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Resolution - 8823RESOLUTION NO. 8823 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA APPROVING THAT CERTAIN AGREEMENT ENTITLED "SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA AND SYLVAN S. SHULMAN CO./ WEST COVINA ASSOCIATES" AND MAKING FINDINGS REGARDING CERTAIN PUBLIC IMPROVEMENTS THE CITY COUNCIL OF THE CITY OF WEST COVINA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council of the City of West Covina (the "Agency") hereby finds, determines and declares that: A. On June 26, 1989, the Agency and the City Council of the City of West Covina (the "City Council") approved an Owner Participation Agreement between the Agency and Sylvan S. Shulman Co./West Covina Associates ("Developer") for the expansion of the Fashion Plaza Regional Shopping Mall ("OPA"). B. On April 9, 1990, Developer and Agency entered into that certain amendment to the OPA ("First Amendment") for the purpose of modifying the rights and obligations of Developer and Agency under the OPA as set forth in the First Amendment. C. Sylvan S. Shulman Company, the general partner of Shulman, has entered into an agreement with CenterMark Properties of West Covina (CMP) pursuant to which Shulman will" be dissolved, the rights and obligations under the OPA, the First Amendment and the Second Amendment approved hereby will be assigned to CMP and the assets distributed to the Sylvan S; Shulman Company and CMP as partners of Shulman in accordance with their respective interests ("Dissolution, Assignment and Conveyance"). D. Since that time, Agency staff has been implementing the terms of the OPA and has negotiated with the Developer for a proposed Second Amendment to the Owner Participation Agreement ("Second Amendment"). The proposed Second Amendment would confirm and consent to the Dissolution, Assignment and Conveyance and modify the rights and obligations between the • Agency and CMP. The modifications to the rights and obligations are contingent upon the close of escrow with respect to the Dissolution, Assignment and Conveyance. E. The Agency and the City Council have held a duly noticed joint public hearing on said Second Amendment to the Owner Participation Agreement pursuant to the requirements of • Health and Safety Code Section 33433 and other applicable law. F. Concurrently with the first publication of the notice of said joint public hearing, the Agency and the City have made available to the public a report on the proposed Second Amendment to the Owner Participation Agreement, which report was duly prepared and made available to the public in accordance with the requirements of Health and Safety Code Section 33433 and other applicable law. G. On June 12, 1989, the Board of Directors of the Agency and the City Council certified and approved the environmental impact report for the Fashion Plaza Expansion Project. This EIR addresses issues concerned with the specific project and anticipated additional development as would be provided on the property subject to the First Amendment. The proposed First Amendment contains no features or impacts which will require important revisions to the previously approved EIR, nor new, significant environmental impacts not previously considered in the original EIR. On April 27, 1992, an initial study was prepared to address Precise Plan No. 840, Rev. 2 relating to the approval of The Plaza at West Covina Master Plan. The initial study was prepared based upon review of the project information and based upon the Final Environmental Impact Report for the Fashion Plaza expansion, certified on June 12, 1989. The initial study has disclosed that although the proposed project could have a significant effect on the environment, there will not be a significant effect because mitigation measures have been incorporated into the project's design. A Negative Declaration of Environmental.Impact..has been prepared. The approval of the Second Amendment is conditioned upon the Developer complying with and implementing the mitigation measures described in the Final Environmental Impact Report for the Fashion Plaza Expansion Project as approved by City Council Resolution No. 8346. H. The Agency is authorized to carry out the redevelopment of Central Business District Redevelopment Project Area (the "Project"). I. The Redevelopment Plan for the Project Area authorizes and directs the Agency to pay all or part of the value of the acquisition and construction of public improvements, which are • enumerated in materials referenced in the Redevelopment Plan and which includes certain public improvements. J. The Agency desires to contribute toward the cost of debt service on the Community Facilities District 1989-1 which • 05/21/92 0859Q/2740/002 -2- was established to finance the construction of certain public improvements within the Project Area (the "Public Improvements"). . K. California Health and Safety Code Section 33445 provides that the redevelopment agency may, with the consent of the legislative body, pay all or part of the value of public buildings, facilities, structures or other improvements upon a finding that such public improvements are of benefit to the Project Area or the immediate neighborhood in which the Project is located and that there is no other reasonable means of financing such public improvements available for the community. L. Without the direct financial participation by the Agency, there are insufficient resources available for the payment of debt service incurred with respect