, necessary or desirable to perfect Lender's lien upon any
381 property for which Escrow Funds were expended.
40 382 9. Indemnification. Borrower agrees to indemnify, defend and hold harmless
383 Lender from and against any and all actions, suits, claims, demands, Iiabilities,
384 losses, damages, obligations and costs or expenses, including, but not limited to,
385 litigation costs and reasonable attorneys' fees, arising from or in any way
386 connected with the performance of the Improvements or the investment of the
to
Capital Improvement Escrow Agreement
November 1992
Page 9
+�r
3R7 Escrow Funds. Borrower assigns to Lender all rights and claims Borrower may
388 have against all persons or entities supplying labor or materials in connection
389 with Improvements; provided,however, that Lender may not pursue any such
390 right or claim unless Borrower is in default under this Agreement or the Loan
391 Documents.
w
392 10. DeterminationS by Lender. In any instance where the consent or approval of
393 Lender may be given or is required, or where any determination,judgment or
394 decision is to be rendered by Lender under this Agreement, the granting,
395 withholding or denial of such consent or approval and the rendering of such
396 determination,judgment or decision shall be made or exercised by Lender at its
rr 397 sole and exclusive option and in its sole and absolute discretion.
398 11. Borrower's Records. Borrower shall furnish such financial statements, invoices,
399 records, papers and documents relating to the Property as Lender may
400 reasonably require from time to time to make the determinations permitted or
401 required to be made by Lender under this Agreement.
402 12. Fees and Costs.
403 a) Borrower shall pay Lender a monthly fee of Y
404 for its services in administering the Escrow Account. Lender shall bill
r,+ 405 Borrower directly for each monthly fee.
406 (b) All reasonable costs and expenses incurred by Lender in
407 connection with collecting, holding and disbursing the Escrow
408 Funds pursuant to this Agreement shall be paid by Borrower. All
409 reasonable . fees, charges, costs and expenses incurred by Lender
a� 410 in connection with inspections made by Lender or Lender's
411 representatives in carrying out Lender's responsibility to make
412 certain determinations under this Agreement shall be paid by
413 Borrower.
Wr 414 13. Successors and AssigmBound. This Agreement shall be binding upon Borrower
415 and Lender and their respective successors' and assigns, and shall inure to the
416 benefit of and may be enforced by the Lender and its successors, transferees and
417 assigns. Borrower shall not assign any of its rights and obligations under this
418 Agreement without the prior written consent of Lender, which consent Lender
10
419 may reasonably withhold.
420 14. No Third Party Beneficiary. This Agreement is intended solely for the benefit
421 of Borrower and Lender and their respective successors and assigns, and no third
422 party shall have any rights or interest in any provision of this Agreement or the
423 other Loan Documents. Nothing contained in this Agreement shall be deemed or
to 424 construed to create an obligation on the part of Lender, or which confers upon
425 any third party a right to enforce against Lender, any right that Borrower may
426 have under this Agreement.
427 Is. Amendmentand Waiver. No amendment to this Agreement will be valid unless
428 it is made in writing and executed by the parties to this Agreement. No specific
to
Capital Improvement Escrow Agreement
November 1992
10
Page 10
,v ,429 waiver kforbearance for any breach of any Jr4e terms of this Agreement
?' 430 shall be considered as a general waiver of that or any other term of this
431 Agreement.
432 16. rompletion of Im2rovements. Lender's release of Escrow Funds or other
433 acknowledgment of completion of any Improvement in a manner satisfactory to
r++ 434 Lender shall not be deemed an acknowledgment that the Improvement has been
435 completed in accordance with applicable building, zoning or other codes,
436 ordinances, statutes, laws, regulations or requirements of any governmental
437 agency.
439 17. No Agency,4E Partnershln. Nothing contained in this Agreement shall constitute
439 Lender as a joint venturer, partner or agent of Borrower, or render Lender liable
440 for any debts, obligations, acts, omissions, representations or contracts of
441 Borrower.
442 18. Assumption or LoanfTransrer of Interests in Borrower.
443 (a) If the Property is transferred and the obligations of Borrower
444 under the Loan Documents are assumed by the transferee of the
445 Property, that transferee shall be required to assume Borrower's
446 duties and obligations under this Agreement and shall be required
447 to execute and deliver to Lender such documents as Lender
448 requires to effectuate such assumption of duties and obligations.
449 (b) If interest(s) in Borrower are transferred so that Lender's consent
450 is required under the Security Instrument, the purchaser(s) of
451 such interest(s) shall be required to execute and deliver to Lender
fb+ 452 such documents as Lender requires to effectuate Borrower's
453 continued obligations under this Agreement.
454 Notwithstanding the foregoing provisions of this S4ion I& nothing herein shall
455 be deemed to permit (i)Borrower to transfer all or any part of its interest in the
456 Property or (H) interests in the Borrower to be transferred, except in compliance
�`� 457 with the Security Instrument.
458 19. Termination pf Capital Improvement Escrow. Upon(a) payment in full of all
459 sums evidenced or secured by the Loan Documents and release by Lender, and
460 (b) payment in full for all Improvements completed or contracted to be
wr+ 461 performed prior to the date of the payment described in (a), Lender shall release
462 to Borrower the remaining amount of cash Escrow Funds, if any, in the Escrow
463 Account and return to Borrower any letter of credit that is part of the Escrow
4b4 Funds.
465 20. Entire Agreement. 71ils Agreement contains the complete and entire
" 466 understanding of the parties and no changes shall be recognized as valid unless
467 they are made in writing and signed by the parties. No specific waiver of any
468 of the terms of this Agreement shall be considered as a general waiver of that
469 or any other term of this Agreement. If any provision of this Agreement is in
470 conflict with any provision of the Security Instrument regarding the Escrow
rr' .
Capital Improvement Escrow Agreement
November 1992
Page 11
rrr '471 Account,v e provision contained in this Agreement all control.
472 21. Notices. All notices, waivers, demands, requests or other communications
473 required or permitted by this Agreement (collectively, "&NAtices"), to be effective,
474 shall be in writing, and given by (a) personal delivery, (b) established overnight
475 commercial courier with delivery charges prepaid or duly charged, or (c)
" 476 registered or certified mail, return receipt requester!, first class postage prepaid.
477 If to Lender, to: Mr. CHARLES J. SIPPLE
478 Title:
479 (For: Resolution Trust Corporation]
.r, 480 c19 Midland
481 210 West 10th Street (P.O. Box 412]59)
Kansas City, Missouri 64141;6158
482 with a copy to: California Sales Center
Ms—Kendall Flag - n
483 Senior Attorney
484 California Office, Legal Division
485 Resolution Trust Corporation
486 NN MacArthur Boulevard
487 I CM=rt Beach,-Cal ifornia 92658-6210
488 If to Borrower, to:
489 501-Main, Inc.
490 100 Wilshire Bouievar juitt 1230
Santa Monica. California 90401
491 Attn: Mr. Shaoul J. Lev,•y. Secretary
492 with a copy to:
493 Mr. LeonardFeldman
494 d
495 A=
rw
496 or to any other address or addressee as any party entitled to receive Notices
497 under this Agreement shall designate, from time to time, by Notice given to the
498 others in the manner provided in this Section.
ww 499 Notices thus given by personal delivery shall be deemed to have been received
500 upon tender to the applicable natural person named above. Notices thus given
501 by overnight courier shall be deemed to have been received the next business day
502 after delivery to such overnight commercial courier. Notices thus given by mail
503 shall be deemed to have been received on the second (2nd) day after deposit into
504 the United States Postal System. All copies to the applicable person(s) or
505 entity(les) designated above to receive copies shall be given in the same manner
506 as the original Notice and such giving shall be a prerequisite to the effectiveness
507 of any Notice.
Capital Improvement Escrow Agreement
November 1992
Page 12
J
�+ r 508 22. v i The invalidity, illegality, or unenfoYeability of any provision of
509 this Agreement pursuant to judicial decree shall not affect the validity or
510 enforceability of any other provision of this Agreement, all of which shall
S 1 I remain in full force and effect.
• 512 23. v in w. All questions with respect to the construction of this
513 Agreement and the rights and liabilities of the parties under this Agreement
5i4 shall be determined in accordar_ce with the laws of the jurisdiction in which.the
515 Property is located, without regard to the application of choice of law principles,
516 except to the extent that such laws are superseded by federal law.
w
517 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year
518 first written above.
519 WITNESS/ATTEST: BORROWER:
520 �ty�(i, fir✓ 501_ MAIN. INC.
�~ A California Corporation
lip
By:
LEO ARD FELDMAN
President
,to �>
By:
SHAOUL LEVY
Vice-President/Secretary
'41
LENDER:
521 as
522 EI for TER VIN Z , .S.13.
to523 �ATJ?3�e
524 CH4RTER,SERVICE (:OMRAII!Q
525 A California Corporation
w�
525 By:
a
Capital Improvement Escrow Agreement
November 1992
Page 13
�r
r 57.7 Exhibit A
528 LEGAL DESCRIP' ON OF PROPERTY
[Set Forth Legal Description, Below, Or Attach, Following]
w
�v
w
rr�
+r+
v
Capital Improvement Escrow Agreement
November 1992
w
Page 14
Leaal Description
w
PARCEL A:
Lot 2 of Tract No. 14122, in the City of Huntington Beach, as shown
on a map recorded in book 656, page(s) 11 and 12, of Miscellaneous
Maps, in the office of the Orange County Recorder.
it
EXCEPT therefrom all oil, gas, minerals, and other hydrocarbon
substances lying below a depth shown below, but with no right of
surface entry, as provided in deeds of record
Depth: 500 feet
�M
PARCEL B:
Non-exclusive appurtenant easements for vehicular and pedestrian
traffic over all private streets and walkways within Tract No.
14122 , as set forth in the Master Declaration of Covenants,
Conditions and Restrictions and Reservation of Easements for Town
Square recorded July 26, 1989, as Instrument No. 89-395282,
Official Records.
PARCEL C:
Non-exclusive easements for vehicular and pedestrian access,
ingress, egress, use and enjoyment in, to and over the "Access
Area" as shown on Exhibit "B" attached to the Agreement recorded
June 14, 1990, as Instrument No. 90-316351, Official Records.
PARCEL D:
An exclusive easement(s) for vehicular and pedestrian access,
ingress, egress, use and enjoyment in, to and over the "Parking
Area" as shown on Exhibit "B" attached to the Agreement recorded
June 14, 1990, as Instrument No. 90-316351, Official Records.
w+
40 ,�. 529 � Exhibit
530 [to the Capital Improvement Escrow Agreement]
SCHEDULE OF IMPROVEMENTS & FSTIMATED COSTS
w
531 [Attach as Exhibit B a fist of Improvements and estimated costs of Improvements]
532 m r v m n E5 imated Cost
+r
(1) AIR CONDITIONING 30,000.00
(2) CARPETING/TILE ETC. 20,000.00
(3) DRYWALLS MATERIAL AND LABOR $ 30,000.00
+r
(4) PAINT $ 15,000.00
(5) PLUMBING $ 15,000.00
�r (6) GENERAL CONTRACTOR $ 15,000.00
(7) ELECTRICAL MATERIAL S 30,000.00
(8) ELECTRICAL LABOR $ 10,000.00
r.+ (9) TENANT FINISHES $ 15,000.00
(10) CONTINGENCY $ 20.000.00
T 0 T A L 200,000.00
'kip
WE HAVE APPROXIMATELY 5,500 SQ. FOOT AVAILABLE. THIS WOMM GIVE
wr US 36.36 PER FOOT WHICH I PREFER TO GIVE AS CREDIT AND LET THE
TENANT DO CAPITAL IMPROVEMENT.
wr
w
Capital Improvement Escrow Agreement
November 1992
w
Page 15
w 533 Exhibit
534 IRREVOCABLE LETTER OF CREDIT
535 (See, Form of Irrevocable Letter of Credit, Attached Hereto and Following.)
4W
wr
..
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Capital Improvement Escrow Agreement
November 1992
Page 16
• Resolution Trust Corporation
IRREVOCABLE LETTER OF CREDIT NO.
October , 1994
CHARTER SERVICES CORPORATION, a California Corporation,
f► Wholly-Owned Subsidiary of the RESOLUTION TRUST CORPORATION, as
receiver for CHARTER SAVINGS BANK
4000 MacArthur Boulevard
Zrewport Beach, California 92660
Attn: Vice-President.- California Office
Dear Sir or Madam: '
For the account and benefit of CHARTER SERVICES CORPORATION, a Califor-
nia Corporation, a wholly-owned Subsidiary of the RESOLUTION TRUST
CORPORATION, as Receiver for CHARTER SAVINGS BANK (the "Beneficiary") ,
the undersigned institution (the "Issuer") hereby opens in your favor
the Issuer's Irrevocable Letter of Credit No. r '° �'�`"" "° �"�°"�' n
("Letter of Credit") for an amount not exceeding 'a "total"of undred
ousan No/Zoo o a s 200 000 00 , effective immediately and
expiring on Mrij1995.
