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HomeMy WebLinkAbout1999 CON CDC MOU (Amendment) SD Unified Port District - Harrison Ave Extension} 011 jjment No. Q,3 AUG 2 31999 SD UNIF=r, AMENDMENT to MEMORANDUM OF UNDERSTANDING \ 9 between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY (CDC) C / c 11 ) C and the SAN DIEGO UNIFIED PORT DISTRICT WHEREAS, the Community Development Commission of the City of National City (CDC) and the San Diego Unified Port District (District) entered into a Memorandum of Understanding (MOU) dated June 10, 1997 for the purpose of providing access to the National City Marina and for the acquisition of blighted properties; and, WHEREAS, under the terms of the MOU, the CDC has accomplished certain provisions and is in the process of resolving other tasks; and, WHEREAS, due to environmental issues affecting certain properties and the necessity of initiating court proceedings with respect to acquisition of certain properties, it is appropriate to extend the MOU for one year in order to complete the tasks; and, NOW, THEREFORE, in consideration of the mutual benefit to the derived therefrom, CDC and District hereby agree to amend the Memorandum of Understanding dated June 10, 1997 by amending the last paragraph thereof, to read as follows: The District and the CDC agree to cooperate and expedite the processes as described above. This MOU shall terminate on June 30, 2000, provided that the rights offirst refusal granted to the CDC pursuant to Section 11 shall survive the expiration or termination of this MOU. Any extension must be mutually agreed upon, in writing by the District and the CDC prior to December 30, 1999. With the foregoing exception, each and every provision of the Memorandum of Understanding dated June 10, 1997 shall remain in full force and effect. / / / / / / / / / Signature Page to Follow • • • • Dated: a3 G% , 1999. orneSAN DIEGO UNIFIED PORT DISTRICT By: David R Chapman B CDC/City Attorney nepaty Esc 2 tive Director COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY 44:21" By: George H. Eiser, III By: George Waters, Chairman Document No. 39455 Filed JUL 2 3 1999 SD UNIFIED PORT DISTRICT Clerk's Office MASTER LOAN AGREEMENT This Master Loan Agreement ("Agreement") is made and entered into between the Community Development Commission of the City of National City ("CDC" or "Borrower"), and the San Diego Unified Port District ("District" or "Lender"), and as of the date this Agreement is fully executed by Borrower and Lender. Recitals A. Whereas, District and CDC entered into that certain "Memorandum of Understanding between the Community Development Commission of the City of National City and the San Diego Unified Port District relative to the Extension of Harrison Avenue & Other Possible Development and Related Public Improvements in the Vicinity of 24th Street and Harrison Avenue, National City," dated June 10, 1997 and filed with the District's Clerk's Office as Document Number 36077 on June 26, 1997 ("MOU"); B. Whereas, under the terms of the MOU, the District would lend money to CDC for conducting due diligence of and acquiring title to certain real properties (therein and herein referred to as the "Subject A Properties"); and C. Whereas, District and CDC wish to enter into this Agreement, as Lender and Borrower, so as to provide a common and consistent means of documenting the loans to be made by the District to CDC under the MOU. Now, therefore, for good and valuable consideration the receipt and adequacy of which are acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINED TERMS Section 1.1. Definitions. a. Terms not defined elsewhere in this Agreement will have the definitions in the Deed of Trust. b. As used in this Agreement, the following terms will have the following meanings: "Additional Advance" is each and every distribution of Loan Proceeds by Lender under the Loan Documents, after the initial distribution of Loan Proceeds under the Note, and each becomes part of the Loan Amount. REO W ATCITY\M ASTERLOAN:071699 1 DUPLICATE - ORIGINAL "Authorized Loan Expenditure" is defined in Section 5.3. "Budget" means all expenses which the District and CDC have jointly agreed will be reimbursed by the District under the MOU. "CDC" or "Borrower" means the Community Development Commission of the City of National City. "CIP" means the Capital Improvement Program account maintained by the District for the City of National City. "District" or "Lender" means the San Diego Unified Port District. "Environmental Indemnity Agreement" is a written agreement executed by Borrower in favor of Lender associated with the Subject A Properties, and is on file with the District's Clerk's Office and Document No. 39051. "Event of Default" is defined in Section 7.1. "Governmental Authority" means the United States of America, the State of California, the County of San Diego, the City of National City or any other political subdivision, agency, department, commission, board, bureau, or instrumentality of any of them. "Governmental Requirement" means any law, ordinance, order, rule, regulation, or requirement of a Governmental Authority. "Loan Amount" is defined in Section 2.1. "Loan Documents" means this Agreement, the Note, each and every Subject A Property Deed of Trust, and all other documents given by Borrower to Lender evidencing, securing or relating to the Loan, except the Environmental Indemnity Agreement. "Loan Proceeds" is defined in Section 2.1. "Loan Term" is defined in Section 3.1.a. "Note" is defined in Section 3.1.a. "Person" means any natural person, corporation, firm, partnership, association, trust, government, agency, or any other entity, whether acting in an individual, fiduciary, or other capacity. "Subject A Property" or "Subject A Properties" means any land, title to which is acquired by CDC or for the benefit of CDC at any time during the Loan Term, and which is located within the southwest quadrant of Interstate Highway 5 (a.k.a.: "I-5") and 24th Street, in National City, California, as depicted on Exhibit "A" attached hereto and incorporated herein by reference as though fully set forth, and including any improvements, fixtures or personalty REOW ATCITYUN ASTERLOAN:071699 2 located thereon, together with: (i) all