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09-01-2015 - Approve Renewal of Letter of Credit for the 1999 T - Item No. SA1 (2).pdfCity of West Covina Memorandum AGENDA ITEM NO SA1 DATE September 1, 2015 TO: Chairman and Successor Agency Board Members FROM: Tom Mauk Interim Executive Director BY: Christa Buhagiar Finance Director SUBJECT: APPROVE RENEWAL OF LETTER OF CREDIT FOR THE 1999 TAX ALLOCATION BONDS RECOMMENDATION: It is recommended the City Council, acting as the Successor Agency to the former Redevelopment Agency of the City of West Covina, approve a First Amendment to Reimbursement Agreement for the Taxable Variable Rate Demand Tax Allocation Bonds, Series 1999 and authorize the Interim Executive Director to execute all necessary documents by adopting the attached resolution: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, ACTING AS THE SUCCESSOR AGENCY TO THE WEST COVINA REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTION AND DELIVERY BY THE AGENCY OF A FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT AND THE TAKING OF CERTAIN ACTIONS IN CONNECTION THEREWITH DISCUSSION: In 1999, the West Covina Public Financing Authority (Authority) issued Taxable Variable Rate Demand Tax Allocation Bonds, Series 1999 (Bonds) to make a loan to the former Redevelopment Agency of the City of West Covina (Former Agency), which was succeeded by the West Covina Community Development Commission. The loan to the Former Agency financed redevelopment activities of the Former Agency. The Bonds are secured by the Fonner Agency's loan repayments to the Authority. The Bonds bear interest at a short term variable rate, which reset every 7 days. Owners of such short term variable rate debt can require the Authority to repurchase their Bonds on 7 days' notice. The funds for such a purchase are provided under a letter of credit, and the Authority's remarketing agent then finds a new buyer to purchase the Bonds and repay any draw on the letter of credit. Principal payments are due on these bonds annually through November 1, 2029 and the current principal outstanding balance on the bonds is $3,120,000. The current Letter of Credit securing the Bonds is issued by Wells Fargo Bank, National Association (Bank) and expires on October 13, 2015. The terms of the Letter of Credit are governed by a Reimbursement Agreement by and among the Authority, the Former Agency, and the Bank. The Bank is offering to renew and extend the expiration date of the Letter of Credit to April 2017. An amendment to the Reimbursement Agreement is required to complete the extension process. However, there is no change to the existing letter of credit fees. The modifications contained in the amendment reflect changes in regulatory disclosures since the approval of the original agreement, as well as a provision to waive a jury trial in the event of a dispute. Staff is recommending approval of an amendment to the Reimbursement Agreement with the Bank. Once the Successor Agency and the Authority Boards have approved the amendment, the Oversight Board to the Successor Agency will be required to approve the Successor Agency action, and then the Department of Finance will be have an opportunity to review the approval. That process is expected to take up to 60 days. The Bank has extended the Letter of Credit on an interim basis until December to provide sufficient time for the remaining approvals. FISCAL IMPACT: The current annual fee is 1.4% of the Letter of Credit amount (outstanding par amount of the Bonds plus interest for 51 days), which decreases over time as the principal balance of the Bonds is paid down. The fee will remain the same under the amendment. Payment of the fees are an enforceable obligation payable from Redevelopment Property Tax Trust Funds deposits and included on the Recognized Obligation Payment Schedule. Prepared by: Christa Buhagiar Finance Director ATTACHMENT 1 — Resolution ATTACHMENT 2 — Amendment to Reimbursement Agreement ATTACHMENT 1 RESOLUTION NO. 2015-66 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, ACTING AS THE SUCCESSOR AGENCY TO THE WEST COVINA REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTION AND DELIVERY BY THE AGENCY OF A FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT AND THE TAKING OF CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the West Covina City Council acting as the Successor Agency to the West Covina Redevelopment Agency (the "Predecessor Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the West Covina Public Financing Authority (the "Authority") for the purpose, among others, of issuing its bonds to be used to provide financial assistance to the Predecessor Agency; WHEREAS, the Authority has previously issued $3,945,000 aggregate principal amount of West Covina Public Financing Authority Taxable Variable Rate Demand Tax Allocation Bonds, Series 1999 (Redevelopment Agency of the City of West Covina-West Covina Redevelopment Project-Subordinate Lien) (the "Bonds") to finance a loan made to the Predecessor Agency by the Authority for the purposes of financing certain improvements in the Predecessor Agency's West Covina Redevelopment Project Area; and WHEREAS, the Bonds were issued and delivered as variable rate obligations supported by a direct pay letter of credit; WHEREAS, in 2010, the Authority and the Predecessor Agency caused the delivery of a substitute letter of credit (the "Letter of Credit") issued pursuant to the terms of a Reimbursement Agreement, dated as of September 1, 2010 (the "First Amendment to Reimbursement Agreement"), by and among the Authority, the Predecessor Agency and Wells Fargo Bank, National Association (the "LOC Bank"); and WHEREAS, on June 28, 2011, the California Legislature adopted ABx1 26, inter cilia, dissolving existing redevelopment agencies, including the Predecessor Agency; WHEREAS, the California Supreme Court substantially upheld the provisions of ABx1 26 on December 29, 2011, resulting in the dissolution of the Predecessor Agency on February 1, 2012; WHEREAS, the remaining powers, assets and obligations of the Successor Agency to the former Redevelopment Agency of the City of West Covina (the "Successor Agency") were transferred to the Successor Agency pursuant to ABx_l 26 on February 1, 2012; WHEREAS, the Authority and the Successor Agency now wish to extend the LOC and amend the terms of the Reimbursement Agreement pursuant to a First Amendment to Reimbursement Agreement, dated as of August 1, 2015 (the "First Amendment to Reimbursement Agreement"), by and among the Successor Agency, the Authority and the LOC Bank; and WHEREAS, the Successor Agency has reviewed the First Amendment to Reimbursement Agreement which is on file with the Secretary of the Successor Agency. NOW, THEREFORE, the City Council of the City of West Covina acting as the Successor Agency to the West Covina Redevelopment Agency does hereby resolve as follows: SECTION 1. All of the recitals herein contained are true and correct and the Successor Agency so finds. SECTION 2. The First Amendment to Reimbursement Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, is hereby approved. The Executive Director of the Successor Agency, and any designee thereof (each an "Authorized Officer") are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to execute and deliver the First Amendment to Reimbursement Agreement in substantially the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the First Amendment to Reimbursement Agreement by such Authorized Officer. SECTION 3. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents, certifications and other instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the First Amendment to Reimbursement Agreement and the transactions contemplated therein and by this Resolution. SECTION 4. This Resolution shall take effect immediately upon its adoption. SECTION 5. The Secretary of the Successor Agency shall certify the adoption of this Resolution. APPROVED AND ADOPTED at a regular meeting held on September 1, 2015. Fredrick Sykes Chairman APPROVED AS TO FORM: ATTEST: Kimberly Hall Barlow Nickolas S. Lewis City Attorney Secretary I, Nickolas S. Lewis, Secretary of the Successor Agency to the West Covina Redevelopment Agency of the City of West Covina, do hereby certify that the foregoing Resolution No. 2015-66 was duly adopted at a regular meeting of the Successor Agency held on the P t day of September 2015, by the following vote of the Council: AYES: NOES: ABSENT: ABSTAIN: Nickolas S. Lewis Secretary ATTACHMENT 2 AMENDMENT TO REIMBURSEMENT AGREEMENT This AMENDMENT TO REIMBURSEMENT AGREEMENT (this "Amendment"), is made and entered into as of [•], 2015 by and among WEST COVINA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and validly existing under and pursuant to the laws of the State of California (the "Authority"), SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA, a public body corporate and politic duly organized and validly existing under and pursuant to the laws of the State of California, including Part 1.85 (commencing with Section 34170) of Division 24 of the California Health and Safety Code (the "Successor Agency"), (the Authority and the Successor Agency, each an "Account Party," and, collectively, the "Account Parties"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the "Bank"). WITNES SETH WHEREAS, the Authority, the West Covina Community Development Commission (the Successor Agency is winding up the affairs of the West Covina Community Development Commission) and the Bank have previously entered into a Reimbursement Agreement, dated as of October 1, 2010 (the "Agreement"), relating to the West Covina Public Financing Authority Taxable Variable Rate Demand Tax Allocation Bonds, Series 1999 (Redevelopment Agency of the City of West Covina — West Covina Redevelopment Project — Subordinate Lien); WHEREAS, the Account Parties desire to extend the Stated Termination Date (as defined in the Agreement) of the Letter of Credit (as defined in the Agreement); WHEREAS, the Bank is willing to extend the Stated Termination Date (as defined in the Agreement) of the Letter of Credit (as defined in the Agreement) as long as certain amendments are made to the Agreement; and WHEREAS, the Account Parties are willing to agree to such amendments in order to extend the Stated Termination Date (as defined in the Agreement) of the Letter of Credit (as defined in the Agreement). NOW, THEREFORE, in consideration of the foregoing, the premises and mutual covenants contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings given thereto in the Agreement. 2. Effectiveness of this Amendment. This Amendment shall become effective as provided herein at the time (the "Amendment Effective Time") on the first date (the "Amendment Effective Date") on which each of the following conditions shall be satisfied or waived by the Bank: (a) Delivery of Amendment. Receipt by the Bank, on or prior to the Amendment Effective Date, of a copy of this Amendment duly executed and delivered by the Account Parties. (b) Resolution/Order. Receipt by the Bank, on or prior to the Amendment Effective Date, of a copy of a resolution or order of the Account Parties authorizing the execution, delivery and performance of this Amendment, certified by the Secretary of each Account Party, which certification shall include a statement to the effect that such resolution or order is in full force and effect on the Amendment Effective Date and has not been amended. (c) Approval of Oversight Board; Approval or No Action by State Department of Finance. The oversight board for the Successor Agency (the "Oversight Board") shall have approved this Amendment and the transactions contemplated hereby (the "Transactions") and the Bank shall have received written evidence thereof, and either (i) the period for review by the California Depat intent of Finance of the Oversight Board's approval shall have lapsed without receipt by the Oversight Board of a request for review from the California Department of Finance or (ii) the California Department of Finance shall have approved the Oversight Board's approval of the Transactions. (d) Incumbency. Receipt by the Bank, on or prior to the Amendment Effective Date, of a certificate of each Account Party certifying the names and true signatures of the officers of such Account Party authorized to sign this Amendment and the other documents to be delivered by such Account Party hereunder. (e) Representations and Covenants of the Authority; No Defaults. The following statements shall be true and correct on and as of the Amendment Effective Date, and the Bank shall have received a certificate signed by an authorized officer of the Authority, dated the Amendment Effective Date, stating that: (i) The representations of the Authority contained in Section 4.01 of the Agreement (other than those contained in Section 4.01(e) and 4.01(k) as to which no representation is made) are true and correct in all material respects on and as of the Amendment Effective Date as though made on and as of such date. (ii) The representations of the Authority contained in Section 4 of this Amendment are true and correct in all respects on and as of the Amendment Effective Date as though made on and as of such date. (iii) The Authority has performed or complied with all of its obligations, agreements and covenants to be performed or complied with by it pursuant to the Agreement on or prior to the Amendment Effective Date. (iv) After giving effect to the execution and delivery of this Amendment by the Authority Party, there exists no Default or Event of Default. (f) Representations and Covenants of the Successor Agency i No Defaults. The following statements shall be true and correct on and as of the Amendment Effective Date, 2 and the Bank shall have received a certificate signed by an authorized officer of the