Funds under this Credit are available to Beneficiary against one or more
sight drafts on the Issuer completed by Beneficiary or by Beneficiary's
loan servicer, Nidland Loan Service, of Kansas City, Missouri, on
Beneficiary's behalf, completed in substantially the form attached
hereto and marked as Exhibit 1 (and incorporated fully herein by this
reference) , for all or any part of this Credit.
This Credit is irrevocable, unconditional and transferable. This Credit
ray be transferred, without charge, one or more times upon receipt of
the Beneficiaries written instructions submitted in substantially the
form attached hereto and marked as jxbib (and incorporated fully
herein by this reference) .
The Issuer shall promptly honor all drafts drawn in compliance with the
terms of this Credit if received on or before the expiration date at:
N k',••-^.aoR'.`^.JwP"^^ Y - ]J"t`Mx' vmv.>-4 vn v_>e s-'ri M1
"k'.�" f- `=","•`X 73"x�y"q�'FSi . .>.,,. ,Y`ro C Fo 3- rw,e:r>9.,,wx+--..,
[address "Of Issuer]
Drafts presented at the Issuer's office at the address set forth above
no later than 10:00 a.m. shall be honored on the date of presentation,
by payment in accordance with the Beneficiary's payment instructions
that accompany each such draft. If requested by the Beneficiary,
payment under this Credit may be made by wire transfer of immediately
California Standard Form
Letter of Credit
Prepared July 9, 1993 1
vM r �p vailable funds to the Beneficiary's account as specified in the draft
(whether executed by the Beneficiary, or by Midland.Lgan_Services) or by
• • deposit of same day funds in the Beneficiaryvs designated account.
This Credit shall be governed by and subject to the Uniform Customs and
�v Practice for Documentary Credits (1983 revision) , International Chamber
of Commerce Publication No. 400 ("UCP") , and to the extent not inconsis-
tent with the UCP, laws of the State of California.
Sincerely yours,
"The Issuer"
(Name of Entity]
�r
[Signed By]
(Name]
(Title]
Date: October , 1994
err
i�
ly
California Standard Form .
Letter of Credit
Prepared July 9, 1993 2
s EITIBIT I TO
IRREVOCABLE LETTER OF CREDIT NO.
SIGHT DRAFT
[Name of Issuer]
[Address)
Attention:
Date: , 199`
Pay on demand to: CHARTER SERVICES CORPORATION, a California Corpora-
tion, a wholly-owned Subsidiary of the RESOLUTION TRUST CORPORATION, as
Receiver for CHARTER SAVINGS BANK, to be delivered at the following
address:
c/o Midland Loan Services
210 West loth Street
P.O. Box 419158
Kansas City, MO 64141-6158
Attention: Charles Sipple
7
of the sum of .::xv: <.: ..:'t t
•
.. Dollars..... $
U•..5 .... This' draft'is..drawn under your Irrevocable'Letter"of -Credit
No:.... in favor of and for the benefit' of the
_.
Beneficiary....(or' 'its assignee/transferee) who is named therein. This
Draft shall be payable immediately on sight.
Sincerely yours,
"Beneficiary"
to
By:
Name:
Title:
f=: MIDLAND LOAN GERVICE8
Loan-Servicing Agen& for
Charter Service Corporation
California Standard Form
Letter of Credit
Prepared July 9, 1993 3
i
EXHIBIT 2 TO
IRREVOCABLE LETTER OF CREDIT NO,
SAMPLF�FORh1 FFOR TRANSFER QE_L , R OF CREDIT
(Name of Issuer)
[Address]
Attention:
199
w Dear Sir or Madam:
We hereby transfer to
..r
atenfont r.x [Name of Assignee] , whose address is set
forth'° elcw; all rights-...to' Etter of Credit No. ',
being held at your Bank, subject to the terms of such�'Credit. � Enclosed
is the original Letter of Credit which should be returned to us with the
endorsement of this transfer thereon.
very truly yours,
"Tbe Beneficiary"
By:
Name:
Title:
Lot: CHAFtTER_SERV-ICE CORPORATION
Acae ted and A reeds Dated:
Vo Assignee/Transferee of Beneficiary
By:
Name:
.� Title:
FU'
Address:
California Standard Form
Lotter of Credit
Prepared July 9, 1993 4
-„
` (�j City of Huntington Beach [COE
City of Huntington Beach
P.O.BOX 190 GLIFORNU 92"s
�p P.O.BOX 190 CALIFORIZU 92b4s
Fremshrdeskof. CONNIE BROCKWAY From lhe&Aof. CONNIE BROCKWAY
CITY CLERK CITY CLERK
(714)636-5227 (714)636.5227
.� r Vi",s/ss
/,41,s f- C,P7z-)
Q < J
Pie a.cr c .0 r �� • wt oai f roc r
'J [�„ �yr -{a /.� a.-va.e�f
o p�a„LJ<,o> cr�c�Vt�7`y w•,�h i.� �'s 7~
P ` •
/ J
r 4�K�s..y�•
City of Huntington Beach
1 2000 MAIN STREET CALIFORNIA92648
.. DEPARTMENT OF ECONOMIC DEVELOPMENT
Office of Va Director 536.5582
Nowng 5364S542
pAdw l sopmont 536.6582 '
Fax (714)375-50U
uary 26, 1995
Randy Herman
Resolution Trust Corporation
Office of Subsidiary Program Management
4000 MacArthur Boulevard ,
Newport Beach, CA M60-2516
SUB►TBCr: Lam Wkiea&1 AMement-01 Hda Sired
Dear Randy: .
As promised, I have enclosed a copy of the fully executed Real Estate Loan Participation
Agreement for your records. `
If you have any questions, please call me.eIY, �7`�7 W Q t 4 V1 �-o r
Sinver
can "C's
�J-
-��+1 Q° tLCy
Keith B. Bohr
KBB:jw
► nsukrar)c(S F6 (1 CY
9JJAAe ,eAt
xc. Connie Brockway, City Ci Cleric
. . ,
WOW
Enclosure
M0t2a
City of Huntington Beach
2000 MAIN STREET CALI FORNIA 92648
_ F.-;:; •-+.�r'.-, DEPARTMENT OF ECONOMIC DEVELOPMENT
Office of the Director 536-5582
Housing 536-5542
Fledeveiopment 536-5582
rax (714)375-5087
January 26, 1995
Randy Herman
Resolution Trust Corporation
Office of Subsidiary Program Management
4000 MacArthur Boulevard
Newport Beach, CA 92660-2516
SUBJECT: an, articipation.Agr�ement-501 Ma_zn Street
Dear Randy:
As promised, I have enclosed a copy of the fully executed Real Estate Loan Participation
Agreement for your records.
If you have any questions, please call me.
Sincerely,
lJ�
Keith B. Bohr
KBBjw
xc: Connie Brockway, City Clerk
Enclosure
ncOl26
1
c
1
�� - City of Huntington Beach
*� 2000 MAIN STREET CALIFORNIA 92648
� DEPARTMENT O F ECONOMIC DEVELOPMENT�
Office of the Director 536-5582
Housing 536-5542
Redevelopment 536-5582
Fax (714)375.5087 ' r`
October 25 1994 C
S T
Commonwealth Land and Title
Attention Bonnie Fish, Escrow Officer
801 No Brand Blvd C81g)
12th Floor
Glendale, CA 91203
Dear Ms Fish
Please consider this letter as written authorization to record the attached Deed in
Full Reconveyance with zero demands of payment to the Redevelopment Agency
of the City of Huntington Beach
If you have any questions, please call me at (714) 374-1529
Thank you for your assistance
Sincerely,
;&�Xz Ifx,-
Keith B Bohr
Assistant Project Manager
KBB jw
Attachment
kbb1025
_ . Attachment Z
iWCORDING MU M-ED )
AS AN ACCOMMODATION BY )
AM`AkW RECORDED MAEL TO: )
COMMONWEALTH LAND TrrLE )
INSURANCE COMPANY )
801 North Brand Boulevard, 12th Floor } ,
Glaxwe, California 91203 ) '
Atra: Bonnie Dish, Escrow Officer , )
Escrow No. )
Tittle No. )
[wam&bars the Pura for r000rdees uwl
DEED IN FULL RECONYEYANCE
Pursuant to that certain Deed of Trust and Assignment of Reny,originally executed by MOLA DEVELOPMENT
CORPORATION, a California corporation,predecessor-in-interest to CHARTER SERVICE CORPORATION,
a California corporation, as Trustor, and recorded In the Official Records of Orange County, California, on
January 18,1989,as Instrument No. 89-0337I5(the "Deed of Trust")and having received, from the owner and
holder of the obligations under such Deed of Trust a request to reeonvey, the REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, as duly appointed Trustee
pursuant to the Substitution of Trustee recorded in the Official Records of Orange County,California on January
4, 1990 as Instrument No. 90-006 9, DOES HEREBY RECONVEY, without warranty, to the person or
persons Iegally entitled thereto, the estate now held by the Trustee, as described on E hibit"A" attached hereto
an:1 incorporated herein by this reference.
Dated: ,.LQ
ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,
a public body, corporate and politic
Connie Bra-�R Name• Linda Moulton-Patterson
Agency C3--rk Title; Chairperson
APPROVED A5 TO FORM: � P`Z y-s l'-
STATE OF CALIFORNIA ) Arthur DeLaLoza
)u Deputy City Attorney
COUNTY OF ORANGE }
Oa 9 1994, before me,
a Notary Public in and for sa ,personally appeared Wally
lmown to me (or proved to me on the satisfactory evidence)to be the person(s) whose name(s) Is/are
subscribed to the within instrument and acl mowle g e that helshelthey executed the same in his/her/their
authorized capacity(ies), and that by hislherltheir signatures a Instrument the person{s),or the entity upon
behalf of which the persons(s) acted, executed the instrument.
INTTNESS MY HAND AND OFFICIAL SEAL.
Notary Public in and for said County EAL)
PARCEL A
Lot 2 of Tract No 14122, in the City of Huntington Beach, as shown on a map recorded in
book 656, page(s) 11 and 12, of Miscellaneous Maps, ui the office of the Orange County
Recorder
EXCEPT therefrom all oil, gas, minerals, and other hydrocarbon substances lying below a
depth shown below, but with no right of surface entry, as provided ui deeds of record
Depth 500 feet
PARCEL B
Non-exclusive appurtenant easements for vehicular and pedestrian traffic over all private
streets and walkways within Tract No 14122, as set forth in the Master Declaration of
Covenants, Conditions and Restrictions and Reservation of Easements for Town Square
recorded July 26, 1989, as Instrument No 89-395282, Official Records
PARCEL C
Non-exclusive easements for vehucular and pedestrian access, ingress, egress, use and
enjoyment m, to and over the "Access Area" as shown on Exhibit "B" attached to the
Agreement recorded June 14, 1990, as Instrument No 90-316351, Official Records
PARCEL D'
An exclusive easement(s) for vehicular and pedestrian access, ingress, egress, use and
enjoyment in, to and over the "Parking Area" as shown on Exhibit "B" attached to the
Agreement recorded June 14, 1990, as Instrument No 90-316351, Official Records
CLTA Preliminary Report form
a
CALIFORNIA ALL-PURPOS CKNOWLEDGMENT tro eoo,
State of
County of
On ram` a?I. 199Y before me,
oA>1: Wj*_MU R•en,-Ac Doe.Wo7
personally appeared 5D. -
F"WM of
la'personally known to me --OR E3 be the person(§) whose name(o Ware
subscribed to the within instrument and ac- _
f f~�a knowledged to me that he sWthey executed
WLCoCOI&+c#wtsab the same in t4sA#>heir authorized
NaFavPLac--cedfaatio acit I ca y
oa,�MMca n► p yQW, and that b +#i 4heEltheir
a+m.fa0a MAY 11.W signatureW on the Instrument the person(,
or the entity upon behalf of which the
persons) acted, executed the Instrument.
WITNESS my hand and official seal.