to the Public Improvements. M. The Public Improvements are used by and are of benefit to persons residing in the Project Area. N. The Agency has received and reviewed the Report of Independent Financial Consultant Pursuant to Section 5.17 of the Fiscal Agent Agreement by and between the Agency and Bankers Trust Company of California, National Association, dated February 1, 1990. A copy of such report is attached hereto as Exhibit "A" and incorporated herein (the "Report"). SECTION 2. The City Council hereby approves that certain Agreement entitled "Second Amendment to Owner Participation Agreement by and between the Redevelopment Agency of the City of West Covina and Sylvan S. Shulman Co./West Covina Associates" and dated as of June 5, 1992 and authorizes the Agency Chairman to execute it in substantially the form attached hereto as Exhibit "B". SECTION 3. The City Council hereby determines that the construction and financing of the Public Improvements will be of benefit to the Project Area and the surrounding area neighborhood in which the Project is located. The City Council further determines that there are no other reasonable means for financing the construction of the Public Improvements without having the Agency pay all or part of the value of such Public Improvements. SECTION 4. The City Council hereby approves the Report • which is attached hereto as Exhibit "A". • 05/21/92 0859Q/2740/002 -3- • The City Clerk shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this 27 day of May , 1992. Mayor ATTEST: L/,�10 . City, Clerk I HEREBY CERTIFY that the foregoing Resolution No. 8823 was duly adopted by the City Council of the City of West Covina at a special meeting thereof held on the 27 day of May , 1992, by the following vote: AYES: Herfert, McFadden, Jennings, Manners NOES: None ABSENT: None ABSTAIN: Wong c City Clerk APPROVED AS TO FORM: 0 1-1 cX - City ��eAttorney 05/21/92 0859Q/2740/002 -4- EXHIBIT A REPORT OF INDEPENDENT FINANCIAL CONSULTANT PURSUANT TO SECTION 5.17 OF THE FISCAL AGENT AGREEMENT Redevelopment Agency of the City of West Covina Community Facilities District No. 1989-1 (Fashion Plaza) 1989 Special Tax Bonds This report has been prepared for the purpose of meeting the requirements of Section 5.17 of the Fiscal Agent Agreement by and between the Redevelopment Agency of the City of West Covina (the "Agency") and Bankers Trust Company of California, National Association, dated February 1, 1990 (the "Fiscal Agent Agreement") of the above -referenced issue (the "Bonds"). Such Section of the Fiscal Agent Agreement requires prior to any amendment of the Owner Participation Agreement by and between the Agency and Sylvan S. Shulman Company/West Covina Associates, dated June 26, 1989 (the "OPA"), that an opinion of an Independent Financial Advisor be obtained stating that such amendment will not adversely affect the payment of the Bonds or the pledge of revenues under the Fiscal Agent Agreement. Rod Gunn Associates, Inc. ("Gunn") is an Independent Financial Advisor within the meaning of Section 5.17 of the Fiscal Agent Agreement. Gunn has read the pertinent provisions of the Fiscal Agent Agreement to which this report relates. Gunn has received and reviewed a document entitled "Second Amendment to Owner Participation Agreement" and certain other financial information, which in our opinion, is sufficient to enable Gunn to express an informed opinion. In Rod Gunn Associates, Inc.'s opinion, the proposed amendment to the Owner Participation Agreement will not adversely affect the payment of the Bonds or the pledge of revenues under the Fiscal Agent Agreement. Very truly yours, iROD GUNN ASSOCIATES, INC. consuisa:vrs U�)-�1.,;/ IIC.J_:'h9 tii�IliYl J!lt;.; i'�I iI!GIOGl46yh0 �Uli(iU�U MARKED TO SHOW CHANGES FROM DRAFT EXHIBIT "B" OF SECOND AMENDMENT TO OWNER PARTICIPATION AGkERIr&DELETION MEANS AN ADDITION • This SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT ("Second Amendment") is entered into by and between THE REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA, a public body, corporate and politic ("Agency"), on the one hand, and SYLVAN S. SHULMAN, CO./WEST COVINA ASSOCIATES, a Delaware limited partnership, ("Shulman") and CENTERMARK PROPERTIES OV WEST COVINA, INC., a Delaware corporation ("CMP"), on the other hand, and is dated and effective as of May 27, 1992. In consideration of the mutual covenants and agreements contained herein, the Agency, Shulman and CMP hereby agree as follows: ajQjj N_j. This Second Amendment is made with respect to the following facts which are acknowledged as true by each of the parties hereto: A. On June 26, 1989, Shulman and the Agency entered into that certain Agreement entitled "Owner Participation Agreement by and between the Redevelopment Agency of the City of west Covina and Sylvan S. Shulman, Co./West Covina Associates, a Delaware limited partnership" ("OPA") for the purpose of redeveloping certain property within the City of West Covina generally known as the West Covina Fashion Plaza. B. On April 9,,1950, Shulman and the Agency entered into that certain amendment to the OPA entitled "First Amendment to Owner Participation Agreement by and between the Redevelopment Agency of the City of West Covina and Sylvan. S. Shulman, Co./West Covina Associate, ("First Amendment") for the purpose of modifying the rights and obligations of Shulman and Agency under the CPA as set forth in the First Amendment. C. Prior hereto, Sylvan S, Shulman Company, the general partner of Shulman, has entered into an agreement with CMP pursuant to which Shulman will be dissolved, the rights and obligations under the OPA and First Amendment assigned to CMP and the assets distributed to the Sylvan S. Shulman Company and CMP as the partners of Shulman in accordance with their respective interests, Sylvan S. Shulman Company will then convey its interest in the Developer Tract- to CMP. The dissolution, assignment and conveyance described herein are hereinafter referred to as the "Dissolution, Assignment and Conveyance," • D. The parties hereto now desire to confirm and consent to the above -referenced Di-ssol.ution, Assignment and Conveyance and to modify the rights and obligations between Agency and CMP as set forth hereinafter contingent upon the close of escrow with respect to the Dissolution, Assignment and Conveyance. 