Stradling Draft of 5/7/22
4825-3218-1203v34/024036-0079
PROJECT IMPLEMENTATION AGREEMENT
by and among
THE CITY OF CHULA VISTA,
a California charter city and municipal corporation,
THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT,
a financing district,
THE SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation,
THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY a joint exercise of powers entity,
and
RIDA CHULA VISTA, LLC
a Delaware limited liability company
Dated as of __________ 1, 2022
Relating to
$_______________________
CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY
REVENUE BONDS
(CHULA VISTA BAYFRONT CONVENTION CENTER)
SERIES 2022A (FEDERALLY TAXABLE)
$_______________________
CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY
REVENUE BONDS
(CHULA VISTA BAYFRONT PHASE 1A INFRASTRUCTURE IMPROVEMENTS) SERIES 2022B (TAX-EXEMPT)
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ARTICLE I
DEFINITIONS
1.1. Definitions Addendum ......................... ..................................................................................... 5
ARTICLE II
SUBJECT OF THE AGREEMENT GENERALLY
2.1. Developer’s Phase 1A Infrastructure Improvemen ts................................................................. 5
2.2. Convention Center ............................ ......................................................................................... 8
2.3. Sweetwater Park .............................. .......................................................................................... 9
ARTICLE III
DURATION OF AGREEMENT
3.1. Term of Agreement ............................ ..................................................................................... 14
ARTICLE IV
PROJECT COSTS
4.1. Phase 1A Infrastructure Improvements ......... .......................................................................... 14
4.2. Convention Center ............................ ....................................................................................... 15
4.3. Cost Reporting ............................... .......................................................................................... 15
ARTICLE V
CONSTRUCTION OF THE PROJECT AND THE REMAINING
PHASE 1A INFRASTRUCTURE IMPROVEMENTS
5.1. Construction of the Project .................. .................................................................................... 16
5.2. Reserved ..................................... ............................................................................................. 21
5.3. Reserved ..................................... ............................................................................................. 21
5.4. Project Schedule and Schedule Updates ........ .......................................................................... 22
5.5. Unavoidable Delay ............................ ...................................................................................... 22
5.6. Completion Guaranty .......................... .................................................................................... 25
5.7. Entitlements ................................. ............................................................................................ 25
5.8. Energy Requirements .......................... .................................................................................... 26
ARTICLE VI
PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY
6.1. Award of Sole Source Prime Contract .......... .......................................................................... 27
6.2. Subcontractor Bid and Award Process for the De veloper’s Phase 1A Infrastructure Improvements .......................................................................................................................... 27
6.3. Bid and Award Process for the Remaining Phase 1A Infrastructure Improvements .............. 28
6.4. The Convention Center as a Special Purpose Pro ject.............................................................. 28
6.5. Procurement of Alterations ................... ................................................................................... 28
6.6. Bid Opening and Award ........................ .................................................................................. 28
6.7. Authority Procurement Policy Acknowledgement . ................................................................. 29
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ARTICLE VII
DESIGN AND CONSTRUCTION STANDARDS
7.1. Standard of Care ............................. ......................................................................................... 29
7.2. Compliance with Laws ......................... ................................................................................... 29
7.3. Compliance with Design and Construction Standa rds; Chula Vista Building Code ............... 32
7.4. Construction Period .......................... ....................................................................................... 33
7.5. Authority Approval Not a Waiver of Obligations ................................................................... 34
ARTICLE VIII
CONSTRUCTION
8.1. Site Safety, Security ........................ ........................................................................................ 34
8.2. Public Right-of-Way .......................... ..................................................................................... 35
8.3. Traffic Control .............................. ........................................................................................... 35
8.4. Maintenance .................................. .......................................................................................... 35
8.5. Construction Cooperation ..................... ................................................................................... 35
ARTICLE IX
PAYMENT OF PROJECT COSTS
9.1. Developer’s Phase 1A Infrastructure Improvemen ts Costs ..................................................... 36
9.2. Convention Center Costs ...................... ................................................................................... 43
9.3. Investment of Amounts in the Construction Fund .................................................................. 52
9.4. Calculation of Specified Default Rate ........ ............................................................................. 52
9.5. Redemption of the Authority Bonds ............ ............................................................................ 52
9.6. Survival ..................................... .............................................................................................. 53
ARTICLE X
ACCEPTANCE OF IMPROVEMENTS
10.1. Developer’s Phase 1A Infrastructure Improveme nts............................................................... 53
10.2. Convention Center ........................... ........................................................................................ 54
10.3. Sweetwater Park ............................. ......................................................................................... 55
ARTICLE XI
WARRANTIES
11.1. Enforcement of Warranties ................... ................................................................................... 55
11.2. Term of Warranties........................... ....................................................................................... 56
11.3. Additional Warranties ....................... ...................................................................................... 56
ARTICLE XII
DEFECTIVE WORK
12.1. Correction, Removal, or Replacement ......... ........................................................................... 56
12.2. Extension of Warranty ....................... ...................................................................................... 56
12.3. Right of Authority to Correct ............... ................................................................................... 56
12.4. No Limitation on Other Remedies ............. ............................................................................. 57
12.5. Disputes .................................... ............................................................................................... 57
12.6. Applicability ............................... ............................................................................................. 57
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ARTICLE XIII
SECURITY FOR CONSTRUCTION
13.1. Bonds ....................................... ................................................................................................ 57
13.2. Insolvency or Bankruptcy .................... .................................................................................... 58
13.3. Calling a Bond .............................. ........................................................................................... 58
ARTICLE XIV
INDEMNITY AND DUTY TO DEFEND
14.1. General Indemnity ........................... ........................................................................................ 59
14.2. Damage to Other Properties .................. .................................................................................. 60
14.3. Hazardous Materials Indemnity ............... ............................................................................... 60
14.4. Illegal Discharge to Storm Drains ........... ................................................................................ 62
14.5. Implementation of Authority Resolution 2020-0 02 ................................................................ 62
14.6. Costs of Defense and Award .................. ................................................................................. 63
14.7. Insurance Proceeds .......................... ........................................................................................ 63
14.8. Declarations ................................ ............................................................................................. 63
14.9. Survival .................................... ............................................................................................... 63
ARTICLE XV
INSURANCE REQUIREMENTS
15.1. Insurance Requirements ...................... .................................................................................... 63
15.2. Forms and Amounts of Coverage ............... ............................................................................. 64
15.3. General Requirements ........................ ..................................................................................... 66
15.4. Waiver of Subrogation ....................... ..................................................................................... 67
15.5. Authority Obligation to Maintain Insurance .. ......................................................................... 68
ARTICLE XVI
RECORDS AND AUDITS
16.1. Retention of Project Records ................ ................................................................................... 68
16.2. Audit of Records............................. ......................................................................................... 68
ARTICLE XVII
TITLE TO ALTERATIONS AND IMPROVEMENTS
17.1. Title to Project ............................ ............................................................................................. 69
17.2. Survival .................................... ............................................................................................... 69
ARTICLE XVIII
LIENS
18.1. No Right to Bind Port District .............. ................................................................................... 69
18.2. Notice of Non-Responsibility ................ .................................................................................. 70
18.3. Mechanics’ Liens............................. ........................................................................................ 70
18.4. Contest of Lien ............................. ........................................................................................... 70
18.5. Port District’s Right to Pay................. ..................................................................................... 70
18.6. Notice of Liens ............................. ........................................................................................... 71
18.7. Right of Entry .............................. ............................................................................................ 71
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ARTICLE XIX
TAXES
19.1. Reporting ................................... .............................................................................................. 71
19.2. Tax Claims .................................. ............................................................................................ 72
19.3. Property Expenses ........................... ........................................................................................ 73
19.4. Property Tax Contest Cooperation ............ .............................................................................. 74
ARTICLE XX
EQUAL EMPLOYMENT OPPORTUNITY/NONDISCRIMINATION AND OFAC
20.1. Nondiscrimination ........................... ........................................................................................ 75
20.2. Compliance with Employment and Labor Requirem ents........................................................ 75
20.3. OFAC Compliance ............................. ..................................................................................... 75
ARTICLE XXI
EVENTS OF DEFAULT AND REMEDIES
21.1. Events of Default ........................... .......................................................................................... 76
21.2. Remedies for Events of Default .............. ................................................................................ 77
21.3. Sweetwater Park ............................. ......................................................................................... 79
21.4. Reserved .................................... .............................................................................................. 79
21.5. Authority Events of Default ................. ................................................................................... 80
21.6. Remedies for Authority Events of Default (Ren t Offset) ........................................................ 80
21.7. Payment Sources for Convention Center ....... ......................................................................... 80
ARTICLE XXII
ASSIGNMENT PARTICIPATION FEE
22.1. Assignment Participation Fee ................ .................................................................................. 81
22.2. Assignment and Collateral Assignment ........ .......................................................................... 83
22.3. Non-Disturbance Agreement ................... ................................................................................ 84
ARTICLE XXIII
NONDISTURBANCE
23.1. Port District Nondisturbance of Lessee and Su blessee Rights under the Convention Center Leases........................................................................................................................... 84
23.2. Authority Nondisturbance of Lessee and Subles see Rights under the Convention Center Leases ...................................................................................................................................... 84
ARTICLE XXIV
Operation of the Site and the Convention Center
24.1. Approved Agreements ......................... .................................................................................... 85
24.2. Reservations ................................ ............................................................................................ 85
24.3. Cooperation in connection with Condemnation . ..................................................................... 87
ARTICLE XXV
“AS-IS” LEASE AND WAIVERS
25.1. Developer’s Acknowledgment .................. .............................................................................. 87
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25.2. Only Express Written Agreements Binding ..... ....................................................................... 88
25.3. As-Is ....................................... ................................................................................................. 88
25.4. Waivers, Disclaimers and Indemnity .......... ............................................................................ 88
25.5. Survival .................................... ............................................................................................... 90
ARTICLE XXVI
MISCELLANEOUS PROVISIONS
26.1. Notices ..................................... ................................................................................................ 90
26.2. Captions .................................... ............................................................................................... 92
26.3. No Merger ................................... ............................................................................................ 92
26.4. Recording ................................... ............................................................................................. 92
26.5. Port District Transfer ...................... ......................................................................................... 92
26.6. Time of Essence ............................. ......................................................................................... 93
26.7. Partial Invalidity .......................... ............................................................................................ 93
26.8. Entire Agreement............................. ........................................................................................ 93
26.9. Joint and Several............................ .......................................................................................... 93
26.10. Developer’s Authority ...................... ....................................................................................... 93
26.11. Interaction with Sewer Agreement ........... ............................................................................... 93
26.12. Resolution of Specified Disputes ........... ................................................................................. 94
26.13. Attorneys’ Fees ............................ ............................................................................................ 97
26.14. Transaction Costs .......................... .......................................................................................... 97
26.15. Provisions Regarding Authority Operations .. ......................................................................... 98
26.16. Replacement Trustees ....................... ....................................................................................... 98
26.17. Effect of Section 365(h)(1) Election ....... ................................................................................ 98
26.18. Financial Information Regarding Continuous O perations....................................................... 99
26.19. Governing Law .............................. .......................................................................................... 99
26.20. Modification ............................... ............................................................................................. 99
26.21. Counterparts ............................... ............................................................................................. 99
26.22. Drafting Presumption; Review Standard ...... ........................................................................... 99
26.23. Administrative Claims ...................... ....................................................................................... 99
26.24. Non-liability of Public Entity Officials and Employees ........................................................ 100
26.25. Authority Executive Director; Authority Appr ovals and Actions ......................................... 100
26.26. Further Assurances ......................... ....................................................................................... 100
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LIST OF EXHIBITS
EXHIBIT A-1 LEGAL DESCRIPTION OF THE SITE ......... ............................................... A-1-1 EXHIBIT A-2 LEGAL DESCRIPTION OF THE GROUND LEASE P ROPERTY ............ A-2-1 EXHIBIT A-3 LEGAL DESCRIPTION OF THE DEVELOPER’S PH ASE 1A INFRASTRUCTURE IMPROVEMENTS SITE ........................................... A-3-1 EXHIBIT B-1 DEPICTION OF THE SITE ................. ........................................................... B-1-1 EXHIBIT B-2 DEPICTION OF THE GROUND LEASE PROPERTY ................................ B-2-1 EXHIBIT B-3 DEPICTION OF THE DEVELOPER’S PHASE 1A
INFRASTRUCTURE IMPROVEMENTS SITE ............................................ B-3-1 EXHIBIT C-1 SOURCES FOR DEVELOPER’S PHASE 1A INFRAS TRUCTURE IMPROVEMENTS COST.................................................................................. C-1 EXHIBIT C-2 DEVELOPER’S PHASE 1A INFRASTRUCTURE IMP ROVEMENTS BUDGET ............................................................................................................ C-2 EXHIBIT D-1-A REMAINING PHASE 1A INFRASTRUCTURE IMP ROVEMENTS (SWEETWATER PARK) .................................................................................. D-1 EXHIBIT D-1-B SOURCES FOR REMAINING PHASE 1A INFRAS TRUCTURE IMPROVEMENTS (SWEETWATER PARK) .................................................. D-1 EXHIBIT E CONSTRUCTION REQUIREMENTS ............... ............................................... E-1 EXHIBIT F CONVENTION CENTER PLANS ................. ................................................... F-1 EXHIBIT G-1 APPROVED SUBCONTRACTOR BID AND AWARD PR OCESS ........... G-1-1 EXHIBIT G-2 SUBCONTRACTOR BIDS AWARDED PRIOR TO EFF ECTIVE DATE .............................................................................................................. G-2-1 EXHIBIT G-3 APPROVED CONSTRUCTION CONTRACTS ....... ........................................ G-3 EXHIBIT H FORM OF COMPLETION GUARANTY ............. ............................................ H-1 EXHIBIT I OTHER GROUND LEASES ..................... ......................................................... I-1 EXHIBIT J [RESERVED] .............................. ........................................................................ J-1 EXHIBIT K-1 DEVELOPER’S PHASE 1A PAYMENT REQUEST .. ................................. K-1-1 EXHIBIT K-2 FORM OF CONVENTION CENTER PAYMENT REQUE ST .................... K-2-1
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EXHIBIT L SOLE SOURCE SUBCONTRACT AWARD APPROVAL
(DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS) ...... L-1
EXHIBIT M BEST QUALIFIED CONTRACTOR SUBCONTRACT AWA RD
APPROVAL (DEVELOPER’S PHASE 1A INFRASTRUCTURE
IMPROVEMENTS) .......................................................................................... M-1 EXHIBIT N-1 LIST OF APPROVED ARBITRATORS .......... ............................................. N-1-1 EXHIBIT N-2 LIST OF APPROVED MEDIATORS ............ ............................................... N-2-1 EXHIBIT O ENERGY REQUIREMENTS ..................... ....................................................... O-1 EXHIBIT P FORM OF DEVELOPER’S CONVENTION CENTER BUD GET .................. P-1 EXHIBIT Q PORT DISTRICT TRANSFER DOCUMENTS ........ ........................................ Q-1 EXHIBIT R FORM OF MEMORANDUM OF AGREEMENT ......... ................................... R-1 EXHIBIT S APPROVED AGREEMENTS ..................... ...................................................... S-1 EXHIBIT T DISTRICT DOCUMENTS ...................... .......................................................... T-1 EXHIBIT U PRIOR AGREEMENTS ........................ ............................................................. U-1 EXHIBIT V-1 APPROVED DRAWINGS AND SPECIFICATIONS FO R
DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS ..... V-1-1 EXHIBIT V-2 APPROVED DRAWINGS AND SPECIFICATIONS FO R REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS ................................. V-2-1
EXHIBIT W FORM OF EQUAL EMPLOYMENT OPPORTUNITY
CERTIFICATION ............................................................................................. W-1 EXHIBIT X-1 FORM OF EARLY WORK AGREEMENT ......... ........................................ X-1-1 EXHIBIT X-2 REIMBURSEMENT AGREEMENT ............... ............................................. X-2-1 EXHIBIT X-3 SEWER AGREEMENT ...................... .......................................................... X-3-1 EXHIBIT Y HOTEL OPERATOR NON-DISTURBANCE AGREEMENT ......................... Y-1 EXHIBIT Z CONSTRUCTION STANDARDS FLYER ............ ........................................... Z-1 EXHIBIT AA IN-BALANCE CERTIFICATE ................. ..................................................... AA-1
4825-3218-1203v34/024036-0079
PROJECT IMPLEMENTATION AGREEMENT
BY AND AMONG
THE CITY OF CHULA VISTA, THE BAYFRONT PROJECT SPECIAL TAX FINANCING
DISTRICT, THE SAN DIEGO UNIFIED PORT DISTRICT, THE CHULA VISTA
BAYFRONT FACILITIES FINANCING AUTHORITY, AND RIDA CHULA VISTA, LLC This PROJECT IMPLEMENTATION AGREEMENT (“ Agreement ”) is entered into as of ____________ 1, 20__ by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), the Bayfront Project Special Tax Financing Dist rict, a financing district established and existing pursuant to Chula Vista Municipal Code Cha pter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance (the “ Financing District ”), the San Diego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing Authority (the “ Authority ”; and, collectively with the City, the Financing D istrict, and the Port District, the “ Public Entities ” or each separately, a “ Public Entity ”), a joint exercise of powers entity created by the City and the Port District pu rsuant to the Joint Exercise of Powers Act (defined herein below), and RIDA Chula Vista, LLC, a Delawar e limited liability company (together with its permitted successors and assigns, including without limitation any Foreclosure Purchaser, the “Developer ”) (collectively, the “ Parties ” and, individually, a “ Party ”), with reference to the following Recitals:
RECITALS
A. The City and the Port District are parties to th at certain Amended and Restated Joint Exercise of Powers Agreement, dated and effective J uly 25, 2019 1 (the “ JEPA Agreement ”), which amended and restated that certain Joint Exercise of Powers Agreement, dated as of May 1, 2014, by and between the City and the Port District. The JE PA Agreement forms the Authority for the purpose of assisting in the financing and refinanci ng of capital improvement projects of the City and the Port District as permitted under the Articles 1 , 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “ Joint Exercise of Powers Act ”) relating to the Chula Vista Bayfront.
B. Pursuant to a “ Site Lease ” dated as of ____________ 1, 20__ (as amended, ame nded and restated, supplemented, or otherwise modified f rom time to time, the “ Site Lease ”), the Port District has leased to the Authority and the Author ity has leased from Port District certain real property described in Exhibit A-1 and depicted in E xhibit B-1 attached hereto (the “ Site ”), upon which an approximately 275,000 net usable square foot convention center (the “ Convention Center ” and, together with the Site, the “ Facility ”) will be constructed by Developer pursuant to thi s Agreement and operated by Developer pursuant to the Sublease, as described in more detail below.
C. Pursuant to a “ Facility Lease ” dated as of ____________ 1, 20__ (as amended, amended and restated, supplemented or otherwise mod ified from time to time, the “ Facility Lease ”), the Authority has in turn subleased the Site and leased the Convention Center to the City.
D. Pursuant to a “ Sublease Agreement ” dated as of ____________ 1, 20__ (as amended, amended and restated, supplemented or othe rwise modified from time to time, together with any New Sublease (as defined in the Sublease), the “ Sublease ”), the City has in turn subleased
1 Update to include Amendment No. 1, if executed pri or to closing.
2 4825-3218-1203v34/024036-0079
the Facility to Developer. The Site Lease, Facilit y Lease, and Sublease are referred to collectively herein as the “ Convention Center Leases .”
E. Port District and Developer have entered into a ground lease dated as of ____________ 1, 20__ (as amended, amended and resta ted, supplemented or otherwise modified from time to time, the “ Ground Lease ”), pursuant to which the Port District has leased to Developer approximately 19.281 acres of land located in the C ity of Chula Vista, California, described in Exhibit A-2 and depicted in Exhibit B-2 attached he reto (the “ Ground Lease Property ”), together with all improvements currently located on the Grou nd Lease Property. Pursuant to the Ground Lease, the Developer is obligated to construct, ope rate and maintain (or cause to be constructed, operated and maintained) the Resort Hotel (defined herein) and Parking Improvements (defined herein) on the Ground Lease Property.
F. The City, the Port District, the Authority and t he County of San Diego (the “County ”) entered into that certain Chula Vista Bayfront P roject Funding Agreement dated as of December 13, 2019, (the “ County Funding Agreement ”) pursuant to which the County will assist the City, the Port District and the Authority in fi nancing the construction of the Phase 1A Infrastructure Improvements by contributing the Cou nty Funds (defined in the Definitions Addendum) as provided for in the County Funding Agreement.
G. To create a vehicle to generate special tax reve nues initially equal to 5.5% of the transient occupancy revenues collected within the C VBMP (defined below), to pay or reimburse the cost of the Phase 1A Infrastructure Improvements (d efined below) and/or to support payments with respect to the Revenue Bonds (defined below), the C ity Council of the City (the “ City Council ”), took certain actions under and pursuant to the powe rs reserved to the City under Sections 3, 5, and 7 of the Constitution and the Charter of the City, an d enacted Chapter 3.61 of the Chula Vista Municipal Code (“ Chapter 3.61 ”) for the purpose of establishing a procedure for financing certain public and private improvements and maintenance and services to serve development within the boundaries of the Financing District through the es tablishment of the Financing District, the levy and collection of special taxes (the “ Special Tax Revenues ”) therein by the Financing District and the issuance of bonds or other indebtedness of such Fin ancing District secured by such special taxes for the purpose of financing the Convention Center and certain other public improvements, including the Phase 1A Infrastructure Improvements, as described below.
H. On September 10, 2019, the City Council initiate d proceedings pursuant to Chapter 3.61 to establish the Financing District, t o authorize the Financing District to finance the purchase, construction, expansion, improvement, and rehabilitation of the Convention Center and certain other public improvements and certain maint enance and services, to authorize the levy of a special tax pursuant to the amended and restated ra te and method of apportionment thereof to pay for such improvements and services and to declare the n ecessity of the Financing District to incur an indebtedness to contribute to the financing of such improvements.