Successor Agency, dated the Amendment Effective Date, stating that: (i) The representations of the Successor Agency contained in Section 4.02 of the Agreement (other than those contained in Section 4.02(e) and 4.02(k) as to which no representation is made) are true and correct in all material respects on and as of the Amendment Effective Date as though made on and as of such date. (ii) The representations of the Successor Agency contained in Section 5 of this Amendment are true and correct in all respects on and as of the Amendment Effective Date as though made on and as of such date. (iii) The Successor Agency has performed or complied with all of its obligations, agreements and covenants to be performed or complied with by it pursuant to the Agreement on or prior to the Amendment Effective Date. (iv) After giving effect to the execution and delivery of this Amendment by the Successor Agency Party, there exists no Default or Event of Default. (g) Fees, Costs and Expenses. The Bank shall have received payment of all fees, costs and expenses due under the Agreement that are to be paid on or prior to the Amendment Effective Date. (11) No Material Adverse Change. As of the Amendment Effective Date, the Bank, in its sole determination, shall be satisfied that (i) except as set forth in Note 21 of the Notes to Basic Financial Statements included in the Comprehensive Annual Financial Report of the City of West Covina for the fiscal year ended June 30, 2014, since June 30, 2014, no material adverse change in the financial condition, business, assets, liabilities or prospects of either Account Party has occurred, and (ii) no law, rule or regulation shall have been enacted, amended, suspended or repealed that would result in a material adverse change of the type described in clause (i). 3. Amendments. At the Amendment Effective Time: (a) The following defined terms set forth in Section 1.01 of the Agreement shall be amended and restated to read as follows: "Business Day" means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close and (b) with respect to all determinations of LIBOR, any day that is a Business Day described in clause (a) and that is also a London Banking Day. As used herein, "London Banking Day" means any day on which dealings in U.S. dollar deposits are conducted by and between banks in the London interbank Eurodollar market. "LIBOR" means a rate per annum determined by the Bank pursuant to the following formula: 3 LIBOR = Base LIBOR 1.00 - Eurodollar Reserve Percentage Notwithstanding the foregoing, if LIBOR shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. As used herein, "Base LIBOR" means, as of any date of determination, the rate of interest per annum determined on the basis of the rate for deposits in U.S. dollars for an interest period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day. If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then "Base LIBOR" shall be determined by the Bank to be the arithmetic average of the rate per annum at which deposits in U.S. dollars would be offered by first class banks in the London interbank market to the Bank at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination. Each calculation by the Bank of Base LIBOR shall be conclusive and binding for all purposes, absent manifest error. AS used herein, "Eurodollar Reserve Percentage" means, for any day, the percentage which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City. (b) The following defined terms shall be added to Section 1.01 of the Agreement and shall be inserted in alphabetical order: "Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to the Authority or the Successor Agency from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder. "Excluded Taxes" means, with respect to the Bank or any Participant, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Bank or such Participant is organized or in which its principal office is located, and (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by the State. "Governmental Authority" means the government of the United States of America or any other nation or any political subdivision thereof or any governmental or quasi- governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, 4 regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government (including any supra national bodies such as the European Union or European Central Bank), or any arbitrator, mediator or other Person with authority to bind a party at law. "Indemnified Taxes" means Taxes other than Excluded Taxes. "Law" means any treaty or any federal, regional, state and local law, statute, rule, ordinance, regulation, code, license, authorization, decision, injunction, interpretation, order or decree of any court or other Governmental Authority. "OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets Control. "PATRIOT Act" means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)). "Sanctions" means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC), the European Union, Her Majesty's Treasury, or other relevant sanctions authority. "Sanctioned Country" means at any time, a country or territory which is itself the subject or target of any Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan and Syria). "Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions- related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b). "Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto. (c) Section 2.07of the Agreement shall be amended by deleting subsections (c) and (d) thereof. (d) Section 2.09 of the Agreement shall be amended by adding the following to the end of said Section: Any and all payments by or on account of any obligation of the Authority or the Successor Agency under any Related Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of the Authority or the Successor Agency, as 5 the case may be) requires the deduction or withholding of any Tax from any such payment by the Authority or the Successor Agency, then the Authority or the Successor Agency, as the case may be, shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Authority or the Successor Agency, as the case may be, shall be increased as necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section), the Bank (or Participant) receives an amount equal to the sum it would have received had no such deduction or withholding been made. The obligations of the Authority and the Successor Agency set forth in this Section 2.09 shall survive the termination of this Agreement. (e) The obligations of the Authority and the Successor Agency set forth in this Section 2.13 shall survive the termination of this Agreement. Section 4.01 of the Agreement shall be amended by adding the following subsection after subsection 4.01(1) and the table of contents shall be amended to reflect the addition of the new Section: (m) Anti-Corruption Laws and Sanctions. None of the Authority or, to the knowledge of the Authority, any of