rights, privileges, tenements, hereditaments, rights -of -way, easements, and appurtenances of the land, the improvements, fixtures or personalty located on the land, and all rights, title, and interest of Borrower in any streets, ways, alleys, strips, or gores of land adjoining such property; and (ii) all of Borrower's right, title, and interest in and to said property, including any rights or entitlements affecting the land, the improvements, fixtures, or personalty. "Title Policy" is defined in Section 3.5. ARTICLE 2 MAKING OF LOAN Section 2.1. Making of Loan. Subject to all the terms, conditions, representations, warranties, and covenants contained in the Loan Documents, including but not limited to, the conditions precedent set forth in Section 5.2. hereinbelow, Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, an amount sufficient to: (i) reimburse CDC for the cost of updates of the narrative appraisals dated January 20, 1997, prepared by Hendrickson Appraisal Company, Inc., covering the Subject A Properties; (ii) reimburse CDC for its actual costs of obtaining all necessary soils studies, Phase I and, if necessary, Phase II environmental (toxic) assessments conducted on the Subject A Properties; (iii) reimburse CDC for its actual costs of obtaining a reuse analysis of the Subject A Properties; (iv) reimburse CDC for its actual costs of acquiring those certain Subject A Properties which CDC and the District have mutually agreed shall be acquired by CDC, in accordance with the procedures set forth in paragraph 6 of the MOU, not to exceed the sum of Nine Million One Hundred Thousand Dollars ($9,100,000.00); and (v) repay Lender for any expense incurred by Lender as a result of entering into this Agreement, the Note, the Subject A Property Deeds of Trust, or any of the Loan Documents, including but not limited to, Authorized Loan Expenditures. Any amount of money disbursed by Lender to Borrower under the Loan Documents; or any expense incurred by Lender as a result of entering into this Loan, including but not limited to, repayment of Lender by Borrower of any Authorized Loan Expenditure shall constitute "Loan Proceeds" and the sum of all Loan Proceeds shall constitute the total amount of money lent by Lender to Borrower (the "Loan Amount"). ARTICLE 3 PURPOSE OF THIS AGREEMENT Section 3.1. Purpose of this Agreement. a. Borrower and Lender each acknowledge that it is the intent of the parties under the MOU that: (i) CDC will acquire title to the mutually agreed upon Subject A Properties; (ii) subject to the conditions precedent stated in Section 5.2. hereinbelow, the District will reimburse CDC for the mutually agreed to expenses associated with such acquisitions; (iii) CDC will execute a note, with an additional advances provision, for the benefit of the District identical to the note attached hereto, as Exhibit "B" and incorporated herein by reference as though fully set forth, for the Loan Amount (the "Note" and/or "Addendum to Note"); (iv) the Note will be secured by unsubordinated deeds of trust of first priority, from Borrower to Lender, each in the REOWATCITY'MASf ERLOAN:071699 3 form and of the substance of the sample deed of trust attached hereto as Exhibit "C" and incorporated herein by reference as though fully set forth, for each Subject A Property acquired by Borrower prior to the full repayment (subject to the provisions of Section 3.6) of the Loan (collectively, the "Subject A Property Deeds of Trust" or individually, a "Subject A Property Deed of Trust"); and (v) CDC will repay the total amount of the Note (subject to the provisions of Section 3.6) and/or Addendum to Note within five (5) years from the initial date the funds are loaned to CDC (the "Loan Term"). b. Borrower and Lender further each acknowledge that acquisition of the Subject A Properties may occur through purchase by CDC or through condemnation proceedings. c. Borrower and Lender further each acknowledge that: (i) CDC has incurred reimbursable expenses associated with the Subject A Property acquisitions prior to acquiring title to same; and (ii) any requests for reimbursement, in the absence of present title, is inconsistent with the intent of the parties as stated in the MOU, which is that, all funds disbursed by the District to CDC for reimbursement of eligible acquisition expenses constitute unsubordinated loan funds to be evidenced by a note and secured by a deed of trust. d. Borrower and Lender finally each acknowledge that execution of this Agreement is required in order to allow the District to reimburse CDC for the mutually agreed to expenses associated with such acquisitions, before CDC has acquired title to the Subject A Properties, and otherwise give effect to the intentions of the parties under the MOU. Section 3.2. Supremacy. Borrower and Lender agree, in light of the above recitals and acknowledgements, that the terms of this Agreement and each of the other Loan Documents: (i) shall supersede any conflicting or inconsistent provision of the MOU; and (ii) shall be fully enforceable by either party in a Court of competent jurisdiction in the State of California. Section 3.3. Failure to acquire any Subject A Property. Borrower and Lender agree, in light of the above recitals and acknowledgements, that Borrower will repay all Loan Proceeds (subject to the provisions of Section 3.6) within five (5) years of the date the District makes the initial disbursement of Loan Proceeds, even if Borrower is not successful in acquiring title to any of the Subject A Properties. Section 3.4. Approvals. All requests for approval of a current Budget item, disbursement of Loan Proceeds, and/or amendment to the current Budget will be delivered to the receiving party in writing. The District and CDC agree not to unreasonably withhold approval of a request for approval of a current Budget item, disbursement of Loan Proceeds, and/or amendment to the current Budget. REOINATCITYVNA STERLOAN:071699 4 Section 3.5. Recording and Filing. Borrower, at its sole cost and expense, will immediately upon acquiring title to a Subject A Property: (i) properly record a Subject A Property Deed of Trust, similar to the sample deed of trust attached hereto as Exhibit "C" and incorporated herein, as though fully set forth, and any other security