I. On February 16, 2021, the City Council adopted a resolution declaring its intention and initiating proceedings to make changes to the r ate and method of apportionment of the Financing District to increase the special tax rates to be le vied initially on taxable property in the Financing District, to extend the term of the special tax to June 30, 2086 and to give the City Council the ability to lower the special tax rates in future fiscal years.
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J. The City and the Port District entered into an A mended and Restated Joint Community Facilities Agreement (Chula Vista Bayfron t Project Special Tax Financing District) effective as of February 24, 2020 (as amended, the “ JCFA ”) to set forth some of the essential terms for the development, operation, maintenance, and se rvicing of various improvements within the Chula Vista Bayfront Master Plan Area (the “ CVBMP ”) or outside the CVBMP as further described in the JCFA. Such essential terms included the pri orities for the allocation of the Special Tax Revenues, as such term is defined in the JCFA, and to provide that the Special Tax Revenues dedicated to the Convention Center and the Develope r’s Phase 1A Infrastructure Improvements shall be disbursed pursuant to an agreement between the Port District, the City and/or the Authority, on the one hand, and the Developer, the Project lenders an d/or the Developer’s contractors, on the other hand.
K. On May 20, 2020, the Authority Board adopted its Resolution 2020-007 ratifying the final form of a procurement policy for developer-pe rformed public improvements for the Authority attached as Exhibit A to such resolution (the “ Authority Procurement Policy ”) and ratifying the final form of Authority Resolution 2020-002 in the form presented and attached as Exhibit B to Resolution 2020-007 (the “ Authority Resolution 2020-002 ”) applying the Authority Procurement Policy to the construction of developer-performed public works for the Project.
L. Pursuant to Authority Resolution 2020-002 and in accordance with Procurement Policy Section 2.a., the Authority Board authorized the Developer to proceed with the development and construction of the Developer’s Phase 1A Infras tructure Improvements and the Convention Center subject to the terms, conditions, and obliga tions of the Authority Procurement Policy, Authority Resolution 2020-002, all applicable Proje ct agreements, including this Agreement, and all applicable federal, state, and local laws and regulations.
M. The Authority, the Port District and the City ha ve determined it to be beneficial to have the Financing District finance certain of the Phase 1A Infrastructure Improvements in connection with the construction of the Resort Hote l, Parking Improvements and the Convention Center. To assist in the financing of the Conventio n Center and the Phase 1A Infrastructure Improvements, the Authority has determined to issue its “ Authority Taxable Bonds ” and its “Authority Tax-Exempt Bonds ” (together with bond or other indebtedness incurred to refinance the Authority Taxable Bonds and/or the Authority Tax-Ex empt Bonds, collectively referred to herein as the “ Authority Bonds ”) pursuant to the terms of the “ Authority Indenture ,” as defined herein. The Authority Bonds will be secured in part and be repa id from loan payments made by the Financing District on the “ Loan ,” as defined herein, and any loan payable on a par ity with the Loan, made under the “ Loan Agreement ,” as defined herein, “ Lease Payments ,” as defined herein, payable by the City pursuant to the Facility Lease and payment s to be made by the Port District pursuant to the Port Support Agreement. JPMorgan Chase Bank, Natio nal Association, a banking association organized and existing under the laws of the United States, will serve as administrative agent (in such capacity referred to herein as the “ Administrative Agent ”) for the purchasers of the first series of Authority Bonds, which will be issued on the Clo sing Date under the Bond Purchase Agreement (defined herein).
N. Pursuant to the Sublease and this Agreement, the Developer is required to cause the development and construction of the “ Project ” which consists of the Developer’s Phase 1A Infrastructure Improvements and the Convention Center (as such terms are defined herein).
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O. Certain Laws may require that certain of the Pha se 1A Infrastructure Improvements (as defined herein) be constructed in connection wi th the construction of the Convention Center, the Resort Hotel, and the Parking Improvements.
P. Developer and the Public Entities desire that De veloper construct the Convention Center, and in connection with the construction of the Convention Center, the Resort Hotel, and the Parking Improvements, construct the Developer’s Pha se 1A Infrastructure Improvements on certain real property described in Exhibit A-3 and depicted in Exhibit B-3 attached hereto (the “ Developer’s Phase 1A Infrastructure Improvements Site ”, together with the Site, the “ Project Site ”), as set forth in this Agreement.
Q. City, Authority and Developer have entered into that certain Chula Vista Bayfront Project Phase 1A Early Work Implementation and Righ t of Entry License Agreement, dated as of September 1, 2021 and filed in the Office of the Di strict Clerk as Document No. 73207 (the “ Early Work Agreement ”), a copy of which is attached hereto as Exhibit X -1. The Early Work Agreement provides for the reimbursement of certain costs des cribed therein by the Authority to the Developer.
However, City, Authority and Developer intend that such costs be reimbursed as part of the Developer’s Phase 1A Infrastructure Improvements Co sts payable hereunder to the extent such amounts are not reimbursed under the Early Work Agreement.
R. City and Developer have entered into (i) that ce rtain City of Chula Vista Reimbursement Agreement to Design Specified Bayfron t Infrastructure Improvements, dated as of September 15, 2020 (the “ Reimbursement Agreement ”), a copy of which is attached hereto as Exhibit X-2, and (ii) that certain City of Chula Vi sta Reimbursement Agreement to Construct Specified Bayfront Sewer Improvements, dated as of September 15, 2020 (the “ Sewer Agreement ”), a copy of which is attached hereto as Exhibit X-3. Each of the Reimbursement Agreement and the Sewer Agreement provide for the reimbursement of ce rtain costs described therein by City to Developer, and therefore such costs are excluded fr om the Developer’s Phase 1A Infrastructure Improvements Costs payable hereunder to avoid double counting.
S. The Parties desire to enter into, and Authority has required that Developer enter into, this Agreement to establish the terms and condition s in compliance with the applicable provisions of the Authority Procurement Policy and Authority Reso lution 2020-002 pursuant to which the Developer may develop and construct the Project and obtain payment for all of the eligible costs of developing and constructing the Developer’s Phase 1 A Infrastructure Improvements from proceeds of the Authority Tax-Exempt Bonds and the County Fu nds, reimbursements pursuant to the Sewer Agreement, and credits to the Developer pursuant to the BFDIF Program, which is on file in the office of the City Clerk, and a portion of the over all costs of developing and constructing the Convention Center from the proceeds of the Authorit y Taxable Bonds and certain amounts to be provided by the City and Port District, all as further described herein.
T. The Parties desire to provide for the developmen t and construction of the “Remaining Phase 1A Infrastructure Improvements ” (as defined herein) by the Port District, pursuant to the procurement rules of the Port District.
U. The Parties further desire to set forth certain provisions relating to nondisturbance, indemnification, and other continuing covenants of the Parties relating to the Resort Hotel, Parking Improvements, and Convention Center Project and the Phase IA Infrastructure Improvements which shall remain in effect for the Term hereof.
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AGREEMENT
NOW THEREFORE, in consideration of the above Recita ls, the covenants contained herein, and other good and valuable consideration, the rece ipt and sufficiency of which the Parties hereby acknowledge, the Authority, the Port District, the City, the Financing District and the Developer agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions Addendum. Defined terms used in this A greement and not specifically defined herein shall have the meanings set forth in the Definitions Addendum attached hereto, which is incorporated herein by this reference. Any refe rence in this Agreement to this Agreement or any other agreement is a reference to such agreement as the same may be amended or amended and restated from time to time.
ARTICLE II
SUBJECT OF THE AGREEMENT GENERALLY
All Exhibits attached to this Agreement are incorpo rated into this Agreement by this reference.
2.1. Developer’s Phase 1A Infrastructure Improvements.
2.1.1. Access to the Developer’s Phase 1A Infrastructure Improvements Site. The Developer Parties shall have the non-exclusive righ t to enter upon the Developer’s Phase 1A Infrastructure Improvements Site in connection with the construction and development of the Developer’s Phase 1A Infrastructure Improvements co mmencing on the Commencement Date and ending on the earlier of the following dates: (x) as to each portion of the Developer’s Phase 1A Infrastructure Improvements Site, the date on which the Developer’s Phase 1A Infrastructure Improvements corresponding to such portion of the D eveloper’s Phase 1A Infrastructure Improvements Site is Accepted, (y) the date on whic h this Agreement is terminated, and (z) the date on which this Agreement expires.
2.1.2. Construction of Developer’s Phase 1A Infrastructure Improvements.
Except as expressly provided in this Agreement, Dev eloper shall cause the development of the Developer’s Phase 1A Infrastructure Improvements on the Developer’s Phase 1A Infrastructure Improvements Site substantially in accordance in al l material respects with the Approved Drawings and Specifications for the development of the Devel oper’s Phase 1A Infrastructure Improvements within the timeframe described in Section 5.1, in e ach case, in accordance with all the terms and conditions of this Agreement. For the avoidance of doubt, Harbor Park is not included as part of the Developer’s Phase 1A Infrastructure Improvements.
2.1.3. Complete and Functional Improvements. Developer shall provide complete and functional Developer’s Phase 1A Infrastructure Improvements substantially in accordance in all material respects with the Approved Drawings and Sp ecifications. Neither recommendation of any progress payment, nor any payment by the Authority to Developer under this Agreement, nor any use or occupancy of the Project or any part thereof by the Authority, the City, or the Port District, nor any failure to act, nor any review of a shop drawin g or sample submittal, will constitute an approval
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by any of the Public Entities of work which is not completed by Developer substantially in accordance with the Approved Drawings and Specifica tions. The foregoing shall not limit claims pursuant to Articles XI or XII.
2.1.4. Payment of Developer’s Phase 1A Contract Sum, Reimb ursements under Sewer Agreement, Credits under BFDIF Program, and D eveloper’s Phase 1A Project Administration Fee. In consideration for the Developer’s developm ent and delivery of the Developer’s Phase 1A Infrastructure Improvements as required by this Agr eement, (a) the Authority shall pay the Developer’s Phase 1A Contract Sum to Developer, (b) the City shall provide to Developer a credit towards the amount payable by Developer pursuant to the BFDIF Program, as a condition of developing the Resort Hotel, Parking Improvements, and Convention Center (as applicable), (c) the City shall pay to Developer amounts required to be reimbursed to Developer pursuant to the Sewer Agreement, and (d) the City shall provide payment t o or credit for Developer, as applicable, the amount of the Developer’s Phase 1A Project Administ ration Fee. The Authority acknowledges and agrees that, without limitation, all of the Public Entity’s Estimated Developer’s Phase 1A Infrastructure Improvements Costs identified in Exh ibit C-2 are Developer’s Phase 1A Infrastructure Improvements Costs, except as noted in Exhibit C-2. The Parties acknowledge that concurrent with requesting payment of Developer’s Phase 1A Contract Sum, Developer will identify amounts to be paid pursuant to the Sewer Agreement and City will issue payment for same consistent with the terms of the Sewer Reimbursement Agreement. Furthe r, Developer will identify BFDIF credit amounts requested with each payment request. City shall incrementally accrue BFDIF credits toward Developer’s ultimate BFDIF obligation, subject to t rue-up and final calculation of credits earned and BFDIF amounts to be paid to City. City shall pay ( pursuant to the Sewer Agreement) or credit (pursuant to the BFDIF Program), as applicable, to Developer portions of the Developer’s Phase 1A Project Administration Fee as and when Developer’s Phase 1A Project Administration Fee Eligible Costs are incurred by Developer.
2.1.5. Sources of Funding for Developer’s Phase 1A Infrast ructure Improvements Cost. The Parties anticipate that the sources of f unding for the payment of the Developer’s Phase 1A Infrastructure Improvements Cost are as set forth on Exhibit C-1.
2.1.6. Changes to Developer’s Phase 1A Infrastructure Improvements.
2.1.6.1. Changes Requested by Developer.
a. In accordance with the Authority Procurement Policy , any change to the Contract Documents or the Approved Dr awings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements sh all be subject to Authority’s prior written approval, except for changes or change orders that result in none of the following (as determined in Authority’s reasonable discretion): (i) any additi onal payment by Authority in excess of the contingency set forth in the Developer’s Phase 1A I nfrastructure Improvements Budget; (ii) any additional maintenance or overhead costs to the Aut hority; (iii) any material delay to the date on which Completion of the Developer’s Phase 1A Infras tructure Improvements occurs; (iv) any material modifications to the design or constructio n of the Developer’s Phase 1A Infrastructure Improvements nor (v) any adverse effect with respec t to the Developer’s Phase 1A Infrastructure Improvements’ compliance with Law. Authority shall provide written approval or a reasonable basis for denial of such changes (a “ Change Order Response ”) within ten (10) Business Days after Authority receives written notice thereof from Deve loper. If Authority does not provide a Change Order Response within such ten (10) Business Day pe riod, then Developer may provide written
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notice thereof to Authority. If Authority does not provide a Change Order Response within two (2) additional Business Days after receipt of such noti ce from Developer, then Developer shall be entitled to an Expedited Review Process as describe d below. Without limitation of the foregoing, Authority shall consider reasonably and in good fai th any change to the Contract Documents or the Approved Drawings and Specifications with respect t o the Developer’s Phase 1A Infrastructure Improvements that is proposed by Developer to addre ss conditions affecting the Project Site that are unknown to Developer as of the Effective Date.
b. Developer shall also be entitled to an Expedited Re view Process for any change to the Contract Documents or the Approved Drawings and Specifications (whether such change results in a change order that is subject to approval by the Authority or not) if Developer determines in good faith that such change s or change orders may be required to Complete the Resort Hotel, Parking Improvements, and Convention Center on or before the completion date set forth in the then-current CPM schedule for the Reso rt Hotel, Parking Improvements, and Project, a copy of which shall be provided by the Developer to the Authority. c. Each “Expedited Review Process” shall proceed as
follows: Developer shall initiate each Expedited R eview Process by sending notice to the Authority by electronic mail to the Authority Email Addresses . Such email shall have the subject line “RHCC Project Expedited Review Process Request” notice sh all include all information necessary to enable the Authority to make a determination of whether to approve or deny the change, change order, or other request that is the subject of the Expedited Review Process. Within 24 Business Hours of receipt of such emailed notice, the applicable Expe dited Review Individual shall provide either an approval, a denial, or a request for clarification and/or documentation. The response from the Expedited Review Individual shall be provided to th e Developer via email. Should the Expedited Review Individual fail to respond within 24 Busines s Hours from the time the email initiating the Expedited Review Process is sent by the Developer, the change shall be deemed disapproved. d. In the event of a deemed disapproval under Section
2.1.6.1c, Developer may proceed in accordance with the Contract Documents and Approved Drawings and Specifications then in existence, with out the requested change, or may request approval of an alternative change through an Expedited Review Process as described in this Section. e. If Authority disapproves a requested change or chan ge order and Authority’s Change Order Response indicat es that the sole reason for such disapproval is the increased cost of the proposed change pursuant to Section 2.1.6.1(a)(i), then Developer may elect to require Authority to approve the change; provide d that the increased cost of such change will not constitute a Developer’s Phase 1A Infrastructure Im provements Cost and Authority shall have no obligation to pay or reimburse Developer for the cost of such change; provided, however, that if upon Acceptance of the Developer’s Phase 1A Infrastructu re Improvements and payment of all Developer’s Phase 1A Infrastructure Improvements Co st, the total Developer’s Phase 1A Infrastructure Improvements Cost was less than the total original Developer’s Phase 1A Infrastructure Improvements Budget, the Authority s hall reimburse Developer for amounts expended by Developer pursuant to this Section, without inte rest, up to the amount by which the original Developer’s Phase 1A Infrastructure Improvements Bu dget exceeds the actual final amount of the Developer’s Phase 1A Infrastructure Improvements Cost paid to Developer. Developer shall provide written notice to Authority of its election to proc eed with a change without Authority approval pursuant to this Section 2.1.6.1e.
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f. All changes and change orders requested pursuant to this Section 2.1.6.1 shall be requested by Developer by email delivered to the Authority Email Addresses with a subject line indicating a “Developer’s Phase 1A Infrastructure Improvements Change” is being requested.
2.1.6.2. Changes Requested by Authority. Developer shall me et and confer in good faith with Authority regarding, and will reasonably consider in good faith, any changes that Authority desires to make to the Appro ved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvement s, and Developer shall use commercially reasonable efforts to implement any such changes, t o the extent Developer reasonably determines that such changes result in none of the following: (i) any delay to the date on which Completion of the Developer’s Phase 1A Infrastructure Improvements occurs; (ii) any adverse effect with respect to the Developer’s Phase 1A Infrastructure Improvement s’ compliance with Law nor (iii) any adverse effect on the development, maintenance or operation of (including any adverse effect on the compliance with Law by) the Convention Center or th e Private Improvements (as defined in the Ground Lease). Subject only to the following sente nce, if and to the extent changes requested by the Authority and approved by the Developer under this Section result in a net increase in the Developer’s Phase 1A Infrastructure Improvements Costs, then the net increase in Developer’s Phase 1A Infrastructure Improvements Costs resulting from such change shall be paid as follows: (A) by the City, if the City requested the change; (B) by the Port District, if the Port District requested t he change; and (C) by the City and Port District, equa lly, or in such other proportion as may be agreed to by the City and Port District; provided that the Developer shall not be required to implement the requested change until the Authority has confirmed to the Developer in writing which Public Entity will be responsible for payment of such increased c ost and such amounts are deposited into the appropriate subaccounts under the Indenture pursuan t to Section 2.1.6.3 below. Changes required to comply with this Agreement, Contemporaneous Agreeme nts, permits, the CDP, or Laws shall not be considered requested by the Authority, the Port District, or the City under this Section 2.1.6.2.
2.1.6.3. If the City is required to contribute money to pay all or a portion of the increased Developer’s Phase 1A Infrastructur e Improvements Costs relating to a change approved pursuant to Section 2.1.6.2, then the City shall deposit the required amount into the Phase 1A Infrastructure Improvements Subaccount of the 20 22B Construction Account. If the Port District is required to contribute money to pay all or a por tion of the increased Developer’s Phase 1A Infrastructure Improvements Costs relating to a cha nge pursuant to Section 2.1.6.2, then the Port District shall deposit the required amount into the Phase 1A Funded Infrastructure Improvements Subaccount of the 2022B Construction Account.
2.1.6.4. Nothing in this Agreement amends or waives the regu latory process for amending permits or plans approved by t he City or the Port District, which shall be governed by the City’s and Port District’s establis hed entitlement and permitting processes and applicable Laws.
2.2. Convention Center. Developer shall cause the development of the Convention Center substantially in accordance in all material respect s with the Convention Center Plans, within the timeframe described in Section 5.1 and in accordanc e with all the terms and conditions of this Agreement.
2.2.1. Complete and Functional Improvements. Developer sh all provide a complete and functional Convention Center substanti ally in accordance in all material respects with
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the Convention Center Plans and the Convention Cent er Costs incurred shall not be less than the Project Public Investment Amount.
2.2.2. Payment of Convention Center Costs. In considerati on for the work performed or caused to be performed by Developer pu rsuant to this Section 2.2, the Authority shall pay the Convention Center Contract Sum to Developer pursuant to the procedures set forth in Section 9.2.
2.3. Sweetwater Park. Port District shall Sufficiently Complete development of Sweetwater Park. “ Sufficient Completion ” or “ Sufficiently Complete ” means that the Port District, in its sole and good faith discretion, determines t hat Sweetwater Park, as developed, satisfies the following criteria: (1) the Sweetwater Park on par cel S2 shall be open to the public and include improvements such as landscaping, public parking lo ts and restrooms, which may be temporary in nature and (2) the development within the Transitio n Buffer Areas and Limited Use zones of parcel SP-1 and the fencing of the No Touch Buffer Area of parcel SP-1 shall be completed. The Transition Buffer Areas and Limited Use zones of parcel SP-1 and the No Touch Buffer Area of parcel SP-1 are described in the certified PMP. Port District may, in its sole and absolute discretion, further devel op Sweetwater Park following achievement of Sufficient Completion, including but not limited to the development of additional features, elements and/or landscaping, without any obligation to the Developer and without requiring Developer’s approval or consent.
2.3.1. Sweetwater Park Updates. Until such time as Develo per exercises a Sweetwater Park Option, Port District shall provide , not less frequently than monthly, written updates to the Developer of the progress of the dev elopment of Sweetwater Park and shall provide written notice to Developer when Port District dete rmines that Sweetwater Park is Sufficiently Complete.
2.3.2. First Sweetwater Park Option. Port District shall provide written notice to Developer at least thirty (30) days before Port Dis trict advertises for bids for the construction of Sweetwater Park and shall provide Developer with al l Sweetwater Park Materials to the extent available at such time. On or before 5:00 p.m. (Pa cific Time) on the last day of such thirty (30) day period (such date, the “ First Sweetwater Park End Date ”), Developer may, but shall not be obligated to, exercise the option to Sufficiently C omplete Sweetwater Park (the “ First Sweetwater Park Option ”). If Developer exercises the First Sweetwater Park Option, then: (a) Sweetwater Park shall thereafter be considered part of Developer’s Phase 1A Infrastructure Improvements for purposes of this Agreement (except as otherwise set forth herein), and Developer shall expeditiously Sufficiently Complete Sweetwater Park, and (b) subj ect to section 2.3.2.1, Developer’s costs to Sufficiently Complete Sweetwater Park shall be cons idered Developer’s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same manner as other Developer’s Phase 1A Infrastructure Improvements Costs.