9 SECTION 2. Unless otherwise specifically indicated, all terms herein shall have the same meaning as set forth in the OPA and First Amendment. •E'ION 3•. Shulman and CMP hereby confirm the Dissolution, Assignment and Conveyance described in Section 1, Paragraph D hereof and the Agency hereby consents to such Dissolution, Assignment and Conveyance. • I UCTiON 9. Section 1.4, Paragraph B of the OPA is hereby deleted and replaced with the following: CMP is a Delaware corporation whose sole shareholder is Centermark Properties, Znc., a Delaware corporation ("CMP"). The principal office and mailing address of the Developer is 611 Olive Street, St. Louis, Missouri 63101. SECTION 5. Section 1..6 of. the OPA i.s amended in subsection (c) thereof by the replacement of the phrase "One Hundred and Forty Thousand (190,000)" with the phrase "One Hundred and Fifty Thousand (150,000)" and by changing of the date of. the Site Plan as referenced in the First Amendment from "April 3, 1990" to "March 26, 1992." 5ECTzo�l�. Section 1.9 and Exhibit 11 of the OPA is hereby deleted and replaced with. he following: The cbl.i.gations of CMP with respect to the Eastland Center are set forth in Exhi.bit I attached hereto and incorporated herein by reference, Neither party's performance under the OPA, as amended by the First and Second Amendments, is conditiond or contingent on either party's performance under Exhibit 1 to the Second Amendment, SZCTLON_.7• Section 2.2 of the OPA is amended by the deletion of the last "sentence thereof and replacement with the following: Agency has heretofore entered into a Cooperative Agreement with City to implement the terms of this Section, a copy of which has been provided to CMP. 6EC_LQN a. In implementation of Section 2.3 of the OPA the California Department of Transportation has vacated the Off -Ramp Parcel. 05/22/92 0667Q/2740/00 -2- SFCTTnM 9. Soction 2.5 B. of the First Amendment is hereby amended by deleting the date "November 30, 1990" in the eighth line thereof and replacing it with the following phrase: • ". .One Hundred and Twent (120) days after close of escrow wiFI respect to the Dzsso.ut on, Assignment and Conveyance. SECTION 10. In implementation of. Section 2.9 of the OPA, all soils and environmental testing, have been completed. CMP acknowledges that the soils are suitahie for the development proposed in the OPA. aECTTDN--jj, Section 2.1.1 of. the OPA is amended by deletion of the word "Assistant" in line six thereof. ZCjTDN 12. Section 3.6 is am:anded by deleting the last sentence thereof and replacing it with the following: Agency has heretoEore entered into a Cooperative Agreement: with the City to implement the terms of this Section, a copy o£ which has been provided to CMP. CTT0�13. Section 4.1 of the OPA has been implemented by virtue of the sale of the Redevelopment Agency of the City of West Covina Community Facilities District No. 1989-1. (Fashion Plaza) 1989 Special Tax Sonds'(the "Bonds"). CMP specifically assumes all obligations of the Developer thereunder. SECTION_1�. Section 4.5 of the OPA is amended, as f0ll owF;; ( I ) Subsection A,1. is hereby amended by adding the following phrase: . . . and the sum of One Hundred Fifty Thousand Dollars ($150,000) in fiscal years 1995-96 through 1.999-00 from the sources and to the extent described in Section 4.9 of this Agreement (Section 16 herein): (2) Subsection A.2. is hereby deleted and replaced with the following: 2, One hundred percent of the ad valorem real property and personal property taxes (including taxes on improvements by occupants) received by the Agency from the Shopping Center Site based on increases in assessed valuation (but not the incremental amounts of any escalations of current taxes permitted by Article XIIIA, Section 2(b) of 05/22/92 • 0667Q/2740/00 -2- ,Rum 0 iu :. the California Constitution upon the Broadway Tract, the Bullock's Tract or the Penney Tract) above the following assessed • valuations; (a) Developer Tract - Thirty -Eight Million Five Hundred and Ninety 'Thousand Dollars ($38,590,000), (b) Broadway Tract, Penney Tract, Bullock's Tract - Sixteen Million Three Hundr.eo Ninety-l`wo 'Thousand Dollars ($16,392,000). (c) Expansion Parcels - Eight Million Seven Hundred Seventy -Seven Thousand Seven Hundred Sixty -Six Dollars ($e,777,766). (d) Agency Tract - Seven Million Fight Hundred TwenL-y-One Thousand Dollars ($7,821,000). (e) Unsecured Roll -Fight million Six Hundred Ninet:v Eight Thousand Seventy Two • The Agepey'S contribution under this paragraph shall not include any incremental taxes received as a result of: a reappraisal due to a transfer of ownership or new construction after completion of the Expansion and any Peripheral