documents which Lender deems necessary or appropriate, in the County of San Diego and in any manner and in any places as Lender may otherwise request, so as to insure that each Subject A Property Deed of Trust recorded is unsubordinated and of first priority; (ii) pay all recording or filing fees, and other charges associated with recording the Subject A Property Deeds of Trust; (iii) provide Lender with a certified copy of each recorded Subject A Property Deed of Trust; and (iv) provide Lender with evidence that a title company, acceptable to Lender, is prepared to issue to Lender an ALTA lender's title insurance policy or endorsement, showing no liens or encumbrances on the Subject A Property which are prior to the Lender's Subject A Property Deeds of Trust, and insuring the full current Loan Amount (the "Title Policy"). Section 3.6. Repayment, CIP and Reconveyance. The Master Loan Agreement and other Loan Documents will be unaffected by increases and/or decreases in the CIP account for National City. However, in the event of a sale by CDC of the Subject A Property(ies), to the District or a third party for redevelopment purposes, during the Loan Term, the net proceeds from the sale of all Subject A Properties received by CDC (including the present value of any seller financed notes), shall be: (i) paid to the District; and (ii) credited to the CIP funds available for National City Marina development or other National City District CIP Projects. Said net proceeds will fully satisfy CDC's obligation to repay the Note. Upon actual receipt by the District of the net proceeds received by CDC from the sale of a Subject A Property, or upon application of a credit by the District to the CIP account for National City in an amount equal to the net proceeds received by CDC from the sale of a Subject A Property, the District will fully reconvey the associated Subject A Property Deed(s) of Trust. ARTICLE 4 LENDER PROTECTIONS Section 4.1. Liens. Once title to a Subject A Property is obtained by CDC, regardless of whether a Deed of Trust has or has not yet been recorded, Borrower agrees to preserve and protect the District's unsubordinated loan position as the first trust deed holder on each Subject A Property, by doing all things reasonably necessary to forestall the assertion of claims of lien against the Subject A Properties or any part thereof, including but not limited to: (i) paying and discharging promptly and fully all lien claims for labor done and materials and services furnished on, in or to the Subject A Properties; (ii) diligently filing or producing the filing of any required lien notices; (iii) requiring all contractors, subcontractors and material suppliers performing work or providing materials on, in or to the Subject A Properties, to execute lien releases for each payment received from CDC; and (iv) obtaining, maintaining and amending the Title Policy for each Subject A Property. Borrower agrees further to execute from time to time any financing statements and other writings that Lender may reasonably require to perfect and maintain the District's unsubordinated loan position as the first trust deed holder on each Subject A Property. REO W ATCITY\M ASTERLOAN:071699 5 Section 4.2. Recorded Deeds of Trust, UCC Filings, Title Policies; and Performance and Payment Bonds. During the life of the Loan, and before Borrower permits any work or construction to be performed on any Subject A Property, Borrower agrees: (i) to provide Lender with a copy of Lender's recorded Deed of Trust for the applicable Subject A Property or Properties; (ii) to file all necessary financing statements under the California Uniform Commercial Code granting the Borrower a prior unsubordinated interest in all fixtures and personalty located or to be located on the relevant Subject A Property or Properties; (iii) to provide Lender a copy of the Title Policy for the applicable Subject A Property or Properties; and (iv) to procure and deliver to Lender, a dual obligee performance and labor and material payment bond, in a form and of substance and amount satisfactory to Lender, covering any work or construction performed to prepare any Subject A Property for sale. Section 4.3. Surveys. During the life of the Loan, if Borrower permits any work or construction to be performed on the Subject A Properties, Borrower agrees to furnish to Lender, immediately on completion of such improvements, a survey of the Subject A Property as so improved, executed by a registered surveyor approved by Lender, in a form and of a substance satisfactory to Lender, bearing the surveyor's certificate and: (i) confirming the legal description and area of the Property; (ii) showing the location of all improvements, roads, fences, easements, zoning setback lines, height restrictions, or other space limitations; (iii) showing all utility lines to point of connection with the public system; (iv) showing all adjoining public and private streets and the distance to and names of nearest intersecting streets; (v) showing all encroachments on the Subject A Property; (vi) certifying that the improvements are located entirely within the permitted setback lines and property lines, and do not encroach on any other property, easement, or public or private right-of-way, or breach or violate any covenant, condition, or restriction of record, or any building or zoning ordinance; and (vii) enumerate and locate all parking spaces. Section 4.4. Title Endorsement. During the life of the Loan, and promptly after completion of any foundation improvements made to a Subject A Property, Borrower agrees to obtain and provide to Lender, a CLTA Indorsement No. 102.5 (or equivalent endorsement) to the relevant Subject A Property Title Policy, guaranteeing that the foundations have been located and constructed within the setback lines. Section 4.5. Approval of Leases and Development Agreements. During the life of the Loan, Borrower agrees it will not enter into any lease or development agreement for any Subject A Property secured by a Subject A Property Deed of Trust, without obtaining the prior written consent of Lender. REO W ATCITY\N ASTERLOAN :071699 6 Section 4.6. Due on Sale. Each Subject A Property Deed of Trust will contain a due on sale clause, which will require