: of WTMY
OPTIONAL
Though the data below Is not required by law,it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
❑ INDIVIDUAL
❑ CORPORATE OFFICER
TRLE OR TYPE OF DQCUME
mrt.F(s)
❑ PARTNER(S) ❑ LIMITED
❑ GENERAL
❑ ATTORNEY4N-FACT NUMBER OF PAGES
Q TRUSTEE(S)
❑ GUARDWACONSERVATOR
fl 'OTHER: t�et k� 9� — n/.?/ 9f
��— DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME of r OR,
SIGNER&OTHER THAN NAMED ABOVE
01993 NATKXM NOTARY ASSOCIATION•SM Pwwwl Ave.,P.O.Box 7184•Canoga Parts.CA 91309.7104
Attachment Z
RECORDING REQUF.SITDI
AS AN ACCOMMODATION BY )
AND W EN RECORDED AWL TO: )
COMMONWEALTH LAND TITLE )
INSURANCE CO:TANY }
801 North Brand Boulevard, 12th Floor
Glendale, California 91203 )
Attn: Bonnie Fish, Escrow Officer . )
Escrow No. )
Title No. )
Iqwe above this Line for recorder's use]
DEED IN FULL RECOINVEYANCE
Pursuant to that certain Deed of Trust and Assignment of Rents,originally executed by MOLA DEVELOPMENT
CORPORATION, a California corporation,predecessor-in-interest to CHARTER SERVICE CORPORATION,
a California corporation, as Trustor, and recorded in the Official Records of Orange County, California, on
January 18, 1989, as Instrument No. 89-033715(the 'Deed of Trust")and having received, from the owner and
holder of the obligations under such Deed of Trust a request to reconvey, the REDEVELOPMENT AGENCY
OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, as duly appointed Trustee
pursuant to the Substitution of Trustee recorded in the Official Records of Orange County,California on January
4, 1990 as Instrument No. 90-006489, DOES 11EPMY RECONVEY, without warranty, to the person or
persons Iegally entitled thereto, the estate now held by the Trustee, as described on Exhibit"A' attached hereto
and incorporated herein by this reference.
Dated: LP /
ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,
a public body, corporate and politic
By By-
Connie Brock Name: Linda Moulton-Patterson
Agency Clerk Title. Chairperson
APPROVED AS TO FORM:STATE OF OF CALIFORNIA } Arthur DeLaLoza
)ss Deputy City Attorney
COUNTY OF ORANGE )
On 9 , 1994, before me;9
a Notary Public in and for sa ,personally appeared ersonally
known to me (or proved to me on the satisfactory evidence) to be the person(s) whose names) Ware
subscribed to the within instrument and acknowI g e that he/shelthey executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures a instrument the person(s), or the entity upon
behalf of which the persons(s) acted, executed the instrument.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public in and for said County EA-)
Ex It% L 4 #A#'
PARCEL A
Lot 2 of Tract No 14122, m the City of Huntington Beach, as shown on a map recorded in
book 656, page(s) 11 and 12, of Miscellaneous Maps, m the office of the Orange County
Recorder -
EXCEPT therefrom all oil, gas, minerals, and other hydrocarbon substances lying below a
depth shown below, but with no right of surface entry, as provided in deeds of record
Depth 500 feet
PARCEL B
Non-exclusive appurtenant easements for vehicular and pedestrian traffic over all private
streets and walkways within Tract No 14122, as set forth in the Master Declaration of
Covenants, Conditions and Restrictions and Reservation of Easements for Town Square
recorded July 26, 1989, as Instrument No 89-395282, Official Records
PARCEL C
Non-exclusive easements for velucular and pedestrian access, ingress, egress, use and
enjoyment m, to and over the "Access Area" as shown on Exhibit "B" attached to the
Agreement recorded June 14, 1990, as Instrument No 90-316351, Official Records
PARCEL D
An exclusive easement(s) for vehicular and pedestrian access, mgress, egress, use and
enjoyment in, to and over the "Parking Area" as shown on Exhibit "B" attached to the
Agreement recorded June 14, 1990, as Instrument No 90-316351, Official Records
CLTA Pretiminary Report Form
I
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No seo�
State of
County ofz, F�
On �� 4 199Y before me,
DATE NAME.ME 00bFFICER•E.G.,- EDOE.N07
personally appeared -
NAME(S)OF SIGNER(S) r
Rpersonaliy known to me --OR-- pfoved4o.-me-o-the-basis-o€-satis€eeta7-evk#ence--
to be the persons} whose name(, Ware
subscribed to the within Instrument and ac-
MAYBMMLJOHN901 knowledged to me that he/sWthey executed
coM4#991M the same in #i-s/# their authorized
Way PLUe—Cc*tOmO y(M Ca acit le y
OQAl�cot�mr p , and that b 44s4HWth e i r
Q_ P1W' C4nvmEx;*wM►Y11.1497 signature(, on the instrument the persons},
or the entity upon behalf of which the i
person(sj acted, executed the instrument.
WITNESS my hand and official seal.
SIGNATJMF OF NOTARY
OPTIONAL
Though the data below is not required by law,it may prove valuable to persons relying on the document and could prevent
fraidulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
❑ INDIVIDUAL
❑ CORPORATE OFFICER
THE(S) TITLE OR TYPE OF DOCUME
❑ PARTNER(S) ❑ LIMITED
❑ GENERAL /
❑ ATTORNEY-IN-FACT NUMBER OF PAGES
❑ TRUSTEE(S)
❑ GUARDIAN/CONSERVATOR
POTHER:r 4L -- . zo 1
DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAI•tE OF PERSON{ ]ORE (tES
SIGNS )OTHER THAN NAMED ABOVE
O1993 NATIONAL NOTARY ASSOCIATION•OM Remmet Ave.,P.O.Box 7184•Canoga Part.CA 91309-7184 '
loff� CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
"UNTPAGMN itAc"
TO: Keith Bohr, Economic Development
FROM: Art DeLaLoza, Deputy City Attorney
DATE: October 20, 1994
SUBJECT: Town Square
Deed of Reconveyance r.2- =,
Escrow No, 22104 �
N � rr
"
cl " o
N x '
� r
This will confirm that you will secure the original executed full reconveyance approved :^
the agency for the Clerk and deliver to escrow for the purchase and sale of 501 Main
ursuant to the LPA approved by the agency this month.
2. You also need to sign a"0 demand" for Commonwealth Escrow.
3. Please secure a check in the amount of$8,261.00 as our part of closing costs.
You may get further information from Bonnie Fish of Commonwealth Land Title at
(818) 552-720I.
Art DeLaLoza
Deputy City Attorney
cc: Bonnie Fish(via fax) (818) 549-0249
RECEIVED
o cT 2 0 V%
DEPARTMENT OF
ECONOMIC DEVELOPMENT
REAL-ESTATE LOAN PARTICIPATION AGREEMENT
THIS AGREEMENT is made this I -s+ day of_M o vch 4e-_r
1994, by and between CHARTER SERVICE CORPORATION, a California
corporation ("CHARTER"), a wholly-owned subsidiary of THE RESOLUTION
TRUST CORPORATION, a United States corporation, in its capacity as
Receiver for CHARTER FEDERAL SAVINGS AND LOAN ASSOCIATION ("RTC"
or"RTC/-CHARTER"), as participant-lender (collectively, 'Participant"); and,
THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a
municipal corporation and/or body politic, as agent lender collectively,
"AGENT/RDA"); with respect to the following facts:
Recitals.
A. Agent and MOLA Development Corporation, a California corporation
("MOLA"), as predecessor-in-interest to CHARTER, previously entered into that
certain Owner's Participation Agreement, recorded on or about January 18, 1989
("OPA"), pursuant to which the parties to the OPA developed that certain real
Property commonly known as 501 Main Street, Huntington Beach, California
92648 ("Propert)"). Under the OPA, Agent/RDA and MOLA agreed to certain
terms relating to expenses, costs and proceeds relative to the Property.
B. Pursuant to formulations prescribed in the OPA, the parties agree that
the Agent/RDA's share of"Net Proceeds" equals 66%, and the
Part ici pa nt/C ha der's share thereof equals 34%.
C. By that certain conveyancing instrument dated December 8, 1989 (and
recorded November 4, 1990), MOLA transferred its interest in and to the
Property to CHARTER, which holds such interest to this date pursuant to and
subject to the OPA. Subsequent to its acquisition, CHARTER's records show
that it expended and advanced certain sums in developing, building and selling
the Property and has received revenues and other proceeds from the leasing
and other operations in and upon the Property, for which such expenses were
incurred. According to CHARTER's files, the sum of$309,065.59 ("Charter
Expenses') has been so expended, above and over the proceeds of the original
construction loan from Sumitomo Bank. In addition, leasing commissions in the
sum of$35,135.90 ("Charter Commissions') have been incurred in such
activities. Out of such operations, CHARTER has realized as of July 31, 1994,
the sum of$103,942 in net operating income ("N01"), exclusive of the foregoing
Expenses and Commissions, and the N01 is expected to increase through the
close of the subject transactions. Under the terms of the OPA, Agent is entitled
to payment of 50% of the N01 (presently, the estimated sum of$51,971.00), and
1
V
Participant has agreed to remit such sum to Agent, pursuant to the terms and
conditions set forth herein.
D. In order to compromise and settle the mutual disputes between them
over the Charter Expenses and Commissions and to allow the P&S Transaction
(defined and referenced below) to close timely, and strictly in reliance upon and
accordance with the provisions of Sections 1542 et seq. of the California
Evidence Code and Rule 408 of the Federal Rules of Evidence, the parties have
agreed that Agent/RDA's share of both of such items shall be fifty percent (50%)
thereof. Specifically, Agent/RDA agrees to reimburse Participant/Charter for its
half of such Expenses in the sum of$154,532.80, in the form of a fully-amortized
repayment over a seven (7)-year term, with interest at the rate of nine percent
(9%) per annum, or approximately$2,486 per month for eighty-four (84) months.
That will coincide with the corresponding term of the Loan by Charter(defined
below) arising out of the P&S Transaction. Agent shall be entitled to pay
Participant either in cash or out of its portion of the Loan repayments received
from the Buyer/Borrower(defined below). And, again as part of such
settlement/compromise, Agent/RDA agrees to pay its half of the Charter
Commissions in the sum of$17,567.95. That sum will be treated as an Project
operating expense and thus offset against and deducted from Agent's share of
the N01 due from Agent (presently, $51,971). thereby leaving approximately the
net sum of$34,403.05 which shall be paid by Participant to Agent within thirty
(30) days of the close of escrow for the P&S Transaction.
E. The parties expressly acknowledge and agree that their mutual and
separate agreements over the matters described in these Recitals are the result
of compromise and settlement, which they are Wiling to make in order to permit
the pending P&S Transaction to be closed and consummated according to its
terms. Neither the signing of this Agreement nor any statement herein shall
constitute or be deemed as any admission by either party, and nothing in this
Agreement shall be admissible as evidence or otherwise used by either party
against the other party, except in any proceeding brought by one party against
the other to enforce the terns hereof. Furthermore, should the P&S Transaction
fail to close at all and/or the Project remain in the ownership of Charter and not
be conveyed unto the Buyer/nominee thereunder, then this Agreement shall be
considered null and void and of no force or effect, and the parties shall retain all
rights and remain subject to all obligations in place or accrued prior to the
execution of this Agreement. Thereafter, the Escrowholder is hereby instructed
to return all monies and documents deposited previously in the P&S Transaction
escrow to the party who originally deposited or lodged the same pursuant to this
Agreement.
F. RTC acting as seller, and 501 MAIN INC. a California corporation, as
buyer("Buyer') have entered into that certain Purchase and Sale Agreement,
dated March 29, 1994 ("Purchase Agreement"), under which Buyer has agreed
2 C-1
to purchase, and RTC has agreed to sell, the Property, subject to the terms and
conditions provided therein ("P&S Transaction'). Pursuant to the Purchase
Agreement, Part ici pant-RTCI-C HARTER, has agreed, subject to the consent of
Agent/RDA, to extend a loan ("Loan") to Buyer, as borrower("Borrower'), in the
principal sum of Seven Hundred Seventy-Nine Thousand_Dollars
779 000.00), for the purpose of financing such purchase. For its part,
Agent/RDA, by this contract, has agreed to participate in such financing to the
extent of its proportionate interest in the Property under and subject to the OPA.
RTC has designated MIDLAND LOAN SERVICES, a Missouri Limited
Partnership ("RTC Loan-Servicer"), as the entity which will service and oversee
the Loan, on behalf of both Participant and Agent, under this Agreement, and
Agent has consented to using the latter but reserves the right to designate a new
loan servicer with the consent of RTC.
G. The parties acknowledge that Buyer's projected cash down-payment of
$41,000.00 will be used to satisfy, but may not cover all of, the broker's
commissions, escrow fees and other sales and closing costs and expenses,
currently estimated at$56,600.00 (collectively, "Closing Costs'), such that no
portion thereof will be available for distribution, and instead a deficit in the
amount of$15,600.00 is projected to arise upon, the closing and consummation
of the P&S Transaction. The actual amount of such projected deficit at the close
of escrow("Closing Deficit')will not be fixed or become certain until just before
the closing date, and Participant will promptly report the Closing Deficit to Agent
when so ascertained. In further compromise and settlement of the mutual
dispute between the parties, as referenced below, Agent has agreed either to
remit unto Participant in cash, or to deposit into escrow, prior to the closing
thereof, as requested by the Escrowholder fifty percent (50%) of the actual
Closing Deficit, which is estimated at this date to be $7,800.00.
H. Furthermore, Buyer will be required by the Purchase Agreement and
Loan Documents to deposit an additional $200.000.00 into a"Capital
Improvement Escrow' to be administered and distributed by the Agent and
Participant jointly pursuant to the provisions of that certain Capital Improvement
Escrow Agreement, executed and delivered concurrently with the Loan
Documents, which shall become effective upon the closing of the P&S
Transaction and the Loan. Such funds are intended for further construction and
building upon the Property, in accordance with the terms and conditions set forth
in the foregoing-described Agreement, and therefore are not subject to this
Agreement or the OPA.