2.3.2.1. Developer may exercise the First Sweetwater Park Option only by giving written notice to the Port District and the Authority, with a copy to the Administrative Agent (“ First Developer Completion Notice ”) prior to the First Sweetwater Park End Date. If Developer does not deliver the First Developer Completion Not ice prior to the First Sweetwater Park End Date, then (a) the First Sweetwater Park Option shall terminate, and (b) the Port District shall expeditiously continue development of the Sweetwater Park until Sufficiently Complete. Notwithstanding delivery of the First Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastru cture Improvements Site until the Developer
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has the right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in accordance with Section 2.3.2.4 below. Notwithstanding the fo regoing, Developer may commence any other work for the performance of the Sweetwater Park tha t does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day after Developer exercises the First Sweetwater Park Option. The Au thority will not issue payment to Developer for work performed on Sweetwater Park if Developer does not exercise any of the First Sweetwater Park Option or the Second Sweetwater Park Option (as def ined below). If Developer exercises the First Sweetwater Park Option, then with respect to Sweetw ater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer f rom and after the date the First Developer Completion Notice is delivered to Port District.
2.3.2.2. If Developer timely delivers the First Developer Co mpletion Notice, then (a) Developer shall Sufficiently Compl ete Sweetwater Park in accordance with Sweetwater Park Materials on or before the Outside Construction Completion Date, and (b)within five (5) Business Days after Port District’s timely receipt of the First Developer Completion Notice, Port District shall deliver to Developer the Sweetw ater Park Materials that have not previously been delivered to Developer. After Developer has delive red the First Developer Completion Notice, the Port District shall reasonably cooperate with Devel oper, at no cost or expense to Developer, in seeking any consent to Developer’s use of such Swee twater Park Materials reasonably requested by Developer from the preparer or issuer of any Sweetwater Park Materials.
2.3.2.3. [Reserved].
2.3.2.4. If Developer exercises the First Sweetwater Park Op tion, the Developer Parties shall have the non-exclusive righ t to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the First Sweetwater Park End Date and ending on the earlier of the following dates: (x) the date on which Sweetwa ter Park is Accepted; and (y) the date on which this Agreement is terminated.
2.3.2.5. If Developer exercises the First Sweetwater Park Op tion, Developer’s failure to Sufficiently Complete Sweetw ater Park by the Original Outside Construction Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges.
2.3.3. Second Sweetwater Park Option. If Developer does n ot exercise the First Sweetwater Park Option and the development of Sweet water Park is not Sufficiently Complete on or before the Second Sweetwater Park End Date, then De veloper may, but shall not be obligated to, exercise the option to Sufficiently Complete Sweetw ater Park (the “ Second Sweetwater Park Option ”; and, together with the First Sweetwater Park Opt ion, the “ Sweetwater Park Option ”). If Developer exercises the Second Sweetwater Park Opti on, then: (a) Sweetwater Park shall thereafter be considered part of Developer’s Phase 1A Infrastr ucture Improvements for purposes of this Agreement (except as otherwise set forth herein), a nd Developer shall expeditiously Sufficiently Complete Sweetwater Park and (b) subject to Section 2.3.3.1, Developer’s costs to Sufficiently Complete Sweetwater Park shall be considered Develo per’s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same m anner as other Developer’s Phase 1A Infrastructure Improvements Costs. The Second Sweet water Park Option shall terminate upon Port District irrevocably notifying Developer that Sweetwater Park is Sufficiently Complete.
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2.3.3.1. Developer may exercise the Second Sweetwater Park O ption only by giving written notice to the Port District and t he Authority, with a copy to the Administrative Agent (“ Second Developer Completion Notice ”) within ten (10) Business Days after the Second Sweetwater Park End Date, but not sooner than ten ( 10) days prior to the Second Sweetwater Park End Date. If Developer does not deliver the Second Developer Completion Notice within the time stated in this Section 2.3.2.1, then (a) the Second Sweetwater Park Option shall terminate at 5:00 p.m. (Pacific Time) on the date that is ten (10) Bu siness Days after the Second Sweetwater Park End Date and Developer shall have no further remedy aga inst Port District with respect to the development of Sweetwater Park, and (b) the Port Di strict shall expeditiously continue development of Sweetwater Park until Sufficiently Complete. No twithstanding delivery of the Second Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastructure Improvements Site until the Developer has the right to enter upon the Remaining Phase 1A Infrastructure Improvem ents Site in accordance with Section 2.3.2.4 below. Notwithstanding the foregoing, Developer ma y commence any work for the performance of the Sweetwater Park that does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day a fter the Second Sweetwater Park End Date.
The Authority will not issue payment to Developer f or work performed on Sweetwater Park if the Port District Sufficiently Completes Sweetwater Par k by the Second Sweetwater Park End Date or if Developer does not exercise any of the Second Sweet water Park Option or the First Sweetwater Park Option. If Developer exercises the Second Sweetwater Park Option, then with respect to Sweetwater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer from and after Developer’s exercise of the Second Sweetwater Park Option. Developer shall not request reimbursement for such costs until after the Second Sweetwater Park End Date.
2.3.3.2. If Developer timely delivers the Second Developer C ompletion Notice, then (a) Developer shall Sufficiently Compl ete Sweetwater Park in accordance with the Sweetwater Park Materials on or before the Outside Construction Completion Date, and (b) within five (5) Business Days after Port District’s timely receipt of the Second Developer Completion Notice, Port District shall (i) issue a notice of t ermination under any outstanding Sweetwater Park Construction Contracts and (ii) deliver to Develope r the Sweetwater Park Materials that have not previously been delivered to Developer. After the Developer has delivered the Second Developer Completion Notice, the Port District shall reasonab ly cooperate with Developer, at no cost or expense to the Developer, in seeking any consent fr om the preparer or issuer of any Sweetwater Park Materials. If Port District fails to issue a notic e of termination under any outstanding Sweetwater Park Construction Contract within five (5) Business Days after Port District’s timely receipt of the Second Developer Completion Notice as set forth abo ve, then Developer shall have the right to issue such notice of termination on behalf of Port Distri ct and on Developer’s own behalf pursuant to Section 2.3.4.2.
2.3.3.3. Prior to delivery of the Second Developer Completio n Notice, but not sooner than six (6) months prior to the Second Sweetwater Park End Date, Developer may request, and Port District shall from time-to-time provide, within ten (10) Business Days after Developer’s request therefor, (i) copies of the Swe etwater Park Materials, all outstanding construction, development and design documents rela ted to Sweetwater Park (including, without limitation, construction contracts, pay application s and architect certifications), at Developer’s sol e cost and expense, and (ii)a written description of the work that remains uncompleted in order to cause Sweetwater Park to be Sufficiently Complete.
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2.3.3.4. If Developer exercises the Second Sweetwater Park O ption, the Developer Parties shall have the non-exclusive righ t to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the date that is the later of (a) ten (10) days after Developer exercises the Second Sweetwater Park Option or (b) the day after the Second Sweetwater Park End Date and ending on the earlier of the following dat es: (x) the date on which Sweetwater Park is Accepted; and (y) the date on which this Agreement is terminated.
2.3.3.5. If Developer exercises the Sweetwater Park Option, Developer’s failure to Sufficiently Complete Sweetwater Park by the Original Outside Construction Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges.
2.3.3.6. Each Sweetwater Park Design Contract is hereby assigned by Port District to Developer; provided, that such assignme nt shall be effective only upon Developer’s exercise of the Second Sweetwater Park Option and o nly for those Sweetwater Park Contracts that Developer accepts by notifying Port District and th e counterparty to such Sweetwater Park Contract in writing. When the Developer accepts the assignm ent of a Sweetwater Park Design Contract, Developer assumes Port District’s rights and obliga tions under such Sweetwater Park Design Contract, but in the case of obligations, only to t he extent such obligations are to be performed afte r the date Developer accepts the assignment. Port Di strict shall not assign any Sweetwater Park Design Contract to, or grant a security interest in any Sweetwater Park Design Contract in favor of, any person or entity other than Developer. Port Di strict hereby grants to Developer a security interest in the Sweetwater Park Design Contracts to secure Port District’s obligations under the preceding sentence of this Section 2.3.3.6, and Por t District shall take such steps as may be reasonably requested by Developer to evidence and p erfect such security interest (including, without limitation, by authorizing Developer to file a UCC- 1 financing statement with respect to the Sweetwater Park Design Contracts). Developer shall not assign its security interest in any Sweetwater Park Design Contract, except that it may assign or collaterally assign such security interest to a permitted assignee, or permitted collateral assignee, of this Agreement.
2.3.4. Sweetwater Park Contracts.
2.3.4.1. Port District shall include in each Sweetwater Park Design Contract (or, to the extent that any Sweetwater Par k Design Contract exists as of the Effective Date, amend such Sweetwater Park Design Contract to inclu de): (a) a provision that permits Port District (or its successors or assignees) or Developer to te rminate such Sweetwater Park Design Contract for convenience upon not more than ten (10) days’ prior written notice, (b) to the extent applicable, a provision that Developer is entitled to use any dra wings, plans or specifications prepared under such Sweetwater Park Design Contract in connection the construction or development of Sweetwater Park, and (c) the following provision with appropriate co nforming modifications: “[Contractor] consents to the assignment of [Port District’s] rights and o bligations in this [Sweetwater Park Design Contract] by [Port District] to RIDA Chula Vista, L LC, its assigns and/or its lenders and their respective assigns (“ Developer Parties ”), and agrees that the warranties and obligations hereunder shall inure to the benefit of Developer Parties, al l as if Developer Parties were a party of this [Sweetwater Park Design Contract]. Such assignment will be effective when a Developer Party delivers to [Contractor] and [Port District] a noti ce accepting such assignment and assuming Port District’s obligations under this [Sweetwater Park Design Contract] from and after the date of such notice. From and after Contractor’s receipt of suc h notice, [Contractor] will treat such Developer Party as the [Port District] under this [Sweetwater Park Design Contract].” To the extent that
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Developer assumes Port District’s obligations under any Sweetwater Park Design Contract, Developer may pay any amounts that are owing to the counterparty under such Sweetwater Park Design Contract which result from a breach by Port District under such Sweetwater Park Design Contract, and such payments shall constitute Develo per’s Phase 1A Infrastructure Improvements Costs. Unless Developer does not exercise the Fir st Sweetwater Park Option prior to the First Sweetwater Park End Date and does not exercise the Second Sweetwater Park Option prior to the Second Sweetwater Park End Date, Port District shal l neither assign nor terminate any Sweetwater Park Design Contract without Developer’s prior writ ten consent, which shall not be unreasonably withheld or delayed.
2.3.4.2. Port District shall include in each Sweetwater Park Construction Contract (or, to the extent that any Sweetwater Par k Construction Contract exists as of the Effective Date, amend such Sweetwater Park Construction Contr act to include): (a) a provision that permits Port District (or its successors or assignees) or D eveloper to terminate such Sweetwater Park Construction Contract for convenience upon not more than ten (10) days’ prior written notice, and (b) the following provision with appropriate confor ming modifications: “[Contractor] agrees that RIDA Chula Vista, LLC, its assigns and/or its lende rs and their respective assigns (“ Developer Parties ”) shall have the right to terminate this [Sweetwat er Park Construction Contract] pursuant to [cross-reference termination for convenience provis ion] of this Sweetwater Park Construction Contract as if Developer Parties were a party of th is [Sweetwater Park Construction Contract]. Such termination will be effective when a Developer Part y delivers to [Contractor] and [Port District] a notice of termination pursuant to such Section. No twithstanding anything to the contrary in this [Sweetwater Park Construction Contract], no Develop er Party shall have any obligations under this [Sweetwater Park Construction Contract].”
2.3.4.3. Developer shall have no right to accept assignment of a Sweetwater Park Design Contract or to terminate for convenience a Sweetwater Park Design Contract or Sweetwater Park Construction Contract, unless and until Developer exercises the First Sweetwater Park Option or the Second Sweetwater Par k Option, as applicable. Developer shall provide any notice of its acceptance of assignment or notice of termination for convenience (excluding any notice of termination for convenienc e after Developer’s acceptance of assignment of the applicable contract) to the Port District and t he counterparty of the respective contract within thirty (30) days following delivery of the First De veloper Completion Notice or the Second Developer Completion Notice, as applicable.
2.3.5. Sweetwater Park Materials. Port District shall use commercially reasonable efforts to deliver the Sweetwater Park Materials to Developer pursuant to Section 2.3.3.3 or as soon as practicable after Developer exercises the First Sweetwater Park Option or the Second Sweetwater Park Option. After Developer exercise the First Sw eetwater Park Option or the Second Sweetwater Park Option, Developer shall have the right to use any and all plans, drawings and specifications that constitute Sweetwater Park Materials for constructi on and development of Sweetwater Park. The Sweetwater Park Materials (other than the Sweetwate r Park Design Contracts that are assumed by Developer) shall remain the property of the Port Di strict, and Developer shall return or deliver all such Sweetwater Park Materials to the Port District upon Acceptance of Sweetwater Park.
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ARTICLE III
DURATION OF AGREEMENT
3.1. Term of Agreement. This Agreement shall become eff ective on the Effective Date, and the term of this Agreement (the “ Term ”) shall extend until the earlier of (a) the termin ation of this Agreement by the Public Entities according to the termination provisions herein, (b) the termination of the Sublease according to Sections 5 .1 or 5.2 of the Sublease (unless Authority provides written notice to Developer within ten (10 ) Business Days after the termination of this Agreement directing Developer to complete the Developer’s Pha se 1A Infrastructure Improvements, in which case (i) except with respect to obligation s that expressly survive the termination of this Agreement, Developer shall have no further obligati ons hereunder with respect to the Convention Center and (ii) the Term shall end upon Acceptance of all Developer’s Phase 1A Infrastructure Improvements and (if Developer has exercised a Swee twater Park Option) the Acceptance of Sweetwater Park, or (c) the later of (i) the termin ation or expiration of the Sublease and (ii) the occurrence of the Expansion Date under and as defin ed in the Ground Lease. Notwithstanding the foregoing, but subject to the next sentence of this Section 3.1, if the Sublease terminates according to Sections 5.1 or 5.2 of the Sublease, but the Ground Lease remains in effect, then (x) Developer shall have no further obligations hereunder with respect to the Convention Center, but this Agreement shall otherwise remain in effect (including with re spect to Developer’s Phase 1A Infrastructure Improvements and Sweetwater Park (including with re spect to the payment for each of the foregoing)) and (y) the Term shall end upon Accepta nce of all Developer’s Phase 1A Infrastructure Improvements and (if Developer has exercised a Swee twater Park Option) the Acceptance of Sweetwater Park. Notwithstanding anything to the contrary herein, the Term shall not extend beyond sixty-six (66) years from the Effective Date.
ARTICLE IV
PROJECT COSTS
4.1. Phase 1A Infrastructure Improvements. The provisio ns of Section 4.1.1 and each subsection thereof shall apply only to the Developer’s Phase 1A Infrastructure Improvements.
4.1.1. Public Entity’s Estimated Developer’s Phase 1A Infr astructure Improvements Cost.
4.1.1.1. The aggregate Public Entity’s Estimated Developer’s Phase 1A Infrastructure Improvements Cost is _______________ _____ dollars ($__________), as shown in Exhibit C-2 attached hereto. Developer’s Phase 1A Infrastructure Improvements Budget as of the Effective Date is attached as Exhibit C-2 hereto. Developer may modify from time to time the Developer’s Phase 1A Infrastructure Improvements Bu dget reasonably and in good faith and shall provide written notice of any such modification to the Public Entities. The Developer’s Phase 1A Infrastructure Improvements Budget shall indicate t he Guaranteed Maximum Price for the General Contractor’s services, which shall not be increased unless (a) the General Contractor is entitled to a n increase under the General Contract or (b) as other wise expressly agreed by the Authority in writing, in the Authority’s sole and absolute discretion.
4.1.1.2. If, at any time, Developer definitively establishes that the amount expended on the Developer’s Phase 1A Infrastructure Improvements will exceed the amount set forth in the Developer’s Phase 1A Infrastructure Improvem ents Budget (including contingency amounts), Developer shall promptly, and in any case not more than ten (10) Business Days after the Developer
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definitively establishes the amount of the increase , notify the Executive Director thereof in writing.
This written notification shall include an itemized cost estimate and, to the extent feasible, a list of recommended revisions (e.g., deductive changes) whi ch Developer believes will bring the cost to within the amount set forth in the Developer’s Phas e 1A Infrastructure Improvements Budget. The Authority may either: (i) approve an increase in t he Developer’s Phase 1A Infrastructure Improvements Budget (which approval shall not be un reasonably withheld, conditioned, or delayed) or (ii) reasonably value engineer, delete or replac e subcomponents of a component of the Developer’s Phase 1A Infrastructure Improvements so that the Developer’s Phase 1A Infrastructure Improvements can be constructed for the amount set forth in the Developer’s Phase 1A Infrastructure Improvements Budget, but only if such modification neither has a material and adverse effect on the design, development, or construction of the Resort Hotel, the Parking Improvements, or the Project nor delays the Completion of the Resort Hotel, the Parking Improvements or the Project.
4.1.2. Approved Drawings and Specifications for the Develo per’s Phase 1A Infrastructure Improvements. As of the Effective D ate, each of the Port District and the City has reviewed and approved the Approved Drawings and Spe cifications for the Developer’s Phase 1A Infrastructure Improvements.
4.2. Convention Center. The provisions of Section 4.2 a nd each subsection thereof shall apply only to the Convention Center.
4.2.1. Estimated Convention Center Cost. The aggregate Es timated Convention Center Cost is ____________________________ ($____________). The Convention Center Budget as of the Effective Date is attached as Exhibit P hereto. Developer may modify from time to time the Convention Center Budget reasonably and in good fai th and shall provide written notice of any such modification to the Public Entities.
4.3. Cost Reporting. Developer shall, during the Term a nd, with respect to each record, for a period of seven (7) years after the date such record is created (or such longer period as Developer may decide in its sole discretion), use c ommercially reasonable efforts to maintain customary records of construction costs incurred by Developer in connection with the Project. Such records shall include, but are not limited to, a ge neral ledger, vendor invoices, cancelled checks, agreements with third-party contractors and contrac tor progress payment billings. Such records may be in electronic format. Developer shall furnish t o Authority an itemized statement of the construction costs incurred and paid by Developer i n connection with the Improvements, as applicable, within thirty (30) days after Developer receives Authority’s request therefor (which request shall not be provided to Developer until th e respective Improvements have been Completed).
The statement shall be sworn to and signed, under p enalty of perjury, by Developer as fairly representing, to the best of Developer’s knowledge, the construction costs incurred and paid by Developer. Should Developer perform any constructio n with its own personnel, Developer shall during the Term and, with respect to each record, for a period of seven (7) years after the date of such record (or such longer period as Developer may deci de in its sole discretion), maintain the following records with respect to the actual work performed b y its own personnel: a payroll journal, copies of cancelled payroll checks, and timecards or other pa yroll documents which show dates worked, hours worked, and pay rates. Books and records herein req uired shall be maintained and made available either at the Project Site, the Convention Center, or at such other location in San Diego County, California as is reasonably acceptable to Authority . Authority shall have the right with 48 hours’ advanced notice and at reasonable times to examine and audit said books and records without restriction for the purpose of determining the accu racy thereof, and the accuracy of the aforesaid
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statement. In the event Developer does not make ava ilable the original books and records at the Project Site, the Convention Center, or at such oth er location in San Diego County, California, then Developer agrees to pay all expenses incurred by th e Authority Parties, as applicable, in conducting an audit at the location where said books and recor ds are maintained. After the seven (7) year period has expired for any record subject to this Section 4.3, Developer shall deliver the original or an electronic copy of such record to Authority at the address set forth in Section 26.1 or such other location designated by Authority in writing, which may include the main offices of the City; provided, however, that Developer may elect to deli ver all of the records subject to this Section 4.3 that expire in a given year at one time, in one delivery, within twelve (12) months after the end of the applicable year.
ARTICLE V
CONSTRUCTION OF THE PROJECT AND THE REMAINING
PHASE 1A INFRASTRUCTURE IMPROVEMENTS
5.1. Construction of the Project.
5.1.1. Commencement and Completion of the Project.
5.1.1.1. Following the Commencement Date, but not later than the Outside Construction Commencement Date, Developer s hall commence the construction of the Project. Developer shall be deemed to have commenc ed the construction of the Project when Developer delivers a notice to proceed with respect to the construction of the Project to Developer’s contractor. Thereafter, Developer shall, subject to the terms of Section 5.5, diligently proceed with the construction of the Project to Completion, and Complete the Project by the Outside Construction Completion Date. Without limiting the generality of the foregoing, Developer acknowledges and agrees that the cessation of construction of the Pr oject for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event, be d eemed a failure by Developer to diligently proceed with the construction of the Project to Com pletion and shall constitute an Event of Default under this Agreement without further notice or cure right by Developer if Developer does not resume construction of the Project within ten (10) days af ter Developer receives notice thereof from Authority which notice shall include the following language: “ FAILURE BY DEVELOPER TO
RESUME CONSTRUCTION OF THE PROJECT (AS SUCH TERM IS DEFINED IN THE PROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN (10) D AYS AFTER THE
DATE DEVELOPER RECEIVES, OR IS DEEMED TO HAVE RECEI VED, THIS NOTICE
SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJ ECT IMPLEMENTATION AGREEMENT ”.
