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Home My WebLink AboutC-2119AMENDMENT NO. 1 TO LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (Rusnak/Areadia) THIS AMENDMENT NO. 1 TO 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (Rusnak/Atcadia) (this "Amendment No. I ") is entered into by and among the REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic, exercising governmental functions and powers and organized and existing pursuant to Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Sections 33000, et sue.) (the "Agency "), PAUL P. RUSNAK, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Owner "), and RUSNAK/ARCADIA, a California corporation (the "Operator "), as of November 1, 2005, to amend to that certain 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (Rusnak/Arcadia), dated December 7, 2004 (the "Agreement "), only as expressly set forth in this Amendment No. 1 and with reference to the following recited facts: RECITALS A. The Agency, the Owner and the Operator entered into the Agreement, pursuant to which the Agency agreed to assist the Owner and the Operator with the expansion of their existing automobile dealership within the Central Redevelopment Project Area of the Agency, on the terms and conditions set forth in the Agreement; and B. The Agreement requires the Owner to deliver a Letter of Credit to the Agency to provide financial assurance to the Agency regarding the performance of the Owner and the Operator of their obligations under the Agreement; and C. The Agency, the Owner and the Operator, now, desire to amend the Agreement to provide for the flexibility of other forms of financial assurance to the Agency regarding the performance of the Owner and the Operator of their obligations under the Agreement, instead of the Letter of Credit, as may be approved by the Executive Director, in his or her sole and absolute discretion, as set forth in this Amendment No. 1; NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES SET FORTH IN THIS AMENDMENT NO. 1 AND OTHER VALUABLE CONSIDERATION, THE AGENCY, THE OWNER AND THE OPERATOR AGREE, AS FOLLOWS: 1. The Recitals set forth above are true and correct and are incorporated into this Amendment No. I by this reference, as though fully set forth in this Amendment No. 1. 2. All terms, phrases and words indicated to be defined terms by initial capitalization in this Amendment No. 1 that are not specifically defined in this Amendment No. I shall have the meaning ascribed to the same term, phrase or word in the Agreement. RVPUB \BAH \702118.2 3. Except as expressly amended by this Amendment No. 1, the Agreement is in all respects ratified and confirmed and all of the terms and provisions and conditions of the Agreement, as amended by this Amendment No. 1, shall be and remain in full force and effect. 4. A new Section 1.2.5 is added to the Agreement, as follows: The Executive Director, in his or her sole and absolute discretion, may approve a form of financial assurance to be provided by the Owner pursuant to Section 1.2.3, instead of the Letter of Credit. Any such alternative financial assurance shall be satisfactory in both form and substance to the Executive Director, in his or her sole and absolute discretion. Nothing contained in this Section 1.2.5 shall prohibit or otherwise restrict the Executive Director from exercising his or her discretion to have any such alternative financial assurance proposed by the Owner or any other person considered for approval by the Agency governing body, in its sole and absolute discretion, in addition to or instead of approval of any such alternative financial assurance by the Executive Director, as provided for in this Section 1.2.5. If, for any reason, the Letter of Credit or any other financial assurance approved by the Executive Director is terminated, cancelled, suspended, voided, rescinded, not renewed or otherwise unavailable for the Agency to draw on or against or otherwise becomes unenforceable by the Agency against either the Owner, the Operator or any third - person providing all or any portion of such Letter of Credit or other financial assurance, then the Owner shall provide the Agency within thirty (30) calendar days following the occurrence of any such condition regarding a previous Letter of Credit or other financial assurance with a replacement Letter of Credit or other financial assurance approved by the Executive Director, in his or sole and absolute discretion. 5. Section 3.5.1(a) of the Agreement is amended to read, in its entirety, as follows: The Owner has delivered the issued Letter of Credit or such alternative financial assurance approved by the Executive Director, in his or her sole and absolute discretion, pursuant to Section 1.2.5, to the Agency, in accordance with Section 1.2.3, and on a continuing basis has provided any required replacement Letter of Credit or alternative financial assurance; 6. This Amendment No. 1 may be executed by the Parties in multiple counter -part originals, each of which shall be considered an original, but all of which together shall constitute one and the same instrument. 7. The agreements contained in this Amendment No. 1 shall not be construed in favor of or against any Party, but shall be construed as if each Party prepared this Amendment No. 1. 8. The Agreement, as amended by this Amendment No. 1, represents the entire understanding between the Parties as to the subject matter of the Agreement, as so amended. 9. Nothing contained in this Amendment No. 1 is intended to constitute a waiver by any Party of any term, condition, default or breach by any other Party under the Agreement. RVPUB \BAH \702118.2 10. The Agency and the Developer agree that this Amendment No. 1 shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without application of such laws' conflicts of laws principles. 11. None of the terms or provisions of this Amendment No. 1 are intended to benefit any person or entity other than the Parties. RVPUB \BAH \702118.2 9 IN WITNESS WHEREOF, the Parties execute this Amendment No. 1, by and through the signatures of their duly authorized representatives below, as follow: AGENCY REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA Executive Director ATTEST: By: Agency Secretary APPROVED AS TO FORM: Best Best & Krieger LLP By: Agency Counsel RVPUB \BAH \702118.2 PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 By: L"Ia Paul P. Rusnak, Trustee OPERATOR RUSNAK/ARCADIA, a California corporation By: I UZA �.,i;l, 1r� 'i.. TjC�!!. Its: By: Nam Its: .CA,LIFORNIA ALL- PURPOSACKNOWLEDGMENT • State of County of � w On 'I\..A 00t, before me, (Ax--Q t c i i a Date Name and Title of Officer e. ( q.,'Jan Joe!Notary Public "7 personally appeared �s P �yn , c._�1, �,•. c� 1 -f (personally known to me-OR-F- proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/ rye subscribed to the within instrument and acknowledged to me that he /she /theyiexecuted the same in his /her /thei�.authorized capacity(ies), and that by his /her /t�signature(s) on the instrument the person(s), P, Gu►�B�tEi or the entity upon behalf of which the person(s) acted, EYE executed the instrument. CommWlar ♦ 1602830 11W NO" PA)k - CaMomio Wt MIpel"couMy - WITNESS my hand and official seal. MyCamm. ExpNea S8P 24, 4 A L (s , � 1 D wL. Signature of No ary Public 7{ OPTIONAL // Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: L" ❑ Individual 'PI Corporate Officer Ll El ❑ Title(s): Partner — ❑ Limited ❑ Gen ral Attorney -in -Fact Trustee Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIG J NER Number of Pages: Signer's Name: ❑ Individual Corporate Officer Title(s): P /1.t�� ❑ Partner — ❑ im iteeneral ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing Top of thumb here 0 1995 National Notary Association • 8236 Remmet Ave., PO, Box 7184 • Canoga Park, CA 91309 -7184 Prod No 5907 Reorder. Call Toll Free 1800- 8766827 S?4Q3RUO A 3Y3 U:mpEirb7 +�aua yipt6N r.+�. !l0i ,t::r.3Z >engt3 �. MavM - RECORDING REQUESTED BY ) . AND WHEN RECORDED MAIL TO: ) (Space Above Line For Use By Recorder) [Recordation of this Document Is Exempt From Fees Payable to the Recorder Under Government Code Section 27383] REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA Notice of Agreement 2004 Land Assembly and Development Agreement (Rusnak/Arcadia) TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of March 17, 2004, Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Owner "), the Arcadia Redevelopment Agency of the City of Arcadia, a public body, corporate and politic (the "Agency "), and Rusnak/Arcadia, a California corporation (the "Operator "), entered into an agreement entitled "2004 Land Assembly and Development Agreement (Rusnak/Arcadia)" (the "Agreement'). A copy of the Agreement is on file with the Secretary of the Agency and is available for inspection and copying by interested persons as a public record of the Agency during the regular business hours of the Agency. The Agreement affects the real property (the "Property ") described in Exhibit "A" attached to this Notice of Agreement. The meaning of defined terms used in this Notice of Agreement shall be the same as set forth in the Agreement. PLEASE TAKE FURTHER NOTICE that the Agreement contains certain community redevelopment covenants running with the land and other agreements of the parties affecting the Property, as set forth below: Section 1.3 of the Agreement provides, as follows: Section 1.3 Restrictions Against Change in Ownership, Management and Control of Owner; Restrictions Against Transfer of Certain Property Interests. RVPUB\DGW\686833.1 0 0 1.3.1 The qualifications and identity of the Owner and the Operator are of particular concern to the Agency. The Agency would not enter into this Agreement, were it not for.the qualifications and identity of the Owner and the Operator. The Owner and the Operator shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in control of the Owner and the Operator, as well as any and all changes in the interest or the degree of control of the Owner and the Operator by any such party, of which information the Owner and the Operator or any of their partners, members or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency, prior to the issuance of a Certificate of Completion with respect to the Expansion Project, if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Owner and the Operator (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency, prior to the time of such change, or the Agency may seek other appropriate relief; provided, however, that (i) the Agency shall first notify the Owner and the Operator in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Owner and the Operator shall have thirty (30) calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Owner and the Operator and submit evidence of the initiation and satisfactory completion of such cure to the Agency, in a form and substance reasonably satisfactory to the Agency. 1.3.2 Except for any Permitted Security Interest, prior to the issuance of a Certificate of Completion, neither the Owner or the Operator shall sell, assign, convey, create any trust estate with respect to or otherwise transfer any of its interests in this Agreement, the Existing Site, the Expansion Site or the Expansion Project, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. The Owner and the Operator recognize that the qualifications and identity of each of them are of particular concern to the Agency and that a sale, assignment, conveyance, creation of a trust estate with respect to or other transfer of any of the Owner's and Operator's interests in this Agreement, the Expansion Site and/or the Expansion Project is for all practical purposes a transfer or disposition of the responsibilities of the Owner or Operator with respect to this Agreement, the Existing Site, the Expansion Site or the Expansion Project and, therefore, are only allowed in accordance with the provisions of this Section 1.3. Notwithstanding the foregoing provisions of this Section 1.3.2, inclusion of the Existing Site and/or the Expansion Site in the trust estate of the Paul P. Rusnak Family Trust Dated November 14, 1988, is expressly authorized under this Agreement. RVPUB\DGM686833.1 2 Section 5.1 of the Agreement provides, as follows: Section 5.1 Owner . Covenant to Undertake Expansion Project. 5.1.1 The Owner covenants and agrees for itself, its successors and assigns, for the sole and exclusive benefit of the Agency that, promptly upon the Owner's acquisition of the Expansion Site and following receipt of all necessary City and other governmental approvals for the development of the Expansion Project, the Expansion Site shall be improved and developed with the Expansion Project. If the Owner only acquires one Phase of Parcels, the Owner covenants and agrees for itself, its successors and assigns that, promptly upon the Owner's acquisition of the Phase, the Owner shall develop the Phase with an expansion of the existing Dealership appropriately scaled for the size of the Parcels in such Phase, subject to the prior approval of the expansion by the Agency and receipt of all necessary City and other governmental approvals for the development of the expansion. The Owner further covenants to develop the Expansion Site and each portion of the Expansion Site in conformity with all applicable laws and this Agreement. The covenants of this Section 5.1 shall run with the land of the Expansion Site or any portion of the Expansion Site acquired by the Owner, until the earlier of the date on which the Certificate of Completion is recorded or the fifteenth (15th) anniversary of the date of recordation of the last Agency Grant Deed recorded through the Agency /Owner Escrow. 5.1.2 The Expansion Project shall be developed and completed on the Expansion Site by the Owner in conformance with the approved Scope of Development and the Schedule of Performance, any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Owner and the Agency and all applicable laws, regulations, orders and conditions of governmental entities with jurisdiction over the Expansion Site or the Expansion Project. Section 6.3 of the Agreement provides, as follows: 6.3 Minimum Assessed Valuation of the Dealership Site. 6.3.1 The redevelopment of the Expansion Site by the Owner is of special interest and concern to the Agency. The redevelopment of the Expansion Site in accordance with the terms of this Agreement shall generate a special source of property tax increment funds payable to the Agency in accordance with Health and Safety Code Section 33760 to fund certain redevelopment activities of the Agency and the affordable housing development programs of the Agency that benefit persons and families of low -and moderate income. RVPUBOGW\686833.1 3 6.3.2 The Owner covenants and agrees that upon the recordation of the Certificate of Completion or as of October 1, 2007, whichever date shall occur first, the assessed valuation of the Dealership Site, as improved with the Expansion Project, for ad valorem property taxation purposes, shall be not less than Ten Million Dollars ($10,000,000.00) in excess of the Expansion Tax Increment Base Year Value (the "Minimum Assessed Valuation "). For purposes of this Section 6.3, the aggregate amount of the assessed value of the Dealership Site, as reported by the Office of the Assessor of the County of Los Angeles, California, as public record information relating to property tax assessments for the Dealership Site (on both the secured, plus unsecured property tax rolls of the Office of the Assessor of the County of Los Angeles, California), on the January 1, 2009, property tax lien date, shall be conclusive evidence of the Owner's satisfaction of or failure to satisfy its covenant of the first sentence of this Section 6.3. 6.3.3 The Owner for itself, its heirs, successors and assigns covenants and agrees that for the term of ten (10) years from the date of recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, whichever date occurs first, the Owner shall not seek to obtain or authorize a reduction or other adjustment of the assessed valuation of the Dealership Site for ad valorem property tax purposes from the Office of the Assessor of the County of Los Angeles, California, to an assessed valuation amount that is less than the Minimum Assessed Valuation, plus an amount a's determined in accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 51(a) of the Revenue and Taxation Code for each succeeding tax year. 6.3.4 In any of the ten (10) years following the earlier of the recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, in which the assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California, is less than the Minimum Assessed Valuation, plus an amount as determined in accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 51(a) of the Revenue and Taxation Code for each tax year following the Expansion Tax Increment Base Year, the Owner, its successors or assigns shall pay to the Agency the difference between one percent (1.0 %) of the Minimum Assessed Valuation and one percent (1.0 %) of the actual assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California (the "In -Lieu Tax Increment Payment "). Any In -Lieu Tax Increment Payment determined by the Agency to be owed.by the Owner shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of such In -Lieu Tax Increment Payment amount. RVPUBOGM686833.I 4 6.3.5 The covenants of this Section 6.3 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.3 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project, without the prior written consent of the Agency. Section 6.4 of the Agreement provides, as follows: Section 6.4 Dealership Minimum Annual Sales and Use Tax and Continuous Operation Covenants. 6.4.1 The Owner and the Operator each covenant to the Agency to cause the Operator to collect and remit to BOE a minimum aggregate amount of seven hundred thousand dollars ($700,000) in Dealership Sales Tax (the "Minimum Annual Sales Tax Amount "), in each Dealership Operating Year, towards repayment of the Agency Loan, pursuant to the terms of the Promissory Note. 6.4.2 If in any Dealership Operating Year the Operator fails to generate the Minimum Annual Sales Tax Amount, the Owner and the Operator and their respective successors or assigns, jointly and severally, shall pay to the City the difference between the Minimum Annual Sales Tax Amount for such Dealership Operating Year and the actual amount of Dealership Sales Tax generated in such Dealership Operating Year, as determined by the Agency (an "hi -Lieu Minimum Sales Tax Payment "). Any In -Lieu Minimum Sales Tax Payment determined by the Agency to be owed by the Owner and/or the Operator shall be paid to the City within forty-five (45) days following transmittal by the Agency to the Owner and the Operator of an invoice for payment of such In -Lieu Minimum Sales Tax Payment amount. 6.4.3 Upon payment in full of all principal and accrued and unpaid interest under the Promissory Note, the covenant of the Owner and the Operator contained in Section 6.4.1 shall terminate ( "Sales Tax Covenant Termination Date "). 6.4.4 The Owner and the Operator each covenant to the Agency to cause the Dealership to be open for business to the general public on the Dealership Site by the earlier of (1) thirty (30) days following the issuance of a final Certificate of Occupancy for the Expansion Project by the City or (2) October 1, 2007 (the "Opening Date "), and to continuously operate the Dealership on the Dealership Site for the ten (10) years following the Opening Date. For the ten (10) years following the Opening Date, the Owner and the Operator shall exercise their reasonable best efforts to cause the Dealership to be continuously operated as a business for the sales and service of new and pre -owned vehicles manufactured by Mercedes Benz. For purposes of this provision 'continuously operate" means the RVPUBIDGW\686833.1 5 Dealership shall not cease to operate for a continuous period of ninety (90) calendar days, except as otherwise excused under the terms of this Agreement. 6.4.5 The Owner and Operator each acknowledge and agree that the sales and use tax reporting and payment information related to sales and use taxes resulting from business activities on the Dealership Site may become a public record, as a result of the covenants of the Owner and the Operator contained in this Section 6.4 The Owner and the Operator each authorize the Agency and the City , to use the sales and use tax reporting and payment information related to sales and use taxes on the gross receipts of the Owner and/or the Operator from the sale or lease of all tangible personal property from the Dealership Site to confirm the Owner's and the Operator's compliance with the covenants of the Owner and the Operator contained in this Section 6.4. Additionally, the Owner and the Operator shall make available to the Agency, upon request, for review and copying, all sales and use tax reporting and payment information that the Owner and/or the Operator submit to the BOE regarding the gross receipts of the Owner and/or the Operator from the sale of all tangible personal property from the Dealership Site. The Agency shall maintain the confidentiality of all information regarding sales and use taxes resulting from business activities on the Dealership Site provided to the Agency to the extent permitted by law. 6.4.6 The covenants of this Section 6.4 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.4 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project. Section 6.6 of the Agreement provides, as follows: 6.6 No Transfer Prior to Repayment of Agency Loan. Neither the Owner or the Operator shall Transfer any of its interest in the Expansion Site, the Dealership Site, any improvements on either such site nor any automobile dealership franchise then being operated on the Expansion Site or the Dealership Site prior to repayment in full of all principal and accrued interest under the Promissory Note, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. Any violation of the provisions of this Section 6.6 by either the Owner or the Operator shall be an Event of Default under this Agreement and the Promissory Note. Section 6.12 of the Agreement provides, as follows: 6.12 Covenant to Maintain Dealership Site on Tax Rolls for 10 Years. RVPUB\DGW5686833.1 - 6 6.12.1 The Owner shall assure that the Dealership Site remains on the County of Los Angeles, California, secured real property tax rolls for the ten (10) calendar years following the date of recordation of the Certificate of Completion for the Expansion Project. 6.12.2 For the ten (10) year period following the date of recordation of the Certificate of Completion for the Expansion Project, the Owner for itself and its successors and assigns covenants and agrees to pay all property tax bills with respect to the Dealership Site and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 and to timely pay all supplemental tax bills regarding such property issued by the County of Los Angeles, California. The Owner further covenants and agrees to make available to the Agency, upon request, commencing in the calendar year following the calendar year in which the Certificate of Completion for the Expansion Project is recorded and in each of the ten (10) calendar years, thereafter, for inspection and copying (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Owner and the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California, and (ii) cancelled checks issued by the Owner in payment of all property tax payments that are made to the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California. Failure of the Owner to comply with the covenant of this Section 6.12 shall be deemed to be a material breach of this Agreement by the Owner and the Agency shall be entitled to pursue any remedy or damages available at law or in equity for such breach. The Agency shall maintain the confidentiality of all information regarding property tax assessments and payments provided to the Agency to the maximum extent permitted by law. 6.12.3 The Owner understands and agrees that, prior to the expiration of the Redevelopment Plan for the Project Area, neither the Owner, nor its successors or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Dealership Site or any portion of the Dealership Site to any person or entity, or for any use of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site, without the prior written consent of the Agency. For the period commencing on the Effective Date and continuing through and including the tenth (10th) anniversary of the date of recordation of a Certificate of Completion for the Expansion Project, the Owner further covenants and agrees that in the event of any conveyance, transfer, assignment, lease, leaseback or sale by the Owner to any entity or person RVPUB\DGW1686833.1 7 or for any use of the Dealership Site or any portion of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site or any portion of the Dealership Site, the Owner, its successors or assigns shall pay to the Agency a fee in lieu of payment of such taxes each year in an amount determined by the Agency to be one percent (1.0 %) of the "full cash value" of the Dealership Site, or portion thereof, as may be subject to such exemption from payment of ad valorem property taxes. The Agency's determination of "full cash value" for in -lieu payment purposes under this Section 6.12.3 shall be established by the Agency each year, if necessary, by reference to the ad valorem property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Agency's determination of "full cash value" and that an in -lieu payment is due shall be conclusive on such matters. If the Agency determines that an amount is payable by the Owner to the Agency as an in -lieu payment under this Section 6.12.3 in any tax year, .then such amount shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of the in -lieu amount. 6.12.4 The covenants of this Section 6.12 shall run with the land of the Dealership Site and shall be a covenant set forth in the Notice of Agreement and the Agency Grant Deed. Section 6.13 of the Agreement provides, as follows: 6.13 Maintenance Condition of the Dealership Site. The Owner and the Operator, for themselves and their respective successors and assigns, each covenant and agree that: 6:13.1 The areas of the Dealership Site that are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If, at any time within twenty (20) years following the date of recordation of the Notice of. Agreement there is an occurrence of an adverse condition on any area of the Dealership Site that is subject to public view in contravention of the general maintenance standard described above (a "Maintenance Deficiency "), then the Agency shall notify the Owner and the Operator in writing of the Maintenance Deficiency. If the Owner or the Operator fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days. of its receipt of notice of the Maintenance Deficiency, the Agency may conduct a public hearing, following transmittal of written notice of the hearing to the Owner and the Operator, at least, ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance RVPUBIDGW\686833.1 8 Deficiency exists and whether the Owner or the Operator has failed to comply with the provisions of this Section 6.13. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance Deficiency exists and that there appears to be non - compliance with the general maintenance standard, described above, the Agency shall have the right to enter the Dealership Site and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that the Agency may then be available to the Agency to .accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Dealership Site, as authorized by this Section 16.3 shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Agency to the Owner and the Operator, the Agency shall have the right to enforce the lien in the manner as provided in Section 6.13.3. 6.13.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Dealership Site that is visible from any. public right -of -way adjacent or contiguous to the Dealership Site, shall be removed by the Owner or the Operator by either painting over the evidence of such vandalism with a paint that has been color - matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti and is not removed within 72 hours following the time of the discovery of the graffiti, the Agency shall have the right to enter the Dealership Site and remove the graffiti, without notice to the Owner or the Operator. Any sum expended by the Agency for the removal of graffiti from the Dealership Site, as authorized by this Section 6.13, in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand to the Owner from the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 6.13.3. 6.13.3 The Parties further mutually understand and agree that the rights conferred upon the Agency under this Section 6.13 expressly include the power to establish and enforce a lien or other encumbrance against the Dealership Site, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Dealership Site to the maintenance standard required under Section 6.13.1 or Section 6.13.2, including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words "reasonable attorneys' fees and costs of the Agency" mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney. The provisions of this Section 6.13, shall be a covenant running with the land for a term of RVPUB\DGw\686833.1 9 twenty (20) years following the date of recordation of the Notice of Agreement, shall be set forth in the Notice of Agreement, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 6.13 shall be deemed to preclude the Owner or the Operator from making any alteration, addition, or other change to any structure or improvement or landscaping on the Dealership Site, provided that any such changes comply with applicable zoning and building .regulations of the City. Section 6.14 of the Agreement provides, as follows: 6.14 Obligation to Refrain from Discrimination. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site or any portion thereof, that there shall be no discrimination against or segregation of any person, or group of persons, -on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site nor shall the Owner, the Operator or any person claiming under or through either of them establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Dealership Site. The covenant of this Section 6.14 shall run with the land of the Dealership Site in perpetuity and be a covenant set forth in the Agency Grant Deed. Section 6.13 of the Agreement provides, as follows: 6.15 Form of Non - discrimination and Non - segregation Clauses. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site, or any portion thereof, that the Owner, the Operator and such successors and assigns shall, refrain from restricting the sale,. lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Dealership Site shall contain or be subject to substantially the following non - discrimination or non - segregation covenants: 6.15.1 In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, RVPUB\DGWM6833.1 10 0 0 occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall nm with the land." 6.15.2 In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure,.or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." 6.15.3 In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 6.15.4 The covenant of this Section 6.15 shall run with the land of the Dealership Site in perpetuity and shall be a covenant in the Agency Grant Deed. RVPUB \DGw\686833.1 11 0 SIGNATURE PAGE TO NOTICE OF AGREEMENT 0 THIS NOTICE OF AGREEMENT is dated as of January 5, 2005, and has been executed on behalf of the parties to the Agreement on the date indicated next to the signatures of their authorized officers. This Notice of Agreement may be executed in counterparts and when fully executed each counterpart shall be deemed to be one original instrument. Dated: otm ATTEST: Agency Secretary APPROVED AS TO FORM: Best Best & Krieger LLP Agency Counsel RVPUBOGW%86833.1 12 AGENCY REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA By: Executive Director PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 Paul P. Rusnak, Trustee NORMA MENDOZAA n, CONC 01521542 rn Notary Pu61kCautontla ((A W 8MBERNMDNOCWN1Y + my Comm. Exp. Oct 23.2008 rbl. c RVPUBOGW%86833.1 12 AGENCY REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA By: Executive Director PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 Paul P. Rusnak, Trustee 0 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California ss. County of n 5 Nom@ R& 0 On �C��n '—f , col 00 �;_ , before me, \A C Via c ,M\n t\�g\N , Date Nama and Title of Olficar (e.g., 'Jane Doe, Notary Public') personally appeared MARMA WOMAN *Commhobn O 1410608 Ito pielsa County 1MyCwn.B*wMrf9200 c, 7 Place Nclary Seal Abave personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) 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 person(s) acted, executed the instrument. WIT SS my hand d fficial seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: _ Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer— Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee . ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: RIGHTTHDMBPRINT OF SIGNER, 0 1997 National Notary Association • 9350 De Soto Ave.,, P.O. Box 2402 • Ch.t.c0h. GA 91313 -2402 Protl. Na. beal naomec man mil -rree imw o,o oou SIGNATURE PAGE TO NOTICE OF AGREEMENT RUSNAK/ARCADIA, a California corporation Dated: 2 2 Dy By: Dated: Z 2 Or By: [ALL SIGNATURES MUST BE NOTARIZED] NORMA MENDOZA CONK tuq ! a 0 Notary Pub11,82,Br3 + y (I Jw , 'l1; CLaNfomla BANBERNARDWOCOINTY My Comm. Exp. W 23, 20DA RVPUB\DGW,686833.1 13 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California !� County of ` v3l 3 �t�4f)eS ss. , On Fed , '). before me, M W \0. Dale R Name and Tale of Officer (e.g., *Jane Doe, Notary Public) personally appeared UC icy `? M t in 's) of Signers) MAINWIlpMONNN _ Commbdon # 1410608 �m�i Courdy 10MV Cam.l Moy9,2007 Place Notary Seal Above ❑ personally known to me �K proved to me on the basis of satisfactory evidence to be the person() whose name() is /ore subscribed to the within instrument and acknowledged to me that he /stye /tf ey executed the same in his /hir /their authorized capacity(i6,9), and that by his /h`gr /ll i e i r signature(N on the instrument the personO, or the entity upon behalf of which the persons) acted, executed the instrument. WITN S my hand ar do laal seal. Signature of Notary Publi OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: n Document Date: �cD `LGQ S Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer —Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER' + ® 1 99 National Notary Association • 9350 De Soto Ave., PO. Box 2402 • Chatsworth, CA 91313 -2402 Prod. NO b9U/ neoraec can mn -rree -c.. o-oou 0 0 EXHIBIT "A" LEGAL DESCRIPTION OF EXISTING SITE THAT PORTION OF LOT 3 OF TRACT 949, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT CERTAIN PIECE OR PARCEL OF LAND IN THE SANTA ANITA RANCHO AS PER MAP RECORDED IN BOOK 1, PAGE 97 OF PATENTS, IN THE OFFICE OF SAID RECORDER, BEING THAT PORTION OF THAT CERTAIN STRIP OF LAND 40.00 FEET WIDE DESCRIBED IN DEED RECORDED IN BOOK 4,44 PAGE 283, OF DEEDS, AND AS SHOWN ON SLAP OF SAID TRACT 94.9, RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF SAID RECORDER, TOGETHER WITH LOTS 6 AND 7 OF TRACT 13768, AS PER MAP RECORDED IN BOOK ,273, PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER, AND TOGETHER WITH A PORTION OF THAT CERTAIN PIECE OR PARCEL OF SAID LAND IN SANTA ANITA.,RANCHO SAID CITY AS PER MAP RECORDED IN BOOK .1 PAGE 97, OF PATENTS IN THE OFFICE OF SAID RECORDER, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT 3, DISTANT WESTERLY THEREON 593.00 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 3; THENCE NORTH, PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 20.00 FEET TO THE NORTH LINE OF THE LAND DESCRIBED IN DEEDS GRANTED TO THE SAID CITY OF ARCADIA FOR ROAD PURPOSES BY DEEDS RECORDED IN BOOK 24642, PAGE 221, AND IN BOOK 24633, PAGE 275, OFFICIAL RECORDS OF SAID COUNTY, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING NORTH, PARALLEL WITH. SAID EASTERLY LINE OF LOT 3, A DISTANCE OF 154.52 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 250.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 220 10' 40" A DISTANCE OF 96.77 FEET TO THE MOST SOUTHERLY CORNER OF SATs LOT 7 OF TRACT 13768, BEING ALSO THE BEGINNING OF A COMPOUND CURVE IN SAID SOUTHERLY LINE THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 390 16' 20" A DISTANCE OF 7.05.42 FEET; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE OF LOT 7, NORTH'610 27' 00" EAST, TANGENT. TO SAID LAST MENTIONED CURVE, A DISTANCE OF 6.25 FEET TO THE BEGINNING OF A TANGENT CURVE IN SAID SOUTHEASTERLY LINE OF LOT 7 THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 15180 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 80 00' 00" A DISTANCE OF 21 48 FEET TO THE END OF SAME, SAID END OF CURVE LYING SOUTH 69° 27' 00" WEST, ALONG SAID SOUTHEASTERLY LINE OF LOT 7, A DISTANCE OF 25.95 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 7; THENCE NORTH 69° 27' 00" EAST 25.96 FEET TO SAID MOST EASTERLY CORNER, SAID EASTERLY CORNER ALSO BEING THE SOUTHWESTERLY CORNER OF LOT 6 IN SAID TRACT 13768 THENCE FOLLOWING THE SOUTHEASTERLY LINE OF SAID LOT 6, THROUGH ITS VARIOUS RVPUB\DGW\686833.1 - Exhibit "A" COURSES AND DISTANCES, TO THE SOUTHEASTERLY CORNER OF SAID LOT 6; THENCE ALONG THE EASTERLY LINE OF SAID LOT 6 AND ITS NORTHERLY PROLONGATION, NORTH 9° 14' 54" WEST 219.09 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, 80 FEET WIDE, AS DESCRIBED IN RESOLUTION RECORDED AUGUST 9, 1963, IN BOOK D 2140, PAGE 264, OFFICIAL RECORDS, SAID POINT ALSO BEING A POINT ON A CURVE, CONCAVE TO THE SOUTHEAST, AND HAVING A RADIUS OF 560 FEET; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED CURVE AND ALONG SAID TRACT A DISTANCE OF 335.06 FEET; AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 38° 32' 37" WEST, ALONG THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, A DISTANCE OF 171.31 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.1,3 FEET; THROUGH A CENTRAL ANGLE OF 4° 34' 52" TO A POINT ON A REVERSE CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.13 FEET, THROUGH `A CENTRAL ANGLE OF 40 34' 52" AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32' 37" WEST 119.90 FEET TO A TANGENT CURVE THAT IS CONCAVE TO THE EAST AND HAVING A RADIUS OF 10 FEET; THENCE SOUTHERLY AND EASTERLY ALONG SAID CURVE, 22.44 FEET; THROUGH A CENTRAL ANGLE OF 1280 32'37" TO ITS POINT OF TANGENCY WITH A LINE PARALLEL TO THE SOUTH LINE OF SAID LOT 3 OF TRACT 949, AND 20 FEET NORTH OF SAID SOUTH LINE THENCE ALONG SAID PARALLEL LINE, IN A GENERAL DIRECTION, TO THE TRUE POINT OF BEGINNING. EXCEPT FROM A PORTION OF THE ABOVE DESCRIBED PROPERTY, ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D 1614 PAGE, 679, OFFICIAL RECORDS. RVPUB \DGW\686833.1 Exhibit "A" t • • RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Arcadia Attention: Executive Director 204 West Huntington Drive P.O. Box 6002 Arcadia, California 91006 -6021 (Space above for Recorder's use only) DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (2004 Land Assembly and Development Agreement — Rusnak/Arcadia) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ( "Deed of Trust ") is made as of January 5, 2005, by PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 (referred to in this Deed of Trust as "Trustor "), whose address is P.O. Box 70489, Pasadena, California 91117 -7489, to United Title Company (referred to in this Deed of Trust as "Trustee "), whose address is 15821 Ventura Boulevard, Suite 160, Encino, California 91436, for the benefit of the REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body corporate and politic, its successors and assigns (referred to in this Deed of Trust as "Beneficiary" or "Agency "), whose address is 204 West Huntington Drive, P.O. Box 6002, Arcadia, California 91006 -6021. 1. Grant of Trust Estate. As security for the performance of each of the Obligations (as defined in Section 2), Trustor, for valuable consideration, grants, bargains, sells, conveys and warrants tor Trustee, to have and to hold, in trust with power of sale, subject to the right, power and authority given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, Trustor hereby grants to Beneficiary a security interest in that certain real property in the City of Arcadia, County of Los Angeles, State of California, more particularly described in Exhibit "A" attached to this Deed of Trust and made a part of this Deed of Trust by this reference (the "Land "), together with the following described estate, property and rights of Trustor in the Land and/or in any improvements now or hereafter constructed on the Land (severally and collectively referred to in this Deed of Trust as the "Property "): 1.1 All the fee and leasehold estates and rights of Trustor now held and hereafter acquired in and to the Property and in and to land lying in streets and roads adjoining the Property, and all access rights and easements appertaining to the Property; and 1.2 All buildings, structures, improvements, furnishings, fixtures and equipment, real, personal and mixed, now or hereafter attached to, or used or adapted for use in the operation of the Property and any and all replacements and additions thereto, including without limitation, all heating apparatus and equipment whatsoever, all boilers, engines, motors, dynamos, generating equipment, pumps, piping and plumbing fixtures, cooling, ventilating, sprinkling, fire - RVPUB\DGW\686844.1 I �' 7 • • extinguishing apparatus, gas and electric fixtures, elevators, escalators, partitions, and shrubbery and plants; and including also all interest of any owner of the Property in any of such items hereafter at any time acquired under conditional sales contract, chattel mortgage or other title - retaining or security instrument, all of which property mentioned in this paragraph shall be deemed part of the realty and not severable wholly or in part without material injury to the freehold; and 1.3 All and singular the lands, tenements, privileges, water, water rights, water stock, mineral, oil and gas rights, hereditaments and appurtenances thereto belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, royalties, issues and profits thereof, and all the estate, rights, title, claim, interest and demand whatsoever of the Trustor either in law or equity, of, in and to the Property, whether now held or hereafter acquired; 1.4 All of the right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about or used in connection with the construction, use, operation or occupancy of the Property and/or the improvements thereon and any business or activity conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefor and the proceeds and products thereof. (i) all materials, supplies, furniture, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment and tools, telephone and other communications equipment; (ii) all books, ledgers, records, accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded data; (iii) all "General Intangibles" (as such term is defined in the California Commercial Code), instruments, money, "Accounts," (as such term is defined in the California Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, choses in action, good will, rights to payment of money, rents, rental fees, equipment fees and other amounts payable by persons who utilize the Property or any of the improvements or paid by persons in order to obtain the right to use the Property and any of the improvements, whether or not so used; trademarks, service marks, trade dress, tradenames, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveys; soils, environmental, engineering or other reports, architectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreements; (iv) all compensation, awards and other payments or relief (and claims therefor) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of the Property (including without limitation, awards for severance damages), together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to the Property, together with interest thereon; (v) any and all claims or demands against any person with respect to damage or diminution in value to the Property or damage or diminution in value to any business or other activity conducted on the Property; (vi) any and all security deposits, deposits of security or advance payments made to others with respect to; (1) insurance policies relating to the Property; (2) taxes or assessments of any kind or nature affecting the Property; (3) utility services for the Property and/or the improvements; (4) maintenance, repair or similar services for the Property or any other services RVPU]30GW\686844.1 2 i or goods to be used in any business or other activity conducted on the Property; (vii) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof, (viii) all warranties, guaranties, utility or street improvement bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (ix) all goods, contract rights, and inventory; (x) all leases and use agreements of machinery, equipment and other personal property; (xi) all insurance policies covering all or any portion of the Property; (xii) all reserves (including those provided for in Section 17 hereof) and funds held in escrow by Beneficiary or other person for Beneficiary's benefit and any funds deposited with Beneficiary, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (xiii) all names by which the Property is now or hereafter known; (xiv) all interests in the security deposits of tenants; (xv) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (xvi) the proceeds from sale, assignment, conveyance or transfer of all or, any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from, upon or within the Property and/or the improvements (but nothing contained herein shall be deemed a consent by Beneficiary to such sale, assignment, conveyance or transfer, except as expressly provided in this Deed of Trust); (xvii) any property described in paragraph B, above, which are not fixtures under California law; (xviii) all other property (other than fixtures) of any kind or character as defined in or subject to the provisions of the California Commercial Code, Secured Transactions, as amended and; (xix) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. 2. Obligations Secured, This Deed of Trust is made for the purpose of securing the performance of each covenant, agreement and obligation of Trustor under this Deed of Trust and of each covenant, agreement and obligation of Trustor set forth in that certain Promissory Note made by the Trustor in favor of the Agency, dated as of January 5, 2005, pursuant to the terms of that certain 2004 Land Assembly and Development Agreement, dated as of December 7, 2004 (the "Agreement ") by and between the Redevelopment Agency of the City of Arcadia, Paul P. Rusnak, Trustee of the Paul P. Rusnak Family Trust dated November 14, 1988, and Rusnak/Arcadia, a California corporation, and the Trustor's covenants set forth in Section 6.3 and/or Section 6.4 of the Agreement and the Trustor's obligations under all other instruments or agreements executed in connection with or to secure any of the covenants of the Trustor previously described in this Section 2 (collectively, the "Transaction Documents ") and all interest thereon and other amounts evidenced thereby; the obligations evidenced by all renewals, extensions, modifications, substitutions and conditions of the Promissory Note, Section 6.3 and/or Section 6.4 of the Agreement or any other Transaction Documents; and any and all other obligations of Trustor to Beneficiary, its successors and assigns, now existing and hereafter arising and which specifically indicate in the instruments which evidence the same that they are intended to be secured by this Deed of Trust. 3. Trustor's Covenant of Performance. Trustor shall perform all of its obligations under the Promissory Note and under this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided in the Promissory Note, the Agreement or this Deed of RVPUB \DGWW68".1 3 Trust, and Trustor shall pay all debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 4. Trustor's Warranties of Title. Trustor warrants to Beneficiary that:it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiary, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as. follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiary's prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiary's interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 5. Trustors Right to Contest Statutory Liens. As used in this Deed of Trust the words "mechanic's lien" and " materialmen's lien" means and.includes a stop notice as this term is defined in California Civil Code Section 3179,•.et seq. The filing of a mechanic's or materialmen's lien against the Property or a stop notice ,against the Trustor or the Beneficiary and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default under this Deed of Trust, if and so long as (a) no defaults exist under the Agreement, this Deed of Trust, or any of the other Transaction Documents; (b) within ten (10) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a surety admitted by the California. Department of Insurance to do business in the State of California and acceptable to Beneficiary in an amount not less than one hundred twenty -five percent (125 %) of the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy, if any, in a form satisfactory to Beneficiary, insuring the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues such contest in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any final judgment, rendered for the lien claimant, within ten (10) days following entry of any such judgment. 6. Maintenance and Inspection of Improvements. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good condition and state of repair. Trustor shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances,. regulations, covenants, conditions and restrictions respecting the Property or the use thereof, and shall pay all fees or charges of any kind in connection therewith. 7. Construction and Repairs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred in such completion or restoration. 8. Alterations. Other than as specifically set forth in the Agreement, no building or other improvement on the Property shall be structurally altered, removed or demolished without the RVPUB%DGW\686844.1 _ 4 Beneficiary's prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiary's prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiary. 9. Compliance With Laws. Trustor shall comply with all statutes, laws, ordinances and regulations that now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 10. Environmental Covenants Representations. Warranties and Indemnity. 10.1 Trustor will not use any Hazardous Materials (as defined in subsection 10.6 below) in the construction of improvements on or about the Property in violation of any Environmental Laws or any other applicable laws. 10.2 Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined in subsection 10.8 below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. 10.3 Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities in violation of any Environmental Laws or any other applicable laws.. Beneficiary reserves the right, in its reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Trustor hereby grants to Beneficiary, its agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as are reasonably necessary to conduct such a review and/or investigation. 10.4 Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subsection 10.10 inaccurate in any material respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiary of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect to such event or situation. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiary a final written environmental report, setting forth a detailed description of such event or situation and the action RVPUB \DGW \686844.1 5 that Trustor proposes to take with respect such event or situation, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval, which approval may be granted or withheld in Beneficiary's sole but reasonable discretion. Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan, Beneficiary's notice to Trustor of such disapproval shall include a brief explanation of the reasons for such disapproval. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiary within said thirty (30) day period, or if such revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of Default" under this Deed of Trust. If Beneficiary does not notify Trustor of its approval or disapproval of the final plan or any revisions to the final plan within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiary of Beneficiary's failure to respond, at which time Beneficiary shall have an additional forty -five (45) days after receipt of such notice from Trustor to notify Trustor of its approval or disapproval of the final plan. If Beneficiary fails to notify Trustor of its disapproval or approval of said plan within said additional forty -five (45) day period the plan shall be deemed approved by Beneficiary. Once any such plan is approved in writing or deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiary, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the environmental plan set forth in this subsection 10.4 and the actions of Beneficiary pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiary a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subsection 10.4. 10.5 Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiary reserves, the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiary, its agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiary deems are necessary to conduct such a review and/or investigation. Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiary to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiary, (c) regulatory officials having jurisdiction over Beneficiary who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiary's or any participant's interests hereunder. RVPUWDGW\686844.1 6 • • 10.6 "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by- products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( "CERCLA "), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA "), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted or publications promulgated pursuant to said laws. 10.7 "Environmental Laws" as used in this Deed of Trust shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth in Subsection 10.6. 10.8 "Environmental Activities" as used in this Deed of Trust shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. 10.9 Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiary's choice), Beneficiary, its successors and assignees, and the elected officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee ", and collectively, the "Indemnitees ") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims ") that may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiary: (a) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any RVPUB\DGW\686844.1 7 portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (b) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak,, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property; ; (c) The failure of Trustor to comply, with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any the environmental condition of the Property or the presence of Hazardous Materials 'on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (d) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters in connection with the Property or the ownership, use, operation or enjoyment of the Property or any portion of the Property, (e) The, extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (f) Any. past, present, or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property; (g) The implementation and enforcement of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (h) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, .transported or disposed of in compliance with all applicable Environmental Laws; or (i) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust or any of the other Transaction Documents. 10.10 Trustor hereby represents and warrants to Beneficiary and Trustee, as follows: (a) The Property is not and has riot been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (b) The Property is in compliance with all Environmental Laws; RVPUB \DGW\686844.1 8 r 0 (c) Trustor has not received any written notice of claims or actions pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor s and/or such previous owner's or user's ownership or use of the Property), by any governmental entity or agency, or any other person or entity and relating to Hazardous Materials or pursuant to any Environmental Laws; and (d) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." 10.11 The provisions of this Section 10 shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 11. Insurance. Trustor shall continuously maintain insurance on the Property and all improvements and additions thereto, with all premiums prepaid, and provide Beneficiary original policies or originally signed certificates evidencing such insurance coverage listing all coverage and endorsements to the policies exactly as stated in the policies and to which the originally signed Lenders loss payee endorsement is attached. All such existing and future insurance policies are hereby assigned to Beneficiary. Unless otherwise specified in the Agreement or in any other Transaction Documents, or unless expressly and in each instance waived by the Beneficiary in writing, said insurance shall (a) be placed with companies admitted and licensed to do business in the State of California, by the California Department of Insurance, and (b) be placed with companies with a Best's Insurance Guide, current edition, rating of "A" or better and indicated to be of sufficient size to qualify for Best's designation "vii." All casualty and builder's risk policies shall (i) be written on forms acceptable to Beneficiary, including fire and extended coverage, vandalism and malicious mischief, or an all perils endorsement, coverage against earthquake, if and when Beneficiary so requires, and flood protection, if the Property is located within a special flood hazard area, as determined by a Zone A designation on a Flood Hazard Boundary Map or a Zone A or V designation on a Flood Insurance Rate Map, together with such "soft costs" and other endorsements and coverages as Beneficiary may from time to time require, (ii) cover one hundred percent (100 %) of the replacement value of the improvements comprising the Property, with agreed value and inflation protection endorsements approved by Beneficiary in writing, (iii) not be subject to any co- insurance or other similar contribution or limitation provisions; (iv) name Beneficiary as a loss payee under a standard 438 BFU endorsement or a complete equivalent thereof acceptable to Beneficiary; and (v) contain a deductible amount not in excess of that approved by Beneficiary from time to time. In addition to said casualty and builder's risk policies, Trustor shall carry such policies as are required by the Agreement or any other Transaction Documents or otherwise by Beneficiary or by any applicable law, including, without limitation comprehensive general liability insurance applicable to the Property, buildings and improvements thereon, covering losses from damage to property and injury or death to persons with a policy limit of no less than Two Million Dollars $2,000,000 or which Beneficiary otherwise requires from time to time, including an extended liability endorsement, if applicable to the Property and required by Beneficiary. Upon Beneficiary's request, Trustor shall cause Beneficiary to be named as an additional insured on such liability policies and named as a loss RVPUB\DGVA686844.1 9 • r payee under a standard 438 BFU endorsement. All insurance policies shall be evaluated and adjusted as required by Beneficiary on an annual basis. Trustor assumes all risk of insufficient coverage of risks or amounts and acknowledges that Beneficiary's requirements are not intended to indicate what Trustor should, in its exercise of its prudent and "reasonable judgment, obtain. The insurance certificates shall confirm that no insurance policy shall be cancelled or modified without thirty (30) days' prior written notice to Beneficiary. Beneficiary may, at its option, require Trustor to maintain said policies in Trustor s possession or deliver said policies to Beneficiary. If retained by Trustor, said policies shall be kept available by Trustor at all times for delivery to Beneficiary or for inspection by Beneficiary, its agents or insurers. In the event of foreclosure of this Deed of Trust or other transfer of title to the Property in extinguishment of some or all of the indebtedness secured by this Deed of Trust, all interest of the Trustor in any insurance policies in force shall pass to the purchaser. Trustor shall provide Beneficiary with proof of premiums paid for each policy term so long as this Deed of Trust remains in effect. Trustor shall reimburse Beneficiary for any premiums paid for such insurance by the Beneficiary upon the Trustor s default in so insuring the improvements or default in assigning and delivering such policies to Beneficiary. 12. Assignment of Insurance and Condemnation Proceeds. Should the Property or any portion, appurtenance, right or interest in the Property be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiary or Trustee`may, at its option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief available at law or in equity in such actions or proceeding. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiary, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiary any return premiums or other repayments upon, any insurance at any time provided for the benefit of the Beneficiary and all refunds or rebates made of taxes or assessments on the Property, and Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Agreement, this Deed of Trust or any other Transaction Documents. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such proceeds with its general assets and shall not be liable for the payment of any interest on any 'such amounts. Trustor also: agrees to ' execute such further assignments of any such policies, compensation, award, damages, iebates,'retum of premiums, repayments, rights of action and proceeds as Beneficiary or Trustee may require. 13. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies`'to be provided by Trustor, Trustor shall give prompt written notice of such damage and casualty to Beneficiary generally describing the nature and cause of such casualty. and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make available to Trustor proceeds of any - insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: ' RVPUMDGW\686844.1 _ 10 13.1 Insurance proceeds that are directly attributable to the damage (the "Proceeds ") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (a) There: exists no default under the Agreement, this Deed of Trust or any other Transaction Documents at any time prior to or during the course of reconstruction; (b) Receipt by Beneficiary of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (c) Receipt by Beneficiary of proof reasonably satisfactory to Beneficiary that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to perform or pay the Obligations as and when due. Such computation shall include Beneficiary's estimate of the amount necessary to pay all of Trustor s operating expenses and perform all acts or pay all of the sums due under the Agreement and this Deed of Trust over the projected period of reconstruction, and Beneficiary may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Agreement, this Deed of Trust, any other Transition Documents or any reconstruction requirements, Beneficiary may, at its option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Agreement or this Deed of Trust; (d) Receipt by Beneficiary from Trustor of sufficient cash funds to cover one hundred percent (100 %) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiary in writing, and the Proceeds, the amount of such difference to be paid in cash to Beneficiary with said amount and any interest earned thereon shall be released to Beneficiary, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiary. In the event of any default under the Agreement, this Deed of Trust, any other Transaction Documents or any reconstruction requirements, Beneficiary may, at its option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Agreement or this Deed of Trust; (e) Receipt by Beneficiary of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiary in writing stating that the work described in the Trustor s certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architects or engineer's certificate shall include its estimate of all costs and expenses that will be required to complete such restorations; and (f) Such additional conditions as may reasonably be imposed by Beneficiary to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage, including, without RV PUB\DG W%86844.1 I I limitation, Beneficiary's _prior written approval of all permits, plans, specifications and construction contracts for such restoration.: 13.2 Beneficiary shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not exceeding ten percent (10 %) of the total.estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all of its conditions precedent to such disbursement have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiary in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as may be imposed by Beneficiary, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies" required by Beneficiary. Trustor shall, during the' progress of the work, also submit to the Beneficiary, at periodic intervals not less frequently than monthly, 'a certificate satisfactory to Beneficiary famished by an architect or engineer approved by Beneficiary in, writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered byany other such certificate; and 13.3 After completion of the restoration and subject to the conditions herein stated in this Section 13, and, if Trustor is not then in default under the Agreement, this Deed of Trust or any other Transaction Documents, Beneficiary shall pay to Trustor (or such other persons or entities that may have an interest in the Proceeds) the undisbursed Proceeds and Trastor's deposit for any estimated restoration expense held by Beneficiary upon delivery to Beneficiary of (i) a certificate executed by Trustor showing that the work has ,been completed and that all bills for labor performed and materials furnished in connection with the restoration work have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiary in writing confirming that the Property has been restored`to substantially the same size, design,, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. 13.4 If (i) any of the conditions in subsection 13.3, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as' may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Agreement, this Deed of Trust or any other Transaction Documents; or (ii) if Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or, (iii) if Trustor is otherwise in default under the Agreement, this Deed of Trust, any other Transaction Documents or any reconstruction requirements set forth in this Deed of Trust or any other. Transaction Documents, Beneficiary may, at its option, apply the Proceeds and any deposits made by Trustor under this Section 13 to RVPUB \DGW\686844.1 12 any amounts due under the Transaction Documents secured by this Deed of Trust, or to complete the necessary repairs and use the Proceeds for the payment of the costs of such repairs If the Proceeds are so applied to amounts secured by this Deed of Trust and, together with any other payments due to Beneficiary under the Agreement and all other debts of Trustor to Beneficiary secured by this Deed of Trust are discharged, Beneficiary shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiary's rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. 13.5 Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiary consents in writing to such construction, which consent may be withheld by Beneficiary in its sole discretion, until all of the conditions contained in this Section 13 are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing in this Section 13 contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this Section 13. 13.6 In any event in which the Beneficiary is not otherwise obligated to permit the insurance proceeds to be applied to the restoration of the Property as described in this Section 13 and, at the option of Beneficiary, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiary, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of any amounts secured by this Deed of Trust or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 14. Use of Condemnation Awards. Should the Property, any portion of the Property or any improvements on the Property be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiary's costs and reasonable attorneys' fees incurred in connection with any such action or proceeding. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions set forth in Section 13 of this Deed of Trust with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiary, renders or will render the Property not economically viable or which substantially impairs Beneficiary's security or lessens to any extent the value, marketability or intended use of the Property, Beneficiary may apply the condemnation proceeds to reduce any outstanding amounts secured by this Deed of Trust in such order as Beneficiary may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from time to time require. If so applied, any proceeds in excess of the sum of all outstanding amounts and accrued and unpaid interest RVPUB \DC,M686844.1 13 due under the Agreement, plus all other sums due to Beneficiary from Trustor shall be paid to Trustor or Trustor's assignee. 15. Property Taxes and Assessments. Trustor shall pay in full on or before the date of delinquency thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof; and upon request, provide the Beneficiary with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 16. Assessment Districts. Trustor agrees not to consent to inclusion of the Land in any local improvement or special assessment district or to• the imposition of any special or local improvement assessment against the Property, without Beneficiary's prior written consent. 17. Mortgage Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to• the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary or any payments secured by this Deed of Trust,. Trustor shall bear and pay the full amount of such taxes. 18. Special Assessment and Insurance Reserves. Trustor shall, at the request of the Beneficiary, pay to Beneficiary monthly installments of the special assessments and insurance premiums estimated by the Beneficiary next to become due, in addition to any other periodic payment or performances owed by Trustor under the Agreement or this Deed of Trust or any other, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiary will have on hand an ,amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the monthly payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiary deems necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiary of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiary on account of assessments or insurance premiums may be commingled and invested with Beneficiary's own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary shall not exercise the rights granted in this Section 18 so long as all of the following conditions are met: 18.1 There is no default under the Agreement, this Deed of Trust or any other Transaction Documents; and 18.2 Trustor pays all assessments and insurance premiums prior to delinquency. 18.3 Upon Trustor's failure to comply with either of conditions (a) or (b), above, Beneficiary may, at its option, then or thereafter exercised, require Trustor to pay the additional sums described in this Section 18. 19. Trustor's Right to Contest Taxes. Trustor shall have the right to contest any real property tax or special assessment, so long as: (a) no defaults exist under the Agreement, this Deed of RVPUBTGW�686844.1 14 Trust or any other Transaction Documents; (b) Trustor makes any payment or deposit or posts any bond as and when required as,a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 20. Report of Real Estate Transaction. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiary, or other party. Trustor s obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this Section 20 are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained in this Section 20 shall be construed to require such returns or reports to be filed by Beneficiary. 21. Leases. With respect to any leases currently or hereafter relating to any portion of the Property, Trustor agrees that: 21.1 Prior to the execution of any such lease or rental agreement by the Trustor, the Trustor shall give the Beneficiary thirty (30) days written notice setting forth the identity of the tenant and the relevant terms of the proposed lease; 21.2 Each such lease shall comply with the covenants of the Trustor under the Agreement, this Deed of Trust and the other Transaction Documents; 21.3 Trustor shall fully comply with all of its obligations under all leases on the Property, so that the same shall not become in default and shall do all that is necessary to preserve the same in force; 21.4 Trustor shall not permit an assignment of any leases, or any subletting thereunder; and 21.5 Beneficiary and its successors and assigns (including any purchaser at a foreclosure or trustees sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interest following any foreclosure or trustee's sale under this Deed of Trust. 22. Assignment of Leases. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiary all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, that it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiary confers upon Trustor a license to collect and retain the rents, RVPUB\DGW\686844.1 15 0 9 issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiary upon a default under this Deed of Trust to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiary may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned in this Deed of Trust to Beneficiary upon the occurrence of an Event of Default under this Deed of Trust or under any of the obligations secured by this Deed of Trust, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant to this Deed of Trust or pursuant to the Agreement or any other Transaction Documents, and Beneficiary shall, in its sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiary shall determine. In the event the Beneficiary exercises or is entitled to exercise any of its rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Agreement, and if any lessee, sublessee or assignee under any lease assigned under this Section 22 files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiary shall have, and is hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in writing, Beneficiary's exercise of any of the rights provided in this Section 22 shall preclude Trustor from the pursuit and benefit of any such rights, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the Property, and such assignment shall not cause Beneficiary to be a "mortgagee in possession" for any purpose. The rights granted in this Section 22 shall be in addition to and not in derogation of any similar or related rights granted to Beneficiary in any separate assignment of leases and rents. . 23. Impairment of Security. Trustor shall not, without first obtaining Beneficiary's written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiary's lien upon the Property or the rents from the Property. Trustor shall not, without the prior written consent of Beneficiary, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non - conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as. might make possible a claim of any implied dedication or easement. 24. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiary or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiary, has RVPUB%DM686844.1 16 waived and does hereby waive any immunity to such liability to Beneficiary under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such action or proceeding or be made a party to.any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiary and Trustee for, any and all loss, damage, expense or cost; including cost of evidence of title, expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review of any such suit, action, or proceeding and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay all costs of suit, cost of evidence of title, expert witness fees and reasonable attorneys' fees in any action, proceeding or suit brought by Beneficiary to foreclose this Deed of Trust and in any appeal or petition for review of any such action, proceeding or suit.. 25. Assignments and Transfers. Trustor acknowledges that Beneficiary relied upon Trustor's financial statements, credit history, business and real property managerial expertise and other factors personal to Trustor in entering into the Agreement, and Trustor covenants not to transfer any of the interest in the Property or to permit the transfer of any interest in Trustor without first receiving Beneficiary's express written consent in each instance. A breach of this covenant shall constitute a default under the Agreement and this Deed of Trust. All sums then due to Beneficiary by Trustor under this Deed of Trust or under the Agreement may, at Beneficiary's option, be declared immediately due and payable if any of Trustor's interests in the Property, or any part thereof, are sold or. transferred, voluntarily or involuntarily, without Beneficiary's prior written consent. 26. No Further Encumbrances. Trustor acknowledges that Beneficiary relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholdei s bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiary's option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiary's requirements of Trustor s preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiary to enter into the Agreement secured by this Deed of Trust, and with the knowledge that Beneficiary will materially rely upon this Section 26 in so doing, Trustor covenants not to encumber the Property without first receiving Beneficiary's express written consent in each instance, which consent may be withheld by Beneficiary in its sole discretion. A breach of this covenant shall constitute a default under the Agreement and this Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary under the Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgages, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiary shall encumber any real or personal property that is the subject of any lien or RVPUB \DGW\686844.1 17 0 0 security interest granted to Beneficiary, under this Deed of Trust, without Beneficiary's prior written consent. 27. Event of Default. An "Event of Default" shall have occurred upon the occurrence of any of the following events: 27.1 The Trustor or the Operator fails to perform any of the non - monetary covenants and conditions of the Promissory Note or Section 6.3 or Section 6.4 of the Agreement, and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Trustor or the Operator from the. Agency or the expiration of an applicable shorter cure period set forth in the Promissory Note or the Agreement; provided, however, that for so long as the Trustor and the Operator are satisfying their joint and several obligations to cause the generation of both the Minimum Assessed Valuation and the Minimum Annual Sales Tax Amount or, alternatively, paying both the In -Lieu Tax Increment Payment and the In -Lieu Minimum Sales Tax Payment, no default under this Deed of Trust shall occur by virtue of any failure on the part of the Owner or the Operator to satisfy any of the other covenants of either Section 6.3 or Section 6.4. 27.2 The determination by the Agency that any representation, warranty, disclosure or statement of the Trustor or the Operator contained in the Agreement, the Promissory Note, this Deed of Trust or in any other writing delivered to the Agency in connection with the Agreement, the Promissory Note or this Deed of Trust, was incomplete, untrue or misleading in any material respect as of the date made. 27.3 The Trustor or the Operator fails to make any payment or deposit of funds required under the Promissory Note or Section 6.3 or Section 6.4 of the Agreement, following seven (7) days' written notice to the Trustor or the Operator from the Agency of such failure. 27.4. The Trustor or the Operator fails to comply with or to perform when due any term, obligation, covenant, or condition contained in the Promissory Note. 27.5 Failure of the Trustor to properly perform its obligations under this Deed of Trust, other than obligations specifically contained in Section 6.3 or Section 6.4 of the Agreement or in the Promissory Note and referenced in this Deed of Trust, by a date specified in this Deed of Trust or in a written notice to Trustor, if applicable, (which date specified shall not be less than ten (10) days nor greater than thirty (30) days from the date of such notice, and shall be determined by the Agency in its sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice shall be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice. 27.6 The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by the Agency) portion of the Property. 27.7 The enactment of any law imposing upon the Agency the payment of the whole or any part of the taxes, assessments, charges or liens required to be paid by the Trustor under this RVPUB\DGW\686644.1 18 0 Deed of Trust or changing, in any way, the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or the Agency's interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust, the covenants of the Owner and the Operator under Section 6.3 or Section 6.4 of the Agreement or the obligations of the Owner or the Operator under the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee (as defined in this Deed of Trust) or the Agency by reason of their ownership of this Deed of Trust or any related documents and, in such event, the Trustor, after demand by the Agency, does not pay such taxes or assessments or reimburse the Agency for such taxes and assessments or, in the opinion of counsel for the Agency, it might be unlawful to require the Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law. 27.8 The occurrence of a default by the Trustor under any of the contracts or agreements assigned to the Agency under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of the Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party to such contracts or agreements. 27.9 There occurs any event of dissolution, reorganization or termination of the Trustor or the Operator that adversely and materially affects the operation or value of the Expansion Site, the Expansion Project, the Dealership or the Dealership Site and such event is not corrected within five (5) days following written notice of such event from the Agency to the Trustor or the Operator. 27.10 The Trustor or the Operator sells, transfers, hypothecates, encumbers or assigns any of its interest in the Property or any portion of the Property, or violates any provision of Section 6.6 of the Agreement, whether voluntarily or involuntarily or by operation of law, prior to payment in full of all principal and accrued interest under the Promissory Note. 27.11 The Trustor or the Operator defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect the Trustor's ability to repay the Promissory Note or the ability of the Trustor or the Operator to perform their, respective, other obligations under the Agreement, the Promissory Note or this Deed of Trust. 27.12 Any creditor attempts to take or sell any of the Trustor's or the Operator's property on or in which the Agency has a lien or security interest securing repayment or performance of the Trustor's or the Operator's obligations under Section 6.3 or Section 6.4 of the Agreement, the Promissory Note or this Deed of Trust. 27.13 A material adverse change occurs in the Trustor's or the Operator's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by the Promissory Note that is secured by this Deed of Trust is materially impaired. 27.14 The Trustor or the Operator becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is referred -to in this Deed of Trust as the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or RVPUB%DGW\b86844.1 19 other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for. debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing of such petition, or shall make an assignment for the benefit of creditors. 27.15 Any court (or similar tribunal) having jurisdiction over either the Trustor, the Operator, any of the Property or other property of either the Trustor or the Operator shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of the Trustor, of the Operator, of any of the Property, of any other real property of the Trustor or the Operator, of any other significant asset of the Trustor or the Operator, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code. 27.16 The entry of any final judgment or arbitration award against the Trustor or the Operator that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by the Owner, the Operator or any other person under this Deed of Trust or as security for performance under the Agreement or the Promissory Note, or (iii) any significant portion of the other assets of the Trustor or the Operator, that is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets. 27.17 The Trustor or the Operator shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up. 27.18 The Trustor or the Operator suspends or terminates its, legal status or is not authorized by the Secretary of State of the State of California to transact business in California. 27.19 Trustor acknowledges and agrees that all material non - monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiary shall be entitled to exercise any. appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non - monetary default. 28. Rights and Remedies on Default. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiary may exercise any one or more of the following rights and remedies: 28.1 Remedies in the Agreement. Beneficiary may exercise any right or remedy provided for in the Agreement, this Deed of Trust or any other Transaction Documents; 28.2 Acceleration. Beneficiary may declare all performances or sums secured by this Deed of Trust immediately due and/or payable; 28.3 Foreclosure Rights. Beneficiary may declare all performances or sums secured by this Deed of Trust immediately due and/or payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default RVPUB\DGw\686844.1 20 • • and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale contained in this Deed of Trust. Should Beneficiary elect to foreclose by exercise of the power of sale contained in this Deed of Trust, Beneficiary shall also deposit with Trustee this Deed of Trust, and any receipts and evidence of expenditures made and secured by this Deed of Trust as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by Trustee in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder upon any terms and conditions specified by Beneficiary and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase all or any portion of the Property, as applicable, at sale. 28.4 Right to Rescind. Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as provided in this Section 28, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations secured by this Deed of Trust, nor otherwise affect any provision, agreement, covenant or condition of the Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties under this Deed of Trust. 28.5 UCC Remedies. Beneficiary shall have all the rights and remedies of a secured party under the California Commercial Code, including, without limitation, Section 9501(4) of the California Commercial Code. Upon request, Trustor shall assemble and make such collateral available to Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both Beneficiary and Trustor. Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the Obligations or sell the collateral at public or private sale in accordance with the California Commercial Code or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiary disposes of all or any part of such the collateral after default, the proceeds of disposition shall be applied in the following order: (a) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; RVPUB %DGWM6844.1 21 0 (b) to the reasonable attorneys' fees and legal expenses incurred by Beneficiary; and (c) to the satisfaction of the Obligations secured by this Deed of Trust. 28.6 Remedial Advances. Should Trustor fail to make any payment or to do any act as required by this Deed of Trust, then Beneficiary or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation under this Deed of Trust, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security of.this Deed of Trust or the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required in this Deed of Trust; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests of any person who is paid by Beneficiary pursuant to the terms of this Section 28.6. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced under this Deed of Trust by or on behalf of Beneficiary, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment of such sums shall be secured by this Deed of Trust. 28.7 Summary Possession. Beneficiary may, at its option, either in person or by agent, employee or court- appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation of the Property at Trustor s expense and lease the same or any part of the Property, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect to any such lease(s) any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such notice., 28.8 Collection of Rents. Beneficiary may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiary, regardless of whether Beneficiary has taken possession of the Property. If any rents are collected by Beneficiary, then Trustor, hereby irrevocably designates Beneficiary as Trustor's attomey -in -fact to endorse instruments received in payment of rents or use fees regarding the Property in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users of the Property to Beneficiary in response to Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiary may exercise its rights under this Section 28.8 either in person, by agent or through a receiver. 28.9 Beneficiary's Enforcement of Leases. Beneficiary is hereby vested with full power to use all measures, legal and equitable, deemed necessary or proper by Beneficiary to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or RVPU13TGW%686844.1 22 0 0 court- appointed receiver, to enter upon the Property, or any part of the Property, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Obligations. Trustor hereby grants to Beneficiary full power and authority to exercise all rights, privileges and powers granted in this Deed of Trust at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Obligations and use and apply all of the rents and other income assigned under this Deed of Trust to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiary, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiary under the Obligations and this Deed of Trust, all in such order as Beneficiary may determine. Beneficiary shall be under no obligation to enforce any of the rights or claims assigned to it under this Deed of Trust or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts of the Property, upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiary after taking possession of the Property under this Deed of Trust. 28.10 Beneficiarvs Enforcement of Contracts. Beneficiary shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach of any such contracts in the name of Beneficiary or, at Beneficiary's option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiary acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiary as its attorney -in -fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiary does not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the breach of any such contracts; provided however, any performance of the respective contracts specifically required by the Beneficiary in writing, following any default by Trustor under the Obligations or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiary under the Obligations and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, RVPUB\DGW%86844.1 23 collateral assignment of leases and rents, security agreement and other documents granted to secure the Obligations. 28.11 Appointment of Receiver. Beneficiary has the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Obligations. The receiver may serve without bond, if permitted by law. Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Obligations secured by this Deed of Trust by a substantial amount. Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiary may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiary's option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds; employ contractors and make any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the purposes stated in this Section 28.11. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. 28.12 Specific Enforcement. Beneficiary may specifically enforce any covenant in this Deed of Trust or the Trustors compliance with its warranties in this Deed of Trust and may restrain or enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection with such enforcement, restraint or injunction. 28.13 General Creditors' Remedies. Beneficiary shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation of any other remedies of Beneficiary. 29. Application of Sale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms of this Deed of Trust, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured by this Deed of Trust; and the remainder, if any, to the Beneficiary and any other person or persons legally entitled to such proceeds of sale. 30. Remedies Cumulative. No remedy conferred upon or reserved to Trustee or Beneficiary in this Deed of Trust is intended to be exclusive of any other remedy provided in this Deed of Trust or under the Agreement or any other Grant Documents, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Obligations, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by RVPUBIDGW\686844.1 24 • 0 this Deed of Trust to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. 31. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiary or Trustee shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaling. In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one or more parcels. Neither Trustee nor Beneficiary shall be required to marshal Trustors assets. 33. SUBMISSION TO JURISDICTION. 33.1 TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING IN THIS DEED OF TRUST SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES SET FORTH IN THIS DEED OF TRUST, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING IN THIS DEED OF TRUST SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). 33.2 TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARY, TRUSTEE OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. RVPUBIDGWM6844.1 - 25 34. Trustor's Indemnification. Trustor agrees to indemnify and hold harmless Trustee and Beneficiary from and against any and all losses, liabilities, penalties; claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses ") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiary, by reason or on account of, or in connection with: (a) any default by Trustor under this Deed of Trust or the Agreement; (b) Trustee's and/or Beneficiary's good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties under this Deed of Trust or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents,. contractors, subcontractors, servants,. employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent to the Property, except for the willful misconduct or gross negligence of the indemnified person; or (f) any failure of Trustor to file any tax reports or returns referred to in this Deed of Trust. The indemnity provided under subsection (f) of this Section 34 shall also extend to counsel for the Beneficiary. Any amount payable to Trustee, Beneficiary or counsel for Beneficiary under this Section 34 shall be due and payable within ten (10) days after demand for payment of such amount and receipt by Trustor of a statement from Trustee, Beneficiary and/or counsel for Beneficiary setting forth in reasonable detail the amount claimed and the basis for such amount, and such amounts shall bear interest at the rate of .10% per annum from and after the date such amounts are paid by Beneficiary, Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this paragraph, shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiary that is subject to the indemnity set forth in this Section 34, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiary, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiary. Notwithstanding the foregoing, Trustee and Beneficiary, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for in this Section 34 shall survive Trustor's performance of the Obligations secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees; Costs. Trustor agrees to reimburse Beneficiary for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incurs in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Agreement or any other Transaction Documents, with or without litigation, including without limitation any costs, expenses and fees incurred: (a). on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiary prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work -out, compromise, settlement or satisfaction of the debt secured by this Deed of Trust or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Agreement or any other Transaction RVPUB\DGW\686844.1 26 Documents. For the purposes of this Deed of Trust, the words "reasonable attorneys' fees" shall mean and include the salaries and fringe benefits of the City Attorney and lawyers employed by the City Attorney of the City of Arcadia, computed on a hourly basis, who may provide legal services to the Beneficiary in connection with the exercise by the Beneficiary of any of its, remedies under this Deed of Trust. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 36. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee named in this Deed of Trust or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiary and the recordation of such writing in the office where this Deed of Trust is recorded, and such authority shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of Beneficiary, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties conferred upon Trustee in this Deed of Trust; but, nevertheless, upon the written request of Beneficiary or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties conferred upon Trustee in this Deed of Trust, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee under this Deed of Trust to said successor or substitute trustee. All references in this Deed of Trust to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as provided in this Deed of Trust) from time to time acting under this Deed of Trust. Trustor hereby ratifies and confirms any and all acts that Trustee named in this Deed of Trust or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue of this Deed of Trust. 38. Reconveyance. 38.1 Upon written request of Beneficiary, stating that all performances and sums secured by this Deed of Trust have been satisfied and paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof RVPUB1nGW\686844.1 27 of the truthfulness of such matters. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39.. No Releases. The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Agreement or any other obligation secured by this Deed of Trust, except in the manner specified in this Deed of Trust. Without affecting the liability of any other person for the payment and performance of any obligation secured by this Deed of Trust (including Trustor should it convey said Property) and without affecting the lien or priority of this Deed of Trust upon any Property not released, Beneficiary may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described in this Deed of Trust, take or release any other security or make compositions or other arrangements with debtors. Beneficiary may also accept additional security, either concurrently with this Deed of Trust or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale under this Deed of Trust. 40. . Beneficiarv's Consents. At any time, upon written request of Trustor, Trustor's payment of Beneficiary's fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person under the Agreement, the Beneficiary may. for the purposes of accommodating the Trustor's construction of the Expansion Project, as defined in the Agreement, on the Lands: (a) consent to the making of any map or plat of the Property; (b) join in granting any easement or creating any restriction on the Lands, (c) join in any other agreement affecting this Deed of Trust or the lien or charge of this Deed of . Trust, and (d) reconvey, without warranty, all or any part of the Property. 41. Further Assurances. Trustor, from time to time, within fifteen (15) days after request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to. Beneficiary, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiary, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiary may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiary, nor the failure of Beneficiary to make such request shall be construed-as a release of such Property, or any part of such Property, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiary are cumulative and given as additional security. RVI'ME)C 686844.1 28 • • 42. Time of Performance. Time is of the essence of this Deed of Trust in connection with all obligations of the Trustor in this Deed of Trust and under the Agreement. 43, Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale under this Deed of Trust be mailed to it at its address as set forth in this Deed of Trust. Any notices to be given to Trustor by Beneficiary under this Deed of Trust shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor set forth in this Deed of Trust, or to such other address that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any notice under this Deed of Trust shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first -class postage pre -paid mail, as officially recorded on the certified mail receipt. 44. Beneficiary's Right to Inspect. Beneficiary and its agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiary's interest and to inspect the Property. 45. Reports and Statements. Trustor shall deliver to Beneficiary, within ninety (90) days after the end of each of Trustor s fiscal years, and within twenty (20) days after Beneficiary's request, following an Event of Default,.reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiary covering the Property, both certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiary so requests, such statements shall specify, in addition to other information requested by Beneficiary, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiary or its representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiary all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 46. Assignment by Beneficiary Participation. Beneficiary may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor s liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiary may make available to any person all credit and financial data furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person designated by Beneficiary any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiary, under the terns of this Deed of Trust. 47. Legal Relationships. The relationship between Beneficiary and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiary. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third RVPUB\DG W1686844.1 29 party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiary of this Deed of Trust. 48. Modification. This Deed of Trust may be amended, modified, changed or vaned only by a written agreement signed by each of Trustor, Beneficiary and Trustee. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiary and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiary's delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor s breach or default. 49. Successors. Subject to the prohibitions against Trustor's assignments in this Deed of Trust, this Deed of Trust shall inure to the benefit of and bind the Trustor, Beneficiary and Trustee, their successors, estates, heirs, personal representatives and assigns. 50. Partial Invalidity. If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event; this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 51. Mutual Negotiation. Beneficiary and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 52. Paragraph Headings. The section headings in this Deed of Trust are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 53. Applicable Law. This Deed of Trust and the respective rights of the Trustor, Beneficiary or Trustee under this Deed of Trust shall be governed by, construed and enforced in accordance with the laws of the State of California. 54. Entire Agreement. This Deed of Trust, the Agreement, and any other Transaction Documents, including any exhibits or addenda, contains the entire agreement of the Trustor, Beneficiary and Trustee with respect to the subject matter of this Deed of Trust. 55. Counterparts. This Deed of Trust may be executed, by, the officers, members and/or principals of the Trustor in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. RVPUB \DGW\686844.I 30 Ll E 56. Fixture Filing and Recording. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 57. Survival of Representations and Warranties. All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Agreement, until full performance or repayment of the Obligations and release and reconveyance of this Deed of Trust. IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust as of the day and year first above written. NORMA MENDOZA L COMM. p1521543 U') Notary Vu611eLa140.1a (AA OJ UN SEMMMO COUNTY Ry C0=. Eap.0d 2J, 2008 TRUSTOR PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 A11111111—ax. Al By: Paul P. Rusnak Trustee [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] RM13%DGM686844.1 31 1:0.011 301V41 II LEGAL DESCRIPTION OF THE LAND LEGAL DESCRIPTION OF EXISTING SITE THAT PORTION OF LOT 3 OF TRACT 949, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT CERTAIN PIECE OR PARCEL OF LAND IN THE SANTA ANITA RANCHO AS PER MAP RECORDED IN BOOK 1, PAGE 97 OF PATENTS, IN THE OFFICE OF SAID RECORDER, BEING THAT PORTION OF THAT CERTAIN STRIP OF LAND 40.00 FEET WIDE DESCRIBED IN DEED RECORDED IN BOOK 4,44 PAGE 283, OF DEEDS, AND AS SHOWN ON SLAP OF SAID TRACT 94.9, RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF SAID RECORDER, TOGETHER WITH LOTS 6 AND 7 OF TRACT 13768, AS PER MAP RECORDED IN BOOK ,273, PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER, AND TOGETHER WITH A PORTION OF THAT CERTAIN PIECE OR PARCEL OF SAID LAND IN SANTA ANITA. RANCHO SAID CITY AS PER MAP RECORDED IN BOOK .1 PAGE 97,. OF PATENTS IN THE OFFICE OF SAID RECORDER, DESCRIBED AS A WHOLE AS FOLLOWS: . BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT 3, DISTANT WESTERLY THEREON 593.00 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 3; THENCE NORTH, PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 20.00 FEET TO THE NORTH LINE OF THE LAND DESCRIBED IN DEEDS GRANTED TO THE SAID CITY OF ARCADIA FOR ROAD PURPOSES BY DEEDS RECORDED IN BOOK 24642, PAGE 221, AND IN BOOK 24633, PAGE 275, OFFICIAL RECORDS OF SAID COUNTY, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING NORTH, PARALLEL WITH SAID EASTERLY LINE OF LOT 3, A DISTANCE OF 154.52 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 250.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 220 10'40" A DISTANCE OF 96.77 FEET TO THE MOST SOUTHERLY CORNER OF SATs LOT 7 OF TRACT 13768, BEING ALSO THE BEGINNING OF A COMPOUND CURVE IN SAID SOUTHERLY LINE THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 390 16' 20" A DISTANCE OF 7.05.42 FEET; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE OF LOT 7, NORTH 610 27' 00" EAST, TANGENT. TO SAID LAST MENTIONED CURVE, A DISTANCE OF .6.25 FEET TO THE BEGINNING OF A TANGENT CURVE IN SAID SOUTHEASTERLY LINE OF LOT 7 THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 80 00' 00" A DISTANCE OF 21_48 FEET TO THE END OF SAME, SAID END OF CURVE LYING SOUTH 69° 27' 00" WEST, ALONG SAID SOUTHEASTERLY LINE OF LOT 7, A DISTANCE OF 25.95 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 7; THENCE NORTH 690 27' 00" EAST 25.96 FEET TO SAID MOST EASTERLY CORNER, SAID EASTERLY CORNER ALSO BEING THE SOUTHWESTERLY CORNER OF LOT 6 IN SAID TRACT 13768 THENCE WMADGM686844.1 Exhibit "A" • 0 FOLLOWING THE SOUTHEASTERLY LINE OF SAID LOT 6, THROUGH ITS VARIOUS COURSES AND DISTANCES, TO THE SOUTHEASTERLY CORNER OF SAID LOT 6; THENCE ALONG THE EASTERLY LINE OF SAID LOT 6 AND ITS NORTHERLY PROLONGATION, NORTH 9° 14' 54" WEST 219.09 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, 80 FEET WIDE, AS DESCRIBED IN RESOLUTION RECORDED AUGUST 9, 1963, IN BOOK D 2140, PAGE 264, OFFICIAL RECORDS, SAID POINT ALSO BEING A POINT ON A CURVE, CONCAVE TO THE SOUTHEAST, AND HAVING A RADIUS OF 560 FEET; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED CURVE AND ALONG SAID TRACT A DISTANCE OF 335.06 FEET; AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 38° 32'37" WEST, ALONG THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, A DISTANCE OF 171.31 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.1,3 FEET; THROUGH A CENTRAL ANGLE OF 40 34' 52" TO A POINT ON A REVERSE CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.13 FEET, THROUGH `A CENTRAL ANGLE OF 40 34' 52" AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32' 37" WEST 119.90 FEET TO A TANGENT CURVE THAT IS CONCAVE TO THE EAST AND HAVING A RADIUS OF 10 FEET; THENCE SOUTHERLY AND EASTERLY ALONG SAID CURVE, 22.44 FEET; THROUGH A CENTRAL ANGLE OF 128° 32'37" TO ITS POINT OF TANGENCY WITH A LINE PARALLEL TO THE SOUTH LINE OF SAID LOT 3 OF TRACT 949, AND 20 FEET NORTH OF SAID SOUTH LINE THENCE ALONG SAID PARALLEL LINE, IN A GENERAL DIRECTION, TO THE TRUE POINT OF BEGINNING. EXCEPT FROM A PORTION OF THE ABOVE DESCRIBED PROPERTY, ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D 1614 PAGE, 679, OFFICIAL RECORDS. RVPUMDGW%686844.1 Exhibit "A" PROMISSORY NOTE PAYABLE TO A PUBLIC AGENCY AND SECURED BY DEED OF TRUST Borrower: Paul P. Rusnak, As trustee of the Paul P. Rusnak Family Trust P.O. Box 70489 Pasadena, CA 91117 -7489 and Rusnak/Arcadia, a California corporation P.O. Box 70489 Pasadena, CA 91117-7489 Principal Amount: NOT TO EXCEED Eight Million Dollars ($8,000,000) Interest Rate: Paragraph 4 (below) Lender: Redevelopment Agency of the City of Arcadia 204 West Huntington Arcadia, California 91006 Date of Promissory Note: January 5, 2005 Maturity Date of Promissory Note: Tenth (10t) Anniversary of the "Opening Date," as defined in Section 6.4.4 of the Agreement 1. PROMISE TO PAY. Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust, and Rusnak/Arcadia, a California corporation (collectively, the 'Borrower "), jointly and severally, promise to pay to the Redevelopment Agency of the City of Arcadia (the "Agency" or "Holder "), or order, in lawful money of the United States of America, the principal sum of all funds drawn or disbursed under that certain Agency Loan as defined and provided for in that certain 2004 Land Assembly and Development Agreement (Rusnak/Arcadia), dated as of December 7, 2004, by and between the Borrower and the Agency (the "Agreement'), together with interest, as set forth in this Promissory Note. 2. INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the Agency under the terms and conditions of the Agency Loan as provided for in the Agreement. This Promissory Note is referred to in the Agreement as the 'Promissory 1 RVPMDGW686849.1 Note ". A copy of the Agreement is on file with the Agency Secretary as a public record of the Agency. 3. PAYMENT. Borrower will pay all amounts of principal and accrued interest under this Promissory Note, prior to its Maturity Date in annual installment amounts amortized over the period from the date of this Promissory Note until the Maturity Date to be calculated by the Agency based on the amount of funds advanced or disbursed under the Agency Loan, with each such installment due on the last business day of each Dealership Operating Year, as defined in the Agreement (each such date referred to as a "scheduled debt service payment "), until the Maturity Date or repayment in full of all outstanding principal and accrued and unpaid interest under this Promissory Note, whichever is earlier. Each scheduled debt service payment shall be equivalent to or greater than the sum of the In -Lieu Minimum Sales Tax Payment and the hi -Lieu Tax Increment Payment, each as defined in the Agreement. Prior to the Maturity Date of this Promissory Note, the Borrower shall make payments of principal and interest to the Agency solely from "Additional Tax Revenues," as this term is defined in sub - paragraph 1., below. If Additional Tax Revenues are not sufficient to make a scheduled debt service payment in full on a scheduled debt service payment date, the portion of such scheduled debt service payment not then paid (the "deficiency debt service amount ") shall be carried forward to the next following scheduled debt service payment date, without affecting the rights of the Agency regarding such a default by the Borrower, and then on such following scheduled debt service payment date, any Additional Tax Revenues shall first be applied to pay the balance of the deficiency debt service amount carried forward and, then, to pay the scheduled debt service payment due on such date. On the Maturity Date, a balloon payment of any and all remaining principal balance and accrued and unpaid interest shall be due and payable by Borrower to the Agency in immediately available funds of the Borrower and not from Additional Tax Revenues. Borrower will make all payments of interest and principal to the Agency under this Promissory Note at the following address of the Agency: 240 W. Huntington Drive, Arcadia, California 91006 -6021, Attention: Executive Director, or at such other place as the Agency may designate in writing to the Borrower. Unless otherwise agreed to by the Agency in writing or required by applicable law, payments will be applied first to any unpaid collection costs, then to any late charges, then to any unpaid interest, and any remaining amount will be applied to principal. 1. The words "Additional Tax Revenues" mean and refer to the following amounts accruing or received between the Opening Date (as defined in the Agreement) and the Maturity Date: (a) the amount of all Dealership Sales Taxes and any In -Lieu Minimum Sales Tax Payment actually made, since the later of (i) the date of this Promissory Note or (ii) the date of the most recently paid scheduled debt service payment, and (b) the amount of Tax Increment (as defined below) actually received by the Agency due to supplemental assessments under Revenue and Taxation Code Sections 75, et seq., by i•! RVPUB \DGWW6849.1 0 0 the Assessor of the County of Los Angeles, California, of the Dealership Site due to the Expansion Project. "Tax Increment" means the assessment, levy and distribution of taxes regarding property to the Agency authorized by Article XVI, Section 16 of the California Constitution and implemented through California Health & Safety Code Sections 33670 et seq., as such law now exists or may be amended, superseded, re- numbered or replaced, in the future and any In -Lieu Tax Increment Payment actually made. 4. INTEREST RATE. Interest shall accrue annually on the outstanding balance of any deficiency debt service amount, until such amount is paid in full, at the rate of six percent (6 %) per annum. Any interest on this Promissory Note shall be computed on a 365/360 simple interest basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. 5. PREPAYMENT. Borrower may pay without penalty all or a portion of the principal and accrued and unpaid interesting owing under this Promissory Note earlier than it is due. 6. LATE CHARGE. If a scheduled debt service payment or any portion of any such payment is ten (10) calendar days or more late, Borrower will also be charged (in addition to the annual installment amount past due) five percent (5 %) of the portion of the annual installment payment amount as a late charge. 7. DEFAULT. An "Event of Default" under this Promissory Note shall have occurred, if any of the following events occurs: a. The Borrower fails to make any payment when due under this Promissory Note. b. The Borrower fails to perform any of the non - monetary covenants and conditions of this Promissory Note or Section 6.3 or Section 6.4 of the Agreement, and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Borrower from the Agency or the expiration of an applicable shorter cure period set forth in this Promissory Note or the Agreement; provided, however, that for so long as the Borrower is satisfying its obligations to cause the generation of both the Minimum Assessed Valuation and the Minimum Annual Sales Tax Amount or, alternatively, paying both the In- Lieu Tax Increment Payment and the In -Lieu Minimum Sales Tax Payment, no default under this Promissory Note shall occur by virtue of any failure on the part of the Borrower to satisfy any of the other covenants of either Section 6.3 or Section 6.4. RVPUB\DGW \686849.1 0 0 C. The determination by the Agency that any representation, warranty, disclosure or statement of the Borrower contained in the Agreement, this Promissory Note, the Deed of Trust or in any other writing delivered to the Agency in connection with the Agreement, this Promissory Note or the Deed of Trust, was incomplete, untrue or misleading in any material respect as of the date made. d. The Borrower fails to make any payment or deposit of funds required under this Promissory Note or Section 6.3 or Section 6.4 of the Agreement, following seven (7) days' written notice to the Borrower from the Agency of such failure or the Agency has given such notice to the Borrower more than three (3) times between the date of this Promissory Note and the Maturity Date. C. Any Event of Default under the Deed of Trust f. There occurs any event of dissolution, reorganization or termination of the Borrower that adversely and materially affects the operation or value of the Existing Site, the Expansion Site, the Expansion Project, the Dealership or the Dealership Site or any portion of any of the foregoing, and such event is not corrected within five (5) days following written notice of such event from the Agency to the Borrower. g. The Borrower sells, transfers, hypothecates, encumbers or assigns any of its interest in the Existing Site, the Expansion Site, the Expansion Project, the Dealership or the Dealership Site or any portion of any of the foregoing„ or violates any provision of Section 6.6 of the Agreement, whether voluntarily or involuntarily or by operation of law, prior to payment in full of all principal and accrued interest under this Promissory Note. h. The Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect the Borrower's ability to repay this Promissory Note. i. Any creditor attempts to take or sell any of the Borrower's property on or in which the Agency has a lien or security interest securing repayment or performance of the Borrower's obligations under Section 6.3 or Section 6.4 of the Agreement, this Promissory Note or the Deed of Trust. j. A material adverse change occurs in the Borrower's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by this Promissory Note is materially impaired. k. The Borrower becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is referred to in this Promissory Note as the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy .Code, or shall be the defendant or subject of any 4 RVPUB \DGM686849.1 0 0 involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing of such petition, or shall make an assignment for the benefit of creditors. 1. Any court (or similar tribunal) having jurisdiction over either the Borrower or any of the property of the Borrower shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of the Borrower or of any of the property of the Borrower or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code. m. The entry of any final judgment or arbitration award against the Borrower that is not paid or stayed pending appeal, or the sequestration or attachment of or any levy or execution upon (i) any of the collateral provided by the Borrower as security for performance under this Promissory Note, or (iii) any significant portion of the other assets of the Borrower, that is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets. n. The Borrower shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up. o. The Borrower suspends or terminates its legal status or is not authorized by the Secretary of State of the State of California to transact business in California. 8. RIGHTS OF THE HOLDER. Upon default by the Borrower under this Promissory Note, the Agency may exercise any of its rights provided under the Agreement or the Agency Deed of Trust, including, without limitation, the declaration by the Agency or the Holder in due course of this Promissory Note that the entire unpaid principal balance of this Promissory Note and all accrued and unpaid interest is immediately due and payable, without notice. Upon the failure of the Borrower to pay all amounts declared due pursuant to this paragraph entitled "RIGHTS OF THE HOLDER," including failure to pay at the Maturity Date, the Holder, at its option, may also, if permitted under applicable law, increase the interest rate on this Promissory Note for interest that accrues after the date such amount is declared due, to the rate of ten percent (10 %) per annum. The Holder may hire or pay someone else to help collect this Promissory Note, if the Borrower does not pay. The Borrower will pay the Holder the amount of any and all such collection related expenses, including without limitation, subject to any limits under applicable law, the Holder's reasonable attorneys' fees, whether or not there is a lawsuit, including, without limitation, reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any post judgment collection services. The Borrower also will pay any court costs, in addition to all other sums provided by law. This Promissory Note has been delivered to the Holder and accepted by the Holder in the County of Los Angeles, State of California. If there is a lawsuit arising under this Promissory Note, the Superior Court of the State of California in the County of Los Angeles shall have jurisdiction over such lawsuit. This Promissory Note shall be governed by and construed in accordance with the laws of the State of California, without regards to its conflicts of law principles. RVPUB \DGw\686849.1 9. COLLATERAL. The Borrower acknowledges this Promissory Note is secured by the Agency Deed of Trust of the same date as this Promissory Note that shall be recorded by the Agency in the records of the Recorder of the County of Los Angeles, California, encumbering certain real property described in the Agreement as the "Expansion Site" and/or the "Expansion Project ". 10. LINE OF CREDIT. This Promissory Note evidences a non - revolving line of credit in favor of the Borrower. The accrued and unpaid interest and principal balance owing on this Promissory Note at any time may be evidenced by an unpaid balance acknowledgment of the Agency on this Promissory Note (each referred to as an "Annex to Promissory Note ") and/or by the internal accounting records of the Agency regarding the Agreement. 11. GENERAL PROVISIONS. a. The Holder may delay or forego enforcing any of its rights or remedies under this Promissory Note without losing them. Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, each waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly stated in writing, no person who signs this Promissory Note, shall be released from liability. All such persons agree that the Holder may renew or extend (repeatedly and for any length of time) this Promissory Note, or release any person, or collateral; or impair, fail to realize upon or perfect the Holder's security interest in the collateral; and take any other action deemed necessary by the Holder, in its sole discretion, without the consent of or notice to anyone. All such persons also agree that the Holder may modify this Promissory Note and/or the Agreement, without the consent of or notice to anyone other than the person with whom the modification is made. b. All defined words, terms or phrases indicated by initial capital letters used in this Promissory Note and not specifically defined in this Promissory Note shall have the meanings ascribed to them in the Agreement. c. Payment or prepayment of this Promissory Note shall not relieve Borrower of the covenants, conditions and obligations set forth in the Agreement, except the obligation to pay all amounts due under this Promissory Note. d. It is the intention of Borrower and Holder to conform strictly to the usury laws now or hereafter enforced in the State of California, and any interest payable under this Promissory Note or any of the other documents to be executed by Borrower in connection with the loan or advance of funds made or to be made under this Promissory Note, shall be subject to reduction to the amount not in excess of the maximum non - usurious amount allowed under the usury laws of the State of California as now or hereafter construed by the courts having jurisdiction over such matters. In the event the maturity of this Promissory Note is no RVPUB \DG W\686849.1 0 0 accelerated by reason of any provision of this Promissory Note or by reason of any election by Holder resulting from any default (or an event permitting acceleration), under this Promissory Note or any other instrument given to secure the payment of this Promissory Note, or otherwise, then accrued interest may never include more than the maximum amount permitted by law, computed from the date of this Promissory Note until payment, and any interest in excess of the maximum amount permitted by law shall be canceled automatically and, if theretofore paid, shall at the option of the Holder either be credited against the principal amount of this Promissory Note or, if all principal has been repaid, then the excess shall be rebated to Borrower. The aggregate of all interest (whether designated as interest, service charges, points, or otherwise) contracted for, chargeable, or receivable under this Promissory Note or any other document executed in connection with this Promissory Note shall under no circumstances exceed the maximum legal rate upon the unpaid principal balance of this Promissory Note remaining unpaid from time to time. In the event such interest does exceed the maximum legal rate, such excess shall be canceled automatically and, if theretofore paid, rebated to the Borrower or credited on the principal amount of this Promissory Note, or if this Promissory Note has been repaid in full, then such excess shall be rebated to Borrower. e. The unenforceability or invalidity of any provision or provisions of this Promissory Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other person or circumstances, and all provisions of this Promissory Note, in all other respects, shall remain valid and enforceable. f. Borrower agrees to indemnify Holder and to hold Holder and Holder's successors and assigns harmless from and against any and all claims, demands, costs, liabilities and obligations of any kind or nature arising from any default under this Promissory Note, including, without limitation, all costs of collection, including attorneys' and expert witness fees and all cost of suit, in the event the unpaid principal sum of this Promissory Note or any interest accrued on this Promissory Note is not paid when due. g. The validity, interpretation and performance of this Promissory Note shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles. h. This Promissory Note may be amended or modified only in writing signed by the Holder and the Borrower. i. Time is of the essence of each provision this Promissory Note. j. BORROWER'S OBLIGATIONS UNDER THIS PROMISSORY NOTE MAY NOT BE ASSIGNED OR OTHERWISE TRANSFERRED OR ASSUMED, WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDER, WHICH 7 RVPUB\DGW \686849.1 MAY BE GIVEN OR WITHHELD IN THE SOLE AND ,ABSOLUTE DISCRETION OF THE HOLDER. k. PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY OF THIS PROMISSORY NOTE. I To PAUL P. RUSNAK, As trustee of the Paul P. Rusnak Family Trust, dated November 14, 1988 /J� By: I u/fM Paul P. Rusnak 3 RVPUB \DGM686849.1 NORMA MENDOZA yL *COMALS1521543 SNuMi�uW COUNTY 7 My Comm. Esp. Ott 27,2008 E Ly'cl°'�- 144 .� f `cif �.: �� ..3... .. ...'.:4 ��.. :I•c" J .... . � y ....., m♦ . —�� ri9ina reevne n-e- i 01002 C ill q t goo _ Kq I 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT ( BY AND BETWEEN I REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, PAUL P.RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 AND ii RUSNAK/ARCADIA, A CALIFORNIA CORPORATION [Dated December 7, 2004, for reference purposes only] RVPUB \DGW\674424.7 Page -1- TABLE OF CONTENTS ARTICLE I PURPOSE OF AGREEMENT ......................................... ............................... 1 Section 1.1 The Purpose of this Agreement ............................. ............................... 1 Section 1.2 Owner Representation of No Relocation of Automobile Dealership; Indemnity and Defense of the City and the Agency......... 2 Section 1.3 Restrictions Against Change in Ownership, Management and Control of Owner; Restrictions Against Transfer of Certain PropertyInterests .................................................. ............................... 3 Section 1.4 Operator. Subordination to Interests of Agency; Priority of AgencyDeed of Trust ........................................... ............................... 4 ARTICLE Il DEFINITIONS .................................................................. ............................... 4 Section2.1 Definitions ............................................................. ............................... 4 ARTICLE III EXPANSION SITE ASSEMBLY .................................. ............................... 13 Section 3.1 Negotiations with Parcel Owners ........................ ............................... 13 Section 3.2 Eminent Domain Proceedings ............................. ............................... 13 Section3.3 Title Approval ..................................................... ............................... 14 Section 3.4 Owner Investigations .......................................... ............................... 15 Section 3.5 Conditions Precedent to Agency Expansion Site Assembly .............. 17 Section 3.6 Expansion Site Assembly Consultations ............ ............................... 18 Section 3.7 Schedule of Performance .................................... ............................... 19 Section 3.8 Payment of Expansion Site Acquisition Costs .... ............................... 19 Section 3.9 Relocation Assistance ......................................... ............................... 21 ARTICLE IV PURCHASE AND SALE OF PARCELS BETWEEN AGENCY AND DEVELOPER; JOINT ESCROW INSTRUCTIONS OF AGENCY AND DEVELOPER TO ESCROW HOLDER .............. ............................... 22 Section 4.1 Agency /Owner Escrow ....................................... ............................... 22 Section 4.2 Opening of Agency /Owner Escrow .................... ............................... 22 Section 4.3 Parcel Reuse Price ............................................... ............................... 22 Section 4.4 Payment of Parcel Reuse Price and Owner Contribution .................. 23 Section 4.5 Owner's Escrow Deposits ................................... ............................... 23 Section 4.6 Agency's Escrow Deposits .................................. ............................... 23 Section 4.7 Agency /Owner Escrow Closing Procedure ........ ............................... 24 -1- TABLE OF CONTENTS (continued) Page Section 4.8 Close of Agency /Owner Escrow ......................... ............................... 25 Section 4.9 Conditions to Close of Agency /Owner Escrow .. ............................... 25 Section 4.10 Recordation and Distribution of Documents ...... ............................... 26 Section 4.11 Report to IRS ...................................................... ............................... 26 Section 4.12 Agency /Owner Escrow Closing Costs ................ ............................... 27 Section 4.13 Agency /Owner Escrow Cancellation and Title Charges ................... 27 Section 4.14 Termination ......................................................... ............................... 27 Section4.15 Possession ............................................................. .............................28 Section 4.16 Parcels Sold " As- Is." ........................................... ............................... 28 Section 4.17 Escrow Holder Authorized to Act Pursuant to Agency/Parcel Owner Escrows and Agency /Owner Escrow ...... ............................... 28 ARTICLE V THE EXPANSION PROJECT ....................................... ............................... 28 Section 5.1 Owner Covenant to Undertake Expansion Project ............................ 28 Section 5.2 Expansion Project Subject to City Regulatory Approval .................. 29 Section 5.3 Owner Changes to Expansion Project Plans and Specifications During Course of Construction ........................... ............................... 30 Section 5.4 Construction Start and Completion of Expansion Project ................. 31 Section 5.5 Compliance with Laws ....................................... ............................... 31 Section 5.6 Expansion Project Fees, Costs and Charges to be Paid by Owner.................................................................. ............................... 31 Section 5.7 Owner Attendance at Agency Meetings ............. ............................... 32 Section 5.8 Agency Right to Inspect Expansion Project and Expansion Site ...... 32 ARTICLE VI SPECIAL REDEVELOPMENT COVENANTS OF THE DEVELOPER................................................................. ............................... 33 Section 6.1 _ General Covenants .............................................. ............................... 33 Section6.2 Insurance ............................................................. ............................... 33 Section 6.3 Minimum Assessed Valuation of the Dealership Site ....................... 36 Section 6.4 Dealership Minimum Annual Sales and Use Tax and Continuous Operation Covenants ....................... ............................... 38 Section 6.5 Operator Incentive .............................................. ............................... 39 Section 6.6 No Transfer Prior to Repayment of Agency Loan ............................. 41 Section 6.7 Owner and Operator Covenant to Defend this Agreement ................ 41 -ii- TABLE OF CONTENTS (continued) Page Section 6.8 Owner and Operator Indemnification of the Agency ........................ 42 Section 6.9 Notice of Agreement ........................................... ............................... 42 Section 6.10 Environmental Indemnity of the Agency by the Owner and the Operator.............................................................. ............................... 42 Section 6.11 Payment of Prevailing Wage .............................. ............................... 44 Section 6.12 Covenant to Maintain Dealership Site on Tax Rolls for 10 Years................................................................... ............................... 44 Section 6.13 Maintenance Condition of the Dealership Site ... ............................... 45 Section 6.14 Obligation to Refrain from Discrimination ......... ............................... 47 Section 6.15 Form of Non - discrimination and Non - segregation Clauses .............. 47 Section 6.16 Survival of Special Redevelopment Covenants .. ............................... 48 ARTICLE VII POST - CLOSING ACTIONS OF THE AGENCY AND THE DEVELOPER................................................................. ............................... 48 Section 7.1 Vacation of Morlan Place ................................... ............................... 48 Section 7.2 Merger of Parcels ................................................ ............................... 48 Section 7.3 Conditional Use Permit ....................................... ............................... 49 Section 7.4 Certificate of Completion ................................... ............................... 49 ARTICLE VIII DEVELOPER FINANCING OF EXPANSION SITE ACQUISITION AND EXPANSION PROJECT ...................................... ............................... 50 Section 8.1 Agency Right to Approve Lenders ..................... ............................... 50 Section 8.2 Recordation of Construction Loan ...................... ............................... 50 Section 8.3 Only Permitted Security Interests Allowed ........ ............................... 50 Section 8.4 Notification of Recording of Security Interest .... ............................... 51 Section 8.5 Rights of Agency ................................................ ............................... 51 Section 8.6 Rights of Lender ................................................. ............................... 51 Section 8.7 Subordination of Agency Deed of Trust ............. ............................... 52 ARTICLE IX REPRESENTATIONS AND WARRANTIES ............... ............................... 53 Section 9.1 Warranties and Representations by the Owner ... ............................... 53 Section 9.2 Warranties and Representations by the Operator ............................... 53 ARTICLE X DEFAULTS, REMEDIES AND TERMINATION ........ ............................... 54 Section 10.1 Defaults - General ............................................... ............................... 54 -iii- TABLE OF CONTENTS (continued) Page Section 10.2 Events of Default ................................................ ............................... 54 Section 10.3 Agency Rights to Accelerate Obligations ........... ............................... 57 Section 10.4 Agency Termination Rights Prior to the Close of the First Phase of Agency /Owner Escrow ........................ ............................... 58 Section 10.5 Agency Power of Termination Regarding Dealership Site ................ 58 Section 10.6 Legal Actions ...................................................... ............................... 61 Section 10.7 Rights and Remedies are Cumulative ................. ............................... 62 ARTICLE XI GENERAL PROVISIONS ............................................. ............................... 62 Section 11.1 Notices, Demands and Communications Between the Parties .......... 62 Section 11.2 Conflict of Interest .............................................. ............................... 63 Section 11.3 Warranty Against Payment of Consideration for Agreement............ 63 Section 11.4 Non - liability of Agency Officials and Employees ............................. 63 Section 11.5 Unavoidable Delay: Extension of Time for Performance .................. 64 Section 11.6 Inspection of Books and Records ....................... ............................... 64 Section11.7 Approvals ............................................................ ............................... 64 Section 11.8 Real Estate Commissions .................................... ............................... 64 Section 11.9 Car and Van Pools .............................................. ............................... 64 Section 11.10 Attorneys' Fees .................................................... ............................... 64 Section 11.11 Binding on Successors and Assigns .................... ............................... 65 Section 11.12 Entire Agreement ................................................ ............................... 65 Section 11.13 Execution of this Agreement .............................. ............................... 65 Section 11.14 Survival of Indemnity Obligations ...................... ............................... 65 EXHIBIT "A" - LEGAL DESCRIPTIONS OF THE PARCELS EXHIBIT "B" - SCHEDULE OF PERFORMANCE EXHIBIT "C" - SCOPE OF DEVELOPMENT EXHIBIT "D" - FORM OF LETTER OF CREDIT EXHIBIT "E" - FORM OF NOTICE OF AGREEMENT EXHIBIT "F" - FORM OF FIRPTA AFFIDAVIT EXHIBIT "G" - FORM OF AGENCY GRANT DEED EXHIBIT "H" - FORM OF CERTIFICATE OF COMPLETION EXHIBIT "I" - FORM OF AGENCY DEED OF TRUST EXHIBIT "J" - FORM OF PROMISSORY NOTE EXHIBIT "K" - LEGAL DESCRIPTION OF EXISTING SITE -iv- REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (Rusnak/Arcadia) THIS 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (Rusnak/Arcadia) (this "Agreement ") is entered into as of December 7, 2004, for reference purposes only, by and between the REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic, exercising governmental functions and powers and organized and existing pursuant to Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Sections 33000, et sue.) (the "Agency "), and PAUL P. RUSNAK, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Owner "), and RUSNAK/ARCADIA, a California corporation (the "Operator "). IN CONSIDERATION OF THE PROMISES SET FORTH IN THIS AGREEMENT, THE AGENCY, THE OWNER AND THE OPERATOR AGREE, AS FOLLOWS: ARTICLE I PURPOSE OF AGREEMENT Section 1.1 The Purpose of this Agreement. The Owner and the Operator desire to expand the existing new and used automobile dealership and automobile service center operated by the Operator and located at 55 West Huntington in the City of Arcadia, California, on land owned by the Owner (the "Dealership "). The Dealership is situated in the redevelopment project area of the Central Redevelopment Project of the Agency (the "Project Area "). Certain lands onto which the Dealership may be expanded, subject to the provisions of this Agreement, are also situated within the Project Area. The purpose of this Agreement is to implement the Redevelopment Plan for the Project Area by providing, as necessary, for the assembly of up to five (5) parcels of property in proximity to the existing Dealership (each -parcel is more particularly described in the legal descriptions attached to this Agreement as Exhibits "A -1" through "A -5" and, collectively, are referred to in this Agreement as the "Expansion Site," as further defined in Section 2.1.35) for sale to the Owner and development by the Owner of an expansion of the existing Dealership onto the Expansion Site. The parcels of land comprising the Expansion Site display a number of symptoms of blight and the Agency has determined that the redevelopment of the Expansion Site, in accordance with the terms of this Agreement, will assist the community in eliminating the conditions of blight on the Expansion Site and prevent the spread of conditions of blight into other areas of the community, including within the Project Area. The Expansion Project (as defined in Section 2.1.34) is in the vital and best interests of the City of Arcadia and the health, safety and welfare of its residents and is in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the Expansion Project is consistent with the Redevelopment Implementation Plan for the Project Area. 1 RVPOBTGW1674424.7 Section 1.2 Owner Representation of No Relocation of Automobile Dealership; Indemnity and Defense of the City and the Agency. 1.2.1 Neither the Agency, nor the Owner, nor the Operator believe that Health and Safety Code Section 33426.7 applies to the transactions contemplated in this Agreement. Additionally, the Owner and the Operator represent to the Agency and the City that, although the Owner and the Operator own and operate other vehicle dealer locations in Southern California, no vehicle dealer business will be relocated, as that term is defined in Health and Safety Code Section 33426.7, from another location and, thereafter, conducted on the Expansion Site, following completion of the Expansion Project. The Owner represents to the Agency that the Expansion Project is an expansion of the existing Dealership within the City and not a relocation of any vehicle dealer business previously conducted at another location. 1.2.2 The Owner and the Operator agree and acknowledge that the Agency entered into this Agreement in material reliance on the representations of the Owner and the Operator set forth in Section 1.2.1. The Owner and the Operator agree, jointly and severally, to indemnify, defend (with counsel reasonably acceptable to the Agency and the City) and hold harmless the Agency and the City, and their respective elected officials, employees, consultants and agents against any liability, damages, claims, proceedings or actions alleging or asserting that the Agency or the City in any way assisted the Owner and the Operator to relocate a vehicle dealer from another location into the City. The lack of insurance coverage or any failure of an insurance carrier to pay shall not relieve the Owner or the Operator of its obligations under this Section 1.2.2. 1.2.3 Additionally, within sixty (60) days following the Effective Date, the Owner shall deliver to the Agency, as an express condition precedent to any obligation of the Agency under this Agreement, an unconditional, irrevocable, standby Letter of Credit in an original principal sum of Four Million Dollars ($4,000,000), in the form attached to this Agreement as Exhibit "E," issued by a federally chartered bank, whose debt is rated not less than "A" by Moody's Investor's Services or comparably rated by another nationally recognized debt rating service or such other issuer approved by the Agency, in the Agency's sole and absolute discretion, naming the Agency as the beneficiary. The Letter of Credit shall be payable in a single draw or one or more partial draws, upon presentation by the Agency of a sight draft. Each draw shall be payable within two (2) days of presentation of the sight draft. The Letter of Credit shall be for a term of not less than twelve (12) months from the Effective Date. The Letter of Credit shall be automatically renewed for additional consecutive twelve (12) month periods, unless drawn upon in full by the Agency, released by the Agency or the issuing bank gives written notice to the Agency, at least one hundred twenty (120) days prior to the expiration date stated in the Letter of Credit, that the bank will not renew the Letter of Credit. The Letter of Credit shall require its issuing bank to notify the Agency, not later than one hundred twenty (120) days prior to the stated expiration date of the Letter of Credit, as to the new expiration date of the Letter of Credit, if the Letter of Credit will be renewed, or of the issuing bank's intention not to renew the Letter of Credit. The Letter of Credit shall permit a draw in full prior to the expiration or termination of the Letter of Credit, if the Letter of Credit has not been replaced or renewed. The Letter of Credit shall provide that draws may be made at a location in either the City of Arcadia, California, or the County of Los Angeles, California, or such other location approved by the Agency, in the Agency's sole and absolute discretion. The Owner further 2 RVPUB\DGW\674424.7 agrees that, if the Owner becomes insolvent or the subject of any action under the bankruptcy laws of the United States or any state, the Agency may immediately draw on the Letter of Credit, without notice to the Owner or any right to notice or a cure period in favor of the Owner as may arise under this Agreement or under other applicable law. The Agency may draw on the Letter of Credit to compensate the Agency for any loss, damage or expense incurred by or imposed upon the Agency or the City arising from the Owner's failure, refusal or delay in satisfying the Owner's obligations under Section 1.2.2 or the Owner's failure, refusal or delay in paying any Parcel Reuse Price or other Expansion Site Acquisition Cost incurred by the Agency that the Owner is obligated to pay under the terms of this Agreement or any loss, damage or expense incurred by or imposed upon the Agency arising from the Owner's default under this Agreement, including, without limitation, the Owner's failure to make any payments required under Section 6.3 or Section 6.4. 1.2.4 Maintenance and Release of Letter of Credit. Subject to the other terms and conditions of this Agreement, the Owner shall maintain the Letter of Credit until the letter of Credit is released by the Agency. The Agency shall release the Letter of Credit upon the Agency's issuance of a Certificate of Completion for the Expansion Project, pursuant to Section 7.4. Section 1.3 Restrictions Against Change in Ownership, Management and Control of Owner; Restrictions Against Transfer of Certain Property Interests. 1.3.1 The qualifications and identity of the Owner and the Operator are of particular concern to the Agency. The Agency would not enter into this Agreement, were it not for the qualifications and identity of the Owner and the Operator. The Owner and the Operator shall promptly notify the Agency in writing of any and all changes whatsoever in.the identity of the business entities or individuals either comprising or in control of the Owner and the Operator, as well as any and all changes in the interest or the degree of control of the Owner and the Operator by any such party, of which information the Owner and the Operator or any of their partners, members or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency, prior to the issuance of a Certificate of Completion with respect to the Expansion Project, if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Owner and the Operator (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency, prior to the time of such change, or the Agency may seek other appropriate relief; provided, however, that (i) the Agency shall first notify the Owner and the Operator in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Owner and the Operator shall have thirty (30) calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Owner and the Operator and submit evidence of the initiation and satisfactory completion of such cure to the Agency, in a form and substance reasonably satisfactory to the Agency. 1.3.2 Except for any Permitted Security Interest, prior to the issuance of a Certificate of Completion, neither the Owner or the Operator shall sell, assign, convey, create any trust estate with respect to or otherwise transfer any of its interests in this Agreement, the Existing Site, the Expansion Site or the Expansion Project, without the prior written approval of 3 RVPUB\DGW\674424.7 the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. The Owner and the Operator recognize that the qualifications and identity of each of them are of particular concern to the Agency and that a sale, assignment, conveyance, creation of a trust estate with respect to or other transfer of any of the Owner's and Operator's interests in this Agreement, the Expansion Site and/or the Expansion Project is for all practical purposes a transfer or disposition of the responsibilities of the Owner or Operator with respect to this Agreement, the Existing Site, the Expansion Site or the Expansion Project and, therefore, are only allowed in accordance with the provisions of this Section 1.3. Notwithstanding the foregoing provisions of this Section 1.3.2, inclusion of the Existing Site and/or the Expansion Site in the trust estate of the Paul P. Rusnak Family Trust Dated November 14, 1988, is expressly authorized under this Agreement. Section 1.4 Operator Subordination to Interests of Agency; Priority of Agency Deed of Trust. 1.4.1 The Operator hereby subordinates any and all interests of the Operator in the Existing Site, the Expansion Site and/or the Dealership Site, or any portion of any such site, whether in the form of leasehold, security, easement or otherwise, to the interests of the Agency in the Existing Site, the Expansion Site and /or the Dealership Site created by this Agreement and/or the Agency Deed of Trust. 1.4.2 The Owner and the Operator each agree that the Agency Deed of Trust, when recorded against the Existing Site, the Expansion Site and/or the Dealership Site or any portion of any such site, shall only be subordinate in priority or interest, if subordinate, to any Permitted Security Interests. ARTICLE II DEFINITIONS Section 2.1 Definitions. In addition to the definitions ascribed to certain words, phrases or terms in the Preamble or Recitals of this Agreement, the following words, phrases or terms shall have the following definitions: 2.1.1 "Agency Loan" means and refers to a non - revolving line of credit loan from the Agency to the Owner in a maximum amount not to exceed Eight Million Dollars ($8,000,000) for the sole purpose of payment of Expansion Site Acquisition Costs, pursuant to the terms of the Promissory Note. 2.1.2 "Agency Deed of Trust" means and refers to one or more deeds of trust in the form of Exhibit "I" to this Agreement granted by the Owner for the benefit of the Agency and recorded against the Existing Site, the Expansion Site and/or the Dealership Site,. in whole or in part, in the official records of the Recorder of the County of Los Angeles, California, securing the Owner's obligations to the Agency pursuant to the Promissory Note and Section 6.3 and Section 6.4, inclusive, of this Agreement. 4 RVPUB \DGW \674424.7 2.1.3 "Agency Grant Deed" means and refers to a grant deed in the form of Exhibit "H" to this Agreement, conveying all of the Agency's interest in a Parcel or Parcels to the Owner. 2.1.4 "Agency /Owner Escrow" means and refers to an escrow established with Escrow Holder for the exchange of monies and documents, as described in ARTICLE IV of this Agreement, for the Agency to sell Parcels acquired by the Agency to the Owner and the Owner to purchase Parcels from the Agency in Phases. 2.1.5 "Agency /Owner Escrow Closing Date" means and refers to the first to occur of (1) the Owner has received a conveyance of title to each of the Parcels from the Agency (whether by Agency Grant Deed or Order for Pre - Judgment Possession) or (2) the date on which the Agency informs the Owner in writing that the Agency will not be acquiring title to any more Parcels, pursuant to this Agreement. 2.1.6 "Agency /Parcel Owner Escrow" means and refers to an escrow established with Escrow Holder to consummate a transaction described in a Parcel Acquisition Agreement between a Parcel Owner and the Agency for the Parcel Owner to sell its Parcel to the Agency and the Agency to purchase the Parcel from the Parcel Owner. 2.1.7 "Agency's Title Notice Response" means and refers to the written response of the Agency to the Owner's Title Notice, in which the Agency (i) either elects to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Owner's Title Notice or (ii) elects not to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Owner's Title Notice. 2.1.8 "ALTA Excess Costs" means and refers to any premium amount required to be paid to obtain the Title Policy from the Title Company in excess of the amount of the CLTA Premium Costs. 2.1.9 "ALTA Survey" means and refers to a survey of a Parcel conducted in accordance with American Land Title Association standards for a land survey that is a pre- requisite to issuance of the Title Policy by the Title Company. 2.1.10 "BOE" means and refers to the California State Board of Equalization or its successor in function. 2.1.11 "CEQA" means and refers to the California Environmental Quality Act, Public Resources Code Sections 21000, et M. 2.1.12 "Certificate of Completion" means and refers to the written certification of the Agency that the Expansion Project is complete in compliance with the tenns and conditions of this Agreement, in the form of Exhibit "I" to this Agreement. 2.1.13 "City" means and refers to the City of Arcadia, California. 5 RVPUB \DGW \674424.7 2.1.14 "City Attorney" means and refers to the City Attorney for the City of Arcadia, California. 2.1.15 "City Requirements" shall have the meaning ascribed to the term in Section 5.2.1. 2.1.16 "Close of Escrow" means and refers to the recording of the Agency Grant Deed in the Official Records of the Recorder of the County of Los Angeles, California, and completion of each of the actions set forth in Article rV by Escrow Holder regarding each Phase of the Agency /Owner Escrow for the Agency to sell a Parcel or Parcels to the Owner. 2.1.17 "CLTA Premium Costs" means and refers to the amount of the Title Company's premium charge for a standard coverage CLTA owner's policy of title insurance insuring fee title to a Parcel in the Owner with coverage in the full amount of the Parcel Reuse Price or the equivalent ALTA owner's policy of title insurance, with regional exceptions. 2.1.18 "Completion Date" shall have the meaning ascribed to the term in Section 5.4. 2.1.19 "Condemnation Parcel Due Diligence Period" shall have the meaning ascribed to the term in Section 3.4.2. 2.1.20 "Court" means and refers to the branch, division, district or other subdivision of the Superior Court of the State of California in and for the County of Los Angeles, California, in which any action in eminent domain commenced by the Agency to acquire a Parcel is pending, if any. 2.1.21 "Dealership Sales Tax" means and refers to an amount equal to one percent (1%) of the gross receipts of the Operator from the sale or lease of all tangible personal property from the Dealership Site that are subject to local sales and use tax pursuant to Revenue and Taxation Code Sections 7200, et seq. 2.1.22 "Dealership Operating Year" means and refers, individually, to each of ten (10) consecutive twelve (12) month periods following the Opening Date, with the first Dealership Operating Year commencing on the first day of the first calendar quarter following the Opening Date, with each such twelve (12) month period referred to in this Agreement in consecutive numerical order as Dealership Operating Year 1, Dealership Operating Year 2, etc. 2.1.23 Section 7.2. 2.1.24 Section 11.13. 2.1.25 in Section 6.10. RVPUB\DGW \674424.7 "Dealership Site" shall have the meaning ascribed to the term in "Effective Date" shall have the meaning ascribed to the term in "Environmental Losses" shall have the meaning ascribed to the term 6 2.1.26 "Environmental Matters" shall have the meaning ascribed to the term in Section 6.10. 2.1.27 "Escrow Closing Date" shall have the meaning ascribed to the term in Section 4.8. 2.1.28 "Escrow Holder" means and refers to United Title Company, 15821 Ventura Boulevard, Suite 160, Encino, California 91436. 2.1.29 "Escrow Opening Date" shall have the meaning ascribed to the term in Section 4.2. 2.1.30 "Escrow Transfer Parcel Due Diligence Period" shall have the meaning ascribed to the term in Section 3.4.1. 2.1.31 "Event of Default" shall have the meaning ascribed to the term in Section 10.2. 2.1.32 "Executive Director" means and refers to the Executive Director of the Agency or his or her designee or successor in function. 2.1.33 "Existing Site" means and refers to that certain real property on which the Dealership is located prior to the Effective Date, as more specifically described in the legal description attached to this Agreement as Exhibit "K." 2.1.34 "Expansion Project" means and refers to those certain private, commercial improvements that the Owner proposes to construct on the Expansion Site, including all required or associated on -site and off -site improvements, all hardscape and all landscaping, all as specifically described in the Scope of Development, and to be developed in accordance with plans and specifications approved by the City and any conditions imposed by the City in its consideration of the Owner's development application related to the Expansion Project. Alternatively, if the Agency acquires all of the Parcels comprising one Phase, but not all of the Parcels comprising the other Phase, the tern "Expansion Project" shall mean and refer to those certain private, commercial improvements that the Owner proposes to construct on the Parcels in the complete Phase, including all required or associated on -site and off -site improvements, all hardscape and all landscaping, pursuant to the provisions of Section 5.1.1, including the prior approval of the Agency, and to be developed in accordance with plans and specifications approved by the City and any conditions imposed by the City in its consideration of the Owner's development application related to such improvements. 2.1.35 "Expansion Site" means and refers to approximately 3.6 acres of land, more or less, in the City, consisting of the five (5) Parcels specifically described in Exhibits "A -1" through "A -5 ". 2.1.36 "Expansion Site Assembly Consultation" shall have the meaning ascribed to the term in Section 3.6. 7 RVPUB\DGW\674424.7 2.1.37 "Expansion Site Acquisition Costs" means and refers to the sum of all payments made by the Agency towards Parcel Purchase Prices, relocation assistance benefits for occupants of Parcels, just compensation to occupants of Parcels and Parcel Owners, for furniture, fixtures, equipment, moveables, inventory and goodwill, whether negotiated or pursuant to an order of a Court in an eminent domain proceeding to acquire a Parcel, payments to obtain waivers of claims to any such compensation or benefits, replacement costs, damages awarded against the Agency in actions for ancillary compensation or damages related to the Agency's acquisition of a Parcel or Parcels through an eminent domain proceeding, including, but not limited to damages for inverse condemnation or pre- condemnation conduct of the Agency, damages or the expense of other performance obligations arising from actions to obtain or retain possession or title to a Parcel or Parcels, reasonable attorney fees related to any of the foregoing or related to this Agreement, expert witness fees of the Agency, trial costs and expenses, interest and other sums payable by the Agency pursuant to an order of a court in any proceeding or action referred to in this Section 2.1.37 or pursuant to statute, all costs, fees and expenses payable by the Agency in the event of an abandonment or dismissal of any eminent domain proceeding regarding any Parcel, any costs and expenses related to cancellation of an Agency/Parcel Owner Escrow due to the Owner's refusal to accept a conveyance of a Parcel and any payments made by the Agency to third -party consultants for appraisals, relocation services, legal services and other services relative to performance of this Agreement. 2.1.38 "Expansion Site Reuse Appraisal" means and refers to the final appraisal report of an appraiser selected and retained by the Agency, in the Agency's sole discretion, regarding the reuse value of the Expansion Site. 2.1.39 "Expansion Tax Increment Base Year Value" means and refers to the aggregate assessed valuation of the Parcels comprising the Dealership Site for ad valorem property taxation purposes as of the January 1 lien date for the tax year of the County of Los Angeles, California; in which the Effective Date occurs. 2.1.40 "FIRPTA Affidavit" means and refers to an affidavit complying with Section 1445 of the United States Internal Revenue Code substantially in the form of Exhibit "G" to this Agreement. 2.1.41 "Hazardous Substances" means and refers to, without limitation, substances defined as "hazardous substances," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Toxic Substances Control Act ( "TSCA ") [15 USC Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor authority, as hazardous substances [40 CFR Part 302]; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code or, as "hazardous substances" in Section 25316 of the California. Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives, 0 RVPUB \DGw\674424.7 radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317. 2.1.42 "In -Lieu Tax Increment Payment" shall have the meaning ascribed to the term in Section 6.3.2. 2.1.43 "In -Lieu Minimum Sales Tax Payment" shall have the meaning ascribed to the term in Section 6.4.1. 2.1.44 "Lender" means and refers to the entity or entities that provide a Loan and may hold a Permitted Security Interest in the Existing Site, the Expansion Site or the Dealership Site or any portion of any such site. 2.1.45 "Letter of Credit" means and refers to the irrevocable standby letter of credit described and required in Section 1.2.3, obtained by the Owner for the benefit of the Agency to secure the Owner's performance of its obligations under this Agreement. 2.1.46 "Loan" or "Loans" means and refers to the loan or loans, if any, that the Owner shall obtain to be used and applied solely for the acquisition of the Expansion Site, the construction of the Expansion Project or, thereafter, the permanent financing of the Expansion Project, all in an aggregate amount (inclusive of principal, points, fees and other initial or later charges, other than interest over the term of the loan) not to exceed the lesser of (i) Twenty -Five Million Dollars ($25,000,000), or (ii) the maximum amount that, when added to the amounts of all other obligations secured by liens upon the Existing Site and the Expansion Site and, eventually, the Dealership Site, will not cause the total of all amounts secured by liens upon the Existing Site and the Expansion Site and, eventually, the Dealership Site to exceed eighty percent (80 %) of. (y) during the period of construction and installation of the Expansion Project, the fair market value of the Dealership Site upon issuance of a Certificate of Occupancy by the City for the completed Expansion Project, as determined by the primary Construction Lender, and (z) following completion of the Expansion Project, the then current fair market value of the Dealership Site. Any Loan shall be obtained by the Owner from a financing source that is reasonably acceptable to the Agency. 2.1.47 "Loan Documents" means and refers to the various documents and instruments by and between the Owner and any Lender that evidence a Loan and the security for repayment of such Loan. 2.1.48 "Minimum Annual Sales Tax Amount" shall have the meaning ascribed to the term in Section 6.4.1. 2.1.49 "Minimum Assessed Valuation" shall have the meaning ascribed to the term in Section 6.3.2. 2.1.50 "Notice of Agreement" means and refers to a notice setting forth the material terms of this Agreement that run with the land of the Expansion Site or the Dealership Site and that shall be recorded in the official records of the Recorder of the County of Los Angeles, California, in the form attached to this Agreement as Exhibit "F." RVPUB\DGw\674424.7 2.1.51 "Notice of Cessation" has the same meaning as ascribed to the term in California Civil Code Section 3092. 2.1.52 "Notice of Completion" has the same meaning as ascribed to the term in California Civil Code Section 3093. 2.1.53 "Opening Date" shall have the meaning ascribed to the term in Section 6.4.3. 2.1.54 "Operator Incentive" shall have the meaning ascribed to the term in Section 6.5 2.1.55 "Owner Contribution" means and refers to the Owner's responsibility to pay the amount of all Expansion Site Acquisition Costs in excess of the amount of the maximum principal of the Agency Loan, including, without limitation, the Parcel Reuse Prices to be paid by the Owner. 2.1.56 "Owner Investigations" means and refers to the Owner's due diligence investigation of each Parcel to determine the suitability of such Parcel for development and operation of the Expansion Project, including, without limitation, investigations of the environmental and geotechnical suitability of such Parcel, as deemed appropriate in the sole and reasonable discretion of the Owner, and the preparation by the Owner of an ALTA Survey of each Parcel, pursuant to Section 3.4.6, all at the sole cost and expense of the Owner. 2.1.57 "Owner Investigation Conclusion Notice" means and refers to a written notice of the Owner delivered to the Agency, prior to the end of the Escrow Parcel Due Diligence Period or the Condemnation Parcel Due Diligence Period relating to a Parcel, as applicable, indicating the Owner's acceptance of the physical condition of the Parcel or indicating the Owner's rejection of the physical condition of the Parcel and refusal to accept a conveyance of fee title to the Parcel, describing in reasonable detail the actions that the Owner reasonably believes are indicated to allow the Owner to accept the physical condition of the Parcel. 2.1.58 "Owner's Title Notice" means and refers to a written notice from the Owner to the Agency indicating the Owner's acceptance of the state of the title to a Parcel, as described in the Preliminary Report, or Owner's objection to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Parcel, describing in suitable detail the actions that the Owner reasonably believes are indicated to cure or correct each of the Owner's objections. 2.1.59 "Owner's Title Notice Waiver" means and refers to a written notice from the Owner to the Agency waiving the Owner's previous objection in the Owner's Title Notice to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for a Parcel. 2.1.60 "Parcel" means and refers, individually, to each of the separate parcels of land legally described in Exhibits "A -1," "A -2," "A -3," "A -4," and "A -5" to this Agreement, respectively. 10 RVPUB\DGW\674424.7 2.1.61 "Parcel Acquisition Agreement" means and refers to a'written agreement between the Agency and a Parcel Owner for the Agency to purchase a Parcel from the Parcel Owner and for the Parcel Owner to sell the Parcel to the Agency. 2.1.62 "Parcel FMV Appraisal" means and refers to the final appraisal report of an appraiser selected and retained by the Agency, in the Agency's sole discretion, regarding the Fair Market Value of each Parcel. 2.1.63 "Parcel Owner" means and refers, collectively, to each person or legal entity in which fee title to a Parcel is vested. 2.1.64 "Parcel Purchase Price" means and refers to the sum of money and the value of other consideration to be paid by the Agency to a Parcel Owner to acquire fee title ownership to the Parcel owned by that Parcel Owner, whether pursuant to a Parcel Acquisition Agreement or a final order of a court in an eminent domain or other action commenced by or against the Agency relating to the Agency's acquisition of a Parcel. 2.1.65 "Parcel Reuse Price" means and refers to the value of a Parcel for redevelopment and reuse through construction, installation and operation of the Expansion Project, agreed to be twenty -eight dollars and fifty cents ($28.50) per square foot of land area, based upon the Expansion Site Reuse Appraisal, multiplied by the land area square footage of the Parcel, less any express credit against the Parcel Purchase Price received by the Agency from the Parcel Owner under the Parcel Acquisition Agreement for abatement or remediation of Hazardous Substances on the Parcel. 2.1.66 "Party" means and refers, individually, to either the Agency, the Owner or the Operator, as applicable. 2.1.67 "Parties" means and refers, collectively, to the Agency, the Owner and the Operator. 2.1.68 "PCO Statement" means and refers to a preliminary change of ownership statement required under California Revenue and Taxation Code Section 480.3. 2.1.69 "Permitted Exceptions" means and refers to (i) any and all items shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the Owner accepts, pursuant to Section 3.3; (ii) any exceptions from coverage under the proposed Title Policy resulting from the Owner's activities on the Parcel; (iii) non- delinquent property taxes and assessments; (iv) this Agreement; (v) the Agency Grant Deed; and (vi) all rights of occupancy of the Parcel. 2.1.70 "Permitted Security Interest" means and refers to a deed of trust or other security instrument required by the Lender(s) to be recorded as a lien against the Expansion Site or the Dealership Site or any portion of the Expansion Site or the Dealership Site to secure the Owner's performance under a Loan and any associated Loan Documents that are all reasonably acceptable to the Agency, not including any form of subordination, inter - creditor or similar agreement affecting the recording priority or enforceability of the Agency Deed of Trust. 11 - RVPUB\DGW\674424.7 2.1.71 "Phase" means and refers to the phased acquisition of the Expansion Site in two Phases, with one Phase consisting of the Parcels legally described in Exhibits "A -l" and "A -3" to this Agreement and one Phase consisting of the Parcels legally described in Exhibits "A -2," "A -4" and "A -5" to this Agreement, which Phases may be transferred to the Owner in any order, so long as all of the Parcels in the Phase are transferred, concurrently, except to the extent that the Owner acquires any Parcel in a Phase through negotiated purchase with a Parcel Owner, in which case such Parcel shall be eliminated from the applicable Phase. 2.1.72 "Preliminary Report" means and refers to a preliminary report issued by the Title Company in contemplation of the issuance of a Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report (or the best copies available) as exceptions to coverage under the proposed Title Policy. 2.1.73 "Project Area" means and refers to the Central Redevelopment Project Area of the Agency. 2.1.74 "Promissory Note" means and refers to a promissory note in the form attached to this Agreement as Exhibit "J" made by the Owner in favor of the Agency evidencing the indebtedness of the Owner to the Agency for all amounts advanced by the Agency under the Agency Loan, the repayment of which shall be secured by the Agency Deed of Trust. 2.1.75 "Property" shall have the meaning ascribed to the term in each and every Agency Deed of Trust. 2.1.76 "Record ", "recorded ", "recording" or "recordation" each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of Los Angeles, California. 2.1.77 "Sales Tax Base Year Value" means and refers to the first Seven Hundred Thousand Dollars ($700,000) in Dealership Sales Tax generated during each Dealership Operating Year. 2.1.78 . "Schedule of Performance" means and refers to the schedule for the performance of certain actions by the Agency or the Owner, pursuant to this Agreement, attached to this Agreement as Exhibit "B." 2.1.79 "Scope of Development" means and refers to the detailed description of the primary elements of the Expansion Project attached to this Agreement as Exhibit "C." 2.1.80 "Title Company" means and refers to United Title Company, 15821 Ventura Boulevard, Suite 160, Encino, California 91436, or, with reference to each Agency/Parcel Owner Escrow, another title insurance company mutually agreed upon by the Agency and a Parcel Owner in the applicable Parcel Acquisition Agreement. 2.1.81 "Title Policy" means and refers to an ALTA extended coverage owners' policy of title insurance issued by the Title Company, without regional exceptions, and with coverage: (1) in the case of an Agency/Parcel Owner Escrow, in the full amount of the 12 RVPUB \DGW\674424.7 2.1.71 "Phase" means and refers to the phased acquisition of the Expansion Site in two Phases, with one Phase consisting of the Parcels legally described in Exhibits "A -1" and "A -3" to this Agreement and one Phase consisting of the Parcels legally described in Exhibits "A -2," "A -4" and "A -5" to this Agreement, which Phases may be transferred to the Owner in any order, so long as all of the Parcels in the Phase are transferred, concurrently, except to the extent that the Owner acquires any Parcel in a Phase through negotiated purchase with a Parcel Owner, in which case such Parcel shall be eliminated from the applicable Phase. 2.1.72 "Preliminary Report" means and refers to a preliminary report issued by the Title Company in contemplation of the issuance of a Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report (or the best copies available) as exceptions to coverage under the proposed Title Policy. 2.1.73 "Project Area" means and refers to the Central Redevelopment Project Area of the Agency. 2.1.74 "Promissory Note" means and refers to a promissory note in the form attached to this Agreement as Exhibit "J" made by the Owner in favor of the Agency evidencing the indebtedness of the Owner to the Agency for all amounts advanced by the Agency under the Agency Loan, the repayment of which shall be secured by the Agency Deed of Trust. 2.1.75 "Property" shall have the meaning ascribed to the term in each and every Agency Deed of Trust. 2.1.76 "Record ", "recorded ", "recording" or "recordation" each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of Los Angeles, California. 2.1.77 "Sales Tax Base Year Value" means and refers to the first Seven Hundred Thousand Dollars ($700,000) in Dealership Sales Tax generated during each Dealership Operating Year. 2.1.78 - "Schedule of Performance" means and refers to the schedule for the performance of certain actions by the Agency or the Owner, pursuant to this Agreement, attached to this Agreement as Exhibit "B." 2.1.79 "Scope of Development" means and refers to the detailed description of the primary elements of the Expansion Project attached to this Agreement as Exhibit "C." 2.1.80 "Title Company" means and refers to United Title Company, 15821 Ventura Boulevard, Suite 160, Encino, California 91436, or, with reference to each Agency /Parcel Owner Escrow, another title insurance company mutually agreed upon by the Agency and a Parcel Owner in the applicable Parcel Acquisition Agreement. 2.1.81 "Title Policy" means and refers to an ALTA extended coverage owners' policy of title insurance issued by the Title Company, without regional exceptions, and with coverage: (1) in the case of an Agency/Parcel Owner Escrow, in the full amount of the 12 RVPUB\DGW\674424.7 Parcel Purchase Price insuring fee title to the Parcel vested in the Agency, or (2) in the case of each Phase of the Agency /Owner Escrow, in the full amount of the Parcel Reuse Price insuring fee title to the Parcel vested in the Owner. 2.1.82 "Unavoidable Delay" means and refers to any delays that are beyond the control of the Agency or the Owner, including delays caused by strikes, acts of God, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, fire or similar causes, and delays resulting from actions taken in or the duration of any eminent domain proceeding to acquire one or more Parcels, but excluding financial circumstances or events that may be resolved by the payment of money, except as otherwise specifically provided in this Agreement, and circumstances subject to Section 6.7. ARTICLE III EXPANSION SITE ASSEMBLY Section 3.1 Negotiations with Parcel Owners. 3.1.1 As of the date of this Agreement, neither the Agency nor the Owner owns any of the Parcels. The Agency shall use its reasonable best efforts to acquire each Parcel from the Parcel Owner by negotiated purchase. Nothing contained in this Agreement shall require the Agency to pay a Parcel Purchase Price that the Agency determines, based upon a Parcel FMV Appraisal, exceeds the fair market value for such Parcel or to spend in excess of the amount of the maximum principal balance of the Agency Loan towards Expansion Site Acquisition Costs. 3.1.2 In connection with each Agency negotiated purchase of a Parcel, if any, the Parcel Owner and the Agency shall enter into a written agreement for the purchase and sale of the Parcel (referred to in this Agreement as a "Parcel Acquisition Agreement ") and open an "Agency/Parcel Owner Escrow" with the Escrow Holder. 3.1.3 All Agency/Parcel Owner Escrows, if any, shall be closed by the date set forth in the Schedule of Performance for such actions, or such other date mutually agreed upon in writing by the Owner and the Agency. 3.1.4 The Owner shall not be a party to any Agency/Parcel Owner Escrow and no-instruction of the Owner to the Escrow Holder regarding an Agency/Parcel Owner Escrow shall have any force or effect as to the Agency or the Escrow Holder in any Agency /Parcel Owner Escrow transaction. As more fully set forth in Article IV, the Agency and the Owner shall open a separate escrow with the Escrow Holder through which the Owner shall purchase from the Agency each Phase of Parcels acquired by the Agency, if any. Section 3.2 Eminent Domain Proceedings. To the extent that the Agency is unable to acquire one or more Parcels through negotiation with the Parcel Owner(s) and the Executive Director determines that (i) an Agency offer with respect to a Parcel has been rejected or (ii) that further discussion, negotiation or modification of a pending Agency offer regarding a Parcel is unlikely to be accepted by the Parcel Owner of such Parcel, the Agency agrees to schedule and 13 RVPIIB \DGw,674424.7 hold a hearing to consider adoption of a resolution of necessity authorizing the use of the Agency's power of eminent domain to acquire such Parcel or Parcels. The Agency shall notify the Owner of its scheduling of a hearing to consider adoption of a resolution of necessity regarding the acquisition of a Parcel. Nothing in this Agreement shall require the Agency to adopt a resolution of necessity regarding any Parcel or to acquire any Parcel by exercise of the Agency's power of eminent domain. If the Agency considers adoption of a resolution of necessity regarding a Parcel and' does not adopt such a resolution, the Agency and the Owner shall promptly schedule an Expansion Site Assembly Consultation to determine whether or not the Parcel should be removed from the Expansion Site. Nothing in this Agreement shall require or commit the Agency to acquire any interest in a Parcel by exercise of the power of eminent domain or otherwise. Additionally, the Owner and the Operator each acknowledge and agree that, if the Agency adopts a resolution of necessity to acquire an interest in a Parcel or Parcels by exercise of its power of eminent domain, the Agency shall be represented in any such proceeding by legal counsel of the Agency's selection, in the Agency's sole and absolute discretion, and the Agency's legal counsel shall not represent the Owner or the Operator in any capacity relative to any such proceeding, nor shall the Owner or the Operator have any right of direction or control or any influence over the conduct of the Agency or its legal counsel relative to any eminent domain proceeding to acquire an interest in a Parcel or Parcels. Section 3.3 Title Approval. As soon as practicable following the opening of each Agency/Parcel Owner Escrow, pursuant to the terms of the Parcel Acquisition Agreement for the Parcel, or within thirty (30) days following the adoption of a resolution of necessity regarding acquisition of a Parcel by the Agency, the Agency shall obtain from Title Company the Preliminary Report and deliver a copy of the Preliminary Report to the Owner. Within thirty (30) days of the Owner's receipt of the Preliminary Report, Owner shall serve the Agency with Owner's Title Notice. If Owner fails to serve the Agency with Owner's Title Notice, within thirty (30) days of the Owner's receipt of the Preliminary Report, the Owner will be deemed to disapprove the status of title to the particular Parcel and refuse to accept title to the Parcel, in which case the Agency may cancel the pending Agency/Parcel Owner Escrow for the Parcel or abandon any eminent domain proceeding for the Agency to acquire the Parcel, in the Agency's sole discretion, and the Parcel shall be removed from the Expansion Site. Within thirty (30) days following receipt by the Agency of Owner's Title Notice, if any, the Agency shall serve Agency's Title Notice Response. If the Owner's Title Notice does not object to any matter in the Preliminary Report, the Agency shall not be required to serve Agency's Title Notice Response. If the Agency does not serve Agency's Title Notice Response, if necessary, within thirty (30) days following its receipt of Owner's Title Notice, the Agency shall be deemed to elect not to remove any matter objected to in Owner's Title Notice, if any, from the Preliminary Report. If ahe Agency elects in Agency's Title Notice Response to cause the removal of any matter objected to in Owner's Title Notice from the Preliminary Report, the Agency shall cause the removal of each such objectionable matter from the Preliminary Report within sixty (60) days of receipt by the Owner of Agency's Title Notice Response or such other period of time that may be agreed to in writing by the Agency and the Owner. If the Agency is unwilling or unable to cause the removal of any matter objected to in Owner's Title Notice from the Preliminary Report, then, within fifteen (15) days of Owner's receipt of Agency's Title Notice Response, the Owner may either (1) refuse to accept the title to the Parcel, in which case the Agency may cancel the pending Agency/Parcel Owner Escrow for the Parcel or abandon any eminent domain proceeding for the Agency to acquire the Parcel, in the Agency's sole discretion, and the Parcel shall be removed 14 RVPUB \DGW \674424.7 from the Expansion Site, or (2) waive its objection to any items set forth in Owner's Title Notice by delivering the Owner's Title Notice Waiver to the Agency. Failure by the Owner to respond in writing to Agency's Title Notice Response, where Agency's Title Notice Response or the Agency's failure to serve Agency's Title Notice Response indicates the Agency's election not to cause the removal of any matter objected to in Owner's Title Notice from the Preliminary Report, within fifteen (15) days of Owner's receipt of Agency's Title Notice Response or expiration of the time period for the Agency to deliver Agency's Title Notice Response under this Agreement, will be deemed Owner's continued refusal to accept the title to and conveyance of the Parcel, in which case the Agency may cancel the pending Agency /Parcel Owner Escrow for the Parcel or abandon any eminent domain proceeding for the Agency to acquire the Parcel, in the Agency's sole discretion, and the Parcel shall be removed from the Expansion Site. Section 3.4 Owner Investigations. 3.4.1 As soon as practicable following the opening of each Agency/Parcel Owner Escrow, the Agency shall notify the Owner that the particular Parcel is available for inspection by the Owner, pursuant to this Section 3.4, subject to the terms of the Parcel Acquisition Agreement for the Parcel. The Owner shall have sixty (60) days or such shorter period of time allowed to the Agency for such due diligence under the applicable Parcel Acquisition Agreement following such notice (each, an "Escrow Transfer Parcel Due Diligence Period ") to complete all of its Owner Investigations. Notwithstanding any provision of this Agreement, any Owner Investigations of the condition or suitability of a Parcel for the Expansion Project, including, without limitation, any intrusive testing or engineering study of the Parcel or intrusive sampling of any structure on the Parcel, shall be subject to the applicable provisions of the Parcel Acquisition Agreement for the particular Parcel. 3.4.2 Owner access to a Parcel being acquired pursuant to the Agency's exercise of the power of eminent domain, following commencement of a legal action, for purposes of conducting Owner Investigations on such Parcel, shall be subject to an appropriate order of the Court. The Owner shall have sixty (60) calendar days or such shorter time period ordered by the Court, following the entry of an order by the Court granting access to a Parcel being acquired by eminent domain, if any (each, a "Condemnation Parcel Due Diligence Period"), to complete all of its Owner Investigations regarding the Parcel. Any Owner Investigations of a Parcel being acquired by eminent domain, including, without limitation, any intrusive testing or engineering study of the Parcel or intrusive sampling of any structure on the Parcel, shall be subject to an appropriate order of the Court. 