1. Concurrently with and immediately following the closings of the P&S
Transaction and Loan in recordation priority, Participant has agreed to and shall
have assigned and transferred unto Agent all pertinent Loan Documents
(defined below), by instrument(s) reasonably approved by both parties and their
respective legal counsel, by which the same shall thereafter become vested in
3
the name of Agent as the agent lender for and on behalf of Participant
pursuant to the terms and conditions of this Agreement and subject to the _
retained and equitable rights titles and interests of Participant in the underlying_
Loan and the repayments and/or collection proceeds thereof The parties -
acknowledge that the Loan and such repayments/collections shall be governdd
by this Agreement and apportioned between Agent and Participant according to
the Agent and Participant Interests respectively which are taken from the
calculations provided in Section 209 of the OPA
J The parties desire to memorialize the foregoing elements of the P&S_
Transaction and Loan including both Agents and Participants interests in the -
Loan as well as in the security therefor and the documents related thereto and
to set forth the respective rights and obligations of the parties under this
Agreement against the background of the OPA
Agreements
NOW THEREFORE in consideration of the covenants terms and conditions
contained herein including the foregoing Recitals the parties hereby agree as
follows
1 Definitions The following terms or expressions shall have the
specific meanings listed below
1 1 Agent s Certificate shall mean the certificate to be issued to
Agent substantially in the form attached hereto and incorporated by reference
herein as Attachment 1
1 2 Agent Interest shall mean the transferred and participating
rights, titles and interests in and to the Loan and Loan Documents being
retained by confirmed unto and held by Agent in the percentage and for the
consideration set forth in Article 2 hereof and pursuant to the OPA
1 3 Business Day shall mean a day on which Agent and Participant
are both open for the transaction of usual and customary business operations
14 Loan Document(s) shall mean the following Loan documents to
be produced out of the P&S Transaction
1 4 1 Seiler-Financing Addendum to Purchase and Sale
Agreement
4
l.V k..)
1.4.2. RTC Note and Rider to Note ('Note');
1.4.3. RTC Deed of Trust, Assignment of Rents and Security
Agreement, and Rider to Deed of Trust ("Deed'of Trust');
1.4.4. RTC Assignment of Leases, Rents and Profits, and Rider
to Assignment;
1.4.5. UCC-1 Financing Statement;
1.4.6. ALTA Loan Policy of Title Insurance, dated
1994, together with all endorsements, supplements
and/or amendments thereto, and issued by Commonwealth Land Title Insurance
Company ("Loan Policy");
1.4.7. Written opinion of Borrower's legal counsel, by its letter
dated September 10 1994 jif any];
1.4.8. RTC Capital Improvement Escrow Agreement;
1.4.9. All other instruments, agreements and documents
executed by Agent and/or Borrower evidencing or securing the Loan.
1.5. `P&S Transaction' shall mean that certain purchase-and-sale
transaction between Participant/seller and Buyer described in the foregoing
Recitals, under which the Loan resulting therefrom shall be subject to this
Agreement and the ratable sharing thereof between Agent and Participant
hereunder.
1.6. 'Participation Certificate" shall mean the certificate to be issued
to Participant substantially in the form attached hereto and incorporated by
reference herein as Attachment 02".
1.7. `Participant Interest" shall mean the retained and participating
rights, titles and interests in and to the Loan and Loan Documents being
confirmed unto and held by Agent/RDA under this Agreement, in the percentage
and for the consideration set forth in Article 2 hereof.
2. Confinmation/Vesting of Participant and Agent Interests.
2.1. Respective Percentages of Loan. The parties expressly
confirm the retention, ownership and holding by Agent of the Agent Interest in
the Loan and Loan Documents, as set forth below. Participant shall receive and
be assigned and transferred the remaining percentage of the Loan and Loan
Documents as the Participant Interest, also as set forth below.
5
Dollar Amount Percentage of Agentl
Name of Part of Participation participant Interests-
Participant $264,860.00_ 34.0%
Agent $5141.140.00 66.0%
Totals: SZ79 000.00 J 091M
2.2. Ratable Sharing of Loan Receipts & Expenses. Subject to the
provisions of this Article and this Agreement, Agent and participant shall share
ratably in all interest, principal and other proceeds received from or payable by
Borrower under the Loan. All fees, costs, expenses and advances incurred or
made shall be apportioned between the parties in accordance with their
respective percentages of Agent and Participation Interests, which are taken
from the calculations provided in Section 209 of the OPA.
2.3. Remittance of Participant's Share. Subject to the provisions of
this Article and Agreement and the reimbursement of any outstanding fees,
expenses or other sums unpaid or delinquent by Borrower to that time,
Participant's share of interest, principal and other proceeds actually received or
collected by Agent from Borrower, based upon the Participant Interest, shall be
remitted by Agent to Participant as soon as feasible, but no later than the thirty
(30) Business Days after receipt thereof by Agent.
2.4. Pro-Rats Loan Interests. Upon execution of this Agreement
and Agent's receipt of the Agent's Certificate, and subject to the provisions of
this Article and Agreement, Agent's proportionate beneficial ownership interest
in the Loan and Loan Documents, as well as its title to the Agent's Interest, shall
be deemed confirmed, retained and vested. Each and any other participant in
the Loan shall likewise be deemed owner of is similar title to and interest in its
respective participation interest. Similarly, upon execution of this Agreement
and Participant's receipt of the Participant's Certificate, and subject to the
provisions of this Article and Agreement, its proportionate legal ownership
interest in the Loan and Loan Documents, as well as its title to the Participant's
Interest, shall be deemed confirmed, transferred and vested.
3. Representations and Warranties.
3.1. Specific Representations. Except as otherwise specifically
provided herein, and subject to the provisions hereof, each party hereby
represents and warrants to the other party, as applicable, that:
6
3.1.1. Agent will be the holder of the Loan Documents and the
legal owner of the Loan and Loan Documents and is the sole owner thereof,
subject to the Participant Interest therein being confirmed and retained in
Participant hereunder. Likewise, Participant is the equitable and beneficial
owner of the Loan and Loan Documents, to the extent of its Participant Interest
therein, subject to the Agent Interest therein being confirmed and transferred to
Agent hereunder.
3.1.2. The Loan and Loan Documents have not been
previously pledged as collateral for any other loan or other purpose, to each
party's respective knowledge and based on reliance upon Borrower's
representations to that effect in the Loan Documents. Neither party has sold,
assigned or transferred the Loan or its respective Participant/Agent Interest to
any other person or entity, except as provided hereunder.
3.1.3. To each party's knowledge, all information shown on the
Participation Certificate and Agent's Certificate shall be materially and
substantially true, accurate and correct.
3.1.4. Agent shall hold in its own name and receive the legal
ownership of the Loan Policy transferred and assigned from Participant, to the
extent of its Agent Interest therein, and subject to the retained, equitable
Participation Interest of Participant therein, the applicable fees and costs, if any,
imposed by the insurer for any required endorsement or other document
evidencing such transfer to be shared between the parties ratably according to
their respective Agent and Participation Interests. The Loan Policy shall insure
the Deed of Trust in the full amount of the Loan to be a valid first lien upon the
Property in favor of Agent and Participant, as applicable, under the Loan and
Loan Documents, free of all liens, encumbrances or easements except as set
forth in such Loan Policy.
3.1.5. Participant has caused Borrower to obtain appropriate
fire and extended warranty/hazard insurance covering the Property, initially
showing Agent and Participant as loss-payee and co-insured with Borrower
thereunder, in an amount determined by Agent and Participant and as specified
in the Loan Documents, but in no event less than the original principal sum of
the Loan, and issued by a reputable insurance company. Participant has
required Borrower under the Loan Documents to maintain such insurance
coverage until the Loan indebtedness is fully repaid and Borrower fully
discharged therefrom. The parties shall, as a condition of closing escrow, have
the legal interest in such policies assigned and transferred into Agent's name as
such co-loss payee and/or co-insured and, subject to the retained, equitable
Participant Interest of Participant therein, the applicable fees and costs, if any,
imposed by the insurer(s)for any required endorsement or other document
7
evidencing such transfer to be shared between the parties ratably according to
their respective Agent and Participation Interests.
3.1.6. Neither party has any actual knowledge of any fact,
pending litigation or other condition or matter, relating to the Borrower, the Loan,
the Loan Documents or this Agreement, which would invalidate, nullify or
otherwise adversely impact upon the Participation or Agent Interest, the Loan or
the Property.
3.1.7. Except as disclosed by an attachment to the Note to be
approved by Agent evidencing the Loan, the terms and provisions thereof as
memorialized in the Loan Documents have not been changed, modified or
supplemented in any material respect, and Borrower has not been released or
discharged from its material obligations thereunder, to each party's knowledge.
3.1.8. Neither party has any knowledge of any default existing
under the Loan Documents, nor of any actual notice of Borrower's intended or
prospective material default under the same.
3.2. No Violations. To each party's knowledge, there are no
violations, defaults or breaches on the part of the warranting party,which would
adversely and materially affect this Agreement cr the Participation or Agent
Interest, of any applicable California or federal laws.
3.3. Independent Underwriting. Agent acknowledges and agrees
that it shall make its own credit analyses, investigations, due-diligence and
decision to acquire the Agent Interest, independently and without reliance upon
Participant or its representatives and based on such documents and information
as Agent in its own discretion deems appropriate, including the Loan
Documents. Agent will continue to make its own credit decisions with respect to
the Agent Interest, the Loan and this Agreement, independently and without
reliance upon Participant or its representatives and based on such documents
and information as Agent in its own discretion shall deem appropriate at the
time.
3.4. Limitation of Liability. In connection with Agent's administration
or enforcement of the Loan Documents or performance under this Agreement,
Agent shall not be liable for any error of judgment or any action taken or omitted
to be taken by Agent, except for its gross negligence or willful misconduct, or
that of its employees, agents or representatives, leading to a provable and
irreparable-loss under the Loan.
8
4. Certificates for Participant&Agent.
4.1. Issuance of Agent's Certificate. Upon execution of this
Agreement and closing of the escrows for the Loan and Purchase Agreement,
the Agent's Certificate, which shall evidence the Agent's Interest, shall forthwith
be executed and delivered to Agent. Receipt thereof shall be acknowledged by
Agent, who shall forthwith return a conformed copy of the Agent Certificate to
Participant, bearing such acknowledgment.
4.2. Issuance of Participant's Certificate. Upon execution of this
Agreement and closing of the escrows for the Loan and Purchase Agreement,
the Participant Certificate, which shall evidence the Participant's Interest, shall
forthwith be delivered to Participant. Agent shall inscribe its acknowledgment
and consent thereto upon such Certificate prior to the time of such delivery.
5. Loan Collateral/Security.
5.1. Participant's Share. Subject to Agent's rights and prerogatives
to hold, service and administer the Loan and Loan Documents in its name as
Agent herein, Participant shall have an equitable and beneficial ownership of an
undivided interest in the Loan and Loan Document equal to its percentage share
therein, based upon its Participation Interest. Should there be a foreclosure and
sale of the Property or any other collateral for the Loan, pursuant to the Deed of
Trust and/or other Loan Documents, Agent is entitled to hold the full legal title to
the re-acquired property/collateral, subject to Participant's equitable and
beneficial ownership and rights therein. Any subsequent liquidation, sale or
other disposal of such property/collateral by Agent shall be pursuant to this
Agreement, and both parties shall be entitled to share and receive the monies
and other proceeds realized therefrom by Agent, proportionately according to
their respective Agent/Participant Interests.
5.2. Pro-Rats Reductions. Subject to Article 2 and this Agreement,
in the event that the proceeds of any collateral are applied, or any payment
actually received from any Guarantor, to reduce the indebtedness under the
Loan, Participant and Agent each shall be entitled to its respective proportionate
share thereof, based upon its Agent or Participation Interest, respectively, after
like proportionate reimbursement for and/or offsetting of any accrued costs or
expenses under the Loan incurred by either party.
6. Administration and Servicing of Loan.
6.1. Standard of Conduct. Agent, and any loan-servicing agency or
entity to whom its duties may be transferred hereunder, shall exercise
9 r
substantially the same degree of care and discretion in administering and
servicing the Loan as Agent would ordinarily take for loans made, arranged,
participated or acquired for its own account. In doing so, Agent shall comply and
act consistently with applicable laws and regulations and the practices generally
prevailing in the local banking/lending community for credit-facilities of
comparable amount and collateral of similar value and location.