Developments, The sums described herein shall be payable so long as the Public Financing has not been repaid in full; (3) Subsection A.3. is hereby amended by deleting therefrom the balance of the paragraph beginning with the sentence which starts,."For purposes of this Agreement" on the fourth line at page 29 and replacing it with the following; For purposes of this Agreement, "Sales Tax Increment Base" shall mean the sum of (i) one Hundred and Thirty Million Dollars ($130,000,000), plus (ii) beginning as of the opening of a new May Co. department store on the Shopping Center Site, a sum equal to the sales tax that the City would receive on sales of twenty million dollars ($20,000,000) (which sum shall be prorated for the year the May Co, store opens for 05/22/92 • 0667Q/2740/00 -4- business, based upon the number of days that May Co, is open for business during such year) . • In the event that the Bullock's Store closes the Sales Tax Increment Base shall be reduced by the amount of taxable sales generated by bullocks in the calendar year immediately prior to the calendar year in which closure occurs. The Sales Tag Increment Base shall be increased by the amount decreased in the preceding sentence upon the opening for business of a new tenant in the Bullock's store; provided, however, in the event that a new Lar'IanCLsj is being relocated to the Bullock's store from another location within the boundaries of the City of West: Covina, the Sales Tax Increment Base shall be increased by an amount equal to the sales tax generated by such tenant in its prior location in the calendar year immediately preceding the calendar year in which the relocation occurred. III Annually, at its sole expanse, the Agency shall retain a firm to examine and certify to the annual sale"i tax calculations. The Agency shall use its best efforts to enable CMP to verify the results of such examination to the extent permitted by law. Any additional cost incurred in such verification by CMP shall be at CMP's sole expense, CMP further has the right, at its expense, to audit ali other sources of Agency contributions to the Public Financing debt service. (4) Subsection B is hereby amended by hereby acknowledging navments made by CMP hereunder are made to Aaencv on schedule and replacing it w 1990-91 1991-92 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 05/22/92 0667Q/2740/00 anq by aele e following: $400,000 $200,000 $200,000 $200,000 $200,000 $200,000 $206,000 $200,000 $200,000 $200,000 -5- ng the payment Paid Paid SECTN 15. Section 9,6 A. is hereby amended by adding the following at the end of said subsection: • Notwithstanding the above, any Developer Advances up to Two Hundred Thousand Dollars ($200,000) per year for each year, commencing in fiscal year 1991-92, through and including fiscal year 2002-03 shall not accrue interest. S];CTrON �6. With respect to Section 4.9 of the OPA as implemented by Section B of the First Amendment, said Section is further amended as follows; The Agency and CMP acknowledge that: it will be necessary, in order to implement the provisions of Section d.5 A. 1. of the OPA as amended by Section 14.(1) hereof, to continue to lease parking spaces to the City for. a Park and Ride facility in a manner approved by the LACTC. The. Agency will. use its best: efforts to enter into an amended or. new Park and Ride Agreement with the City for the rental of additional spaces and obtain the approval thereof by LACTC so as to achieve the additional sum of one Hundred and Fifty Thousand Dollars. ($150,000) per annumy`or such greater amounts as maY be approved hy Cit A gncv and LACTC, through T�iscal year 2000-01 as described in Section 14.(1) hereof. The Developer agrees to extend the term of the Park and Ride spaces for five (5) years (or such longer period as may be approved by City Agency and LACTC) and will use its best efforts to secure approval of the same by the appropriate tenants. The terms of the Amended Park and Ride Agreement (including, without limitation, the location of the Park and Ride spaces on the Shopping center Site) shall be approved by the LACTC, the Agency, the City and CMP. The parties acknowledge that an additional amendment: to the REA may be necessary in order to permit this continued use of the Shopping Center Site. Concurrently with this Second Amendment, • Agency has entered into an amended Cooperative Agreement with the City to implement the terms of this Section, a copy of which has been provided to CMP. In, the event that the Agency is able to enter into an amended or new Park and Ride Agreement set forth hereinabove, any amounts paid by 05/22/92 0667Q/2740/00 -6- Agency hereunder shall offset and reduce Agency's obligations under..Section 4,5 A of the OPA, as amended herein. • SECTION 17, Section 7.7 of the OPA, as amended by the Amendment, is hereby amended in Subsection 3 thereof by deletion of the date "November 30, 1990" at line five at of the First Amendment and replaced with the following: One Hundred and Twenty 120 da s f: .er close of_, escrow with respect o )e Dissolution Assij _nment and Conveyance." • 6 First page 7 SECTLON_11. The Site Plan attached as Exhibit No. 1 to the OPA is hereby deleted and replaced with the Site Plan dated March 26, 1992 and attached hereto as Exhibit No, 2 and incorporated herein by reference. SECTION ,L2. The Schedule of Performance attached to the OPA as Exhibit No. 3 is hereby deleted and replaced with Exhibit No, 3 attached hereto and incorporated herein by reference. LQT1DN 20. The