5.1.1.2. The Convention Center Plans have been previously ap proved in writing by Port District, Authority and City. Chan ges to the Convention Center Plans must be approved by the Authority in writing, in Authority’ s sole and absolute discretion, and, once approved, shall be considered a part of the “Conven tion Center Plans”; provided, however, Authority’s approval of any change in the Conventio n Center Plans shall not be required if: (a) such change does not result in a use that is not a Permi tted Use, (b) such change does not require modifications to the Convention Center Plans for th e structural portions of the Convention Center, (c) such change does not change the design principl es of the exterior appearance of the Convention Center (if any), as set forth in the CDP, (d) such change is in compliance with the Chula Vista Building Code, (e) such change is in compliance wit h, and does not violate the provisions of, the PMP, CDP, the EIR, CVBMP Documents and any other La ws, (f) such change does not trigger any
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storm water construction BMP permit or permanent st ructural BMP permit or alterations to existing permanent structural BMPs, and (g) such change does not pave any area greater than twenty-five (25) square feet unless Developer has previously secured the approval to perform such work from all applicable Governmental Authorities, including the Authority. Within thirty (30) days of the Authority’s notice to Developer, Developer shall pr ovide to Authority a reasonably detailed explanation of all changes that Developer has made to the Convention Center Plans without the Authority’s approval pursuant to this Section 5.1.1 , including, without limitation, an explanation of why such change did not require approval from the A uthority, and copies of the revised Convention Center Plans showing the changes, and Authority sha ll have thirty (30) days from the receipt of such information to object to the changes to the Convent ion Center Plans as requiring the Authority’s approval as provided in this Section 5.1.1.2. The Convention Center Plans are by this reference made a part hereof. In the event of any inconsisten cy between the Convention Center Plans and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail.
5.1.1.3. In constructing the Project, Developer shall comply with all Construction Requirements set forth in Exhibit E at tached hereto and all Laws, including, without limitation, the PMP requirements, mitigation measur es or conditions of approval under the terms of any of the approvals by any Governmental Authority for the Project, including any CDPs applicable to the Project Site or the use or development there of and any conditions of approval or mitigation measures or Project changes pursuant to any environmental review under CEQA.
5.1.2. Initial Public Financing Payments; Construction Lat e Charge. 2 Developer hereby acknowledges that if the Resort Hotel, Parki ng Improvements, and Convention Center are not Complete by the Original Outside Construction Compl etion Date (as extended in accordance herewith), Authority Parties, Port District Parties , Financing District Parties, and City Parties will incur costs not contemplated by this Agreement, the Ground Lease and the Convention Center Leases. Accordingly, in the event Developer does n ot Complete the Resort Hotel, Parking Improvements, and Convention Center by the Original Outside Construction Completion Date (as extended in accordance herewith), then, beginning w ith the first month following the Original Outside Construction Completion Date, and monthly t hereafter until the Resort Hotel, Parking Improvements, and Convention Center are Complete, t he Developer shall, on or before the first day of each such month, pay to the Trustee, as assignee of Authority under the Authority Indenture, the payments (collectively referred to as the “ DPFP ”) based on the formula set forth below (collectively, “Construction Late Charges ”). The Parties further agree that the Constructio n Late Charges apply whether or not Developer receives notice of its fai lure to Complete the Convention Center, Resort Hotel, or Parking Improvements, and that said Const ruction Late Charges are appropriate to compensate the City, Port District, Financing Distr ict, and Authority, and are the sole compensation and remedy of the Public Entities, for the Develope r’s failure to construct the Resort Hotel, Convention Center, Developer’s Phase 1A Infrastruct ure Improvements, or the Parking Improvements by the Original Outside Construction C ompletion Date, including any loss resulting from the loss of revenues that the Authority Partie s, the Port District Parties, the Financing Distric t Parties and the City Parties would have received if the Resort Hotel, Convention Center, Parking Improvements, and Developer’s Phase 1A Infrastructu re Improvements had been Completed by the Original Outside Construction Completion Date (as e xtended in accordance herewith).
Notwithstanding the preceding sentence, Developer a cknowledges and agrees that, as and to the extent provided in the next sentence, there will be an Event of Default for the failure to Complete th e
2 This section is under review by Port and City Attorney.
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Convention Center if (a) Developer fails to Complet e the Convention Center by the date that is three hundred sixty-five (365) days after the Outside Con struction Completion Date (the “ Extended Construction Period Deadline ”) (as extended as a result of a Force Majeure Even t or Municipal Breach) (“ Late Completion ”) and (b) either (i) without limiting Section 21.1 .1, Developer does not pay the Construction Late Charges each month until Completion of the Convention Center (a “Construction Late Charge Failure ”) or (ii) if Developer can reasonably Complete the Convention Center within thirty (30) days of the Extended Cons truction Period Deadline, Developer does not Complete the Convention Center within such thirty ( 30) days, and if the nature of the Completion of the Convention Center is such that Developer cannot reasonably Complete the Convention Center within such thirty (30) days, Developer does not di ligently commence such cure within such thirty (30) days or thereafter fails to diligently proceed to rectify and cure such failure (a “Completion Cure Failure” , and any Completion Cure Failure or any Constructi on Late Charge Failure, a “ Post- Late Completion Failure ”). Developer acknowledges and agrees that if Late Completion occurs and any Post-Late Completion Failure occurs, then t he Public Entities may declare an Event of Default for failure to Complete the Convention Cent er, and such Event of Default shall constitute a cross-default under the Ground Lease and the Sublea se, if Developer does not cure its Post-Late Completion Failure within thirty (30) days of recei pt of notice from the Authority, and Developer shall not be entitled to any additional cure period s under Article XXI herein. Developer acknowledges and agrees that the payment of Constru ction Late Charges does not constitute an exclusive remedy for any Event of Default under thi s Agreement for failure to construct the Convention Center or the Developer’s Phase 1A Infra structure Improvements, Event of Default under the Sublease for failure to Complete the Conv ention Center, or Event of Default under the Ground Lease for failure to Complete the Resort Hot el and Parking Improvements. Each of the Public Entities acknowledges and agrees that if Dev eloper fails to Complete the Convention Center, the Resort Hotel and Parking Improvements, Develope r shall only be required to pay one set of Construction Late Charges monthly and such Construc tion Late Charges shall not be doubled.
Without limiting the generality of the foregoing, D eveloper acknowledges and agrees that the cessation of construction of the Convention Center for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event or Municipal Breach, be deemed a failure by Developer to diligently proceed with the construction of the Con vention Center to Completion and shall constitute an Event of Default under this Agreement without fu rther notice or cure right by Developer if Developer does not resume construction of the Conve ntion Center within ten (10) days after Developer receives notice thereof from the Public E ntities which notice shall include the following language: “ FAILURE BY DEVELOPER TO RESUME CONSTRUCTION OF THE
CONVENTION CENTER (AS SUCH TERM IS DEFINED IN THE P ROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN (10) DAYS AFTE R THE DATE
DEVELOPER RECEIVES, OR IS DEEMED TO HAVE RECEIVED, THIS NOTICE SHALL
CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJECT IM PLEMENTATION AGREEMENT ”.
Calculation of DPFP Formula:
DPFP = PDSO – (EF + DSP)
12 Example of Calculation of DPFP:
Assuming the following annual amounts:
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• Annual PDSO: $18,000,000
• Annual EF: $4,000,000
• Annual DSP: $4,000,000
DPFP = $18,000,000 – ($4,000,000+ $4,000,000)
12 DPFP = $10,000,000
12 DPFP = $833,333.33
For purposes of this Section 5.1.2:
“District Support Payment ” or “ DSP ” means, with respect to any Fiscal Year, the Annua l Support Payments under and as defined in the Port S upport Agreement as of the Effective Date that are due and payable during such Fiscal Year.
“Existing Funds ” or “ EF ” means, collectively, with respect to any Fiscal Year, moneys in an amount equivalent to each of the following sources of funds described in (i), (ii), and (iii), actuall y received by the Port District or the City, during such Fiscal Year:
(i) the Real Estate Revenues (defined below) receiv ed by the Port District during the preceding Fiscal Year, which Real Estate Revenues shall be subject to adjustment pursuant to Section
5.1.3 below;
(ii) the TOT attributable to the RV Park Lease; and
(iii) an amount equal to $986,625.00, increasing 3% on July 1 of each year, commencing July 1, 2017, which amount is based on the payment made by the Port District to the City in Fiscal Year 2016 pursuant to that certain Municipal Servic es Agreement No. 88-2012 between the Port District and the City for the provision of Police, Fire and Emergency Medical Services. “Real Estate Revenues ” means all funds actually received by the Port Dis trict from the following items on a yearly basis:
(a) the funds actually received by the Port District fr om the premises that are the subject of the real estate agreements (each, the “ Original Premises ”) set forth in Exhibit 1 (each, a “Real Estate Agreement ” and collectively, the “ Real Estate Agreements ”); provided, however, if any of the Real Estate Agreements are renewed, repl aced, assigned, or amended prior to the date on which the Support Agreement terminates in accordanc e with its terms, then on and after such renewal, replacement, assignment, or amendment, as applicable, the following shall apply:
(1) if the Original Premises for such Real Estate A greement remains the same, the Port District shall contribute the funds actually received by the Port District from such Real Estate Agreement regardless of whether such amounts are the same, less, or more than previously contributed by the Port District under this Agreement;
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(2) if the Original Premises for such Real Estate A greement are decreased either in size or configuration, the Port District shall contribute the funds actually received by the Port District from such Real Estate Agreement regar dless of whether such amounts are the same, less, or more than previously contributed by the Po rt District under this Agreement; provided, that if the portion of the Original Premises excluded from the aforementioned agreement (“ Remainder Parcel ”) becomes the subject of a future Real Estate Agre ement, the Port District shall contribute funds actually received from the Port District from such Remainder Parcel pursuant to this Section; (3) if the Original Premises for such Real Estate A greement are increased either in size or configuration to include addition al premises outside of the Original Premises boundaries of such Real Estate Agreement and such a dditional premises are immediately adjoining the original premises or are located in the City of Chula Vista (each a “ Modified Boundary Agreement ”), the Port District shall contribute funds actual ly received from the Port District from such Real Estate Agreement based on a formula calcu lated by multiplying the total amount of the funds actually received from the Port District for such Real Estate Agreement in the immediately prior year by a fraction, the numerator of which sh all be an amount equal to the Modified Boundary Agreement premises still within the original premis es boundary, and the denominator of which shall be the total premises area of the Modified Boundary Agreement as modified. For example, if the Original Premises of a Real Estate Agreement encomp asses 5.0 acres, and the Modified Boundary Agreement includes 4.0 acres of the Original Premis es, and adds 6.0 acres of premises outside the original premises, then forty percent (40%) of the funds actually received by the Port District under the Modified Boundary Agreement shall be paid as Real Estate Revenues under this Section; the City and the Port District acknowledge and agree that an y modification of the RV Park Lease (listed on and as defined in Exhibit 1) to include some or all of parcel S-3 or a replacement of the RV Park TUOP (listed on and as defined in Exhibit 1) where the Developer is the tenant shall not constitute a “Modified Boundary Agreement” for purposes of this Section; and for any of the scenarios (1)-(3) above, if the new Real Estate Agreement is a revenu e generating agreement then the Port District may deduct from the funds to be paid the Authority under scenarios (1)-(3) any related out-pocket operating costs paid by the Port District to the third parties to operate the premises. (4) Subject to paragraph (a)(3), above, and paragra ph (b), below, of this definition of “Real Estate Revenues,” for the avoidance of doubt, it is the intent of the Port District to contribute funds from Original Premises derived fro m a Real Estate Agreement that the Port District actually receives during the term of the Support Agreement. (b) less $3,283,970, which is the actual amount of the buyout payment paid solely by the Port District to Chula Vista Marina, LP, dba Chula Vista Marina (“ RV Park Lessee ”) to terminate the lease between the RV Park Lessee and the Port D istrict (“ Net RV Park Buyout Credit ”), such amount to be amortized over a period of eight years commencing on July 1, 2018 pursuant to the Net RV Park Buyout Credit Schedule (defined below), as such Net RV Park Buyout Credit Schedule and its contents may be administratively modified from time to time with the mutual consent of the City Manager of the City and the Executive Director of t he Port District, without further approval of the BPC or City Council.
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“Net RV Park Buyout Credit Schedule ” means the following schedule:
Fiscal Year (FY) RV Park Buyout Credit Cumulative C redit FY 19 $410,500 $410,500
FY 20 $410,500 $821,000
FY 21 $410,500 $1,231,500
FY 22 $410,500 $1,642,000
FY 23 $410,500 $2,052,500
FY 24 $410,500 $2,463,000
FY 25 $410,500 $2,873,500
FY 26 $410,470 $3,283,970
“Public Debt Service Obligation ” or “ PDSO ” means, for any year, the actual amount payable by the Authority during such year for princ ipal and interest (including default interest, if applicable) on the Authority Bonds; provided that t he PDSO for any one year shall not include more than one thirty-fifth (1/35) of the total original principal amount of the Authority Bonds issued on the Effective Date.
“TOT ” means the transient occupancy taxes levied pursua nt to Chula Vista Municipal Code Chapter 3.40, attributable to the RV Park Lease.
The amount of the DPFP will be reduced to the exten t the DPFP would otherwise be increased solely because Port District or the City fails to use commercially reasonable efforts to ensure the receipt of amounts that, if received by the City or the Port District, would be Existing Revenues and are due and payable to the City or the Port District.
5.1.3. True-Up Payments. Because the actual amounts of th e DPFP may not be known when Developer is required to pay Constructio n Late Charges (since some of the amounts used in the calculation of DPFP will not be known), the Authority shall promptly, after any request by Developer, notify Developer of the reasonably ex pected amount of the applicable DPFP and Developer shall initially pay Construction Late Cha rges based on such estimated amounts. Within sixty (60) days after the end of each Fiscal Year with respect to which Developer was required to pay Construction Late Charges pursuant to this Section 5.1, the Port District shall reasonably determine the actual Real Estate Revenues it received during such Fiscal Year and present such amount, together with reasonable supporting documentation, to Developer for Developer’s review and approval. If the amount of such actual Real Estate Revenues received by the Port District exceeds the Real Estate Revenues as calculated based on the preceding Fiscal Year, then the Authority shall make a true-up payment to Developer for the differe nce within twenty (20) Business Days from the Revenue Fund maintained under the Authority Indentu re. If the amount of such Real Estate Revenues calculated by the Port District based on t he preceding Fiscal Year exceeds the amount of such actual Real Estate Revenues received by the Po rt District, then Developer shall make a true-up payment to the Trustee as assignee of the Authority for deposit into the Revenue Fund under the Authority Indenture for the difference within twenty (20) Business Days of a notice of deficiency.
5.2. Reserved.
5.3. Reserved.
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5.4. Project Schedule and Schedule Updates.
5.4.1. Planned Completion Date. For the Developer’s Phase 1A Infrastructure Improvements, the Project schedule shall indicate a planned completion date following the Commencement Date that is not later than the Outsid e Construction Completion Date (the “ Planned Completion Date ”). The Planned Completion Date may be extended in the event of a delay, provided that Developer duly requests a time extens ion in accordance with this Section 5.4 and such extension is authorized under this Article V. Any such schedule is for information purposes only.
5.4.2. Critical Path Method Schedules. Developer shall re quire that MMJV maintain a detailed, computer-generated, logic-driv en, precedence style critical path method (“ CPM ”) schedule that is prepared with Primavera or othe r software used by MMJV and that includes all of MMJV’s work related to the Project. Developer shall submit to the Authority a courtesy copy of all schedules and schedule updates that Developer receives from MMJV. If requested by the Authority, Developer shall deliver digital copies of any schedules in native computer file format.
5.4.3. Schedule Updates. Developer shall provide to Autho rity regular schedule updates not less than monthly, which shall include: actual start dates; actual completion dates; and remaining duration of activities in progress. Devel oper shall promptly notify the Authority of any changes to the schedule.
5.5. Unavoidable Delay. Each of the Developer and the P ort District shall be entitled to an extension of the date of the performance of any obligation required of such Party under this Agreement upon the occurrence of a Force Majeure Ev ent as and to the extent set forth in this Section 5.5. For the avoidance of doubt, the Hotel Ground Lease shall control as to a Force Majeure Event with respect to the Resort Hotel and Parking Improvements. (a) Definition. The term “ Force Majeure Event ” means the occurrence of any of the following events (and the actual collateral effects of such event), individually or in any combination, to the extent that (x) such event is b eyond the reasonable control of the Developer, the Port District, the City, the Financing District, or the Authority, as applicable, that is asserting th at a Force Majeure Event has occurred (the “ Force Majeure Party ”) and (y) such event and/or such actual collateral effect prevents such Force Majeur e Party from the performance of its obligations under this Agreement and is approved by the Authority pursuant to Section 5.5(e) below:
(i) A strike, or similar labor disturbances causing a w ork stoppage, excluding any such strike or work stoppage that cou ld have been avoided had the Force Majeure Party (or Hotel Operator or a Developer Party, in t he case of the Project), complied with Laws or labor agreements with respect to the Project, if any.
(ii) Hurricanes, typhoons, tornadoes, cyclones, other se vere storms, lightning or floods.
(iii) Days of precipitation or high winds in any month in excess of ten (10) year average for the area within City’s jurisdiction.
(iv) An earthquake, volcanic eruptions, explosions, dise ase, epidemics or other natural disaster.
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(v) Fires (including wildfires).
(vi) Inability to procure labor, utilities, equipment, m aterials, or supplies in the open market due to lack of availability (but , in each case, not attributable to a mere increase in price or the Force Majeure Party’s (or Hotel Operator or a Developer Party, in the case of the Project) acts or failure to act).
(vii) Acts of war or armed conflict, insurrections, riots , and acts of terrorism (including hijacking, chemical or biologi cal events, nuclear events, disease related events, arson or bombing) or, with respect to any of the foregoing, any threat thereof. (viii) Extraordinary delays in the issuance of any approva ls or authorizations from any Governmental Authority (exc luding any non-regulatory approvals provided under the terms of this Agreement by the Port Distr ict, the Authority or the City) that is necessary t o proceed with development or operation of the Conven tion Center, Developer’s Phase 1A Infrastructure Improvements or the Remaining Phase 1A Infrastructure Improvements, as applicable (provided that Developer has timely and properly fi led all applications, submitted all required documents and fees and taken all other reasonable actions that are necessary to obtain such approvals or authorizations and that the Force Majeure Party (or Hotel Operator or a Developer Party) is not responsible for the delay in the issuance of such a pprovals or authorizations by such party’s own actions or inactions). For purposes of this paragr aph, (A) “extraordinary delays” with respect to Cit y regulatory approvals or authorizations that are subject to the Staffing and Processing Agreement shall mean delays in City processing actions or approvals that exceed 150% of the time periods for City actions under the terms of the Staffing and Process ing Agreement, excluding any such delays caused by Developer’s own actions or inactions thereunder, and (B) “extraordinary delays” with respect to any other approval or authorization from any Govern mental Authority shall mean delays beyond the reasonably expected time period for such approval o r authorization which reasonably expected time period shall include customary or reasonably foreseeable delays in obtaining such approvals. (ix) An act of God.
(x) Embargoes or blockades.
(xi) Pre-Existing Hazardous Material (that is not the re sult of Material Exacerbation).
(xii) Closures or work stoppages ordered by any Governmen tal Authority that do not arise from a breach of this Agreement o r the Sublease or misconduct by Force Majeure Party (or Hotel Operator or a Developer Party, in the case of the Project). (b) Calculation of Delay. Actual delays resulting from the occurrence of one or more Force Majeure Events occurring concurrently sh all be calculated concurrently and not consecutively.
(c) Exclusions. For purposes of this Section 5.5, a Force Majeure Event shall not include adverse general economic or market conditio ns not caused by any of the events described in
5.5(a)(i) through (xii) above.
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(d) Payment Obligations. In no event will a Force Maje ure Event excuse the payment of Project Costs due under this Agreement.
(e) Notice and Acceptance Requirement. After the Force Majeure Party learns of any Force Majeure Event, such Force Majeure Party s hall endeavor to provide prompt (under the circumstances) informal written notice to the Execu tive Director and Authority staff working in the field that a Force Majeure Event has commenced, wit h a formal written notice to follow as described below. The Force Majeure Party shall notify the Au thority, the Administrative Agent, and the other Parties in writing within ten (10) Business Days af ter the Force Majeure Party learns of, and in no event later than thirty (30) days after commencemen t of a Force Majeure Event. Such notice (the “Initial Force Majeure Notice ”) must be made in good faith and describe the Forc e Majeure Event creating delay, why such delay is occurring, the es timated expected duration of such delay, and the commercially reasonable efforts that the Force Maje ure Party is taking to minimize the period of delay. Commencing on the date that is thirty (30) days after the date of the Initial Force Majeure Notice and for so long as the Force Majeure Event o r the actual collateral effects of such Force Majeure Event exist (whichever is later), the Force Majeure Party shall provide to the Authority, the Administrative Agent, and the other Parties monthly written updates on the estimated expected duration of such delay and the commercially reasonable efforts that the Force Majeure Party is taking to minimize the period of delay. Within thirty (30 ) days after the Force Majeure Event or the actual collateral effects of such Force Majeure Event ceas e to exist (whichever is later), the Force Majeure Party shall notify the Authority, the Administrativ e Agent, and the other Parties in writing that the Force Majeure Event and the actual collateral effec ts of such Force Majeure Event, as applicable, have ceased to exist and of the number of days by w hich Force Majeure Event (including the actual collateral effects of such Force Majeure Event) has delayed the Force Majeure Party’s construction of the Project (or, with respect to the Port Distri ct, the Remaining Phase 1A Infrastructure Improvements) or Completion (the “ Force Majeure Notice ”). Within thirty (30) days after Authority’s receipt of the Force Majeure Notice, th e Authority shall provide notice to the Force Majeure Party and the other Parties (“ Force Majeure Response ”) that either the Authority (a) requires additional information to make a deter mination regarding the Force Majeure Party’s assertion of the existence of a Force Majeure Event or the duration of the delay caused by the Force Majeure Event or the actual collateral effects of s uch Force Majeure Event, (b) approves the Force Majeure Notice, or (c) denies some or all of the Fo rce Majeure Notice. The Authority’s approval or denial of the Force Majeure Notice shall be in the Authority’s reasonable discretion. If the Authority denies some or all of the Force Majeure Notice, the Authority and the Force Majeure Party will meet and confer in good faith within ten (10) days after the Authority’s delivery of the Force Majeure Response to attempt to reach a mutually acceptable modification to the Force Majeure Notice that will result in the Authority approving the Force Ma jeure Notice as modified (“ Meet & Confer Period ”). If the Authority and the Force Majeure Party d o not agree on a modification to the Force Majeure Notice during the Meet & Confer Period, the Force Majeure Party may elect to withdraw the Force Majeure Notice and if the Force Majeure Party does not withdraw the Force Majeure Notice, the Authority shall present the Force Majeure Notic e to the Authority Board for its consideration to either approve or deny the Force Majeure Notice at a regularly scheduled meeting that shall take place within sixty (60) days after the expiration of the Meet & Confer Period. If the Authority Board denies the Force Majeure Notice, then the dispute s hall be resolved by a court of competent jurisdiction. If a court of competent jurisdiction determines in a final and non-appealable decision that the putative Force Majeure Event that was desc ribed in such Force Majeure Notice did not constitute a Force Majeure Event, the duration of s uch delay in the construction of the Project (or, with respect to the Port District, the Remaining Ph ase 1A Infrastructure Improvements) or Completion specified therein was not reasonable, or the efforts that the Force Majeure Party took to
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minimize the period of delay were not commercially reasonable, then, at the Authority’s sole and exclusive remedy for the Force Majeure Party’s fail ure to perform any obligation under this Agreement from which the Force Majeure Party claime d to be excused as a result of such Force Majeure Event, but was not excused, the Force Majeure Party shall make the Authority whole for any loss that the Authority suffered as a result of such failure.