3.4.3 The Owner shall complete all of its Owner Investigations within the Escrow Transfer Parcel Due Diligence Period or the Condemnation Parcel Due Diligence Period, as applicable, and shall conduct all of its Owner Investigations at its sole cost and expense. The Owner shall rely solely and exclusively upon the results of its Owner Investigations of the Parcels, including, without limitation, investigations regarding geotechnical soil conditions, compliance with applicable laws pertaining to the use of the Parcel by the Owner and any other matters relevant to the physical condition or suitability of the Parcel for the Expansion Project, as the Owner may deem necessary and appropriate. The Agency makes no representation or warranty to the Owner relating to the condition or suitability of a Parcel for any intended use or development by the Owner. 15 RVPUB\DGw\674424.7 3.4.4 The Owner shall deliver a Owner Investigation Conclusion Notice to the Agency and the Escrow Holder for each Parcel, prior to the end of the Escrow Transfer Parcel Due Diligence Period or the Condemnation Parcel Due Diligence Period, as applicable. If the Owner does not accept the condition of a Parcel by the end of the applicable Escrow Transfer Parcel Due Diligence Period or Condemnation Parcel Due Diligence Period, the Owner shall be deemed to have rejected the condition of the Parcel and refused to accept conveyance of title to the Parcel. If the condition of a Parcel is rejected by the Owner, then the Agency and the Owner shall schedule an Expansion Site Assembly Consultation to confer about the means by which such rejection may be withdrawn by the Owner. If the Agency and the Owner cannot agree upon a means of correcting the condition of the Parcel rejected by the Owner, the Parcel shall be removed from the Expansion Site and the Agency may cancel any Agency/Parcel Owner Escrow regarding the Parcel or abandon any eminent domain proceeding for the Agency to acquire the Parcel, in the Agency's sole discretion. 3.4.5 The Owner acknowledges that there is a high probability that certain of the Parcels contain structures improved with asbestos containing materials ( "ACM ") and/or lead -based paint ( "LBP ") and that, if the Owner accepts the condition of a Parcel, and the Phase of the Agency /Owner Escrow regarding the Parcel closes or the Agency obtains a prejudgment order of possession for the Parcel from the Court, as applicable, the Owner shall be solely responsible for abating and transporting any ACM and/or LBP- containing demolition wastes for disposal off -site at a lawful waste disposal facility in the manner required by law. The Owner acknowledges that the Agency assumes no liability for damages for personal injury, illness, disability, or death to the Owner, or any person, including members of the general public, arising from or incident to the use, abatement, handling, removal, transportation or disposal of any ACM or LBP from or in any improvements on any Parcel. The Owner further acknowledges that there is a possibility that one or more of the Parcels contain buried vaults, buried in- ground swimming pools, underground storage tanks, subsurface debris and non - native soils previously imported by unknown third persons from off -site locations, abandoned infrastructure and utilities and other man -made materials associated with the prior improvement and use of one or more of the Parcels. The Owner shall accept all such conditions of a Parcel, without any liability of the Agency whatsoever, upon the Owner's acceptance of the condition of the Parcel. The Owner Investigation Conclusion Notice accepting the condition of a Parcel shall evidence the acceptance of the condition of the Parcel by the Owner in its existing "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition as of the last day of the Escrow Transfer Parcel Due Diligence Period or the Condemnation Parcel Due Diligence Period, as applicable. In its sole discretion, the Owner may accept a Parcel in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition at any time before the end of the applicable Escrow Transfer Parcel Due Diligence Period or Condemnation Parcel Due Diligence Period. The Owner may not commence any portion of the Expansion Project on the Parcel, including, without limitation, the demolition of any improvements on the Parcel, until all Phases of the Agency /Owner Escrow are closed. 3.4.6 As part of its Owner Investigations, the Owner shall cause an ALTA Survey of each Parcel to be prepared by a licensed civil engineer selected by the Owner to enable the Title Company to issue, with respect to a given Parcel, at the time of the close of the Agency/Parcel Owner Escrow for the Parcel or the entry of a final order of the Court in an eminent domain proceeding for the Agency to acquire the Parcel, an Extended Coverage ALTA 16 RVPUBIDGW\674424.7 Owner's Policy of Title Insurance insuring fee title to the Parcel vested in the Agency or the Owner, as applicable, in the full amount of the Parcel Purchase Price. The Owner shall deliver a copy of the ALTA Survey for each Parcel to the Agency, with its Owner Investigation Conclusion Notice. Any exception to title indicated by the ALTA Survey for a Parcel shall be a Permitted Exception, unless the Owner delivers written notice of its objection to such title survey exception to the Agency with the Owner Investigation Conclusion Notice regarding the Parcel, in which case the Agency and the Owner shall proceed pursuant to Section 3.3. to attempt to resolve any such objection of the Owner. 3.4.7 Any Owner Investigations of a Parcel shall not unreasonably disrupt any then existing use or occupancy of the Parcel or the business operations of the Agency. The Owner shall be liable for any damage or injury to any person or property arising from the acts of the Owner, its employees, agents or representatives during the course of any Owner Investigations on a Parcel, and the Owner shall indemnify, defend with counsel reasonably acceptable to the Agency and hold harmless the Agency and its elected officials, officers, directors, attorneys, agents and employees from any and all liens, claims, demands or liability arising from any Owner Investigations on a Parcel. Prior to commencing any Owner Investigations on a Parcel, the Owner shall deliver copies of policies or certificates of insurance to the Agency evidencing compliance by the Owner with the insurance requirements of Section 6.2. 3.4.8 The Owner acknowledges receipt from the Agency of a Phase I Environmental Assessment Report, dated January 30, 2002, prepared by IT Corporation (now, Shaw Environmental) regarding all of the Parcels, without representation or warranty from the Agency regarding the assumptions, methods or accuracy of the report. Section 3.5 Conditions Precedent to Agency Expansion Site Assembly. 3.5.1 The Agency shall only initiate actions to acquire any of the Parcels following confirmation by the Executive Director that each of the following conditions is satisfied: (a) The Owner has delivered the issued Letter of Credit to the Agency; (b) The Owner has executed the Promissory Note, the Agency Deed of Trust and the Notice of Agreement, the latter two (2) documents for recordation against the Existing Site, and deposited all of them into Escrow, for immediate recordation and delivery to the Agency; (c) The Owner has submitted to the Agency copies of polices of insurance evidencing insurance coverage carried by the Owner meeting all of the requirements of Section 6.2; (d) The Agency has received a Parcel FMV Appraisal regarding each Parcel and the governing board of the Agency has approved each such Parcel FMV Appraisal; and 17 RVPUn \DGW\674424.7 (e) No information has come to the attention of the Executive Director indicating that the total Expansion Site Acquisition Costs will exceed the sum of the Parcel FMV Appraisals for all of the Parcels by more than ten percent (10 %). 3.5.2 If the Executive Director does not confirm the satisfaction of each of the conditions set forth in Section 3.5.1 by the date set forth in the Schedule of Performance for such confirmation, either Party shall have the right to terminate this Agreement, without liability to the other Party, by delivering written notice of termination to the other Party, unless at least ten (10) days prior to the date set forth in the Schedule of Performance for such confirmation, the Parties agree in writing to a specific extension of the date by which the Executive Director may confirm the satisfaction of one or more of the conditions set forth in Section 3.5.1. 3.5.3 Following the Executive Director's confirmation of the satisfaction of all of the conditions set forth in Section 3.5.1, the Agency shall transmit to the Parcel Owner of each Parcel a written offer to purchase the Parcel owned by such Parcel Owner, if the Agency has not previously transmitted such an offer to the Parcel Owner, within the previous one hundred eighty (180) days. Each written offer of the Agency to purchase a Parcel shall be based upon the Parcel FMV Appraisal for the Parcel. The Agency reserves the discretion to engage in discussions and negotiations with each Parcel Owner regarding the terms and conditions of each offer of the Agency to purchase a Parcel. The Agency further reserves the discretion to modify or withdraw any pending offer of the Agency to purchase a Parcel, at any time prior to acceptance of the offer by the Parcel Owner. Upon acceptance by a Parcel Owner of an offer of the Agency to purchase a Parcel by execution of a Parcel Acquisition Agreement by the Parcel Owner, pursuant to the terms of a pending offer of the Agency to such Parcel Owner, the Agency shall promptly open an Agency /Parcel Owner Escrow for the purchase and sale of the Parcel, pursuant to Section 3.1.2 and the terms of the Parcel Acquisition Agreement between the Parcel Owner and the Agency. If an Agency offer to purchase a Parcel is either rejected by or no response is forthcoming from the Parcel Owner, within thirty (30) days following the date of transmittal of the Agency offer, or if the Executive Director determines that further discussion, negotiation or modification of a pending Agency offer to purchase a Parcel is unlikely to be accepted by the Parcel Owner, the Agency shall schedule and hold a hearing to consider adoption of a resolution of necessity authorizing the use of the Agency's power of eminent domain to acquire such Parcel, pursuant to Section 3.2. Section 3.6 Expansion Site Assembly Consultations. During the Expansion Site assembly process, the Owner and Agency staff shall conduct regular meetings at the Agency offices (each, an "Expansion Site Assembly Consultation ") to review the status of each of the following matters of mutual interest to the Agency and the Owner, as applicable: 3.6.1 The Owner Investigations; 3.6.2 Administration of any Agency/Parcel Owner Escrows and the Agency /Owner Escrow; 3.6.3 Relocation of existing occupants of the Parcels; 18 RVPUB \DGW\674424.7 3.6.4 Resolution of title matters and matters relating to the physical condition of the Parcels; 3.6.5 Review and confirmation of the dates and times set forth in the Schedule of Perfonmance for the performance of certain obligations and satisfaction of various conditions precedent to the redevelopment of the Parcels; 3.6.6 Current budgets and cost estimates of Agency staff, if any, for each element of the Expansion Site Acquisition Costs. Section 3.7 Schedule of Performance._ The Schedule of Performance establishes various dates and times for the accomplishment of various tasks assigned to the Agency and the Owner and the satisfaction of the conditions precedent to the close of Phases of the Agency /Owner Escrow. The Agency and the Owner agree that time is of the essence in the performance of such tasks and the satisfaction of conditions precedent, in view of the large investment of resources that both Parties recognize will be required for assembly of the Expansion Site and the undertaking of the Expansion Project. If the date or time for the performance of a task -or the satisfaction of a condition, as set forth in either the text of this Agreement or in the Schedule of Performance, may not be achieved, then prior to such date or time set forth in the text of this Agreement or the Schedule of Performance, the Agency and the Owner shall, as part of their Expansion Site Assembly Consultations, consider whether a modification to the text of this Agreement or to the Schedule of Performance is indicated. Any decision to approve a modification to a time or date established in either the text of this Agreement or the Schedule of Performance shall be subject to the sole discretion of each party. Any modification of a time or date for performance of a particular task or satisfaction of a particular condition that does not result in a change of more than sixty (60) days may be approved on behalf of the Agency by the Executive Director, in his or her reasonable discretion. A modification of a time or date for performance of a task or satisfaction of a condition (or a series of such modifications) that results in a change of more than one hundred twenty (120) days shall be subject to the approval of the governing board of the Agency, in its sole discretion: Section 3.8 Payment of Expansion Site Acquisition Costs. 3.8.1 Subject to the Owner's obligation to use the Owner's funds to purchase Parcels from the Agency, pursuant to ARTICLE IV, the Agency shall provide the Agency Loan to the Owner for the sole purpose of payment of Expansion Site Acquisition Costs. 3.8.2 The Agency's agreement to provide the Agency Loan is expressly subordinate and subject to the covenants, conditions, restrictions and agreements relating to the issuance of the 2001 Tax Allocation Bonds Series A and Series B and any prior pledge or commitment of property tax increment funds allocated or allocable to the Agency, pursuant to Health and Safety Code Section 33670 or 33675, or other allocation of such funds made pursuant to law (i.e., Low and Moderate Income Housing Fund, statutorily required pass - through payments to affected taxing entities, Educational Revenue Augmentation Fund, etc.). 3.8.3 The Agency shall advance funds up to the maximum principal amount of the Agency Loan by paying Expansion Site Acquisition Costs. Concurrent with and/or 19 RVPUB\DGW \674424.7 following the Agency's advance of all or any portion of the Agency Loan, the Agency may request the Owner to pay any Expansion Site Acquisition Costs, as reasonably necessary to prevent the Agency from being committed to deposit, advance or pay monetary amounts in excess of the maximum principal amount of the Agency Loan. The Owner acknowledges and agrees that, at any given time, the Agency may have deposited, advanced, be committed to pay or have paid Expansion Site Acquisition Costs in excess of the maximum principal amount of the Agency Loan and that the Owner is obligated to pay any and all Expansion Site Acquisition Costs in excess of the maximum principal amount of the Agency Loan. The Owner agrees to provide any funds requested by the Agency for deposits or commitments towards or payment of Expansion Site Acquisition Costs in excess of the maximum principal amount of the Agency Loan. For the purposes of this Agreement, the payment of, deposit of or contractual commitment to pay any amount of or towards Expansion Site Acquisition Costs by the Agency shall be considered advanced by the Agency in determining the amount of principal of the Agency Loan advanced at any given time. 3.8.4 The amount of Agency advances under the Agency Loan, the amount of Owner advances of the Owner Contribution and any amounts to be paid by the Owner, if any, at the close of each Phase of the Agency /Owner Escrow shall be determined by the Agency and written notice of such determination sent to the Owner and Escrow Holder, at least ten (10) days prior to the Close of Escrow regarding each Phase of the Agency /Owner Escrow and, following the close of the final Phase of the Agency /Owner Escrow, within thirty (30) days of the end of each calendar quarter, until the final resolution of any and all claims against the Agency for Expansion Site Acquisition Costs, as determined by the Agency. The Owner shall be credited the full amount of all advances of the Owner Contribution, up to the amount of the Parcel Reuse Price payable by the Owner at the close of the first Phase of the Agency /Owner Escrow, towards the Parcel Reuse Price payable by the Owner at the close of the first Phase of the Agency /Owner Escrow. The Owner shall also be credited the full amount of all advances of the Owner Contribution that were not credited to the Owner at the close of the first Phase of the Agency /Owner Escrow, up to the amount of the Parcel Reuse Price payable by the Owner at the close of the second Phase of the Agency /Owner Escrow, towards the Parcel Reuse Price payable by the Owner at the close of the second Phase of the Agency /Owner Escrow. The Owner further acknowledges that there are likely to be Expansion Site Acquisition Costs that are not apparent nor determined at the close of all Phases of the Agency /Owner Escrow, including, without limitation, loss of goodwill and relocation costs, and the Owner agrees to pay all or its share of these later determined Expansion Site Acquisition Costs, pursuant to the terms of this Agreement. The Agency's determination of the amount of funds advanced towards Expansion Site Acquisition Costs by the Agency and of all amounts to be paid by the Owner towards Expansion Site Acquisition Costs shall be final and conclusive, as between the Agency and the Owner. 3.8.5 The funding mechanism for payment of Expansion Site Acquisition Costs, as described in this Section 3.8, is established between the Parties to address the fact that the Agency does not, currently, have adequate funds available to advance all of the Expansion Site Acquisition Costs and to establish the level of financial commitment by the Owner to Expansion Site Acquisition Costs and pursuit and completion of the Expansion Project. 20 RVPUB\DGWW74424.7 Section 3.9 Relocation Assistance. 3.9.1 The Agency shall take all legally required actions, if any, to provide for the relocation of occupants; if any, of each Parcel. Any relocation of Parcel occupants shall be accomplished by the Agency in accordance with the provisions of Government Code Sections 7260 et sue. and other applicable law. The Agency shall have the sole discretion to select and retain the services of consultants, at the Agency's expense, to assist the Agency with any evaluation, processing and administration of any relocation activities. 3.9.2 Prior to the close of each Agency/Parcel Owner Escrow, the occupant(s) of each affected Parcel shall be given written notice of displacement by the Agency instructing the occupant to vacate the Parcel and surrender possession of the Parcel to the Agency, within the following times: (i) ninety (90) days following the date of such notice of displacement, or (ii) ninety (90) days following the close of such Agency/Parcel Owner Escrow; or (iii) such other date designated by the Agency in compliance with applicable law. Each notice of displacement shall advise the occupant that the Agency shall pay relocation assistance benefits to each qualifying occupant in accordance with applicable law. The Owner acknowledges and agrees that no work, other than Owner Investigations, shall occur on a Parcel, until the occupants of the Parcel surrender possession of the Parcel, pursuant to a notice of displacement from the Agency or otherwise. 3.9.3 If the Agency and the Owner close a Phase of the Agency /Owner Escrow with one or more occupants still in possession of a Parcel conveyed through the Agency /Owner Escrow, then the Agency shall be responsible for enforcing its notice of displacement against each remaining occupant, including, without limitation, the payment of all costs associated with either the Agency or the Owner obtaining a writ of possession for the Parcel against any remaining occupant that does not comply with the notice of displacement and/or is otherwise in unlawful detainer of the Parcel. 3.9.4 Notwithstanding anything in this Section 3.9 to the contrary, no occupant of a Parcel shall be deemed to be a beneficiary of any obligation of the Agency to pay relocation assistance benefits, until such time as the Agency issues a written notice of displacement to such occupant. 21 RVPUB \DGW\674424.7 ARTICLE IV PURCHASE AND SALE OF PARCELS BETWEEN AGENCY AND DEVELOPER; JOINT ESCROW INSTRUCTIONS OF AGENCY AND DEVELOPER TO ESCROW HOLDER Section 4.1 Agency /Owner Escrow. For the purposes of exchanging funds and documents to complete the sale from the Agency to the Owner and the purchase by the Owner from the Agency of each Parcel acquired by the Agency, pursuant to the terms of this Agreement, the Agency and the Owner agree to open an escrow with Escrow Holder (the "Agency /Owner Escrow "). The Agency /Owner Escrow shall close in two Phases. Section 4.2 Opening of Agency /Owner Escrow. For purposes of this Agreement, the opening of the Agency /Owner Escrow shall be the date on which a fully executed copy of this Agreement is deposited with Escrow Holder ( "Escrow Opening Date "). The Owner shall open the Agency /Owner Escrow by delivering a fully executed copy of this Agreement, the Promissory Note, the Agency Deed of Trust and the Notice of Agreement, the latter two (2) documents for immediate recordation against the Existing Site, to Escrow Holder, within ten (10) days of the Effective Date. Escrow Holder shall promptly confirm in writing to both the Agency and the Owner the Escrow Opening Date, shall deliver the original Promissory Note to the Agency and immediately record the Agency Deed of Trust and the Notice of Agreement against the Existing Site and deliver the original recorded Agency Deed of Trust and Notice of Agreement to the Agency with copies to the Owner. This ARTICLE IV of this Agreement shall constitute the joint escrow instructions of the Agency and the Owner to Escrow Holder for conduct of the Agency /Owner Escrow to complete the transactions contemplated in this ARTICLE IV. The Agency and the Owner shall also execute and return to Escrow Holder the general escrow instructions of Escrow Holder. If there is any inconsistency between the provisions of Escrow Holder's general escrow instructions and the provisions of this Agreement, the provisions of this Agreement shall control. Section 4.3 Parcel Reuse Price. The Owner shall pay the Agency the Parcel Reuse Price, subject to any credit for previous advances of Owner Contribution amounts as provided in Section 3.8.4, and any additional amount of Owner Contribution, if any, as determined by the Agency, under Section 3.8.4, at the close of each Phase of the Agency /Owner Escrow for title to each Parcel to be conveyed to the Owner by the Agency through the particular Phase of the Agency /Owner Escrow. 22 RVPUMDGWW4424.7 Section 4.4 Payment of Parcel Reuse Price and Owner Contribution. The Owner shall deposit the Parcel Reuse Price, subject to any credit for previous advances of Owner Contribution amounts as provided in Section 3.8.4, and any additional Owner Contribution, if required, regarding a Parcel and any other funds required to be paid by the Owner through the Agency /Owner Escrow, into the Agency /Owner Escrow in immediately available funds approved by the Agency, at least, one (1) business day prior to the Escrow Closing Date for the particular Phase of the Agency /Owner Escrow. Escrow Holder shall accept the deposit of the Parcel Reuse Price and any additional Owner Contribution applicable to a Phase, together with all other funds previously delivered into the Agency /Owner Escrow with respect to such Phase, to the credit of the Agency and, shall disburse such funds to the Agency or, if instructed by the Agency, shall disburse such funds, up to the amount of each Parcel Purchase Price for a Parcel, through the applicable Agency/Parcel Owner Escrow to the applicable Parcel Owner, in payment of the Parcel Purchase Price for the Parcel. Section 4.5 Owner's Escrow Deposits. Following satisfaction or waiver of each of Owner's conditions to close of a particular Phase of the Agency /Owner Escrow, as set forth in Section 4.9.1, Owner shall deposit the following items into the Agency /Owner Escrow at least one (1) business day prior to the Escrow Closing Date for the particular Phase of the Agency /Owner Escrow scheduled by Escrow Holder in a writing delivered to each of the Parties: 4.5.1 Parcel Reuse Price and Other Costs. The Parcel Reuse Price, plus the ALTA Excess Costs and any additional funds required to be deposited into the Agency /Owner Escrow by Owner under the terms of this Agreement to close the applicable Phase of the Agency /Owner Escrow, in immediately available funds. 4.5.2 PCO Statement. A PCO Statement executed by the authorized representative(s) of the Owner; 4.5.3 _ Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Owner, with each signature acknowledged by a California notary, for recordation against each Parcel within the particular Phase; 4.5.4 Agency Deed of Trust. The Agency Deed of Trust executed by the authorized representative(s) of the Owner, with each signature acknowledged by a California notary, for recordation against each Parcel within the particular Phase; 4.5.5 Proof of Owner Authority. A copy of a resolution or other valid official action of the Owner's governing body approving this Agreement and authorizing the individual(s) executing and delivering this Agreement and any associated documents to do so on behalf of the Owner, certified by an officer of the Owner. Section 4.6 Agency's Escrow Deposits. Following satisfaction or waiver of each of the Agency's conditions to close of the particular Phase of the Agency /Owner Escrow, as set forth in Section 4.9.2, the Agency shall deposit the following items into the Agency /Owner Escrow at least one (1) business day prior to the Escrow Closing Date for the particular Phase of the Agency /Owner Escrow scheduled by Escrow Holder in a writing delivered to each of the Parties: 23 RVPUB\DGW%674424.7 4.6.1 Agency Grant Deed. The Agency Grant Deed conveying the specific Parcels constituting the Phase to the Owner, executed by the authorized representative(s) of the Agency and acknowledged by a California notary; 4.6.2 FIRPTA Affidavit. The FIRPTA Affidavit completed and executed by the authorized representative(s) of the Agency; 4.6.3 California Tax Withholding. A California Franchise Tax Board Form 593 -W completed and executed by the authorized representative(s) of the Agency; 4.6.4 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Agency, with each signature acknowledged by a California notary, for recordation against each Parcel within the particular Phase; 4.6.5 Aeencv Resolution. A copy of a resolution of the Agency governing body approving this Agreement and authorizing the individual(s) executing and delivering this Agreement and any associated documents to do so on behalf of the Agency, certified by the Agency Secretary; 4.6.6 Title Policy Premium and Other Costs. The CLTA Premium Costs and any additional funds to be deposited into the Agency /Owner Escrow by the Agency under the terms of this Agreement to close the particular Phase of the Agency /Owner Escrow, in immediately available funds. Section 4.7 Agency /Owner Escrow Closing Procedure. When each of Owner's escrow deposits, as set forth in Section 4.5, and each of the Agency's escrow deposits, as set forth in Section 4.6, are deposited into the Agency /Owner Escrow, all conditions to close of the particular Phase of the Agency /Owner Escrow are satisfied or waived by the Party for whose benefit such condition exists, and the Title Company is unconditionally committed to issue a Title Policy regarding each Parcel being conveyed to Owner through the particular Phase of the Agency /Owner Escrow, Escrow Holder shall close the Phase of the Agency /Owner Escrow by doing all of the following: 4.7.1 Recordation of Documents. File the Agency Grant Deed, the Agency Deed of Trust and any other documents to be recorded in the official records of the Recorder of the County of Los Angeles, California, with the Office of the Recorder of the County of Los Angeles, California, for recordation in the order set forth in Section 4.10; 4.7.2 PCO Statement. File the PCO Statement with the Office of the Recorder of the County of Los Angeles, California; 4.7.3 FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal Revenue Service; 4.7.4 California Franchise Tax Board Filing. File the Agency's California Franchise Tax Board Form 593 -W with the California Franchise Tax Board; 24 RVPUB \DGW \674424.7 4.7.5 Title Policy. Obtain and deliver to Owner a Title Policy issued by the Title Company for each Parcel being conveyed to the Owner through the applicable Phase of the Agency /Owner Escrow; Section 4.8 Close of Agency /Owner Escrow. Close of each Phase of the Agency /Owner Escrow shall occur no later than the tenth (10th) business day following the satisfaction or waiver of all conditions precedent to the close of the applicable Phase of the Agency /Owner Escrow, as set forth in Section 4.9, on a date reasonably scheduled by Escrow Holder for such closing ( "Escrow Closing Date "). If for any reason the Agency does not acquire title to a Parcel for conveyance through the Agency /Owner Escrow or all Phases of the Agency /Owner Escrow are not closed by the date set forth in the Schedule of Performance for such action, then any Party not then in default of this Agreement may cancel the Agency /Owner Escrow, without liability to the other Party or any other person for such termination and cancellation, by delivering written notice of cancellation to the other Party and Escrow Holder, subject to the obligations of the Owner to pursue the Expansion Project and the right reserved to the Agency to acquire all or any portion of the Expansion Site from the Owner, pursuant to Section 10.6. Section 4.9 Conditions to Close of Agency /Owner Escrow. The conditions set forth below in this Section 4.9 shall be satisfied or waived by the respective benefited Party on or before the Escrow Closing Date for each Phase of the Agency /Owner Escrow or the Party benefited by any unsatisfied condition shall not be required to proceed to close the particular Phase of the Agency /Owner Escrow. Escrow. Holder shall proceed as though all conditions to close of a particular Phase of the Agency /Owner Escrow are satisfied or waived, unless Escrow Holder receives a written notice from the Owner stating that any one or more of the conditions for the benefit of the Owner is not satisfied or waived, or from the Agency stating that any one or more of the conditions for the benefit of the Agency is not satisfied or waived. 4.9.1 Owner's Conditions. Owner's obligation to purchase a Parcel from the Agency on the Escrow Closing Date for a particular Phase of the Agency /Owner Escrow applicable to the Parcel shall be subject to the satisfaction of the following conditions precedent, each of which can only be waived in writing by the Owner: (a) The Agency owns fee title to or an order of pre - judgment possession has been entered by the court for each Parcel within the particular Phase; (b) The Owner accepts the condition of the Parcel, pursuant to Section 3.4; (c) The Owner approves the condition of title to the Parcel, pursuant to Section 3.3; (d) Title Company is unconditionally committed to issue a Title Policy insuring fee title to the Parcel vested in the Owner in the amount of the Parcel Reuse Price of each Parcel; (e) The Agency deposits all of the items into the Agency /Owner Escrow required by Section 4.6; 25 RVPUB\DGW\674424.7 (f) The Agency performs all of its material obligations under this Agreement required to be performed by the Agency prior to close of the particular Phase of the Agency /Owner Escrow. 4.9.2 Agency's Conditions. Agency's obligation to sell a Parcel to Owner on or before the Escrow Closing Date for a particular Phase of the Agency /Owner Escrow shall be subject to the satisfaction of the following conditions precedent, which can only be waived in writing by Agency: (a) The Agency owns fee title to or an order of pre - judgment possession has been entered by the Court for each Parcel within the particular Phase; (b) Owner deposits all of the items into the Agency /Owner Escrow required by Section 4.5; (c) Owner performs all of its material obligations required to be performed by Owner under this Agreement prior to close of the particular Phase of the Agency /Owner Escrow; (d) Owner provides evidence reasonably satisfactory to the Agency that Owner has received an irrevocable commitment from a Lender to provide a Loan or that Owner has dedicated and segregated sufficient amounts of its own funds to finance the construction of the Expansion Project (only a condition precedent to the close of the second Phase of the Agency /Owner Escrow); (e) All representations, warranties and covenants of the Owner made in this Agreement are true and correct on the Effective Date and the Escrow Closing Date for the particular Phase of the Agency /Owner Escrow. Section 4.10 Recordation and Distribution of Documents. Escrow Holder shall cause the following documents to be recorded in the official real property records of the Recorder of the County of Los Angeles, California, in the following order, at the close of each Phase of the Agency /Owner Escrow: (i) the Agency Grant Deed, (ii) the Agency Deed of Trust, (iii) the Notice of Agreement, and (iv) any other documents to be recorded through the Agency /Owner Escrow at Owner's instruction, consistent with this Agreement and with the prior written consent of the Agency. All recorded documents shall provide that they are to be returned to Escrow Holder after recordation. When originals of such recorded documents are returned to Escrow Holder, Escrow Holder shall deliver: (i) the original Agency Grant Deed to the Owner, with a copy to the Agency, each showing all recording information, (ii) the original Agency Deed of Trust to the Agency, with a copy to the Owner, each showing all recording information, (iii) the original Notice of Agreement to the Agency, with a copy to the Owner, each showing all recording information, and (iv) any other documents recorded at the close of the particular Phase of the Agency /Owner Escrow to Owner, with a copy to the Agency, each showing all recording information. Section 4.11 Report to IRS. After the Escrow Closing Date for a particular Phase of the Agency /Owner Escrow and prior to the last date on which such report is required to be filed with Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the 26 RVPUBOGW \674424.7 Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and sale of the Agency Property to the Internal Revenue Service on Form 1099 -13, W -9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Concurrently with the filing of such reporting form with IRS, Escrow Holder shall deliver a copy of the filed form to Agency and Owner. Section 4.12 Agency /Owner Escrow Closing Costs. Agency shall pay the CLTA Premium Costs, any documentary transfer taxes for the sale of each Parcel, one -half (1/2) of the Agency /Owner Escrow fees and such other costs as Escrow Holder reasonably determines to be customarily borne by sellers in the County of Los Angeles, California. Owner shall pay all recording costs, if any, one -half (1/2) of the Agency /Owner Escrow fees, the ALTA Excess Costs, and such other costs as Escrow Holder reasonably determines to be customarily borne by buyers in the County of Los Angeles, California. Escrow Holder shall notify Owner and Agency of the costs to be borne by each at least three (3) business days prior to each Escrow Closing Date. Section 4.13 Agency /Owner Escrow Cancellation and Title Charges. If a Phase of the Agency /Owner Escrow fails to close due to the Agency's material default under this Agreement, the Agency shall pay all ordinary and reasonable Agency /Owner Escrow cancellation and title charges. If a Phase of the Agency /Owner Escrow fails to close due to Owner's material default under this Agreement, the Owner shall pay all ordinary and reasonable Agency /Owner Escrow cancellation and title charges. If a Phase of the Agency /Owner Escrow fails to close for any reason other than the material default of either the Owner or the Agency, the Owner and the Agency shall each pay one -half (1/2) of any ordinary and reasonable Agency /Owner Escrow and title order cancellation charges. Section 4.14 Termination. If this Agreement is terminated and the Agency /Owner Escrow is canceled, pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement and cancel the Agency /Owner Escrow (other than because of the default of the other Party), the Parties shall do each of the following: 4.14.1 Cancellation Instructions. The Parties shall, within three (3) business days of Escrow Holder's written request, execute any Agency /Owner Escrow cancellation instructions reasonably requested by Escrow Holder; 4.14.2 Return of Funds and Documents. Within ten (10) days of receipt by the Parties of a settlement statement of cancellation charges from Escrow Holder: (i) Owner and Escrow Holder shall return to Agency any documents previously delivered by Agency to Owner or Escrow Holder, (ii) Agency or Escrow Holder shall return to Owner all documents previously delivered by Owner to Agency or Escrow Holder; and (iii) Escrow Holder shall return any funds deposited into the Agency /Owner Escrow to the depositing Party, less the depositing Party's share of customary and reasonable escrow and title order cancellation charges, if any. 4.14.3 Survival of Indemnities and Remedies. Any indemnification obligations contained in this Agreement and any rights or remedies exercisable upon a material default under this Agreement shall survive termination of this Agreement pursuant to a contractual right provided in this Agreement. Otherwise, Owner and Agency shall have no 27 RVPUBIDGW1674424.7 - V?R further obligations to each other pursuant to this Agreement, upon a termination pursuant to a contractual right provided in this Agreement. Section 4.15 Possession. Agency shall deliver fee title to the Parcel or such title as may be delivered pursuant to an order for pre judgment possession of a Parcel to Owner at the close of the Phase of the Agency /Owner Escrow applicable to such Parcel, subject to any Permitted Exceptions, unless otherwise agreed in writing by both the Agency and the Owner. Section 4.16 Parcels Sold "As -Is." Owner acknowledges and agrees that, except for the Agency's express obligations, representations, warranties and covenants set forth in this Agreement, Owner is purchasing each Parcel from the Agency on an "AS IS" basis and in reliance solely upon Owner's own investigation of each Parcel. Neither Agency nor any agents, employees, or affiliates of Agency made any representations or warranties, expressed or implied, concerning any Parcel or otherwise that induced Owner to enter into or to consummate this Agreement, except as expressly set forth in this Agreement. All representations, warranties and covenants, other than those expressly contained in this Agreement, are disclaimed by the Agency. Section 4.17 Escrow Holder Authorized to Act Pursuant to Agency/Parcel Owner Escrows and Agency /Owner Escrow. The Agency and the Owner authorize the Escrow Holder to: 4.17.1 Serve concurrently as the Escrow .Holder under each of the Agency/Parcel Owner Escrows and the Agency /Owner Escrow; 4.17.2 Pay and charge the Owner and the Agency for their respective shares of the applicable fees, charges and costs payable by either the Agency or the Owner under the Agency /Owner Escrow; and 4.17.3 Record any instruments delivered through the Agency /Owner Escrow in the official records of the Recorder of the County of Los Angeles, California, pursuant to the joint instruction of the Parties. ARTICLE V THE EXPANSION PROJECT Section 5.1 Owner Covenant to Undertake Expansion Project. 5.1.1 The Owner covenants and agrees for itself, its successors and assigns, for the sole and exclusive benefit of the Agency that, promptly upon the Owner's acquisition of the Expansion Site and following receipt of all necessary City and other governmental approvals for the development of the Expansion Project, the Expansion Site shall be improved and developed with the Expansion Project. If the Owner only acquires one Phase of Parcels, the Owner covenants and agrees for itself, its successors and assigns that, promptly upon the Owner's acquisition of the Phase, the Owner shall develop the Phase with an expansion of the existing Dealership appropriately scaled for the size of the Parcels in such Phase, subject to the prior approval of the expansion by the Agency and receipt of all necessary City and other governmental approvals for the development of the expansion. The Owner further covenants to 28 RVPUMDGW%674424.7 develop the Expansion Site and each portion of the Expansion Site in conformity with all applicable laws and this Agreement. The covenants of this Section 5.1 shall run with the land of the Expansion Site or any portion of the Expansion Site acquired by the Owner, until the earlier of the date on which the Certificate of Completion is recorded or the fifteenth (15`h) anniversary of the date of recordation of the last Agency Grant Deed recorded through the Agency /Owner Escrow. 5.1.2 The Expansion Project shall be developed and completed on the Expansion Site by the Owner in conformance with the approved Scope of Development and the Schedule of Performance, any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Owner and the Agency and all applicable laws, regulations, orders and conditions of governmental entities with jurisdiction over the Expansion Site or the Expansion Project. Section 5.2 Expansion Project Subject to City Regulatory Approval. 5.2.1 The City's zoning, building and land use regulations (whether contained in ordinances, the City's municipal code, conditions of approval or elsewhere) (collectively, the "City Requirements "), shall be applicable to the use and development of the Expansion Project on the Expansion Site by the Owner, pursuant to this Agreement. The Owner acknowledges that all plans and specifications and any changes to plans and specifications for the Expansion Project on the Expansion Site shall be subject to the City Requirements. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any City Requirements regarding the Expansion Site, the Expansion Project, the Owner, any successor -in- interest of the Owner or any successor -in- interest to the Expansion Site. City Requirements may only be changed or waived by modification or variance approved by the City and consistent with this Agreement. 5.2.2 The approval of the Scope of Development by the Agency in this Agreement shall not be binding on the City Council or the Planning Commission of the City regarding any approvals of the Expansion Project required by such bodies. If any revisions of the Scope of Development are required by a governmental official, agency, department or bureau (other than the Agency) having jurisdiction over the Expansion Site, the Owner shall promptly make any such revisions that are generally consistent with the Scope of Development. 5.2.3 Notwithstanding any provision to the contrary in this Agreement, the Owner agrees to accept and comply fully with any and all reasonable and lawful conditions of approval applicable to all approvals, permits and other governmental actions regarding the development or operation of the Expansion Project on the Expansion Site, consistent with the Scope of Development and this Agreement. The Owner further acknowledges the terms, conditions and requirements of that certain Mitigation Monitoring Plan adopted by the Agency in conjunction with that certain Mitigated Negative Declaration adopted by the Agency relative to the Agency's approval of this Agreement, pursuant to CEQA, and the Owner agrees to comply with all of the provisions of such Mitigation Monitoring Plan, including, without limitation, cooperating completely, during all remediation, demolition and construction activities on any of the Parcels, with any historian and/or architectural consultant retained by the Agency 29 RVPUa\DGNN674424.7 to monitor, photograph, preserve, remove or transport historical or archaeological matter on or from any Parcel and payment of specified financial contribution amounts toward mitigation of traffic impacts. Additionally, the Owner agrees that the Agency shall own and be entitled to remove, in the Agency's sole discretion and at the Agency's sole expense, from each Parcel any property unearthed or otherwise located on any Parcel, which property is determined to be historical or of historical significance by the Agency's historian or architectural consultant, regardless of physical size or economic or historical value. 5.2.4 The Owner shall prepare and submit a complete development application and any other required application or document (including, without limitation, deposit, fund or surety) for the Expansion Project, pursuant to the requirements of the City and consistent with the Scope of Development, to the City, within the time period(s) for such actions set forth in the Schedule of Performance. 5.2.5 During the development and permit application review process of the City for the Owner's development application and permits for the Expansion Project, the Owner shall provide the Agency with monthly progress reports to advise the Agency of the status of the submission to and review by the City of the Owner's development application and permits for the Expansion Project. The Owner shall communicate and consult with Agency staff as frequently as necessary to assure the Agency that any such development application, permits and related documents regarding the Expansion Project were timely submitted by the Owner to the City and are being processed in a timely fashion. 5.2.6 Any failure by the City to approve or disapprove any plans or applications or to issue any permits for the development of the Expansion Project on the Expansion Site, within thirty (30) calendar days from the date on which the City deems the Owner's application for such approval or permit complete, shall constitute an Unavoidable Delay, and the Schedule of Performance shall be extended by that period of time beyond said thirty (30) calendar day period, until the date on which the City approves or disapproves such permit or approval. If the City disapproves of any such permit or approval application of the Owner, the Owner shall, within thirty (30) calendar days after receipt of such disapproval, revise and re- submit such application in such form and substance as required by the City. Section 5.3 Owner Changes to Expansion Project Plans and Specifications During Course of Construction. The Owner shall have the right during the course of construction of the Expansion Project to make "minor field changes," without seeking the approval of the Agency, if such changes do not affect the type of use to be conducted within all or any portion of a structure. "Minor field changes "' shall be defined as those changes from the approved construction drawings, plans and specifications that have no substantial effect on the Expansion Project and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing any such "minor field changes" or in any and all approvals by the City otherwise required for any such "minor field changes." 30 RVPU13%DGNVW4424.7 Section 5.4 Construction Start and Completion of Expansion Project. The Owner shall commence construction of the Expansion Project in accordance with the Schedule of Performance and, thereafter, shall diligently proceed to complete the construction of the Expansion Project, in a good and workmanlike manner in accordance with the approved plans, specifications and conditions for the Expansion Project approved by the City. The Expansion Project shall be completed by the date set forth in the Schedule of Performance for completion (the "Completion Date "). The Agency acting by and through its Executive Director may extend the Completion Date for up to an additional ninety (90) days. The Owner will, promptly upon completion of the Expansion Project, cause the Expansion Project to be inspected by each governmental body with jurisdiction over the Expansion Site or the Expansion Project, shall correct any defects and deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all occupancy certificates and other licenses, permits and authorizations necessary for the operation and occupancy of the completed Expansion Project. The Owner shall do and perform all of the foregoing acts and things and cause to be issued and executed all such occupancy certificates, licenses and authorizations on or before the Completion Date. After commencement of the work of improvement of the Expansion Project, the Owner shall not permit the work of improvement of the Expansion Project to cease or be suspended for a time period in excess of thirty (30) calendar days, either consecutively or in the aggregate, for any reason. Notwithstanding the foregoing, such thirty (30) calendar day period may be extended by the Agency, acting by and through its Executive Director, up to an additional aggregate maximum of sixty (60) calendar days, in the Executive Director's sole discretion. Section 5.5 Compliance with Laws. All work performed in connection with the Expansion Project shall comply with all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or which may be enacted or amended hereafter, and with all applicable directions, rules and regulations of the fire department, health department, building department or other departments of every governmental agency now having or hereafter acquiring jurisdiction over the Expansion Site or construction or operation of the Expansion Project. Section 5.6 Expansion Project Fees, Costs and Charges to be Paid by Owner. The Owner and the Agency agree that the Agency shall not provide any financial assistance to the Owner in connection with the work of improvement of the Expansion Project. The Owner shall be solely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Expansion Project. The Owner shall pay any and all fees pertaining to the review and approval of the Expansion Project by the City and any other governmental bodies and utility service providers, including the cost and preparation of all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development or operation of the Expansion Project on the Expansion Site including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and disclosure documents and design review documents. The Owner shall pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections, that may be required in development of the Expansion Project, whether located on or off of the Expansion Site The Owner shall obtain any and all necessary approvals, prior to the commencement of applicable portions of said construction, and the Owner 31 RVPUB\DGw\674424.7 shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. Section 5.7 Owner Attendance at Agency Meetings. The Owner agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the Expansion Project, such that these person(s) can meaningfully respond to Agency questions regarding the progress of the Expansion Project, attend meetings of the Agency governing body, when requested to do so by Agency Staff. Section 5.8 Agency Right to Inspect Expansion Project and Expansion Site. Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Expansion Site, without the payment of charges or fees, during normal construction hours, during the period of construction of the Expansion Project. Such officers, employees, agents or representatives of the Agency shall be those persons who are designated by the Executive Director. Any and all officers, employees, agents or representatives of the Agency who enter the Expansion Site shall identify themselves at the construction management office on the Expansion Site, upon their entrance on to the Expansion Site, and shall at all times be accompanied by a representative of the Owner, while on the Expansion Site. The Owner shall make a representative of the Owner available for this purpose at all times during normal construction hours, upon reasonable notice from the Agency. The Agency shall indemnify and hold the Owner harmless from injury, property damage or liability arising out of the exercise by the Agency of the right of access to the Expansion Site provided in this Section 5.8, other than injury, property damage or liability arising from the negligence or willful misconduct of the Owner or its officers, agents or employees. The Agency shall inspect relevant portions of the Expansion Site, prior to issuing any written statements reflecting adversely on the Owner's compliance with the terms and conditions of this Agreement pertaining to development of the Expansion Site. If in the Agency's reasonable judgment it is necessary, the Agency shall have the further right, from time to time, to retain a consultant or consultants to inspect the work and verify compliance by the Owner with the provisions of this Agreement. The Owner understands and agrees that any such Agency inspections are for the sole purpose of protecting the Agency's rights under this Agreement, are made solely for the Agency's benefit, that the Agency's inspections may be superficial and general in nature, and are for the purposes of informing the Agency of the progress of construction of the Expansion Project and the conformity of the Expansion Project with the terms and conditions of this Agreement, and that the Owner shall not be entitled to rely on any such inspection(s) as constituting the Agency's approval, satisfaction or acceptance of any materials, workmanship, conformity of the Expansion Project with this Agreement or otherwise. The Owner agrees to make its own regular inspections of the work of construction of the Expansion Project to determine that the quality of the Expansion Project and all other requirements of the work of construction of the Expansion Project are being performed in a manner satisfactory to the Owner. The Owner also agrees to immediately notify the Agency in writing should the Owner's inspections show any matters that will prevent the Expansion Project from being completed by the Completion Date. Without limiting the foregoing, the Owner shall permit the Agency to examine and copy all books and account records and other papers relating to the Expansion Site and the construction of the Expansion Project, The Owner will use commercially reasonable efforts to cause all contractors, subcontractors and materialmen to cooperate with the Agency to enable such examination, including, without limitation, records described in Section 6.10 (payroll records). 32 RVPUB\DGw�674424.7 - ARTICLE VI SPECIAL REDEVELOPMENT COVENANTS OF THE DEVELOPER Section 6.1 General Covenants. From and after the Effective Date and continuing until the recordation of the Certificate of Completion, the Owner and the Operator covenant and agree that they will: 6.1.1 Promptly pay principal and interest and all other sums falling due under any Loan Documents, as and when the same become due and payable; 6.1.2 Maintain, preserve and keep its personal property and equipment situated on the Expansion Site in good repair, working order and condition and from time to time make all needful and proper repairs, renewals, replacements and additions thereto so that at all times the efficiency of such property and equipment shall be fully preserved and maintained; 6.1.3 Pay when due and before any penalty attaches all general taxes and all special taxes, special assessments, water charges, drainage and sewer charges and all other charges of any kind whatsoever, ordinary or extraordinary that may be lawfully levied, assessed, imposed or charged on or against the Expansion Site or the Expansion Project, and will, upon written request, provide the Agency with official receipts evidencing such payments; 6.1.4 Obtain and maintain the insurance coverage required in Section 6.2 of this Agreement; Section 6.2 Insurance. The Owner, to protect the Agency, its governing board, commissions, agents, attorneys, officers, employees and authorized representatives against any and all claims and liability for death, injury, loss and damage resulting from the Owner's actions in connection with this Agreement, the Expansion -Site and the Expansion Project, shall secure and maintain the insurance coverage, described in and required by this Section 6.2. The Agency shall have no further obligation under this Agreement, unless and until the Owner provides copies of the required policies evidencing the insurance required by this Section 6.2 to the Agency Executive Director and the Agency Executive Director approves such evidence of insurance within sixty (60) days of the Effective Date. The Owner shall pay any deductibles and self - insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. 6.2.1 Workers' Compensation Insurance Requirement: The Owner shall submit written proof that the Owner is insured against liability for workers' compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Owner makes the following certification, required by Section 1861 of the Labor Code: "I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self - insurance in accordance with the provisions of that code, and I will comply with 33 RVPUB%DGW\674424.7 such provisions before commencing the performance of the work of the Agreement." (a) The Owner shall require each contractor and sub - contractor to provide workers' compensation coverage for all of such contractor's or sub - contractor's employees, unless the contractor's or sub - contractor's employees are covered by workers' compensation insurance provided by the Owner. If any class of employees engaged in work or services performed in connection with the Expansion Project is not covered by Labor Code Section 3700, the Owner shall provide and/or require each contractor or sub - contractor to provide adequate workers' compensation insurance covering such employees. 6.2.2 Liability and Permanent Insurance Requirements: (a) The Owner shall maintain in full force and effect, until recordation of the Certificate of Completion, subject to Section 6.2.5, the following insurance coverage: (i) Commercial General Liability Insurance coverage, including, but not limited to, Premises - Operations, Contractual Liability Insurance (specifically covering the indemnity obligations of the Owner pursuant to this Agreement), Products - Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of the construction of the Expansion Project and/or the Owner's operation of the Expansion Site or the Expansion Project. Said insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. (ii) Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and non -owned vehicles used by the Owner with minimum limits for Bodily Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy. (iii) If the Owner hires a consultant to provide design services, such as architectural or engineering services in connection with the Expansion Project, the Owner shall require such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000). (iv) Upon acceptance of the Expansion Project by the Owner, or any portion thereof, from each contractor, the Owner shall maintain Fire and Extended Coverage Insurance on the Expansion Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Expansion Project so accepted. 6.2.3 During the construction of the Expansion Project, the Owner shall require that each contractor performing work on the Expansion Project under a contract of more 34 RVPUB\DGW\67"24.7 than fifty thousand dollars ($50,000) maintain the following insurance coverage, as specified below, at all times during the performance of said work: (a) Each General Contractor shall maintain Builder's Risk Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Expansion Project. (b) Each General Contractor and each sub - contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Owner during the construction of the Expansion Project from claims involving bodily injury and/or death and damage to the property of others. (c) Each General Contractor and each sub - contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non -owned vehicles used in the performance of the contractor's obligations with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy. 6.2.4 The Commercial General Liability Insurance required in Section 6.2.2(a)(i), above, shall include an endorsement naming the Agency, and the Agency's elected officials, officers, agents, and employees as additional insured for liability arising out of this Agreement and any operation related to this Agreement. 6.2.5 If any of the insurance coverage required under this Agreement is written on a claims -made basis, such insurance policy shall provide an extended reporting period continuing through the fifth (5 °i) anniversary of the date of recordation of the Certificate of Completion in the official records of the Recorder of the County of Los Angeles, California. The requirements of this Section 6.2.5 shall survive any expiration or termination of this Agreement and the recordation of the Agency Grant Deed and the Certificate of Completion in the official records of the Recorder of the County of Los Angeles, California. 6.2.6 Receipt by the Agency of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement. 6.2.7 Subject to Section 6.2.5, the above required insurance coverage shall be maintained by the Owner or its contractors, as required by the terms of this Agreement, until the date of recordation of the Certificate of Completion in the official records of the Recorder of the County of Los Angeles, California, and shall not be reduced, modified, or canceled without thirty (30) days prior written notice to the Agency. Also, phrases such as "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall not be included in the cancellation wording of'any Certificates of Insurance or any coverage for the Agency, the Agency's board members, agents, and employees. The Owner shall immediately obtain replacement coverage for any insurance policy that is terminated, 35 RVPUB\DGW \674424.7 canceled, non - renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy. 6.2.8 All .insurance to be obtained and maintained by the Owner under this Agreement shall be issued by a company or companies listed in the then current "Best's Key Rating Guide" publication with a minimum of a "A;VII" rating and be a admitted to business in the State of California by the State of California Department of Insurance. 