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HomeMy WebLinkAboutO-01-31VILLAGE OF DEERFIELD LAKE AND COOK COUNTIES, ILLINOIS ORDINANCE NO. 0-01-31 AN ORDINANCE AUTHORIZING THE EXECUTION OF A CERTAIN ECONOMIC INCENTIVE AGREEMENT PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF DEERFIELD, LAKE AND COOK COUNTIES, ILLINOIS, this 19th day of September , 2001. Published in pamphlet form by authority of the President and Board of Trustees of the Village of Deerfield, Lake and Cook Counties, Illinois, this 20th day of September, 2001. VILLAGE OF DEERFIELD LAKE AND COOK COUNTIES, ILLINOIS ORDINANCE NO. o— 01— 31 AN ORDINANCE AUTHORIZING THE EXECUTION OF A CERTAIN ECONOMIC INCENTIVE AGREEMENT WHEREAS, the owner of the Deerbrook Shopping Center ( "Owner ") at the southwest corner of Lake Cook Road and Waukegan Road within the Village of Deerfield and Sears have proposed a project to construct a new Sears "The Great Indoors" store, and to substantially redevelop and rehabilitate the Deerbrook Shopping Center in accordance with final development plans to be approved by the Village; and, WHEREAS, the Owner and Sears have represented to the Village that economic assistance from the Village in the form of a rebate to the Owner of a portion of the local retailer's occupation taxes that will be generated by such development of the Subject Property and received by the Village over a finite period of time; and, WHEREAS, the Village of Deerfield possesses the authority pursuant to its power as a home rule under Article 7, Section 6 of the 1970 Constitution of the State of Illinois to enter into an Economic Incentive Agreement relating to the development of land within the corporate limits of the Village pursuant to which the Village agrees to share or rebate to the owner of the Subject Property a portion of the retailer's occupation taxes received by the Village and generated by the development of the Subject Property over a finite period of time; and WHEREAS, the President and Board of Trustees of the Village of Deerfield have determined that: A. that the Subject Property of this Agreement consists of the Deerbrook Mall Shopping Center (the "Center ") on approximately 43 acres located at the southwest corner of Waukegan Road and Lake Cook Road; B. that the Center contains a significant amount of vacant and underutilized space; C. that the proposed development of the Sears "The Great Indoors" store, and the redevelopment and rehabilitation of the shopping center in accordance with final development plans to be approved by the Village (the "Project "), will create and retain job opportunities within the Village; D. that the Project will improve the appearance, functionality and competitive position of the Center and the retailers presently doing business in the Center; E. that the Project will strengthen the commercial sector of the Village; F. that the Project will enhance the tax base of the Village; G. that the Owner and Sears both meet high standards of credit worthiness and financial strength; H. that without this Agreement the Project would not be feasible; and, I. that the Economic Incentive Agreement hereinbelow authorized is made in the best interests of the Village of Deerfield an pursuant to the home rule powers of the Village of Deerfield; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF DEERFIELD, LAKE AND COOK COUNTIES, ILLINOIS, in the exercise of its home rule powers, as follows: SECTION 1: That the above and foregoing recitals are hereby incorporated and made a part of this Ordinance as if fully set forth herein. SECTION 2: That the President and Clerk of the Village of Deerfield are hereby authorized and directed to respectively execute and attest a certain Economic Incentive Agreement for the Project, a copy of which is attached hereto and made a part hereof. SECTION 3: That the Village Clerk is hereby authorized and directed to cause a copy of this Agreement or a memorandum thereof to be recorded in the office of the Cook County Recorder of Deeds. SECTION 4: That this Ordinance, and each of its terms, shall be the effective legislative act of a home rule municipality without regard to whether such Ordinance should: (a) contain terms contrary to the provisions of current or subsequent non - preemptive state law; or, (b) legislate in a manner or regarding a matter not delegated to municipalities by state law. It is the intent of the corporate authorities of the Village of Deerfield that to the extent that the terms of this Ordinance should be inconsistent with any non - preemptive state law, this Ordinance shall supersede state law in that regard within its jurisdiction. SECTION 5: That this Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form as provided by law. PASSED this 19th day of September _'2001. AYES: Kayne, Ragona, Rosenthal, Seiden, Swanson, Wylie (6) NAYS: None (0 ) ABSENT: None (0 ) ABSTAIN: Non APPROVED this ATTEST: ECONOMIC INCENTIVE AGREEMENT This AGREEMENT is dated this 19th day of September, 2001, by and between the VILLAGE OF DEERFIELD, Cook and Lake Counties, Illinois (the "Village "), and GATEWAY FAIRVIEW, INC., a California corporation (the "Owner ") RECITALS A. Owner is the owner of the Deerbrook Shopping Center (the "Center ") located within the Village and located at the southwest corner of the intersection of Lake Cook Road and Waukegan Road. The legal description of the Center is attached hereto as Exhibit A. B. Owner proposes a project. (the "Project ") for the Center which will involve demolition of the space previously occupied by Service Merchandise, construction of new leaseable space for a Sears "the great indoors" (see below), relocation or reconfiguration of existing tenants and renovation and rehabilitation of certain common areas, including landscape improvements, parking lot improvements, stormwater drainage improvements and other public improvements in accordance with the final development plans and Development Agreement approved by the Village (the "Project "). C. The Project includes the construction of new anchor tenant space on a pad to be leased to Sears Roebuck and Co. ( "Sears "), where Sears intends to operate its store known as "the great indoors" (the "TGI Store "; such project the "TGI Project "). Owner has represented to the Village that economic assistance from the Village is required for the TGI Project and the rehabilitation of the Center, and that, but for such economic assistance, the Project in general and the TGI Project in particular would not economically viable. 