Agency shall participate in a refinance or sale of the Site, or portion thereof, as follows: If at any time during the outstanding term of the Public Financing, CMP refinances the Shopping Center Site and Expansion Parcel, or any portion thereof, in excess of (a) the existing secured debts; (b) liens currently on the Site; (c) costs of the Expansion; (d) costs of the Dissolution, Assignment and Conveyance; (e) cumulative operating losses funded by CMP from and after the close of escrow of the Dissolution, Assignment and Conveyance; and (f) cumulative capital expenditures made with respect to the Shopping Center Site and Expansion Parcel or any portion thereof, after the closing, then the Agency will share in any excess proceeds to the extent of (1) the deferred amounts described in Section 14(4) hereof remaining unpaid, plus (2) One Hundred Twenty Thousand Dollars ($120,000) per year, increased at the rate of 2% per year, with a cumulative aggregate cap of One Million Dollars ($1,000,000)), The Agency's share of the excess proceeds shall be equal to :such proceeds multiplie(I by a fraction, the denominator of which would be the sum of (i) CMP's equity prior to the refinancing and (ii) the sum of (1) plus (2) above and the numerator of which shall be item (ii) above. If CMP were to sell the Shopping Center Site or any portion thereof and the sale proceeds were to exceed the costs described in items (a) through (£) above plus a 10% annual cumulative return, then the Agency would share in such excess sales proceeds to the same extent and in the same proportion as in the paragraph immediately preceding, 05/22/92 0667Q/2740/00 -7- • u • SECTION 21. Notwithstanding the provisions of the OPA, the First Amendment or this Second Amendment, CMP hereby commits to expend an additional sum of not less than One Million Five Hundred Thousand Dollars ($1,500,000) in actual and direct construction costs,nexcluding design, finance and related "soft" costs, in physical improvements to the property and improvements within the curbline of the existing shopping center ("Existing Shopping Center Site"), including without limitation, interior and exterior graphic signage and landscaping in accordance with Exhibit 4 attached hereto and incorporated herein by reference and subject to Agency/City review and 'approval pursuant to Article III of the OPA. SECTION 22, CMP shall, concurrently with the close of escrow of the Dissolution, Assignment and Conveyance, make all payments necessary to insure that the property faxes, sales taxes, special tales, Developer Advances, relocation and acquisition eostsn+ith respect to the Developer parcel in accordance with Section 4,2,c, of the OPA and any other lien and obligations secured by the Shopping Center Site, or any part thereof, including all applicable interest, penalties or costs, with respect to all of the above, are current. The current amount of relocation and acquisition costs is Two Hundred iMty- even Thousand Two Hundre and Nine Dollars SECTION 23. The effectiveness of this Second Amendment shall be contingent upon the close of escrow of the Dissolution, Assignment and Conveyance and the concurrent: fulfillment of the payment obligations described in Section 22 of this second Amendment,/his Second Amendment Shall be terminated and none of the parties shall have any rights or obligations hereunder if the Dissolution, Assignment and Conveyance does not occur on or before June 9, 1992 unless extended by the Executive Director of the Agency to a date not later than?luly 15, 1992, provided that the amounts recuired b Assignment and Conve ance escrow on or before June 19 1992. t e ev F��.erm�ion A�e rights and ob igatrons of the parties shall be governed by the OPA and the First Amendment, SECTION -A. Contingent upon the clone of escrow for the Dissolution, Assignment and Conveyance and the concurrent fulfillment of the payment obligation described in Section 22 of this Second Amendment, the Agency and Sylvan S, Shulman Company shall, without the necessity of any further act on the part of. the Agency, Shulman, CMP or the Sylvan S Shulman Compan be conclusively deemed to have released ach other and all ofitheir elected officials (in the case of the Agency), partners (in Shulman),�agent, employees, representatives, attorneys, successors and assigns x e t MP , and each of them, from any and all sums of money, 05/22/92 0667Q/2740/00 -6- accounts, claims, damages and causea of action whatsoever, of whatever kind or nature, whether known or unknown, pr suspected or unsuspected which the Agency or Sylvan S. Shulman Company now owns, holds, has or had or claimed to have ag— a nst the • other arising out of or relating to the OPA, as amended. in regard to the foregoing releases, the Agency and Sylvan S. Shulman Company further agreeAas follows: (a) There is a risk that subsequent to the Dissolution, Assignment and Conveyance, either. may incur or suffer loss, damage or injuries which are in some way unknown and unanticipated at the time this Second Amendment is signed, (b) Fxcept as otherwise provided herein, the Agency or Sylvan S. Shulman Company hereby assumq, the above -mentioned risk and agrees that this general. release shall apply to all unknown or unanticipated results of the transactions and occurrences described above, as well as those known and anticipated, and upon consultation with legal counsel, the Agency and sylvan S. Shulman Company does hereby waive any and all rights under Californial_ivll Code § 1542, which section has