6.2. Agent's Compensation. As compensation for servicing and
collection of the Loan, Agent shall be entitled to the following:
6.2.1. Initial Loan set-up/conversion fees of$175.00, monthly
Loan-servicing fees of$95.001month for the Loan term, and Loan-transfer/de- .
conversion fees of$175.00 (if applicable), all of which consists of the projected
fees and expenses to be charged and collected by the RTC Loan-Servicer out of
the Loan repayments/proceeds actually received from Borrower, and to whom
such items shall forthwith be paid and remitted should they be sent to Agent
directly, the same to be allocated and shared proportionately between the
parties, according to their respective Agent or Participation Interest.
6.2.2. Any other amounts actually received or recovered by
Agent under the Loan not otherwise specifically provided herein and not
otherwise payable or due to Participant hereunder.
6.3. Monitoring and Reporting. Agent shall use its reasonable
efforts and diligence to monitor Borrower's performance under the Loan and any
related activities involving the Property, in accordance with the Loan Documents.
Should Agent discover and verify any of the following occurrences, it shall notify
Participant reasonably after actual knowledge thereof, as a part of any
enforcement and/or remedial efforts provided under the Loan Documents:
6.3.1. Abandonment of any material portion of the Property or
any anchor tenant or major leasehold thereunder,
6.3.2. Sale or other disposition of all or any material portion of
the Property;
6.3.3. Material loss, damage or waste to the Property or injury
to any person(s) in possession or occupation thereof, in excess of$50,000.00,
whether or not covered by insurance; or,
6.3.4. Death, bankruptcy, insolvency or other permanent and
continuing disability of Borrower or any Guarantor of the Loan, which would
materially impair or delay repayment thereof.
10 r
7. Collection and Enforcement of Loan.
7.1. Loan Payments. Agent shall use its reasonable efforts to
collect the interest, principal and other indebtedness due and payable under the
Loan and Loan Documents and shall take all steps reasonable necessary or
proper to enforce the terms and conditions thereof. Agent may retain its portion
thereof, based upon its Agent Interest, and shall account for and transmit to
Participant, directly or as otherwise instructed thereby, the latter's proportionate
share of principal, interest or other proceeds actually received by Agent on
account of the Loan, based upon the Participation Interest, and subject to and in
accordance with the provisions hereof.
7.2. Reimbursement of Expenses. Agent shall use its reasonable
efforts to recover from Borrower all fees, expenses, charges and other amounts
which are the Borrower's obligations under the Note or Loan Documents. Upon
demand and not later than thirty (30) Business Days thereafter, Participant will
reimburse Agent for its share of any and all costs, expenses and disbursements,
including its Loan-servicing fees and related costs and expenses, which may be
incurred or made by Agent under the Note and Loan Documents, and/or in any
action,judicial or otherwise, which may be undertaken by Agent to collect the
same, for which Agent has not been reimbursed at any time by Borrower. To the
extent such amounts are unpaid, Agent shall be entitled to deduct the same from
and to reimburse Agent out of Borrower's payments under the Loan, which are
actually received by Agent, proportionately based upon the respective
Participant and Agent Interests, prior to any distributions to Participant of its
share of Loan receipts.
7.3. Limits on Expenditures. Any one-time expenditure or
contractual commitment, including without limitation further advances under the
Loan, foreclosure or litigation costs, repairs and maintenance, property
management fees or other similar expenditures, exceeding one percent (1%) of
the original Loan principal, or the annual aggregate of such expenditures or
commitments exceeding five percent (5%) of the original Loan principal, shall be
documented and provided in writing to Participant. Expenses including the
foregoing incurred in connection with enforcement shall be allocated to all
outstanding amounts under the Loan proportionately based upon the respective
Participant and Agent Interests. In addition, costs and expenses of collection,
including reasonable or court-approved attorneys' fees and legal costs, shall be
reimbursed to Agent by Participant on the same basis.
7.4. Ratable Distribution. Agent's actual receipt of payments of
principal, interest, expenses, default interest, late charges and other costs and
charges from Borrower or other persons under the Loan, not otherwise
described herein, shall be allocated and distributed proportionately, in
I �
accordance with the Participation and Agent Interests, which are taken from the
calculations provided in Section 209 of the OPA
7.5. Advances. Agent shall be entitled in its commercially
reasonable and good faith judgment to pay or make advances for needed repairs
and maintenance, delinquent taxes, insurance premiums and other expenditures
related to the Property, to the extent it deems advisable or required under the
Deed of Trust and other Loan Documents, should Borrower fail to do so or
otherwise default or breach the same. Such expend ituresladvances shall be
subject to the same monetary and other limitations and conditions and be
reimbursed similarly, as other Loan costs and expenses are so governed under
this Article.
8. Possession of Documents.
8.1. Custody of Loan Documents. Agent shall retain physical
custody and actual possession of the Loan Documents, subject to Participant's
equitable and beneficial interest therein, based upon and to the extent of its
Participation Interest. Participant acknowledges receipt and review of copies of
the Loan Documents and upon request, Agent will furnish to Participant copies
of such other documents as Agent shall receive pursuant to the Loan and Loan
Documents. In any dealings with third parties, including servicing of the Loan,
collection and other remedial efforts and any management of the Property
following foreclosure and re vesting of title thereto in Agent, pursuant to the
provisions hereof, Agent may act nominally in its own name and right to the
extent of its Agent Interest therein, and subject to the equitable, beneficial
ownership and title in Participant to the extent of its Participant Interest, without
any requirement to disclose its agency hereunder to any third parties, all as
subject to the provisions of this Agreement and the Loan Documents.
8.2. Accounts & Files. Agent will keep its customary or usual books
of account and records reflecting each party's interest in the Loan. Such books
and records and Agent's Loan files and other information shall be available for
inspection, with reasonable limits as to frequency, at the principal office of
Agent, during regular business hours, by the parties or their representatives and
employees. Upon request, Agent shall furnish Participant with true and correct
copies of any of such books, records or files, at Participant's cost.
9. Agent's Authority. Notwithstanding anything herein to the
contrary, Agent shall not take any of the following actions except with the prior
written consent of Participant, which consent shall not be unreasonably limited,
conditioned or withheld:
12
9.1. Forgive or materially reduce the indebtedness under the Loan;
9.2. Release the Deed of Trust or other material security for the Loan;
9.3. Release the Borrower or any party materially liable for repayment
of the Note of for performance of any other material obligation under the Loan
Documents;
9.4. Cancel or agree to the termination of the Note or any Loan
Documents;
9.5. Materially modify or amend the Note or other Loan Document, or
waive any of the material rights thereunder or any material condition to
Borrower's duty to repay Loan;
9.5. Materially extend the due date for payment of the entire
outstanding Loan balance, and all accrued interest which remains unpaid,
except as specified in the Loan Documents;
9.7. Accept substitute collateral for any material collateral granted in
connection with the Loan;
9.8. Materially reduce the interest rate payable under the Note;
9.9. Sell, assign, or dispose of a majority or material portion of
Agent's Loan-servicing duties and administrative and management obligations
under this Agreement, except to a subsidiary, parent or other affiliated entity of
Agent, the City, CHARTER, the RTC or the RTC Loan-Servicer.
10. Defaults/Breaches of Borrower,
10.1. Remedies Under Loan Documents. In the event Agent
determines that a material default, breach or failure condition with respect to
Borrower's obligations under the Loan or Loan Documents has occurred, Agent
shall provide written notice to Participant of the same as soon as possible, and
shall advise the latter of Agent's proposed course of action in response thereto.
Agent may determine in its discretion whether to enforce such obligations by
foreclosure or otherwise, and Agent shall give notice to Participant if it elects to
proceed by way of foreclosure, deed in lieu of foreclosure, judicial proceedings
or any other remedy, unless Agent determines in its discretion that notice is not
practicable, in which case Agent shall endeavor to notify Participant of the action
taken by Agent as soon thereafter as practicable. After and during the
continuance of Borrower's event of default, Agent may take or refrain from taking
such action to realize on the collateral as Agent may deem appropriate in its
discretion, and Agent shall not be responsible or liable for any loss or damage
13
occasioned by the exercise of such discretion made in good faith or in
reasonable reliance upon the advice of legal counsel.
10.2. Property-Management Fees. If Agent shall acquire the
Property or other collateral as a result of its enforcement under the Loan
Documents, Agent (or a property-management firm/entity hired by it) shall
manage, utilize, maintain and/or dispose of the same, by way of lease, sale,
hypothecation or otherwise, nominally in its own name to the extent of its Agent
Interest therein, and subject to Participant equitable, beneficial ownership
thereof and title thereto to the extent of its Participant Interest therein, as
deemed appropriate in Agent's discretion. Any and all income, rentals, proceeds
or other funds or property actually received by Agent, and all expenses, costs,
fees and other charges reasonable and necessarily incurred by Agent in
carrying out its activities under this Paragraph shall be shared, remitted and/or
borne proportionately between Agent and Participant, based upon their
respective Agent and Participant Interests. In performing the foregoing actions,
Agent or any third-party property manager retained by it for such purposes, shall
be entitled to retain and receive as a management fee (excluding expenses) a
sum not to exceed five percent (5°!o) of such rentals and income, in addition to
reimbursement of advanced or incurred fees, costs and expenses. To the extent
unreimbursed out of the Property, Participant shall pay over the same to Agent,
upon written notice and request therefor, similarly as other fees and expenses
are reimbursable to Agent under this Agreement.
11. Assignment of Interests.
11.1. Assiqnabilitv& Transferability. Each party may assign,
transfer, encumber, hypothecate or convey its rights, titles and/or interest in and
to its respective Participation/Agent Interest under this Agreement and the Loan,
without any prior consent or approval of the other party required, to any third
party, including to a Federal Home Loan Bank or Federal Reserve Bank, of
which the transferor or assignor is a member, for the purpose of securing
advances made by the latter Bank. Written notice of any such assignment,
transfer and/or hypothecation shall be given promptly to the other party.
11.2. No Transfer of Servicing Duties. Notwithstanding the
foregoing, Agent shall not assign transfer or otherwise dispose of a material
portion of its Loan-servicing and administrativelmanagement duties and
obligations (except to a parent, subsidiary or other affiliated entity)without the
prior written consent of Participant, which consent shall be unreasonably
withheld, limited or conditioned, as referenced in and governed under Article 9,
above.
14
�l
11.3. Preservation of Accrued Rights. No assignment, transfer, sale,
conveyance, hypothecation or other disposition of a party's interest herein shall
have any effect upon any existing right or duty of such party vis-6-vis the
other party to this Agreement, which right/duty was incurred, accrued and in
place prior to the assignmentltransfer, in which event, Agent and Participant
shall be entitled to continue dealing solely with each other hereunder as to such
matters.
12. Agent's Insolvency or Material Default.
12.1. Tri_qaerim Events.In the event that:
12.1.1. Agent fails to perform substantially the material
obligations imposed upon it hereunder for a continuous period of at least thirty
(30) consecutive days, without having cured, ameliorated or commenced and
continued diligently to curelameliorate the same following Participant's prior
thirty (30)-day written notice to so cure/ameliorate;
12.1.2. A receiver, conservator or public agency supervisor is
finally appointed and installed over Agent by proper order of a tribunal having
jurisdiction thereover, or,
12.1.3. Agent files a petition in bankruptcy, makes a general
assignment for the benefit of its creditors, is adjudicated a bankrupt or admits its
insolvency;
Then: Participant shall give Agent written notice requesting that
Agency remedy or resolve the same. If Agent fails to so remedy the default, or
fails to commence and continue diligently to do so, within thirty (30) days of such
notice, then Agent, upon the written demand of Participant after the expiration of
such period, shall assign and deliver to Participant or its designate the Loan
Documents and all deposits, sums, instruments, certificates (other than the
Agent Certificate), policies, security and contracts relating to the Loan.
12.2. Assumption of Agent's Role. Pursuant to the assignment and
delivery, if any, under the preceding Subparagraph:
12.2.1. The Agent-assignor shall retain its Agent Interest in the
Loan and Loan Documents and shall be entitled to an equitable ownership title
thereto and interest therein;
12.2.2. The Participant-assignee shall retain its Participant
Interest and shall become the"Agent' under this Agreement in place of the
Agent originally named herein, with all of the rights, duties, powers, privileges
15
and immunities conferred or imposed by this Agreement upon the Agent
originally named herein, including the duties to service and administer the Loan
and/or manage and maintain the Property following re-vesting at foreclosure;
and,
12.2.3. The Agent originally named herein shall become a
'Participant" hereunder to the extent of its Agent Interest in the loan and Loan
Documents.
13. Termination of Agent's Servicing. Agent's duties to service
and/or administer the Loan as provided hereunder shall expire and terminate
upon the occurrence of the first of the following events:
13.1. Full Payment & Discharge. The loan is fully paid off, the
Borrower discharged and the Deed of Trust and other Loan Documents released
and reconveyed in full;
13.2. Foreclosure. The Deed of Trust is foreclosed upon, either
judicially or otherwise, and the Property thereafter disposed of and acquired by a
person or entity other than Agent; or,
13.3. Agent's Material Default. The provisions of the preceding
Article come into effect.