520515.v9: 100601/010 D. The targeted opening date for the TGI Store is April, 2003, with the overall Project targeted for substantial completion by the end of 2003. E. Pursuant to the Village's powers as a home rule municipal corporation of the State of Illinois, pursuant to Article VII of the 1970 Constitution of the State of Illinois, the Village possesses the authority and power to enter into this Agreement pursuant to which the Village agrees to share or rebate to Owner a portion of the Retailer's Occupation Taxes received by the Village and generated by the Center over a period of time as set forth below. F. But for the generally accepted creditworthiness and financial strength of Owner and the reputation of Sears and other tenants of the Center as creditworthy retailers, the Village would not provide the economic incentive as set forth herein below. G. As a result of the improvements to be undertaken as part of the Project, the Village expects that significant real estate and sales tax revenues will be generated from the operation of the Center, and that the proposed Project will serve to enhance the tax base of the Village and other governmental entities and -will promote the health, safety and welfare of the Village's residents and businesses and enhance the economic well-being of the Village. H. The Owner and Sears have represented to the Village that each will be making capital investments in the Project in the estimated amounts set forth in Exhibit C. NOW, THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE VILLAGE AND OWNER, as follows: Section 1: Incorporation of Recitals. The recitals set forth hereinabove are incorporated herein. 520515.v9: 100601/010 2 Section 2: Owner Commitment. As a condition precedent to the Village's obligations set forth herein below, Owner agrees as follows: A. To enter into a ground lease with Sears pursuant to which Owner will ground lease a parcel containing approximately 133,000 square feet to Sears for an initial term of not.less than twenty years. Such parcel is approximately depicted on the site plan attached hereto as Exhibit B. In the event that a ground lease is not executed and evidence thereof delivered.to the Village on or before December 31, 2001, this Agreement shall be null and void. B. To cause Sears to proceed with due diligence to construct or cause to be constructed the TGI Project in accordance with the final development plans and Development Agreement approved by the Village for the Project. C. To proceed with due diligence to construct or cause to be constructed certain additional improvements constituting the remainder of the Project in accordance with the final development plans and Development Agreement approved by the Village for the Project. Section 3: "Sales Tag" Defined. A. For purposes of this Agreement, the term "sales tax" or "municipal sales tax revenues" shall refer to the 1% tax imposed on municipal retailers by the Village, pursuant to the authorizations set forth in 65 ILCS 5/8 -11 -1, et. seq. and 35 ILCS 120/1, et. seq. "Sales tax" does not include any additional sales tax revenues that might result from a future increase in the Village of Deerfield municipal sales tax rate, nor from any future national, state or local sales or excise tax (such as a tax upon e- commerce) which does not currently exist except to the extent provided below in subsection (B) below. B. The parties acknowledge that the agreement to distribute Incremental Sales Tax revenues as herein provided is predicated on existing law in the State of Illinois providing for the 520515.v9: 100601/010 3 payment to Illinois municipalities of one percent (1 %) of the Sales Tax generated within each such municipality. The General Assembly of the State of Illinois, from time to time, has considered modifying or eliminating the distribution of Sales Tax revenues to Illinois municipalities. The parties desire to make express provision for the effect that such a change in state law would have upon the operation of this Agreement. Accordingly, the parties agree as follows: (i) Should the Illinois General Assembly hereafter and during the term of this Agreement eliminate the distribution of Sales Tax revenues to Illinois municipalities, the Village shall not, under any circumstances, be required to impose a municipal sales tax or other tax to provide a source of funds to replace the eliminated Sales Tax distributions; provided, however, that in the event that the Village does impose a municipal sales tax or other tax to provide a source of funds to replace the eliminated Sales Tax, then in such case the parties agree to exercise their respective best efforts to make the appropriate equitable changes to this Agreement to carry out the intent of this Agreement. (ii) Should the Illinois General Assembly hereafter and during the term of this Agreement eliminate the distribution of Sales Tax revenues to Illinois municipalities, or otherwise alter the distribution formula in a manner which prevents the Village and Owner from being