been duly explained, and which reads as follows: A general release does not extend to claims which the creditor does not know or suspect tp-exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.. (c) The advice of legal counsel has been obtained by both parties prior to the signing of this second Amendment. The parties execute this Second Amendment voluntarily, with full knowledge of its significance, and with the express intention of extinguishing all obligations between the parties except as expressly provided herein. SECTION 25. Ceatermark properties, Inc., a Delaware corporation ("Guarantor") is the sole shareholder of GMP. The Guarantor will benefit materially by the execution of this Second Amendment. Concurrent with the execution of this Second Amendment by CMP and prior to the approval of this Second Amendment by the Agency, the Guarantor shall execute and deliver to the Agency the "Guaranty", which is attached hereto • as Exhibit No, 5 and is incorporated herein by reference. The parties agree and acknowledge that the delivery of the Guaranty by the Guarantor is a material inducement for the Agency to approve the Second Amendment, and that but for the provision of such Guaranty, the Agency would not approve this Second Amendment, 05/22/92 0657Q/2740/00 -O- The principal office and mailing address of the Guarantor for the purposes of this Second Amendment, including, without limitation, the Guaranty (Exhibit No, 5), is 611. Olive Street, St. Louis, Missouri 63101. • SECTION 26. Upon close of escrow of the Dissolution, Assignment and conveyance and the concurrent payment of the amounts described in Section 22 hereof, Agency and CMP each agree that there are no defau].L-s under the OPA, First Amendment and related documents, TI N Z27, Except as otherwise provided in this Second Amendment, all terms of the OPA and First Amendment shall remain in full force and effect. In witness whereof the parties have executed this Second Amendment to OPA as of the date first above written. ATTEST: Janet Berry, Secretary APPROVED AS TO FORM: Agency Special Counsel • REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA go Chairperson SYLVAN S. SHULMAN CO./WEST COVINA ASSOCIATES By_ Its 05/22/92 0667Q/2740/00 -10- • • • CENTERMARK PROPERTIES OF WEST COVINA, INC. By It CENTERMARK PROPERTIES INC. By it 05/22/92 0667Q/2740/00 -1.- • Uii1pIT_ NQ, 1 Eaatiand Center 1. Rerlev�opmPnt CMP and the Agency acknowledge that the redevwlopm8nL of Eastland Center is in the best interests of both the Agency and CMP. Although that redevelopment is constrained by many factors (including existing contractual commitments, economic conditions, the availability of suitable tenants and the availability of financing) the Agency and CMP agree to make reasonable efforts to effect that redevelopment at the earliest practical opportunity. Specifically, CMP agrees to make reasonable efforts, in concert with Agency staff to: (a) conclude lease negotiations with Pharmor and to obtain REA and governmental approvals to make possible a Pharmor opening in 1993; (b) complete a study (including cost estimates) of architectural design concepts for Eastland, developed by Communication Arts, Inc., for presentation to Agency staff on or before. September 30, 1992. (c) submit to Agency staff on or before March 31, 1993 a site plan and a financial program/proforma for the redevelopment of Eastland for potential implementation within the next five years; and (d) immediately confirm the interest of Costco, or other suitable major tenant, in the Eastland site and to determine the investment required to consummate such a deal and the economic impact- on the City of West Covina, X�'A • 9 Exhibit No. 1 Page 1 of 1 YFLIBIT NO, J SITE MAP • [To be supplied] • Exbibit No. 2 Page 1 Df 1 • • C� SCHEDULE OF PERFORMANCE 1. Execution of Second Amend��l Agreement shall be authorized, executed and delivered by Developer to Agency, �rQuisition of Expon ion Parcels" Developer shall provide all. necessary funds to enable Agency to acquire each remaining expansion parcels and complete each remaining tenant relocation. Final Construction Dxawinc and Plans Developer shall submit final construc- tion drawings and plans to City for issuance of build- ing permits for each phase of the Project- as such phasing is approved by Precise Plan No, 840. within 5 days after close of escrow with respect to the Dissolution, Assignment and Conveyance. 15 days prior to the execu- tion of a settlement agree- ment or entry of judgment for each remaining expansion parcel or each remaining tenant relocation . within 24C days from approval of a Precise Plan for each corresponding phase of the Project (Developer has submitted Final Con- truction Drawings and Plans for Expansion.) Completion of Imprrovement8 Prior to 'issuance of Developer Shall substantially Ccrtificote of Occupancy complete the improvements for the Expansion. pursuant to Section 21 of the Second Amendment, Qg n v-ey in of Title Agency shall convey posse- sion and/or title to Developer of Developer Parcel in accordance with Section 2.5 of the OPA as amended. Issuance of Building Permita Subject to fulfillment of this Agreement, and subject to all applicable City Codes, City shall issue building permits with respect to the Project. No later than 120 days after close of escrow with respect to the Dissolution, Assignment and Conveyance. Within 45 days from sub- mission of Final Construc- tion Drawings to the City by Developer but in the case of the Expansion no later than June 30, 1993. Exhibit i':o. Page 1 o 2 :J LL JL 'JL 7 • 8 9 0 11 ccgnilencef'&J t of��nst ;r.s?n Developer shall commence construction of the Project. Public Improvements Developer shall commence and complete off -site improve- ments. yQIDP�-3-52-L1_.5�� �5�11.