14. Right to Repurchase/Purchase Interest. In the event that:
14.1. A receiver, conservator or public agency supervisor is finally
appointed and installed over either party by proper order of a tribunal having
jurisdiction thereover, or,
14.2. Either party files a petition in bankruptcy, makes a general
assignment for the benefit of its creditors, is adjudicated a bankrupt or admits its
insolvency;
Then: the other, non-defaulting party shall have the right, at its sole and
exclusive option, to purchase or repurchase the defaulting party's respective
interest in the Loan, as set forth-above in Article 2, at any time, upon written
demand and tender of the appropriate purchase price. The purchase price
therefor shall equal the then-outstanding balance of the defaulting party's
respective interest in the Loan, namely, its Participant or Agent Interest, plus its
share of accrued and unpaid interest and other charges, and accounting for its
share of unreimbursed expenses/advances, through the date of actual
16
purchaselrepurchase. Nothing hereunder shall be construed as creating or
imposing any obligation to so purchase/repurchase such interest.
15. General Provisions.
15.1 Notices. Notices required or permitted hereunder shall
be deemed property given, served and delivered if sent by facsimile or other
immediately confirmable electronic transmission, by personal delivery or by the
United States mail, certified or registered mail, postage and fees fully prepaid,
with return receipt requested. Such notice shall be effective as of the date of the
facsimile transmission or receipt for personal delivery, or if mailed, then three (3)
Business Days after the date of the U.S. Postal Service post-mark. Any notice
sent by mail shall be addressed to Agent or Participant at the respective address
set forth in the signature block for that party, below. Any party may change its
address by giving notice to the other party in the manner provided herein.
15.2 Assignments & Transfers. Except as otherwise provided
herein, neither party shall assign, transfer or otherwise dispose of its rights or
interests under this Agreement, voluntarily or involuntarily, without the prior
written consent of the other party which shall not be unreasonably limited,
conditioned or withheld. Subject to the provisions hereof, this Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors, transferees and assigns.
15.3 Governing Law: Construction. This Agreement shall be
governed by and construed in accordance with the law of the State of California,
unless preempted by federal law, including the applicable provisions of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, Pub. L.
No. 101-73, 103 Stat. 183 (effective August 9, 1989). Whenever the context
requires, all words used in the singular shall be construed as used in the plural,
and vice versa, and each gender will include any other gender. The captions of
the paragraphs of this Agreement are for convenience only and do not define or
limit any terms or provisions. The invalidity or unenforceability of any one or
more of the provisions of this Agreement shalt in no way affect any other
provision, and the invalid or unenforceable provision shall be severed herefrom
and the remaining provisions continued without the severed provision.
15.4 Counterparts. This Agreement may be signed in
multiple counterparts, each of which shall constitute an original Agreement and
all of which together shall constitute one and the same, single Agreement when
each of the parties has signed counterpart hereof.
15.5 Incumbengy Representations. Each party hereby
represents and warrants unto the other party, as follows:
17
15.5.1 It is a separate, duly incorporated entity in good
standing in the jurisdiction(s) of its incorporation and where it carries on its
business;
15.5.2 It has the authority and is duly authorized by its
board of directors of other governing body to enter into this Agreement;
15.5.3 The respective officer(s) executing this Agreement
on behalf of the parties each has the authority and capacity to execute this
Agreement;
15.5.4 When so executed, this Agreement shall be fully
binding upon each party according to the terms and conditions hereof; and
15.5.5 There is no material disability, infirmity or
impairment in the ability and power of any of the parties or their respective
signatories to enter into this Agreement or to execute its provisions.
15.6 Integrated Instrument. This Agreement constitutes the
entire agreement of the parties with respect to the matters contained herein and
supersedes all prior agreements, written or oral, between the parties with
reference to the subject matters of this Agreement. No other agreements, oral or
written, prior or contemporaneous, exist between the parties as to such matters,
except as set forth herein and the OPA.
15.7 Survival of Representations. All representations,
warranties, covenants and agreements of the parties herein or in the
attachments and exhibits hereto shall survive and continue after the execution
and delivery of this Agreement.
15.8 No Waiver of Prior Breach/Default. Neither a waiver by
any party of any right or interest under this Agreement nor its consent to a
default or breach by any other party shall imply or be deemed to be any waiver
of or consent to any other right, interest, breach or default, whether prior or
subsequent, by such other party.
15.9 Arbitration of Disputes. The parties agree that any
dispute between them under this Agreement shall be resolved and settled by
binding arbitration in Orange County, California, in accordance with the
Commercial or other applicable Rules and Regulations of the American
Arbitration Association then in force. The decision of the arbitrator shall be final
and binding upon the parties, both as to law and fact, and shall not be
appealable to any court in.any jurisdiction, except where the arbitrator has acted
illegally or in excess of his jurisdiction. Judgment to enforce the arbitrator's
18 (�_
award may be entered in any court having jurisdiction over the parties and the
subject matter as to which the parties expressly consent to personal jurisdiction
in Orange County, California Until the award and decision of the arbitration
panel have become final the parties respective rights and obligations
hereunder shall continue in full force and effect, unless otherwise ordered
enjoined or abated in such arbitration or other judicial action which may be
brought to enforce such arbitration award
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above in Orange County California regardless of the
actual date or place of the signing hereof
Participant Agent
CHARTER SERVICE THE REDEVELOPMENT AGENCY
CORPORATION OF THE CITY OF HUNTINGTON
BEACH
A California Corporation A Municipal Corporation and Body
Politic
By
Napfie Pant9�z NPrman Name Mich el Uberuaga
Title Executive Director
ATTEST'
Agency Clcrk
c/o The Resolution Trust Corporation
Legal Division (Attn Asst Gen Counsel) Agency Counsel
4000 MacArthur Boulevard 2000 Main Street
Newport Beach CA 92660-2516 Huntington Beach CA 92648
Ref 501 Main St Huntington Beach CA
Loan to 501 Main, Inc
Telephone No 714/852-7700 Telephone No 714/536-5555
Facsimile No 714/852-7794 Facsimile No 714/374-1590
19
Approved as to Legal Form & Substance.
The foregoing Agreement is hereby approved as to legal form, content and
substance.
Dated: _��� 5 , 1994 Dated: L'-7 • la , 1994
RESOLUTION TRUST CORPORATION AGENCY COUNSEL
LEGAL DIVISION
By: " A r '- By:
KENDALL FLAG UNERT (�,# GAIL HUTTON p•4'4
RTC Counsel jo./2 ,Agency Counsel
Attorneys for Participant Attorneys for Agent
20
Attachment"1'
AGENTS CERTIFICATE
This will certify that THE REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, as Agent-Lender under that certain Real-Estate
Loan Participation Agreement, dated 441 ve^ rr - 1994 ("Agreement"),
has acquired and now owns the following-described Agent Interest in the real-
property secured-Roan ("Loan')to the Borrower named therein, namely 501
MAIN. INC., pursuant to the Agreement, for the consideration recited below.
Such party's rights and interests in its Agent Interest, as evidenced by
this Certificate, are subject to and shall be governed by the Agreement. Except
as otherwise provided, all capitalized terms shall have the same definitions as
used in the Agreement. If and as permitted, limited or conditioned, the sale,
transfer, hypothecation and other disposition of this Certificate and/or the Agent
Interest evidenced hereby, are subject to the Agreement.
Agent Interest
Original Loan
Principal Current Balance Percentage Consideration
$779,000.00 $779,000.00 66.0 % $514,140.00
Dated: A1yVeAJr,/J _, 1994
!CHARTER SERVICE CORPORATION , a wholly-awned
subsidiary of xwomwat nummi,THE RESOLUTION
TRUST CORPORATION, As Receiver for
CHARTER FEDERAL SAVINGS AND
LOAN ASSOCIATION
By:
Name:
Title: c
21
Acknowledgment of Receipt
Issuance and receipt of a copy of this Agent's Certificate are hereby
acknowledged and confirmed.
Dated: move.*-bcr I , 1994
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH
000
e:
[seal] Title: Executive Dirertl(r
22
Attachment"2'
PARTICIPATION CERTIFICATE
This will certify that CHARTER SERVICE CORPORATION,a Califomia corporation,by and
through THE RESOLUTION TRUST CORPORATION,as Receiver for CHARTER FEDERAL
SAVINGS AND LOAN ASSOCIATION, and as Participant-Lender of the Loan described in that certain
Real-Estate Loan Participation-Agreement,dated e4�_, 1994('Agreement'), holds and
owns the following-described participant Interest In the real-property secured-loan ('Loan")to the
Borrower named therein, namely, 501 MAIN, INC., pursuant to the Agreement,for the consideration
recited below.
Such party's rights and Interests In its Participant Interest,as evidenced by this Certificate, are
subject to and shall be governed by the Agreement. Except as otherwise provided,all capitalized terms
shall have the same definitions as used in the Agreement. If and as permitted, limited or conditioned,
the sale,transfer, hypothecation and other disposition of this Certificate and/or the Participant Interest
evidenced hereby, are subject to the Agreement.
Participant Interest
Original Loan Principal Current Balance Percentane Consideration
779�Oeo�o4p��
4:;Q 9" $779,000.00 34.0% $264,860.00
Dated. A v yt4u% 1 1994
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH
By:
Name: X Michael Uberuaga
[seal] Title: x Executive Director
Acknowledament and Consent
Receipt of a copy of this Participant Certificate is hereby acknowledged and confirmed.
Dated: v , 1994
CHARTER SERVICE CORPORATION , a wholly-crimcd
subsidiary of Ia THE RESOLUTION
TRUST CORPORATION, as Receiver for
CHARTER SAVINGS AND LOAN
ASSOCIATION
By:
Name:, _ _ ✓.y,4
Title: rrl�
23 All
HCITV OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
Ht1NTMOON TEACH
To: CONNIE BROCKWAY, City Clerk
From: ARTHUR DELALOZA, Deputy City Attorney
Date: October 12, 1994
Subject: RTC AGREEMENT
Enclosed is the original agreement as amended into the record by Gail Hutton at the
meeting during which the agreement was approved.
1 initialed each page to preserve the integrity of the document I approved. The
agreement was executed and Federal Express'ed back to us by Charter Service Corp.,
and RTC legal counsel Kendall Flagg-Kunert.
Please note that pages and 24were amended by the RTC because such
amendment is consistent with the first paragraph of the agreement. I would accordingly
view the amendment as a correction of an immaterial signature block description, thus
not requiring further action by the agency.
If you have any questions, please call. x
Thanks, Connie. i
Can
x� r
ARTHUR DELALOZA :
Deputy City Attorney
cc: Gail Hutton, City Attorney
Michael Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
Barbara Kaiser, Director of Economic Development
Keith Bohr, Assistant Project Manager
P.S. Please provide me with two certified copies for escrow purposes as soon as
possible.
pn�n�
REQUEST FOR CITY-COUNCILACTION
r
Date SEPTEMBER 6, 1994
Submitted to: honorable Mayor and Members of the City Council
Submitted by: 1L HUTTON, City Attorney
zr.Al
Prepared by: WAIL HUTTON, City Attorney &_
Subject: Approve (1)The Loan Participation Agreement with RTC;
(2)Sale of the Town Square Retail Center Located at
501 Main Street(Main-Pier Redevelopment Project Area)
Consistent with Council Policy? [X j Yes [ j New Policy or Exception
_statement of Issue Recommendation Analysis, Source.Alternative Actions,_Attachments
9/Hly¢ &flottr l * ?/J.219�. 6N `t`{ �e��rr c� I jR 9f-��9�Co�rShd� loA*V
Statement of Issue:
The Agency entered into an Owner Participation Agreement with Mola
Development for the development of the Town Square project, and as a result
acquired a two-thirds ownership interest in the commercial portion of the project.
This property was placed in escrow by RTC to be sold to a third party. The
transaction requires the Agency to reconvey its interest, under a deed of trust,
and the Loan Participation Agreement is designed to preserve the Agency's
rights to all proceeds of the sale and allow such sale to close on September 10,
1994.
Recommended Action:
1) Approve the sale of the Agency's interest in 501 Main Street (Town
Square) to 501 Main, Inc., a California corporation in the amount of
$820,000, with financing in the amount of$779,000 to be provided by the
Agency and the Resolution Trust Corporation (RTC), so long as all terms
and conditions of sale are consistent with the applicable OPA and the
Agency receives its share of all consideration flowing from Buyer. ,
2) Approve the attached Loan Participation Agreement("LPA7) (Attachment
3). Authorize and direct the Executive Director to execute.
✓Y�
A JJ
1
3) Approve a Deed in Full Reconveyance, conveying the Agency's two-thirds
interest in the Town Square commercial portion to Charter Service
Corporation, after terms of OPA have been satisfied. Authorize and direct
the chairperson to execute and the clerk to attest such deed.
4) Authorize and direct the Executive Director to execute all appropriate
escrow documents as needed to close escrow, so long as approved as to
form by the Agency counsel.