able to ascertain the amount of Sales Tax revenues being received by the Village as a direct result of the retail sales activities generated from the Center, the Village shall have no obligation to make Incremental Sales Tax distributions to Owner based upon the retail sales generated from the Center; provided, 520515.v9: 100601/010 4 however, that in such a case the parties agree to exercise their respective best efforts to make appropriate equitable changes to this Agreement to carry out the intent of this Agreement. (iii) Should the Illinois General Assembly hereafter and during the term of this Agreement increase the percentage of Sales Tax revenues distributed to Illinois municipalities, the Incremental Sales Tax distributions provided for herein shall continue, but shall apply solely to the amount of Sales Tax revenues equal to 1% of taxable retail sales activities generated from the Center, with the distribution of such Incremental Sales Tax revenues continuing to be made in accordance with the distribution formula contained in this Agreement. (iv) Should the Illinois General Assembly hereafter and during the term of this Agreement reduce the percentage of Sales Tax revenues distributed to Illinois municipalities, Incremental Sales Tax distributions shall continue, but solely to the extent of Incremental Sales Tax revenues from retail sales generated from the Center, with distribution of such Incremental Sales Taxes continuing to be made in accordance with the distribution formula contained in this Agreement. Section 4: Agreement to Share a Portion of Sales Tax. A. Commencing as of (x) the first (0) day of the month next following the date on which the TGI Store first opens for business, or, (y) if the TGI Store first opens for business on the first (19`) day of the month, on such opening date (the "Commencement Date "), and continuing throughout the term hereof, the Village shall annually pay to Owner, by direct transfer 520515.v9: 100601/010 5 V to an account designated by Owner, an amount equal to 606/o of the Incremental Sales Taxes (defined below), subject to the limitations set forth in this Agreement. B. "Incremental Sales Taxes" for a fiscal year means the amount by which the Annual Sales Taxes for such fiscal year exceed the Base Sales Tax Amount. The "Base Sales Tax Amount" is $993,921.00, which is the Annual Sales Taxes generated by the Center for calendar year 2000, as confirmed by the Illinois Department of Revenue. "Annual Sales Taxes" for a fiscal year means the sales taxes generated by the Center for such fiscal year. For purposes of this Agreement, a "fiscal year" is the twelve month period beginning with the Commencement Date or any anniversary thereof. Section 5: Requisitions for Incremental Sales Tag Payments. A. Incremental Sales Tax payments to the Owner pursuant to this Agreement shall be made pursuant to a Requisition for Payment of Project Costs ( "Requisition ") submitted by the Owner to the Village. B. Each Requisition must be accompanied by: (i) Evidence, satisfactory to the Village in its reasonable discretion, that Owner and /or Sears (or their agents) incurred Project Costs (defined below) to the extent requested in the Requisition. "Project Costs" means any and all costs for those items listed on Exhibit C actually incurred by Owner and/or Sears in connection with the Project, including the TGI Project. This condition may be satisfied by submission of appropriate Owner's and Contractor's Sworn Statements and certificates or affidavits of officers of Owner and/or Sears certifying the stated Project Costs. If the Village, acting reasonably, determines that the information provided is 520515.v9: 100601/010 6 inadequate for purposes of verifying the Project Costs underlying the Requisition, the Village may, at its sole expense, audit the books and records of Owner and Sears relating to such Project Costs. (ii) Evidence, satisfactory to the Village in its reasonable discretion, that Owner and /or Sears has actually paid the Project Costs covered by the Requisition in question. This condition may be satisfied by submission of customary waivers of liens covering the payments requested in the Requisition; and (iii) Such further and additional reasonable representations, warranties and information as the Village may deem appropriate. C. The Village or its designated agent or agents shall approve or disapprove a Requisition by written notice to the Owner within thirty (30) days after the receipt of the Requisition. Approval of the Requisition will not be unreasonably withheld, delayed or conditioned. The failure to timely approve or disapprove a Requisition shall be deemed to be approval thereof. If a Requisition is disapproved by the Village or its designated agent or agents, the reasons for disallowance will be set forth in writing and the Owner may resubmit the Requisition with such additional information as may be required, and the same procedures set forth in this Agreement for approval of a Requisition shall apply to such re- submittals. D. Payment pursuant to an approved Requisition shall be paid by the Village pursuant to the provisions of 0 below. Section 6: Term. Subject to the limitations of 0 herein below, the term of this Agreement shall commence on the Commencement Date and shall continue until the earlier to occur of (i) the fifteenth (15th) anniversary of the Commencement Date; or (ii) the date as of 520515.v9: 100601/010 7 which Owner shall have received a total of $5,500,000 of Incremental Sales Tax payments pursuant hereto. The obligation of payment, if any, with respect to Incremental Sales Tax in the 15th full calendar year of this Agreement, being the last year of the term hereof, shall continue until earlier to occur of (i) six (6) months after the