� t3.Qll Developer shall make reasonable and dili en efforts to complete the Cons truct on of the Project. Within 60 days from issuance of building permits. In coordination with Developer construction but no later than the issuance of a Certificate of OCCn- pancy. J1 October 15, 1993• but in no event later than March 15, 1994. Exhibit: 4o, Page 2 'of 2J • • • �x�IaIT Flo a IMPROVEMENTS TO EXISTING SHOPPING CENTtR SITE (SECTION 21) I, Interior Mal�ImprovemelLtS. The current interior has acceptable landscaping and water features but: lacks detailing, color, texture and warmth. The IntULiUr Mall. Iiiiprovements may include, but ore not limited to t:he following: a. flags, banners and colorful hanging treatments throughout the mall and courts; b, a richer color scheme for more brightness; c, use of additional lighting in the form of specialty lighting, neon, etc.; d. additional seating in court areas, entrances; e, use of more colorful landscaping; in particular, annual color; f. enhancement,of.,existing handrails. II. Exterior Ma11 Improvements The entrances to be developed as part of the rxpan;ion are bright and exciting but the existing entrances lack color and a sense of "Entry," Accordingly, Exterior Mall Improvements may include, but are not limited to the following: a, Incorporation of flags, banners and sculptures to the front entrance b. Incorporation of specialty lighting, also at the front entranCe, in the f.o'lffm of uplighting for the palms and flags and banners, uplighting in key landscaped areas surrounding the entrance, possibly sconce lighting on the building, and neon lighting where appropriate C. An architectural feature at the southwesterly entrance, near Broadway, such as a space frame projecting from the building, similar to the space frame treatment being done at the southeasterly entrance, but on a smaller scale; Exhibit No, 4 Page 1 of 2 UJ • • • d. Enhance paving trey}ment- and/or additional seating. III. Other ImprovemQnts Other improvements of a lower priority may include but are not limited to; a. Incorporation of additional interior mal] fountains and enhanced signage and graphics, b, Additional extorior mass seating, signeaye and graphics. Exhibit '*'oe 4 Page 2 of 2 EXHIBIT NO. 5 GUARANTY AND AGREEMENT •Qf SENTERMARK PR PERTTE�5IN _,_ TIiIS.GUARANTY AND AGREEMENT OF CENTERMARK PROPERTIES OF WEST COVINA, INC., (the "Guaranty") is hereby made and executed as of May 27, 1992 by CENTERMARK PROPERTIES OF WEST COVINA, INC., a Delaware corporation (the "Guarantor") in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF WEST COVINA, a public body corporate and politic (the "Agency"), $ECLlaLa A. The Agency and CENTERMARK PROPERTIES OF WEST COVINA, INC., a Delaware corporation ("CMP") have entered into or will enter into a certain Second Amendment to Owner Participation Agreement (the "Second Amendment") amending that certain Owner Participation Agreement dated June 26, 1989 ("OPA") as amended by the First Amendment to Owner. Participation Agreement dated April 9, 1990 ("First Amendment") (the OPA as amended by the First Amendment and Second'Amendment are hereinafter referred to as the "OPA, As Amended"). B. The OPA provides that Centermark Properties, Inc., a Delaware corporation (the "Guarantor.") shall make and deliver a guaranty of CMP's obligations under the OPA. C. The Guarantor, which is the sole shareholder of CMP, will significantly benefit by the execution by the Agency of the Second Amendment, D. The execution .by the Guarantor of this Guaranty is a condition but for which the Agency would not execute the Second Amendment. E. Guaranto'r has reviewed and approves the form and content of the OPA, As Amended. • IN WITNESS WHEREOF, in consideration of the execution of the second Amendment, and of other valuable consideration, receipt of which is hereby acknowledged; the Guarantor hereby agrees as follows: 1. Except as expressly set forth herein, all terms shall have the same meaning as in the OPA, As Amended. I Exhibit No. 5 Page 1 of 6 2. Guarantor guarantees to the Agency the full and timely completion of each and every obligation, duty, premise, covenant and agreement of CMP pursuant to the OPA, As Amended. • 3. This Guaranty is unconditional and may be. enforced directly against the Guarantor. No extensions, modifications or changes to the OPA, As Amended shall release the Guarantor or affect this Guaranty in any way, and the Guarantor waives notification thereof. 0 I 9. The undersigned hereby waives all of the suretyship Provisions of the California Civil Code Sections 2728 through 2855. 