its directors, members, officers or employees or any agent or representative of Authority that will act in any capacity in connection with or benefit from the Letter of Credit or this Agreement, (i) is a Sanctioned Person or currently the subject or target of any Sanctions or (ii) has taken any action, directly or indirectly, that would result in a violation by such Persons of any Anti-Corruption Laws. (g) Section 4.02 of the Agreement shall be amended by adding the following subsection after subsection 4.02(m) and the table of contents shall be amended to reflect the addition of the new Section: (n) Anti-Corruption Laws and Sanctions. None of the Successor Agency or, to the knowledge of the Successor Agency, any of its directors, members, officers or employees or any agent or representative of Successor Agency that will act in any capacity in connection with or benefit from the Letter of Credit or this Agreement, (i) is a Sanctioned Person or currently the subject or target of any Sanctions or (ii) has taken any action, directly or indirectly, that would result in a violation by such Persons of any Anti- Corruption Laws. (h) Section 5.02 of the Agreement shall be amended by adding the following subsection after subsection 5.02(d): Anti-Corruption Laws and Sanctions. The Authority will maintain in effect and enforce policies and procedures designed to ensure compliance by the Authority, its council members, directors, officers, employees and agents with Anti- Corruption Laws and applicable Sanctions. The Authority shall not permit the proceeds of any drawing under the Letter of Credit to be used (i) in furtherance of an offer, 6 payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto. (i) Section 6.02 of the Agreement shall be amended by adding the following subsection after subsection 6.02(h): (i) Anti-Corruption Laws and Sanctions. The Successor Agency will maintain in effect and enforce policies and procedures designed to ensure compliance by the Successor Agency, its council members, directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Successor Agency shall not permit the proceeds of any drawing under the Letter of Credit to be used (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto. (j) Section 8.16 of the Agreement shall be amended and restated in its entirety to read as follows and the table of contents shall be amended to reflect the new caption: SECTION 8.16. GOVERNING LAW; JURISDICTION; ETC. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. (b) SUBMISSION TO JURISDICTION. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER RELATED DOCUMENT TO WHICH EACH IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER RELATED DOCUMENT SHALL AFFECT ANY RIGHT THAT 7 THE BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER RELATED DOCUMENT AGAINST THE AUTHORITY OR THE SUCCESSOR AGENCY OR ANY OF THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION. (c) WAIVER OF VENUE. THE AUTHORITY AND THE SUCCESSOR AGENCY EACH IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED LOAN DOCUMENT IN ANY COURT REFERRED TO IN SUBSECTION (B) OF THIS SECTION 8.16. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAWES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (d) SERVICE OF PROCESS. EACH OF THE AUTHORITY AND THE SUCCESSOR AGENCY IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.03. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAWS. (e) WAIVER OF RIGHT TO JURY TRIAL; JUDICIAL REFERENCE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM. IF AND TO THE EXTENT THAT THE FOREGOING WAIVER OF JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN SUCH FORUM, EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW. IT IS HEREBY ACKNOWLEDGED THAT THE WAIVER OF A JURY TRIAL TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS AND THE CONSENT TO JUDICIAL REFERENCE IS A MATERIAL INDUCEMENT FOR THE PARTIES TO EXECUTED AND DELIVER THIS AGREEMENT. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT SUCH WAIVER AND CONSENT HAS BEEN KNOWINGLY AND VOLUNTARILY MADE FOLLOWING CONSULTATION WITH ITS RESPECTIVE LEGAL COUNSEL. (k) Article VIII of the Agreement shall be amended by adding the following Sections after Section 8.18 of the Agreement and the table of contents shall be amended to reflect the addition of the new Sections: 8 SECTION 8.19. Assignment For Collateral. The Bank may assign and pledge, without the consent of the Authority or the Successor Agency, all or any portion of the Authority's and the Successor Agency's obligations to the Bank under this Agreement and the other Related Documents (including Bank Bonds) owing to it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned obligations made by the Authority or the Successor Agency to the Bank in accordance with the terms of this Agreement shall satisfy the Authority's or the Successor Agency's obligations hereunder and under the other Related Documents in respect of such assigned obligation to the extent of such payment. No such assignment shall release the Bank from its obligations hereunder or under the Letter of Credit. SECTION 8.20. USA PATRIOT Act. The Bank hereby notifies each of the Authority and the Successor Agency that pursuant to the requirements of the PATRIOT Act, the Bank is required to obtain, verify and record information that identifies the Authority and the Successor Agency, which information includes the name and address of the Authority and the Successor Agency, and other information that will allow the Bank to identify the Authority and the Successor Agency in accordance with the PATRIOT Act. SECTION 8.21. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Related Document), each the Authority and the Successor Agency acknowledges and agrees that: (a) (i) the services regarding this Agreement provided by the Bank and any Affiliate thereof are arm's-length commercial transactions between the Authority and the Successor Agency, on the one hand, and the Bank and its Affiliates, on the other hand, (ii) each of the Authority and the Successor Agency has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) each of the Authority and the Successor Agency is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Related Documents; (b) (i) the Bank and its Affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be, acting as an advisor, agent or fiduciary for the Authority or the Successor Agency and (ii) neither the Bank nor any of its Affiliates has any obligation to the Authority or the Successor Agency with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Related Documents; and (c) the Bank and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Authority or the Successor Agency, and neither the Bank nor any of its Affiliates has any obligation to disclose any of such interests to the Authority or the Successor Agency. To the fullest extent permitted by law, each of the Authority and the Successor Agency hereby waives and releases any claims that it may have against the Bank or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby. 9 3. Amendment of the Letter of Credit. Promptly following the Amendment Effective Time, the Bank shall execute and cause to be delivered to the Trustee a certificate in the form attached hereto as Exhibit A extending the Stated Termination Date of the Letter of Credit. 