last fiscal year of this Agreement; or (ii) the date on which annual payment of Incremental Sales Tax for the 15th fiscal year is made to the Owner, whichever occurs first. Section 7: Manner of Payment: Calculation of Amounts Due and Owing. A. On or before the last day of the fifth (5h) month of each fiscal year for the term hereof, the Village and Owner shall jointly ascertain from the Illinois Department of Revenue ("DOR!'), the total Annual Sales Tax for the prior fiscal year (i.e., the amount of sales tax distributed to the Village by DOR attributable to the Center for the prior fiscal year). To that end, Owner shall provide, and shall cause Sears to provide, to the Village with a Power of Attorney letter addressed to and in a form satisfactory to DOR, authorizing DOR to release gross revenue and sales tax information to the Village on at least a quarterly basis throughout the term of this Agreement. The Owner and Sears shall continue to provide such additional or further authorizations during the term of this Agreement as DOR may require to release gross revenue and sales tax information to the Village as provided herein. The Village shall take all action as may be reasonably necessary to obtain the information from DOR in order to compute the Annual Sales Taxes from the Center as provided for herein, and to obtain said payments from DOR. B. The Village shall make the annual payment of Incremental Sales Tax for a fiscal year, based on approved Requisitions not previously paid, within: (i) thirty (30) days after the Village receives payment from DOR, representing sales tax from the Center for all twelve months 520515.v9: 100601/010 8 of such fiscal year, or (ii) by the end of the sixth (6t') month of the next following fiscal year, which ever occurs first. C. Owner shall have the right, upon at least ten (10) days prior written notice, to audit the books and records of the Village with respect to Annual Sales Tax and Incremental Sales Tax payments. If in the course of such inspection it is determined to the reasonable satisfaction of the Village that Incremental Sales Tax has been underpaid, the Village shall pay the amount of such underpayment within ten (10) business days after such determination. If such underpayment results from the gross negligence or willful misconduct of the Village and if the. amount of such underpayment exceeds 5% of the total amount which should have been paid, the Village shall reimburse Owner for its reasonable costs ofsuch inspection. D. Notwithstanding anything herein to the contrary, although Owner's right to Incremental Sales Tax amounts will begin to accrue as of the Commencement Date, no payments of Incremental Sales Tax amounts will actually be made to Owner until the Project is substantially complete. The Village shall deposit all Incremental Sales Tax amounts, which would otherwise have been paid to Owner but for the preceding sentence, into a strict joint order escrow account (requiring the authorization of both Owner and the Village for disbursement). Such funds will be invested for the sole benefit of Owner and in accordance with Owner's sole direction, with all investment earnings to be added to the escrow fund. The escrow funds will be disbursed to Owner when the Project is substantially complete in accordance with the final development plans and Development Agreement approved by the Village for the Project. For purposes of this 0, "substantial completion" means that stage of completion where all improvements are usable for their intended purpose without material interference and where the only work to be completed is either a "punchlist" item or cannot be completed at that time due to seasonal or weather 520515.v9: 100601/010 9 conditions. If the parties do not agree as to the determination of whether substantial completion as been achieved, the parties will, within ten (10) days after demand by either party, jointly select an architect or engineer to make such determination, which determination shall be binding on the parties and whose fee shall be divided equally between the parties. If the parties cannot agree on an architect/engineer within such 10 day period, than within the five day period thereafter each party shall appoint its own architect or engineer, and the two architect /engineers shall jointly select a.third architect or engineer, who will make the determination and whose determination will be binding on the parties. Each party will pay its own appointed architect /engineer and be responsible for one -half of the fees of the third architect /engineer. The Village acknowledges and agrees that the construction of improvements and the opening of retail establishments for business on the outparcels is not part of the Project for purposes of this 0 (i.e., outparcel improvements construction need not be substantially completed before escrow funds are to be released). Section S: Maximum Pavment to Owner. A. The maximum payment of Incremental Sales Tax from the Village to the Owner shall be $5,500,000. When and if Owner shall have received $5,500,000 in total, the Term of this Agreement shall expire and Owner shall be entitled to no additional payment. If the term of this Agreement expires prior to the time Owner receives a total of $5,500,000, the Village shall have no further obligation to make any additional Incremental Sales Tax payment to Owner. There is no interest accruing on this obligation. B. This is a limited obligation of the Village. The Village's obligation to make payment is limited solely and exclusively from the proceeds of Incremental Sales Tax actually received by the Village. This is not to be construed as a full -faith and credit or general obligation of the Village for any purpose. 