6.2.9 If the Owner is or becomes self - insured, prior to the date of recordation of the Certificate of Completion in the official records of the Recorder of the County of Los Angeles, California, the Owner shall provide coverage equivalent to the insurance coverage and endorsements required in this Section 6.2. The Agency will not accept self - insurance in satisfaction of the insurance requirements of this Section 6.2, unless the Agency determines, in its sole discretion and by written acceptance, that the self - insurance coverage proposed to be provided by the Owner is equivalent to the coverage required in this Section 6.2. A determination by the Agency that proposed self - insurance coverage is not equivalent to the insurance coverage required by this Section 6.2 will be communicated to the Owner in writing by the Agency, along with the reasons for such determination. 6.2.10 All insurance obtained and maintained by the Owner in satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Agency. 6.2.11 Insurance coverage in the minimum amounts set forth in this Agreement shall not be construed to relieve the Owner of any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Agency from taking such other actions as are available to it under any other provision of this Agreement or otherwise at law. 6.2.12 Failure by the Owner to maintain all insurance required by this Agreement in effect at all times shall be an Event of Default by the Owner. The Agency, at its sole option, may exercise any remedy available to it in connection with such an Event of Default. Additionally, the Agency may purchase such required insurance coverage and the Agency shall be entitled to immediate payment from the Owner for any premiums and associated costs paid by the Agency for such insurance coverage. Any election by the Agency not to purchase insurance for the Owner shall not relieve the Owner of its obligation to obtain and maintain the insurance coverage required by this Agreement. Section 6.3 Minimum Assessed Valuation of the Dealership Site. 6.3.1 The redevelopment of the Expansion Site by the Owner is of special interest and concern to the Agency. The redevelopment of the Expansion Site in accordance with the terms of this Agreement shall generate a special source of property tax increment funds payable to the Agency in accordance with Health and Safety Code Section 33760 to fund certain redevelopment activities of the Agency and the affordable housing development programs of the Agency that benefit persons and families of low -and moderate income. 36 RVPUn\DGW\67"24.7 6.3.2 The Owner covenants and agrees that upon the recordation of the Certificate of Completion or as of October 1, 2007, whichever date shall occur first, the assessed valuation of the Dealership Site, as improved with the Expansion Project, for ad valorem property taxation purposes, shall be not less than Ten Million Dollars ($10,000,000.00) in excess of the Expansion Tax Increment Base Year Value (the "Minimum Assessed Valuation "). For purposes of this Section 6.3, the aggregate amount of the assessed value of the Dealership Site, as reported by the Office of the Assessor of the County of Los Angeles, California, as public record information relating to property tax assessments for the Dealership Site (on both the secured, plus unsecured property tax rolls of the Office of the Assessor of the County of Los Angeles, California), on the January 1, 2009, property tax lien date, shall be conclusive evidence of the Owner's satisfaction of or failure to satisfy its covenant of the first sentence of this Section 6.3. 6.3.3 The Owner for itself, its heirs, successors and assigns covenants and agrees that for the term of ten (10) years from the date of recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, whichever date occurs first, the Owner shall not seek to obtain or authorize a reduction or other adjustment of the assessed valuation of the Dealership Site for ad valorem property tax purposes from the Office of the Assessor of the County of Los Angeles, California, to an assessed valuation amount that is less than the Minimum Assessed Valuation, plus an amount as determined in accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 5l(a) of the Revenue and Taxation Code for each succeeding tax year. 6.3.4 In any of the ten (10) years following the earlier of the recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, in which the assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California, is less than the Minimum Assessed Valuation, plus an amount as determined in accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 51(a) of the Revenue and Taxation Code for each tax year following the Expansion Tax Increment Base Year, the Owner, its successors or assigns shall pay to the Agency the difference between one percent (1.0 %) of the Minimum Assessed Valuation and one percent (1.0 %) of the actual assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California (the "In -Lieu Tax Increment Payment "). Any In -Lieu Tax Increment Payment determined by the Agency to be owed by the Owner shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of such In -Lieu Tax Increment Payment amount. 6.3.5 The covenants of this Section 6.3 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.3 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project, without the prior written consent of the Agency. 37 RVPUn\DGW\674424.7 Section 6.4 Dealership Minimum Annual Sales and Use Tax and Continuous Operation Covenants. 6.4.1 The Owner and the Operator each covenant to the Agency to cause the Operator to collect and remit to BOE a minimum aggregate amount of seven hundred thousand dollars ($700,000) in Dealership Sales Tax (the "Minimum Annual Sales Tax Amount "), in each Dealership Operating Year, towards repayment of the Agency Loan, pursuant to the terms of the Promissory Note. 6.4.2 If in any Dealership Operating Year the.Operator fails to generate the Minimum Annual Sales Tax Amount, the Owner and the Operator and their respective successors or assigns, jointly and severally, shall pay to the City the difference between the Minimum Annual Sales Tax Amount for such Dealership Operating Year and the actual amount of Dealership Sales Tax generated in such Dealership Operating Year, as determined by the Agency (an "In -Lieu Minimum Sales Tax Payment"). Any In -Lieu Minimum Sales Tax Payment determined by the Agency to be owed by the Owner and/or the Operator shall be paid to the City within forty -five (45) days following transmittal by the Agency to the Owner and the Operator of an invoice for payment of such In -Lieu Minimum Sales Tax Payment amount. 6.4.3 Upon payment in full of all principal and accrued and unpaid interest under the Promissory Note, the covenant of the Owner and the Operator contained in Section 6.4.1 shall terminate ( "Sales Tax Covenant Termination Date "). 6.4.4 The Owner and the Operator each covenant to the Agency to cause the Dealership to be open for business to the general public on the Dealership Site by the earlier of (1) thirty (30) days following the issuance of a final Certificate of Occupancy for the Expansion Project by the City or (2) October 1, 2007 (the "Opening Date "), and to continuously operate the Dealership on the Dealership Site for the ten (10) years following the Opening Date. For the ten (10) years following the Opening Date, the Owner and the Operator shall exercise their reasonable best efforts to cause the Dealership to be continuously operated as a business for the sales and service of new and pre -owned vehicles manufactured by Mercedes Benz. For purposes of this provision "continuously operate" means the Dealership shall not cease to operate for a continuous period of ninety (90) calendar days, except as otherwise excused under the terms of this Agreement. 6.4.5 The Owner and Operator each acknowledge and agree that the sales and use tax reporting and payment information related to sales and use taxes resulting from business activities on the Dealership Site may become a public record, as a result of the covenants of the Owner and the Operator contained in this Section 6.4. The Owner and the Operator each authorize the Agency and the City to use the sales and use tax reporting and payment information related to sales and use taxes on the gross receipts of the Owner and/or the Operator from the sale or lease of all tangible personal property from the Dealership Site to confirm the Owner's and the Operator's compliance with the covenants of the Owner and the Operator contained in this Section 6.4. Additionally, the Owner and the Operator shall make available to the Agency, upon request, for review and copying, all sales and use tax reporting and payment information that the Owner and/or the Operator submit to the BOE regarding the gross receipts of the Owner and/or the Operator from the sale of all tangible personal property M RVPUB \DGW\674424.7 from the Dealership Site. The Agency shall maintain the confidentiality of all information regarding sales and use taxes resulting from business activities on the Dealership Site provided to the Agency to the extent permitted by law. 6.4.6 The covenants of this Section 6.4 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.4 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project. Section 6.5 Operator Incentive. If the Sales Tax Covenant Termination Date occurs in any Dealership Operating Year, commencing with the next calendar quarter following the calendar quarter in which the Sales Tax Covenant Termination Date occurs, the Agency shall begin paying to the Operator an amount equal to fifty percent (50 %) of the City Sales Tax Revenue (as defined in the next sentence), pursuant to sub - section (e) (the "Operator Incentive "). "City Sales Tax Revenue" means and refers to the amount of local sales and use taxes received by the City, pursuant to Revenue and Taxation Code Sections 7200, et sue., and all monies received by the City from the Sales and Use Tax Compensation Fund established pursuant to Revenue and Taxation Code Section 97.68 (as such statutes may be modified, amended, re- numbered, re -named or substituted), that is quantifiable as directly attributable to the gross receipts of the Operator from the sale or lease of all tangible personal property from the Dealership Site in each Dealership Operating Year in excess of the Sales Tax Base Year Value, until the end of Dealership Operating Year 10. Notwithstanding any other provision of this Agreement, the Agency shall not pay more than Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate in Operator Incentive payments to the Operator, pursuant to the terms of this Section 6.5. (a) All Operator Incentive money received by the Operator pursuant to the terms of this Section 6.5 shall be held by the Operator and expended by the Operator only for (i) expansion or Improvements (exclusive of maintenance and repairs) to the Dealership or (ii) construction and installation of improvements to real property on the Dealership Site or within one thousand (1,000) feet of the Dealership Site for use as a Smart car (manufactured by MCC (Micro Compact Car), a division of Daimler - Chrysler) franchise dealership for new Smart car automobile retail sales, each only with the prior written approval of the Executive Director, and all Operator Incentive monies shall be expended for such approved purposes within five (5) calendar years of the date of Operator's receipt of the first Operator Incentive payment from the Agency pursuant to this Section 6.5, but in no event later than the first anniversary of the end of Dealership Operating Year 10. (b) Determination of City Sales Tax Revenue. Within forty -five (45) days following the City's receipt of all sales and use tax remittance advice from BOE following the end of each calendar quarter following the Sales Tax Covenant Termination Date and during a Dealership Operating Year, the Agency shall determine the City Sales Tax Revenue for the particular calendar quarter and provide the Operator with written notice of the Agency's determination (each, a "Notice of Determination "), together with reasonable supporting documents and calculations. Notwithstanding any other provision of law, including, without implied limitation, any statutes of limitation provided therefore in the Government Code or the Code of Civil Procedure, the Agency's determination of the matters set forth in a Notice of 39 RVPUB\DGVA674424.7 Determination shall be deemed final, conclusive, and non - appealable, unless, within thirty (30) days following the Operator's receipt of the Notice of Determination, the Operator notifies the Agency in writing that the Operator appeals one or more of the matters set forth in the Notice of Determination setting forth the special matters appealed and all bases for such appeal (a "Notice of Appeal "). Any matter set forth in a Notice of Determination that is not appealed by the Operator within the time period set forth in the preceding sentence, shall be final and conclusive as against the Operator. The provisions of this sub - section (b) shall be strictly construed and the Operator waives, to the maximum legal extent, any statutory or judicially created right to institute any administrative or judicial proceeding to contest any matter set forth in a Notice of Determination that is not timely appealed in strict accordance with this sub - section (b). (c) If the Operator files a timely Notice of Appeal with the Agency, pursuant to sub - paragraph (b), the Agency and the Operator shall negotiate in good faith to resolve their dispute for a period of no less than thirty (30) days (the "Negotiation Period "). If, by the end of the Negotiation Period, the Agency and the Operator are unable to resolve the dispute set forth in the Notice of Appeal, each of them may exercise any judicial remedy available to them pursuant to this Agreement, at law or in equity for the resolution of such dispute; provided, however, that any provision of law to the contrary notwithstanding, such judicial remedy must be instituted (defined as the filing of an action in a court of competent jurisdiction in strict accordance with the terms of this Agreement) within ninety (90) days following the end of the Negotiation Period or be barred forever. In connection with any such legal action, the Agency and the Operator irrevocably consent to the appointment of a referee to resolve such dispute in accordance with Code of Civil Procedure Section 638, et seq., and to pay equal amounts of the cost of such referee. (d) The Agency and the Operator agree that any disputed amount of City Sales Tax Revenues shall not accrue interest during the pendency of any Negotiation Period or subsequent legal proceeding (including any appeals filed in connection therewith), unless the court makes a determination that the Agency acted in bad faith with regard to the dispute, in which case, any Operator Incentive amount ultimately adjudged to be owing to the Operator shall be deemed to have accrued interest at the rate of six percent (6 %) simple interest per annum, commencing on the day following the end of the Negotiation Period and continuing thereafter until paid. (e) Agency Payments. The Agency shall pay the Operator Incentive to the Operator in quarterly installments, subject to the provisions of sub - sections (c) and (d), within thirty (30) days following the earlier of (i) expiration of each appeal period under sub- section (b), without the Operator filing an appeal, (ii) negotiation of an agreed upon amount of the Operator Incentive under sub- section (c), or (iii) final disposition of any legal action that determines the amount of the Operator Incentive under sub - section (c). Any amounts of the Operator Incentive not paid by the Agency within the time period established for such payment in the preceding sentence shall bear interest at the rate of six percent (6 %) simple interest per annum commencing on the day following the expiration of the time period for such payment established in the preceding sentence. (f) Notwithstanding any other provision of this Agreement, the Agency's obligation to make any Operator Incentive payment is expressly subject to the legal 40 RVPUB\DGW \674424.7 availability of funds to the Agency for such purpose and any obligation of the Agency to make any Operator Incentive payment shall terminate on the earlier of (i) the end of Dealership Operating Year 10 or (ii) the last date upon which the Agency is entitled to receive property tax increment revenues, pursuant to Health and Safety Code Section 33670 and the Redevelopment Plan for the Project Area, that may legally be used for making Operator Incentive payments under this Agreement. (g) Source of Operator Incentive Payments. The Operator Incentive payments may be paid from any source of funds legally available to the Agency for such purpose and nothing in this Agreement is intended to constitute a pledge, pursuant to Health and Safety Code Section 33671, of property tax revenues allocated or allocable to the Agency pursuant to Health and Safety Code Section 33670 or 33675. The Parties each acknowledge and agree that the City and Agency are separate legal entities, the City,, not the Agency, actually receives the Dealership Sales Tax, the City is not a Party to this Agreement and has no rights or obligations under this Agreement, and the Dealership Sales Tax is being used merely as a measure of the amount of the Operator Incentive payments that may periodically be owing by the Agency and the Agency is not pledging sales tax funds or any other specific Agency funds for payment of any Operator Incentive payments. The Agency's obligation to make Operator Incentive payments is expressly subject and subordinate to the Agency's pledge, pursuant to Health and Safety Code Section 33671, of any property tax revenues that are allocated or allocable to the Agency pursuant to California Health and Safety Code Section 33670 or 33675. Section 6.6 No Transfer Prior to Repayment of Agency Loan. Neither the Owner or the Operator shall Transfer any of its interest in the Expansion Site, the Dealership Site, any improvements on either such site nor any automobile dealership franchise then being operated on the Expansion Site or the Dealership Site prior to repayment in full of all principal and accrued interest under the Promissory Note, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. Any violation of the provisions of this Section 6.6 by either the Owner or the Operator shall be an Event of Default under this Agreement and the Promissory Note. Section 6.7 Owner and Operator Covenant to Defend this Agreement. The Owner and the Operator each acknowledge that the Agency is a "public entity" and/or a "public agency" as defined under applicable California law. Therefore, the Agency must satisfy the requirements of certain California statutes relating to the actions of public entities and redevelopment agencies, including, without limitation, CEQA and Health and Safety Code Section 33426.7. Also, as a public body and a redevelopment agency, the Agency's action in approving this Agreement may be subject to proceedings to invalidate this Agreement, injunctive relief or damages. The Owner and the Operator each assume the risk of delays and damages that may result to either of them as a result of any third -party legal actions related to the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the Agency is determined to have occurred. If a third -party files a legal action regarding the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the Agency may terminate this Agreement on thirty (30) days written notice to the Owner and the Operator of the Agency's intent to terminate this Agreement, referencing this Section 6.7, without any further obligation to perform the terms of this Agreement and without any liability to the Owner or the Operator resulting from such 41 RVPUB%DGW\674424.7 termination, unless the Owner or the Operator unconditionally agrees to indemnify and defend the Agency against such third -party legal action, as provided hereinafter in this Section 6.7. Within 30 days of receipt of the Agency's notice of intent to terminate this Agreement, as provided in the preceding sentence, the Owner or the Operator may offer to defend the Agency in the third -party legal action, with counsel reasonably acceptable to the Agency, and pay all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Owner or the Operator must be in writing and in a form reasonably acceptable to the Agency. Nothing contained in this Section 6.7 shall be deemed or construed to be an express or implied admission that the Agency is liable to the Owner or the Operator or any other person or entity for damages alleged from any alleged or established failure of the Agency to comply with any statute, including, without limitation, CEQA or Health and Safety Code Section 33426.7. Section 6.8 Owner and Operator Indemnification of the Agency. In addition to any other specific indemnification or defense obligations of the Owner or the Operator set forth in this Agreement, the Owner and the Operator each agree to indemnify, defend (upon written request by the Agency and with counsel reasonably acceptable to the Agency) and hold harmless the Agency, its governing board, commissions, agents, officers, employees, attorneys and authorized representatives from any and all losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and expenses, including, but not limited to reasonable attorney's fees of counsel retained by the .Agency, expert fees, costs of staff time, and investigation costs, of whatever kind or nature, that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, through any act, omission, fault or negligence, whether active or passive, of the Owner or the Operator or their respective directors, officers, agents, employees, independent contractors, subcontractors of any tier, or authorized representatives, relating in any manner to this Agreement, any work to be performed by the Owner or the Operator related to this Agreement, or any authority or obligation exercised or undertaken by the Owner or the Operator under this Agreement. Without limiting the generality of the foregoing, the Owner's and the Operator's obligations to indemnify the Agency shall include injury or death to any person or persons, damage to any property, regardless of where located, including the property of the Agency, any workers' compensation or prevailing wage determination, claim or suit or any other matter arising from or connected with any goods or materials provided or services or labor performed regarding the Expansion Project or the Expansion Site on behalf of Owner or the Operator by any person or entity. Section 6.9 Notice of Agreement. The Owner and the Operator each agree to execute in recordable form the Notice of Agreement, including notary acknowledgement of the signatures of the authorized representatives of the Owner and the Operator executing the Notice of Agreement. The Owner and the Operator each also authorize the Agency to record the Notice of Agreement in the official records of the Recorder of the County of Los Angeles, California, against the Dealership Site or any portion thereof, immediately upon the Owner's acquisition of title to any portion of the Expansion Site. Section 6.10 Environmental Indemnity of the Agency by the Owner and the Operator. The Owner and the Operator each agree, jointly and severally, at their sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel selected by the 42 RVPUMDGW\674424.7 Owner or the Operator and approved by the Agency, which approval shall not be unreasonably withheld, the Agency and its elected officials, officers, attorneys, agents and employees and each of them, from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and costs of attorneys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever (collectively, "Environmental Losses ") that may, at any time, be imposed upon, incurred or suffered by, or claimed, asserted or awarded against, the Agency directly or indirectly relating to or arising from any of the following "Environmental Matters" existing or occurring during or arising from the Owner's ownership of the Expansion Site or the Expansion Project, construction or operation of the Expansion Project or operation of the Dealership on the Dealership Site: 6.10.1 The presence of Hazardous Materials on, in, under, from or affecting all or any portion of the Expansion Site, the Expansion Project or the Dealership Site; 6.10.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under, from or affecting the Expansion Site or the Expansion Project; 6.10.3 The violation of any law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Owner; its agents or contractors, relating to or governing in any way Hazardous Materials on, in, under, from or affecting the Expansion Site, the Expansion Project or the Dealership Site; 6.10.4 The failure of the Owner or the Operator or their respective agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the like in connection with the Owner's activities on the Expansion Site, regarding the Expansion Project or on the Dealership Site; 6.10.5 The implementation and enforcement by the Owner or the Operator or their respective agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the release, potential release or discharge of Hazardous Materials on, in, under, from or affecting the Expansion Site, the Expansion Project or the Dealership Site; 6.10.6 The failure of the Owner or the Operator or their respective agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Materials existing, stored or generated on, in, under or from the Expansion Site, the Expansion Project or the Dealership Site; 6.10.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from or affecting the Expansion Site, the Expansion Project or the Dealership Site or the violation of any Environmental Law relating to the Expansion Site, the Expansion Project or the Dealership Site; 43 RVPUB \DGWW4424.7 6.10.8 The Owner and /or the Operator, jointly and severally, shall pay to the Agency all costs and expenses including, without limitation, reasonable attorneys fees and costs, incurred by the Agency in connection with enforcement of the environmental indemnity set forth in this Section 6.10. Section 6.11 Payment of Prevailing Wage. The Owner and the Operator each agree that in connection with the construction and installation of the Expansion Project, not less than "prevailing wages," as this term is defined in California Labor Code Sections 1770 et seq., shall be paid by the Owner and the Operator and their respective contractors and any subcontractors to all laborers employed in connection with the construction and installation of the Expansion Project. The provisions of California Labor Code Sections 1775 and 1776 shall be applicable to the performance of this obligations of the Owner and the Operator in construction and installation of the Expansion Project. The Agency shall have the right, but not the obligation, to inspect and copy all of the payroll records of the Owner, the Operator and their respective contractors and sub - contractors related to the Expansion Project. The Agency shall also have the right to exercise the remedies provided in the California Labor Code, in addition to all other remedies available to the Agency at law, under contract or in equity, in the event of a breach of the obligations of the Owner and the Operator to pay not less than "prevailing wages" to all laborers employed in connection with the construction and installation of the Expansion Project. The Owner and the Operator each agree to and acknowledges their legal duty to pay prevailing wages regarding the Expansion Project, as generally described in this Section 6.11. Notwithstanding any other provision of this Section 6.11 or this Agreement, the Agency shall not be under any duty to monitor or ensure the Owner's or the Operator's compliance with any State of California Labor Laws, including, without limitation, prevailing wage laws. Section 6.12 Covenant to Maintain Dealership Site on Tax Rolls for 10 Years. 6.12.1 The Owner shall assure that the Dealership Site remains on the County of Los Angeles, California, secured real property tax rolls for the ten (10) calendar years following the date of recordation of the Certificate of Completion for the Expansion Project. 6.12.2 For the ten (10) year period following the date of recordation of the Certificate of Completion for the Expansion Project, the Owner for itself and its successors and assigns covenants and agrees to pay all property tax bills with respect to the Dealership Site and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 and to timely pay all supplemental tax bills regarding such property issued by the County of Los Angeles, California. The Owner further covenants and agrees to make available to the Agency, upon request, commencing in the calendar year following the calendar year in which the Certificate of Completion for the Expansion Project is recorded and in each of the ten (10) calendar years, thereafter, for inspection and copying (i) a true and correct copy. of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Owner and the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California, and (ii) cancelled checks issued by the Owner in payment of all property tax payments that are made to the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California. 44 RVPUB\DGWN674424.7 Failure of the Owner to comply with the covenant of this Section 6.12 shall be deemed to be a material breach of this Agreement by the Owner and the Agency shall be entitled to pursue any remedy or damages available at law or in equity for such breach. The Agency shall maintain the confidentiality of all information regarding property tax assessments and payments provided to the Agency to the maximum extent permitted by law. 6.123 The Owner understands and agrees that, prior to the expiration of the Redevelopment Plan for the Project Area, neither the Owner, nor its successors or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Dealership Site or any portion of the Dealership Site to any person or entity, or for any use of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site, without the prior written consent of the Agency. For the period commencing on the Effective Date and continuing through and including the tenth (10c') anniversary of the date of recordation of a Certificate of Completion for the Expansion Project, the Owner further covenants and agrees that in the event of any conveyance, transfer, assignment, lease, leaseback or sale by the Owner to any entity or person or for any use of the Dealership Site or any portion of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site or any portion of the Dealership Site, the Owner, its successors or assigns shall pay to the Agency a fee in lieu of payment of such taxes each year in an amount determined by the Agency to be one percent (1.0 %) of the "full cash value" of the Dealership Site, or portion thereof, as may be subject to such exemption from payment of ad valorem property taxes. The Agency's determination of "full cash value" for in -lieu payment purposes under this Section 6.12.3 shall be established by the Agency each year, if necessary, by reference to the ad valorem property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Agency's determination of "full cash value" and that an in -lieu payment is due shall be conclusive on such matters. If the Agency determines that an amount is payable by the Owner to the Agency as an in -lieu payment under this Section 6.12.3 in any tax year, then such amount shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of the in -lieu amount. 6.12.4 The covenants of this Section 6.12 shall run with the land of the Dealership Site and shall be a covenant set forth in the Notice of Agreement and the Agency Grant Deed. Section 6.13 Maintenance Condition of the Dealership Site. The Owner and the Operator, for themselves and their respective successors and assigns, each covenant and agree that: 6.13.1 The areas of the Dealership Site that are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If, at any time within twenty (20) years following the date of recordation of the Notice of Agreement there is an occurrence of an adverse condition on any 45 RVPUB\DGM674424.7 area of the Dealership Site that is subject to public view in contravention of the general maintenance standard described above (a "Maintenance Deficiency "), then the Agency shall notify the Owner and the Operator in writing of the Maintenance Deficiency. If the Owner or the Operator fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the Agency may conduct a public hearing, following transmittal of written notice of the hearing to the Owner and the Operator, at least, ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency exists and whether the Owner or the Operator has failed to comply with the provisions of this Section 6.13. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance Deficiency exists and that there appears to be non - compliance with the general maintenance standard, described above, the Agency shall have the right to enter the Dealership Site and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that the Agency may then be available to the Agency to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Dealership Site, as authorized by this Section 6.13 shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Agency to the Owner and the Operator, the Agency shall have the right to enforce the lien in the manner as provided in Section 6.13.3. 6.13.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Dealership Site that is visible from any public right -of -way adjacent or contiguous to the Dealership Site, shall be removed by the Owner or the Operator by either painting over the evidence of such vandalism with a paint that has been color- matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti and is not removed within 72 hours following the time of the discovery of the graffiti, the Agency shall have the right to enter the Dealership Site and remove the graffiti, without notice to the Owner or the Operator. Any sum expended by the Agency for the removal of graffiti from the Dealership Site, as authorized by this Section 6.13, in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand to the Owner from the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 6.13.3. 6.13.3 The Parties further mutually understand and agree that the rights conferred upon the Agency under this Section 6.13 expressly include the power to establish and enforce a lien or other encumbrance against the Dealership Site, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Dealership Site to the maintenance standard required under Section 6.13.1 or Section 6.13.2, including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words "reasonable attorneys' fees and costs of the Agency" mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney. The provisions of this Section 6.13, shall be a covenant running with the land for a term of twenty (20) years following the date of recordation of the Notice of Agreement, shall be set forth in the Notice of Agreement, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 6.13 shall be 46 RVPUMDGWN674424.7 deemed to preclude the Owner or the Operator from making any alteration, addition, or other change to any structure or improvement or landscaping on the Dealership Site, provided that any such changes comply with applicable zoning and building regulations of the City. Section 6.14 Obligation to Refrain from Discrimination. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site or any portion thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site nor shall the Owner, the Operator or any person claiming under or through either of them establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Dealership Site. The covenant of this Section 6.14 shall run with the land of the Dealership Site in perpetuity and be a covenant set forth in the Agency Grant Deed. Section 6.15 Form of Non - discrimination and Non- segregation Clauses. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site, or any portion thereof, that the Owner, the Operator and such successors and assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Dealership Site shall contain or be subject to substantially the following non- discrimination or non - segregation covenants: 6.15.1 In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 6.15.2 In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." 47 RVPUB \DGW\674424.7 6.15.3 In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 6.15.4 The covenant of this Section 6.15 shall run with the land of the Dealership Site in perpetuity and shall be a covenant in the Agency Grant Deed. Section 6.16 Survival of Special Redevelopment Covenants. Each of the special redevelopment covenants set forth in this ARTICLE VI shall be a covenant running with the land of the Dealership Site and shall survive each Close of Escrow under the Agency /Owner Escrow, for the time period set forth in each such special redevelopment covenant. ARTICLE VII POST - CLOSING ACTIONS OF THE AGENCY AND THE DEVELOPER Section 7.1 Vacation of Morlan Place. The Agency shall exercise its reasonable best efforts to cause the City to schedule a public hearing to consider the possible vacation of a portion of Morlan Place in accordance with the Scope of Development for such lands proposed by the Owner by the date set forth in the Schedule of Performance for such action, subject to the submission by the Owner of all necessary engineering and other information required by the City for consideration of such a street vacation. If the City vacates a portion of Morlan Place, within thirty (30) days of notice of the vacation of such portion of Morlan Place by the City, the Owner shall pay to the Agency the lesser of (i) the amount the Agency paid to acquire fee title to the land under that portion of Morlan Place vacated by the City or (ii) the fair reuse value of the land under that portion of Morlan Place vacated by the City, exclusive of land in which the Owner held a reversionary interest pursuant to Streets and Highways Code Section 8350, prior to the Effective Date. Section 7.2 Merger of Parcels. Within the time period for such action set forth in the Schedule of Performance, the Owner shall take all reasonable actions necessary to cause the City to approve a map merging all of the Parcels comprising the Expansion Site, including any portions of Morlan Place that may be vacated by the City, and the property on which the existing Dealership is located into a single legal parcel, in compliance with the Subdivision Map Act and the requirements of the City, .all at the Owner's sole cost and expense. The Owner hereby consents to a ninety (90) day extension of time, pursuant to Government Code Section 65957, for the City to process the Owner's complete parcel map application for the Dealership Site, for a total processing period of one hundred fifty (150) days. The legal parcel to be created by the merger of the Expansion Site, any vacated portions of Morlan Place, if any, and the Existing Site is referred to in this Agreement as the "Dealership Site." 48 - RVPU©\DG4V\674424.7 Section 7.3 Conditional Use Permit. The Agency shall exercise its reasonable best efforts to cause the City to approve any conditional use permit or other discretionary approval required for the Expansion Project in accordance with the Scope of Development by the date set forth in the Schedule of Performance, provided that the Owner has submitted all necessary applications and other information required by the City for consideration of such conditional use permit or other discretionary approval by the date set forth in the Schedule of Performance. Section 7.4 Certificate of Completion. 7.4.1 Following the completion of construction and installation of the Expansion Project, excluding any normal and minor building "punch- list" items to be completed by the Owner, and written request from the Owner for issuance of the Certificate of Completion, the Agency shall inspect the Expansion Project to determine whether or not the Expansion Project has been completed in compliance with this Agreement. If the Agency determines that the Expansion Project is complete and in compliance with this Agreement, the Agency shall furnish the Owner with a Certificate of Completion for the Expansion Project, executed in recordable form. If the Agency determines that the Expansion Project is not in compliance with this Agreement, the Agency shall send written notice of each non - conformity to the Owner, pursuant to Section 7.4.3. 7.4.2 The Agency shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be evidence of the Agency's conclusive determination of satisfactory completion of the Expansion Project, pursuant to the terms of this Agreement. After the recordation of the Certificate of Completion, any person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Dealership Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding construction or installation of the Expansion Project, except that such person shall be bound by any reservations, covenants, conditions, restrictions and other interests recorded against the Dealership Site pursuant to this Agreement. 7.4.3 If the Agency fails or refuses to issue a Certificate of Completion for the Expansion Project, after written request from the Owner, the Agency shall, within fifteen (15) calendar days of the Owner's written request or within three (3) calendar days after the next regular meeting of the Agency, whichever date occurs later, provide Owner with a written statement setting forth the reasons for the Agency's failure or refusal to issue a Certificate of Completion. The statement shall also contain the Agency's opinion of the action(s) the Owner must take to obtain a Certificate of Completion from the Agency. If the reason for such refusal is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Owner or other minor building "punch- list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by the Owner in a form reasonably acceptable to the Agency in an amount representing the fair value of the work not yet completed, as reasonably determined by the Agency. If the Agency fails to provide such written statement, within the foregoing time period, the Owner shall be deemed conclusively and without further action of the Agency to have satisfied the requirements of this Agreement with respect to the Expansion Project, as if a Certificate of Completion had been issued by the Agency pursuant to this Agreement. 49 RVPU©\DGW \674424.7 7.4.4 A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Owner to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Expansion Project, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion under Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or conditions subsequent contained in the Agency Grant Deed or any other instruments recorded against the Expansion Site pursuant to this Agreement. A Certificate of Completion is not evidence of the compliance of the Expansion Project with any building code, conditions of approval, land use, zoning or other requirements of the City or any governmental entity with jurisdiction over the Expansion Site, other than the Agency. ARTICLE VIII DEVELOPER FINANCING OF EXPANSION SITE ACQUISITION AND EXPANSION PROJECT Section 8.1 Agency Right to Approve Lenders. The Agency shall have the right to approve each Lender proposed by the Owner or the Operator to provide a Loan and the right to review and approve any and all Loan Documents evidencing any Loan and/or any security for any Loan, in the Agency's reasonable discretion. The Owner or the Operator shall submit the name of any proposed Lender and all Loan Documents proposed to evidence and/or secure a Loan from such Lender to either the Owner or the Operator, as applicable, to the Agency for review and approval, prior to executing such Loan Documents. The Agency shall review and approve or disapprove any Lender and/or Loan Documents submitted to the Agency for review and approval, within thirty (30) days of receipt of such information by the Agency. The Agency's failure to approve or disapprove any Lender and/or any Loan Documents submitted to the Agency for review and approval within such thirty (30) day period shall constitute the Agency's approval of the submitted Lender and/or Loan Documents. Section 8.2 Recordation of Construction Loan. The Owner covenants to cause a Loan providing financing for the construction and installation of the Expansion Project to be recorded against the Expansion Site or the Dealership Site, within thirty (30) days following the Agency /Owner Escrow Closing Date. Section 8.3 Only Permitted Security Interests Allowed. During the time period between the Effective Date and the recordation of a full reconveyance of the Agency Deed of Trust, the Owner shall not place and shall not allow to be placed on the Existing Site, the Expansion Site, the Dealership Site or any portion of any such site any mortgage, deed of trust, encumbrance or lien other than a Permitted Security Interest. In the event of the recordation of any lien, encumbrance, mortgage, levy or attachment made on the Existing Site, the Expansion Site, the Dealership Site or any portion of any such site that is not a Permitted Security Interest, the Owner shall remove, have removed, or assure the satisfaction thereof to the satisfaction of the Agency. Following sixty (60) calendar days prior written notice to the Owner, the Agency shall have the right, but not the obligation, to satisfy any unauthorized liens or encumbrances recorded against the Existing Site, the Expansion Site, the Dealership Site or any portion of any such site. Nothing in this Section 8.3, though, shall require the Owner to pay or make provisions for the payment of any tax, assessment, lien or charge that the Owner is in the process of contesting the 50 RVPUB \DGM674424.7 validity or amount thereof, in good faith, and so long as such contest shall not subject the Existing Site, the Expansion Site, the Dealership Site or any portion of any such site, to forfeiture or sale. Section 8.4 Notification of Recording of Security Interest. The Owner shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien created or attached to the Existing Site, the Expansion Site, the Dealership Site or any portion of any such site, prior to recordation of a full reconveyance of the Agency Deed of Trust, whether by voluntary act of the Owner or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Owner to the Agency, prior to suit being filed to foreclose any such mechanic's lien. The Owner shall promptly provide the Agency with copies of all Loan Documents evidencing such security interest and related debt. Section 8.5 Rights of Agency. Whenever a Lender delivers a notice or demand to the Owner regarding any breach or default by the Owner under any Loan Document, such Lender shall concurrently deliver a copy of the same notice to the Agency. In the event of a default or breach by the Owner under a Permitted Security Interest, prior to the recordation of a full reconveyance of the Agency Deed of Trust, where the Lender has not exercised its option to complete the Expansion Project under Section 8.6.1, the Agency may cure the default of the Owner under the Loan or the Loan Documents, but is under no obligation to do so, prior to completion of any sale or foreclosure of the Expansion Site under the Loan Documents. The Agency shall be entitled to reimbursement from the Owner of all costs and expenses incurred by the Agency in curing any default of the Owner under the Loan or the Loan Documents. The Agency is authorized to add the amount of any such costs and disbursements to the amount secured by the Agency Deed of Trust. Section 8.6 Rights of Lender. 8.6.1 Whenever the Agency delivers any notice or demand to the Owner regarding any breach or default by the Owner in the completion of construction and installation of the Expansion Project, or any breach or default of any other obligations of the Owner under this Agreement that, if not timely cured by the Owner, would entitle the Agency to terminate this Agreement or exercise its right to acquire all or any portion of the Expansion Site, pursuant to Section 10.6 the Agency shall concurrently send a copy of such notice or demand to the Lender. The Lender shall (insofar as the rights of the Agency are concerned) have the right, but not the obligation, at its option, to commence the cure or remedy of any such default of the Owner and to diligently and continuously proceed with such cure or remedy, within the same time period, if any, provided to the Owner in this Agreement to cure or remedy such default and add the cost of the cure or remedy to the security interest debt and the lien of its security interest. Nothing contained in this Agreement shall be deemed to permit or authorize the Lender to undertake or continue the construction or completion of the Expansion Project (beyond the extent necessary to conserve or protect the improvements or construction already made), without expressly assuming the Owner's obligations under this Agreement by written agreement satisfactory to the Agency in which the Lender agrees to complete, in the manner provided in this Agreement, the improvements to which the lien or title of the Lender relates and must submit evidence satisfactory to the Agency that it has the qualifications and financial capability necessary to perform such obligations. The Lender, upon completing such Expansion Project in 51 AVPUB \DGW1674424,7 accordance with the terms and provisions of this Agreement shall be entitled, upon written request made to the Agency, to be issued a Certificate of Completion by the Agency. Nothing in this Section 8.3 shall prevent or delay the exercise of any power of sale under the Agency Deed of Trust, pursuant to its terms. 8.6.2 In any case where, sixty (60) calendar days after notice of a default by the Owner under Section 8.6.1, the Lender has not exercised the option provided in Section 8.6.1 to construct the applicable portions of the Expansion Project, or has exercised the option, but has not proceeded diligently and continuously with construction, the Agency may purchase the Lender's security interest in the Dealership Site by payment to the Lender of the amount of the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the Lender by the Owner under its loan or security agreement and, if the ownership of the Expansion Site or any portion of the Expansion Site has vested in the Lender, the Agency, at its option, but not its obligation, shall be entitled to a conveyance of any portion of the Expansion Site vested in the Lender from the Lender to the Agency. 8.6.3 After expiration of the sixty (60) calendar day period, provided for in Section 8.6.2, the Lender may demand, in writing, that the Agency act pursuant to the option granted in Section 8.6.2. If the Agency fails to exercise the right granted in Section 8.6.2 within sixty (60) calendar days from the date of the Agency's receipt of such written demand from the Lender, the Agency shall be conclusively deemed to have waived its right of purchase of any security interest created by the Loan or the Loan Documents, pursuant to Section 8.6.2. Section 8.7 Subordination of Agency Deed of Trust. At the Close of each Phase of the Agency /Owner Escrow, the Agency Deed of Trust shall be recorded against each Parcel comprising the subject Phase in first lien position. The Agency will agree to subordinate the Agency Deed of Trust to second lien position, subordinate only to a Permitted Security Interest securing only repayment of other purchase money financing used by the Owner to pay the Parcel Reuse Prices for each Parcel in the subject. Phase. The Owner may also make a written request to the Agency for the Agency to agree to subordinate the lien priority of the Agency Deed of Trust to any Permitted Security Interest securing repayment of financing for construction and installation of the Expansion Project. The form of any future subordination agreement subordinating the priority of the Agency Deed of Trust to any Permitted Security Interest securing repayment of financing for construction and installation of the Expansion Project shall be in a form reasonably acceptable to the Agency and providing, without limitation, for all of the following: (a) The Owner to provide payment and performance bonds in favor of the Agency for the completion of the Expansion Project and the payment of all architects, engineers, materialmen, equipment suppliers, laborers and contractors providing materials, equipment, labor or otherwise employed relative to the Expansion Project, in forms and amounts acceptable to the Agency; (b) Use of the proceeds of the Loan secured by the Permitted Security Interest is restricted to construction and installation of the Expansion Project; 52 RV"%DGM674424.7 (c) The Loan Documents require use of third -party fund control for distribution of the proceeds of the Loan for payment of the costs of construction and installation of the Expansion Project; (d) The maximum points paid by the Owner to obtain the Loan shall not exceed one half of one percent (.5 %) of the original principal amount of the Loan; (e) The term of the Loan shall not exceed ninety (90) days beyond the Completion Date; (f) The terms of the Loan do not require any pre - payment penalty, charge or fee; and (g) The Agency shall not be required to forego or delay the exercise of any right or remedy of the Agency under this Agreement, the Agency Deed of Trust, the Promissory Note or any other document related to or associated with this Agreement or the transactions contemplated in this Agreement. ARTICLE IX REPRESENTATIONS AND WARRANTIES Section 9.1 Warranties and Representations by the Owner. The Owner makes the following representations, covenants and warranties as of the Effective Date and acknowledges that the execution of this Agreement by the Agency is made in material reliance by the Agency on such covenants, representations and warranties of the Owner: 9.1.1 The Owner has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement, such that this Agreement is valid and enforceable against the Owner in accordance with its terms and each instrument to be executed by the Owner pursuant to or in connection with this Agreement will, when executed, be valid and enforceable against the Owner in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution, delivery or performance of this Agreement by the Owner. 9.1.2 If the Owner becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Owner under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon Owner's knowledge and/or belief as of a certain date, the Owner will give immediate written notice of such changed fact or circumstance to the Agency. Section 9.2 Warranties and Representations by the Operator. The Operator makes the following representations, covenants and warranties as of the Effective Date and acknowledges that the execution of this Agreement by the Agency is made in material reliance by the Agency on such covenants, representations and warranties of the Operator: 53 RVPUB\DGW%674424.7 9.2.1 The Operator has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement, such that this Agreement is valid and enforceable against the Operator in accordance with its terms and each instrument to be executed by the Operator pursuant to or in connection with this Agreement will, when executed, be valid and enforceable against the Operator in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution, delivery or performance of this Agreement by the Operator. 9.2.2 If the Operator becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Operator under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon Operator's knowledge and/or belief as of a certain date, the Operator will give immediate written notice of such changed fact or circumstance to the Agency. ARTICLE X DEFAULTS, REMEDIES AND TERMINATION Section 10.1 Defaults - General. 10.1.1 Subject to any extensions of time provided for in this Agreement, failure or delay by either Party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written notice from the injured Party specifying such default, and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such Party shall not be deemed to be in default under this Agreement. 10.1.2 The injured Party shall give written notice of default to the Party in default, specifying the default complained of by the non - defaulting Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. 10.1.3 Any failure or delays by either Party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either Party in asserting any of their rights and/or remedies shall not deprive either Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 10.2 Events of Default. In addition to other acts or omissions of the Owner or the Operator that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events shall constitute an "Event of Default" under this Agreement that is not subject to the provisions of Sections 10.1.1 or 10.1.2: 54 RVPURTGW�674424.7 10.2.1 Any default by the Owner or the Operator under any Loan Documents for any purpose or reason, following any required notice and expiration of any applicable cure period provided under such Loan Documents. 10.2.2 The Owner or the Operator fails to perform any of the non - monetary covenants or conditions of this Agreement, other than those covenants contained in Section 6.1, Section 6.3, Section 6.4 or Section 8.2 (which are each specifically addressed, below), and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Owner or the Operator from the Agency or the expiration of an applicable shorter cure period set forth in this Agreement. 10.2.3 Any failure of the Owner to satisfy the Owner's covenant set forth in Section 8.2. 10.2.4 Any breach of the covenants of the Owner or the Operator set forth in Section 6.1. 10.2.5 The Owner or the Operator fails to perform any of the non - monetary covenants and conditions of Section 6.3 or Section 6.4, and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Owner or the Operator from the Agency or the expiration of an applicable shorter cure period set forth in this Agreement; provided, however, that for so long as the Owner and the Operator are satisfying their joint and several obligations to cause the generation of both the Minimum Assessed Valuation and the Minimum Annual Sales Tax Amount or, alternatively, to pay both the In -Lieu Tax Increment Payment and the In -Lieu Minimum Sales Tax Payment, no default under this Agreement shall occur by virtue of any failure on the part of the Owner or the Operator to satisfy any of the other covenants of either Section 6.3 or Section 6.4, except as provided in Section 10.2.13. 10.2.6 The determination by the Agency that any representation, warranty, disclosure or statement of the Owner or the Operator contained in this Agreement, the Promissory Note, the Deed of Trust or in any other writing delivered to the Agency in connection with this Agreement, the Promissory Note or the Deed of Trust, was incomplete, untrue or misleading in any material respect as of the date made. 10.2.7 The Owner or the Operator fails to make any payment or deposit of funds required under this Agreement or to pay any other charge set forth in this Agreement, following seven (7) days' written notice to the Owner or the Operator from the Agency of such failure or the Agency gives such notice to the Owner or the Operator on more than three (3) occasions. 10.2.8 The occurrence of an Event of Default under the Promissory Note. 10.2.9 The occurrence of an Event of Default under the Agency Deed of Trust. 10.2.10 Any material deviation in the work of improvement of the Expansion Project from the approved Scope of Development, without the prior written approval of the 55 RVPUBIDGW\674424.7 - Agency, or the appearance of defective workmanship or materials and such defects are not corrected or substantially corrected, within thirty (30) days after receipt of written notice thereof from the Agency to the Owner. 10.2.11 Any portion of the Expansion Project encroaches over the Expansion Site boundaries or setback lines or violates any easement rights, or any structure upon adjoining lands encroaches upon the Expansion Site and the condition is not corrected, within thirty (30) days following written notice of such encroachment or violation to the Owner from the Agency. 10.2.12 Failure to commence construction of all or any portion of the Expansion Project in accordance with the Schedule of Performance. 10.2.13 The work of improvement of the Expansion Project is delayed or suspended for a period in excess of that permitted under Section 5.4 of this Agreement, subject to the occurrence or granting of any extension of time provided for in this Agreement; or the work of construction of the Expansion Project is not completed by December 31, 2007, subject to the occurrence or granting of any extension of time provided for in this Agreement. 10.2.14 There occurs any event of dissolution, reorganization or termination of the Owner or the Operator that adversely and materially affects the operation or value of the Existing Site, the Expansion Site, the Expansion Project, the Dealership or the Dealership Site and such event is not corrected within five (5) days following written notice of such event from the Agency to the Owner and the Operator. 10.115 The Owner or the Operator sells, transfers, hypothecates, encumbers or assigns any of its interest in this Agreement, the Existing Site, the Expansion Site, the Expansion Project, the Dealership, the Dealership Site, any improvements on any such site or any portion of any of the foregoing, or violates the provisions of Section 6.6, whether voluntarily or involuntarily or by operation, of law, prior to payment in full of all principal and accrued interest under the Promissory Note or otherwise in violation of the terms of this Agreement, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. 10.2.16 Rusnak/Arcadia, a California corporation, ceases to be the operator of the Dealership, prior to the tenth (10`h) anniversary of the Opening Date, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. 10.2.17 The Owner or the Operator defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect the Owner's or the Operator's ability to repay the Promissory Note or the ability of the Owner or the Operator to perform their, respective, other obligations under this Agreement, the Promissory Note or the Agency Deed of Trust. 