4. Representations and Warranties of the Authority. (a) The Authority is a joint powers authority duly organized and existing under the Constitution and laws of the State of California. (b) The Authority Party has the power and authority to execute, deliver and perform this Amendment. (c) The Authority has taken all necessary action to authorize this Amendment, and to execute, deliver and perform its obligations under this Amendment in accordance with its terms. (d) This Amendment has been duly executed and delivered by the Authority, and when executed and delivered by the Bank will be, a legal, valid and binding obligation of the Authority in accordance with its terms, except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (e) The execution, delivery and performance of this Amendment by the Authority in accordance with its terms does not and will not (i) contravene any organizational documents of the Authority, (ii) require any consent or approval of any person other than those which have been obtained (and not revoked) prior to the Amendment Effective Time, (iii) violate any laws, rules or regulations (including, without limitation, Regulations T, U or X of the Federal Reserve Bank, or any successor regulations), (iv) conflict with, result in a breach of or constitute a default under any contract to which the Authority is a party or by which it or any of its property may be bound or (v) result in or require the creation or imposition of any lien upon or with respect to any property now owned or hereafter acquired by the Authority except such liens, if any, expressly created by any Related Document. (0 There is no action, suit or proceeding, at law or in equity, or before any court, public board, public body or arbitrator pending (or to the knowledge of the Authority, threatened), against the Authority or any officers of the Authority in their respective capacities as such (i) to restrain or enjoin the execution and delivery by the Authority of this Amendment, (ii) in any manner questioning the authority of the Authority to execute, deliver and perform this Amendment or the other Related Documents to which it is a party, or (iii) questioning the validity or enforceability of this Amendment or the other Related Documents to which it is a party. 5. Representations and Warranties of the Successor Agency. (a) The Successor Agency is a public body corporate and politic duly organized and existing under the Constitution and laws of the State of California. 10 (b) The Successor Agency Party has the power and authority to execute, deliver and perform this Amendment. (c) The Successor Agency has taken all necessary action to authorize this Amendment, and to execute, deliver and perform its obligations under this Amendment in accordance with its terms. (d) This Amendment has been duly executed and delivered by the Successor Agency, and when executed and delivered by the Bank will be, a legal, valid and binding obligation of the Successor Agency in accordance with its terms, except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (e) The execution, delivery and performance of this Amendment by the Successor Agency in accordance with its terms does not and will not (i) contravene any organizational documents of the Successor Agency, (ii) require any consent or approval of any person other than those which have been obtained (and not revoked) prior to the Amendment Effective Time, (iii) violate any laws, rules or regulations (including, without limitation, Regulations T, U or X of the Federal Reserve Bank, or any successor regulations), (iv) conflict with, result in a breach of or constitute a default under any contract to which the Successor Agency is a party or by which it or any of its property may be bound or (v) result in or require the creation or imposition of any lien upon or with respect to any property now owned or hereafter acquired by the Successor Agency except such liens, if any, expressly created by any Related Document. (1) There is no action, suit or proceeding, at law or in equity, or before any court, public board, public body or arbitrator pending (or to the knowledge of the Successor Agency, threatened), against the Successor Agency or any officers of the Successor Agency in their respective capacities as such (i) to restrain or enjoin the execution and delivery by the Successor Agency of this Amendment, (ii) in any manner questioning the authority of the Successor Agency to execute, deliver and perform this Amendment or the other Related Documents to which it is a party, or (iii) questioning the validity or enforceability of this Amendment or the other Related Documents to which it is a party. 6. Miscellaneous. (a) Except as expressly modified by this Amendment, the Agreement shall continue to be and remain in full force and effect in accordance with its terms. (b) This Amendment may be executed in any number of counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. (c) This Amendment may be executed by facsimile signature and each such signature shall be treated in all respects as having the same effect as an original signature. 11 (d) THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT UNDER, AND SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CHOICE OF LAW RULES. (e) Each Account Party jointly and severally agrees to pay the fees and expenses of counsel to the Bank incurred in connection with the preparation, negotiation, execution and delivery of this Amendment and the documents described herein no later than ten (10) days after the delivery of an invoice therefor. [Remainder of page intentionally left blank.] 12 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written. WEST COVINA PUBLIC FINANCING AUTHORITY By: Name: Title: SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA By: Name: Title: Approved as to Form: Name: Title: -Signature Page- Amendment to Reimbursement Agreement WELLS FARGO BANK, NATIONAL ASSOCIATION By: Name: Title: -Signature P age- Amendment to Reimbursement Agreement EXHIBIT A Amendment To Irrevocable Standby Letter of Credit Number: NZS668499 Amendment Number: 002 Amend Date: [e], 2015 BENEFICIARY U.S. BANK NATIONAL ASSOCIATION 633 WEST FIFTH STREET, 24T FLOOR LOS ANGELES, CA 90071 ATTN: CORPORATE TRUST SERVICES APPLICANT WEST COVINA PUBLIC FINANCING AUTHORITY AND THE SUCCESSOR AGENCY OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA 1444 WEST GARVEY AVE SOUTH WEST COVINA, CA 91790 LADIES AND GENTLEMEN: AT THE REQUEST AND FOR THE ACCOUNT OF THE ABOVE REFERENCED APPLICANT, WE HEREBY AMEND OUR. IRREVOCABLE STANDBY LETTER OF CREDIT (THE "WELLS CREDIT") IN YOUR FAVOR AS FOLLOWS: THE THIRD PARAGRAPH OF PAGE ONE OF OUR LETTER OF CREDIT DATED OCTOBER 13, 2010 IS NOW TO READ: THIS LETTER OF CREDIT EXPIRES AT THE PRESENTATION OFFICE ON [s] OR, IF SUCH DATE IS NOT A BUSINESS DAY, THEN ON THE FIRST (19 SUCCEEDING BUSINESS DAY THEREAFTER (THE "EXPIRATION DATE"). ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. THIS AMENDMENT IS TO BE ATTACHED TO THE ORIGINAL WELLS CREDIT AND IS AN INTEGRAL PART THEREOF. Very Truly Yours, WELLS FARGO BANK, N.A. By: The original of the Letter of Credit contains an embossed seal over the Authorized Signature. Please direct any written correspondence or inquiries regarding this Letter of Credit, always quoting our reference number, to Wells Fargo Bank, National Association, Attn: U.S. Standby Trade Services at either One Front Street MAC A0195-212 San Francisco, CA 94111 OF 401 Linden Street MAC D4004-017 Winston-Salem, NC 27101 Exhibit A to Amendment to Reimbursement Agreement Phone inquiries regarding this credit should be directed to our Standby Customer Connection Professionals 1-800-798-2815 Option 1 1-800-776-3862 Option 2 (Hours of Operation: 8:00 a.m. PT to 5:00 p.m. PT) (Hours of Operation: 8:00 a.m. EST to 5:30 p.m. EST) Exhibit A to Amendment to Reimbursement Agreement City of West Covina Memorandum AGENDA TO: Mayor and City Council ITEM NO. SA 2 FROM: Tom Mauk Interim City Manager DATE September 1, 2015 BY: Chris Freeland Assistant City Manager/Community Development Commission Director SUBJECT: LOAN AGREEMENT CONCERNING LITIGATION FEES INCURRED FOR THE ROPS PERIODS OF FEBRUARY 2012 TO JUNE 2012, JULY 2012 TO DECEMBER 2012, AND JANUARY 2014 TO JUNE 2014 WHICH EXCEEDED THE LITIGATION COST ESTIMATES FOR THOSE SAME PERIODS RECOMMENDATION: It is recommended that the City Council, acting as the Successor Agency to the West Covina Redevelopment Agency, approve the Loan Agreement concerning Litigation Fees incurred for the ROPS periods of February 2012 to June 2012, July 2012 to December 2012, and January 2014 to June 2014 that exceeded litigation cost estimates for those same periods. BACKGROUND: The former West Covina Redevelopment Agency was dissolved pursuant to state law on February 1, 2012. In the wake of this dissolution, the City elected to perform the functions of the "Successor Agency" to the former. West Covina Redevelopment Agency as permitted by the redevelopment dissolution statutes. Because the City elected to perform such functions, Health & Safety Code section 34173(h) permits the City to loan funds to the Successor Agency for the purpose covering the Successor Agency's "administrative costs, enforceable obligations, or project-related expenses at the city's discretion." Additionally, pursuant to Part 1.85 of the California Health & Safety Code, the Successor Agency is permitted to engage in activities, including litigation, for the purpose of protecting its assets and liabilities for the purpose of ensuring that the taxing entities receiving maximum benefit from the wind down of the former-West Covina Redevelopment Agency's affairs. In pursuit of those activities for the purpose of protecting its assets and liabilities to ensure that the taxing entities receive maximum benefit from the wind down of the former-West Covina Redevelopment Agency's affairs, the Successor Agency was required to engage in litigation to protect such assets. As part of the Recognized Obligation Payment Schedule process, the Successor Agency, in engaging in such litigation, provided estimates for its litigation costs on its Recognized Obligation Payment Schedules ("ROPS") for the periods February 2012 to June 2010, July 2012 to December 2012, and January 2014 to June 2014. However, such estimates for litigation costs were not sufficient to cover the actual costs of litigation occurring during the ROPS periods mentioned above. Thus, in order to continue to protect the assets of the Successor Agency during the ROPS periods mentioned above to the benefit of the Successor Agency's taxing entities, the City loaned the Agency funds in the amounts of $821,365.00 and $109,000.00 to cover such litigation costs discussed above as authorized under Health & Safety Code section 34173(h). To date, the City has only received $60,000.00 in repayment on the $109,000.00 loan it made to the Successor Agency. The purpose of the Loan Agreement is to formalize the loan given under the authority of Health & Safety Code section 34173(h) such that the City can be repaid for the costs it incurred on behalf of the Successor Agency in performing and assisting in the performance of the Successor Agency's obligations wider the redevelopment dissolution statutes. The Department of Finance (DOF) recommended entering into a loan agreement in order to legally effectuate reimbursement to the City. On October 7, 2014 the City and Successor Agency executed the Loan Agreement and on December 4, 2014 the Oversight Board adopted resolution OB-0030 approving the Loan Agreement. The Oversight Board resolution was subsequently submitted to DOF. DOF' s determination letter dated January 16, 2015 stated they did not approve the loan agreement. In order to obtain DOF approval, staff has revised the loan agreement to include a Promissory Note and a Deed of Trust to secure the loan. This Loan Agreement is in addition to and separate from a loan agreement concerning loans in the amount of $48,413, which was approved by DOF The attached Loan Agreement covers a variety of litigation costs pertaining to several cases incurred by the City on behalf of the Successor Agency during the ROPS periods of February 2012 to June 2010, July 2012 to December 2012, and January 2014 to June 2014. They are as follows: $821,365.00 Loan (February 2012 to June 2010 and July 2012 to December 2012) Payee ROPS Period Amount Squire Sanders February 2012 to June 2012 $587,509.00 Alvarez-Glasman Colvin February 2012 to June 2012 $22,204.00 Eminent Domain Law Group February 2012 to June 2012 $7,946.00 Hunsucker Goldstein February 2012 to June 2012 $429.00 Squire Sanders July 2012 to December 2012 $172,343.00 Alvarez-Glasman Colvin July 2012 to December 2012 $17,602.00 Eminent Domain Law Group July 2012 to December 2012 $13,182.00 Hunsucker Goldstein July 2012 to December 2012 $150.00 Total Outstanding: $821,365.00 $109,000 Loan (January 2014 to June 2014) Payee ROPS Period Amount Alvarez-Glasman Colvin January 2014 to June 2014 $18,661.00 Alvarez-Glasman Colvin January 2014 to June 2014 $14,447.00 Alvarez-Glasman Colvin January 2014 to June 2014 $67,459.00 Alvarez-Glasman Colvin January 2014 to June 2014 $4,456.00 Alvarez-Glasman Colvin January 2014 to June 2014 $3,977 Subtotal: $109,000.00 Payment Received by Agency: ($60,000.00) Total Outstanding: $49,000.00 The figures above were previously provided to DOF, staff is currently working on reconciling the accounts. If approved by the City Council and Successor Agency Board, this Loan Agreement must then be approved by the Oversight Board, and then the California Department of Finance. LEGAL REVIEW: The City Attorney and Successor Agency Counsel have approved the proposed Loan Agreement and this report. FISCAL IMPACT: Once fully approved by all relevant agencies and listed on a Recognized Obligation Payment Schedule, the City will receive repayment in the amounts noted above, pursuant to the terms of the Loan Agreement, from the Successor Agency. Prepared By: ‘"1.