520515.v9: 100601/010 10 Section 9: Necessity for Continuation of TGI Operation. The Village enters into this Agreement to provide Owner with an economic incentive, based on the high standard of creditworthiness and financial strength of Owner and the ability of the Project in general and the TGI Store in particular to strengthen the commercial base of the Village and increase tax revenues in the Village. The Village is also entering into this Agreement based on Owner's assurance that Owner has a ground lease for at least twenty (20) years with Sears. Accordingly, in the event that business ceases to be conducted from the TGI Store premises by Sears or any replacement tenant for any reason (other than temporary store closings due to casualty or other act of God, condemnation or other governmental action, or to remodel the TGI Store premises to accommodate a change in use following a subletting or assignment), whether voluntarily or involuntarily, and if the TGI Store remains closed for two years after the date of closing, then, except as provided below, after the expiration of such two year period the Village shall have no further obligation to pay Owner for any Incremental Sales Tax generated after such period, and this Agreement shall terminate. However, if Sears or a replacement retailer re -opens for business in substantially the entire TGI Store premises during such two year period, this Agreement and the Village's payment obligations shall continue in full force and effect. Any such replacement retailer must have an expectation of a level of sales tax generation and a standard of creditworthiness reasonably acceptable to the Village. The Village specifically acknowledges that Sears will have certain rights to assign its Lease and /or sublease the TGI Store, and that exercise of such rights in and of itself will not result in termination of this Agreement. In the event the TGI Store is closed as a result of fire, a natural disaster, or other casualty beyond the reasonable control of Owner, then the obligations of this Agreement shall remain in effect unless and until the 520515.v9: 100601/010 11 earlier of (a) Owner's determination that TGI Store will not reopen; or (b) the passage of two years from the date of closure. Section 10: Owner Representations. A. Owner represents as follows: (i) That the Project requires economic assistance from the Village, and that but for the economic assistance to be given by the Village, the Project as contemplated would not be economically viable. (ii) That the Project improvements shall be constructed and fully completed in a good and workmanlike manner substantially in accordance with the approved final development plans, as well as all applicable laws, rules and regulations of the Village, County of Cook, State of Illinois, and the United States.. (iii) That the Owner does not anticipate requesting any further economic assistance or incentives from the Village during the term of this Agreement. Section 11: Defaults. A. The occurrence of any one of the following shall constitute a default by Owner under this Agreement: (i) Failure to comply with any term provision or condition of this Agreement within the times herein specified, where such failure is not cured within the cure period provided for in 0. (ii) In the event of any material breach of any material representation or warranty of the Owner contained herein, where such breach is not cured within the cure period provided for in 0. 520515.v9: 100601/010 12 (iii) Prior to substantial completion of the Project, the Owner shall: (i) become insolvent; and (ii) be unable, or admits in writing its inability to pay, its debts as they mature; or (iii) make a general assignment for the benefit of creditors or to an agent authorized to liquidate any: substantial amount of its or their property; or (iv) be adjudicated a bankrupt; or (v) file a petition in bankruptcy or to effect a plan or other arrangement with creditors; or (vi) file an answer to a creditors' petition (admitting the material allegations thereof) for an adjudication of bankruptcy or to effect a plan or other arrangement with creditors; or (vii) apply to a court for the appointment of a receiver for any asset; or (viii) have a receiver or similar official appointed for any of its assets, or, if such receiver or similar official is appointed without the consent of the Owner and such appointment shall not be discharged within sixty (60) days after his appointment or the Owner has not bonded against such receivership or appointment; or (ix) a petition described in (v) is filed against the Owner and remains undismissed for a period of sixty (60) consecutive days, unless the same has been bonded. B. Upon the occurrence of a default by the Owner as hereinabove set forth, the Village shall be relieved of any and all of its obligations arising pursuant to this Agreement and such obligations on the part of the Village shall be immediately canceled and without any force or effect, except with respect to the obligation to pay Incremental Sales Tax amounts accrued up to the date of termination. 520515.v9: 100601/010 13 Section 12: Notices. All notices and requests required pursuant to this Agreement shall be sent by certified mail as follows: To the Owner: Gateway Fairview, Inc. c/o Lend Lease Real Estate Investments, Inc. 455 N. Cityfront Plaza Dr. Suite 3200 Chicago, IL, 60611 Attn: William J. Horvath With a copy to: Gateway Fairview, Inc. Gateway Plaza 300 N. Lake Avenue Pasadena, CA 91101 -4199 Attn: Chief Counsel With a copy to: D'Ancona & Pflaum LLC 111 East Wacker Drive Suite 2800 Chicago, Illinois 60601 Attn: Lawrence J. Moss And with a copy to: Sears Roebuck & Co. 3333 Beverly Road B2 -094A Hoffman Estates, Illinois 60179 Attn: Susan Russell To the Village: Village of Deerfield 850 Waukegan Road Deerfield, Illinois 60015 Attn: Village Manager With a copy to: Rosenthal, Murphey, Coblentz & Janega 30 North LaSalle Street Chicago, Illinois 60602 Attn: Peter D. Coblentz, Esq. or at such other addresses as the parties may indicate in writing to the other either by personal delivery or by certified or registered mail, return receipt requested, with proof of delivery thereof. 