repayment of the Loan Amount (subject to the provisions of Section 3.6) in full, or in accordance with a partial repayment schedule agreed to by the parties in writing, upon the sale or transfer of title from Borrower. ARTICLE 5 LOAN DISBURSEMENTS AND AUTHORIZED LOAN EXPENDITURES Section 5.1. Disbursement of Loan Proceeds. Subject to Borrower's satisfaction of each of the conditions precedent set forth in Section 5.2. below, Lender will disburse the Loan Proceeds (as defined in Section 2.1 above) to Borrower promptly (within thirty (30) days). All disbursed Loan Proceeds, whether or not secured by a Subject A Property Deed of Trust, shall increase the Loan Amount. Section 5.2. Conditions Precedent to Loan Disbursements. a. Lender shall not be obligated to loan and Borrower shall not be entitled to borrow any money under this Agreement for reimbursement of Borrower's cost of obtaining soils or environmental studies conducted on Subject A Properties or obtaining a reuse analysis of the property located in the southwest quadrant of I-5 and 24th Street, unless and until the following conditions to Lender's lending obligation have been satisfied by Borrower to Lender's satisfaction: (i) District and CDC have jointly agreed on a budget for all MOU expenses ("Budget"); (ii) the Loan Proceeds requested by CDC are consistent with the current Budget; (iii) no Event of Default or potential default will have occurred and be continuing; and (iv) Lender has received from CDC: (1) a fully executed Note (in the case of the initial disbursement) or an Addendum to the Note (in the case of each subsequent disbursement), (2) and will receive the fully executed applicable Subject A Property Deed of Trust, and (3) any fully executed applicable security documents required under this Agreement. Notwithstanding any provision of this paragraph to the contrary, Borrower is still required to complete the following items in accordance with the MOU: (i) obtain and provide to the District, updates of the narrative appraisals dated January 20, 1997, prepared by Hendrickson Appraisal Company, Inc., covering the Subject A Properties; (ii) conduct and provide to the District, the necessary soils studies, Phase I, and if necessary, Phase II environmental (toxic) assessments on the Subject A Properties; (iii) obtain and provide to the District, a reuse analysis of the property located in the southwest quadrant of I-5 and 24'1' Street that may be acquired. b. Lender shall not be obligated to loan and Borrower shall not be entitled to borrow any money under this Agreement for reimbursement of Borrower's cost of acquiring a Subject A Property or Properties, unless and until the following conditions to Lender's lending obligation have been satisfied by Borrower to Lender's satisfaction, or waived by Lender: (i) CDC has consulted District on its planned acquisition of a Subject A Property or Properties in accordance with the MOU; (ii) CDC and District have mutually agreed on the maximum expenses to be incurred by CDC in the acquisition of a Subject A Property or Properties in accordance with the REOINATCITY\M AST ER LO.AN:071699 7 MOU; (iii) the sum of all expenses to be incurred by CDC for the acquisition of Subject A Properties does not exceed Nine Million One Hundred Thousand Dollars ($9,100,000.00), including documented expenses already incurred by District; (iv) CDC has committed to the acquisition (or redevelopment by an executed "Owner Participation Agreement," as approved by both CDC and District) of the Subject B Properties as described in the MOU; (v) there is a current Budget; (vi) the amount of Loan Proceeds requested by CDC for acquisition of a Subject A Property or Properties is consistent with the current Budget; (vii) no Event of Default or potential default will have occurred and be continuing; and (viii) Lender has received from CDC: (1) a fully executed Note (in the case of the initial disbursement) or an Addendum to the Note (in the case of each subsequent disbursement), (2) and will receive the fully executed applicable Subject A Property Deed of Trust, and (3) any fully executed applicable security document(s) required under this Agreement. Notwithstanding any provision of this paragraph to the contrary, Borrower retains the obligation for (i) any relocations and related activities; and (ii) the installation of public improvements, including landscaping, in accordance with the Master Plan along 24`h Street from 1-5 to Harrison Avenue. Section 5.3. Authorized Loan Expenditures. Borrower hereby authorizes Lender to incur the following loan expenses (individually, an "Authorized Loan Expenditure" and, collectively, "Authorized Loan Expenditures"), without giving notice to Borrower. Borrower agrees that, if Lender incurs any of the following expenses, each such Authorized Loan Expenditure will be deemed Loan Proceeds, will increase the Loan Amount, and will be secured by the Subject A Property Deeds of Trust: a. All actual expenses incurred by third parties at Lender's request in connection with making or administering the Loan, amending, approving or consenting to changes or additions to any of the Loan Documents, including, but not limited to, fees and disbursements paid to Lender's outside counsel, consultants, brokers, and other professionals, which Lender in its sole discretion deems necessary to assist it in this regard, whether or not such is included in the current Budget. b. All actual expenses, fees, commissions, recording costs, transfer and other taxes (if any), surveys, appraisal costs, title and hazard insurance premiums, notary and escrow charges, and all other usual or customary loan closing and administration charges and expenses associated with any of the Loan Documents, whether or not such is included in the current Budget. c. All actual expenses incurred by the Lender, or by third parties at Lender's request, in connection with the enforcement by Lender of any rights or remedies under any of the Loan Documents, whether or not any action or proceeding is commenced, or whether or not such is included in the current Budget. d. Any other expense specifically included in the current Budget. REO\NATCI TY'M ASTERLOAN:071699 8 Section 5.4. Accounting. Lender shall maintain an accurate accounting of the