5) Approve establishment of an escrow account for receipt of all proceeds
due pursuant to the Sale Agreement, the Loan Participation Agreement
and the OPA including but not limited to, down payment deposits and loan
payments until further agreement on the disposition of such proceeds has
been reached.
6) Authorize expenditure of up to $20,000 for 50% of closing costs on
condition that any such fees later deemed to be RTC's responsibility shall
be reimbursed to the Agency.
Analysis:
On June 6, 1988, the Redevelopment Agency entered into an Owner
Participation Agreement (OPA) with Mola Development for the development of a
mixed use project known as Town Square. The project consists of 73 stacked
condominiums, 16 townhomes and 10,000 square feet of retail. The project is
located within the Main-Pier Redevelopment Project Area and is bordered by
Main and Sixth streets and Orange Avenue. Construction commenced in
December of 1988, the condominiums and the shell of the retail were allegedly
completed in May of 1990.
Subsequent to the approval of the OPA, Mola Development transferred its
interest in the project to its subsidiary Charter Service Corporation. in June of
1990 Charter Service Corporation was seized by federal regulators and is now
under the control of the Resolution Trust Corporation (RTC).
In August of 1993, the Town Square retail center was included in a nationally
advertised sealed bid offering with an asking price of$1,350,000, wherein
buyers would be required to provide their own financing. The bids received were
substantially below the asking price. The Agency and the RTC mutually agreed
that the bids received would not be accepted. Cushman & Wakefield, a
commercial broker was hired to continue to market the center.
A new appraisal was prepared on September 30, 1993, valuing the center at
$1,100,000. It was decided by staff that the best way to maximize the value
2
received for the center was to offer to provide (seller)financing to a suitable
buyer making an acceptable offer.
According to the Redevelopment Director, three offers were received in excess
of 70% of the $1,100,000 threshold, two at $800,000. On January 14, 1994, the
subject offer was received from Mr. Shoul J. Levy (501 Main Inc.), in the amount
of$820,000, along with a nonrefundable deposit of$25,000.
In order to close escrow, the Agency must approve a Deed in Full
Reconveyance as to Agency's two-thirds interest in Town Square. Such deed
shall not be released unless the Agency retains its two-thirds (213) interest in all
"net proceeds' of the sale as that term has been defined in the OPA.
At this time, because of our dispute with RTC, an escrow account will be
established for receipt of all "net proceeds" of sale, per the OPA, including but
not limited to: the non-refundable deposit, dorm payment, and any and all loan
payments, until further agreement or determination on the disposition of such
proceeds occurs. Meanwhile, by virtue of the LPA, a condition precedent to this
transaction is the immediate payment by RTC of some $50,000 in operating
revenue that we believe is owing under the OPA, and the immediate transmittal
of all documents RTC claims supports its expenditures.
This action is not to be construed as an amendment to the OPA.
Funding Source:
Main-Pier Fund Balance.
Alternative Actions:
Deny the recommended action and terminate the sale.
Attachments:
1) Staff Report dated June 6, 1988.
2) Deed in Full Reconveyance.
3) Recommended Loan Participation Agreement.
3
Attachment 1
REQUE ,i FOR CITY COUNC�;/
REDEVELOPMENT AGENCY ACTION
RH 88-2s
Date June 6, I988
�ibmitted to: Honorable Mayor/Chairman and City Council/Redevelopment Agency Members
submitted by: Paul E. Cook, City Administrator/Executive Director
,fired by: 'Douglas N. La Belle, Deputy City Administrator/Community Development
;ubject: OWNER PARTICIPATION AGREEMENT--MOLA DEVELOPMENT
CORPORATION
:onsistent with Council Policy? I I Yes I I New Policy or Exception
%Statement of Issue,Recommendation,Analysis, Fending Source,Alternative Actions,Attachments:
F
Under California Redevelopment Law, the Redevelopment Agency is authorized to
provide certain kinds of assistance directed at supporting and promoting private sector
invedtments..in Redevelopment Project Areas. Mola Development Corporation is
requesting Agency assistance in the development of a mixed use project consisting of
sixteen(16) townhomes, seventy-three (73) condominium units and ten thousand (10,000)
square feet of retail/commercial located within Tovm Square subarea of the Main-Pier
Redevelopment Project Area.
The attached agreement provides Iimited support for the proposed project by the Agency
by allowing for the subordination of an Agency owned parcel during the project's
construction. Also, this agreement establishes a limit to which Mola Development
Corporation would be obligated to expend funds for necessary offsite public
Improvements, and provides for.the Agency to purchase a property located adjacent to the
proposed development site owned by Mola Development Corporation.
This agreement is consistent with the established redevelopment goals for the Main-Pier
Project Area, as well as authorizing provisions of State Law.
RECOMMENDATION•
Staff recommends that the following separate actions be taken.
1. Conduct a joint public,hearing on the Owner Participation Agreement; and
2. Adopt appropriate resolutions between the City Council /Agency and Mola
Development Corporation.
ANALYSIS: '
Approval of the attached Owner Participation Agreement would:
1. Commit the Redevelopment Agency to subordinating the Agency-owned parcel
within the proposed development site (valued at $2,200,000)during the project's
construction;
2. Require that the Agency acquire an adjacent parcel owned by Mola Development
Corporation(valued at $300,000);
3. Commit the Agency to reimbursing Mola Development Corporation for certain
offsite public improvement costs exceeding$300,000; and
4. Commit the Agency to coordinating the purchase of a "third party"parcel within
the proposed development site.
For these commitments, the Redevelopment Agency will be paid$2,500,000 from
proceeds of project sales for its land, plus a percentage from both residential and
commercial sale profits estimated to be up to an additional $500,000.
Upon completion, the project's total assessed value is estimated to be$16,000.000-
$18,000,000. The Agency's projected tax increment is estimated to net between
$140,000-$160,000 annually.
_ti LTERNA-=ACTIONS:
1. Continue action in the Owner Participation Agreement and related documents to
allow for additional review time.
.2. Direct staff to further negotiate specific points of the agreement with the developer.
ENDING•
Possible payback from future tax increment to developer if offsite public Improvements
exceed$300,000.
ATTACHIy[ENTS•
1. Health and Safety Code 33433 Report.
2. Owner Participation Agreement.
3. Keyser Marston letter of May 19, 1988.
4. Keyser Marston Reuse Analysis of April, 1988.
5. Redevelopment Agency Resolutions.
6. City Council Resolutions.
PEC/DLB/CPS:lp
3803h
FB CITY OF HUNTINCTON BEACH
INTER-DEPARTMENT COMMUNICATION
HunmNcraa 81ACH
To: REDEVELOPMENT AGENCY CHAIRPERSON AND
MEMBERS OF THE REDEVELOPMENT AGENCY
From: GAIL HUTTON, City Attorney
Date: September 2, 1994
Subject: TOWN SOARE DISTRIBUTION OF PROCEEDS OF SALE
The RTC attorney has requested a two-week continuance on this matter for the
purpose of settling our differences in the distribution of proceeds of the sale.
We are about $75,000 apart on a joint recommended action and we believe we
can resolve this difference in time for the September 19, 1994 agenda.
C 97 C 7_-
GAIL HUTTON
City Attorney
cc: Michael Uberuaga, City Administrator
Barbara Kaiser, Deputy City Attorney
I
1
A
CITY OF HUNTINOTON 6EACH
INTER-DEPARTMENT COMMUNICATION
HtXfn MCW 8EAQ!
TO MICHAEL T UBERUAGA, CITY ADMINISTRATOR
cum----
FROM BARBARA A KAISER, DIRECTOR OF ECONOMIC
DEVELOPAMNT
RE RTC SALE OF TOWN SQUARE
CITY COUNCEL AGENDA ITEM F-1
DATE SEPTEMBER 2, 1994
Attached is correspondence from the attorneys representing the Resolution Trust
Corporation (RTC) in the sale of the commercial portion of Town Square This item Ls
scheduled for City CouncillAgency action on September 6, 1994 as item F-1
The attorneys have requested that this letter be made available to the City Council for
this meeting In effect, they indicate they are unable and unwilling to sign the Loan
Participation Agreement as currently drafted by the City Attorney's office
cc Mayor and City Council
City Attorney
�IN`E-SALES-CENTER TEL 714 32-7611 Sep 01 9 16 11 NO 014 P 02
ALk, 9 94 13 E7 QLJC-91 COHCN t T AL V P 2
QUAN, COHEN, KURAHASHI, YANG, 6CHOLTZ & HIRMO
A PROPUGONAI WAP0M+TJCW
mckARD K. CUM ATTORNEYS AY LAW
KENNEA P 61044OLTY 771 •OUTN fIGUEROA BYREET
pus M4 0 COHEN
euM KUWASHI THIRTY EIONTH FI 90ft FACSIMILE
AONALD
M HtMIWQ
YANG
gOtIALO L09 ANGEL[G, CALIFORNIA 00017 2610 2131802 71 07
TELCPHONE 2131802-7sf0
WdWd Dked 0141 NO. 21 a 18 41
1rI R+FIY N.ta To #12197
4 1 August 91, 1994
By Facsimile'IyapglnIM o1n & first-Class MR
Arthur DaLaLoza, $sq
Office of tho Clty Attorney
0ty of Huntington Beaeh
2OW Darn Street, Fourth Moor
Huntiuigton Bea&, Cal*riva 92648
Re SA WPurchase of Town Square Protect to 541 Main, Inc
Revisions to Loan ParticIpation Agreement,
Dear Mr DeLaLoza
Your revisions of the proposed Loan Participation Agrewnerit ("tlus Agreemment" or O'LPA")
have been reviewed by our office and the RT'C's Legal Division. Our joint review has of necessity --
been trtuicated, because of the extr-emoly short time Tomaiaing for our response to bo included M the
Oty's agenda materials in this case, Wch wAi be presented and cons3dored by the City Council at
its upcoming September 6, 1994 hwmg You stated at the end of last week(Frida`y dot-1 ►thing
we wished to have entered into thoso materials needed to be provided to you by today We trust,
then, that this letter will be made so avadablo to the members of the City Council in time for that,
hearing date
Before we identify the most crucial and troublewme subjects raised by your re-drafting of
this Agreement, a recitation of the recent history in thin transaction would be Instructive The
original version of the LP'A, prepared by our law firm, was transmitted to the City (Ms Barbara
Xalser) by way of our "fax" of June 7, 1994,which was also the "print date" of the orlswd dmft
A week later, we received through RTC counsel a mark-up of that draft, which showed only a few
insertions and changes and was "Approved as to form, as ammtWod at pages 1, 2, 4, 8 and 131 by
your&elf on behalf of the City Attorneys Offico In Other words, as of June 1S, when we reviewed
these changes, the City Attorney had already approved ft form of this Agreenimt, subject to a
handful of additions marked on four (4) pages out of a 16-page document I would note that this
INE-SALES-CENTER TEL 714 2-7611 Scp 01 94 16 12 No 014 P 03
qUC; 21 94 a, -7 OLIAN COHEN ET AL P 3
QUAN, COHEN, KURAHASHI, YANG, SCHOLTZ & HmANO
August 31 1"4
page 2
original form contamed among the "General Provisions" of Article 15 the standard formulations of
binding-arbitration to sottle problems arising thereunder bstWon tho parties and the usual attorneys
fees/legal casts clause
tst Xolld4uig a series of meetings with RTC personnel and the City's staff(inCludung yourself),
, 4j�;dd�ted to redraft that first version and diereafter forWarded the same to our client, the
' C ,egal Division our knit in the second draft was to incorporate certain ideas which Wo
understood Came from you and the City Attarney's Offlco Essentially. the RTC conceded that not
enough tune xemained to resolve completely the numerous =netary Issues pertaining to the
reunbursement of expenses and fees claimed by tho RTC/Charter Service Corporation as having been
Incurred in the development. Construction and completion. of t6rtant improvements throughout the
Town Square Project ("Project") Instead, the RTC decided to defer ultimata resolutlon of those
disputes by agreeing to formal arbitration of rho contested issues at a later time and by "escrowing"
the funds and payments to be remitted by the borrower/buyer pending a negotiated settlement or
formal 4udiCation. She primary purposes of such a deferral and escrow were to allow consumma-
tion of the pending Salo-and-purchase transaction and timely Closing of the pendmg escrow and not
to jeopardize the fuiancial and other advantages accruing to Chm WRTC and the City therefrom.
r
Our information is that it was you who made the suggestion to submit these disputed matters
to binding arbitration Therefore. acting on our client's instructions, we crafted the LPA to add
language for such escrow slid arbitration n imisms We also rEs-drafted certain related recitals and
provisions to uidicate they were "contentions" rather than undleputed factual statements Again,our
objectives were to preserve the underlying sale transaction and yet at the same time to enable the
City to sign an LPA reasonably acceptable to a in concept.