5. Guarantor waives: (a) any defense based upon any legal disability or other defense of.Developer, any other guarantor or other person or by reason of the cessation or limitation of the liability of Developer from any cause other than full payment of all sums payable under the Agreement (including without limitation the Attachments thereto); (b) any defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of Developer or any principal of Developer or any defect in the formation of Developer or any principal- of Developer; (c) any defense based upon the application by Developer of the funds for purposes other than the purposeb represented by Developer to Agency or intended or"understood by Agency or Guarantor; (d) any defense,.based upon Agency's election of any remedy against Guarantor or Developer or both including, without limitation, election by Agency to exercise its rights under the power of sale set forth in the Deed of 'Trust (Attachment No, to the Agreement) and the consequent loss by Guarantor of the right to recover any deficiency from Developer; (e) any defence barred upon Agency'r, failure to disclose to Guarantor any information concerning Developer's financial condition or any other circumstances bearing on Developer's ability to pay all sums payable under the Agreement and the Creditor Agreement (including without limitation the Attachments thereto); (f) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (g) any defense based upon Agency's election, in any proceeding instituted under. the Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or any successor statute; (h) any defense based upon any borrowing or any grant of a security interest under Section 364 of the Federal. Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy which Agency may have against Developer or any other guarantors and any right to participate in, or benefit from, any security for the Agreement or the Creditor Agreement (including without limitation the Attachments Exhibit Ho. 5 Page 2 oZ 6 thereto) now or hereafter held by Agency; (1) presentment, demand, protest and notice of any kind; and (k) the benefit of any statute of limitations affecting the liability of Guarantor horeunder or the enforcement hereof. Guarantor agrees that tho • payment of all sums payable under the Agreement and the Creditor Agreement (including without limitation the Attachments thereto) or any part thereof or other act which tolls any statute of limitations applicable to the Agreement: (including without limitation the Attachments thereto) shall. similarly operate to toll the statute of limitations applicable to Guarantor's liability hereunder. without limiting the generality of the foregoing or any other provision hereof, Guarantor expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2699 and 3437 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d) and 726, or any of such sections. • 6. Guarantor hereby waives and agrees not: to assert: or take advantage of (a) any right to require the Agency to proceed against CMP or to pursue any other remedy in the Agency's power before proceeding against the Guarantor, (b) demand, protest, and notice which the Agency may be required to provide .to CMP under the OPA, As Amended, and (c) any duty on the part of Agency to disclose to Guarantor any facts Agency now or hereafter knows about the "Site" (as defined in the OPA), the CPA, As Amended, or CMP,'r'egar.dl.ess of whether Agency has reason to believe that,.•any such facts materially increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such farts to Guarantor., it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding tho Site, the CPA, As Amended, the obligations of CMP, the financial condition of CMP, and of all circumstances bearing on the risk of any obligation by CMP hereby guaranteed. 7. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against CMP, and any benefit of, and any right to participate in any security now or hereafter held by Agency. a. The obligations of Guarantor hereunder are independent of the obligations of CMP and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (Or any other guarantor) whether or not CMP is joined therein or a separate action or actions are brought against CMP, Exhibit No. 5 Page 3 oA 6 91 In the event of any litigation between Agency and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. • 10. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder except by a writing duly executed by the Agency. • 0 11. Guarantor agrees to pay all reasonable attorney, s fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 12. Guarantor hereby waives notice of any demand by the Agency, as well as notice of any default by CMP. 13. The Agency may assign this Guaranty, When 50 assigned, Guarantor shall be bound as above to the assignees without in any manner affecting Guarantor's liability hereunder. 14, This Guaranty shall. remain in effect notwithstanding any bankruptcy, reorganization or insolvency of CMP or any successor or assignee thereof or any disaffirmance by a trustee of CMP. 15. This Guaranty shall inure, to' the benefit of and bind the successors and assigns, -of -Agency and Guarantor. 16. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Los Angeles, State of California, in an appropriate municipal court of that county, or in the FederaT District Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon revenue or forum non conyeniens. 17. The laws of the state of California shall govern the interpretation ant] enforcement of this Guaranty. Exhibit No. 5 Page 4 of 5 IN WITNESS WHEREOF, the undersigned has executed this Guaranty this 27th day of May, 1992, • CENTERMARK PROPERTIES, INC a Delaware corporation BY: — Its: 13y; Its: Exhibit Mo. 5 Page 5 of 6 u STATE OF CALIFORNIA ) 55. COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person whose name subscribed to the within i.nstr.ument and acknowledged that executed the same. WITNESS my hand and official seal. (SEAL) STATE OF CALIFORNIA ) ss., COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the person whose name subscribed to the within instrument and acknowledged that executed the same. . (SEAL) WITNESS my hand and official seal. Exnibit No. 5 Page 6 of 6