520515.x9: 100601/010 14 Section 13: Law Governing. This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois. Section 14: Assignments. Owner shall not assign its rights and obligations under this Agreement to any person or entity (other than an affiliated entity of Owner) without the prior written consent of the Village, which consent will not be unreasonably withheld, provided, however, that the Owner may, without the requirement of consent of (but with notice to) the Village, assign its rights and obligations under this Agreement to any successor owner of the Center, and may collateral assign such rights to an institutional lender providing mortgage financing for the Center. Section 15: Time. Time is of the essence under this Agreement and all time limits set forth are mandatory and cannot be waived except by a lawfully authorized and executed written waiver by the party excusing such timely performance, except for delays caused by force Majeure. Section 16: Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Village and the Owner and their respective successors and assigns. Section 17: Limitation of Liability. No recourse under or upon any obligation, covenant or agreement of this Agreement or for any claim based thereon or otherwise in respect thereof shall be had against the Village, it officers, agents and employees, in any amount in excess of any specific sum agreed by the Village to be paid to the Owner hereunder (including amounts payable to Owner under 0, if any), subject to the terms and conditions herein, and no liability, right or claim at law or in equity shall attach to or shall be incurred by the Village, its officers, agents and employees in excess of such amounts and all and any such rights or claims of the Owner against the Village, its officers, agents and employees are hereby expressly waived and released as a condition of an as consideration for the execution of this Agreement by the Village. 520515.v9: 100601/010 15 Section 18: Legal and Other Fees and Expenses. A. In the event that any third party or parties institute any legal proceedings against the Owner, Sears and /or the Village which relate to the terms of this Agreement, the Owner, on notice from the Village, shall assume, fully and vigorously, the entire defense of such lawsuit and all expenses, provided, however: (i) Owner shall not make any settlement or compromise of the lawsuit, or fail to pursue any available avenue of appeal of any adverse judgment, without the approval of the Village; and, (ii) if the Village, in its sole discretion, determines that there is, or may be, a conflict of interest between Village and Owner, or an issue of importance to the Village having a potentially substantial adverse effect on the Village, then the Village shall have the option of being represented by its own legal counsel. In the event the Village exercises such option, Owner shall reimburse the Village for any expenses, including but not limited to court costs, reasonable attorneys' fees, witness fees and other expenses of litigation incurred by the Village in connection therewith. B. In the event either party institutes legal proceedings against the other for violation of this Agreement, the court having jurisdiction thereof shall determine and include in its judgment against the non - prevailing party all expenses of such legal proceedings incurred by the prevailing party, including court costs, reasonable attorneys' fees and witness fees incurred by the prevailing party in connection therewith. Section 19: No Waiver or Relinquishment of Right to Enforce Agreement. Failure of any party to this Agreement to insist upon the strict and prompt performance of the terms, covenants, agreements, and conditions herein contained, or any of them, upon any other party imposed, shall not constitute or be construed as a waiver or relinquishment of any party's right 520515.v9: 100601/010 16 thereafter to enforce any such term, covenant, agreement or condition, but the same shall continue in full force and effect. Section 20: Village Approval or Direction. Where Village approval or direction is required by this Agreement, such approval or direction means the approval or direction of the Corporate Authorities of the Village, unless otherwise expressly provided or required by law, and any such approval may be required to be given only after and if all requirements for granting such approval have been met, unless such requirements are inconsistent with this Agreement. Section 21: Section Headings and Subheadings. All section headings or other headings in this Agreement are for general aid of the reader and shall not limit the plain meaning or application of any of the provisions thereunder whether covered or relevant to such heading or not. Section 22: Authorization to Execute. The agents of the Owner who have executed this Agreement warrant that they respectively have been lawfully authorized by the Owner to execute this Agreement on behalf of the Owner. The Village President and Village Clerk hereby warrant that they have been lawfully authorized by the Village Board to execute this Agreement. The Owner and the Village shall deliver, upon request to each other, copies of all articles of incorporation, by -laws, minutes and other evidence of the authority to so execute this Agreement on behalf of the respective parties. Section 23: Amendment. This Agreement sets forth all the promises, inducements, agreements, conditions and understandings between the Owner and the Village relative to the subject matter hereof, and there are no promises, agreements, conditions or understandings, either oral or written, expressed or implied, between them, other than are herein set forth. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the 520515.v9: 100601/010 17 parties hereto unless authorized in accordance with law and reduced in writing and signed by them. Section 24: Curing Default. In the event of any alleged default under or violation of this Agreement, the party not in default or violation shall serve written notice upon the party or parties in default or violation, which notice shall be in writing and shall specify the particular violation or default. The parties hereto reserve the right to cure any violation of this Agreement or default by any of them hereunder within sixty (60) days from written notice of such default; provided, however, that if such default or violation is not reasonably susceptible to cure within such sixty (60) day period, the Owner or parties shall have a longer period of time as is reasonably necessary, so long a s the Owner is acting with due diligence to attempt to cure such default or violation. If such default is so cured to the reasonable satisfaction of the parties hereto within said sixty (60) day period, or within a reasonable cure period as hereinabove defined, all the terms and conditions of this Agreement shall remain in full force and effect as if no such violation occurred. Any obligation of the Village to make payments hereunder during any default period shall be stayed. Furthermore, any period of default shall not extend the time limits set forth for payments hereunder. Section 25: Conflict Between the Text and Exhibits. In the event of a conflict in the provisions of the text of this Agreement and the exhibits attached hereto, the text of the Agreement shall control and govern. Section 26: Severabilitv. If any provision of this Agreement is hold invalid by a court of competent jurisdiction or in the event ,such a court shall determine that the Village does not have the power to perform any such provision, such provision shall be deemed to be excised here from and the invalidity thereof shall not affect any of the other provisions contained herein, and such 520515.v9: 100601/010 18 judgment or decree shall relieve the Village from performance under such invalid provision of this Agreement; provided however, if the judgment or decree relieves the Village of its monetary obligations under 0 of this Agreement, then the Agreement shall be terminated. If the Village is relieved only partially of its monetary obligations hereunder, Owner shall remain bound by this Agreement. Section 27: Expiration and Termination. When all funds pursuant to this Agreement have been paid or upon the expiration of the term hereof, the Agreement shall terminate. Section 28: Recording of Agreement. This Agreement or a Memorandum hereof shall be recorded with the Recorder of Deeds of Cook County, Illinois, at the expense of the Owner. Section 29: Execution of Agreement. This Agreement shall be signed last by the Village and the Village President shall affix the date on which he signs this Agreement on Page 1 hereof, which date shall be the effective of this Agreement. This Agreement may be executed in two or more counterparts, each of which taken together, shall constitute one and the same instrument. IN WITNESS WBEREOF, the parties hereto havesset their hands and seals as of the date and year first written above. An Illinois,unici VilAge Clerk 520515.v9: 100601/010 19 GATEWAY FAIRVIEW, INC., A California Corporation By: Its: ATTEST: 520515.v9: 100601/010 20 EXHIBIT A Center Legal Description TRACT A: THAT PART OF THE NORTHEAST 1/4 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:. BEGINNING AT THE INTERSECTION OF THE NORTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION 4 AND THE CENTER LINE OF WAUKEGAN ROAD; THENCE WEST ON THE NORTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION 4, 793.80 FEET, SAID POINT BEING ON THE EASTERLY LINE EXTENDED NORTHERLY OF DOWNEY'S COUNTRY HOME ADDITION TO DEERFIELD, A SUBDIVISION OF PART OF THE NORTH 1/2 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN; THENCE SOUTHERLY ON THE EASTERLY LINE OF SAID DOWNEY'S COUNTRY HOME ADDITION TO DEERFIELD, 1174 FEET. TO THE SOUTHEASTERLY'CORNER OF SAID SUBDIVISION; THENCE EAST PARALLEL TO THE NORTH LINE OF THE NORTHEAST 1/4 OF SAID SECTION 4, 830.09 FEET TO THE CENTER OF WAUKEGAN ROAD; THENCE NORTHERLY ON THE CENTER LINE OF WAUKEGAN ROAD 1190.4 FEET TO THE POINT OF BEGINNING, (EXCEPTING FROM THE ABOVE TRACT OF LAND THE NORTH 50 FEET AND THE EASTERLY 50 FEET THEREOF DEDICATED FOR PUBLIC HIGHWAY), IN COOK COUNTY, ILLINOIS. TRACT B: THAT PART OF THE NORTH 1/2 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EASTERLY AND NORTHERLY OF THE NORTHERN ILLINOIS TOLL HIGHWAY DESCRIBED AS: COMMENCING AT THE POINT OF INTERSECTION OF ALINE 1576 FEET NORTH OF AND PARALLEL WITH THE EAST AND WEST QUARTER SECTION LINE OF SAID SECTION 4, WITH A LINE 33 FEET WESTERLY OF (MEASURED PERPENDICULARLY) AND PARALLEL WITH THE CENTER LINE (AS OCCUPIED) OF WAUKEGAN ROAD (FORMERLY STATE ROAD), THENCE WEST ALONG SAID LINE 1576 FEET NORTH AND PARALLEL WITH SAID QUARTER SECTION LINE 1622.35 FEET TO ITS POINT OF INTERSECTION WITH THE EASTERLY RIGHT OF WAY LINE OF THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD; THENCE SOUTH 25 DEGREES 13 MINUTES 30 SECONDS EAST ALONG SAID EASTERLY RIGHT OF WAY LINE 364.88 FEET TO ITS POINT OF INTERSECTION WITH THE NORTHEASTERLY RIGHT OF WAY LINE OF SAID TOLL ROAD; THENCE SOUTH 59 DEGREES 08 MINUTES 30 SECONDS EAST ALONG THE NORTHEASTERLY LINE OF SAID TOLL