Loan Amount. Borrower shall be entitled to receive a copy of such accounting upon delivery of a written request to Lender. ARTICLE 6 BORROWER'S REPRESENTATIONS AND WARRANTIES Section 6.1. Borrower's Representations and Warranties. As a material inducement to Lender to enter into this Agreement and to make the Loan to Borrower, Borrower, and each signatory who signs on its behalf, unconditionally represents and warrants to Lender as follows: a. Borrower is duly formed and validly existing under the laws of the State of California, is qualified to do business in California, and has full power to consummate the transactions contemplated. b. Borrower has full authority to execute this Agreement, the Note, the Subject A Property Deeds of Trust, and all of the other Loan Documents, to undertake and consummate the contemplated transactions, and to pay, perform, and observe all of the conditions, covenants, agreements, and obligations contained herein. c. This Agreement, the Note, the Subject A Property Deeds of Trust, and each of the other Loan Documents constitute a legal and binding obligation of Borrower, and is valid and enforceable against Borrower, in accordance with the terms of each such document. d. There are no actions, suits, or proceedings pending or, to the best knowledge of Borrower, threatened against or affecting Borrower, the Subject A Properties, or any part of such, or involving the validity or enforceability of the MOU, the Note, any Subject A Property Deeds of Trust, the District's right to hold an unsubordinated loan position as the first trust deed holder on each Subject A Property when title comes into CDC's name, or the validity or enforceability of any Loan Document, at law or in equity, or before or by any Governmental Authority. Borrower is not, at the time of execution of this Agreement, in default with respect to any order, writ, injunction, decree, or demand of any court or other Governmental Authority. e. The consummation of the transactions covered by this Agreement and the payment and performance of the obligations in any of the Loan Documents, will not be in violation of CDC's constitutional or statutory authorities, nor will it result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, contract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which the Borrower or the City of National City is a party or by which it or they or the Subject A Properties may be bound or affected. f. Borrower is or, on recordation of the Subject A Property Deeds of Trust in the REO\NATCI TY\M A STERLOAN:07I 699 9 official records of San Diego County, will be, the sole legal and beneficial owner of the Subject A Properties, which title is or will be upon said recordation, free of all claims, liens, and encumbrances other than those shown in the Title Policy and Lender's liens as described herein. g. Upon receipt of title to a Subject A Property, Borrower will: (i) acquire all necessary rights -of -way; and (ii) construct all street improvements to provide sufficient access to the Subject A Properties, as anticipated under the MOU and in accordance with the District's and CDC's applicable Master Plans. h. Borrower's use and occupancy of the Subject A Properties will comply in full with all applicable Governmental Requirements. All approvals, licenses, permits, certifications, filings, and other actions normally accepted as proof of compliance with all Governmental Requirements by prudent lending institutions that make investments secured by real property in the general area of the Subject A Properties, to the extent available as of the date of this Agreement, have been given or taken, and to the extent that the approvals, licenses, permits, certifications, filings, and other actions are not available as of the date of this Agreement, either: (i) the Governmental Authority charged with giving or taking them is under a legal duty to do so; or (ii) Borrower is entitled to have them given or taken as the ministerial act of that Governmental Authority. i. Borrower will faithfully and timely file all required Federal, State, County, and City tax returns and pay all taxes due on the real property, the personal property and the income derived therefrom. Borrower knows of no basis for additional assessments with respect to any taxes. J. All reports, documents, instruments, information, and forms of evidence delivered to Lender concerning the Loan, or required by any of the Loan Documents, are accurate, correct, and sufficiently complete to give Lender true and accurate knowledge of their subject matter, and do not contain any untrue statement of a material fact or omit any material fact necessary to make them not misleading. k. Borrower certifies to Lender that: (i) all representations and warranties made in this Agreement and all the other Loan Documents are true and correct in all material respects and do not contain any untrue statements of a material fact or omit any material fact necessary to make the representations and warranties not misleading; (ii) will remain true and correct in all material respects and will survive so long as any of Borrower's obligations have not been satisfied or the Loan or any part of it remains outstanding, and for any applicable statute of limitations period; and (iii) each request by Borrower for a disbursement of Loan Proceeds will constitute an affirmation that all representations and warranties remain true and correct as of the date of that request. Section 6.2. Lender's Reliance. Each representation and warranty made in this Agreement, in any of the Loan Documents, and in the MOU or any document delivered to Lender by Borrower associated with the MOU, will be deemed: (i) to have been relied on by Lender, regardless of any investigation, inspection, or inquiry made by Lender or any related disbursement made by Lender; and (ii) to REO\N ATCI TYM A ST ER LOAN:071699 10 have been made after Borrower's diligent inquiry calculated to ascertain the truth and accuracy of the subject matter of each representation and warranty as given. ARTICLE 7 DEFAULT Section 7.1. Events of Default. At the option of Lender, each of the following events will constitute a default of this Agreement (each an "Event of Default"): a. A default or breach of any provision of the