5.6. Completion Guaranty. On or before the Effective Da te, Developer shall cause each Completion Guarantor (as defined in each Completion Guaranty) to execute and deliver to Authority, and maintain in effect in accordance with its terms , a Completion Guaranty substantially in the form attached hereto as Exhibit H and incorporated herei n by reference (“ Completion Guaranty ”), with any deviations from such form being reasonably acce ptable to Authority, City, Port District, the Administrative Agent, and Developer.
5.7. Entitlements.
5.7.1. Entitlement Costs. If any discretionary approval, permit or entitlement, including, without limitation, environmental analys is under CEQA or the National Environmental Policy Act, the PMP, a Port Master Plan Amendment ( “ PMPA ”), stormwater permits, a CDP and/or a Coastal Act exclusion (collectively, “ Discretionary Entitlement ”), are necessary, in Port District’s sole and absolute determination, in connection with any Improvements or Alterations, demolition work, remediation work or other projects undertaken by Developer on or at the Project Site or the Improvements (each of the foregoing for which a Dis cretionary Entitlement is required, the “Discretionary Project ”), then Developer shall enter into agreements, con sistent with the Port District’s applicable standard practices at that ti me (if any), with third-party experts, professional s and consultants to prepare reports and other materi als (“ Consultant Services ”) that are required to process the Discretionary Project and for the Port District or any other relevant Governmental Authority to consider the Discretionary Entitlement or Discretionary Project. Developer shall be directly responsible for the costs of the Consultan t Services. Developer shall reimburse Port District pursuant to the Reimbursement Procedure for all rea sonable costs and expenses incurred by Port District in connection with preparing, processing, considering and approving any Discretionary Project, any Discretionary Entitlement or any appea l of any CDP or Coastal Act exclusion to the CCC. If Developer fails to reimburse Port District for such costs or expenses pursuant to the Reimbursement Procedure, then, in addition to any o ther remedies that Port District may have, following three (3) Business Days’ prior written no tice to Developer, Port District may, at its reasonable discretion, discontinue the preparing, p rocessing, considering or approving of such Discretionary Project, Discretionary Entitlement or such appeal of a CDP or Coastal Act exclusion to the CCC, as applicable, until Developer reimburses Port District, and Developer shall be responsible for any costs and expenses incurred by Port District related to such discontinuance and if such failure continues for seven (7) additional Business Days af ter written notice from Port District to Developer, then such failure shall be an Event of Default. Not hing herein shall obligate Port District to seek, process or obtain any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project for the benefi t of Developer, and Port District makes no warranty or representation to Developer that Develo per will obtain any Discretionary Entitlement or ministerial approval. Port District shall not be re quired to pay any Governmental Authority fees or costs and expenses for any Consultant Services asso ciated with any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project. If Developer requests Port District’s assistance in obtaining from any th ird-party Governmental Authority any licenses, approvals, notifications, registrations or permits in connection with development, use and operation of the Project Site and the Improvements, including the construction of the Initial Project
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Improvements, Port District will consider Developer ’s request and inform Developer within thirty (30) days whether it will agree to reasonably assist Developer.
5.7.2. Entitlements Indemnity. Without limitation of Deve loper’s other obligations under this Agreement, Developer agrees, at its sole cost and expense, and with counsel reasonably selected by the Public Entities and reas onably acceptable to Developer, to indemnify, defend and hold harmless the Port District Parties, Authority Parties, Financing District Parties, and the City Parties from any third-party claims, deman ds, actions, causes of action, suits and Related Costs, arising out of Port District’s approval of a ny Discretionary Project, Discretionary Entitlement or appeal of a CDP or Coastal Act exclusion to the CCC. Port District may, in its sole and absolute discretion, participate in the defense of any claim s, demands, actions and causes of action and suits, and Developer shall reimburse Port District for all reasonable costs that are incurred by Port Distric t in connection therewith, including, without limitat ion, reimbursement for attorneys’ fees, experts’ fees and other costs. Port District’s participation in such defense shall not relieve Developer of any of its obligations under this Section 5.7.2. The fore going indemnity obligations of Developer are in addition to, and not in limitation of, any other in demnity obligations of Developer contained in this Agreement, the Ground Lease, and the Sublease, and this Section 5.7.2 shall survive the expiration or earlier termination of this Agreement and the Sublease.
5.7.3. Reservation of Discretion. Developer acknowledges and agrees that, notwithstanding the terms and conditions of this Ag reement, and the Sublease, Port District reserves its discretion to condition, approve or disapprove any Discretionary Entitlements or Discretionary Project, including, without limitation, adoption of any and all feasible mitigation measures, alternatives to a Discretionary Project, including a no project alternative, and a statement of overriding consideration, if applicable, and that n othing in this Agreement or the Sublease will be construed as circumventing or limiting Port Distric t’s discretion with respect to any Discretionary Entitlement, or any Discretionary Project, includin g, without limitation, the exercise of eminent domain, code enforcement and the making of findings and determinations required by Laws.
Developer acknowledges and agrees that any and all Discretionary Entitlements may be conditioned, approved or denied by Port District, in its sole and absolute determination, and Developer accepts the risk that Port District may deny any and all Discre tionary Entitlements, and hereby waives any claims, demands, actions, causes of action, suits against Port District for such conditions or denial.
5.7.4. Ministerial Action by Authority. At Developer’s request, the Authority will take any reasonable and lawful ministerial action t hat is reasonably necessary in connection with Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project (including, without limitatio n, signing any application for a Discretionary Entitlement in its capacity as the owner of the Con vention Center, tenant under the Site Lease or sublandlord under the Facility Lease).
5.8. Energy Requirements. Notwithstanding any other pro vision of this Agreement to the contrary, the only obligations of Developer with respect to Section 15 and Exhibit 3 of the Settlement Agreement and any indemnification obligations with respect thereto are set forth in Exhibit O attached hereto and incorporated herein by reference and in the Ground Lease.
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ARTICLE VI
PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY
6.1. Award of Sole Source Prime Contract. Pursuant to t he findings of the Authority Board found in Authority Resolution 2020-002, the D eveloper may award one or more single sole source prime contracts to MMJV for the partial desi gn and construction of the Project subject to the terms and conditions of Authority Resolution 2020-0 02 and this Article VI of this Agreement. The Authority has approved the final, executable constr uction contracts for the Convention Center and the Developer’s Phase 1A Infrastructure Improvements listed on Exhibit G-3. 3
6.2. Subcontractor Bid and Award Process for the Develop er’s Phase 1A Infrastructure Improvements. The provisions of this Section 6.2 s hall apply only to the Phase 1A Infrastructure Improvements that Developer performs. Developer sha ll award subcontracts in compliance with the Authority Procurement Policy and Authority Resoluti on 2020-002 and as implemented (with modifications) and further delineated in the bid an d award process that is attached as Exhibit G-1 hereto and as further set out in this Section 6.2. Developer represents and warrants that the subcontracts listed in Exhibit G-2 hereto were awarded in accordance with the bid and award process set forth in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Authority Procurement Policy and Authority Reso lution 2020-002. Developer may utilize subcontracts awarded prior to the Effective Date of this Agreement, provided such subcontracts were procured in accordance with this Section 6.2. Nothi ng herein is intended to limit the Executive Director’s authority to implement the Authority Pro curement Policy and Authority Resolution 2020- 002 and approve waivers as set forth therein.
6.2.1. Sole Source Subcontract Award. If so intended by D eveloper, Developer shall provide notice of its intention to award a so le source contract to Authority and Authority shall evidence its approval of the Developer’s proposed s ole source subcontract award (which approval shall not be unreasonably withheld) by delivering a signed Sole Source Subcontract Award Approval in the form set forth in Exhibit L (with respect to Developer’s Phase 1A Infrastructure Improvements) and Authority shall evidence its appr oval of such sole source subcontract award by counter-signing such Sole Source Subcontract Award Approval. Authority shall counter-sign a Sole Source Subcontract Award Approval or provide written notice of Authority’s reasons for withholding approval within five (5) Business Days after receiv ing written notice from the Developer. If Authority fails to respond to a written request for Sole Source Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respond in writing within two (2) Business Da ys after receiving written notice from the Developer. If Authority fails to respond within su ch additional two (2) Business Day period, then Authority shall be deemed to have approved such Sole Source Subcontract Award Approval.
6.2.2. Best Qualified Contractor Subcontract Award. If so intended by Developer, Developer shall provide notice of its intention to award a subcontract on the best qualified contracto r (who is not the lowest bidder) to Authority and Aut hority shall evidence its approval of the Developer’s proposed best qualified subcontract awa rd (which approval shall not be unreasonably withheld) by delivering a signed Best Qualified Con tractor Subcontract Award Approval in the form set forth in Exhibit M (with respect to Developer’s Phase 1A Infrastructure Improvements) and Authority shall evidence its approval of such best qualified contractor award by counter-signing such Best Qualified Contractor Subcontract Award Approva l. Authority shall counter-sign a Best
3 NTD: Such approval to occur before Closing.
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Qualified Contractor Subcontract Award Approval or provide written notice of Authority’s reasons for withholding approval within five (5) Business D ays after receiving written notice from the Developer. If Authority fails to respond to a writ ten request for Best Qualified Contractor Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respon d in writing within two (2) Business Days after receiving written notice from the Developer. If Au thority fails to respond within such additional two (2) Business Day period, then Authority shall be de emed to have approved such Best Qualified Contractor Subcontract Award Approval.
6.2.3. Applicability of Authority Procurement Policy. Not withstanding anything to the contrary set forth in the Authority Procurem ent Policy or Authority Resolution 2020-002, to the extent that Developer procures work to construc t all or a portion of the Remaining Phase 1A Infrastructure Improvements pursuant to Section 2.3 and to the extent Developer procures work with respect to Remaining Phase 1A Infrastructure Improvements (or, with the reasonable approval of the Executive Director, Developer’s Phase 1A Infrastruc ture Improvements) as a result of a casualty or condemnation event, Developer may procure such work without regard to the bidding requirements set forth in Sections 1 and 2 of the Authority Proc urement Policy. Except with respect to Sections 1 and 2 of the Authority Procurement Policy, the requ irements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by t his Agreement, shall remain in effect and apply to the Remaining Phase 1A Infrastructure Improvemen ts constructed by Developer and any work with respect to Remaining Phase 1A Infrastructure I mprovements (or, with the reasonable approval of the Executive Director, Developer’s Phase 1A Inf rastructure Improvements) procured by Developer as a result of a casualty or condemnation event. The modifications described above are intended to be modifications by agreement approved by the Authority Board, as expressly authorized in the Authority Procurement Policy.
6.3. Bid and Award Process for the Remaining Phase 1A In frastructure Improvements. If the Port District constructs or causes the construc tion of the Remaining Phase 1A Infrastructure Improvements, the Port District shall use its procurement policies, then in effect.
6.4. The Convention Center as a Special Purpose Project. Pursuant to Authority Resolution 2020-002, the Convention Center constitu tes a “special purpose project” as defined in Section 6 of the Authority Procurement Policy, and the requirements of Sections 1.b.ii, 1.b.iii, 2 and 3(b) of the Authority Procurement Policy shall not apply to the provisions of this Agreement pertaining to development and construction of the C onvention Center or work for the Convention Center procured by Developer as a result of a casua lty or condemnation event pursuant to Article V of the Sublease.
6.5. Procurement of Alterations. Procurement of work f or Alterations is governed by the Sublease and not this Agreement, and the requirements of the Authority Procurement Policy shall not apply to Alterations. The modifications described a bove are intended to be modifications by agreement approved by the Authority Board, as expre ssly authorized in the Authority Procurement Policy.
6.6. Bid Opening and Award. In the case of any Competit ive Bid or Solicitation Process for the Developer’s Phase 1A Infrastructure Improve ments, Developer shall provide the Authority with a copy of the tabulation of competitive bid re sults with respect to each contract and subcontract , as applicable. Developer shall provide the Authority with copies of all executed contracts awarded in accordance with this Section 6.6 and Developer shal l certify in writing to the Authority that such
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contracts were awarded in accordance with the proce ss described in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority in accordance with the Authority Procurement Policy and Authority Resolution 2020-002. A list o f the subcontracts awarded for the Developer’s Phase 1A Infrastructure Improvements prior to the E ffective Date is set forth in Exhibit G-2.
Developer hereby certifies to the Public Entities t hat the subcontracts listed in Exhibit G-2 were bid and awarded in accordance with the process describe d in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Au thority Procurement Policy and Authority Resolution 2020-002.
6.7. Authority Procurement Policy Acknowledgement. In t he event Developer exercises the Second Sweetwater Park Option and only for purp oses of Developer’s procurement of General Contracts for Sweetwater Park, Authority waives the bidding requirement of the Authority Procurement Policy (including, without limitation, set forth in Sections 1 and 2 of the Authority Procurement Policy). All other requirements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by this Agreement, shall apply to Developer’s procurement of contracts for Sweetwater Park. Authority acknowled ges that in compliance with the applicable provisions of the Authority Procurement Policy and Authority Resolution 2020-002, Authority has required Developer to enter into this Agreement to establish the terms and conditions pursuant to which the Developer may develop and construct the P roject and obtain payment for a portion of the eligible costs of developing and constructing the D eveloper’s Phase 1A Infrastructure Improvements and the Convention Center from the proceeds of the Authority Bonds and the County Funds, and that to the extent requirements set forth in this Agreem ent differ from the requirements set forth in Authority Procurement Policy and Authority Resoluti on 2020-002, the requirements set forth in this Agreement will govern the procurement, development and funding of the Project, including the Remaining Phase 1A Infrastructure Improvements if Developer has exercised the Second Sweetwater Park Option (to the extent permitted by Authority P rocurement Policy and Authority Resolution 2020-002). Notwithstanding anything to the contrar y in this Agreement, Sections 6.2 through 6.2.2 shall not apply to the Remaining Phase 1A Infrastructure Improvements.
ARTICLE VII
DESIGN AND CONSTRUCTION STANDARDS
7.1. Standard of Care. Developer will use commercially reasonable efforts to furnish efficient business administration and supervision a nd manage the performance of the work with respect to the Project in an expeditious and econom ical manner consistent with Authority’s interests.
Developer shall endeavor to cause the General Contr actor and all Subcontractors to construct the Project in a workmanlike manner. Developer’s profes sional consultants shall be skilled in the profession necessary to perform their respective se rvices and Developer shall cause them to perform their services related to the Project in a skillful and competent manner, consistent with the standard s generally recognized as being employed by professio nals qualified to perform the services in the same discipline in the State of California.
7.2. Compliance with Laws.
7.2.1. Port District Compliance with Laws. Port District shall in its construction of the Remaining Phase 1A Infrastructure Improvements abide by and comply with, and cause any of its General Contractor, Subcontractors, employees, and agents, to abide by and comply with all Laws.
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7.2.2. Developer’s Compliance with Laws. Developer shall in all activities on or in connection with the Project Site and the Project , and in all uses thereof, including without limitation the Permitted Use and any construction o f the Project, abide by and comply with, and cause the Developer Parties (other than Developer) and Hotel Operator to abide by and comply with, all Laws at Developer’s sole cost and expense, and Authority shall not have any obligations or responsibilities to comply with any Laws as to the Project Site and the Improvements or any use thereby by Developer Parties or Hotel Operator. In particular and without limitation, Developer shall have the sole and exclusive obligation and responsi bility, at Developer’s sole cost and expense, to comply with the requirements of the following, to t he extent applicable: (i) the San Diego Unified Port District Code, including without limitation, A rticle 10 (Stormwater Management and Discharge Control), (ii) the ADA, including but not limited t o regulations promulgated thereunder, (iii) applicable federal, state and local laws and regulations regarding employment and labor practices, including, without limitation, the provi sions of Section 7.2.3 and Article XX of this Agreement, (iv) any Coastal Development Permit (“ CDP ”) (including any conditions of approval or mitigation measures or project changes pursuant to the environmental review under the California Environmental Quality Act (“ CEQA ”)) or any other California Coastal Commission (“ CCC ”) regulations or local, state or federal requirements now or hereafter affecting the Project Site or the Improvements, including the use or development ther eof, (v) the Port Master Plan (“ PMP ”), (vi) the Chula Vista Municipal Code, (vii) any other develop ment permits or approvals accepted by Developer, and (viii) the policies adopted by the B PC. Until the earlier of such time as all components of the Developer’s Phase 1A Infrastructu re Improvements are Accepted or the Term of this Agreement terminates or expires, neither the B PC nor the City Council shall adopt any Law that only applies to the Developer’s Phase 1A Infrastruc ture Improvements, unless the Law is determined by the BPC, in its sole and absolute discretion, or the City Council, in its sole and absolute discret ion (as applicable), but in either case, in a manner th at is neither arbitrary nor capricious, to be neces sary for health and safety reasons, to protect the welfa re of the people, or to exercise the Port District’ s police powers under the Port Act or the City Counci l’s police powers under applicable Laws, including the CVMC. The foregoing limitation shall not apply to the adoption of any ordinance or resolution that authorizes an amendment to this Agr eement or any Contemporaneous Agreement, or is adopted to authorize the enforcement of Port Dis trict’s or City’s rights or the performance of Port District’s or City’s obligations under this Agreeme nt or any Contemporaneous Agreement, including without limitation, any ordinances or resolutions a dopted by the BPC or City Council as part of any discretionary approval. In the event of any conflict between the terms of a policy adopted by the BPC or City Council and this Agreement, Developer shall deliver notice to Port District or City, as applicable, of such a conflict and the Parties shal l meet and confer within ten (10) days of Port District’s or City’s, as applicable, receipt of the notice to discuss the conflict and attempt to reso lve the conflict in good faith prior to commencing mediation pursuant to Section 26.12.10. If the conflict is not resolved pursuant to Section 26.12.10, then the terms of this Agreement shall control and Developer shall be excused from complying with the terms of such policy adopted by the BPC or City Council, to the extent of such conflict only.
7.2.3. Prevailing Wage.
7.2.3.1. This Section 7.2.3.1 applies only to the Project and does not apply to the Remaining Phase 1A Infrastructure Improvemen ts unless and until Developer exercises a Sweetwater Park Option. Developer acknowledges and agrees that:
a. Any construction, alteration, demolition, installat ion, or repair work, in each case for the Project, required or performed under this Agreement constitutes
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“public work” under California Prevailing Wage Law, including Labor Code §§ 1720 through 1861, et seq. (“ PWL ”), and obligates Developer to cause such work to b e performed as “public work,” including, but not limited to, the payment of appli cable prevailing wages to all Persons subject to th e PWL.
b. Developer shall cause all Persons performing “publi c work” for the Project under this Agreement to compl y with all applicable provisions of the PWL and other applicable wage Laws.
c. Developer’s violations of the PWL shall constitute a breach (subject to cure pursuant to Section 21.1.2) under this Agreement. d. Authority hereby notifies Developer, and Developer
hereby acknowledges, that the PWL includes, without limitation, Labor Code § 1771.1(b) that provides that the following requirements described in Labor Code § 1771.1(a) shall be included in all bid invitations and “public work” contracts: “A con tractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of § 4104 of the Public Contract Code , or engage in the performance of any contract for “public work,” as defined in this chapter, unless it is currently registered and qualified to perform “publ ic work” pursuant to Section 1725.5. It is not a violation of this Section for an unregistered contr actor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by S ections 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perf orm “public work” pursuant to Section 1725.5 at the time the contract is awarded.”
e. Developer acknowledges that its obligations under t he PWL with respect to the Project include, without limitation, ensuring that:
i. pursuant to Labor Code § 1771.1(b), a bid shall not be accepted nor any contract or subcontract entered into without proof of the contractor or subcontractor’s current registration to perform “public work” pursuant to § 1725.5; ii. pursuant to Labor Code § 1771.4(a)(1), the call for bids and contract documents shall specify that the project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations (“ DIR ”); iii. pursuant to Labor Code § 1771.4(a)(2), it posts or requires the prime contractor to post job site notices, as prescribed by regulation; and iv. pursuant to Labor Code § 1773.3(a)(1), it provides notice to the DIR of any “public works” contract su bject to the requirements of the PWL, within thirty (30) days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. Pursuant to Labor Co de § 1773.3(a)(2), the notice shall be transmitted electronically in a format specified by the DIR and shall include the name and registration number issued by the DIR pursuant to § 1725.5 of the contractor, the name and registration number issued by the DIR pursuant to § 1725.5 of any subcontractor listed on the successful bid, the bid and contract award dates, t he contract amount, the estimated start and completion dates, job site location, and any additi onal information that the DIR specifies that aids i n the administration and enforcement of the PWL. PWC- 100 is the name of the form currently used by
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the DIR for providing the notice, but Developer sha ll determine and use whatever form the DIR requires.
f. None of the Authority, Port District, City, or Fina ncing District shall be responsible for Developer’s failu re to comply with any applicable provisions of the PWL.
g. Notwithstanding anything in this Agreement to the
contrary, Developer shall not be responsible for an y Person’s failure to comply with any applicable provisions of the PWL with respect to any work perf ormed by, or on behalf of, any Public Entity Party (other than by a Developer Party or Hotel Ope rator, or on behalf of a Developer Party or Hotel Operator, or by any Person acting directly or indir ectly under a contract with a Developer Party or Hotel Operator).