10.2.18 Any creditor attempts to take or sell any of the Owner's or the Operator's property on or in which the Agency has a lien or security interest securing repayment or :performance of the Owner's or the Operator's obligations under this Agreement, the Promissory Note or the Agency Deed of Trust. 56 RVPUBUTGW %74424.7 10.2.19 A material adverse change occurs in the Owner's of the Operator's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by the Promissory Note is materially impaired. 10.2.20 The Owner or the Operator becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is referred to in this Deed of Trust as the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing of such petition, or shall make an assignment for the benefit of creditors. 10.2.21 Any court (or similar tribunal) having jurisdiction over either the Owner or the Operator or any of the property of either the Owner or the Operator shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of the Owner or the Operator, of any of the Property, of any other real property of the Owner or the Operator, of any other significant asset of the Owner or the Operator, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code. 10.2.22 The entry of any final judgment or arbitration award against the Owner or the Operator that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the collateral provided by the Owner or the Operator or any other person under the Agency Deed of Trust or as security for performance under this Agreement or the Promissory Note, or (iii) any significant portion of the other assets of the Owner or the Operator, that is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets. 10.2.23 The Owner or the Operator shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up. 10.2.24 The Owner or the Operator suspends or terminates its legal status or is not authorized by the Secretary of State of the State of California to transact business in California. Section 10.3 Agency Rights to Accelerate Obligations. Upon the occurrence of any Event of Default, the Agency may declare all amounts due or that may become due to the Agency or the City in the future pursuant to the provisions of Section 6.3, Section 6.4 and/or the Promissory Note to be immediately due and payable by the Owner and the Operator, jointly and severally, by sending written notice to both the Owner and the Operator of the Event of Default and the Agency's election to exercise its rights under this Section 10.3, and such amounts shall, upon such notice, become immediately due and payable by the Owner and the Operator, jointly and severally. For the purposes of this Section 10.3, the phrase "all amounts due or that may 57 RVPUB \DGW \674424.7 become due to the Agency or the City in the future pursuant to the provisions of Section 6.3" means and refers to all In -Lieu Tax Increment Payments that would be due to the Agency, if the Owner's and/or the Operator's compliance with the covenants of Section 6.3 was determined for the entire duration of the covenants contained in Section 6.3, as of the time of the Event of Default specified in the Agency's notice exercising its rights under this Section 10.3. For the purposes of this Section 10.3, the phrase "all amounts due or that may become due to the Agency or the City in the future pursuant to the provisions of Section 6.4" means and refers to all In -Lieu Minimum Sales Tax Payments that would be due to the Agency, if the Owner's and/or the Operator's compliance with the covenants of Section 6.4 was determined for the entire duration of the covenants contained in Section 6.4, as of the time of the Event of Default specified in the Agency's notice exercising its rights under this Section 10.3. The Agency may exercise its rights to accelerate the obligations of the Owner and /or the Operator contained in Section 6.3, Section 6.4 and/or the Promissory Note, following any Event of Default, regardless of any prior forbearance by the Agency and regardless of whether or not the time for commencement of the obligations contained in Section 6.3, Section 6.4 and/or the Promissory Note has occurred. The occurrence of an Event of Default, with or without, Agency's acceleration of the obligations of the Owner and/or the Operator contained in Section 6.3, Section 6.4 and/or the Promissory Note pursuant to this Section 10.3, shall terminate the Agency's obligations to pay any Operator Incentive pursuant to Section 6.5. Section 10.4 Agency Termination Rights Prior to the Close of the First Phase of Agency /Owner Escrow. Upon the occurrence of an Event of Default at any time prior to the close of the first Phase of the Agency /Owner Escrow, the Agency may terminate this Agreement by sending written notice of termination to both the Owner and the Operator. Section 10.5 Agency Power of Termination Regarding Dealership Site. 10.5.1 The Agency hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable by the Agency, in its sole and absolute discretion, upon thirty (30) calendar days written notice to the Owner and the Operator referencing this Section 10.5, to terminate the fee interest of the Owner in real property conveyed through the Agency Grant Deed and any leasehold or other interest of the Operator in the real property conveyed through the Agency Giant Deed and/or any improvements to such property and revest such fee title in the Agency and take possession of all or any portion of such real property and improvements, without compensation to the Owner, upon the occurrence of an Event of Default following the close of any Phase of the Agency /Owner Escrow and prior to the issuance of a Certificate of Completion for the Expansion Project. The Owner and the Operator agree that the power of termination reserved to the Agency in this Section 10.5 shall apply to the entire Dealership Site, following merger or other combination of the Expansion Site and the Existing Site, as though all such real property and improvements were conveyed through an Agency Grant Deed and the Owner hereby grants such power of termination over the Existing Site to the Agency. 10.5.2 The thirty (30) calendar day written notice specified Section 10.5.1 shall specify the Event of Default triggering the Agency's exercise of its power of termination. The Agency shall proceed with its remedy set forth in Section 10.5.1 only if the Owner and/or the Operator continue in default for a period of thirty (30) calendar days following such notice 58 RVPUB %DGW\674424.7 or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. 10.5.3 The Agency shall compensate the Owner or its successor in interest in ownership of the Expansion Site, for conveyance of marketable, lien -free fee title to the Expansion Site to the Agency, only pursuant to the provisions of Section 10.5.7. 10.5.4 The rights of the Agency under this Section 10.5 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (a) Permitted Security Interests; (b) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Expansion Site, the Dealership Site or any portion of either site and permitted or authorized by this Agreement, except any such interests held by the Operator, which are expressly subordinate to this Agreement and the Agency Deed of Trust, pursuant to Section 1.4, 10.5.5 The deed to a Parcel or to any portion thereof conveyed by the Owner to a third -party shall contain appropriate references and provisions to give effect to the Agency's rights under this Section 10.5. 10.5.6 Upon the Agency's exercise of its power of termination pursuant to this Section 10.5, the Owner and the Operator or their respective successors or assigns shall convey by grant deed to the Agency title to the real property conveyed by the Agency Grant Deed and all improvements thereon in accordance with Civil Code Section 1109, as hereafter amended or substituted. Such conveyance shall be duly acknowledged by the Owner in a manner suitable for recordation. The Agency may enforce its rights pursuant to this Section 10.5 by means of an injunctive relief or forfeiture of title action Sled in any court of competent jurisdiction. 10.5.7 Upon the revesting in the Agency of title to the real property subject to the Agency's power of termination, whether by grant deed or court decree, the Agency shall use its reasonable good faith efforts to resell the real property at fair market value, as soon and in such manner as the Agency shall find feasible and consistent with the objectives of the Redevelopment Plan, to a qualified and responsible party or parties (as reasonably determined by the Agency) who will assume the Owner's and Operator's obligations to begin and /or complete and/or operate the Expansion Project, or such other replacement development - acceptable to the Agency in its sole and absolute discretion, consistent with the Redevelopment Plan. Upon such resale of the real property (or any portion thereof), the proceeds thereof shall be applied as follows: (a) First, to pay any and all amounts required to release /reconvey any Permitted Security Interest; and (b) Second, to reimburse the Agency on its own behalf or on behalf of the City for all actual internal and third -party costs and expenses previously or currently incurred by the Agency or the City related to the Expansion Property, the Expansion Project or this 59 RVPCB\DGW \674424.7 Agreement, including, but not limited to, customary and reasonable fees or salaries to third -party personnel engaged in such actions, in connection with the recapture, management and resale of the real property or any part thereof; all taxes, assessments and utility charges paid by the City and/or the Agency with respect to the real property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Owner or the Operator with respect to the acquisition of the real property or the construction of the Expansion Project; and amounts otherwise owing to the Agency by the Owner or the Operator or their respective successor or assigns pursuant to the terms of this Agreement; and (c) Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Owner, or its successors in interest to the real property or any part thereof, equal to the sum o£ (1) the Parcel Purchase Prices paid to the Agency; (2) the amount of any equity in the Existing Site held by the Owner on the last day immediately prior to the Agency /Owner Escrow Closing Date; and (3) the third -party costs actually incurred and paid by the Owner regarding the development of the Expansion Project, including, but not limited to, costs of carry, taxes, and other items as set forth in the Owner's cost certification, which shall be subject to the Agency's reasonable approval; provided, however, that the Owner shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, liens or other encumbrances that are paid by the Agency pursuant to the provisions of sub - sections (a) or (b) above. (d) Any portion of the proceeds from the resale of the real property remaining after the foregoing applications shall be retained by the Agency as its sole and exclusive property. 10.5.8 IMMEDIATELY FOLLOWING THE THIRTY (30) DAY PERIOD SPECIFIED IN SECTION 10.5.1, ABOVE, THE AGENCY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE REAL PROPERTY CONVEYED TO THE OWNER THROUGH THE AGENCY GRANT DEED OR THE DEALERSHIP SITE AND ANY IMPROVEMENTS TO SUCH REAL PROPERTY, WITHOUT FURTHER PRIOR NOTICE OR COMPENSATION, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 10.5.7, TO THE OWNER OR THE OPERATOR. BY INITIALING BELOW, BOTH THE OWNER AND THE OPERATOR HEREBY EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT THE OWNER OR THE OPERATOR MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. OWNER'S INITIALS 4- OPERATOR'S INITIALS -.0 10.5.9 THE OWNER AND THE OPERATOR EACH ACKNOWLEDGE AND AGREE THAT THE AGENCY'S EXERCISE OF ITS POWER OF TERMINATION 60 RVPU13\DGW\674424.7 AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 10.5 SHALL WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE OWNER THROUGH THE AGENCY GRANT DEED, THE DEALERSHIP SITE, AND ANY INTEREST OF THE OPERATOR IN SUCH REAL PROPERTY OR IMPROVEMENTS TO SUCH REAL PROPERTY. THE OWNER AND THE OPERATOR EACH HEREBY EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE OWNER OR THE OPERATOR MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE OWNER AND THE OPERATOR FURTHER EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE OWNER OR THE OPERATOR MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE OWNER AND THE OPERATOR EACH ACKNOWLEDGE THAT THE TERMS AND CONDITIONS OF THIS AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE AGENCY'S POWER OF TERMINATION PROVIDED IN THIS SECTION 10.5 AND FURTHER ACKNOWLEDGE THAT EACH HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO THIS SECTION 10.5. OWNER'S INITIALS Section 10.6 Legal Actions. OPERATOR'S INITIALS J 10.6.1 In addition to any other rights or remedies, either Party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy available to that Party under this Agreement or at law or in equity. 10.6.2 The laws of the State of California shall govern the interpretation and enforcement of this Agreement. The Parties acknowledge and agree that this Agreement is entered into, is to be fully and completely performed in and relates to real property situated in the City of Arcadia, County of Los Angeles, California. 10.6.3 In the event that any legal action is commenced by the Owner against the Agency, service of process on the Agency shall be made by personal service upon the City Clerk of the City of Arcadia, California, at 204 West Huntington Drive, Arcadia, California (or such other Agent for service of process and at such address as may be specified in written notice from the Agency), or in such other manner as may be provided by law. 10.6.4 In the event that any legal action is commenced by the Agency against the Owner, service of process on the Owner shall be made by personal service on Paul P. Rusnak at 55 West Huntington Drive, Arcadia, California (or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such 61 RVPUB\DGW\674424.7 other manner as may be provided by law, and shall be valid whether made within or without the State of California. 10.6.5 In the event that any legal action is commenced by the Agency against the Operator, service of process on the Operator shall be made by personal service on any corporate officer of the Operator at 55 West Huntington Drive, Arcadia, California (or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 10.7 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties as set forth in this ARTICLE X are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party. ARTICLE XI GENERAL PROVISIONS Section 11.1 Notices, Demands and Communications Between the Parties. 11.1.1 Any and all notices, demands or communications submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and dispatched by messenger for immediate personal delivery, by a nationally recognized overnight courier service or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency or the Owner, as applicable, as designated in Section 11.1.2. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States mail, as provided in this Section 11.1.1. 11.1.2 The following are the authorized addresses for the submission of notices, demands or communications to the Parties: To the Owner: Paul P. Rusnak, Trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 P.O. Box 70489 Pasadena, CA 91117 -7489 Fax: (626)792 -6300 With courtesy copy to: Christensen, Miller, Fink, et al 10250 Constellation Blvd., 19`h Floor 62 RVPUB \DGW\674424.7 To the Operator: With courtesy copy to: Los Angeles, CA 90067 Attention: Barry Fink, Esq. Fax: (310)556 -2920 Rusnak/Arcadia P.O. Box 70489 Pasadena, CA 91117-7489 Attention: Paul Rusnak, Chairman Fax: (626)792 -6300 Christensen, Miller, Fink, et al 10250 Constellation Blvd., 19`h Floor Los Angeles, CA 90067 Attention: Barry Fink, Esq. Fax: (310)556 -2920 To the Agency: Redevelopment Agency of the City of Arcadia 204 W. Huntington Drive P.O. Box 60021 Arcadia, California 91006 -6021 Attention: Executive Director Fax: (626)447 -3309 With courtesy copy to: Best Best & Krieger, LLP P.O. Box 1028 Riverside, California 92502 Attention: Kevin K. Randolph, Esq. Fax: (909)686 -3083 Section 11.2 Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement or the development of the Expansion Site shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 11.3 Warranty Against Payment of Consideration for Agreement. The Owner warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 11.3, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Owner. Section 11.4 Non - liability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the Agency under this Agreement or for any amount that may become due to the Owner or to its successor, or on any obligations under the terms of this Agreement, except as may arise from the gross negligence or willful acts of such member, official or employee. 63 RVPUB\DGW\674424.7 _ Section l 1.5 Unavoidable Delay: Extension of Time for Performance. 11.5.1 In addition to specific provisions of this Agreement, performance by . either Party under this Agreement shall not be deemed to be in default, or considered to be a default, where any such delays or defaults are due to an Unavoidable Delay that is not attributable to the fault of the Party claiming an extension of time to perform. An extension of time for any Unavoidable Delay shall be for the period of the Unavoidable Delay and shall commence to run from the date of occurrence of the Unavoidable Delay, only if the Party asserting the existence of the Unavoidable Delay has first provided the other Party with written notice of the occurrence of the Unavoidable Delay, within ten (10) days of the commencement of such asserted Unavoidable Delay. 11.5.2 Except as otherwise specifically set forth in this Agreement, the Parties expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of either of them that may have provided a basis for entering into this Agreement and that occur at any time after the execution of this Agreement, do not constitute an Unavoidable Delay and do not provide any Party with grounds for asserting the existence of an Unavoidable Delay in the performance of any covenant or undertaking arising under this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement. Section 11.6 Inspection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Owner pertaining to the Expansion Site and/or the development of the Expansion Project. The Owner shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Expansion Site and/or the development of the Expansion Project, as pertinent to the purposes of this Agreement. Section 11.7 Approvals. Approvals required of the Agency or the Owner, or any officers, agents or employees of either the Agency or the Owner, shall not be unreasonably withheld, conditioned or delayed and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. Section 11.8 Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees that may arise from or be related to this Agreement. The Owner shall pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals. Section 11.9 Car and Van Pools. The Owner and the Operator each agree to exercise their reasonable best efforts to cause their employees working at the Dealership Site or otherwise within the City to participate in car pools and/or van pools to help improve traffic flow and air quality within the geographic region in which the City is located. Section 11.10 Attorneys' Fees. If either Party files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes or is 64 RVPUB %DC3M674424.7 made a party to any action or proceeding brought by the Escrow Holder, then as between the Owner and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes, and not as damages, its reasonable attorneys' fees as fixed by the court or other forum for resolution of disputes in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. Section 11.11 Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors and assigns. Section 11.12 Entire Agreement. 11.12.1 This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. This Agreement includes 60 pages and 10 attachments, constituting the entire understanding and Agreement of the Parties. 11.12.2 This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to all or any portion of the Expansion Site and the development. 11.12.3 None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with any deed conveying title to any of the Parcels comprising the Expansion Site, and this Agreement shall continue in full force and effect before and after such conveyances, until issuance of the Certificate of Completion. 11.12.4 All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representative(s) of the Agency and the Owner.. Section 11.13 Execution of this Agreement. Following its execution by the authorized representative(s) of the Owner and prompt delivery, thereafter, to the Agency, this Agreement shall be subject to the review and approval by the governing body of the Agency, in its sole and absolute discretion, no later than forty -five (45) calendar days after the date of delivery to the Agency of this Agreement executed by the authorized representative(s) of the Owner. If the Agency has not approved, executed and delivered this Agreement to the Owner within the foregoing time period, then no provision of this Agreement shall be of any force or effect for any purpose. The "Effective Date" of this Agreement shall be the date when this Agreement shall have been approved by the Agency governing body. Section 11.14 Survival of Indemnity Obligations. All general and specific indemnity and defense obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement and the recordation of the Agency Grant Deed and the Certificate of Completion in the official records of the Recorder of the County of Los Angeles, California. 65 RVPUD\DGW�674424.7 SIGNATURE PAGE TO 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (RUSNAKIARCADIA IN WITNESS WHEREOF, the Agency, the Owner and the Operator have executed this 2004 Land Assembly and Development Agreement (RusnaklArcadia) by and through the signatures of their duly authorized representative(s) set forth below, as of the dates set forth below. Dated: 0, Toro ATTEST: f Agency Secretary APPROVED AS TO FORM: Best Best & Krieger LLP � �P' �� Agency Counsel 66 RVPUB \DGM674424.7 AGENCY REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA By: W dy Executive Director CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California ss. County of �� v \e On - 1 r Q00S , before me, )) w i\(1. , Date �,+ tN�ame and Ttle of Office Public') (e.g., "Jane Doe, Notary Public') personally appeared �1�� (ate R . i $1V , Name(a) of SlgneQa�� Y,�M409 CamyltwOnpn 1 1410609 Co9hrtM Los My 9Np9etMoy9 4007 Place Notary Seal Abov personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person() whose name() is /fie subscribed to the within instrument and acknowledged to me that he /s`fye /tl\ey executed the same in his /her /tNir authorized capacity(iN), and that by his /hsr /tl4gir signature(s) on the instrument the personis), or the entity upon behalf of which the person(&) acted, executed the instrument. WITN SS my hand a d o cial seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Documen+t n ► Title or Type of Document: Qy,. a V S5 Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer— Title(s): • Partner — ❑ Limited ❑ General • Attorney in Fact ❑ Trustee • Guardian or Conservator • Other: Signer Is Representing: 0 1997 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chal..mm, CA 91313 -2402 Prod No 5907 Reorder: Call Toll -Frae 1- 600 -676 -6627 SIGNATURE PAGE TO 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (RUSNAK/ARCADIA Dated: H-30.09 67 RVPUB\DGW\674424.7 rally I J013 PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 mwdwh Paul P. Rusnak, Trustee SIGNATURE PAGE TO 2004 LAND ASSEMBLY AND DEVELOPMENT AGREEMENT (RUSNAK/ARCADIA OPERATOR RUSNAK/ARCADIA, a California corporation Dated: I (• 30 • D By: Dated: , 2-12 By: 68 RVPUB \DGW \674424.7 .La CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California n County of ss. c �c�p1Q!, On _1�. QO05 , before me, Mn.�i Date Name and Title of Officer (e.g., "Jane Doe, Notary Public') personally appeared Names) of Signers) 6ilANNA 6MAOt0�M commNim M 1410M ImpI= Mgma CCU* MyCamm.8 =11 Place Notary Seal Above ❑ personally known to me �4 proved to me on the basis of satisfactory evidence to be the person() whose names) is /�re subscribed to the within instrument and acknowledged to me that he /sIte /tAey executed the same in his/h&r/their authorized capacity(igs), and that by his /her /their signature(N on the instrument the personN), or the entity upon behalf of which the person() acted, executed the instrument. WITINIONS my hand a d fliicial seal. Signature of Notary Public OPTIONAL Though the information below is not required bylaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: Document Date: �fh��1.0. cwt 1, cA ©0 S Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner —E] Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER 91997 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatswodh, CA 91313 -2402 Prod. No, 5907 Reorder'. Call Tall -Free 1- SOD - 878 -682r EXHIBIT "A" LEGAL DESCRIPTIONS OF THE PARCELS [See the following Exhibits "A -1" through "A -5" inclusive] Exhibit A RVPUB\DGW\674424.7 EXHIBIT "A -1 " (a.k.a. Church Property) LOT 5 OF TRACT NO. 13768, IN THE CITY OF ARCADIA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 273 PAGE 37 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. Exhibit A -1 RVPUB\DGW\674424.7 EXHIBIT "A -2" (a.k.a. Rod's Restaurant Property) THAT PORTION OF LOT 3 OF TRACT NO. 949, IN THE CITY OF ARCADIA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS PER MAP RECORDED IN BOOK 17 PAGE(S) 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE NORTHERLY LINE OF HUNTINGTON DRIVE WITH THE EASTERLY LINE OF MORLAN PLACE AS SAID LINES ARE SHOWN ON MAP OF TRACT NO. 13768, RECORDED IN BOOK 273, PAGE 37 OF MAPS, RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE SAID NORTHERLY LINE A DISTANCE OF 60.4 FEET, MORE OR LESS, TO THE WESTERLY FACE OF THE WESTERLY WALL OF A FIVE STORY AND BASEMENT REINFORCED CONCRETE STRUCTURE; THENCE NORTHERLY ALONG THE SAID WESTERLY FACE OF THE WESTERLY WALL, AND THE NORTHERLY PROLONGATION THEREOF, A DISTANCE OF 293 FEET, MORE OR LESS, TO THE INTERSECTION THEREOF WITH THE SOUTHEASTERLY LINE OF SAID MORLAN PLACE, A DISTANCE OF 313.85 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. EXCEPT THE INTEREST OF THE CITY OF ARCADIA, IN THE SOUTH 20 FEET OF SAID LAND WHICH WAS CONVEYED TO SAID CITY FOR ROAD PURPOSES BY DEED RECORDED IN BOOK 24642, PAGE 220, OFFICIAL RECORDS OF SAID COUNTY. Exhibit A -2 RVPUB\DGM674424.7 EXHIBIT "A -3" (a.k.a. Dahlgren Property) BEGINNING AT THE NORTHWESTERLY CORNER OF LOT 5, TRACT 13768, AS SHOWN ON MAP RECORDED IN BOOK 273 PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER; THENCE ALONG THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID LOT 5, NORTH 9° 14' 54" WEST 54.92 FEET TO THE SOUTHERLY LINE OF SANTA CLARA STREET, (80 FEET WIDE) AS DESCRIBED IN CITY OF ARCADIA RESOLUTION NO. 3607 RECORDED ON AUGUST 9, 1963 AS DOCUMENT NO 5909 IN BOOK D -2140 PAGE 264 OF SAID OFFICIAL RECORDS; THENCE ALONG SAID SOUTHERLY LINE, EASTERLY 56.04 FEET ALONG A CURVE CONCAVE TO THE SOUTH AND HAVING A RADIUS OF 560 FEET; THENCE CONTINUING ALONG SAID SOUTHERLY LINE NORTH 780 33'32" EAST 188.46 FEET, MORE OR LESS, TO THE NORTHERLY PROLONGATION OF THE EASTERLY LINE OF LOT 5 OF SAID TRACT 13768; THENCE ALONG LAST SAID PROLONGATION, SOUTH 8.68 FEET TO THE NORTHEAST CORNER OF SAID LOT 5; THENCE SOUTHWESTERLY ALONG THE NORTHERLY LINE OF SAID LOT 5 TO THE POINT OF BEGINNING. EXCEPT ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D -1614 PAGE 679, OF OFFICIAL RECORDS. ALSO EXCEPT THEREFROM ALL MINERALS AND OIL RIGHTS AS RESERVED IN THE DEED FROM E.J. BALDWIN RECORDED JUNE 3, 1902 IN BOOK 1574 PAGE 292, OF DEEDS, IN THE OFFICE OF THE RECORDER OF LOS ANGELES COUNTY AND AS AGAIN EXCEPTED IN THE DEED FROM ROSE13UDD DOBLE ATKINSON AND OTHERS, RECORDED FEBRUARY 28, 1952 IN BOOK 38352, PAGE 138, OFFICIAL RECORDS OF LOS ANGELES COUNTY, BUT WITHOUT THE RIGHT OF SURFACE ENTRY OR RIGHT OF INGRESS AND EGRESS WITHIN 500 FEET OF THE SURFACE OF SAID LAND FOR THE EXPLORATION FOR, MINING, EXTRACTING OR REMOVING THE SAME. Exhibit A -3 RVPUB %DGWN674424.7 EXHIBIT "A -4" (a.k.a. Elks Club Property) BEGINNING AT THE MOST WESTERLY CORNER OF LOT 9 OF SAID TRACT NO. 13768; THENCE EAST ALONG THE SOUTH LINE OF SAID LOT 9, A DISTANCE OF 48.38 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST 402.2 FEET OF LOT 3 OF TRACT NO. 949, IN THE CITY OF ARCADIA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 17, PAGE 13 OF MAPS, IN THE OFFICE OF THE SAID COUNTY RECORDER; THENCE NORTH ALONG THE NORTH PROLONGATION OF SAID WEST LINE A DISTANCE OF 20.21 FEET TO THE SOUTHERLY LINE OF MORLAN PLACE, 60 FEET WIDE, AS SHOWN ON SAID TRACT NO. 13768; THENCE SOUTHERLY AND WESTERLY ALONG THE SOUTHERLY LINE OF SAID MORLAN PLACE A DISTANCE OF 52.47 FEET TO THE TRUE POINT OF BEGINNING. Exhibit A -4 RVPUBOGW\674424.7 EXHIBIT "A -5" (a.k.a. 35 W. Huntington Partners Property) PARCEL 1: THAT PORTION OF LOT 3 OF TRACT NO. 949, IN THE CITY OF ARCADIA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN. THE SOUTHERLY LINE OF SAID LOT 3, DISTANT 402.20 FEET WEST, FROM THE SOUTHEAST CORNER OF SAID LOT 3; THENCE NORTH PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 305 FEET TO THE MOST SOUTHERLY. LINE OF LOT 9 OF TRACT NO. 13768, AS PER MAP RECORDED IN BOOK 273 PAGE 37 OF MAPS, IN SAID RECORDERS OFFICE; THENCE WEST ALONG SAID MOST SOUTHERLY LINE TO THE SOUTHEASTERLY LINE OF MORLAN PLACE (60.00 FEET) AS SHOWN AND DEDICATED ON SAID TRACT NO. 13768; THENCE SOUTHWESTERLY ALONG SAID PLACE TO THE NORTHEAST CORNER OF THE LAND AS DESCRIBED IN THE DEED TO F.W. JONAS AND ADELE S. JONAS, RECORDED SEPTEMBER 21, 1956 AS INSTRUMENT NO. 1442, OF OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID DEED TO F.W. JONAS AND ADELE S. JONAS AND ITS PROLONGATION THEREOF TO THE SOUTHERLY LINE OF SAID LOT 3; THENCE EAST ALONG SAID SOUTHERLY LINE TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE INTEREST OF THE CITY OF ARCADIA, IN THE SOUTHERLY 20.00 FEET OF SAID LAND WHICH WAS CONVEYED TO SAID CITY OF ROAD PURPOSED BY DEED RECORDED IN BOOK 24642 PAGE 220 OF OFFICIAL RECORDS OF SAID COUNTY. PARCEL 2: THAT PORTION OF LOT 9 OF TRACT NO. 13768, IN THE CITY OF ARCADIA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 273 PAGES 37 AND 38 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AS BOUNDED BY THE FOLLOWING DESCRIBED LINES: BEGINNING AT THE MOST WESTERLY CORNER OF LOT 9 OF SAID TRACT NO. 13768; THENCE EAST ALONG THE SOUTH LINE OF SAID LOT 9, A DISTANCE OF 48.38 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST 402.2 FEET OF LOT 3 OF TRACT NO. 949, IN THE CITY OF ARCADIA, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN Exhibit A -5 RVPUB \DGW\674424.7 THE OFFICE OF THE COUNTY RECORDER; THENCE NORTH ALONG THE NORTH PROLONGATION OF SAID WEST LINE A DISTANCE 20.21 FEET TO THE SOUTHERLY LINE OF MORLAN PLACE, 60 FEET WIDE, AS SHOWN ON SAID TRACT NO. 13768; THENCE SOUTHERLY AND WESTERLY ALONG THE SOUTHERLY LINE OF SAID MORLAN PLACE A DISTANCE OF 52.47 FEET TO THE POINT OF BEGINNING. Exhibit A -5 RVPUB\DGW\674424.7 EXHIBIT "B" SCHEDULE OF PERFORMANCE A. Days shall be calendar days, unless otherwise specified. B. The Agency Executive Director is authorized by the Agency Board to make minor changes to the schedule prior to the Completion Date resulting in an aggregate extension of the Completion Date of ninety (90) calendar days or less. C. Where the action/task is to be performed by the City of Arcadia, the Agency shall use its reasonable efforts to obtain performance by the City. D. All specific dates set forth in parentheses in this schedule are estimates only and not binding on the Parties. Land Assembly and Development Agreement (Rusnak/Arcadia) Exhibit B RVPUB \DGW\674424.7 Action Date Action to be Completed B 1. Joint Public Hearing of Agency /City Council re: Effective Date — date of Public consideration of proposed Land Assembly and Development Hearing (tentative 12/7/04) Agreement 2a. Owner delivers Letter of Credit to Agency Within 60 days following Effective Date 2/7/05 b. Owner delivers copies of insurance policies required by Within 60 days following Effective Section 6.2 of the Agreement Date 2/7/05 C. Owner to open Agency /Owner Escrow with Escrow Holder Within 60 days following Effective Date 2/7/05 d. Owner delivers executed Promissory Note, Agency Deed of Within 60 days following Effective Trust and Notice of Agreement to Escrow for recordation Date (2/7/05) against Existing Site and/or delivery to the Agency 3. Executive Director to confirm satisfaction or non - satisfaction Within 90 days following Effective of all conditions precedent to Expansion Site assembly under Date (3/7/05) Section 3.5 of the Agreement 4. All Agency/Parcel Owner Escrows,' if any, to be closed Within 180 days following Effective (Notice of Agreement and Agency Deed of Trust recorded at Date the close of each Phase of the Agency/Owner Escrow) (6/7/05) 5. Occurrence of the Agency /Owner Escrow Closing Date Within 270 days following the Effective Date 9/7/05 Exhibit B RVPUB \DGW\674424.7 Exhibit B RVPUBIDGM674424.7 Action Date Action to be Completed B 6. Owner to submit complete Expansion Site Plan, applications Within 30 days following the for Architectural Design Review, Conditional Use Permit, Agency /Owner Escrow Closing Date Tract Map; pays all fees and provide any required security. (10/7/05) Owner may request partial vacation of Morlan Place 7. Agency will use reasonable efforts to have City Planning Within 90 days following completion Commission and City Council process all the development of the actions set forth in Paragraph 6 applications for the Expansion Project and schedule a public above hearing on any requested partial vacation of Morlan Place 1/7/06) 8. Planning Commission and City Council consider partial Within 60 days following completion vacation of Morlan Place, if requested; Relocations of the actions set forth in Paragraph 7, completed by Agency above (3/7/06) 9. Tract Map and Street Vacation, if requested, recorded Within 30 days following completion of the actions set forth in Paragraph 8, above (4/7/06) 10. Owner completes removal/remediation of hazardous waste, Within 180 days following clearance of Expansion Site; submits construction drawings completion of the actions set forth in for Expansion Project to City, pays fees, obtains building Paragraph 9, above (10/7/06) permit; commences construction of Expansion Project (i.e., utility relocations and final grading are complete), including rehabilitation/conversion of public storage building 11. Owner completes construction of Expansion Project, obtains Within 210 days following final Certificate of Occupancy for the Expansion Project completion of the actions set forth in (including rehabilitation/conversion of public storage Paragraph 10, above (5/7/07) building) from City 12. Owner requests Certificate of Completion for Expansion Within 30 days following completion Project from Agency of the actions set forth in Paragraph 11, above (6/7/07 13. Agency considers request for issuance of Certificate of Within 30 days following completion Completion for the Expansion Project of the actions set forth in Paragraph 12, above (7/7/07) 14. Commencement of minimum sales and use tax generation 30 days following completion of the covenant period under Section 6.4 of the Agreement actions set forth in Paragraph 11 above (defined as the "Opening Date" in Section 6.4.4 of the Agreement) Exhibit B RVPUBIDGM674424.7 Exhibit B RVPUB\DGW%74424.7 Action Date Action to be Completed B 15. Agency annual calculation of property taxes paid by Owner Annually, following issuance of a to State /County, pursuant to Section 6.3 of the Agreement Certificate of Completion for the Expansion Project or January 1, 2008, whichever occurs first and following the availability of the property tax roll in each year 16. Agency annual calculation of sales and use taxes paid by Annually, following the end of each Operator to State /County, pursuant to Section 6.4 of the Dealership Operating Year Agreement; Agency annual calculation of sales and use taxes received by the City, pursuant to Section 6.5 of the Agreement 17. Expiration of minimum sales and use tax generation On the tenth (10`h) anniversary of the covenant period under Section 6.4 of the Agreement and Opening Date Operator Incentive, if any, under Section 6.5 of the Agreement 18. Agency prepares final calculation to ascertain Owner Within 45 days following completion compliance with minimum sales and use tax generation of the actions set forth in Paragraph covenant of Section 6.4 of the Agreement. If compliance, 17, above Agency reconveys Agency Deed of Trust. If not, Agency forwards invoice to Owner for balance owed. Owner remits balance owed to Agency Exhibit B RVPUB\DGW%74424.7 EXHIBIT "C" SCOPE OF DEVELOPMENT Pursuant to the Schedule of Performance (Exhibit 'B "), Owner shall design and construct, at its sole expense, a 300,000± square foot expansion of the Dealership consistent with the concept plan attached as Exhibit "C -1" including the removal of the existing buildings, any hazardous materials therein or thereon, consistent with the preservation of any possible historical artifacts per Section 5.2.3, and rehabilitating the public storage facility building for auto dealership franchise use. All work shall be done in accordance with City of Arcadia, California, ordinances, guidelines and procedures, the Arcadia Redevelopment Plan, Agency Design guidelines and procedures, and this Agreement. Exhibit C RVPUB\DGW\674424.7 EXHIBIT "C -1" EXPANSION PROJECT CONCEPT PLAN [Attached behind this cover page Exhibit C -1 RVPUB\DGW\674424.7 Exhibit C -1 (a) EXHIBIT -A RUSNAKIARCADIA December 19, 2003 Prepared by FMG Architects - G. R. Maraviglia City of Arcadia -ELF. SPACE ANALYSIS: Proposed Site Expansion Project - Existing Automobile Dealershi - Site Acreage: 331,392 6- uare Feet 1 7.61 Acres Building Area. New'. 90,286 Square Feet Future: 7,200 Sq uare Feet Modified - Existing: 27,331 S uare Feet Subtotal: 124,817 Square Feet 'Demolition (Known): 7,499 Square Feet "Demo excludes two (2) assembly build- 'Net Total: '117,318 Square Feet ings (Elks & Church Hall) & Restaurant. Information not available at this time. PROPOSED BUILDING STUDY ANALYSIS: ross S uare Feet Fourth or MBUS AcluraLWS No.: Area Description: 6es ment: Ground: Second: Third: Roof: WS.Read: Notes: Site Expansion: Service Buildin -Ne 74,506 77,744 74,266 91: 91 New inventory above: 150 Service Canopy-Ne%A 4,488 Included 25d Level'. spaces. Showroom /Off. -New 11,292 11 11 Roof Level: 248 spaces. Parts-Existing E. 7,571 0 0 C 0 Showroom /Parts E. 0 7,531 0 0 0 Admin:Offices E. 0 0 7,675 7,675 7,675 Existing Site: Showroom Building 8,838 1,945 Canopy 2,600 9 Serv. Ctr. -Parts -Wash-Detailing 8,786 808 4 Car 7,571 2,176 120,217 88,172 7,675 81,941 Total: 305, 576 Gross Square Feet Subtotals: j 7,2001 Total- Future: 312,776 Gross Square Feet Future: Off- street Parjung Require : Gross S.F.: No of Spaces51,937 MNMWE� 87,457 175 Total Parking Spaces: 383 Parkin Re ularions: City-Standard 9x20: 80 %Minimum Cif -Com act 8x16: 20% Maximum CBC Table 11 B -6: 8 Accessible Exhibit C -1 (a) 6 Z O J O W D Z Q J d V' Z Ln N X W T7 2 aer vilxr VARVI I I I I Imo+ d6 rr r� 0 r, �r r 14 FT W11 4b, .c � o z 0 � m x .40, - cooe'a = =a =ma o =woa 6 *o- ins- ixn- n \co- s�ao \o��00000��a = - -e •ne Exhibit C -1 (b) W V � _ C O y ¢¢ ' 0 ^ o %m 2 aer vilxr VARVI I I I I Imo+ d6 rr r� 0 r, �r r 14 FT W11 4b, .c � o z 0 � m x .40, - cooe'a = =a =ma o =woa 6 *o- ins- ixn- n \co- s�ao \o��00000��a = - -e •ne Exhibit C -1 (b) Z LO 1 n am rtler rixro 6 II1111II III s r <♦ '�s4 b �+ b> by 48 48 \Xl /. im w i O ' O I I N I o-1 al M �IrE rW well :c - cooz '.z 1.1 -1 =1 1a1-11e 0m0'co'6,16, \co's mo \,., ... \, :.,.N =m Exhibit C -1 (C) Jd wz a ¢ > �. d I T j U Z0 G< 8 3 s 1- y/ Y 0 U O n W x W O fll oz I/I N o! C VI < W .Qi F O h F N F N L O 2N 2 K6 W Wm ¢m O O O O O O O n� s r <♦ '�s4 b �+ b> by 48 48 \Xl /. im w i O ' O I I N I o-1 al M �IrE rW well :c - cooz '.z 1.1 -1 =1 1a1-11e 0m0'co'6,16, \co's mo \,., ... \, :.,.N =m Exhibit C -1 (C) 6 Z Q J n U- 0 0 C /\ N i O Z g Ag U> O W LOU - N N U O � z 9 � w a 8 Z® 3 k J 6 E s t e a WAY Y11MI YINV* No Isom r m 0 0 E E E wdLFC - f0UZ 'CZ »0 '11 °0 P-1—d 5., ..'a ....... \ .. .... aw�p sltl Exhibit C -1 (d) EXHIBIT "D" FORM OF LETTER OF CREDIT [Attached Behind This Cover Page] Exhibit D RVPUBIDGWN674424.7 _, 2004 [NAME AND ADDRESS OF ISSUING BANKI IRREVOCABLE STANDBY LETTER OF CREDIT' BENEFICIARY: APPLICANT: LETTER OF CREDIT NUMBER: EXPIRY DATE: AT: ISSUING BANK'S INTERNATIONAL BANKING COUNTERS LOCATED AT ADDRESS INDICATED ABOVE AMOUNT: US UNITED STATES DOLLARS) WE HEREBY ISSUE THIS IRREVOCABLE STANDBY LETTER OF CREDIT AVAILABLE BY PAYMENT BY DRAFT(S) DRAWN AT SIGHT ON SPECIAL CONDITIONS: PARTIAL DRAWINGS ARE ALLOWED. ** *THIS PAGE I IS AN INTEGRAL PART OF CREDIT NO. Exhibit D RVPU13\DGW\6744247 THE ORIGINAL OF THIS LETTER OF CREDIT MUST ACCOMPANY THE DRAWING. THIS LETTER OF CREDIT INITIALLY EXPIRES ON 200_. IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE CONSIDERED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR FROM THE PRESENT OR ANY FUTURE EXPIRATION DATE UNLESS WE NOTIFY YOU IN WRITING BY COURIER AT LEAST ONE HUNDRED TWENTY (120) DAYS PRIOR TO ANY SUCH EXPIRATION DATE THAT THIS LETTER OF CREDIT WILL NOT BE RENEWED. ALL BANKING CHARGES OTHER THAN THOSE OF THE ISSUING BANK ARE FOR ACCOUNT OF THE BENEFICIARY. PURSUANT TO U.S. LAW WE ARE PROHIBITED FROM ISSUING, TRANSFERRING, ACCEPTING OR PAYING LETTERS OF CREDIT TO ANY PARTY OR ENTITY IDENTIFIED BY THE OFFICE OF FOREIGN ASSETS CONTROL, U.S. DEPT. OF TREASURY, OR SUBJECT TO THE DENIAL OF EXPORT PRIVILEGES BY THE U.S. DEPT. OF COMMERCE. DRAFTS DRAWN UNDER THIS CREDIT MUST BEAR THE CLAUSE: 'DRAWN UNDER IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER " THIS CREDIT IS SUBJECT TO "THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS" (1993 REVISION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500. WE HEREBY ENGAGE WITH YOU THAT DRAFT(S) DRAWN AND /OR DOCUMENTS PRESENTED AND NEGOTIATED UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT WILL BE DULY HONORED UPON PRESENTATION TO US. (NAME OF ISSUING BANK] A MEMBER OF THE FEDERAL RESERVE SYSTEM STANDBY LETTERS OF CREDIT ** *THIS PAGE 2 IS AN INTEGRAL PART OF CREDIT NO. Exhibit D RVPUB%DGM674424.7 EXHIBIT "E" FORM OF NOTICE OF AGREEMENT [Attached Behind This Cover Page] Exhibit E RVPUBIDGWA674424.7 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: (Space Above Line For Use By Recorder) [Recordation of this Document Is Exempt From Fees Payable to the Recorder Under Government Code Section 27383] REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA Notice of Agreement 2004 Land Assembly and Development Agreement (Rusnak/Arcadia) TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that as of March 17, 2004, Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Owner "), the Arcadia Redevelopment Agency of the City of Arcadia, a public body, corporate and politic (the "Agency "), and Rusnak/Arcadia, a California corporation (the "Operator "), entered into an agreement entitled "2004 Land Assembly and Development Agreement (Rusnak/Arcadia)" (the "Agreement "). A copy of the Agreement is on file with the Secretary of the Agency and is available for inspection and copying by interested persons as a public record of the Agency during the regular business hours of the Agency. The Agreement affects the real property (the 'Property ") described in Exhibit "A" attached to this Notice of Agreement. The meaning of defined terms used in this Notice of Agreement shall be the same as set forth in the Agreement. 4 Exhibit E s RVPUBTGW \674424.7 {(6,a6F PLEASE TAKE FURTHER NOTICE that the Agreement contains certain community redevelopment covenants running with the land and other agreements of the parties affecting the Property, as set forth below: Section 1.3 of the Agreement provides, as follows: Section 1.3 Restrictions Against Change in Ownership, Management and Control of Owner; Restrictions Against Transfer of Certain Property Interests. 1.3.1 The qualifications and identity of the Owner and the Operator are of particular concern to the Agency. The Agency would not enter into this Agreement, were it not for the qualifications and identity of the Owner and the Operator. The Owner and the Operator shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in control of the Owner and the Operator, as well as any and all changes in the interest or the degree of control of the Owner and the Operator by any such party, of which information the Owner and the Operator or any of their partners, members or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency, prior to the issuance of a Certificate of Completion with respect to the Expansion Project, if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Owner and the Operator (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency, prior to the time of such change, or the Agency may seek other appropriate relief; provided, however, that (i) the Agency shall first notify the Owner and the Operator in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Owner and the Operator shall have thirty (30) calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Owner and the Operator and submit evidence of the initiation and satisfactory completion of such cure to the Agency, in a form and substance reasonably satisfactory to the Agency. 1.3.2 Except for any Permitted Security Interest, prior to the issuance of a Certificate of Completion, neither the Owner or the Operator shall sell, assign, convey, create any trust estate with respect to or otherwise transfer any of its interests in this Agreement, the Existing Site, the Expansion Site or the Expansion Project, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. The Owner and the Operator recognize that the qualifications and identity of each of them are of particular concern to the Agency and that a sale, assignment, conveyance, creation of a trust estate with respect to or other transfer of any of the Exhibit E RVPUB %DGW1674424.7 Owner's and Operator's interests in this Agreement, the Expansion Site and/or the Expansion Project is for all practical purposes a transfer or disposition of the responsibilities of the Owner or Operator with respect to this Agreement, the Existing Site, the Expansion Site or the Expansion Project and, therefore, are only allowed in accordance with the provisions of this Section 1.3. Notwithstanding the foregoing ,provisions of this Section 1.3.2, inclusion of the Existing Site and/or the Expansion Site in the trust estate of the Paul P. Rusnak Family Trust Dated November 14, 1988, is expressly authorized under this Agreement. Section 5.1 of the Agreement provides, as follows: Section 5.1 Owner Covenant to Undertake Expansion Project. 5.1.1 The Owner covenants and agrees for itself, its successors and assigns, for the sole and exclusive benefit of the Agency that, promptly upon the Owner's acquisition of the Expansion Site and following receipt of all necessary City and other governmental approvals for the development of the Expansion Project, the Expansion Site shall be improved and developed with the Expansion Project. If the Owner only acquires one Phase of Parcels, the Owner covenants and agrees for itself, its successors and assigns that, promptly upon the Owner's acquisition of the Phase, the Owner shall develop the Phase with an expansion of the existing Dealership appropriately scaled for the size of the Parcels in such Phase, subject to the prior approval of the expansion by the Agency and receipt of all necessary City and other governmental approvals for the development of the expansion. The Owner further covenants to develop the Expansion Site and each portion of the Expansion Site in conformity with all applicable laws and this Agreement. The covenants of this Section 5.1 shall run with the land of the Expansion Site or any portion of the Expansion Site acquired by the Owner, until the earlier of the date on which the Certificate of Completion is recorded or the fifteenth (15th) anniversary of the date of recordation of the last Agency Grant Deed recorded through the Agency /Owner Escrow. 5.1.2 The Expansion Project shall be developed and completed on the Expansion Site by the Owner in conformance with the approved Scope of Development and the Schedule of Performance, any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Owner and the Agency and all applicable laws, regulations, orders and conditions of governmental entities with jurisdiction over the Expansion Site or the Expansion Project. Exhibit E RVPUB\DGW%674424.7 Section 6.3 of the Agreement provides, as follows: 6.3 Minimum Assessed Valuation of the Dealership Site. 6.3.1 The redevelopment of the Expansion Site by the Owner is of special interest and concern to the Agency. The redevelopment of the Expansion Site in accordance with the terms of this Agreement shall generate a special source of property tax increment funds payable to the Agency in accordance with Health and Safety Code Section 33760 to fund certain redevelopment activities of the Agency and the affordable housing development programs of the Agency that benefit persons and families of low -and moderate income. 6.3.2 The Owner covenants and agrees that upon the recordation of the Certificate of Completion or as of October 1, 2007, whichever date shall occur first, the assessed valuation of the Dealership Site, as improved with the Expansion Project, for ad valorem property taxation purposes, shall be not less than Ten Million Dollars ($10,000,000.00) in excess of the Expansion Tax Increment Base Year Value (the "Minimum Assessed Valuation "). For purposes of this Section 6.3, the aggregate amount of the assessed value of the Dealership Site, as reported by the Office of the Assessor of the County of Los Angeles, California, as public record information relating to property tax assessments for the Dealership Site (on both the secured, plus unsecured property tax rolls of the Office of the Assessor of the County of Los Angeles, California), on the January 1, 2009, property tax lien date, shall be conclusive evidence of the Owner's satisfaction of or failure to satisfy its covenant of the first sentence of this Section 6.3. 6.3.3 The Owner for itself, its heirs, successors and assigns covenants and agrees that for the term of ten (10) years from the date of recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, whichever date occurs first, the Owner shall not seek to obtain or authorize a reduction or other adjustment of the assessed valuation of the Dealership Site for ad valorem property tax purposes from the Office of the Assessor of the County of Los Angeles, California, to an assessed valuation amount that is less than the Minimum Assessed Valuation, plus an amount as determined in accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 51(a) of the Revenue and Taxation Code for each succeeding tax year. 6.3.4 In any of the ten (10) years following the earlier of the recordation of the Certificate of Completion for the Expansion Project or October 1, 2007, in which the assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California, is less than the Minimum Assessed Valuation, plus an amount as determined in Exhibit E RVPUB\DGw\674424.7 accordance with Subdivision (b) of Section 2 of Article XIIIA of the California Constitution and Section 51(a) of the Revenue and Taxation Code for each tax year following the Expansion Tax Increment Base Year, the Owner, its successors or assigns shall pay to the Agency the difference between one percent (1.0 %) of the Minimum Assessed Valuation and one percent (1.0 %) of the actual assessed valuation of the Dealership Site for ad valorem property tax purposes, as determined by the Office of the Assessor of the County of Los Angeles, California (the "In -Lieu Tax Increment Payment "). Any In -Lieu Tax Increment Payment determined by the Agency to be owed by the Owner shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of such In -Lieu Tax Increment Payment amount. 6.3.5 The covenants of this Section 6.3 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.3 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project, without the prior written consent of the Agency. Section 6.4 of the Agreement provides, as follows: Section 6.4 Dealership Minimum Annual Sales and Use Tax and Continuous Operation Covenants. 6.4.1 The Owner and the Operator each covenant to the Agency to cause the Operator to collect and remit to BOE a minimum aggregate amount of seven hundred thousand dollars ($700,000) in Dealership Sales Tax (the "Minimum Annual Sales Tax Amount "), in each Dealership Operating Year, towards repayment of the Agency Loan, pursuant to the terns of the Promissory Note. 6.4.2 If in any Dealership Operating Year the Operator fails to generate the Minimum Annual Sales Tax Amount, the Owner and the Operator and their respective successors or assigns, jointly and severally, shall pay to the City the difference between the Minimum Annual Sales Tax Amount for such Dealership Operating Year and the actual amount of Dealership Sales Tax generated in such Dealership Operating Year, as determined by the Agency (an "In -Lieu Minimum Sales Tax Payment "). Any In -Lieu Minimum Sales Tax Payment determined by the Agency to be owed by the Owner and/or the Operator shall be paid to the City within forty -five (45) days following transmittal by the Agency to the Owner and the Operator of an invoice for payment of such In -Lieu Minimum Sales Tax Payment amount. 6.4.3 Upon payment in full of all principal and accrued and unpaid interest under the Promissory Note, the covenant of the Owner and Exhibit E RVPUMDGW1674424.7 the Operator contained in Section 6.4.1 shall terminate ( "Sales Tax Covenant Termination Date "). 6.4.4 The Owner and the Operator each covenant to the Agency to cause the Dealership to be open for business to the_ general public on the Dealership Site by the earlier of (1) thirty (30) days following the issuance of a final Certificate of Occupancy for the Expansion Project by the City or (2) October 1, 2007 (the "Opening Date "), and to continuously operate the Dealership on the Dealership Site for the ten (10) years following the Opening Date. For the ten (10) years following the Opening Date, the Owner and the Operator shall exercise their reasonable best efforts to cause the Dealership to be continuously operated as a business for the sales and service of new and pre -owned vehicles manufactured by Mercedes Benz. For purposes of this provision "continuously operate" means the Dealership shall not cease to operate for a continuous period of ninety (90) calendar days, except as otherwise excused under the terms of this Agreement. 6.4.5 The Owner and Operator each acknowledge and agree that the sales and use tax reporting and payment information related to sales and use taxes resulting from business activities on the Dealership Site may become a public record, as a result of the covenants of the Owner and the Operator contained in this Section 6.4. The Owner and the Operator each authorize the Agency and the City to use the sales and use tax reporting and payment information related to sales and use taxes on the gross receipts of the Owner and/or the Operator from the sale or lease of all tangible personal property from the Dealership Site to confirm the Owner's and the Operator's compliance with the covenants of the Owner and the Operator contained in this Section 6.4. Additionally, the Owner and the Operator shall make available to the Agency, upon request, for review and copying, all sales and use tax reporting and payment information that the Owner and/or the Operator submit to the BOE regarding the gross receipts of the Owner and/or the Operator from the sale of all tangible personal property from the Dealership Site. The Agency shall maintain the confidentiality of all information regarding sales and use taxes resulting from business activities on the Dealership Site provided to the Agency to the extent permitted by law. 6.4.6 The covenants of this Section 6.4 shall be covenants running with the land of the Existing Site, the Expansion Site and the Dealership Site. The covenants of this Section 6.4 shall not be limited, reduced or otherwise affected by any change in the size or scope of the Expansion Project. Exhibit E RVPUB\DW674424.7 Section 6.6 of the Agreement provides, as follows: 6.6 No Transfer Prior to Repayment of Agency Loan. Neither the Owner or the Operator shall Transfer any of its interest in the Expansion Site, the Dealership Site, any improvements on either such site nor any automobile dealership franchise then being operated on the Expansion Site or the Dealership Site prior to repayment in full of all principal and accrued interest under the Promissory Note, without the prior written approval of the Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. Any violation of the provisions of this Section 6.6 by either the Owner or the Operator shall be an Event of Default under this Agreement and the Promissory Note. Section 6.12 of the Agreement provides, as follows: 6.12 Covenant to Maintain Dealership Site on Tax Rolls for 10 Years. 6.12.1 The Owner shall assure that the Dealership Site remains on the County of Los Angeles, California, secured real property tax rolls for the ten (10) calendar years following the date of recordation of the Certificate of Completion for the Expansion Project. 6.12.2 For the ten (10) year period following the date of recordation of the Certificate of Completion for the Expansion Project, the Owner for itself and its successors and assigns covenants and agrees to pay all property tax bills with respect to the Dealership Site and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 and to timely pay all supplemental tax bills regarding such property issued by the County of Los Angeles, California. The Owner further covenants and agrees to make available to the Agency, upon request, commencing in the calendar year following the calendar year in which the Certificate of Completion for the Expansion Project is recorded and in each of the ten (10) calendar years, thereafter, for inspection and copying (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Owner and the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California, and (ii) cancelled checks issued by the Owner in payment of all property tax payments that are made to the County of Los Angeles, California, regarding the Dealership Site and all improvements thereon, with respect to the preceding fiscal year of the County of Los Angeles, California. Failure of the Owner to comply with the covenant of this Section 6.12 shall be deemed to be a material breach of this Agreement by the Owner and the Agency shall be entitled to pursue any remedy or damages available at law or in equity for such breach. The Exhibit E RVPUB \DGW\674424.7 Agency shall maintain the confidentiality of all information regarding property tax assessments and payments provided to the Agency to the maximum extent permitted by law. 6.12.3 The Owner understands and agrees that, prior to the expiration of the Redevelopment Plan for the Project Area, neither the Owner, nor its successors or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Dealership Site or any portion of the Dealership Site to any person or entity, or for any use of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site, without the prior written consent of the Agency. For the period commencing on the Effective Date and continuing through and including the tenth (10th) anniversary of the date of recordation of a Certificate of Completion for the Expansion Project, the Owner further covenants and agrees that in the event of any conveyance, transfer, assignment, lease, leaseback or sale by the Owner to any entity or person or for any use of the Dealership Site or any portion of the Dealership Site, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any portion of real property taxes otherwise assessable regarding the Dealership Site or any portion of the Dealership Site, the Owner, its successors or assigns shall pay to the Agency a fee in lieu of payment of such taxes each year in an amount determined by the Agency to be one percent (1.0 %) of the "full cash value" of the Dealership Site, or portion thereof, as may be subject to such exemption from payment of ad valorem property taxes. The Agency's determination of "full cash value" for in -lieu payment purposes under this Section 6.12.3 shall be established by the Agency each year, if necessary, by reference to the ad valorem property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Agency's determination of "full cash value" and that an in -lieu payment is due shall be conclusive on such matters. If the Agency determines that an amount is payable by the Owner to the Agency as an in -lieu payment under this Section 6.12.3 in any tax year, then such amount shall be paid to the Agency within forty -five (45) days following transmittal by the Agency to the Owner of an invoice for payment of the in -lieu amount. 6.12.4 The covenants of this Section 6.12 shall run with the land of the Dealership Site and shall be a covenant set forth in the Notice of Agreement and the Agency Grant Deed. Exhibit E RVPU6 \DGW \674424.7 Section 6.13 of the Agreement provides, as follows: 6.13 Maintenance Condition of the Dealership Site. The Owner and the Operator, for themselves and their respective successors and assigns, each covenant and agree that: 6.13.1 The areas of the Dealership Site that are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If, at any time within twenty (20) years following the date of recordation of the Notice of Agreement there is an occurrence of an adverse condition on any area of the Dealership Site that is subject to public view in contravention of the general maintenance standard described above (a "Maintenance Deficiency "), then the Agency shall notify the Owner and the Operator in writing of the Maintenance Deficiency. If the Owner or the Operator fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the Agency may conduct a public hearing, following transmittal of written notice of the hearing to the Owner and the Operator, at least, ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency exists and whether the Owner or the Operator has failed to comply with the provisions of this Section 6.13. If, upon the conclusion of the public hearing, the Agency finds that a Maintenance Deficiency exists and that there appears to be non - compliance with the general maintenance standard, described above, the Agency shall have the right to enter the Dealership Site and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that the Agency may then be available to the Agency to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Dealership Site, as authorized by this Section 6.13 shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Agency to the Owner and the Operator, the Agency shall have the right to enforce the lien in the manner as provided in Section 6.13.3. 