master Note, any Subject A Property Deed of Trust, or any of the Loan Documents. b. The filing of any lien against the Subject A Property(ies) or the service on Lender of any bonded stop notice related to the Loan, if the claim of lien or bonded stop notice continues for thirty (30) days without discharge, satisfaction, or the making of provision for payment (including bonding) to the satisfaction of Lender as provided for in this Agreement. c. The attachment, levy, execution, or other judicial seizure of any portion of the Subject A Properties or improvements thereon, or any substantial portion of the other assets of Borrower, that is not released, expunged, bonded, discharged, or dismissed within thirty (30) days after the attachment, levy, execution, or seizure. d. Borrower's failure to remedy any breach of any obligation of Borrower to protect Lender set forth in Article 4 hereof, within thirty (30) days of Borrower's discovery or receipt of notice of such breach. e. Borrower's failure to remedy any breach of a representation or warranty of Borrower set forth in Article 6 hereof, within thirty (30) days of Borrower's discovery or receipt of notice of such breach. ARTICLE 8 REMEDIES Section 8.1. Option to Act. On the occurrence of any Event of Default, in addition to its other rights in this Agreement or in any of the Loan Documents, at law, or in equity, Lender may, without prior demand, exercise any one or more of the following rights and remedies: a. Terminate its obligation to make disbursements of Loan Proceeds. b. Declare the Note, and all other sums owing to Lender with respect to the other Loan Documents, immediately due. REO\NATCITYW ASTERLOAN:071699 11 c. Make any disbursements after the happening of any one or more of the Events of Default, without waiving its right to demand payment of the Note and all other sums owing to Lender with respect to this Agreement or any of the Loan Documents or any other rights or remedies and without liability to make any other or further disbursements of Loan Proceeds, regardless of Lender's previous exercise of rights and/or remedies. d. Proceed to enforce Lender's rights and remedies as authorized at law, or in equity, with respect to the Event of Default, in any order preferred by Lender, and remain entitled to exercise all other rights and remedies described in this Agreement or the Subject A Property Deeds of Trust. Section 8.2. Repayment of Funds Advanced. If Lender must expend funds in exercising or enforcing any of its rights or remedies under this Agreement, or any of the other Loan Documents, the actual amount of funds expended by Lender or on Lender's behalf, will constitute Authorized Loan Expenditures payable by Borrower and will, upon delivery of written notice to Borrower, be deemed an additional disbursement of Loan Proceeds and thereby increase the Loan Amount. Section 8.3. Rights Cumulative, No Waiver. All of Lender's rights and remedies provided in this Agreement, or in any of the other Loan Documents, are cumulative and may be exercised by Lender at any time. Lender's exercise of any right or remedy will not constitute a cure of any Event of Default unless the full outstanding Loan Amount due to Lender is repaid and Borrower has cured all other Events of Default. No waiver will be implied from Lender's failure to take, or delay in taking, any action concerning any Event of Default or from any previous waiver of any similar or unrelated Event of Default. Any waiver of an Event of Default, whether under this Agreement or any of the Loan Documents, must be in writing and properly executed by the Lender and will be limited to its specific terms. Section 8.4. Disclaimer. Whether Lender elects to employ any of the remedies available to it in connection with an Event of Default, Lender will not be liable for Borrower's obligations under this Agreement, the Note, any Subject A Property Deed of Trust, or in any of the Loan Documents. ARTICLE 9 MISCELLANEOUS Section 9.1. No Waiver. No failure or delay on the part of Lender in exercising any right or remedy under this Agreement or any of the Loan Documents will operate as a waiver, nor will Lender be estopped to exercise any right or remedy at any future time because of any failure or delay. No express waiver will affect any matter other than the matter expressly waived and that waiver will be operative only for the time and to the extent stated. Waivers of any covenant, term, or condition REO'NATCITYSv1A STERLOAN:071699 12 in this Agreement or any of the Loan Documents will not be construed to waive any subsequent breach of the same covenant, term, or condition. Section 9.2. No Third Party Beneficiary. This Agreement is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other Person will have any right of action or any rights to receive any portion of the Loan Proceeds. Section 9.3. Notices. All notices required to be given will be served in the manner provided in the relevant Subject A Property Deeds of Trust. Section 9.4 . Authority to File Notices. Borrower irrevocably appoints Lender as its agent (the agency being coupled with an interest) to file for record any notice that Lender deems necessary or desirable to protect its interests under this Agreement or any of the Loan Documents. Section 9.5. Third Party Actions. Lender will have the right to commence, appear in, or defend any action or proceeding brought by or against a third party which it deems necessary, in its sole and absolute discretion, purporting to affect the rights, duties, or liabilities of the parties hereunder, or the disbursement of any funds under this Agreement or any of the Loan Documents. In connection with that right, Lender may incur and pay costs and expenses, including, without limitation, reasonable attorney fees, which Borrower agrees to repay to Lender on demand, and if not repaid, Borrower authorizes Lender to add same as additional advances to the Loan Amount. This Section does not apply to actions or proceedings between the parties. Section 9.6. Assignment. The terms of this Agreement and all of the Loan Documents will be binding on and inure to the benefit of successors and assigns of the parties. However, Borrower will not assign this Agreement or any of the Loan Documents, or any right or interest Borrower may have in or under this Agreement or any of the Loan Documents, or convey the Subject A Properties or any improvements, personalty or fixtures located on the Subject A Properties, now or later secured by the Subject A Property Deeds of Trust, without the prior written consent of Lender. Section 9.7. Time. Time is of the essence. REO W ATCITYWASTERLOAN:071699 13 Section 9.8. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges, understands, and agrees as follows: a. The relationship between Borrower and Lender is, and will at all times remain, solely that of borrower and lender, and Lender neither undertakes nor assumes any responsibility for or duty to Borrower to find buyers, tenants or developers for the Subject A Properties. b. Lender will not be responsible or liable to Borrower for any loss or damage of any kind to any person or property whether suffered by Borrower or any other person or group of persons while on the Subject A Properties, and Borrower will hold Lender harmless from any liability, loss, or damage for these things. Section 9.9. Controlling Law. This Agreement, and each of the Loan Documents, will be governed by and construed in accordance with the laws of the State of California. Section 9.10. Consent. All consents and approvals by Lender required or permitted by any provision of this Agreement or any of the Loan Documents will be in writing. Lender's consent to or approval of any act by Borrower requiring further consent or approval will not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. Section 9.11. Survival of Warranties and Covenants. The warranties, representations, conditions, covenants, and agreements of this Agreement will survive the making of the Loan and the execution and delivery of the Note and Subject A Property Deeds of Trust, and will continue in full force and effect until the applicable statutes of limitation have expired on any potential claim, action or proceeding arising or alleged to arise from or associated with this Agreement or any of the Loan Documents. Nothing in this Section is intended to limit any other provision of this Agreement or any of the Loan Documents that, by their stated terms, survive the repayment of the Loan Amount or the termination of any of the Loan Documents. Section 9.12. No Representations by Lender. Lender, by accepting or approving any item or thing required or requested under this Agreement or any of the Loan Documents, including but not limited to, issuing certificates, notices, maintaining an accounting, statements of income and expense or other financial records, surveys, appraisals, or insurance policies, will not be deemed to have warranted or represented the sufficiency, legality, effectiveness, or legal effect of any such item or thing or of any particular term, provision, or condition of same, and any acceptance or approval will not be or constitute any warranty or representation by Lender. REO\NATCITY' ASTERLOAN:071699 14 Section 9.13. Amendment. This Agreement, and all of the Loan Documents and the terms contained in each of them, may not be modified, waived, discharged, or terminated except by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge, or termination is asserted. Section 9.14. Counterparts. This Agreement, and any of the Loan Documents, may be executed in any number of counterparts and by different parties in separate counterparts, each of which when executed and delivered will be deemed an original, and all of which taken together will constitute one and the same instrument. Section 9.15. Severability. If any term, provision, covenant, or condition, or any application thereof, of this Agreement or any of the Loan Documents, is held by a court of competent jurisdiction to be invalid, void, or unenforceable, all other terms, provisions, covenants and conditions, and all applications not held invalid, void, or unenforceable, will continue in full force and will in no way be affected, impaired, or invalidated. Section 9.16. Captions and Number. All Article and Section headings in this Agreement are inserted for convenience of reference only and do not constitute a part of such document for any other purpose. When the context and construction so require, all words used in the singular will be deemed to have been used in the plural and vice versa. Section 9.17. Indemnity. Borrower agrees to defend, indemnify, and hold Lender harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney fees that Lender may reasonably incur as a direct or indirect consequence of: (i) the making of the Loan; (ii) Borrower's failure to perform any obligations as and when required by this Agreement, the Note, the Subject A Property Deeds of Trust, or any of the Loan Documents; (iii) the failure, at any time, of any of Borrower's representations or warranties to be true and correct; or (iv) any act or omission by Borrower, Borrower's agent, employee, contractor or subcontractor, with respect to the Loan, a Subject A Property, or the improvements thereon. Borrower will pay immediately on Lender's demand any amounts owing under this indemnity, together with interest at the maximum rate permitted by law from the date Lender makes a payment or incurs a loss. Borrower's duty to indemnify Lender will survive the termination, release or cancellation of this Agreement, the Note, any of the Subject A Property Deeds of Trust, or the Loan Documents, and the reconveyance or partial reconveyance of the Subject A Property Deeds of Trust. REO\NATCITYUA AST ERLOAN:071699 15 Section 9.18. Further Assurances. At Lender's request and at Borrower's expense, Borrower will execute, acknowledge, and deliver all other instruments and perform all other acts necessary, desirable, or proper to carry out the purposes of this Agreement or any of the other Loan Documents or to perfect and preserve any liens created thereby. Section 9.19. Disclosure of Information. Borrower acknowledges that Lender is a governmental entity and agrees that all information provided to Lender in association with this Loan is subject to public disclosure. / / / / / / /// / / / /// / / / / / / / / / / / / / / / / / / / / / / / / / / / /// /// / / / REO'NATC:ITY MASTERLOAN:071699 16 Section 9.20. Integration And Interpretation. The Loan Documents