7.3. Compliance with Design and Construction Standards; Chula Vista Building Code.
7.3.1. Design and Construction Standards.
7.3.1.1. Developer shall comply, and require compliance by a ny of its General Contractor, Subcontractors, employees, and agents, or other Developer Parties, with the applicable Design and Construction Standards in con nection with the design and construction of Developer’s Phase 1A Infrastructure Improvements. Developer shall not be required to exceed the Design and Construction Standards or to comply with other standards in connection with the design and construction of Developer’s Phase 1A Infrastruc ture Improvements except to the extent set forth in the approved Contract Documents or the Approved Drawings and Specifications, all as interpreted by the City in accordance with the Law.
7.3.1.2. Developer shall be entitled to an Expedited Review Process in the event that a Public Entity Development Party reques ts, requires, instructs or demands (for purposes of this Section 7.3.1, a “ Requirement ”) that any Developer Party satisfy or implement an y design or construction standard in connection with Developer’ s Phase 1A Infrastructure Improvements that Developer reasonably and in good faith determines t o be in excess of the requirements of the Design and Construction Standards; provided that prior to initiating the Expedited Review Process, Developer shall have submitted a written request to the applicable Public Entity Development Party that the Requirement be rescinded, including the re asons for Developer’s objection to the Requirement. Should the Expedited Review Individua l fail to respond within 24 Business Hours from the time the email initiating the Expedited Re view Process is sent by the Developer, the Developer’s request to rescind the Requirement shall be deemed disapproved.
7.3.1.3. In the event that any requirement set forth in the Design and Construction Standards may be satisfied in more tha n one manner consistent with the Design and Construction Standards, Developer may elect to sati sfy such requirement in the manner consistent with such requirements selected by Developer.
7.3.2. Chula Vista Building Code.
7.3.2.1. Developer shall comply, and require compliance by a ny of its General Contractor, Subcontractors, employees, and agents, or other Developer Parties, with the applicable provisions of the Chula Vista Building C ode, in connection with the design and
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construction of Convention Center, Resort Hotel, and Parking Improvements. Developer shall not be required to exceed the requirements of the Chula Vi sta Building Code or to comply with other standards in connection with the design and construction of the Convention Center, Resort Hotel, and Parking Improvements except to the extent set forth in the approved Convention Center Plans, Resort Hotel Plans (defined in the Ground Lease), Prelimin ary Parking Improvement Plans (defined in the Ground Lease), and Parking Improvement Plans (defin ed in the Ground Lease), all as interpreted by the City in accordance with the Law.
7.3.2.2. Developer shall be entitled to an Expedited Review Process in the event that any Public Entity Development Party requests, requires, instructs or demands (for purposes of this Section 7.3.2, a “ Requirement ”) that any Developer Party satisfy or implement an y design or construction standard in connection with the Conven tion Center that Developer reasonably and in good faith determines to exceed the requirements of the Chula Vista Building Code; provided that prior to initiating the Expedited Review Process, D eveloper shall have submitted a written request to the applicable Public Entity Development Party that the Requirement be rescinded, including the reasons for Developer’s objection to the Requiremen t. Should the Expedited Review Individual fail to respond within 24 Business Hours from the time the email initiating the Expedited Review Process is sent by the Developer, the Developer’s request t o rescind the Requirement shall be deemed disapproved.
7.3.2.3. In the event that any standard or requirement set f orth in the Chula Vista Building Code may be satisfied in more than one manner consistent with the Chula Vista Building Code (as determined by the City), Develope r may elect to satisfy such standard or requirement in the manner consistent with the Chula Vista Building Code (as determined by the City) selected by Developer.
7.3.3. Standard Specifications. In connection with any mo dification of the Approved Drawings and Specifications for the Develo per’s Phase 1A Infrastructure Improvements, Developer shall comply, and require compliance by a ny of its General Contractor, Subcontractors, employees, and agents, with the editions of the fol lowing reference specifications that were in effect on the Plan Submission Date: the Standard Specifica tions and the Chula Vista Standard Special Provisions.
7.3.4. Summary of Construction Standards. In order to cla rify the design and construction standards applicable Developer’s Phase 1A Infrastructure Improvements and the Convention Center, Developer may, in Developer’s di scretion, provide a flier substantially in the form attached hereto as Exhibit Z to any Person entering the Project Site.
7.3.5. Expedited Review Process Inapplicable to Other Publ ic Agencies. The provisions of Sections 7.3.1 and 7.3.2 permitting a n Expedited Review Process with respect to Design and Construction Standards and the Chula Vis ta Building Code apply only to Requirements imposed by the City or Port District and are inapplicable to any requirements that may be imposed by other public agencies. At the request of the Devel oper, the City and Port District will use reasonabl e efforts to meet with other public agencies and the Developer to address requests, requirements, instructions, or demands imposed by such other publ ic agencies that the Developer reasonably and in good faith determines to exceed applicable legal requirements.
7.4. Construction Period. With respect to Convention Ce nter and any portion of the Developer’s Phase 1A Infrastructure Improvements, t he provisions of Sections 7.1, 7.2 and 7.3 shall
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apply until Acceptance of the Convention Center or such portion of Developer’s Phase 1A Infrastructure Improvement, as applicable.
7.5. Authority Approval Not a Waiver of Obligations. Wh ere approval by the Authority, the Executive Director, or other representatives of the Authority is required, it is understood to be general approval only and does not relieve Develope r of responsibility for complying with all applicable Laws or other requirements of this Agree ment, except in the case of the Authority’s express waiver of the requirement to comply with (a ) any Authority requirement, to the extent such requirement is waivable, or (b) any other requireme nt of this Agreement waivable by the Authority.
For purposes of this Agreement, in the event of Aut hority’s express waiver provided pursuant to clauses (a) or (b) above, Developer shall be deemed in compliance with such Authority requirements or other requirement of this Agreement as a result of such waiver, in each case, only to the extent of such waiver. No such waiver shall constitute an as sumption of liability by the Authority, nor shall the Authority, through approval, become an insurer or surety of work associated with the approvals.
ARTICLE VIII
CONSTRUCTION
8.1. Site Safety, Security. Developer shall be responsi ble for Project Site safety and security, with respect to Developer’s construction of the Project.
8.1.1. Persons. As between the Developer, on one hand, an d the City, Port District, and the Authority, on the other hand, and without expanding the Developer’s contractual obligations or duties to any Person other than the City, Port District, and Authority, the Developer shall be solely responsible for the safety and secu rity of its officers, agents, and employees authorized by Developer to access the Project Site.
8.1.2. Other. Developer is responsible for each portion o f the Developer’s Phase 1A Infrastructure Improvements Site and all o ther materials, equipment, and other incidentals on such portion of the Developer’s Phase 1A Infrast ructure Improvements Site until such portion of the completed Developer’s Phase 1A Infrastructure Improvements have been Accepted by the City or Port District, as applicable. Developer is respons ible for the Site, materials, equipment, and all ot her incidentals on the Site until the completed Convent ion Center has been Accepted by the Authority.
From and after Acceptance, any responsibility of th e Developer for the Convention Center shall be pursuant to the Sublease.
8.1.3. Environment. In the construction and development o f the Project, Developer shall comply with all environmental laws and regulations, including the Clean Air Act of 1970, the Clean Water Act, Executive Order number 1 1738, and the Stormwater Management and Discharge Control Ordinance No. 0-17988 and any and all Best Management Practice (“ BMP ”) guidelines and pollution elimination requirements a s may be established by an enforcement official.
Furthermore, Developer shall prepare and incorporat e into the drawings and specifications a Stormwater Pollution Prevention Plan (“ SWPPP ”) to be implemented by Developer during Project construction and, until Acceptance of the Conventio n Center or the applicable Developer’s Phase 1A Infrastructure Improvements. Where applicable, the SWPPP shall comply with both the California Regional Water Quality Control Board Statewide Gene ral Construction Storm Water permit and National Pollution Discharge Elimination System per mit requirements and shall be in conformance with the City of Chula Vista BMP Design Manual and CVMC Chapter 14.20 (Storm Water Management and Discharge Control).
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8.1.4. Access to Project Site. During the Construction Pe riod, the Public Entity Parties shall have the right, but not the obligatio n, to enter upon and inspect the portions of the Project Site where the construction of the Project is ongoing, during normal business hours and upon a two (2) Business Days’ prior notice to Developer (except for or in connection with inspections undertaken by any Public Entity in its regulatory c apacity and except in the case of an emergency in which case no prior notice shall be required but ea ch of such Public Entity Parties that enter the Project Site shall notify Developer and Developer’s Risk Construction Manager thereof by phone prior to entering the Project Site), and each Publi c Entity that enters the Project Site shall, and sh all cause each of its respective Public Entity Parties that enter the Project Site, as applicable, to:
(a) comply with all applicable security and safety procedures of Developer of which Developer informs such Public Entity in writing and with whic h such Public Entity Party can reasonably comply, and (b) not interfere with Developer’s cons truction of the Project. Notwithstanding the foregoing, nothing herein shall limit the Port Dist rict’s or City’s right to enter the Project Site at any time to exercise their respective police powers.
8.2. Public Right-of-Way. All work, including materials testing, special testing, and surveying to be conducted in the public right-of-wa y shall be coordinated with the Authority.
Developer agrees to follow all Laws and regulations , and all written and publicly available standards and regulations of the Authority, as applicable, wh ile working in the public right-of-way, including, but not limited to, utilizing proper traffic control and obtaining necessary permits.
8.3. Traffic Control. In connection with the Project, D eveloper shall be responsible for traffic management, including traffic control imple mentation, maintenance, and preparing detailed traffic control plans to be submitted to the jurisdiction for approval.
8.4. Maintenance. Developer shall maintain and be respo nsible for each portion of the Developer’s Phase 1A Infrastructure Improvements un til Acceptance of such portion, including ongoing erosion prevention measures. Upon Acceptan ce, the City, the Port District and/or the Authority, as applicable, shall be responsible for maintenance of such portion of the Developer’s Phase 1A Infrastructure Improvements, as determined through one or more separate agreements among two or more of the City, the Port District, a nd the Authority. All costs incurred by Developer in maintaining the Developer’s Phase 1A Infrastruct ure Improvements shall be Developer’s Phase 1A Infrastructure Improvements Costs. To the extent such costs are incurred after Completion but before Acceptance of the Developer’s Phase 1A I nfrastructure Improvements and are not paid to Developer pursuant to Section 9.1 (including pursua nt to the Final Accounting under Section 9.1.6), Authority shall reimburse Developer for such costs within thirty (30) days after Developer provides Authority with a request for reimbursement, together with supporting documentation evidencing such costs. For the avoidance of doubt, Developer shall have no further obligations pursuant to this Section 8.4 with respect to any portion of the Deve loper’s Phase 1A Infrastructure Improvements after Acceptance of such portion of the Developer’s Phase 1A Infrastructure Improvements.
8.5. Construction Cooperation.
8.5.1. Within thirty (30) calendar days after the Effectiv e Date, the Parties shall schedule a meeting at the Site regarding the constr uction and development of the Project, the Resort Hotel and the Parking Improvements and other matter s related thereto. Developer and the Public Entities, as applicable, shall cause executive and project level personnel of Developer and the Public Entities (including such Public Entity Development Parties whose presence may be reasonably requested by Developer) to attend such meeting.
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8.5.2. On the [ ] Business Day 4 of each month at the Site, (or such other time and place as the Parties may reasonably agree), Developer and the Public Entities, as applicable, shall cause appropriate personnel of Developer and the Pu blic Entities (including such Public Entity Development Parties whose presence may be reasonably requested by Developer) to attend a meeting regarding the construction and development of the P roject, the Resort Hotel and the Parking Improvements and other matters related thereto. Ot her meetings relating to the Project or the Work shall be held (in person, by telephone, or by virtu al meeting room, as agreed by the Parties) at times and at such frequency as reasonably requested by the Developer or any Public Entity. Such additional meetings shall occur within seventy-two Business Ho urs of a written request submitted by email to the other Parties. Such meetings shall be attended by appropriate representatives of Developer and the Public Entities, including such Public Entity D evelopment Parties whose presence may be reasonably requested by Developer and such representatives of the Developer whole presence may be reasonably requested by a Public Entity. Any reque st for attendance of specified individuals or representatives of Developer or any Public Entity D evelopment Parties shall be made by written notice to the applicable Party by email not fewer t han 24 Business Hours prior to the applicable meeting and upon receipt of such written request, t he applicable Party shall take all reasonably available actions to ensure the attendance of the r equested individual or representative or another individual authorized to make determinations on the requested Person’s behalf. All notices and requests to the Public Entities under this Section shall be submitted to the Authority Email Addresses.
ARTICLE IX
PAYMENT OF PROJECT COSTS
9.1. Developer’s Phase 1A Infrastructure Improvements Co sts. The provisions of this Section 9.1 and each subsection of this Section 9.1 shall apply solely to the Developer’s Phase 1A Infrastructure Improvements.
9.1.1. Payment of Costs Associated with the Developer’s Ph ase 1A Infrastructure Improvements. Based upon Developer’s Phase 1A Paym ent Requests submitted to the Authority by the Developer, the Authority shall make progress pa yments on account of the Developer’s Phase 1A Contract Sum to the Developer in accordance with th e provisions of this Section 9.1. The amount of each progress payment shall be computed as follows:
9.1.1.1. The amount of each progress payment shall first include:
a. The Developer’s Phase 1A Infrastructure Improvement s Costs incurred or to be incurred by Developer and f or which Developer has made or intends to make actual payment prior to the next Developer’s Phase 1A Payment Request; and b. The Stipulated Developer’s Phase 1A Infrastructure
Improvements Overhead Amount that has accrued as of the date of such Developer’s Phase 1A Payment Request.
4 NTD: To coincide with monthly payment application meetings.
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9.1.1.2. The amount of each progress payment shall then be r educed by, without duplication:
a. The aggregate of any amounts previously paid by the Authority in respect of the Developer’s Phase 1A Contract Sum; b. The amount by which the Architect, pursuant to the
Architect’s Certificate that is attached to such De veloper’s Phase 1A Payment Request, reduces the amount to be paid with respect to such Developer’s Phase 1A Payment Request. The Architect may reduce such amount to the extent the work performed by Developer for which payment is requested has not been performed substantially in accordance in all material respects with the Approved Drawings and Specifications for the Developer’s Pha se 1A Infrastructure Improvements, in which case the amount to be disbursed under the applicabl e Developer’s Phase 1A Payment Request shall be reduced to reflect the cost of causing such cons truction to be performed substantially in accordance in all material respects with such Appro ved Drawings and Specifications (without duplication of any similar reduction that is made b y Developer). In the event of any such reduction, Developer may seek payment for the amounts so reduc ed in any subsequent Developer’s Phase 1A Payment Request; and
c. Any amount for which the Developer does not intend to pay General Contractor or any Subcontractor, unless the work has been performed by others the Developer intends to pay.
9.1.1.3. Funds for Payment of Costs/Expenses.
a. On the Effective Date, Authority shall cause the Tr ustee to (i) from the proceeds of the Authority Tax-Exemp t Bonds, deposit an amount equal to $[ ] [NTD: net proceeds of the Authority Tax-Exempt Bond s less the bond proceeds contribution to Sweetwater Park referenced in clause (ii)] into the 2022B Bond Proceeds Subaccount and (ii) f rom the proceeds of the Authority Tax-Exempt Bonds, tra nsfer an amount equal to $__________ to the Port District for costs relating to the Sufficient Completion of Sweetwater Park. The Parties acknowledge that the County Funding Agreement provi des for the County to pay County Funds to the Authority in multiple payments, from time to ti me as described in the County Funding Agreement, and that such payments are expected to o ccur after the Effective Date. Within five (5) Business Days of the Authority’s receipt of any Cou nty Funds, the Authority shall transfer such County Funds as follows: (x) the Authority shall t ransfer the first $________ of the County Funds that the Authority receives (the “ County Sweetwater Park Funds ”) to the Port District; and (y) the Authority shall transfer the remainder of the Count y Funds that the Authority receives (expected to cumulatively equal $_________) to the Trustee for d eposit into the County Funded Developer’s Phase 1A Subaccount. The Authority shall cause the Trustee to make the deposits described in clause (y), above.
b. The Authority shall take all actions necessary to c ause the Trustee to disburse moneys from the 2022B Bond Proc eeds Subaccount, the County Funded Developer’s Phase 1A Subaccount, and the Phase 1A I nfrastructure Improvements Subaccount, of the 2022B Construction Account and the Authority Ex isting Revenues Account (in that order) for payments required to be made to the Developer, as a nd when required under this Agreement. Each Public Entity shall not interfere with any lawfully made disbursement request delivered to the Trustee. Until the County Funds Release Date, (A) Authority shall not permit any funds in the
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2022B Bond Proceeds Subaccount or the County Funded Developer’s Phase 1A Subaccount of the 2022B Construction Account to be used for any purpose other than making payments to Developer in accordance with this Section 9.1 without the prior written consent of the Developer, which consent shall be granted or withheld in Developer’s sole di scretion, and (B) Authority shall direct or authorize the Trustee to transfer funds out of the 2022B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount of the 2022B Construction Account only to the account or accounts designated by Developer in writing (or as otherwise consented to in Developer’s sole discretion). Until the County Funds Release Date, (A) Authority shall not permit any funds in the Authority Existing Revenues Account of the Revenue Fund to be used for any purpose other than (i) making payments to Developer in accordance with thi s Section 9.1 without the prior written consent of the Developer, which consent shall be granted or withheld in Developer’s sole discretion, or (ii) transfers to any fund or account established under the Authority Indenture or disbursements to the Authority, the City or the Port District to pay any cost incurred by the Authority, the City or the Po rt District with respect to the Resort Hotel, Conventi on Center, Parking Improvements, or Developer’s Phase 1A Infrastructure Improvements (collectively, the “Additional Authority Uses”), in an amount not to exceed $1,000,000 in the aggregate (the “Add itional Authority Uses Cap”), and (B) Authority shall direct or authorize the Trustee to transfer funds out of the Authority Existing Revenues Account of the Revenue Fund only to the account or accounts designated by Developer in writing (or as otherwise consented to in Developer’s sole discreti on) or, subject to the Additional Authority Uses Cap, to any other account or payee for the payment of Additional Authority Uses. After the date that is eighteen (18) months after the Commencement Date , the Authority may permit funds in the Authority Existing Revenues Account of the Revenue Fund to be used to pay Additional Authority Uses in excess of the Additional Authority Uses Cap so long as, immediately after giving effect to such payment, the remaining balance in in the Autho rity Existing Revenues Account of the Revenue Fund is at least $3,000,000 (or a lesser amount with the reasonable consent of Developer). c. Until the County Funds Release Date, the Port Distr ict shall use the County Sweetwater Park Funds only for Remaining Phase 1A Infrastructure Improvements Costs. Notwithstanding the foregoing, not later than five (5) Business Days after the Developer exercises a Sweetwater Park Option, the Port District shall promptly transfer all remaining County Sweetwater Park Funds to the Trustee for dep osit into the County Funded Developer’s Phase 1A Subaccount.
d. Until Acceptance of the Developer’s Phase 1A
Infrastructure Improvements and payment of all Deve loper’s Phase 1A Infrastructure Improvements Costs, the City, Financing District, and Port Distr ict shall use commercially reasonable efforts to ensure the receipt of amounts that, if received by the City, the Financing District, or the Port Distr ict, would be Pre-Completion Lease Payments (as defined in the Facility Lease), Special Taxes (as defined in the Loan Agreement), or Real Estate Reve nues (as defined in the Support Agreement), respectively, and are due and payable to the City, the Financing District, or the Port District, as applicable. Pursuant to and subject to the terms o f the Support Agreement, the Port District shall transfer or cause all Real Estate Revenues to be tr ansferred to the Trustee for deposit into the Authority Existing Revenues Account for application in accordance with the Authority Indenture.
Pursuant to and subject to Section 4.12 of the Faci lity Lease, the City shall transfer or cause to be transferred to the Trustee the Pre-Completion Lease Payments for deposit into the Authority Existing Revenues Account for application in accordance with the Authority Indenture. Pursuant to and subject to the terms of the Loan Agreement, the Fin ancing District shall transfer or cause all Special Taxes to be transferred to the Trustee for deposit into the Authority Existing Revenues Account for application in accordance with the Authority Indenture.
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e. Not later than five (5) Business Days after the lat er to occur of (i) Sufficient Completion of the Remaining Phase 1A Infrastructure Improvements and (ii) payment of all Remaining Phase 1A Infrastructu re Improvements Costs to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements (or on such earlier date designated by the Port District if the Port District reasonably determines that sufficient moneys have been set aside by the Port District to Sufficiently Complete Sweetwater P ark), and provided that the Developer has not previously exercised a Sweetwater Park Option, the Port District shall transfer any remaining County Sweetwater Park Funds held by the Port District dir ectly to the Trustee for deposit in the County Funded Developer’s Phase 1A Subaccount.
f. On and after the County Funds Release Date, all amo unts in the County Funded Developer’s Phase 1A Subaccount shall be available for withdrawal and use by the Authority for any purpose as may be agreed to b y the City and the Port District from time to time without any obligation to confer with or obtain consent from the Developer.