— Paulina Morales Senior Project Manager Attachment No. 1— Loan Agreement Attachment No. 1 LOAN AGREEMENT BETWEEN THE CITY OF WEST COVINA AND THE SUCCESSOR AGENCY TO THE WEST COVINA REDEVELOPMENT AGENCY THIS AGREEMENT ("Agreement") is made this day of September 2015, by and between the City of West Covina, a Municipal Corporation of the State of California (the "City" or "Lender"); and Successor Agency to the West Covina Redevelopment Agency ("Agency"), a public body, corporate and politic organized and existing under the laws of the State of California ("Borrower"). RECITALS WHEREAS, in June of 2011, the California State Legislature enacted legislation which resulted in the dissolution of all redevelopment agencies in the State of California, including the West Covina Redevelopment Agency, on February 1, 2012 ("Dissolution Law"); WHEREAS, Dissolution Law created successor agencies for the purpose of winding down the affairs of the dissolved redevelopment agencies; WHEREAS, the City elected to perform the functions of the Successor Agency to the West Covina Redevelopment Agency; WHEREAS, the Borrower and the City are distinct legal governmental entities pursuant to Health & Safety Code section 34173(g); WHEREAS, pursuant to Part 1.85 of the California Health & Safety Code, the Borrower is permitted to engage in activities, including litigation, for the purpose of protecting its assets and liabilities for the purpose of ensuring that the taxing entities receiving maximum benefit from the wind down of the former-West Covina Redevelopment Agency's affairs; WHEREAS, in pursuit of those activities for the purpose of protecting its assets and liabilities to ensure that the taxing entities receive maximum benefit from the wind down of the former-West Covina Redevelopment Agency's affairs, the Borrower was required to engage in litigation to protect such assets; WHEREAS, the Borrower, in engaging in litigation, provided estimates for its litigation costs on its Recognized Obligation Payment Schedules ("ROPS") for the periods February 2012 to June 2012, July 2012 to December 2012, and January 2014 to June 2014; WHEREAS, such estimates for litigation costs were not sufficient to cover the actual costs of litigation occurring during the ROPS periods mentioned above; WHEREAS, in order to continue to protect the assets of the Agency during the ROPS periods mentioned above to the benefit of the Agency's taxing entities, the City loaned the Agency 1 funds in the amounts of $821,365.00 and $109,000.00 to cover those litigation costs discussed above pursuant to Health & Safety Code section 34173(h) ("Loan"); WHEREAS, the City has already received $60,000.00 repayment on the $109,000.00 loaned to the Agency; WHEREAS, the parties now desire to memorialize the Loan. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein set forth, and for other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged by each of the parties hereto, the parties hereto hereby agree as follows: Recitals The recitals set forth above are true and correct and incorporated herein by this reference. 2. Loan and Repayment. (a) Borrower agrees to accept and borrow from Lender the aggregate principal sum not to exceed Eight Hundred Seventy Thousand Three Hundred Sixty-Five Dollars ($870,365.00) (the "Loan"). The Loan will accrue interest at the rate of eight percent (8%) per annum. (b) Subject to the terms and conditions of this Agreement, Borrower agrees and promises to pay the City in the amount of Eight Hundred Seventy Thousand Three Hundred Sixty-Five Dollars ($870,365.00). The Loan amounts represent the following loans made by the City to the Agency to cover the Agency's litigation costs and constitutes the Loan discussed above: $821,365.00 Loan (February 2012 to June 2012 and July 2012 to December 2012) Payee ROPS Period Amount Squire Sanders February 2012 to June 2012 $587,509.00 Alvarez-Glasman Colvin February 2012 to June 2012 $22,204.00 Eminent Domain Law Group February 2012 to June 2012 $7,946.00 Hunsucker Goldstein February 2012 to June 2012 $429.00 Squire Sanders July 2012 to December 2012 $172,343.00 Alvarez-Glasman Colvin July 2012 to December 2012 $17,602.00 Eminent Domain Law Group July 2012 to December 2012 $13,182.00 Hunsucker Goldstein July 2012 to December 2012 $150.00 Total: $821,365.00 2 $109,000.00 Loan (January 2014 to June 2014) Payee ROPS Period Amount Alvarez-Glasman Colvin January 2014 to June 2014 $18,661.00 Alvarez-Glasnnan Colvin January 2014 to June 2014 $14,447.00 Alvarez-Glasman Colvin January 2014 to June 2014 $67,459.00 Alvarez-Glasman Colvin January 2014 to June 2014 $4,456.00 Alvarez-Glasman Colvin January 2014 to June 2014 $3,977.00 Subtotal: $109,000.00 Payment Received from Agency: ($60,000.00) Total Outstanding: $49,000.00 (c) Recognized Obligation Payment Schedule. Agency has listed the Loan on its Recognized Obligation Payment Schedule ("ROPS") 15-16B (covering period January 2015 to June 2016) and shall continue to list the Loan on its future ROPS as an enforceable obligation until the Loan has been fully repaid. (d) Payment. Agency shall pay City the amounts due on the Loan immediately upon allocation of funds to Agency pursuant to the Recognized Obligation Payment Schedule process under the California Health & Safety Code. 3. Loan Documents (a) In order to set forth and document the additional covenants, provisions, terms and conditions of (a) the Loan transaction, (b) the repayment of the Loan, and (c) Lender's security for said repayment, Borrower agrees to deliver to Lender, concurrently with its execution of this Agreement, duly executed original counterparts (or as many as otherwise indicated) of this Agreement and each of the following documents (collectively, the "Loan Documents"): (b) Promissory Note. A promissory note in the principal amount of Eight Hundred Seventy Thousand Three Hundred Sixty-Five Dollars ($870,365.00), executed by Borrower, as maker, in favor of Lender, as holder, in form and content satisfactory to Lender in its sole and absolute discretion (the "Note"); (c) Deed of Trust with Fixture Filing, Assignment of Leases and Rents and Security Agreement. A Deed of Trust with Fixture Filing, Assignment of Leases and Rents and Security Agreement encumbering APN: 8735-001- 912 parcel of real property (the "Real Property") in the City of West Covina, Los Angeles County, in the State of California (listed