Evidently,because the impasse between the City and RTC worsened, rather than dissipating, -'
our second draft.(bearing "Print Date Punt 28, 1994"), which contained those new provisions,was
not forwarded to you or the City We emphasize that the only substantive first to
second versions of our LPA were the foregoing According to our informatI01%, discussions between
and among the principals continued throughout this period,but without significant resolution of the
disagreements For example, RTC Attorney Kendall Flagg-Kunert sent a letter of July 12 to
explicate the RTC's position for justifying Charier's Seeking reimbursement of th6 expenses in
question Your office then responded by letter dated July 19, directed to her, setting forth your
viCws about the continuing effect of rho Owner's Participation Agre nt (`OPA"), sighed in the
late 1980's by the City and Charter's pred=ssor In title Thereafiirr, by "fax' dated Icily 21, you
responded further to her conmrning additional comments to the LPA.
In that communication, your criticism ontered upon the heed to reflect tine City's extant 2/3
interest in the project in all Loan Documents being oxectited for Charter's seller-financing of the
deal, and you made specific commentary on certain provisions to that effect Once more, i wish to
note that nowhore did you insist upon changing or deleting the alretidy► *Xlsting provisions calling for
a "proportionate" sharing of bph income/revonues iW expenses/habilitl4s between the parties based
upon their respective 1/3--2/3 portions Further, you made no objection to the binding nature of the,
Sep 01 94�IME--SALES-CENTER TEL:714�2-7611 16 13 No . P.04
ro: e2 '94 13:S8 (4LM.COHEH ET (C PA
QUAN, Cotitt4, KtlRAHASHI, YANG, SCHOLTZ & HIRANO
August 31, 1994
Page 3; -
arbiivation pravIsion nor to the attorneys' foot clause. both of which had been rctatned without
modification In Article 15's "General Provisions`.
.v Since tiro RTC'6 than-exarcisod option to extend the purchaselsale osoow closing data waa
'�; ,•_x,. ;V, i'ett it Imperative to aod(y,916 city foppely about these timing and cbsing ccrx*ms.
{• ;in hex'letter of August 1, Ms. Plagg-Ktmert duly advised your office of die adverse eonsequeaoa9
b(failirig to Close the seller-financing and sale tramsactions and offered to placa all Loan repayment$
into a `blocked account* pending the parties' resolving the disputed "money" Issues, either by
negotiated sealetnetrt or.by AAA-monitored arbitration under Arttcic 15. (A copy of that Ietter is
attached for reference.)
About a week later (August 8), you and 1 tad diroutly about Haase Issues, and you
recommended a potential solution for tr*ving the parties forward, namely, that they ;witch their
respective 1positlonse under the Agrwment, Insofar m rho City would become the des%nated
"Agtnt' lender and ChatterfkTC the •Psr dpstnt" krAW thereunder. Pmvloully,we had chosen
tbo reverse because the seller firtan Ang structure came from Charter/RTC, vhteroupon the city
through its Redevelopn=t Agency ( RDA,!)would participatC In the seller's loan, to the extent of
its retained 213 interest in the Project wider the OPA. We ako discussed the necessity of conveying
lefal and beneficial title Into the ADA/City and the mechanics of ab WllshhV that transfer, Your
August 9 louer partially confirmed our diseaasslons in those areas.
After obtaining tho RTC's concurrc=with then nwv proposal, we undertook to revise tht
1XA substantially to embody your Ideas. The third draft showing the latest chaoges then was
'fexcd' to your office on August 18. The tame day, following our being advised for the first time
thr.t you had not seen ft second draft (6128194 print-date), we forwarded a `rod-linod" version
thereof, ueith our request drat you review the last draft (VI7194 pckl data) on Its own n=ts.
no.,m'd standln4 tlia lntervening draft. (A"clean" copy of the 9/17/94 docunient was of"0 to you
on August 22, at your roquest.) ---�----
You will rtWl that the progression of our firm's documentation of the LPA had riot liken
the operative language very far feam its original format+ iced, other than to include, first, the
blocked-escrow account and specific arbitration oonoopts and, second. the svVitcbing of the parties'
Agent/Participant labels, both of which were done at your suggestion,the Sum and substance of our
LFA format remained materially unchanged tine Its Inception. Yet,you Insisted in.out August 18
coafercnce that the third vorslou bad moved the parties further away than ever before. I urged you
to take a closes look at the last form of the LPA in•th$t rogard,because Y was gem mcly surprised
at your assessment, giv=our earnest efforts to acoamnwdate your prtvtous requests.
After a few more conforomes,you finally advised on August 26 that you'would be sending
your own revision of the LPA, wW you idetulfied several Areas of concern. Your lengthy "fax"
arrlved in our ofi]co after hours that Friday evening. V&en I arrived tho next Monday to find It,
I enticed many pages i«issing, and those were received Iewr that morning (August 29). Again, a
'INE.SAL.ES-CENTER TEL. :714- - fti2-7G11 Sep 01 94� 16= 34 N0 .014 P.05
FU K- -12
OVAN, COHL-N, KURAHAS}!I, YANG, SCHOLIZ & HIRANO
Au st St, 1Q94
page 4:
nibstantial portion as the end (Article 15) Was; $dtl oxnittod, and woo finally received the enure
document mid-aftmoon.of Tuesday, August 90.
1eodless to say,that has left very little time to roview in depth,discuss with our clients and
p?'` R
it at ful comnwnts on your form of the LPA before your stated August 31 deadOno date.
•i � � will tt m t to summarize our fiery objections to our documem Those W
,.,.•i!� �sa P y
'r6ughly lntb-f mr (4)=jar categories. IA tho interest of time,we will not Itemize all of the many
other objections and reaponsas we ha-re as to amblguity and h uslstency in language, omisslons of
dofinedlcaplWized terminology and other problems, all of which VM expressly reservo. If we can
overcome the major obstacles outlined below, we would be pl asod to apprise you of those details.
Fiat and foremost, you have irde VA into this Agreernert the notion that tho OPA bus
conttaued vitality not only with respect to the performance under the LPA but afterward, even if the
Project becaraos foreclosed upon and ro-vested In the City as Agent thereunder. We strongly object
to that propostd, wt only boonse we find absolutely no such Intent in the wording of the OPA but
ales baaauso the OPA simply lacks Any ascertainable standards against which to m=um the
propriety or vmlldley of the parties' adlotu pettaloing to ft servicing of the Loan andlor the
manage=t of the Wgjeot,post-foreclosure. As we read the OPA. Section 209(3)merely mquIres
r
thee "Net Proweds` realized from the saloArsrufer to a "laird party' be apportioned as indicated.
Nowhem else In that otherwlsC longtby instruramt dace the OPA purport to govern the incurring of
casts and exponses after such sale,whether for Loan-servicing,collections and enforcement,property
mawement or the like. Where Is no legal basis for saddling the LPA with any Magical or overriding
OPA st$. ords that era norAxistent and inappliCabla.
Socondly. you have introduced for the first time the startlIng demand that rho City and
{harWIRTC share costs,expenses•azsd liabilities under 04 LPA.an on mut basis,or 050% split" --"'-�-
(your vAWing),tnstaad of apportioning those Items on the sm peroentago(roughly, 1/3 to Charter
and 213 to tha City) the parties share as to Loan rcpaymenrs and other receipts !w? tit borrower
artic'lor tho property. When we discussed thh subject briefly this week. you gave no theorotical or
Iegsl jus11G=tlon for this. Moreover,vm cannot find any lawful or logleal reason for diverging from
what should urd1narily and customa:Ily be the same proportionate allocation of corctpts 0_d costs in
this type of loan-partIclpation arrangement.
Evea though we had suggested tho parties expressly be deemed to ad as indepondent
contractors, and not as either partners. trustees or flduclariea to each other, you have now&16LA
such language. Fra;ttmably, that Is Intentional and appows consistent with your.prior position that
tho Agent/City doss act under the LPA as a ftustWfidttciary on behalf of the ParticIpant/Charter.
If that Is your posture, than in essence you are forcing our clients to pay and be liable for a gre
percct:tatt of costs and expenses tour they receive In receipts wut(nootno. in this context,not only
Is tat proposal incongruous and nonsensical, but it Is all the more inoquitable and unfair. Your
Insist:=on this subject is baffling and cannot be supported by the RTC or our firm.
VINE-SALES-CENTER TEL =714-R52-7611 Sep 01 94 16 : 15 No .014 P.06
• sue, �r '94 ia:� c�t+�ar.tarrr �,d..
P.G
QUAN. COHEN, KURAHASHt, YANG, SCHOLTZ & HiFtANO
August 31, 1994
T%rp 5:
In addition, by deleting our references to the lor+g-standing actions of the City Council in
June 1991, which approved by explielt resolution tho expenditure of a total not to exceed $2.0
!Million for devolopment and completlon of the Project, you would have, at best,rho P"es ignore
Lho legal offect of such approvals and, at worst, the City disavow the same. Of that total sum, an
' :�, stlhtatod SM,000 was spoclfic;ally earmarked forlconstructlon of tc�n8nt improvements and leasing
.�j�.,•�.�asis�Iiy�tho ilevaloper. You arc advised that ChgrterlRTC explicitly trlioQ upon tuck $along in '
'.• - .� tfre'trxpex4tures at hand. Accordingly,wo would insist that you restore back into the LPA
appropriate recitals of those approvals, substantially In tht form of the Iartpus wa prepared in our
• prior versions thereof. .
As a further polnty you have now opted to change any isbltradon under the LPA to a iZ2-
bindieeg,rather than binding,nature. Your modification offoed ely removes any incentive or becuflt
to arbitrating the OPA disputes betwoen the parties, since all arbitration awards or dcclsions under
your language presumably can I& RppWod de nova to tho courts, themby r=Aoring any such
proceedings a rmlUty and ultimately a waste of time and money. You will recall that a binding
mbitradon rnecbWFm has oxlstod in our versions of the LPA since tlu initUl draft. And, more
importantly, that]clad of proaooft Is rho favored and effmlvc mottos of eriaouraging tiro partles
to settle their disputes, wldwA the need for protracted, expentivo judicial actions to enforce the
patties' rights and obligations thereunder. We respectfully suggest that we return to the origInal
forinat,'especlally in vkw of the public (and thus budget-wise 114o.d) naturo of bcyh ontitks.
Fuialiy, you have cxeatcd the concept of"Conditions Precedent• in your LPA. Once more,
we are contused by tl=so-called condltions: do you Intend that these become p(odlcalat to tho
t;'imi on thereof by the parties or to their R;rfomp
m thereunder? Certainly, if your purpose is
to call for the indicated matters to be satisfied lwfore the City wlil sign,wo may be able to deal wlch
tl:e question. However. if you mean to create what in reallty constitute conditions s-uhmg ,that
is. those that tPply to the condaued validity of the Agreement,based upon the actions of the parties
attar exeeutlou and delivery, than we would have subswalal objections and would not rommmond
our clients ester into such an exteaegemsnt. The lovel of uncertalnty and potential't�dr ihilatcral.
arbitrary conclusions at any time by the City about whether such "conditions" have In fact been
satisfied, are unacceptable to us.
For all of thcso reasons,we respccrxfully advise that Manor Service C.orpotation and the RTC
as Receiver for Charter Savings,the sole parent company of Charter Service,arc unable to exec to
the LPA, as presently worded by your office. Should this City be willing to authorise good faith and
diligent negotiations by both parties in reaching a mutually aeceptible form of LPA. along the lines
we have sununarkod abo,vo,we would It-ewlse revornmend that our clients go forward in this case
aril work towards a bilateral sema tiGnt reasonably accommodating both sides.
Plnzse be advised that the closing date for the R TV&purchase-and-sate escrow is Currently
sct for to bcr . We do not bolieve that our clients have any further options to extend that
datc. nerofore, the entire transaction. including the Clty's particlpation In the Loan, must cloea If
at all on or before the scheduled date.
J114E _HLLS-ULNIL1- ILL 'm-p Vl yU Vlv V�
94 14 OO ouAN COHEN ET
QUAN, COHEN, KURAHASHI, YANG, SCHOLTZ & HIRANO
August 31, 1994
Page 6
If you have any questions or regalre any further information in this me. pleases fee] free to
contact us Thank you for your courtesy and attvUlon heroin
Very truly yours,
QUAN, CDHRh1, XORAHAS ii YANG
SCHOLTZ& DIRANO
A Professional Corporation
RT P YANG
cc RTC/Legal Division(Attn Ms Kendall Flagg-Kunut,$sq By "FAX*
RTC/Sales Center (Attu Ms, Melinda Magee) --By `rax"
September 12, 1994
Connie,
A few questions regarding the attached report so I can understand your procedures.
1. Report is addressed to Mayor and Council and is an RCA.However, the
mmended actions all seem to be Agency actions.
0�6�rCity
2. No C I-s-i ature is requested on the Loan Participation Agreement.
` 3. The Loan Participation Agreement is not executed by the Participant.
Thanks for your help. �d
:"44 Q-�
Barbara
AZ za
% f �s GG�•lLc J
. w� C(,y�.1/!'�G.�b�-1 LLl/t-G�� �l•l G� �/>�..�nc•�c�� .