9.1.2. Prerequisites to Payment.
9.1.2.1. Developer’s Phase 1A Payment Request. Prior to the disbursement of any amounts to pay the Developer’s Phase 1A Contract Sum, Developer shall provide the Executive Director with a Developer’s P hase 1A Payment Request, together with all of the items described therein. Each Developer’s Phas e 1A Payment Request shall show (i) the Developer’s Phase 1A Infrastructure Improvements Co sts incurred or to be incurred by Developer and for which Developer has made or intends to make actual payment prior to the next Developer’s Phase 1A Payment Request and (ii) the Stipulated De veloper’s Phase 1A Infrastructure Improvements Overhead Amount with respect to such D eveloper’s Phase 1A Infrastructure Improvements. The form of Developer’s Phase 1A Pay ment Request attached hereto as Exhibit K-1 may be modified or replaced by Developer, subject t o the consent of Authority provided or withheld in Authority’s sole discretion.
Each Developer’s Phase 1A Payment Request shall be delivered in the following manner (or by such other means as is reas onably agreed to by the Developer and the Authority): Developer shall send by electronic mai l to the Authority Email Addresses a notice that the Developer’s Phase 1A Payment Request and suppor ting documentation have been uploaded to an internet website, the link to which shall be includ ed in such email notice. Authority shall send confirmation to the Developer by electronic mail on ce Authority has successfully accessed the Developer’s Phase 1A Payment Request.
The Authority shall not have an obligation to make payment to Developer unless and until Developer provides the Executive D irector with a Developer’s Phase 1A Payment Request, together with all of the items described t herein (including the Architect’s Certificate), and such Developer’s Phase 1A Payment Request is approv ed by the Executive Director as provided below.
9.1.2.2. Inspection. The Developer’s Phase 1A Infrastructur e Improvements shall be subject to City inspection, a s applicable, as provided in section 2-11 of the Greenbook. Developer shall ensure that all persons and entities providing work or services for the Developer’s Phase 1A Infrastructure Improvements co mply with the inspection requirements provided in section 2-11 of the Greenbook.
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9.1.2.3. Prevailing Wage Compliance. Developer shall ensure that all persons and entities providing work or services for the Developer’s Phase 1A Infrastructure Improvements comply with prevailing wage requiremen ts, as and to the extent described in Section 7.2.3.1.
9.1.2.4. Public Entity Approval. The Executive Director shall review each Developer’s Phase 1A Payment Request and the suppor ting documentation. If the Executive Director finds in his/her reasonable discretion tha t any such Developer’s Phase 1A Payment Request is incomplete (except to a de minimis extent) or co ntains material errors or misstatements on its face , then the Executive Director shall so inform Develop er in writing within ten (10) Business Days after Developer provides such Developer’s Phase 1A Paymen t Request to Authority of the reasons for his/her finding. Developer shall have the right to respond to such finding by submitting further documentation requested in such finding after recei pt of said finding. The Executive Director shall review any further documentation received from Deve loper in support of the Developer’s Phase 1A Payment Request and inform Developer of his/her app roval or denial of the Developer’s Phase 1A Payment Request within five (5) Business Days after Developer provides such further documentation to Authority. If the Executive Director does not f ind that any such Developer’s Phase 1A Payment Request is incomplete (except to a de minimis extent) or contains material errors or misstatements on its face, then the Executive Director shall so info rm Developer in writing within ten (10) Business Days after Developer provides such Developer’s Phas e 1A Payment Request to Authority and within that time period approve the Developer’s Phase 1A P ayment Request. If the Executive Director determines that the Developer’s Phase 1A Payment Re quest is incomplete (except to a de minimis extent) or contains material errors or misstatement s on its face, but that sufficient and complete information exists with respect to a portion of the Phase 1A Payment Request, then the Executive Director shall approve the Developer’s Phase 1A Pay ment Request with respect to such portion of the Developer’s Phase 1A Payment Request and so not ify Developer within ten (10) Business Days after Developer provides such Developer’s Phase 1A Payment Request to Authority. The Authority shall cause the Executive Director to carry out his or her duties under this Section 9.1.2.4 in a reasonable and good faith manner. Notwithstanding anything to the contrary set forth in this Agreement, (a) the Authority may make payment to De veloper under protest and commence dispute resolution proceedings pursuant to Section 26.12 an d (b) if Authority has made a payment to Developer and later determines that the payment was made in error, whether due to an incomplete or inaccurate payment request or due to missing docume ntation or otherwise, Authority may commence dispute resolution proceedings pursuant to Section 26.12 to challenge such previous payment. A certificate or request that Developer delivers unde r this Agreement will be deemed to contain material errors or misstatements on its face if suc h material error or omission is apparent from the four corners of such certificate or request without the use of extrinsic evidence.
9.1.3. Time of Payment. If the Executive Director provide s approval pursuant to Section 9.1.2 with respect to all or any portion of any Developer’s Phase 1A Payment Request, then the Authority shall cause payment to be made to Dev eloper for the approved costs/expenses associated with such Developer’s Phase 1A Payment R equest by the Payment Date (excluding any Developer’s Phase 1A Contested Charges). If the Pa yment Date falls on a weekend or holiday, the Payment Date shall be extended to the next Business Day. Except for Developer Phase 1A Contested Charges, all costs/expenses associated with each De veloper Phase 1A Payment Request shall accrue interest at the Specified Default Rate from the Pay ment Date until paid. At the request of the Authority, the Developer will waive the interest ac crued during the first ten (10) Business Days following the applicable Payment Date up to a total of four (4) times in each calendar year for payments made after the required Payment Date under this Section 9.1.3 and Sections 9.1.4.3(b),
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9.2.3 and 9.2.4.2(b). Any payment or portion there of made to Developer in accordance with a Developer’s Phase 1A Payment Request and later dete rmined by the Authority and Developer or by an arbitrator after dispute resolution pursuant to Section 26.12 to have been incorrectly made shall accrue interest at the Specified Default Rate from the date the Authority made the incorrect payment until the date the Developer returns such amount to the Authority with interest. Developer shall pay the amount of the incorrect payment or portion ther eof plus such accrued interest to Authority within ten (10) Business Days following the determination that such payment was incorrectly made to Developer, or, with the written approval of the Exe cutive Director, such amounts shall be deducted from the following Developer’s Phase 1A Payment Req uest(s) submitted by the Developer. Subject to Section 21.7 and Section 21.8, additional Develo per’s Phase 1A Infrastructure Improvements Costs incurred by the Developer that result from th e failure to make payments when required by this Agreement will be the obligation of the Authority.
9.1.3.1. Additional Costs. Any costs that may accrue, such as interest on late payments to the General Contractor, Subcontrac tors, suppliers, or consultants as a result of the Developer’s failure to make a payment to such parti es shall not be the obligation of the Authority if the Authority has timely made all required payments to Developer or Developer has failed to provide the corresponding complete Developer’s Phase 1A Pay ment Request to Authority. Such additional costs shall be the obligation of the Developer and not eligible for reimbursement.
9.1.4. Withholding and Contested Charges.
9.1.4.1. Withholding. Except to the extent required by law, Developer shall comply with and enforce the provisions relati ng to retainage and withholding set forth in the General Contract. Any deviations from such provisi ons of the General Contract shall be subject to the Authority’s approval, which shall be provided in the sole and absolute discretion of the Authority.
Without limiting the foregoing, Developer may relea se retainage or withholding amounts to a General Contractor, subject to Authority’s reasonab le approval, if it would reduce the overall cost of the applicable General Contract. Amounts required to be withheld or retained pursuant to this Agreement shall be excluded from amounts requested for payment pursuant to Developer Phase 1A Payment Requests until such amounts will be actually paid to the applicable General Contractor.
9.1.4.2. Payment and Invoicing for Withholding. Where a sto p payment notice or mechanic’s lien has been filed following the recordation of the Notice of Completion, Developer shall, to the extent in compliance with L aw, withhold the amount in controversy until a fully executed release of stop payment notice or me chanic’s lien or a bond releasing the stop payment notice or mechanic’s lien has been filed and a conformed copy delivered to the Authority, as applicable. Notwithstanding anything in this Agree ment to the contrary, Developer shall not be required to withhold any funds from the General Con tractor or any Subcontractor to the extent doing so would violate any applicable law.
9.1.4.3. Developer’s Phase 1A Contested Charges. In the eve nt the Authority contests whether any amount that is inclu ded in any Developer’s Phase 1A Payment Request is properly included in the Developer’s Pha se 1A Contract Sum (“ Developer’s Phase 1A Contested Charges ”), the Authority shall provide Developer a written statement of the Developer’s Phase 1A Contested Charges, the reason why the costs/expense s are contested, and a proposed resolution.
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a. Appeal to the Executive Director. Developer may ap peal the determination by the Authority of any Developer ’s Phase 1A Contested Charges. The appeal must be received within thirty (30) days after the Authority notifies the Developer of such Developer’s Phase 1A Contested Charge. During the appeal period, and as long as any Developer’s Phase 1A Contested Charge remains disputed, Develop er shall proceed with the development of the Project, and the Authority shall compensate Develop er for all amounts requested under Developer’s Phase 1A Payment Request at issue other than the De veloper’s Phase 1A Contested Charges. If, following the appeal, the Executive Director determ ines that any Developer’s Phase 1A Contested Charges are eligible for reimbursement or payment t o Developer, such amounts shall be included in the next payment to Developer. If the Parties invo lved in the dispute regarding Developer’s Phase 1A Contested Charges are unable to agree and settle such dispute within ten (10) Business Days after the commencement of the appeal period, t hen the Parties shall resolve the conflict pursuant to Section 26.12.
b. Interest. All Developer’s Phase 1A Contested Charg es shall accrue interest at the Specified Default Rate from the Payment Date that would have been applicable to such Developer’s Phase 1A Contested Charges if such Developer’s Phase 1A Contested Charges were approved for payment until the date on which such Developer’s Phase 1A Contested Charges are paid to Developer; provided, that no in terest shall be paid to Developer with respect to any Developer’s Phase 1A Contested Charges that are finally determined to be ineligible for reimbursement or payment to Developer. At the requ est of the Authority, the Developer will waive the interest accrued during the first ten (10) Business Days following the applicable Payment Date up to a total of four (4) times in each calendar year for payments made after the required Payment Date under this Section 9.1.4.3(b) and Sections 9.1.3, 9.2.3 and 9.2.4.2(b).
9.1.5. Cutoff for Submission of Invoices. Developer shall submit its final Developer’s Phase 1A Payment Request not later than the Cutoff Date. Any Developer’s Phase 1A Payment Requests submitted after the Cutoff Date shall not be reviewed or included as a Developer’s Phase 1A Infrastructure Improvements Cost or Stipul ated Developer’s Phase 1A Infrastructure Improvements Overhead Amount. The final payment by the Authority for the Developer’s Phase 1A Infrastructure Improvements will be made only after Developer has submitted all documentation reasonably necessary to substantiate the cost of co nstruction and completing the Developer’s Phase 1A Infrastructure Improvements associated with that phase, mechanic’s lien free, stop payment notice free, substantially in accordance with the A pproved Drawings and Specifications for the Developer’s Phase 1A Infrastructure Improvements in all material respects. Final inspection and sign-off by the inspectors of the Authority with as sociated mechanic’s lien and stop payment notice releases (or bonds releasing contested mechanic’s l iens or stop payment notices) shall be sufficient evidence of the mechanic’s lien or stop payment not ice free completion of the Developer’s Phase 1A Infrastructure Improvements.
9.1.6. Final Accounting. Following Completion of the Deve loper’s Phase 1A Infrastructure Improvements, Developer shall submit a Final Accounting to the Authority in order to determine the actual amount of the Developer’s Phas e 1A Infrastructure Improvements Costs, the Stipulated Developer’s Phase 1A Infrastructure Impr ovements Overhead Amount and Developer’s Phase 1A Contract Sum. Developer shall also submit all supporting information reasonably necessary (to the extent not otherwise previously s ubmitted in conjunction with a Developer’s Phase 1A Payment Request) to document the Developer ’s Phase 1A Infrastructure Improvements Costs, including specific details on the costs and work attributable to the Developer’s Phase 1A Infrastructure Improvements, including, as applicab le, third-party invoices, billings, and receipts fo r
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construction surveying, soil testing, blue printing , actual construction costs, and similar expenses.
Developer shall also submit final lien releases and stop payment notice waivers and releases for all Developer’s Phase 1A Infrastructure Improvements. Any dispute regarding the Final Accounting shall be resolved in accordance with Section 26.12.
9.1.6.1. True-up Payments. Within thirty (30) Business Days following a Final Accounting, the Authority shall determine whe ther the actual payments made with respect to the Developer’s Phase 1A Infrastructure Improvement s equal the audited approved costs and expenses and provide the Authority’s report thereon (the “ Authority’s Phase 1A Final Review ”) to Developer for Developer’s review and approval. Any dispute regarding the Authority’s Final Review shall be resolved in accordance with Section 26.12. In the event that the amount of the Developer’s Phase 1A Contract Sum as determined in the approved Authority’s Final Review (the “Developer’s Phase 1A Final Amount ”) exceeds the amount of the actual payments, then the Authority shall make a true-up payment to Developer for the difference within twenty (20) Business Days. If the amount of actual payments to Develope r exceeds the Developer’s Phase 1A Final Amount, then Developer shall remit or cause the rem ittance of the difference to the Authority within twenty (20) Business Days of a notice of deficiency.
9.2. Convention Center Costs. The provisions of this Se ction 9.2 and each subsection of this Section 9.2 shall apply solely to the Convention Center.
9.2.1. Payment of Costs Associated with the Convention Center. On the Effective Date, Authority shall pay the Initial Development F ee Payment to Developer. Based upon the Convention Center Payment Requests submitted to the Authority by the Developer, the Authority shall make progress payments on account of the Conv ention Center Contract Sum to the Developer in accordance with the provisions of this Section 9 .2. The amount of each progress payment shall be computed as follows:
9.2.1.1. The amount of each progress payment shall first include:
a. The Convention Center Costs incurred or to be incur red by Developer and for which Developer has made or in tends to make actual payment prior to the next Convention Center Payment Request;
b. The Initial Development Fee Payment plus the Remain ing Convention Center Development Fee that has accrued as of the date of such Convention Center Payment Request; and
c. The Stipulated Convention Center Overhead Amount th at has accrued as of the date of such Convention Center Payment Request.
9.2.1.2. The amount of each progress payment shall then be r educed by, without duplication:
a. The aggregate of any amounts previously paid by the Authority in respect of the Convention Center Contract Sum; b. The amount by which the Architect, pursuant to the
Architect’s Certificate that is attached to such Co nvention Center Payment Request, reduces the
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amount to be paid with respect to such Convention C enter Payment Request. The Architect may reduce such amount to the extent the work performed by Developer for which payment is requested has not been performed substantially in accordance in all material respects with the Convention Center Plans, in which case the amount to be disbur sed under the applicable Convention Center Payment Request shall be reduced to reflect the cos t of causing such construction to be performed substantially in accordance in all material respect s with the Convention Center Plans (without duplication of any similar reduction that is made b y Developer). In the event of any such reduction, Developer may seek payment for the amounts so reduc ed in any subsequent Convention Center Payment Request; and
c. Any amount for which the Developer does not intend to pay General Contractor or any Subcontractor, unless the work has been performed by others the Developer intends to pay.
9.2.1.3. Maximum Convention Center Amount. The maximum amou nt disbursed hereunder for the Convention Center Contr act Sum shall not exceed the Maximum Convention Center Amount. Neither Developer nor it s General Contractor nor any Subcontractor, nor any combination thereof, shall be entitled to p ayment in respect of the Convention Center Contract Sum in excess of the Maximum Convention Ce nter Amount. For the avoidance of doubt, Repair/Restoration Costs are not included in the Co nvention Center Contract Sum and shall not be limited to the Maximum Convention Center Amount, ra ther such amounts will also be funded from Net Proceeds transferred to the 2022A Construction Account and other amounts available to the Developer for Repair/Restoration Costs pursuant to the terms of the Sublease, Facility Lease and Authority Indenture. Once transferred to the 2022A Construction Account pursuant to the terms of the Authority Indenture, such Net Proceeds will be disbursed pursuant to the procedures set forth in Section 9.2.1.
9.2.1.4. Allocation of Common Costs. Common costs shall be reasonably and equitably allocated between the Developer’s Pha se 1A Infrastructure Improvements and the Convention Center, generally consistently with the allocation of such common costs set forth in the Form of Convention Center Budget attached hereto as Exhibit P, and such allocations shall be subject to review and approval by the Port District and Cit y (in their reasonable discretion). All such common costs shall be tracked and allocated so as t o properly distinguish common cost allocations between the Developer’s Phase 1A Infrastructure Imp rovements and the Convention Center for purposes of complying with provisions applicable to the Authority Tax-Exempt Bonds.
9.2.1.5. Funds for Payment of Costs/Expenses.
a. Subject to Section 9.2.1.5(b) and Section 21.7, (i) the source of funds for the payment of costs and expens es for the Convention Center shall be limited to (A) eligible proceeds of the Taxable Authority Bond s actually on deposit in the 2022A Bond Proceeds Subaccount, (B) amounts deposited in the P ublic Entity Contribution Subaccount, and (C) any Net Proceeds authorized to be used for such payments (in an amount not to exceed the Project Public Investment Amount plus any Net Proce eds or other amounts available therefor pursuant to the Authority Indenture, the Facility L ease and the Sublease), (D) Advance Rent (to the extent received by any Public Entity and not paid t o Developer pursuant to this Agreement), (E) amounts on deposit in the Authority Surplus Fun d (solely to the extent provided in Section 21.7), (F) other amounts to the extent provided in Section 21.7, and (G) other amounts deposited by the Developer with the Authority to pay Convention Cent er Costs and (ii) no other funds of the City, the
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Financing District, the Port District, the Authorit y, or the County, or monies held by, owed to, or in trust for, the City, the Financing District, the Po rt District, the Authority or the County, shall be used by the Authority or sought to be collected by any D eveloper Party for the payment of costs and expenses for the Convention Center other than those identified in this Section. Notwithstanding anything to the contrary set forth in this Agreemen t, the failure of the Authority to make payments with respect to the Convention Center Contract Sum in accordance with the provisions of this Section
9.2 shall not constitute a default or Event of Defa ult of any Public Entity under this Agreement, only if such failure occurs because the Authority is una ble to disburse such funds, or is unable to cause such funds to be disbursed, solely because insuffic ient funds are available in the 2022A Bond Proceeds Subaccount because (i) a Defaulting Purcha ser failed to make any Advance that (A) is with respect to the 2022A Bonds and (B) the Bond Purchas e Agreement required any Defaulting Purchaser to make, or (ii) Purchasers are not then required to make additional Advances because the aggregate amount of all Advances (as defined in the Bond Purchase Agreement) then made is equal to or greater than the corresponding cumulative amo unt set forth for the appropriate time period on the Advance Funding Schedule (as defined in the Bon d Purchase Agreement), or (iii) Purchasers are not then required to make additional Advances becau se a condition precedent to such Advance is not satisfied pursuant to (x) Section 4.02(b)(ii) as a result of an Event of Default described in Section
7.01, subsection (e), (f) (but only with respect to a default or event of default by a Developer Party in the Completion Guarantor, or an affiliate of either of them), (h), (j), (k) (but only if the void, voidable, unenforceable or illegal provision relate s to an obligation of a Developer Party, the Completion Guarantor, or an affiliate of either of them), (l) (but only terminations by Developer, the Completion Guarantor, or an affiliate of either of them), (n) (but only with respect to insurance required to be maintained by a Developer Party or t he Completion Guarantor), or (o) (but only with respect to Governmental Approvals (defined in the B ond Purchase Agreement) required to be obtained by a Developer Party or the Completion Gua rantor or an affiliate of either of them pursuant to this Agreement, Ground Lease, or Sublease) or (y ) Section 4.02(v) (but only with respect to Governmental Approvals required to be obtained by a Developer Party or the Completion Guarantor or an affiliate of either of them pursuant to this Agreement, the Ground Lease, or the Sublease). For the avoidance of doubt: (a) the absence of sufficie nt funds in any subaccount of the 2022B Construction Account or the Authority Existing Reve nues Subaccount shall not waive the Authority’s obligation to make payments to the Deve loper that are due and payable in accordance with Section 9.1 hereunder and the Authority shall pay such amounts once sufficient funds become available together with any applicable interest pay able under Section 9.1, and (b) except as set forth in the preceding sentence and unless and until the full Public Entity Contribution Amount has been disbursed to Developer pursuant to Section 9.2, the absence of sufficient funds in any subaccount of the 2022A Construction Account or the Authority Exi sting Revenues Account shall not waive the Authority’s obligation to make payments to the Deve loper that are due and payable in accordance with Section 9.2 hereunder and the Authority shall pay such amounts (without interest if excused in accordance with the immediately preceding sentence) once sufficient funds become available. The Authority shall not consent to or permit any modifi cation to the Advance Funding Schedule (defined in the Bond Purchase Agreement) without the consent of the Developer, which shall not be unreasonably withheld, conditional, or delayed. Th is Section 9.2.1.5a shall not limit the Developer’s application of proceeds of Advance Rent to pay for the costs and expenses of the Convention Center. b. On the Effective Date, Authority shall cause the Tr ustee to deposit a portion of the Project Public Investme nt Amount into the 2022A Construction Account, as follows: (i) the Authority shall deposit $_____ ___ from the proceeds of the Taxable Authority Bonds into the 2022A Bond Proceeds Subaccount, (ii) the City shall transfer to the Trustee and instruct the Trustee to deposit $9,500,000 into the Public Entity Contribution Subaccount, and
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(iii) the Port District shall transfer to the Trust ee and instruct the Trustee to deposit $9,500,000 i nto the Public Entity Contribution Subaccount. Pursuan t to the terms of the Authority Indenture, the Authority shall cause the Trustee to transfer (x) any proceeds of an Advance received under the Bond Purchase Agreement into such accounts as provided i n the Authority Indenture and (y) any Net Proceeds deposited into the Insurance and Condemnat ion Fund that are available to be used for repair, rebuilding, restoration or reconstruction o f the Convention Center to the 2022A Construction Account if required pursuant to the terms of the Au thority Indenture, the Sublease and the Facility Lease. The Authority shall take all actions necess ary to cause the Trustee to disburse moneys from the 2022A Construction Account (except as provided in Section 9.2.1.7 below, first from the 2022A Bond Proceeds Subaccount, until the 2022A Bond Proc eeds Subaccount is depleted, and then from the Public Entity Contribution Subaccount) (a) for payments required to be made to the Developer as and when required under this Agreement, the Subleas e, the Facility Lease and the Authority Indenture, including for any repair, rebuilding, restoration or reconstruction of the Convention Center and (b) until Full Payment, only to Developer. No Public Entity shall interfere with any lawfully made disbursement request delivered to the Trustee.
c. Until Full Payment, the Authority shall (a) neither direct nor authorize the Trustee to transfer amounts out o f the 2022A Construction Account or the Authority Surplus Fund for any purpose other than t o Developer for payment of Convention Center Contract Sum pursuant to Section 9.2 of this Agreem ent, interest due to Developer pursuant to Sections 9.2.3 and 9.2.4.2(b) of this Agreement, an d amounts to be paid to Developer pursuant to Section 5.1.3, and (b) direct or authorize the Trus tee to transfer amounts out of the 2022A Construction Account or the Authority Surplus Fund only to the account or accounts designated by Developer in writing.
d. Until Full Payment, the Authority shall use reasona ble efforts to cause the Trustee to deliver to the Deve loper and the Authority on a monthly basis statements for all accounts in the Construction Fun d showing the account balance and deposits and withdrawals for the month covered by the statement.