contain, or expressly incorporate by reference, the entire agreement between Lender and Borrower with respect to the covered matters and supersede all prior agreements, discussions, negotiations or correspondence. Any reference to the Subject A Property or Properties in any of the Loan Documents will include all or any portion of them. Any reference to the Loan Documents in any of the Loan Documents will include all renewals, amendments, or extensions approved by Lender. Executed on this 234day of , 1999. Port Attorney Lender: San Diego Unified Port District By: "" ` By: '&40.4. We:a...v.00es DEPUTY PORT ORNEY Borrower: CDC Attorney Community Development Commission of the City of National City By: //lZ BY: 11...1_,F,e/.L [,cJt REONATC ITY\M ASTERLOAN:071699 17 THE FOLLOWING LEGAL DESCRIPTION COVERS THE PROPERTY KNOWN AS 840 WEST 24" STREET, NATIONAL CITY, CALIFORNIA. ALL THAT PORTION OF BLOCK 281 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY, OCTOBER 2, 1882 AS MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST WESTERLY CORNER OF SAID BLOCK 281; THENCE NORTH 71° 00' EAST ALONG THE NORTHERLY LINE OF SAID BLOCK 281, A DISTANCE OF 106.13 FEET TO A LINE THAT IS CONCENTRIC WITH AND 12 FEET WESTERLY, MEASURED RADIALLY FROM THE SAID CENTER LINE OF SAID SPUR TRACK OF THE SAN DIEGO AND ARIZONA EASTERLY RAILWAY COMPANY; THENCE SOUTHERLY ALONG SAID CONCENTRIC LINE FROM A TANGENT THAT BEARS SOUTH 9° 03' 30" EAST ON A CURVE TO THE RIGHT HAVING A RADIUS OF 447.28 FEET (THE CHORD OF SAID CURVE BEARS SOUTH 0° 01' 45" EAST 140.39 FEET) AN ARC DISTANCE OF 140.97 FEET; THENCE SOUTH 9° 00' WEST PARALLEL WITH AND 12 FEET WESTERLY AT RIGHT ANGLES FROM SAID CENTER LINE OF SAID SPUR TRACK TANGENT TO LAST DESCRIBED CURVE AT LAST MENTIONED POINT, 59.15 FEET; THENCE SOUTH 71° 00' WEST 32.39 FEET TO THE WESTERLY LINE OF SAID BLOCK 281; THENCE NORTH 19° 06' WEST ALONG SAID WESTERLY LINE OF BLOCK 281, A DISTANCE OF 185.0 FEET TO THE POINT OF BEGINNING. THE FOLLOWING LEGAL DESCRIPTION COVERS THE PROPERTY KNOWN AS 2501 CLEVELAND AVENUE, NATIONAL CITY, CALIFORNIA. THAT PORTION OF BLOCK 281 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 346, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 2, 1882, INCLUDING A PORTION OF THE ALLEY IN SAID BLOCK 281, DESCRIBED IN PARCELS A AND B BELOW. PARCEL "A": BEGINNING AT THE MOST NORTHERLY CORNER OF BLOCK 261 OF NATIONAL CITY, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348 COMPILED FOR THE SAN DIEGO LAND & TOWN COMPANY AND FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON OCTOBER 2, 1882, THENCE SOUTH 19° 06' EAST ALONG THE EASTERLY LINE OF SAID BLOCK 281, A DISTANCE OF 250 FEET TO THE MOST EASTERLY CORNER OF SAID BLOCK 281; THENCE SOUTH 71° 00' WEST ALONG THE SOUTHERLY LINE OF SAID BLOCK 281 A DISTANCE OF 224.44 FEET TO A LINE THAT IS CONCENTRIC WITH AND 12 FEET SOUTHEASTERLY MEASURED RADIALLY FROM THE CENTER LINE OF THE MAIN TRACK OF THE CORONADO BRANCH OF THE SAN DIEGO AND ARIZONA EASTERN RAILWAY COMPANY; THENCE NORTHEASTERLY ALONG SAID CONCENTRIC LINE FROM A TANGENT THAT BEARS NORTH 6° 05' EAST ON A CURVE TO THE RIGHT HAVING A RADIUS OF 449.73 FEET - THE CHORD OF SAID CURVE BEARS NORTH 16° 20' 40" EAST 160.22 FEET- AN ARC DISTANCE OF 161.08 FEET; THENCE NORTH 26° 36' 20" EAST PARALLEL WITH AND 12 FEET SOUTHEASTERLY AT RIGHT ANGLES FROM SAID CENTER LINE OF MAIN TRACK OF SAID CORONADO BEACH TANGENT TO LAST DESCRIBED CURVE AT LAST MENTIONED POINT, HAVING A RADIUS OF 473.73 FEET -THE. CHORD OF SAID CURVE BEARS NORTH 21° 03' 04" EAST 91.71 FEET- AN ARC DISTANT OF 91.85 FEET TO THE NORTHERLY LINE OF SAID BLOCK 281; THENCE NORTH 71° 00' EAST ALONG SAID NORTHERLY LINE OF BLOCK 261 A DISTANCE OF 22.14 FEET POINT OF BEGINNING. EXF-3IBIT "A" Page 1 of 2 PARCEL "B": BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID BLOCK 281 THAT IS SOUTH 71° 00' WEST ALONG SAID NORTHERLY, LINE 51.64 FEET FROM THE MOST NORTHERLY CORNER OF SAID BLOCK 281, SAID POINT IS ALSO IN A LINE THAT IS CONCENTRIC WITH AND 12 FEET NORTHWESTERLY MEASURED RADIALLY FROM THE CENTER LINE OF THE MAIN TRACK OF THE CORONADO,BRANCH OF THE SAN DIEGO AND ARIZONA EASTERN RAILWAY COMPANY; THENCE SOUTHWESTERLY ALONG SAID CONCETRIC LINE FROM A TANGENT THAT BEARS SOUTH 17° 37' 32" WEST ON A CURVE TO THE RIGHT HAVING A RADIUS OF 449.73 FEET -THE CHORD OF SAID CURVE BEARS SOUTH 22° 06' 56" WEST 70.41 FEET- AN ARC DISTANCE OF 70.49 FEET; THENCE SOUTH 26° 36' 20" WEST PARALLEL WITH AND 12 FEET NORTHWESTERLY AT RIGHT ANGLES FROM SAID CENTER LINE OF MAIN TRACK OF SAID CORONADO BEACH, TANGENT TO LAST DESCRIBED CURVE AT LAST MENTIONED POINT 70.19 FEET; THENCE NORTH 86* 39' 10" WEST 0.50 FEET TO A LINE THAT IS CONCENTRIC WITH AND 12 FEET EASTERLY MEASURED RADIALLY FROM THE CENTER LINE OF A SPUR TRACK OF THE SAN DIEGO AND ARIZONA EASTERN RAILWAY COMPANY; THENCE NORTHERLY ALONG SAID CONCENTRIC LINE FROM A TANGENT THAT BEARS NORTH 3° 20' 50" EAST ON A CURVE TO THE LEFT, HAVING A RADIUS OF 471.26 FEET -THE CHORD OF SAID CURVE BEARS NORTH 3° 06' 40" WEST 106.02 FEET- AN ARC DISTANCE OF 106.24 FEET TO THE SAID NORTHERLY LINE OF BLOCK 281; THENCE NORTH 71.00 FEET EAST ALONG SAID NORTHERLY LINE OF BLOCK 281 A DISTANCE OF 67.88 FEET POINT OF BEGINNING. TOGETHER WITH THOSE PORTIONS OF THE NORTH ONE-HALF OF 25TH STREET AND THE WEST ONE-HALF OF CLEVELAND AVENUE, FORMERLY 8TH AVENUE IF ANY, AS CLOSED BY RESOLUTION NO. 12268 OF THE CITY OF NATIONAL CITY, RECORDED FEBRUARY 26, 1977 AS DOCUMENT NO. 72282 OF OFFICIAL RECORDS, WHICH REVERT BY OPERATION OF LAW TO SAID PARCELS "A" AND "B" ABOVE. THE FOLLOWING LEGAL DESCRIPTION COVERS THE PROPERTY KNOWN AS 2510 CLEVELAND AVENUE, NATIONAL CITY, CALIFORNIA. LOTS 1 TO 10 INCLUSIVE, AND LOTS 13 TO 22, INCLUSIVE, BLOCK 282 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP NO. 348, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 2, 1882. ALSO THE WESTERLY 50.00 FEET OF 8T" AVENUE ADJOINING THE ABOVE BLOCK ON THE EAST, AND THE NORTHERLY 40.00 FEET OF 26' STREET ADJOINING ON THE SOUTH TOGETHER WITH THE ALLEY IN SAID BLOCK, AS CLOSED BY RESOLUTION NO. 1064 ON JULY 20, 1926. ALSO THAT PORTION OF THE SOUTH HALF OF 25' STREET ADJOINING SAID BLOCK 282 ON TIIE NORTH AND LYING BETWEEN THE NORTHWESTERLY PROLONGATION OF THE EASTERLY AND WESTERLY LINES OF SAID BLOCK 282. Page 2 of 2