6.13.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Dealership Site that is visible from any public right -of -way adjacent or contiguous to the Dealership Site, shall be removed by the Owner or the Operator by either painting over the evidence of such vandalism with a paint that has been color- matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti and is not removed within 72 hours following the time of the discovery of the graffiti, the Exhibit E RVPUB\DGW\674424.7 Agency shall have the right to enter the Dealership Site and remove the graffiti, without notice to the Owner or the Operator. Any sum expended by the Agency for the removal of graffiti from the Dealership Site, as authorized by this Section 6.13, in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Dealership Site. If the amount of the lien is not paid within thirty (30) days after written demand to the Owner from the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 6.13.3. 6.13.3 The Parties further mutually understand and agree that the rights conferred upon the Agency under this Section 6.13 expressly include the power to establish and enforce a lien or other encumbrance against the Dealership Site, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Dealership Site to the maintenance standard required under Section 6.13.1 or Section 6.13.2, including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words "reasonable attorneys' fees and costs of the Agency" mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney. The provisions of this Section 6.13, shall be a covenant running with the land for a term of twenty (20) years following the date of recordation of the Notice of Agreement, shall be set forth in the Notice of Agreement, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 6.13 shall be deemed to preclude the Owner or the Operator from making any alteration, addition, or other change to any structure or improvement or landscaping on the Dealership Site, provided that any such changes comply with applicable zoning and building regulations of the City. Section 6.14 of the Agreement provides, as follows: 6.14 Obligation to Refrain from Discrimination. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site or any portion thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site nor shall the Owner, the Operator or any person claiming under or through either of them establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Dealership Site. The covenant of this Section 6.14 shall run Exhibit E RVPUB\DGW1674424.7 with the land of the Dealership Site in perpetuity and be a covenant set forth in the Agency Grant Deed. Section 6.13 of the Agreement provides, as follows: 6.15 Form of Non - discrimination and Non - segregation Clauses. The Owner and the Operator each covenant and agree for themselves and their respective successors and assigns and every successor -in- interest to the Dealership or the Dealership Site, or any portion thereof, that the Owner, the Operator and such successors and assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Dealership or the Dealership Site (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Dealership Site shall contain or be subject to substantially the following non - discrimination or non- segregation covenants: 6.15.1 In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 6.15.2 In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." 6.15.3 In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Exhibit E RVPUB\nGW\674424.7 premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants,. lessees, sublessees, subtenants, or venders of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 6.15.4 The covenant of this Section 6.15 shall run with the land of the Dealership Site in perpetuity and shall be a covenant in the Agency Grant Deed. Exhibit E RVPUMDGW\674424.7 SIGNATURE PAGE TO NOTICE OF AGREEMENT THIS NOTICE OF AGREEMENT is dated as of December 7, 2004, and has been executed on behalf of the parties to the Agreement on the date indicated next to the signatures of their authorized officers. This Notice of Agreement may be executed in counterparts and when fully executed each counterpart shall be deemed to be one original instrument. AGENCY REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA Dated: 1( :�O, 04 By: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: Best Best & Krieger LLP Agency Counsel OWNER PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 611110UAWZ Paul P. Rusnak, Trustee Exhibit E RVPUMDGW�674424.7 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California SS. County of Los Angeles On November 30, 2004, before me, Marina Simonian Date Name and Title of officer (e.g.. "Jane Doe, Notary Public') personally appeared Paul P. Rusnak Name(s) of Signer(s) VARMWAOMM All Callifilfid0m • 1410608 Nolay title • CaMorrMO lot Arpoln CoudY MyCairn.6ipMtliWy9, 4007 Place Notary Seal Above ❑ personally known to me N proved to me on the basis of satisfactory evidence to be the person(sl whose narri is%e subscribed to the within instrument and acknowledged to me that he/sl+e/triey executed the . same in his /Nr /Npir authorized capacity(*), and that by his /hr /their signatureN on the instrument the person'(, or the entity upon behalf of which the persons.) acted, executed the instrument. WITNEf S my h=0fNoWry l seal. � t lic OPTIONAL Though the in formation below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Notice of Agreement (LADA Dated Dec. 7, 2004) Document Date: November 30 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of humb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: 0 1997 National Notary Association • 9350 De Soto Ave., P.o. Box 2402 • Chatsworth, CA 91313 -2402 Prod. No 5907 Reorder: can tai -tree I -nuu -era -doll Dated: h. 3 Mq Dated: SIGNATURE PAGE TO NOTICE OF AGREEMENT OPERATOR RUSNAK/ARCADIA, a California corporation f: , Its [ALL SIGNATURES MUST BE NOTARIZED] Exhibit E RVPUB\DGW\674424.7 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California 1 ss. County of Los Angeles J On November 30, 2004 before me, Marina Simonian Date Name and Tdle of Officer (e.g., 'Jane Doe, Notary Public') personally appeared Paul P. Rusnak Name(s) of Signer(s) >� a1,- ,011111161MOfl 1 141060! LOS wy . 8""V&&, 2W7 Place Notary Seal Above ❑ personally known to me Ril proved to me on the basis of satisfactory evidence to be the person whose name() is /a\e subscribed to the within instrument and acknowledged to me that he /side /t1 ey executed the same in his /h)�r /their authorized capacity(igs), and that by his /h `qr /f�eir signature(N on the instrument the person), or the entity upon behalf of which the person( acted, executed the instrument. WITN SS my hand nd fficial seal. CA Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Notice of Document Date: November 30, 2004 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual • Corporate Officer — Title(s): • Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator Cl Other: Signer Is Representing: ement (LADA dated Dec. 7, 2004) Number of Pages: RtGKf THUMBPRINT OF SIGNER C 1997 National Nolery Assodation • 9350 De Sato Ave., PO Box 2402 • Chatsworth, CA 91313 -2402 Proc. NO. aaur I....11 1.,. wn nna i o ... .,.... EXHIBIT "A" Exhibit A RVPUB\DGW\674424.7 EXHIBIT "A:" LEGAL DESCRIPTION OF EXISTING SITE THAT PORTION OF LOT 3 OF TRACT 949, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT CERTAIN PIECE OR PARCEL OF LAND IN THE SANTA ANITA RANCHO AS PER MAP RECORDED IN BOOK 1, PAGE 97 OF PATENTS, IN THE OFFICE OF SAID RECORDER, BEING THAT PORTION OF THAT CERTAIN STRIP OF LAND 40.00 FEET WIDE DESCRIBED IN DEED RECORDED IN BOOK 4,44 PAGE 283, OF DEEDS, AND AS SHOWN ON SLAP OF SAID TRACT 94.9, RECORDED .IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF SAID RECORDER, TOGETHER WITH LOTS 6 AND 7 OF TRACT 13768, AS PER MAP RECORDED IN BOOK ,273, PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER, AND TOGETHER WITH A PORTION OF THAT CERTAIN PIECE OR PARCEL OF SAID LAND IN SANTA ANITA. RANCHO SAID CITY AS PER MAP RECORDED IN BOOK .I PAGE 97, OF PATENTS IN THE OFFICE OF SAID RECORDER, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT 3, DISTANT WESTERLY THEREON 593.00 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 3; THENCE NORTH, PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 20.00 FEET TO THE NORTH LINE OF THE LAND DESCRIBED IN DEEDS GRANTED TO THE SAID CITY OF ARCADIA FOR ROAD PURPOSES BY DEEDS RECORDED IN BOOK 24642, PAGE 221, AND IN BOOK 24633, PAGE 275, OFFICIAL RECORDS OF SAID COUNTY, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING NORTH, PARALLEL WITH SAID EASTERLY LINE OF LOT 3, A DISTANCE OF 154.52 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 250.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 220 10' 40" A DISTANCE OF 96.77 FEET TO THE MOST SOUTHERLY CORNER OF SATs LOT 7 OF TRACT 13768, BEING ALSO THE BEGINNING OF A COMPOUND CURVE IN SAID SOUTHERLY LNE THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 390 16' 20" A DISTANCE OF 7.05.42 FEET; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE OF LOT 7, NORTH 61° 27' 00" EAST, TANGENT. TO SAID LAST MENTIONED CURVE, A DISTANCE OF 6.25 FEET TO THE BEGINNING OF A TANGENT CURVE IN SAID SOUTHEASTERLY LINE OF LOT 7 THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 80 00'00" A DISTANCE OF 21_48 FEET TO THE END OF SAME, SAID END OF CURVE LYING SOUTH 690 27' 00" WEST, ALONG SAID SOUTHEASTERLY LINE OF LOT 7, A DISTANCE OF 25.95 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 7; THENCE NORTH 690 27' 00" EAST 25.96 FEET TO SAID MOST EASTERLY CORNER, SAID EASTERLY CORNER ALSO BEING THE SOUTHWESTERLY CORNER OF LOT 6 RVPUB \DGW \674424.7 Exhibit A IN SAID TRACT 13768 THENCE FOLLOWING THE SOUTHEASTERLY LINE OF SAID LOT 6, THROUGH ITS VARIOUS COURSES AND DISTANCES, TO THE SOUTHEASTERLY CORNER OF SAID LOT 6; THENCE ALONG THE EASTERLY LINE OF SAID LOT 6 AND ITS NORTHERLY PROLONGATION, NORTH 9° 14' 54" WEST 219.09 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, 80 FEET WIDE, AS DESCRIBED IN RESOLUTION RECORDED AUGUST 9, 1963, IN BOOK D 2140, PAGE 264, OFFICIAL RECORDS, SAID POINT ALSO BEING A POINT ON A CURVE, CONCAVE TO THE SOUTHEAST, AND HAVING A RADIUS OF 560 FEET; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED CURVE AND ALONG SAID TRACT A DISTANCE OF 335.06 FEET; AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32'37" WEST, ALONG THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, A DISTANCE OF 171.31 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.1,3 FEET; THROUGH A CENTRAL ANGLE OF 40 34' 52" TO A POINT ON A REVERSE CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.13 FEET, THROUGH `A CENTRAL ANGLE OF 40 34' 52" AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32'37" WEST 119.90 FEET TO A TANGENT CURVE THAT IS CONCAVE TO THE EAST AND HAVING A RADIUS OF 10 FEET; THENCE SOUTHERLY AND EASTERLY ALONG SAID CURVE, 22.44 FEET; THROUGH A CENTRAL ANGLE OF 128° 32' 37" TO ITS POINT OF TANGENCY WITH A LINE PARALLEL TO THE SOUTH LINE OF SAID LOT 3 OF TRACT 949, AND 20 FEET NORTH OF SAID SOUTH LINE THENCE ALONG SAID PARALLEL LINE, IN A GENERAL DIRECTION, TO THE TRUE POINT OF BEGINNING. EXCEPT FROM A PORTION OF THE ABOVE DESCRIBED PROPERTY, ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D 1614 PAGE, 679, OFFICIAL RECORDS. RVPMDGW \674424.7 Exhibit A. EXHIBIT "F" �yIn [Attached Behind This Cover Page] Exhibit F RVPUB\DGW\674424.7 CERTIFICATE OF NON - FOREIGN PERSON STATUS This Certificate is given in connection with the real property purchase and sale transaction(s) contemplated under Article IV of that certain 2004 Land Assembly and Development Agreement (Rusnak/Arcadia), dated as of December 7, 2004, by and between the ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic ( "Seller "), and PAUL P. RUSNAK, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 ( "Buyer "). The purpose of this Certificate is to provide Buyer with a statement to the effect that Seller is not a foreign person or entity subject to the withholding tax provisions of Section 1445 of the Internal Revenue Code, as amended. The undersigned certifies the following: Seller is not a foreign person, non - resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Internal Revenue Code and Income Tax Code Regulations. 2. Seller's social security or taxpayer identification numbers are: 3. Seller's address is: The undersigned and Seller understand that this Certificate may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained in this Certificate could be punished by fine, imprisonment or both. Seller agrees to indemnify, defend and hold Buyer harmless from and against any and all obligations, liabilities, claims, losses, actions, causes of action, rights, demands, damages, costs and expenses of every kind, nature or character whatsoever (including, without limitation, actual attorneys' fees and court costs) incurred by the Buyer as a result of: (i) the failure of Seller to pay U.S. Federal income tax that Seller is required to pay under applicable U.S. laws; or (ii) any false or misleading statement contained in this Certificate. RVPU13\DGw\674424.7 Exhibit F Under penalty of perjury, the undersigned declares that he or she has examined this Certificate and, to the best of their knowledge and belief, it is true, correct, and complete. The undersigned further fully declare that he or she has full and complete authority to sign this Certificate on behalf of Seller. SELLER: REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic IC Exhibit F RVPUB%DGW\674424.7 Executive Director EXHIBIT "G" FORM OF AGENCY GRANT DEED Exhibit G RVPUB \DGM674424.7 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Attention: THIS SPACE ABOVE FOR RECORDER'S USE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA AGENCY GRANT DEED PART ONE For valuable consideration, the receipt of which is hereby acknowledged, the Redevelopment Agency of the City of Arcadia, a public body, corporate and politic (the "Agency "), hereby grants to Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Grantee "), the real property legally described in Exhibit "A" and by this reference incorporated in this Agency Grant Deed (the "Property "). This conveyance is intended to convey all of the rights of the Agency as transferred to it by under its Deed delivered to the Agency, dated as of together with all other title now or hereafter acquired by the Agency by reason of those certain orders issued in each of the following condemnation actions initiated by the Agency authorizing possession of certain portions of the within described Property: Los Angeles County Superior Court Case No. ' fi The Grant of the Property to the Grantee is further subject to the following community redevelopment terms, conditions and covenants: 1. The Property is conveyed subject to that certain 2004 Land Assembly and Development Agreement (Rusnak/Arcadia) dated as of December 7, 2004, by and between the Agency and the Grantee (the "Agreement "). The provisions of the Agreement are incorporated into this Agency Grant Deed by this reference and are deemed to be a part of this Agency Grant Deed, as though fully set forth in this Agency Grant Deed. Exhibit G RVPUB \DGM674424.7 2. The Grantee acknowledges and agrees that the Property is transferred and granted by the Agency to the Grantee in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS CONDITION," in its condition as of the date of recordation of this Agency Grant Deed, with no warranties, expressed or implied, as to the environmental condition of the Property, the presence or absence of any patent or latent environmental condition on or in the Property, or any other matters affecting the Property. 3. The Grantee covenants and agrees for itself, its successors and assigns that the following uses on the Property are prohibited: pawn shops, flea market or second hand "swap meet' or surplus stores, second hand or used merchandise stores, antique stores, if merchandise is less than 100 years old, laundromats, thrift stores, bail bonds offices, dance studios/halls, karaoke bars or halls, modeling agencies, palmistry, fortune telling, astrology, psychic, beauty college, acupressure studios or facilities, electronic and/or video game arcades, pinball arcades, hot tub /suntan facilities, automobile related uses except sale of new, or used cars in connection with the sale of new cars, auto service or gas stations, tire and battery shops, muffler shops, automobile storage garage, fast food restaurants, except where such are included and incidental within an office building, and which do not contain drive- through service, drive - in theaters, bars and cocktail lounges, except in conjunction with a bona fide dinnerhouse restaurant, coin - operated, self - service dry cleaning machines, frozen foods locker, mortuaries, sanitariums, bath — Turkish and the like, churches or other religious institutions, educational training/tutoring facilities, coin - operated and automatic car washes, storage garage, upholstery shop, utility trailer and truck rental yard, pool or billiard halls, martial arts studios or academies, billboards advertising products not identifying a use on premises, any operation (for industrial areas) primarily used as a distilling, refining, smelting, agricultural or mining operation, check cashing service, nail salons, message parlors, so- called adult book or adult entertainment establishments stores selling liquor for off premise consumption, except as part of a comprehensive development plan of at least 40,000 sq. ft., convenience stores, ambulance services, bowling alley, gun shop, or heavy machinery rental 4. The Grantee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there will be no discrimination against or segregation of any person or group of persons on account of race,.color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor will the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property. Exhibit G RVPUB \DGw\674424.7 5. All deeds, leases or contracts made relative to the Property must contain the following nondiscrimination clauses: In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 6. Neither the Grantee, nor its successors or assigns shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property or any portion thereof to any entity or party, or for any use of the Property, that is partially or wholly exempt from the payment of real property taxes or that would cause the exemption of the payment of all or any Exhibit G RVPUa \DGW\674424.7 portion of real property taxes otherwise assessable regarding the Property, without the prior written consent of the Agency. 7. The covenants, terms and conditions of PART TWO of this Agency Grant Deed shall have the duration as set forth below: Section 1: until such time as the Certificate of Completion under the Agreement is recorded in the official records of the Recorder of the County of Los Angeles or twenty one (21) years from the date of recordation of this Agency Grant Deed, whichever date shall first occur; Section 2: in perpetuity; Section 3: until the termination date of the Redevelopment Plan for the Central Redevelopment Project; Section 4: in perpetuity; Section 5: in perpetuity; Section 6: until the termination date of the Redevelopment Plan for the Central Redevelopment Project. 8. Agency Reservation of Power of Termination. 8.1 The Agency hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et sec., exercisable by the Agency, in its sole and absolute discretion, upon thirty (30) calendar days written notice to the Grantee and the Operator referencing this Section 8.1, to terminate the fee interest of the Grantee in real property conveyed through the Agency Grant Deed and any leasehold or other interest of the Operator in the real property conveyed through the Agency Grant Deed and/or any improvements to such property and revest such fee title in the Agency and take possession of all or any portion of such real property and improvements, without compensation to the Grantee, upon the occurrence of an Event of Default following the close of any Phase of the Agency /Grantee Escrow and prior to the issuance of a Certificate of Completion for the Expansion Project. The Grantee and the Operator agree that the power of termination reserved to the Agency in this Section 8.1 shall apply to the entire Dealership Site, following merger or other combination of the Expansion Site and the Existing Site, as though all such real property and improvements were conveyed through an Agency Grant Deed. 8.2 The thirty (30) calendar day written notice specified Section 8.1 shall specify the Event of Default triggering the Agency's exercise of its power of termination. The Agency shall proceed with its remedy set forth in Section 8.1 only if the Grantee and/or the Operator continue in default for a period of thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. Exhibit G RVPUB \DGWN674424.7 8.3 The Agency shall compensate the Grantee or its successor in interest in ownership of the Expansion Site, for conveyance of marketable, lien -free fee title to the Expansion Site to the Agency, only pursuant to the provisions of Section 8.7. 8.4 The rights of the Agency under this Section 8 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (a) Permitted Security Interests; (b) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Expansion Site, the Dealership Site or any portion of either site and permitted or authorized by this Agreement, except any such interests held by the Operator, which are expressly subordinate to this Agreement and the Agency Deed of Trust, pursuant to Section 1.4 of the Agreement. 8.5 The deed to a Parcel or to any portion thereof conveyed by the Grantee to a third -party shall contain appropriate references and provisions to give effect to the Agency's rights under this Section 8, 8.6 Upon the Agency's exercise of its power of termination pursuant to this Section 10.5, the Grantee and the Operator or their respective successors or assigns shall convey by grant deed to the Agency title to the real property conveyed by the Agency Grant Deed and all improvements thereon in accordance with Civil Code Section 1109, as hereafter amended or substituted. Such conveyance shall be duly acknowledged by the Grantee in a manner suitable for recordation. The Agency may enforce its rights pursuant to this Section 8 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 8.7 Upon the revesting in the Agency of title to the real property subject to the Agency's power of termination, whether by grant deed or court decree, the Agency shall use its reasonable good faith efforts to resell the real property at fair market value, as soon and in such manner as the Agency shall find feasible and consistent with the objectives of the Redevelopment Plan, to a qualified and responsible party or parties (as reasonably determined by the Agency) who will assume the Grantee's and Operator's obligations to begin and /or complete and/or operate the Expansion Project, or such other replacement development acceptable to the Agency in its sole and absolute discretion, consistent with the Redevelopment Plan. Upon such resale of the real property (or any portion thereof), the proceeds thereof shall be applied as follows: (a) First, to pay any and all amounts required to release /reconvey any Permitted Security Interest; and (b) Second, to reimburse the Agency on its own behalf or on behalf of the City for all actual internal and third -party costs and expenses previously or currently incurred by the Agency or the City related to the Expansion Property, the Expansion Project or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third -party Exhibit G RVPUB\DGW\674424.7 personnel engaged in such actions, in connection with the recapture, management and resale of the real property or any part thereof, all taxes, assessments and utility charges paid by the City and/or the Agency with respect to the real property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Grantee or the Operator with respect to the acquisition of the real property or the construction of the Expansion Project; and amounts otherwise owing to the Agency by the Grantee or the Operator or their respective successor or assigns pursuant to the terms of this Agreement; and (c) Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Grantee, or its successors in interest to the real property or any part thereof, equal to the sum of: (1) the Parcel Purchase Prices paid to the Agency; (2) the amount of any equity in the Existing Site held by the Grantee on the last day immediately prior to the Agency /Grantee Escrow Closing Date; and (3) the third -party costs actually incurred and paid by the Grantee regarding the development of the Expansion Project, including, but not limited to, costs of carry, taxes, and other items as set forth in the Grantee's cost certification, which shall be subject to the Agency's reasonable approval; provided, however, that the Grantee shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, liens or other encumbrances that are paid by the Agency pursuant to the provisions of sub - sections (a) or (b) above. (d) Any portion of the proceeds from the resale of the real property remaining after the foregoing applications shall be retained by the Agency as its sole and exclusive property. 8.8 IMMEDIATELY FOLLOWING THE THIRTY (30) DAY PERIOD SPECIFIED IN SECTION 8.1, ABOVE, THE AGENCY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE REAL PROPERTY CONVEYED TO THE GRANTEE THROUGH THE AGENCY GRANT DEED OR THE DEALERSHIP SITE AND ANY IMPROVEMENTS TO SUCH REAL PROPERTY, WITHOUT FURTHER PRIOR NOTICE OR COMPENSATION, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8.7, TO THE GRANTEE OR THE OPERATOR. BY INITIALING BELOW, BOTH THE GRANTEE AND THE OPERATOR HEREBY EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT THE GRANTEE OR THE OPERATOR MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. GRANTEE'S INITIALS OPERATOR'S IMTIALS 8.9 THE OWNER AND THE OPERATOR EACH ACKNOWLEDGE AND AGREE THAT THE AGENCY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 8 SHALL WORK A FORFEITURE Exhibit G RVPUBOGW\674424.7 OF THE ESTATE IN THE PROPERTY CONVEYED TO THE OWNER THROUGH THE AGENCY GRANT DEED, THE DEALERSHIP SITE, AND ANY INTEREST OF THE OPERATOR IN SUCH REAL PROPERTY OR IMPROVEMENTS TO SUCH REAL PROPERTY. THE OWNER AND THE OPERATOR EACH HEREBY EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE OWNER OR THE OPERATOR MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE OWNER AND THE OPERATOR FURTHER EXPRESSLY WAIVE, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE OWNER OR THE OPERATOR MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE OWNER AND THE OPERATOR EACH ACKNOWLEDGE THAT THE TERMS AND CONDITIONS OF THIS AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE AGENCY'S POWER OF TERMINATION PROVIDED IN THIS SECTION 8 AND FURTHER ACKNOWLEDGE THAT EACH HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO THIS SECTION 8. GRANTEE'S INITIALS OPERATOR'S INITIALS 9. Each of the covenants and agreements contained in this Agency Grant Deed touch and concern the Property and each of them is expressly declared to be a community redevelopment covenant which runs with the land for the benefit of the Agency or the City of Arcadia, as the successor public agency to the Agency, and such covenants run with the land in favor of the Agency for the entire period that such covenants are in full force and effect, regardless of whether the Agency is or remains an owner of any land or interest in land to which such covenants relate. The Agency, in the event of any breach of any such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed are for the benefit of and are enforceable only by the Agency or the City of Arcadia, as the successor public agency to the Agency. 10. If legal proceedings are initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Grant Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees and costs from the other party in addition to any other damages or relief obtained in such proceedings. 11. In the event that any provision of this Agency Grant Deed may be held to be invalid or unlawful by a final judgment of a court, such invalidity shall not affect the validity of any other provision of this Agency Grant Deed. Exhibit G RVPUB\DGW\674424.7 IN WITNESS WHEREOF, the Agency has caused this Agency Grant Deed to be executed by its authorized officers on this day of 200_. AGENCY Redevelopment Agency of the City of Arcadia Executive Director Exhibit G RVPUB %0GW1674424.7 ACCEPTANCE OF AGENCY GRANT DEED AND COMMUNITY REDEVELOPMENT COVENANTS The undersigned hereby acknowledges acceptance by Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988, the Grantee in the within Agency Grant Deed, of the delivery of the subject Property described in the within Agency Grant Deed from the Redevelopment Agency of the City of Arcadia. GRANTEE PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 LIM Paul P. Rusnak, Trustee [ALL SIGNATURES TO BE NOTARY ACKNOWLEDGED] Exhibit G RVPUB\DGN\674424.7 EXHIBIT "H" FORM OF CERTIFICATE OF COMPLETION When Recorded, Mail to: We, Chairperson and , Secretary of the Arcadia Redevelopment Agency (the "Agency ") hereby certify as follows: By its Resolution No. _, adopted and approved the Agency has resolved as follows: Section 1. The Expansion Project required to be constructed in accordance with that certain 2004 Land Assembly and Development Agreement (Rusnak/Arcadia) (the "Agreement ") dated December 7, 2004, by and between the Agency, Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust Dated November 14, 1988 (the "Owner "), and Rusnak/Arcadia, a California corporation (the "Operator "), on certain real property, as more specifically described in the legal description(s) attached to this Certificate of Completion as Exhibit "A" and incorporated into this Certificate of Completion by this reference (the "Expansion Site "), has been completed in accordance with the provisions of the Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination by the Agency of the Owner's satisfaction of its obligation under the Agreement to construct and install the Expansion Project on the Expansion Site, including any and all buildings, parking areas, landscaping areas and related improvements necessary to support or meet any requirements applicable to the Expansion Project and its use and occupancy on the Expansion Site, whether or not such improvements are located on the Expansion Site or on other property subject to the Agreement, excluding any normal and customary tenant improvements and minor building "punch -list" items. Notwithstanding any provision of this Certificate of Completion, the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the Agency Grant Deed(s) by which the Parcels constituting the Expansion Site were conveyed to the Owner by the Agency under the Agreement. The Agreement is an official record of the Agency and a copy of the Agreement may be inspected in the office of the Secretary of the Agency located at 240 W. Huntington Drive, Arcadia, California 91006, during the regular business hours of the Agency. Section 3. The Parcels constituting the Expansion Site to which this Certificate of Completion pertains are specifically described in Exhibit "A" attached to this Certificate of Completion. Exhibit H RVPUB\DGWM4424.7 DATED AND ISSUED this ` day of Chairperson Secretary Exhibit H RVPUBTGW\674424.7 EXHIBIT "A" Exhibit A RVPUB \DGW\674424.7 EXHIBIT "I" FORM OF AGENCY DEED OF TRUST [Attached behind this cover page] Exhibit I RVPUB\DGW \674424.7 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Arcadia Attention: Executive Director 204 West Huntington Drive P.O. Box 6002 Arcadia, California 91006 -6021 ee �— s��r (Space above for Recorder's use only) DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (2004 Land Assembly and Development Agreement — Rusnak/Arcadia) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ( "Deed of Trust ") is made as of 12004, by PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 (referred to in this Deed of Trust as "Trustor "), whose address is P.O. Box 70489, Pasadena, California 91117 -7489, to United Title Company (referred to in this Deed of Trust as "Trustee "), whose address is 15821 Ventura Boulevard, Suite 160, Encino, California 91436, for the benefit of the REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body corporate and politic, its successors and assigns (referred to in this Deed of Trust as "Beneficiary" or "Agency "), whose address is 204 West Huntington Drive, P.O. Box 6002, Arcadia, California 91006 -6021. 1. Grant of Trust Estate. As security for the performance of each of the Obligations (as defined in Section 2), Trustor, for valuable consideration, grants, bargains, sells, conveys and warrants to Trustee, to have and to hold, in trust with power of sale, subject to the right, power and authority given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, Trustor hereby grants to Beneficiary a security interest in that certain real property in the City of Arcadia, County of Los Angeles, State of California, more particularly described in Exhibit "A" attached to this Deed of Trust and made a part of this Deed of Trust by this reference (the "Land "), together with the following described estate, property and rights of Trustor in the Land and/or in any improvements now or hereafter constructed on the Land (severally and collectively referred to in this Deed of Trust as the "Property "): LI All the fee and leasehold estates and rights of Trustor now held and hereafter acquired in and to the Property and in and to land lying in streets and roads adjoining the Property, and all access rights and easements appertaining to the Property; and 1.2 All buildings, structures, improvements, furnishings, fixtures and equipment, real, personal and mixed, now or hereafter attached to, or used or adapted for use in the operation of the Property and any and all replacements and additions thereto, including without limitation, all heating apparatus and equipment whatsoever, all boilers, engines, motors, dynamos, generating RVPUB\DGW\674424.7 - 1 equipment, pumps, piping and plumbing fixtures, cooling, ventilating, sprinkling, fire - extinguishing apparatus, gas and electric fixtures, elevators, escalators, partitions, and shrubbery and plants; and including also all interest of any owner of the Property in any of such items hereafter at any time acquired under conditional sales contract, chattel mortgage or other title - retaining or security instrument, all of which property mentioned in this paragraph shall be deemed part of the realty and not severable wholly or in part without material injury to the freehold; and 1.3 All and singular the lands, tenements, privileges, water, water rights, water stock, mineral, oil and gas rights, hereditaments and appurtenances thereto belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, royalties, issues and profits thereof, and all the estate, rights, title, claim, interest and demand whatsoever of the Trustor either in law or equity, of, in and to the Property, whether now held or hereafter acquired; 1.4 All of the right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about or used in connection with the construction, use, operation or occupancy of the Property and/or the improvements thereon and any business or activity conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefor and the proceeds and products thereof: (i) all materials, supplies, furniture, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment and tools, telephone and other communications equipment; (ii) all books, ledgers, records, accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded data; (iii) all "General Intangibles" (as such term is defined in the California Commercial Code), instruments, money, "Accounts," (as such term is defined in the California Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, choses in action, good will, rights to payment of money, rents, rental fees, equipment fees and other amounts payable by persons who utilize the Property or any of the improvements or paid by persons in order to obtain the right to use the Property and any of the improvements, whether or not so used; trademarks, service marks, trade dress, tradenames, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveys; soils, environmental, engineering or other reports, architectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreements; (iv) all compensation, awards and other payments or relief (and claims therefor) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of the Property (including without limitation, awards for severance damages), together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to the Property, together with interest thereon; (v) any and all claims or demands against any person with respect to damage or diminution in value to the Property or damage or diminution in value to any business or other activity conducted on the Property; (vi) any and all security deposits, deposits of security or advance payments made to others with respect to: (1) insurance policies relating to the Property; (2) taxes or assessments of RVPUB\1X3JW\674424.7 2 any kind or nature affecting the Property; (3) utility services for the Property and/or the improvements; (4) maintenance, repair or similar services for the Property or any other services or goods to be used in any business or other activity conducted on the Property; (vii) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof, (viii) all warranties, guaranties, utility, or street improvement bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (ix) all goods, contract rights, and inventory; (x) all leases and use agreements of machinery, equipment and other personal property; (xi) all insurance policies covering all or any portion of the Property; (xii) all reserves (including those provided for in Section 17 hereof) and funds held in escrow by Beneficiary or other person for Beneficiary's benefit and any funds deposited with Beneficiary, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (xiii) all names by which the Property is now or hereafter known; (xiv) all interests in the security deposits of tenants; (xv) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (xvi) the proceeds from sale, assignment, conveyance or transfer of all or, any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from, upon or within the Property and/or the improvements (but nothing contained herein shall be deemed a consent by Beneficiary to such sale, assignment, conveyance or transfer, except as expressly provided in this Deed of Trust); (xvii) any property described in paragraph B, above, which are not fixtures under California law; (xviii) all other property (other than fixtures) of any kind or character as defined in or subject to the provisions of the California Commercial Code, Secured Transactions, as amended and; (xix) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. 2. Obli¢ations Secured. This Deed of Trust is made for the purpose of securing the performance of each covenant, agreement and obligation of Trustor under this Deed of Trust and of each covenant, agreement and obligation of Trustor set forth in that certain Promissory Note made by the Trustor in favor of the Agency, dated as of , pursuant to the terms of that certain 2004 Land Assembly and Development Agreement, dated as of December 7, 2004 (the "Agreement ") by and between the Redevelopment Agency of the City of Arcadia, Paul P. Rusnak, Trustee of the Paul P. Rusnak Family Trust dated November 14, 1988, and Rusnak/Arcadia, a California corporation, and the Trustor's covenants set forth in Section 6.3 and/or Section 6.4 of the Agreement and the Trustor's obligations under all other instruments or agreements executed in connection with or to secure any of the covenants of the Trustor previously described in this Section 2 (collectively, the "Transaction Documents ") and all interest thereon and other amounts evidenced thereby; the obligations evidenced by all renewals, extensions, modifications, substitutions and conditions of the Promissory Note, Section 6.3 and/or Section 6.4 of the Agreement or any other Transaction Documents; and any and all other obligations of Trustor to Beneficiary, its successors and assigns, now existing and hereafter arising and which specifically indicate in the instruments which evidence the same that they are intended to be secured by this Deed of Trust. 3. Trustor's Covenant of Performance. Trustor shall perform all of its obligations under the Promissory Note and under this Deed of Trust when due, without excuse or delay of any kind RVPUB %DGM674424.7 3 whatsoever, except as expressly provided in the Promissory Note, the Agreement or this Deed of Trust, and Trustor shall pay all debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 4. Trustor's Warranties of Title. Trustor warrants to Beneficiary that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiary, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiary's prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiary's interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 5. Trustor's Right to Contest Statutory Liens. As used in this Deed of Trust the words "mechanic's lien" and "materialmen's lien" means and includes a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materiahnen's lien against the Property or a stop notice against the Trustor or the Beneficiary and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default under this Deed of Trust, if and so long as (a) no defaults exist under the Agreement, this Deed of Trust, or any of the other Transaction Documents; (b) within ten (10) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a surety admitted by the California Department of Insurance to do business in the State of California and acceptable to Beneficiary in an amount not less than one hundred twenty -five percent (125 %) of the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy, if any, in a form satisfactory to Beneficiary, insuring the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues such contest in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any final judgment rendered for the lien claimant, within ten (10) days following entry of any such judgment. 6. Maintenance and Inspection of Improvements. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good condition and state of repair. Trustor shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof, and shall pay all fees or charges of any kind in connection therewith. 7. Construction and ReLairs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred in such completion or restoration. RVPUB \DGW\674424.7 4 8. Alterations. Other than as specifically set forth in the Agreement, no building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiary's prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiary's prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiary. 9. Compliance With Laws. Trustor shall comply with all statutes, laws, ordinances and regulations that now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 10. Environmental Covenants. Representations. Warranties and Indemnity. 10.1 Trustor will not use any Hazardous Materials (as defined in subsection 10.6 below) in the construction of improvements on or about the Property in violation of any Environmental Laws or any other applicable laws. 10.2 Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined in subsection 10.8 below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Property to assure and monitor continued compliance by Truster and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. 10.3 Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities in violation of any Environmental Laws or any other applicable laws.. Beneficiary reserves the right, in its reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Truster hereby grants to Beneficiary, its agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as are reasonably necessary to conduct such a review and/or investigation. 10.4 Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subsection 10.10 inaccurate in any material respect, if made at the'time of such discovery, Trustor shall promptly notify Beneficiary of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect to such event or situation. RVPUB \DGW\674424.7 5 Within sixty (60) days after such discovery, Truster shall submit to Beneficiary a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect such event or situation, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval, which approval may be granted or withheld in Beneficiary's sole but reasonable discretion. Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan, Beneficiary's notice to Trustor of such disapproval shall include a brief explanation of the reasons for such disapproval. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiary within said thirty (30) day period, or if such revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of Default" under this Deed of Trust. If Beneficiary does not notify Trustor of its approval or disapproval of the final plan or any revisions to the final plan within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiary of Beneficiary's failure to respond, at which time Beneficiary shall have an additional forty -five (45) days after receipt of such notice from Trustor to notify Trustor of its approval or disapproval of the final plan. If Beneficiary fails to notify Trustor of its disapproval or approval of said plan within said additional forty -five (45) day period the plan shall be deemed approved by Beneficiary. Once any such plan is approved in writing or deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiary, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the environmental plan set forth in this subsection 10.4 and the actions of Beneficiary pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiary a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subsection 10.4. 10.5 Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiary reserves the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiary, its agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiary deems are necessary to conduct such a review and/or investigation. Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiary to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiary, (c) regulatory officials having jurisdiction over Beneficiary who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial RVPUBTGW\674424.7 6 institution in connection with a disposition or proposed disposition of all or part of Beneficiary's or any participant's interests hereunder. 10.6 "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by- products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( "CERCLA "), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA "), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted or publications promulgated pursuant to said laws. 10.7 "Environmental Laws" as used in this Deed of Trust shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth in Subsection 10.6. 16.8 "Environmental Activities" as used in this Deed of Trust shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. 10.9 Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiary's choice), Beneficiary, its successors and assignees, and the elected officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee ", and collectively, the "Indemnitees ") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims ") that may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiary: RVPUB \DGW\674424.7 7 (a) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (b) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property; (c) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (d) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters in connection with the Property or the ownership, use, operation or enjoyment of the Property or any portion of the Property, (e) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (f) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property; (g) The implementation and enforcement of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (h) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (i) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust or any of the other Transaction Documents. 10.10 Truster hereby represents and warrants to Beneficiary and Trustee, as follows: (a) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; RVPUB %DGM674424.7 8 (b) The Property is in compliance with all Environmental Laws; (c) Trustor has not received any written notice of claims or actions pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or users ownership or use of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to any Environmental Laws; and (d) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." 10.11 The provisions of this Section 10 shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 11. Insurance. Trustor shall continuously maintain insurance on the Property and all improvements and additions thereto, with all premiums prepaid, and provide Beneficiary original policies or originally signed certificates evidencing such insurance coverage listing all coverage and endorsements to the policies exactly as stated in the policies and to which the originally signed Lenders loss payee endorsement is attached. All such existing and future insurance policies are hereby assigned to Beneficiary. Unless otherwise specified in the Agreement or in any other Transaction Documents, or unless expressly and in each instance waived by the Beneficiary in writing, said insurance shall (a) be placed with companies admitted and licensed to do business in the State of California, by the California Department of Insurance, and (b) be placed with companies with a Best's Insurance Guide, current edition, rating of "A" or better and indicated to be of sufficient size to qualify for Best's designation "vii." All casualty and builder's risk policies shall (i) be written on forms acceptable to Beneficiary, including fire and extended coverage, vandalism and malicious mischief, or an all perils endorsement, coverage against earthquake, if and when Beneficiary so requires, and flood protection, if the Property is located within a special flood hazard area, as determined by a Zone A designation on a Flood Hazard Boundary Map or a Zone A or V designation on a Flood Insurance Rate Map, together with such "soft costs" and other endorsements and coverages as Beneficiary may from time to time require, (ii) cover one hundred percent (100 %) of the replacement value of the improvements comprising the Property, with agreed value and inflation protection endorsements approved by Beneficiary in writing, (iii) not be subject to any co- insurance or other similar contribution or limitation provisions; (iv) name Beneficiary as a loss payee under a standard 438 BFU endorsement or a complete equivalent thereof acceptable to Beneficiary; and (v) contain a deductible amount not in excess of that approved by Beneficiary from time to time. In addition to said casualty and builder's risk policies, Trustor shall carry such policies as are required by the Agreement or any other Transaction Documents or otherwise by Beneficiary or by any applicable law, including, without limitation comprehensive general liability insurance applicable to the Property, buildings and improvements thereon, covering losses from damage to property and injury or death to persons with a policy limit of no less than Two Million Dollars $2,000,000 or which Beneficiary otherwise requires from time to time, including an extended liability endorsement, if applicable RVPUB \DGW\674424.7 - 9 to the Property and required by Beneficiary. Upon Beneficiary's request, Trustor shall cause Beneficiary to be named as an additional insured on such liability policies and named as a loss payee under a standard 438 BFU endorsement. All insurance policies shall be evaluated and adjusted as required by Beneficiary on an annual basis. Trustor assumes all risk of insufficient coverage of risks or amounts and acknowledges that Beneficiary's requirements are not intended to indicate what Truster should, in its exercise of its prudent and reasonable judgment, obtain. The insurance certificates shall confirm that no insurance policy shall be cancelled or modified without thirty (30) days' prior written notice to Beneficiary. Beneficiary may, at its option, require Trustor to maintain said policies in Trustoi's possession or deliver said policies to Beneficiary. If retained by Truster, said policies shall be kept available by Truster at all times for delivery to Beneficiary or for inspection by Beneficiary, its agents or insurers. In the event of foreclosure of this Deed of Trust or other transfer of title to the Property in extinguishment of some or all of the indebtedness secured by this Deed of Trust, all interest of the Trustor in any insurance policies in force shall pass to the purchaser. Trustor shall provide Beneficiary with proof of premiums paid for each policy term so long as this Deed of Trust remains in effect. Trustor shall reimburse Beneficiary for any premiums paid for such insurance by the Beneficiary upon the Trustor s default in so insuring the improvements or default in assigning and delivering such policies to Beneficiary. 12. Assignment of Insurance and Condemnation Proceeds. Should the Property or any portion, appurtenance, right or interest in the Property be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiary or Trustee may, at its option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief available at law or in equity in such actions or proceeding. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiary, but no such assignments shall be effective to invalidate or impair any insurance policy. Truster further assigns to Beneficiary any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiary and all refunds or rebates made of taxes or assessments on the Property, and Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Truster under the Agreement, this Deed of Trust or any other Transaction Documents. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such proceeds with its general assets and shall not be liable for the payment of any interest on any such amounts. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiary or Trustee may require. 13. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice of such damage and casualty to Beneficiary generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make RVPUB\DGW\674424.7 10 available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: 13.1 Insurance proceeds that are directly attributable to the damage (the "Proceeds ") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (a) There, exists no default under the Agreement, this Deed of Trust or any other Transaction Documents at any time prior to or during the course of reconstruction; (b) Receipt by Beneficiary of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that. all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (c) Receipt by Beneficiary of proof reasonably satisfactory to Beneficiary that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to perform or pay the Obligations as and when due. Such computation shall include Beneficiary's estimate of the amount necessary to pay all of Trustor's operating expenses and perform all acts or pay all of the sums due under the Agreement and this Deed of Trust over the projected period of reconstruction, and Beneficiary may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Agreement, this Deed of Trust, any other Transition Documents or any reconstruction requirements, Beneficiary may, at its option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Agreement or this Deed of Trust; (d) Receipt by Beneficiary from Trustor of sufficient cash funds to cover one hundred percent (100 %) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiary in writing, and the Proceeds, the amount of such difference to be paid in cash to Beneficiary with said amount and any interest earned thereon shall be released to Beneficiary, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiary. In the event of any default under the Agreement, this Deed of Trust, any other Transaction Documents or any reconstruction requirements, Beneficiary may, at its option, apply any portion or all of such amounts and interest against the accrued _interest and principal sums outstanding under the Agreement or this Deed of Trust; (e) Receipt by Beneficiary of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiary in writing stating that the work described in the Trustor s certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses that will be required to complete such restorations; and (f) Such additional conditions as may reasonably be imposed by Beneficiary to provide assurance that the Proceeds will be used to restore the Property to substantially the RVPUBOGW \6744247 11 same condition, to the extent possible, as existed prior to the damage, including, without limitation, Beneficiary's prior written approval of all permits, plans, specifications and construction contracts for such restoration. 13.2 Beneficiary shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not exceeding ten percent (10 %) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all of its conditions precedent to such disbursement have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiary in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as may be imposed by Beneficiary, no defaults or misrepresentations of Trustor and Trustor s obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiary. Trustor shall, during the progress of the work, also submit to the Beneficiary, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiary furnished by an architect or engineer approved by Beneficiary in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and 13.3 After completion of the restoration and subject to the conditions herein stated in this Section 13, and, if Trustor is not then in default under the Agreement, this Deed of Trust or any other Transaction Documents, Beneficiary shall pay to Trustor (or such other persons or entities that may have an interest in the Proceeds) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiary upon delivery to Beneficiary of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection with the restoration work have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiary in writing confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. 13.4 If (i) any of the conditions in subsection 13.3, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Agreement, this Deed of Trust or any other Transaction Documents; or (ii) if Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) if Trustor is otherwise in default under the Agreement, this Deed of Trust, any other Transaction Documents or any reconstruction requirements set forth in this Deed of Trust or any other Transaction Documents, Beneficiary RVPUB\DGW \674424.7 12 may, at its option, apply the Proceeds and any deposits made by Trustor under this Section 13 to any amounts due under the Transaction Documents secured by this Deed of Trust, or to complete the necessary repairs and use the Proceeds for the payment of the costs of such repairs If the Proceeds are so applied to amounts secured by this Deed of Trust and, together with any other payments due to Beneficiary under the Agreement and all other debts of Trustor to Beneficiary secured by this Deed of Trust are discharged, Beneficiary shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiary's rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. 13.5 Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiary consents in writing to such construction, which consent may be withheld by Beneficiary in its sole discretion, until all of the conditions contained in this Section 13 are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing in this Section 13 contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this Section 13. 13.6 In any event in which the Beneficiary is not otherwise obligated to permit the insurance proceeds to be applied to the restoration of the Property as described in this Section 13 and, at the option of Beneficiary, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiary, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of any amounts secured by this Deed of Trust or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 14. Use of Condemnation Awards. Should the Property, any portion of the Property or any improvements on the Property be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiary's costs and reasonable attorneys' fees incurred in connection with any such action or proceeding. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions set forth in Section 13 of this Deed of Trust with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiary, renders or will render the Property not economically viable or which substantially impairs Beneficiary's security or lessens to any extent the value, marketability or intended use of the Property, Beneficiary may apply the condemnation proceeds to reduce any outstanding amounts secured by this Deed of Trust in such order as Beneficiary may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from time to time require. If so applied, RVPUBTGW�674424.7 13 - any proceeds in excess of the sum of all outstanding amounts and accrued and unpaid interest due under the Agreement, plus all other sums due to Beneficiary from Trustor shall be paid to Trustor or Trustor's assignee. 15. Pronerty Taxes and Assessments. Trustor shall pay in full on or before the date of delinquency thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiary with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 16. Assessment Districts. Trustor agrees not to consent to inclusion of the Land in any local improvement or special assessment district or to the imposition of any special or local improvement assessment against the Property, without Beneficiary's prior written consent. 17. Mortgage Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary or any payments secured by this Deed of Trust,. Trustor shall bear and pay the full amount of such taxes. 