ROAD 737.445 FEET; THENCE NORTH 64 DEGREES 46 MINUTES 30 SECONDS EAST 433.887 FEET; THENCE NORTH 25 DEGREES 13 MINUTES 30 SECONDS WEST, 75.00 FEET; THENCE NORTH 64 DEGREES 46 MINUTES 30 SECONDS EAST, 629.232 FEET TO ITS POINT OF INTERSECTION WITH SAID LINE 33 FEET WESTERLY OF AND PARALLEL WITH THE CENTER LINE OF WAUKEGAN ROAD; THENCE NORTH 27 DEGREES 07 MINUTES 05 SECONDS WEST ALONG SAID PARALLEL LINE 210.56 FEET TO THE POINT OF 520515.v9: 100601/010 BEGINNING, TOGETHER WITH THAT PART, IF ANY, OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: A STRIP OF LAND LYING BETWEEN THE EAST LINE OF THE CHICAGO, MILWAUKEE AND ST. PAUL RAILROAD RIGHT OF WAY AND A LINE 33 FEET WESTERLY OF (MEASURED PERPENDICULARLY) AND PARALLEL WITH THE CENTER LINE (AS OCCUPIED) OF WAUKEGAN ROAD (FORMERLY STATE ROAD) NORTH OF A LINE 1576 FEET NORTH OF AND PARALLEL WITH THE EAST AND WEST QUARTER SECTION LINE OF SAID SECTION 4, AND SOUTH OF THE SOUTH LINE OF DOWNEY'S COOK COUNTY HOME ADDITION TO DEERFIELD AND SAID SOUTH LINE EXTENDED EASTERLY, A SUBDIVISION OF PART OF THE NORTH 1/2 OF SAID SECTION 4, (EXCEPT THAT PART OF THE NORTH 1/2 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EASTERLY AND NORTHERLY OF THE NORTHERN ILLINOIS TOLL HIGHWAY, DESCRIBED AS FOLLOWS: COMMENCING AT THE POINT OF INTERSECTION OF A LINE 1576 FEET NORTH OF AND PARALLEL WITH THE EAST AND WEST QUARTER SECTION LINE OF SAID SECTION 4 WITH A LINE 33 FEET WESTERLY OF AND PARALLEL WITH THE CENTER LINE (AS OCCUPIED) OF WAUKEGAN ROAD(FORMERLY STATE ROAD); THENCE SOUTH 27 DEGREES 07 MINUTES 5 SECONDS EAST ALONG SAID PARALLEL LINE 33 FEET WESTERLY OF SAID CENTER LINE 210.56 FEET; THENCE SOUTH 64 DEGREES 46 MINUTES 30 SECONDS WEST 629.232 FEET; THENCE SOUTH 25 DEGREES 13 MINUTES 30 SECONDS EAST 75.00 FEET FOR A POINT OF BEGINNING OF THE PARCEL OF LAND DESCRIBED HEREBY; THENCE SOUTH 64 DEGREES 46 MINUTES 30 SECONDS WEST 433.887 FEET TO A POINT OF INTERSECTION WITH THE NORTHEASTERLY LINE OF SAID TOLL HIGHWAY SAID POINT BEING 737.445 FEET SOUTHEASTERLY OF (AS MEASURED ALONG SAID NORTHEASTERLY LINE) ITS POINT OF INTERSECTION WITH THE EASTERLY RIGHT OF WAY LINE OF THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD; THENCE NORTH 59 DEGREES 08 MINUTES 30 SECONDS WEST IN SAID NORTHEASTERLY LINE 13.773 FEET; THENCE NORTH 64 DEGREES 46 MINUTES 30 SECONDS EAST 441.573 FEET; THENCE SOUTH 25 DEGREES 13 MINUTES 30 SECONDS EAST 11.43 FEET TO THE POINT OF BEGINNING), IN COOK COUNTY, ILLINOIS. TRACT C: PARCEL 1: THAT PART OF THE NORTH 1/2 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EASTERLY AND NORTHERLY OF THE NORTHERN ILLINOIS TOLL HIGHWAY DESCRIBED AS FOLLOWS: COMMENCING AT THE POINT OF INTERSECTION OF A LINE 1576 FEET NORTH OF AND PARALLEL WITH THE EAST AND WEST QUARTER SECTION LINE OF SAID SECTION 4 WITH A LINE 33 FEET WESTERLY OF AND PARALLEL WITH THE CENTER LINE (AS OCCUPIED) OF WAUKEGAN ROAD(FORMERLY STATE ROAD); THENCE SOUTH 27 DEGREES 07 MINUTES 5 SECONDS EAST ALONG SAID PARALLEL LINE 33 FEET WESTERLY OF SAID CENTER LINE 210.56 FEET; THENCE SOUTH 64 DEGREES 46 MINUTES 30 SECONDS WEST 629.232 FEET; THENCE SOUTH 25 DEGREES 13 MINUTES 30 SECONDS EAST 75.00 FEET FOR A POINT OF 520515.v9: 100601/010 .22 BEGINNING OF THE PARCEL OF LAND DESCRIBED. HEREBY; THENCE SOUTH 64 DEGREES 46 MINUTES 30 SECONDS WEST 433.887 FEET TO A POINT OF INTERSECTION WITH THE NORTHEASTERLY LINE OF SAID TOLL HIGHWAY SAID POINT BEING 737.445 FEET SOUTHEASTERLY OF (AS MEASURED ALONG SAID NORTHEASTERLY LINE) ITS POINT OF INTERSECTION WITH THE EASTERLY RIGHT OF WAY LINE OF THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD; THENCE NORTH 59 DEGREES 08 NIlNUTES 30 SECONDS WEST IN SAID NORTHEASTERLY LINE 13.773 FEET; THENCE NORTH 64 DEGREES 46 NIINUTES 30 SECONDS EAST 441.573 FEET; THENCE SOUTH 25 DEGREES 13 MINUTES 30 SECONDS EAST 11.43 FEET TO THE POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS. PARCEL 2: THAT PART OF THE NORTH 1/2 OF SECTION 4, TOWNSHIP 42 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EASTERLY AND NORTHERLY OF THE NORTHERN ILLINOIS TOLL HIGHWAY DESCRIBED AS: COMMENCING AT THE POINT OF INTERSECTION OF A LINE 1576 FEET NORTH OF AND PARALLEL WITH THE EAST AND WEST QUARTER SECTION LINE OF SAID SECTION 4 WITH A LINE 33 FEET WESTERLY OF AND PARALLEL WITH THE CENTER LINE (AS OCCUPIED) OF WAUKEGAN ROAD(FORMERLY STATE ROAD); THENCE SOUTH 27 DEGREES 071VIINUTES 05 SECONDS EAST ALONG SAID PARALLEL LINE 33 FEET WESTERLY OF SAID CENTER LINE 210.56 FEET FOR A POINT OF BEGINNING OF THE PARCEL OF LAND DESCRIBED HEREBY; CONTINUING THENCE SOUTH 27 DEGREES 07 MINUTES 05 SECONDS EAST ALONG SAID PARALLEL LINE 816.02 FEET TO A POINT 398.48 FEET SOUTHEASTERLY OF THE INTERSECTION OF THE LAST SAID PARALLEL LINE WITH A LINE 559.06 FEET SOUTH OF AND PARALLEL WITH SAID LINE 1576 FEET NORTH OF AND PARALLEL WITH SAID QUARTER SECTION LINE; THENCE SOUTH 85 DEGREES 48 MINUTES 35 SECONDS WEST 855.62 FEET TO A POINT OF INTERSECTION WITH THE NORTHEASTERLY RIGHT OF WAY LINE OF SAID TOLL ROAD, SAID POINT BEING 813.39 FEET SOUTHEASTERLY OF (MEASURED IN THE SAID NORTHEASTERLY LINE) ITS POINT OF INTERSECTION WITH SAID LINE 559.06 FEET SOUTH OF SAID LINE 1576 FEET NORTH OF SAID QUARTER SECTION LINE; THENCE NORTH 59 DEGREES 08 MINUTES 30 SECONDS WEST IN SAID NORTHEASTERLY LINE 522.355 FEET, TO A POINT 737.445 FEET SOUTHEASTERLY (AS MEASURED ALONG SAID LINE) FROM ITS INTERSECTION WITH THE EASTERLY RIGHT OF WAY LINE OF THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD: THENCE NORTH 64 DEGREES 46 MINUTES 30 SECONDS EAST 433.887 FEET; THENCE NORTH 25 DEGREES 13 MINUTES 30 SECONDS WEST 75 FEET; THENCE NORTH 64 DEGREES 46 MINUTES 30 SECONDS EAST 629.232 FEET TO THE POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS. 520515.v9: 100601/010 23 EXHIBIT B Site Plan 520515.v9: 100601/010