on Exhibit A attached hereto and by this reference made a part hereof, and as more particularly described therein), duly executed by Borrower for the benefit of Lender, as beneficiary and secured party, in form and content 3 satisfactory to Lender in its sole and absolute discretion, properly acknowledged so as to be suitable for recording with the Los Angeles County Recorder's Office, State of California; 4. Conditions Precedent (a) The obligation of Lender to make the Loan to Borrower is subject to the fulfillment of each and every one of the following conditions precedent, each of which is hereby deemed material, which conditions Borrower hereby covenants to fully satisfy: (b) Loan Documents. Borrower shall have delivered to Lender each and every one of the Loan Documents as provided in Article II hereof, and all other documents provided for herein or requested by Lender (all properly executed and, where appropriate, acknowledged); (c) Title Insurance. North American Title Company shall be prepared to issue 31 ALTA Lender's policies of title insurance in form and content satisfactory to Lender in the aggregate face amount of Eight Hundred Seventy Thousand Three Hundred Sixty-Five Dollars ($870,365.00) in favor of Lender, insuring Lender's beneficial interest in and to the Deed of Trust as a valid first (1st) priority lien on the real property described therein, and insuring the full amount of the Deed of Trust, subject only to such exceptions as are approved by Lender and including such endorsements as are reasonably required by Lender; (d) Section 3.3 Representations and Warranties. Each and every one of the representations and warranties set forth in Article IV of this Agreement shall be true and correct as of the date first set forth above and shall remain true and correct until the Loan is repaid; and (e) Section 3.4 Provision of Financial Statements. Borrower shall have furnished Lender a copy of Borrower's financial statements in form and substance satisfactory to Lender in its sole and absolute discretion. 5. General Terms. (a) Real Property. Lender is responsible for ensuring that good and marketable title to the Real Property and no other person or entity has claimed any right, title or interest in or to any portion of the Real Property to its satisfaction. Lender has and shall continue to have a first (1st) priority perfected security interest in and to the Real Property, together with an assignment of rents concerning the Real Property. The Real Property shall at all times remain free and clear of all claims, liens, encumbrances and security interests (except those in favor of Lender); (b) No Event of Default. No event of default hereunder or under any of the other Loan Documents, and no event which would constitute an event of 4 default with the passage of time or the giving of notice, or both, shall have occurred and be continuing; Survival. The representations, warranties and covenants of Borrower contained herein or in any document or certificate furnished or to be furnished by Borrower or at Borrower's instructions to Lender pursuant to this Agreement, including, without limitation, the other Loan Documents and any other documents to be executed by Borrower hereunder, shall survive the recordation of the Deed of Trust and other documents hereunder; No Misrepresentation or Omission. No representation or warranty of Borrower in this Agreement, or in any document or certificate furnished or to be furnished to Lender pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading; Financial Information. All financial statements and information relating to Borrower which have been or may hereafter be delivered by Borrower to Lender are true and correct and have been prepared in accordance with generally accepted accounting principles consistently applied and there has been no material adverse change in the financial condition of Borrower since the submission of such financial information to Lender; Additional Information. Borrower shall promptly supply Lender with such information concerning its financial affairs as Lender may request from time to time hereafter, executed by the Treasurer of the City of West Covina and certified under penalty of perjury as true and correct and shall promptly notify Lender of any material adverse change in Borrower's financial condition and of any condition or event which constitutes a breach of any covenant or obligation of Borrower under this Agreement; Books and Accounts. The Agency will keep or cause to be kept proper books of record and accounts showing the use of the Loan funds, Loan repayments and any amount outstanding. Default. The City understands and agrees that the Agency's ability to repay the Loan depends upon the California Department of Finance's approval of the Loan as an enforceable obligation on Agency's relevant ROPS. Notwithstanding the foregoing, the failure of Agency to repay the Loan will result in a default of the terms of this Agreement. Severability. If any section, paragraph, sentence, clause, or phrase of this Loan Agreement is found for any reason to be illegal, invalid or unenforceable, the remaining terms of the Loan Agreement will continue in the same force or effect. a) Amendment. This Agreement may be amended at any time in writing, signed by both parties and with Agency's Oversight Board's approval. [Signatures on the following page] 6 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. SUCCESSOR AGENCY TO THE WEST CITY OF WEST COVINA COVINA REDEVELOPMENT AGENCY Fredrick Sykes Fredrick Sykes Successor Agency Chairman Mayor APPROVED AS TO FORM: APPROVED AS TO FORM: Kimberly Hall Barlow Kimberly Hall Barlow Successor Agency Counsel City Attorney ATTEST: ATTEST: Nickolas S. Lewis, Agency Secretary Nickolas S. Lewis, City Clerk 7 EXHIBIT A LIST OF REAL PROPERTY Real property in the City of West Covina, County of Los Angeles, State of California, described as follows: PARCEL 9 OF PARCEL MAP NO. 60193, IN THE CITY OF WEST COVINA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED DECEMBER 29, 2005 IN BOOK 336, PAGE 93 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT ALL OIL, GAS, AND OTHER HYDROCARBONS AND ALL MINERALS, TOGETHER WITH THE RIGHT TO DEVELOP, PRODUCE AND EXTRACT THE SAME, AS GRANTED TO NARCISSE S. GARNIER, ET AL., BY DEED RECORDED SEPTEMBER 29, 1944 IN BOOK 21288 PAGE 260, OFFICIAL RECORDS. BY INSTRUMENTS OF RECORD, THE OWNERS OF SAID OIL, GAS, AND OTHER HYDROCARBONS AND MINERALS, RELINQUISHED ALL OF THEIR RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND OR THE SUBSURFACE THEREOF TO A DEPTH OF 500 FEET BELOW THE SURFACE THEREOF, (MEASURED VERTICALLY FROM THE SURFACE, FOR THE PURPOSE OF DEVELOPING, PRODUCING AND EXTRACTING THE SAME. ALSO EXCEPT THEREFROM THE "PRECIOUS METALS AND ORES THEREOF" AS EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND SR. AND WILLIAM WORKMAN RECORDED IN BOOK 10 PAGE 39 OF DEEDS. APN: 8735-001-912 8