18. Snecial Assessment and Insurance Reserves. Trustor shall, at the request of the Beneficiary, pay to Beneficiary equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiary next to become due, in addition to any other periodic payment or performances owed by Trustor under the Agreement or this Deed of Trust or any other, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiary will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the monthly payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiary deems necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiary of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiary on account of assessments or insurance premiums may be commingled and invested with Beneficiary's own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary shall not exercise the rights granted in this Section 18 so long as all of the following conditions are met: 18.1 There is no default under the Agreement, this Deed of Trust or any other Transaction Documents; and 18.2 Trustor pays all assessments and insurance premiums prior to delinquency. 18.3 Upon Trustor's failure to comply with either of conditions (a) or (b), above, Beneficiary may, at its option, then or thereafter exercised, require Trustor to pay the additional sums described in this Section 18. RVPUB\DGWW74424.7 14 19. Trustor's Right to Contest Taxes. Trustor shall have the right to contest any real property tax or special assessment, so long as: (a) no defaults exist under the Agreement, this Deed of Trust or any other Transaction Documents; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (e) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 20. Report of Real Estate Transaction. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiary, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this Section 20 are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained in this Section 20 shall be construed to require such returns or reports to be filed by Beneficiary. 21. Leases. With respect to any leases currently or hereafter relating to any portion of the Property, Trustor agrees that: 21.1 Prior to the execution of any such lease or rental agreement by the Trustor, the Trustor shall give the Beneficiary thirty (30) days written notice setting forth the identity of the tenant and the relevant terms of the proposed lease; 21.2 Each such lease shall comply with the covenants of the Truster under the Agreement, this Deed of Trust and the other Transaction Documents; 21.3 Trustor shall fully comply with all of its obligations under all leases on the Property, so that the same shall not become in default and shall do all that is necessary to preserve the same in force; 21.4 Trustor shall not permit an assignment of any leases, or any subletting thereunder; and 21.5 Beneficiary and its successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interest following any foreclosure or trustee's sale under this Deed of Trust. 22. Assignment of Leases. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiary all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, that RVPUB\DGW674424.7 15 it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiary confers upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiary upon a default under this Deed of Trust to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiary may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned in this Deed of Trust to Beneficiary upon the occurrence of an Event of Default under this Deed of Trust or under any of the obligations secured by this Deed of Trust, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant to this Deed of Trust or pursuant to the Agreement or any other Transaction Documents, and Beneficiary shall, in its sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiary shall determine. In the event the Beneficiary exercises or is entitled to exercise any of its rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Agreement, and if any lessee, sublessee or assignee under any lease assigned under this Section 22 files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiary shall have, and is hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in writing, Beneficiary's exercise of any of the rights provided in this Section 22 shall preclude Trustor from the pursuit and benefit of any such rights, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the Property, and such assignment shall not cause Beneficiary to be a "mortgagee in possession" for any purpose. The rights granted in this Section 22 shall be in addition to and not in derogation of any similar or related rights granted to Beneficiary in any separate assignment of leases and rents. 23. Impairment of Security. Trustor shall not, without first obtaining Beneficiary's written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiary's lien upon the Property or the rents from the Property. Trustor shall not, without the prior written consent of Beneficiary, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non - conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 24. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the RVPUB \DGW\674424.7 16 rights or powers of Beneficiary or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiary, has waived and does hereby waive any immunity to such liability to Beneficiary under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiary and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title, expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review of any such suit, action, or proceeding and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay all costs of suit, cost of evidence of title, expert witness fees and reasonable attorneys' fees in any action, proceeding or suit brought by Beneficiary to foreclose this Deed of Trust and in any appeal or petition for review of any such action, proceeding or suit.. 25. Assignments and Transfers. Trustor acknowledges that Beneficiary relied upon Trustor's financial statements, credit history, business and real property managerial expertise and other factors personal to Trustor in entering into the Agreement, and Trustor covenants not to transfer any of the interest in the Property or to permit the transfer of any interest in Trustor without first receiving Beneficiary's express written consent in each instance. A breach of this covenant shall constitute a default under the Agreement and this Deed of Trust. All sums then due to Beneficiary by Trustor under this Deed of Trust or under the Agreement may, at Beneficiary's option, be declared immediately due and payable if any of Trustor's interests in the Property, or any part thereof, are sold or transferred, voluntarily or involuntarily, without Beneficiary's prior written consent. 26. No Further Encumbrances. Trustor acknowledges that Beneficiary relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiary's option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiary's requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiary to enter into the Agreement secured by this Deed of Trust, and with the knowledge that Beneficiary will materially rely upon this Section 26 in so doing, Trustor covenants not to encumber the Property without.first receiving Beneficiary's express written consent in each instance, which consent may be withheld by Beneficiary in its sole discretion. A breach of this covenant shall constitute a default under the Agreement and this Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary under the Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgages, RVPUB\DGWW4424.7 17 deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiary shall encumber any real or personal property that is the subject of any lien or security interest granted to Beneficiary under this Deed of Trust, without Beneficiary's prior written consent. 27. Event of Default. An "Event of Default" shall have occurred upon the occurrence of any of the following events: 27.1 The Trustor or the Operator fails to perform any of the non - monetary covenants and conditions of the Promissory Note or Section 6.3 or Section 6.4 of the Agreement, and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Trustor or the Operator from the Agency or the expiration of an applicable shorter cure period set forth in the Promissory Note or the Agreement; provided, however, that for so long as the Trustor and the Operator are satisfying their joint and several obligations to cause the generation of both the Minimum Assessed Valuation and the Minimum Annual Sales Tax Amount or, alternatively, paying both the In -Lieu Tax Increment Payment and the In -Lieu Minimum Sales Tax Payment, no default under this Deed of Trust shall occur by virtue of any failure on the part of the Owner or the Operator to satisfy any of the other covenants of either Section 6.3 or Section 6.4. 27.2 The determination by the Agency that any representation, warranty, disclosure or statement of the Trustor or the Operator contained in the Agreement, the Promissory Note, this Deed of Trust or in any other writing delivered to the Agency in connection with the Agreement, the Promissory Note or this Deed of Trust, was incomplete, untrue or misleading in any material respect as of the date made. 27.3 The Trustor or the Operator fails to make any payment or deposit of funds required under the Promissory Note or Section 6.3 or Section 6.4 of the Agreement, following seven (7) days' written notice to the Trustor or the Operator from the Agency of such failure. 27.4 The Trustor or the Operator fails to comply with or to perform when due any term, obligation, covenant, or condition contained in the Promissory Note. 27.5 Failure of the Trustor to properly perform its obligations under this Deed of Trust, other than obligations specifically contained in Section 6.3 or Section 6.4 of the Agreement or in the Promissory Note and referenced in this Deed of Trust, by a date specified in this Deed of Trust or in a written notice to Trustor, if applicable, (which date specified shall not be less than ten (10) days nor greater than thirty (30) days from the date of such notice, and shall be determined by the Agency in its sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice shall be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice. 27.6 The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by the Agency) portion of the Property., RVPUB \DGW \674424.7 18 27.7 The enactment of any law imposing upon the Agency the payment of the whole or any part of the taxes, assessments, charges or liens required to be paid by the Trustor under this Deed of Trust or changing, in any way, the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or the Agency's interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust, the covenants of the Owner and the Operator under Section 6.3 or Section 6.4 of the Agreement or the obligations of the Owner or the Operator under the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee (as defined in this Deed of Trust) or the Agency by reason of their ownership of this Deed of Trust or any related documents and, in such event, the Truster, after demand by the Agency, does not pay such taxes or assessments or reimburse the.Agency for such taxes and assessments or, in the opinion of counsel for the Agency, it might be unlawful to require the Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law. 27.8 The occurrence of a default by the Trustor under any of the contracts or agreements assigned to the Agency under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of the Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party to such contracts or agreements. 27.9 There occurs any event of dissolution, reorganization or termination of the Trustor or the Operator that adversely and materially affects the operation or value of the Expansion Site, the Expansion Project, the Dealership or the Dealership Site and such event is not corrected within five (5) days following written notice of such event from the Agency to the Trustor or the Operator. 27.10 The Trustor or the Operator sells, transfers, hypothecates, encumbers or assigns any of its interest in the Property or any portion of the Property, or violates any provision of Section 6.6 of the Agreement, whether voluntarily or involuntarily or by operation of law, prior to payment in full of all principal and accrued interest under the Promissory Note. 27.11 The Trustor or the Operator defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect the Trustor's ability to repay the Promissory Note or the ability of the Trustor or the Operator to perform their, respective, other obligations under the Agreement, the Promissory Note or this Deed of Trust. 27.12 Any creditor attempts to take or sell any of the Trustor's or the Operator's property on or in which the Agency has a lien or security interest securing repayment or performance of the Trustor's or the Operator's obligations under Section 6.3 or Section 6.4 of the Agreement, the Promissory Note or this Deed of Trust. 27.13 A material adverse change occurs in the Truster's or the Operator's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by the Promissory Note that is secured by this Deed of Trust is materially impaired. 27.14 The Trustor or the Operator becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from RVPUMDGW1674424.7 19 time to time (which Act, as amended, is referred to in this Deed of Trust as the 'Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing of such petition, or shall make an assignment for the benefit of creditors. 27.15 Any court (or similar tribunal) having jurisdiction over either the Trustor, the Operator, any of the Property or other property of either the Trustor or the Operator shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of the Trustor, of the Operator, of any of the Property, of any other real property of the Trustor or the Operator, of any other significant asset of the Trustor or the Operator, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code. 27.16 The entry of any final judgment or arbitration award against the Trustor or the Operator that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by the Owner, the Operator or any other person under this Deed of Trust or as security for performance under the Agreement or the Promissory Note, or (iii) any significant portion of the other assets of the Trustor or the Operator, that is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets. 27.17 The Trustor or the Operator shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up. 27.18 The Trustor or the Operator suspends or terminates its legal status or is not authorized by the Secretary of State of the State of California to transact business in California. 27.19 Trustor acknowledges and agrees that all material non - monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiary shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non - monetary default. 28. Rights and Remedies on Default. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiary may exercise any one or more of the following rights and remedies: 28.1 Remedies in the Agreement. Beneficiary may exercise any right or remedy provided for in the Agreement, this Deed of Trust or any other Transaction Documents; 28.2 Acceleration. Beneficiary may declare all performances or sums secured by this Deed of Trust immediately due and/or payable; RVPUMDGW %74424.7 20 28.3 Foreclosure Rights. Beneficiary may declare all performances or sums secured by this Deed of Trust immediately due and/or payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale contained in this Deed of Trust. Should Beneficiary elect to foreclose by exercise of the power of sale contained in this Deed of Trust, Beneficiary shall also deposit with Trustee this Deed of Trust, and any receipts and evidence of expenditures made and secured by this Deed of Trust as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by Trustee in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder upon any terms and conditions specified by Beneficiary and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof Any person, including Trustor, Trustee or Beneficiary, may purchase all or any portion of the Property, as applicable, at sale. 28.4 Right to Rescind. Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as provided in this Section 28, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations secured by this Deed of Trust, nor otherwise affect any provision, agreement, covenant or condition of the Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties under this Deed of Trust. 28.5 UCC Remedies. Beneficiary shall have all the rights and remedies of a secured party under the California Commercial Code, including, without limitation, Section 9501(4) of the California Commercial Code. Upon request, Trustor shall assemble and make such collateral available to Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both Beneficiary and Trustor. Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the Obligations or sell the collateral at public or private sale in accordance with the California Commercial Code or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiary disposes of all or any part of such the collateral after default, the proceeds of disposition shall be applied in the following order: RVPUB\DOW\674424.7 21 (a) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (b) to the reasonable attorneys' fees and legal expenses incurred by Beneficiary; and (c) to the satisfaction of the Obligations secured by this Deed of Trust. 28.6 Remedial Advances. Should Trustor fail to make any payment or to do any act as required by this Deed of Trust, then Beneficiary or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation under this Deed of Trust, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required in this Deed of Trust; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests of any person who is paid by Beneficiary pursuant to the terms of this Section 28.6. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced under this Deed of Trust by or on behalf of Beneficiary, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment of such sums shall be secured by this Deed of Trust. 28.7 Summary Possession. Beneficiary may, at its option, either in person or by agent, employee or court- appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation of the Property at Trustor's expense and lease the same or any part of the Property, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect to any such lease(s) any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such notice. 28.8 Collection of Rents. Beneficiary may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiary, regardless of whether Beneficiary has taken possession of the Property. If any rents are collected by Beneficiary, then Trustor hereby irrevocably designates Beneficiary as Trustor s attomey -in -fact to endorse instruments received in payment of rents or use fees regarding the Property in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users of the Property to Beneficiary in response to Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiary may exercise its rights under this Section 28.8 either in person, by agent or through a receiver. RVPUBOGW\674424.7 22 28.9 Beneficiary's Enforcement of Leases. Beneficiary is hereby vested with full power to use all measures, legal and equitable, deemed necessary or proper by Beneficiary to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court- appointed receiver, to enter upon the Property, or any part of the Property, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Obligations. Trustor hereby grants to Beneficiary full power and authority to exercise all rights, privileges and powers_ granted in this Deed of Trust at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Obligations and use and apply all of the rents and other income assigned under this Deed of Trust to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiary, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiary under the Obligations and this Deed of Trust, all in such order as Beneficiary may determine. Beneficiary shall be under no obligation to enforce any of the rights or claims assigned to it under this Deed of Trust or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts of the Property, upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiary after taking possession of the Property under this Deed of Trust. 28.10 Beneficiary's Enforcement of Contracts. Beneficiary shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach of any such contracts in the name of Beneficiary or, at Beneficiary's option, in the-name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiary acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiary as its attorney -in -fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiary does not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the breach of any such contracts; provided however, any performance of the respective contracts specifically required by the Beneficiary in writing, following any default by Trustor under the Obligations or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiary under the Obligations and RVPUB\DGM674424.7 23 secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Obligations. 28.11 Appointment of Receiver. Beneficiary has the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Obligations. The receiver may serve without bond, if permitted by law. Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Obligations secured by this Deed of Trust by a substantial amount. Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiary may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiary's option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the purposes stated in this Section 28.11. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. 28.12 Specific Enforcement. Beneficiary may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties in this Deed of Trust and may restrain or enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection with such enforcement, restraint or injunction. 28.13 General Creditors' Remedies. Beneficiary shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation of any other remedies of Beneficiary. 29. Application of Sale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms of this Deed of Trust, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured by this Deed of Trust; and the remainder, if any, to the Beneficiary and any other person or persons legally entitled to such proceeds of sale. 30. Remedies Cumulative. No remedy conferred upon or reserved to Trustee or Beneficiary in this Deed of Trust is intended to be exclusive of any other remedy provided in this Deed of Trust or under the Agreement or any other Grant Documents, or otherwise by law provided or RVPUB \DGW\674424.7 24 permitted, or provided in any guaranty given in connection with the Obligations, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this Deed of Trust to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. 31. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiary or Trustee shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaline. In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one or more parcels. Neither Trustee nor Beneficiary shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION. 33.1 TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING IN THIS DEED OF TRUST SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES SET FORTH IN THIS DEED OF TRUST, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING IN THIS DEED OF TRUST SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). 33.2 TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARY, RVPUB\DGW\674424.7 - 25 TRUSTEE OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. . Trustor's Indemnification. Trustor agrees to indemnify and hold harmless Trustee and Beneficiary from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses ") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiary by reason or on account of, or in connection with: (a) any default by Trustor under this Deed of Trust or the Agreement; (b) Trustee's and/or Beneficiary's good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties under this Deed of Trust or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent to the Property, except for the willful misconduct or gross negligence of the indemnified person; or (f) any failure of Trustor to file any tax reports or returns referred to in this Deed of Trust. The indemnity provided under subsection (f) of this Section 34 shall also extend to counsel for the Beneficiary. Any amount payable to Trustee, Beneficiary or counsel for Beneficiary under this Section 34 shall be due and payable within ten (10) days after demand for payment of such amount and receipt by Trustor of a statement from Trustee, Beneficiary and/or counsel for Beneficiary setting forth in reasonable detail the amount claimed and the basis for such amount, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiary, Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiary that is subject to the indemnity set forth in this Section 34, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiary, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiary. Notwithstanding the foregoing, Trustee and Beneficiary, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for in this Section 34 shall survive Trustor's performance of the Obligations secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees: Costs. Trustor agrees to reimburse Beneficiary for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incurs in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Agreement or any other Transaction Documents, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiary prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all RVPUB \DGW\674424.7 26 negotiations, documentation, and other actions relating to any work -out, compromise, settlement or satisfaction of the debt secured by this Deed of Trust or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Agreement or any other Transaction Documents. For the purposes of this Deed of Trust, the words "reasonable attorneys' fees" shall mean and include the salaries and fringe benefits of the City Attorney and lawyers employed by the City Attorney of the City of Arcadia, computed on a hourly basis, who may provide legal services to the Beneficiary in connection with the exercise by the Beneficiary of any of its remedies under this Deed of Trust. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of lfto per annum, and shall be secured by this Deed of Trust. 36. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee named in this Deed of Trust or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiary and the recordation of such writing in the office where this Deed of Trust is recorded, and such authority shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of Beneficiary, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties conferred upon Trustee in this Deed of Trust; but, nevertheless, upon the written request of Beneficiary or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties conferred upon Trustee in this Deed of Trust, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee under this Deed of Trust to said successor or substitute trustee. All references in this Deed of Trust to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as provided in this Deed of Trust) from time to time acting under this Deed of Trust. Trustor hereby ratifies and confirms any and all acts that Trustee named in this Deed of Trust or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue of this Deed of Trust. 38. Reconveyance. 38.1 Upon written request of Beneficiary, stating that all performances and sums secured by this Deed of Trust have been satisfied and paid, and upon surrender of this Deed of RVPUB\DGWW"24.7 27 Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness of such matters. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No Releases. The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Agreement or any other obligation secured by this Deed of Trust, except in the manner specified in this Deed of Trust. Without affecting the liability of any other person for the payment and performance of any obligation secured by this Deed of Trust (including Trustor should it convey said Property) and without affecting the lien or priority of this Deed of Trust upon any Property not released, Beneficiary may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described in this Deed of Trust, take or release any other security or make compositions or other arrangements with debtors. Beneficiary may also accept additional security, either concurrently with this Deed of Trust or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale under this Deed of Trust. 40. Beneficiary's Consents. At any time, upon written request of Trustor, Trustor's payment of Beneficiary's fees and .presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person under the Agreement, the Beneficiary may for the purposes of accommodating the Trustor's construction of the Expansion Project, as defined in the Agreement, on the Lands: (a) consent to the making of any map or plat of the Property; (b) join in granting.any easement or creating any restriction on the Lands, (c) join in any other agreement affecting this Deed of Trust or the lien or charge of this Deed of Trust, and (d) reconvey, without warranty, all or any part of the Property. 41. Further Assurances. Trustor, from time to time, within fifteen (15) days after request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiary, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiary, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiary may reasonably request in order to perfect, preserve, continue,. extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiary, nor the failure of Beneficiary to make such request shall be construed as a release of such Property, or any part of such Property, from the conveyance of title under this Deed of Trust, it being understood and RVPUB\DGWW74424.7 28 agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiary are cumulative and given as additional security. 42. Time of Performance. Time is of the essence of this Deed of Trust in connection with. all obligations of the Trustor in this Deed of Trust and under the Agreement. 43. Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale under this Deed of Trust be mailed to it at its address as set forth in this Deed of Trust. Any notices to be given to Trustor by Beneficiary under this Deed of Trust shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor set forth in this Deed of Trust, or to such other address that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any notice under this Deed of Trust shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first -class postage pre -paid mail, as officially recorded on the certified mail receipt. 44. Beneficiary's Right to hispect. Beneficiary and its agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiary's interest and to inspect the Property. 45. Reports and Statements. Trustor shall deliver to Beneficiary, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiary's request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiary covering the Property, both certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiary so requests, such statements shall specify, in addition to other information requested by Beneficiary, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiary or its representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiary all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 46. Assignment by Beneficiary' Participation. Beneficiary may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiary may make available to any person all credit and financial data furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person designated by Beneficiary any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiary, under the terms of this Deed of Trust. 47. Legal Relationships. The relationship between Beneficiary and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make RVPUBIDGW1674424.7 29 representations, to act, or to incur debts or liabilities on behalf of Beneficiary. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiary of this Deed of Trust. 48. Modification. This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by each of Trustor, Beneficiary and Trustee. No requirement of this Deed of Trust may be'waived, at any time, except in a writing signed by Beneficiary and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiary's delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the covenants or. agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor s breach or default. 49. Successors. Subject to the prohibitions against Trustor's assignments in this Deed of Trust, this Deed of Trust shall inure to the benefit of and bind the Trustor, Beneficiary and Trustee, their successors, estates, heirs, personal representatives and assigns. 50. Partial Invalidity. If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 51. Mutual Negotiation. Beneficiary and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 52. Paragraph Headings. The section headings in this Deed of Trust are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 53. Applicable Law. This Deed of Trust and the respective rights of the Trustor, Beneficiary or Trustee under this Deed of Trust shall be governed by, construed and enforced in accordance with the laws of the State of California. 54. Entire Agreement. This Deed of Trust, the Agreement, and any other Transaction Documents, including any exhibits or addenda, contains the entire agreement of the Trustor, Beneficiary and Trustee with respect to the subject matter of this Deed of Trust. 55. Counterparts. This Deed of Trust may be executed by the officers, members and/or principals of the Trustor in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust RVPUB\DGW\674424.7 30 may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 56. Fixture Filing and Recordine. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 57. Survival of Representations and Warranties. All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Agreement, until full performance or repayment of the Obligations and release and reconveyance of this Deed of Trust. IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust as of the day and year first above written. TRUSTOR PAUL P. RUSNAK, TRUSTEE OF THE PAUL P. RUSNAK FAMILY TRUST DATED NOVEMBER 14, 1988 ^ By: 64Li--- E'0 [ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED] RVPUI3\DGW\674424.7 31 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California ss. County of Los Angeles On November 30, 2004 before me, Marina Simonian Data Name and Tide of Officer (e.g., "Jane Doe, Notary Public') personally appeared Paul P. Rusnak Name(s) of Signers) 6811i0iA 80401W W Conwril alon 1 1410606 LOLOI Arks Courtly MyCamm. � Maw9r 4007 Place Notary Seal Above ❑ personally known to me Lx proved to me on the basis of satisfactory evidence to be the person(\) whose name( is /ai;e subscribed to the within instrument and acknowledged to me that he /shp /tky executed the same in his /h)v their authorized capacity(ks), and that by his /hitr /their signature(s) on the instrument the person(9t1, or the entity upon behalf of which the person's) acted, executed the instrument. WIT ESS my han official seal. signature of Notary `U 1311C OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Deed of Trust (LADA dated Dec. 7, 2004) Document Date: November 30, 2004 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer— Title(s): ❑ Partner — ❑ Limited []General ❑ Attorney in Fad ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER 0 1997 National Notary Association • 9350 De Soto Ave., PO. Box 2402 • Chatsworth, UA slain -4AUZ ".. rve. a =., 1 .N, 1 EXHIBIT "A" LEGAL DESCRIPTION OF THE LAND RVPUB \DGMT\674424.7 Agency Deed of Trust — Exhibit EXHIBIT "A " LEGAL DESCRIPTION OF EXISTING SITE THAT PORTION OF LOT 3 OF TRACT 949, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT CERTAIN PIECE OR PARCEL OF LAND IN THE SANTA ANITA RANCHO AS PER MAP RECORDED IN BOOK 1, PAGE 97 OF PATENTS, IN THE OFFICE OF SAID RECORDER, BEING THAT PORTION OF THAT CERTAIN STRIP OF LAND 40.00 FEET WIDE DESCRIBED IN DEED RECORDED IN BOOK 4,44 PAGE 283, OF DEEDS, AND AS SHOWN ON SLAP OF SAID TRACT 94.9, RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF SAID RECORDER, TOGETHER WITH LOTS 6 AND 7 OF TRACT 13768, AS PER MAP RECORDED IN BOOK ,273, PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER, AND TOGETHER WITH A PORTION OF THAT CERTAIN PIECE OR PARCEL OF SAID LAND IN SANTA ANITA. RANCHO SAID CITY AS PER MAP RECORDED IN BOOK .1 PAGE 97, OF PATENTS IN THE OFFICE OF SAID RECORDER, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT 3, DISTANT WESTERLY THEREON 593.00 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 3; THENCE NORTH, PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 20.00 FEET TO THE NORTH LINE OF THE LAND DESCRIBED IN DEEDS GRANTED TO THE SAID CITY OF ARCADIA FOR ROAD PURPOSES BY DEEDS RECORDED IN BOOK 24642, PAGE 221, AND IN BOOK 24633, PAGE 275, OFFICIAL RECORDS OF SAID COUNTY, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING NORTH, PARALLEL WITH SAID EASTERLY LINE OF LOT 3, A DISTANCE OF 154.52 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 250.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 220 10'40" A DISTANCE OF 96.77 FEET TO THE MOST SOUTHERLY CORNER OF SATs LOT 7 OF TRACT 13768, BEING ALSO THE BEGINNING OF A COMPOUND CURVE IN SAID SOUTHERLY LINE THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 390 16' 20" A DISTANCE OF 7.05.42 FEET; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE OF LOT 7, NORTH 61° 27' 00" EAST, TANGENT. TO SAID LAST MENTIONED CURVE, A DISTANCE OF 6.25 FEET TO THE BEGINNING OF A TANGENT CURVE IN SAID SOUTHEASTERLY LINE OF LOT 7 THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF S° 00'00" A DISTANCE OF 21 48 FEET TO THE END OF SAME, SAID END OF CURVE LYING SOUTH 690 27' 00" WEST, ALONG SAID SOUTHEASTERLY LINE OF LOT 7, A DISTANCE OF 25.95 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 7; THENCE NORTH 690 27' 00" EAST 25.96 FEET TO SAID MOST EASTERLY CORNER, SAID EASTERLY CORNER ALSO BEING THE SOUTHWESTERLY CORNER OF LOT 6 RVPUB \DGW \674424.7 Exhibit A IN SAID TRACT 13768 THENCE FOLLOWING THE SOUTHEASTERLY LINE OF SAID LOT 6, THROUGH ITS VARIOUS COURSES AND DISTANCES, TO THE SOUTHEASTERLY CORNER OF SAID LOT 6; THENCE ALONG THE EASTERLY LINE OF SAID LOT 6 AND ITS NORTHERLY PROLONGATION, NORTH 90 14' 54" WEST 219.09 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, 80 FEET WIDE, AS DESCRIBED IN RESOLUTION RECORDED AUGUST 9, 1963, IN BOOK D 2140, PAGE 264, OFFICIAL RECORDS, SAID POINT ALSO BEING A POINT ON A CURVE, CONCAVE TO THE SOUTHEAST, AND HAVING A RADIUS OF 560 FEET; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED CURVE AND ALONG SAID TRACT A DISTANCE OF 335.06 FEET; AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32'37" WEST, ALONG THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, A DISTANCE OF 171.31 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.1,3 FEET; THROUGH A CENTRAL ANGLE OF 4° 34' 52" TO A POINT ON A REVERSE CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.13 FEET, THROUGH `A CENTRAL ANGLE OF 40 34' 52" AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32'37" WEST 119.90 FEET TO A TANGENT CURVE THAT IS CONCAVE TO THE EAST AND HAVING A RADIUS OF 10 FEET; THENCE SOUTHERLY AND EASTERLY ALONG SAID CURVE, 22.44 FEET; THROUGH A CENTRAL. ANGLE OF 128° 32' 37" TO ITS POINT OF TANGENCY WITH A LINE PARALLEL TO THE SOUTH LINE OF SAID LOT 3 OF TRACT 949, AND 20 FEET NORTH OF SAID SOUTH LINE THENCE ALONG SAID PARALLEL LINE, IN A GENERAL DIRECTION, TO THE TRUE POINT OF BEGINNING. EXCEPT FROM A PORTION OF THE ABOVE DESCRIBED PROPERTY, ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D 1614 PAGE, 679, OFFICIAL RECORDS. RVPUB \DGW \674424.7 Exhibit A. EXHIBIT "J" FORM OF PROMISSORY NOTE [Attached Behind This Cover Page] RvruB\DGM674424.7 Exhibit J PROMISSORY NOTE PAYABLE TO A PUBLIC AGENCY AND SECURED BY DEED OF TRUST Borrower: Paul P. Rusnak, As trustee of the Paul P. Rusnak Family Trust P.O. Box 70489 Pasadena, CA 91117 -7489 and Rusnak/Arcadia, a California corporation P.O. Box 70489 Pasadena, CA 91117 -7489 Principal Amount: NOT TO EXCEED Eight Million Dollars ($8,000,000) Interest Rate: Paragraph 4 (below) Lender: 6�,r�s s Redevelopment Agency of the City of Arcadia 204 West Huntington Arcadia, California 91006 Date of Promissory Note: 200_ [TO BE CONFIRMED BY AGENCY ON EFFECTIVE DATE OF AGREEMENT] Maturity Date of Promissory Note: 201_ [TO BE CONFIRMED BY AGENCY ON EFFECTIVE DATE OF AGREEMENT] 1. PROMISE TO PAY. Paul P. Rusnak, as trustee of the Paul P. Rusnak Family Trust, and Rusnak/Arcadia, a California corporation (collectively, the "Borrower "), jointly and severally, promise to pay to the Redevelopment Agency of the City of Arcadia (the "Agency" or "Holder "), or order, in lawful money of the United States of America, the principal sum of all funds drawn or disbursed under that certain Agency Loan as defined and provided for in that certain 2004 Land Assembly and Development Agreement (Rusnak/Arcadia), dated as of December 7, 2004, by and between the Borrower and the Agency (the "Agreement "), together with interest, as set forth in this Promissory Note. RVPUa\DGW\674424.7 I 2. INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the Agency under the terms and conditions of the Agency Loan as provided for in the Agreement. This Promissory Note is referred to in the Agreement as the 'Promissory Note ". A copy of the Agreement is on file with the Agency Secretary as a public record of the Agency. 3. PAYMENT. Borrower will pay all amounts of principal and accrued interest under this Promissory Note, prior to its Maturity Date in annual installment amounts amortized over the period from the date of this Promissory , Note until the Maturity Date to be calculated by the Agency based on the amount of funds advanced or disbursed under the. Agency Loan, with each such installment due on the last business day of each Dealership Operating Year, as defined in the Agreement (each such date referred to as a "scheduled debt service payment"), until the Maturity Date or repayment in full of all outstanding principal and accrued and unpaid interest under this Promissory Note, whichever is earlier. Each scheduled debt service payment shall be equivalent to or greater than the sum of the In -Lieu Minimum Sales Tax Payment and the In -Lieu Tax Increment Payment, each as defined in the Agreement. Prior to the Maturity Date of this Promissory Note, the Borrower shall make payments of principal and interest to the Agency solely from "Additional Tax Revenues," as this term is defined in sub - paragraph I., below. If Additional Tax Revenues are not sufficient to make a scheduled debt service payment in full on a scheduled debt service payment date, the portion of such scheduled debt service payment not then paid (the "deficiency debt service amount ") shall be carried forward to the next following scheduled debt service payment date, without affecting the rights of the Agency regarding such a default by the Borrower, and then on such following scheduled debt service payment date, any Additional Tax Revenues shall first be applied to pay the balance of the deficiency debt service amount carried forward and, then, to pay the scheduled debt service payment due on such date. On the Maturity Date, a balloon payment of any and all remaining principal balance and accrued and unpaid interest shall be due and payable by Borrower to the Agency in immediately available funds of the Borrower and not from Additional Tax Revenues. Borrower will make all payments of interest and principal to the Agency under this Promissory Note at the following address of the Agency: 240 W. Huntington Drive, Arcadia, California 91006 -6021, Attention: Executive Director, or at such other place as the Agency may designate in writing to the Borrower. Unless otherwise agreed to by the Agency in writing or required by applicable law, payments will be applied first to any unpaid collection costs, then to any late charges, then to any unpaid interest, and any remaining amount will be applied to principal. 1. The words "Additional Tax Revenues" mean and refer to the following amounts accruing or received between the Opening Date (as defined in the Agreement) and the Maturity Date: (a) the amount of all Dealership Sales Taxes and any In -Lieu Minimum Sales Tax Payment actually made, since the later RVPUa\DGW \674424.7 2 of (i) the date of this Promissory Note or (ii) the date of the most recently paid scheduled debt service payment, and (b) the amount of Tax Increment (as defined below) actually received by the Agency due to supplemental assessments under Revenue and Taxation Code Sections 75, et seq., by the Assessor of the County of Los Angeles, California, of the Dealership Site due to the Expansion Project. "Tax Increment" means the assessment, levy and distribution of taxes regarding property to the Agency authorized by Article XVI, Section 16 of the California Constitution and implemented through California Health & Safety Code Sections 33670 et seq., as such law now exists or may be amended, superseded, re- numbered or replaced, in the future and any In -Lieu Tax Increment Payment actually made. 4. INTEREST RATE. Interest shall accrue annually on the outstanding balance of any deficiency debt service amount, until such amount is paid in full, at the rate of six percent (6 %) per annum. Any interest on this Promissory Note shall be computed on a 365/360 simple interest basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. 5. PREPAYMENT. Borrower may pay without penalty all or a portion of the principal and accrued and unpaid interesting owing under this Promissory Note earlier than it is due. 6. LATE CHARGE. If a scheduled debt service payment or any portion of any such payment is ten (10) calendar days or more late, Borrower will also be charged (in addition to the annual installment amount past due) five percent (5 %) of the portion of the annual installment payment amount as a late charge. 7. DEFAULT. An "Event of Default" under this Promissory Note shall have occurred, if any of the following events occurs: a. The Borrower fails to make any payment when due under this Promissory Note b. The Borrower fails to perform any of the non - monetary covenants and conditions of this Promissory Note or Section 6.3 or Section 6.4 of the Agreement, and such failure is not cured to the Agency's reasonable satisfaction within thirty (30) days following written notice of the failure to the Borrower from the Agency or the expiration of an applicable shorter cure period set forth in this Promissory Note or the Agreement; provided, however, that for so long as the Borrower is satisfying its obligations to cause the generation of both the Minimum Assessed Valuation and the Minimum Annual Sales Tax Amount or, alternatively, paying both the In- RVPUBOGW\674424.7 3 Lieu Tax Increment Payment and the In -Lieu Minimum Sales Tax Payment, no default under this Promissory Note shall occur by virtue of any failure on the part of the Borrower to satisfy any of the other covenants of either Section 6.3 or Section 6.4. C. The determination by the Agency that any representation, warranty, disclosure or statement of the Borrower contained in the Agreement, this Promissory Note, the Deed of Trust or in any other writing delivered to the Agency in connection with the Agreement, this Promissory Note or the Deed of Trust, was incomplete, untrue or misleading in any material respect as of the date made. d. The Borrower fails to make any payment or deposit of funds required under this Promissory Note or Section 6.3 or Section 6.4 of the Agreement, following seven (7) days' written notice to the Borrower from the Agency of such failure or the Agency has given such notice to the Borrower more than three (3) times between the date of this Promissory Note and the Maturity Date. e. Any Event of Default under the Deed of Trust. f. There occurs any event of dissolution, reorganization or termination of the Borrower that adversely and materially affects the operation or value of the Existing Site, the Expansion Site, the Expansion Project, the Dealership or the Dealership Site or any portion of any of the foregoing, and such event is not corrected within five (5) days following written notice of such event from the Agency to the Borrower. g. The Borrower sells, transfers, hypothecates, encumbers or assigns any of its interest in the Existing Site, the Expansion Site, the Expansion Project, the Dealership or the Dealership Site or any portion of any of the foregoing„ or violates any provision of Section 6.6 of the Agreement, whether voluntarily or involuntarily or by operation of law, prior to payment in full of all principal and accrued interest under this Promissory Note. h. The Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect the Borrower's ability to repay this Promissory Note. i. Any creditor attempts to take or sell any of the Borrower's property on or in which the Agency has a lien or security interest securing repayment or performance of the Borrower's obligations under Section 6.3 or Section 6.4 of the Agreement, this Promissory Note or the Deed of Trust. j. A material adverse change occurs in the Borrower's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by this Promissory Note is materially impaired. k. The Borrower becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is referred to in this Promissory Note RVPUB\DGM674424.7 4 as the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing of such petition, or shall make an assignment for the benefit of creditors. 1. Any court (or similar tribunal) having jurisdiction over either the Borrower or any of the property of the Borrower shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of the Borrower or of any of the property of the Borrower or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code. m. The entry of any final judgment or arbitration award against the Borrower that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the collateral provided by the Borrower as security for performance under this Promissory Note, or (iii) any significant portion of the other assets of the Borrower, that is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets. n. The Borrower shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up. o. The Borrower suspends or terminates its legal status or is not authorized by the Secretary of State of the State of California to transact business in California. 8. RIGHTS OF THE HOLDER. Upon default by the Borrower under this Promissory Note, the Agency may exercise any of its rights provided under the Agreement or the Agency Deed of Trust, including, without limitation, the declaration by the Agency or the Holder in due course of this Promissory Note that the entire unpaid principal balance of this Promissory Note and all accrued and unpaid interest is immediately due and payable, without notice. Upon the failure of the Borrower to pay all amounts declared due pursuant to this paragraph entitled "RIGHTS OF THE HOLDER," including failure to pay at the Maturity Date, the Holder, at its option, may also, if permitted under applicable law, increase the interest rate on this Promissory Note for interest that accrues after the date such amount is declared due, to the rate of ten percent (10 %) per annum. The Holder may hire or pay someone else to help collect this Promissory Note, if the Borrower does not pay. The Borrower will pay the Holder the amount of any and all such collection related expenses, including without limitation, subject to any limits under applicable law, the Holder's reasonable attorneys' fees, whether or not there is a lawsuit, including, without limitation, reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or RVPUB\DGVA674424.7 5 .injunction), appeals, and any post - judgment collection services. The Borrower also will pay any court costs, in addition to all other sums provided by law. This Promissory Note has been delivered to the Holder and accepted by the Holder in the County of Los Angeles, State of California. If there is a lawsuit arising under this Promissory Note, the Superior Court of the State of California in the County of Los Angeles shall have jurisdiction over such lawsuit. This Promissory Note shall be governed by and construed in accordance with the laws of the State of California, without regards to its conflicts of law principles. 9. COLLATERAL. The Borrower acknowledges this Promissory Note is secured by the Agency Deed of Trust of the same date as this Promissory Note that shall be recorded by the Agency in the records of the Recorder of the County of Los Angeles, California, encumbering certain real property described in the Agreement as the "Expansion Site" and/or the "Expansion Project ". 10. LINE OF CREDIT. This Promissory Note evidences a non - revolving line of credit in favor of the Borrower. The accrued and unpaid interest and principal balance owing on this Promissory Note at any time may be evidenced by an unpaid balance acknowledgment of the Agency on this Promissory Note (each referred to as an "Annex to Promissory Note ") and/or by the internal accounting records of the Agency regarding the Agreement. 11. GENERAL PROVISIONS. a. The Holder may delay or forego enforcing any of its rights or remedies under this Promissory Note without losing them. Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, each waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly stated in writing, no person who signs this Promissory Note, shall be released from liability. All such persons agree that the Holder may renew or extend (repeatedly and for any length of time) this Promissory Note, or release any person, or collateral; or impair, fail to realize upon or perfect the Holder's security interest in the collateral; and take any other action deemed necessary by the Holder, in its sole discretion, without the consent of or notice to anyone. All such persons also agree that the Holder may modify this Promissory Note and /or the Agreement, without the consent of or notice to anyone other than the person with whom the modification is made. b. All defined words, terms or phrases indicated by initial capital letters used in this Promissory Note and not specifically defined in this Promissory Note shall have the meanings ascribed to them in the Agreement. RVPUB\DGW\674424.7 c. Payment or prepayment of this Promissory Note shall not relieve Borrower of the covenants, conditions and obligations set forth in the Agreement, except the obligation to pay all amounts due under this Promissory Note. d. It is the intention of Borrower and Holder to conform strictly to the usury laws now or hereafter enforced in the State of California, and any interest payable under this Promissory Note or any of the other documents to be executed by Borrower in connection with the loan or advance of funds made or to be made under this Promissory Note, shall be subject to reduction to the amount not in excess of the maximum non - usurious amount allowed under the usury laws of the State of California as now or hereafter construed by the courts having jurisdiction over such matters. In the event the maturity of this Promissory Note is accelerated by reason of any provision of this Promissory Note or by reason of any election by Holder resulting from any default (or an event permitting acceleration), under this Promissory Note or any other instrument given to secure the payment of this Promissory Note, or otherwise, then accrued interest may never include more than the maximum amount permitted by law, computed from the date of this Promissory Note until payment, and any interest in excess of the maximum amount permitted by law shall be canceled automatically and, if theretofore paid, shall at the option of the Holder either be credited against the principal amount of this Promissory Note or, if all principal has been repaid, then the excess shall be rebated to Borrower. The aggregate of all interest (whether designated as interest, service charges, points, or otherwise) contracted for, chargeable, or receivable under this Promissory Note or any other document executed in connection with this Promissory Note shall under no circumstances exceed the maximum legal rate upon the unpaid principal balance of this Promissory Note remaining unpaid from time to time. In the event such interest does exceed the maximum legal rate, such excess shall be canceled automatically and, if theretofore paid, rebated to the Borrower or credited on the principal amount of this Promissory Note, or if this Promissory Note has been repaid in full, then such excess shall be rebated to Borrower. e. The unenforceability or invalidity of any provision or provisions of this Promissory Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other person or circumstances, and all provisions of this Promissory Note, in all other respects, shall remain valid and enforceable. f. Borrower agrees to indemnify Holder and to hold Holder and Holder's successors and assigns harmless from and against any and all claims, demands, costs, liabilities and obligations of any kind or nature arising from any default under this Promissory Note, including, without limitation, all costs of collection, including attorneys' and expert witness fees and all cost of suit, in the event the unpaid principal sum of this Promissory Note or any interest accrued on this Promissory Note is not paid when due. RVPUB \DG W1674424.7 7 g. The validity, interpretation and performance of this Promissory Note shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles. h. This Promissory Note may be amended or modified only in writing signed by the Holder and the Borrower. i. Time is of the essence of each provision this Promissory Note. j. BORROWER'S OBLIGATIONS UNDER THIS PROMISSORY NOTE MAY NOT BE ASSIGNED OR OTHERWISE TRANSFERRED OR ASSUMED, WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDER, WHICH MAY BE GIVEN OR WITHHELD IN THE SOLE AND ABSOLUTE DISCRETION OF THE HOLDER. k. PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY OF THIS PROMISSORY NOTE. PAUL P.RUSNAK, As trustee of the Paul P. Rusnak Family Trust, dated November 14, 1988 RVPUB\DGW\674424.7 8 EXHIBIT "K" LEGAL DESCRIPTION OF EXISTING SITE THAT PORTION OF LOT 3 OF TRACT 949, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT CERTAIN PIECE OR PARCEL OF LAND IN THE SANTA ANITA RANCHO AS PER MAP RECORDED IN BOOK 1, PAGE 97 OF PATENTS, IN THE OFFICE OF SAID RECORDER, BEING THAT PORTION OF THAT CERTAIN STRIP OF LAND 40.00 FEET WIDE DESCRIBED IN DEED RECORDED IN BOOK 4,44 PAGE 283, OF DEEDS, AND AS SHOWN ON SLAP OF SAID TRACT 94.9, RECORDED IN BOOK 17 PAGE 13 OF MAPS, IN THE OFFICE OF SAID RECORDER, TOGETHER WITH LOTS 6 AND 7 OF TRACT 13768, AS PER MAP RECORDED IN BOOK ,273, PAGE 37 OF MAPS, IN THE OFFICE OF SAID RECORDER, AND TOGETHER WITH A PORTION OF THAT CERTAIN PIECE OR PARCEL OF SAID LAND IN SANTA ANITA. RANCHO SAID CITY AS PER MAP RECORDED IN BOOK] PAGE 97, OF PATENTS IN THE OFFICE OF SAID RECORDER, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT 3, DISTANT WESTERLY THEREON 593.00 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 3; THENCE NORTH, PARALLEL WITH THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 20.00 FEET TO THE NORTH LINE OF THE LAND DESCRIBED IN DEEDS GRANTED TO THE SAID CITY OF ARCADIA FOR ROAD PURPOSES BY DEEDS RECORDED IN BOOK 24642, PAGE 221, AND IN BOOK 24633, PAGE 275, OFFICIAL RECORDS OF SAID COUNTY, BEING THE TRUE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE CONTINUING NORTH, PARALLEL WITH SAID EASTERLY LINE OF LOT 3, A DISTANCE OF 154.52 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 250.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 220 10' 40" A DISTANCE OF 96.77 FEET TO THE MOST SOUTHERLY CORNER OF SATs LOT 7 OF TRACT 13768, BEING ALSO THE BEGINNING OF A COMPOUND CURVE IN SAID SOUTHERLY LINE THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 390 16' 20" A DISTANCE OF 7.05.42 FEET; THENCE CONTINUING ALONG SAID SOUTHEASTERLY LINE OF LOT 7, NORTH 610 27' 00" EAST, TANGENT. TO SAID LAST MENTIONED CURVE, A DISTANCE OF 6.25 FEET TO THE BEGINNING OF A TANGENT CURVE IN SAID SOUTHEASTERLY LINE OF LOT 7 THAT IS CONCAVE TO THE SOUTHEAST AND HAS A RADIUS OF 153.80 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH AN ARC OF 80 00'00" A DISTANCE OF 21 48 FEET TO THE END OF SAME, SAID END OF CURVE LYING SOUTH 690 27' 00" WEST, ALONG SAID SOUTHEASTERLY LINE OF LOT 7, A DISTANCE OF 25.95 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 7; THENCE NORTH 690 27' 00" EAST 25.96 FEET TO SAID MOST EASTERLY CORNER, SAID EASTERLY CORNER ALSO BEING THE SOUTHWESTERLY CORNER OF LOT 6 RVPUB \DGH624424.2 Exhibit K IN SAID TRACT 13768 THENCE FOLLOWING THE SOUTHEASTERLY LINE OF SAID LOT 6, THROUGH ITS VARIOUS COURSES AND DISTANCES, TO THE SOUTHEASTERLY CORNER OF SAID LOT 6; THENCE ALONG THE EASTERLY LINE OF SAID LOT 6 AND ITS NORTHERLY PROLONGATION, NORTH 90 14' 54" WEST 219.09 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, 80 FEET WIDE, AS DESCRIBED IN RESOLUTION RECORDED AUGUST 9, 1963, IN BOOK D 2140, PAGE 264, OFFICIAL RECORDS, SAID POINT ALSO BEING A POINT ON A CURVE, CONCAVE TO THE SOUTHEAST, AND HAVING A RADIUS OF 560 FEET; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED CURVE AND ALONG SAID TRACT A DISTANCE OF 335.06 FEET; AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32' 37" WEST, ALONG THE SOUTHEASTERLY LINE OF SANTA CLARA STREET, A DISTANCE OF 171.31 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125. t,3 FEET; THROUGH A CENTRAL ANGLE OF 4° 34' 52" TO A POINT ON A REVERSE CURVE, CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 1,565.04 FEET; THENCE CONTINUING ALONG SAID STREET, SOUTHWESTERLY ALONG SAID CURVE 125.13 FEET, THROUGH `A CENTRAL ANGLE OF 40 34' 52" AND TANGENT TO SAID LAST MENTIONED CURVE SOUTH 380 32'37" WEST 119.90 FEET TO A TANGENT CURVE THAT IS CONCAVE TO THE EAST AND HAVING A RADIUS OF 10 FEET; THENCE SOUTHERLY AND EASTERLY ALONG SAID CURVE, 22.44 FEET; THROUGH A CENTRAL ANGLE OF 128° 32' 37" TO ITS POINT OF TANGENCY WITH A LINE PARALLEL TO THE SOUTH LINE OF SAID LOT 3 OF TRACT 949, AND 20 FEET NORTH OF SAID SOUTH LINE THENCE ALONG SAID PARALLEL LINE, IN A GENERAL DIRECTION, TO THE TRUE POINT OF BEGINNING. EXCEPT FROM A PORTION OF THE ABOVE DESCRIBED PROPERTY, ALL MINERALS, ORES, PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES LYING 500 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, RECORDED MAY 15, 1962 IN BOOK D 1614 PAGE, 679, OFFICIAL RECORDS. RVPUB�DGW\674424.7 Exhibit K