9.2.1.6. Application of Funds. Payments to the Developer ma de pursuant to this Section 9.2 shall be made:
a. First, from eligible proceeds of the Taxable Author ity Bonds authorized to be used for such payments, subject to availability of amounts in the 2022A Bond Proceeds Subaccount; and
b. Second, except as otherwise provided in Section 9.2 .1.7 below, upon the exhaustion of the proceeds describe d in clause a., from amounts transferred to the Trustee by the City and Port District for deposit i n the Public Entity Contribution Subaccount (which shall be equal to $19,000,000); and
c. Third, upon the exhaustion of the proceeds describe d in clause a. and clause b., or sooner if and to the ex tent elected by the Developer in its sole discretion in a written notice delivered to the Authority, from t he proceeds of Advance Rent received by the Authority pursuant to the Facility Lease;
d. Solely to the extent provided in Section 21.7, from amounts on deposit in the Authority Surplus Fund; and
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e. If and as needed in accordance with the terms of th e Sublease, Facility Lease and Authority Indenture, f rom the Net Proceeds available for use for Repair/Restoration Costs.
9.2.1.7. Use of Amounts in Public Entity Contribution Subacc ount.
Notwithstanding Section 9.2.1.6, Developer may subm it a Convention Center Payment Request which requests disbursement of moneys from the Publ ic Entity Contribution Subaccount prior to depletion of all proceeds of the Taxable Authority Bonds if insufficient Taxable Authority Bond proceeds are available in the 2022A Bond Proceeds S ubaccount to make a payment of Convention Center Contract Sum as required under this Section 9.2. Notwithstanding the provisions of Section
9.2.2.1 to the contrary, disbursements of moneys fr om the Public Entity Contribution shall not be conditioned on delivery of an In-Balance Certificat e by the Administrative Agent. Further, if the Executive Director does not respond to a Convention Center Payment Request which requests disbursement of moneys from the Public Entity Contr ibution Subaccount prior to depletion of all proceeds of the Taxable Authority Bonds within ten (10) Business Days after Developer provides such Convention Center Payment Request to Authority , then such Convention Center Payment Request shall be deemed to have been approved under protest by the Executive Director.
Concurrently with the delivery of a Convention Cent er Payment Request which requests disbursement of moneys from the Public Entity Contr ibution Subaccount, Developer shall deliver a RIDA Requisition in the form attached as Exhibit F to the Authority Indenture to the Trustee and the Authority stating the amount of such Convention Cen ter Payment Request that the Developer is requesting be paid from the Public Entity Contribut ion Subaccount. Authority shall provide the Trustee with a copy of any approval, denial, or req uest for additional documentation provided to Developer pursuant to Section 9.2.2.3 in response t o such Convention Center Payment Request.
Authority and Developer acknowledge that the Truste e is instructed in the Authority Indenture to provide written notice to Authority if the Trustee has not received an approval or denial within seven (7) Business Days of receipt of the Developer’s Pub lic Entity Contribution Subaccount Requisition and to disburse the requested payment to Developer on the tenth (10 th ) Business Day following receipt of the RIDA Requisition if Trustee has not received a written denial of the Convention Center Payment Request on or before the ninth (9 th ) Business Day following the Trustee’s receipt of t he RIDA Requisition. In the event the amount on depos it in the Public Entity Contribution Subaccount is less than $19,000,000, future advances of Taxabl e Authority Bond proceeds made pursuant to the Bond Purchase Agreement shall be deposited into the Public Entity Contribution Subaccount until the balance therein equals $19,000,000 and thereaft er into the 2022A Bond Proceeds Subaccount.
All other provisions of this Section 9.2 shall appl y to all disbursements of moneys from the Public Entity Contribution Subaccount. All notices provid ed to Authority under this Section shall be submitted by email to the Authority Email Addresses with the subject line “Developer Requisition for Convention Center Costs – Response Deadline [in sert response date]” (and Developer shall insert the date on which the ninth (9 th ) Business Day following the submittal of the Conve ntion Center Payment Request in the subject line of the email).
9.2.2. Prerequisites to Payment.
9.2.2.1. Convention Center Payment Request. Prior to the di sbursement or reimbursement of any amounts to pay the Conventi on Center Contract Sum or Repair/Restoration Costs, Developer shall provide the Executive Direct or and the Administrative Agent with a Convention Center Payment Request, together with al l of the items described therein. Each Convention Center Payment Request shall show (i) th e Convention Center Costs or Repair/Restoration Costs, as applicable, incurred o r to be incurred by Developer and for which
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Developer has made or intends to make actual paymen t prior to the next Convention Center Payment Request, (ii) the Remaining Convention Center Devel opment Fee computed upon such Convention Center Costs and (iii) the Stipulated Convention Ce nter Overhead Costs with respect to such Convention Center Costs and as applicable. The for m of Convention Center Payment Request attached hereto as Exhibit K-2 may be modified or r eplaced by Developer, subject to the consent of Authority and Administrative Agent, provided or wit hheld in the sole discretion of each of the Authority and the Administrative Agent.
Each Convention Center Payment Request shall be del ivered in the following manner (or by such other means as is reasonably agr eed to by the Developer and the Authority):
Developer shall send by electronic mail to the Auth ority Email Addresses and the Administrative Agent Email Address a notice that the Convention Ce nter Payment Request and supporting documentation has been uploaded to an internet webs ite, the link to which shall be included in the email notice. Authority shall send confirmation to the Developer by electronic mail once Authority has successfully accessed the Convention Center Payment Request.
The Authority shall not have an obligation to make payment to Developer unless and until (a) Developer provides the Executi ve Director with a Convention Center Payment Request, together with all of the items described t herein (including the Architect’s Certificate), and such Convention Center Payment Request is approved by the Executive Director as provided below and (b) Administrative Agent delivers to Authority an In-Balance Certificate in the form attached as Exhibit AA; provided that the Administrative Agent shall be deemed to have submitted such In- Balance Certificate if the Administrative Agent has not delivered notice to the Authority and Developer stating that the Project (as defined in t he Bond Purchase Agreement) is not In-Balance (as defined in the Bond Purchase Agreement) on or befor e six (6) Business Days following the later to occur of the date on which the Developer delivers ( i) the Convention Center Payment Request to the Authority with a copy to the Administrative Agent a nd (ii) the Other Requisite Information (defined in the Bond Purchase Agreement) with respect to suc h Convention Center Payment Request to the Administrative Agent.
9.2.2.2. Prevailing Wage Compliance. Developer shall ensure that all persons and entities providing work or services for the Improvements comply with Prevailing Wage requirements, as and to the extent described in Section 7.2.3.1.
9.2.2.3. Public Entity Approval. The Executive Director shall review each Convention Center Payment Request and the supportin g documentation. If the Executive Director finds in his/her reasonable discretion that any suc h Convention Center Payment Request is incomplete (except to a de minimis extent) or conta ins material errors or misstatements on its face, then the Executive Director shall so inform Develop er in writing within ten (10) Business Days after Developer provides such Convention Center Payment Request to Authority, of the reasons for his/her finding. Developer shall have the right to respond to such finding by submitting further documentation requested in such finding after recei pt of said finding. The Executive Director shall review any further documentation received from Deve loper in support of the Convention Center Payment Request and inform Developer of his/her app roval or denial of the Convention Center Payment Request within five (5) Business Days after Developer provides such further documentation to Authority. If the Executive Director does not f ind that any such Convention Center Payment Request is incomplete (except to a de minimis extent) or contains material errors or misstatements on its face, then the Executive Director shall so info rm Developer in writing within ten (10) Business Days after Developer provides such Convention Cente r Payment Request to Authority and within
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that time period approve the Convention Center Paym ent Request. If the Executive Director determines that the Convention Center Payment Reque st is incomplete (except to a de minimis extent) or contains material errors or misstatement s on its face, but that sufficient and complete information exists with respect to a portion of the Construction Costs Payment Request, then the Executive Director shall approve the Convention Cen ter Payment Request with respect to such portion of the Convention Center Payment Request an d so notify Developer within ten (10) Business Days after Developer provides such Convention Cente r Payment Request to Authority. The Authority shall cause the Executive Director to car ry out his or her duties under this Section 9.2.2.3 in a reasonable and good faith manner. Notwithstan ding anything to the contrary set forth in this Agreement, (a) the Authority may make payment to De veloper under protest and commence dispute resolution proceedings pursuant to Section 26.12 an d (b) if Authority has made a payment to Developer and later determines that the payment was made in error, whether due to an incomplete or inaccurate payment request or due to missing docume ntation or otherwise, Authority may commence dispute resolution proceedings pursuant to Section 26.12 to challenge such previous payment. A certificate or request that Developer delivers unde r this Agreement will be deemed to contain material errors or misstatements on its face if suc h material error or omission is apparent from the four corners of such certificate or request without the use of extrinsic evidence.
9.2.3. Time of Payment. If the Executive Director provide s approval pursuant to Section 9.2.2 with respect to all or any portion of any Convention Center Payment Request, then the Authority shall cause payment to be made to Develop er for the approved costs/expenses associated with such Convention Center Payment Request to be p aid by the Payment Date (excluding any Convention Center Contested Charges). If the Payme nt Date falls on a weekend or holiday, the Payment Date shall be extended to the next Business Day. Except for Convention Center Contested Charges, all costs/expenses associated with each Co nvention Center Payment Request shall accrue interest at the Specified Default Rate from the Pay ment Date until paid. At the request of the Authority, the Developer will waive the interest ac crued during the first ten (10) Business Days following the applicable Payment Date up to a total of four (4) times in each calendar year for payments made after the required Payment Date under this Section 9.2.3 and Sections 9.1.3,
9.1.4.3(b) and 9.2.4.2(b). Any payment or portion thereof made to Developer in accordance with a Convention Center Payment Request and later determi ned by the Authority and Developer or by an arbitrator after dispute resolution pursuant to Sec tion 26.12 to have been incorrectly made shall accrue interest at the Specified Default Rate from the date the Authority made the payment until the date the Developer returns such payment together wi th such interest thereon to the Authority.
Developer shall pay the amount of the incorrect payment or portion thereof plus such accrued interest to Authority within ten (10) Business Days followin g the determination that such payment was incorrectly made to Developer, or, with the written approval of the Executive Director, such amounts shall be deducted from the following Convention Cen ter Payment Request(s) submitted by the Developer. Subject to Section 21.7, additional cos ts incurred by the Developer in excess of the amount of interest paid to Developer pursuant to Se ctions 9.2.3 and 9.2.4.2(b) (calculated as if interest at the Specified Default Rate had accrued during the ten (10) Business Day cure periods described in such Sections 9.2.3 and 9.2.4.2(b) and was not waived by Developer) that, in each case, result from the failure to make payments when requi red by this Agreement will be the obligation of the Authority.
9.2.3.1. Advance Rent Notices. In the event that the paymen t required pursuant to Section 9.2.3 will be made, in whole or in part, from the proceeds of Advance Rent received by the Authority under the Facility Lease, then the Authority shall, no later than two (2) days after submitting the applicable approval descr ibed in Section 9.2.2, provide a Facility Lease
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Advance Rent Notice to the City for the amount of A dvance Rent required to make such payment.
Except as set forth in this Section 9.2.3.1 or in Section 9.2.6.1, (a) the Authority shall not, without the Developer’s prior written consent, provide a Facili ty Lease Advance Rent Notice to the City and (b) the City shall not, without the Developer’s pri or written consent, provide a Sublease Advance Rent Notice to the Developer unless the City shall have received a corresponding Facility Lease Advance Rent Notice from the Authority. As provide d in the Sublease, if Developer receives a notice from the City confirming that the City assig ned to the Authority its right to receive the payment of Advance Rent under the Sublease, then, f rom and after the date of the receipt of such notice, Developer shall pay Advance Rent to the Aut hority as the City’s assignee. The Parties acknowledge that additional procedures regarding th e payment of Advance Rent are set forth in the Advance Rent Side Letter.
9.2.3.2. Additional Costs. Any costs that may accrue, such as interest on late payments to the General Contractor, Subcontrac tors, suppliers, or consultants as a result of the Developer’s failure to make a payment to such parti es shall not be the obligation of the Authority if the Authority has timely made all required payments to Developer or Developer has failed to provide the corresponding complete Convention Center Payment Request to Authority. Such additional costs shall be the obligation of the Developer and not eligible for reimbursement.
9.2.4. Withholding and Contested Charges.
9.2.4.1. Payment and Invoicing for Withholding. Where a sto p payment notice or mechanic’s lien has been filed following the recordation of the Notice of Completion, Developer shall, to the extent in compliance with L aw, withhold the amount in controversy until a fully executed release of stop payment notice or me chanic’s lien or a bond releasing the stop payment notice or mechanic’s lien has been filed and a conformed copy delivered to the Authority, as applicable. Notwithstanding anything in this Agree ment to the contrary, Developer shall not be required to withhold any funds from the General Con tractor or any Subcontractor to the extent doing so would violate any applicable law.
9.2.4.2. Convention Center Contested Charges. In the event the Authority contests whether any amount that is included in any Convention Center Payment Request is properly included in the Convention Center Contract Sum or a s a Repair/Restoration Cost (“ Convention Center Contested Charges ”), the Authority shall provide Developer a written statement of the Convention Center Contested Charges, the reason why the costs/expenses are contested, and a proposed resolution.
a. Appeal to the Executive Director. Developer may ap peal the determination by the Authority of any Conventio n Center Contested Charges. The appeal must be received within thirty (30) days after the Autho rity notifies the Developer of such Convention Center Contested Charge. During the appeal period, and as long as any Convention Center Contested Charge remains disputed, Developer shall proceed wi th the development of the Project (or repair and restoration of the Convention Center, as applicable ), and the Authority shall compensate Developer for all amounts requested under the Convention Cent er Payment Request at issue other than the Convention Center Contested Charges. If, following the appeal, the Executive Director determines that any Convention Center Contested Charges are el igible for reimbursement, such amounts shall be included in the next payment to Developer. If the Parties involved in the dispute regarding Convention Center Contested Charges are unable to a gree and settle such dispute within ten (10)
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Business Days after the commencement of the appeal period, then the Parties shall resolve the conflict pursuant to Section 26.12.
b. Interest. All Convention Center Contested Charges shall accrue interest at the Specified Default Rate from the Payment Date that would have been applicable to such Convention Center Contested Charges if such Convention Center Contested Charges were approved for payment until the date on which such C onvention Center Contested Charges are paid to Developer; provided, that no interest shall be paid to Developer with respect to any Convention Center Contested Charges that are finally determine d to be ineligible for reimbursement or payment to Developer. At the request of the Authority, the Developer will waive the interest accrued during the first ten (10) Business Days following the appl icable Payment Date up to a total of four (4) times in each calendar year for payments made after the r equired Payment Date under this Section
9.2.4.2(b) and Sections 9.1.3, 9.1.4.3(b) and 9.2.3.
9.2.5. Cutoff for Submission of Invoices. Except with res pect to any Convention Center Payment Request for Repair/Restoration Costs , Developer shall submit its final Construction Costs Payment Request not later than the Cutoff Dat e. Any Construction Costs Payment Requests (other than those for Repair/Restoration Costs) sub mitted after the Cutoff Date shall not be reviewed or included in the Project Costs for the Convention Center. The final payment by the Authority, for the Project or for Repair/Restoration Costs, as app licable, will be made only after Developer has submitted all documentation reasonably necessary to substantiate the cost of construction and completing or restoring/repairing, as applicable, t he Convention Center associated with that phase, mechanic’s lien free, stop payment notice free, sub stantially in accordance with the Convention Center Plans in all material respects. Final inspe ction and sign-off by the inspectors of the Authori ty with associated mechanic’s lien and stop payment no tice releases (or bonds releasing contested mechanic’s liens or stop payment notices) shall be sufficient evidence of the mechanic’s lien or stop payment notice free completion of the Convention Center.
9.2.6. Final Accounting. Following Completion of the Conv ention Center, Developer shall submit a Final Accounting to the Au thority in order to determine the actual amount of the Convention Center Costs and Convention Cente r Contract Sum. Developer shall also submit all supporting information reasonably necessary (to the extent not otherwise previously submitted in conjunction with a Convention Center Payment Reques t) to document the Convention Center Costs, including specific details on the costs and work at tributable to the Convention Center, including, as applicable, third-party invoices, billings, and rec eipts for construction surveying, soil testing, blu e printing, actual construction costs, and similar ex penses. Developer shall also submit final lien releases and stop payment notice waivers and releas es for the Convention Center. Any dispute regarding the Final Accounting shall be resolved in accordance with Section 26.12.
9.2.6.1. True-up Payments. Within thirty (30) Business Days following a Final Accounting, the Authority shall determine whe ther the actual payments made with respect to the Convention Center equal the audited approved co sts and expenses and provide the Authority’s report thereon (the “ Authority’s Convention Center Final Review ”) to Developer for Developer’s review and approval. Any dispute regarding the Aut hority’s Convention Center Final Review shall be resolved in accordance with Section 26.12. In t he event that the amount of the Convention Center Contract Sum as determined in the Authority’s Final Review (the “ Convention Center Final Amount ”) exceeds the amount of the actual payments, then: (a) the Authority shall make a true-up payment to Developer for the difference within twen ty (20) Business Days and (b) in the event that the payment required pursuant to clause (a) will be made, in whole or in part, from the proceeds of
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Advance Rent received by the Authority under the Fa cility Lease, then the Authority shall, no later than two (2) Business Days after the final determin ation of the Convention Center Final Amount, provide an Advance Rent Notice to the City under the Facility Lease for the amount of Advance Rent required to make such payment. If the amount of ac tual payments to Developer exceeds the Convention Center Final Amount, then Developer shal l remit or cause the remittance of the difference to the Trustee as assignee of the Author ity for deposit in the Revenue Fund under the Authority Indenture within twenty (20) Business Days of a notice of deficiency.
9.2.6.2. Final Accounting and True-up for Repair/Replacement Costs. If requested by either the Authority or Developer not later than one (1) year following payment to Developer of the final Repair/Replacement Costs inc urred as a result of any Condemnation as provided in Section 5.1 of the Sublease, the Develo per shall submit a Final Accounting which shall be processed to resolution in a similar manner to t he Final Accounting described in Sections 9.2.6 and 9.2.6.1 for Convention Center Costs. There wil l be no Final Accounting with respect to a casualty event pursuant to Section 5.2 of the Sublease.
9.2.7. Casualty and Condemnation. While the disbursement provisions of this Section 9.2 have been drafted primarily to address the disbursement of funds for the development of the Convention Center, the Parties intend that the provisions of this Section 9.2 (with the exception of Subsections 9.2.5 which will not be applicable i n such context) will also govern the disbursement of funds for the reconstruction or modification of the Convention Center following any event of damage to or destruction of, or condemnation or emi nent domain with respect to, any portion of the Convention Center. As such, when the provisions of this Section 9.2 (with the exception of Subsections 9.2.5) are given effect in connection w ith such reconstruction or modification, such provision will be construed with the intent that De veloper be able to access funds for such purposes, and the provisions of this Section 9.2 (with the ex ception of Subsections 9.2.5) will be deemed modified as reasonably necessary to give effect to such intent. Net Proceeds not disbursed pursuant to this Section 9.2 shall be disbursed pursuant to Article V of the Sublease and Section 6.1(a) of the Facility Lease.
9.3. Investment of Amounts in the Construction Fund. Th e Parties acknowledge that proceeds of the Authority Bonds and Net Proceeds on deposit from time to time in the Construction Fund and the Insurance and Condemnation Fund will b e invested in Permitted Investments pursuant to, and as defined in, the Authority Indenture. Th e Authority agrees to provide the Developer an opportunity to provide recommendations regarding th e Permitted Investments in which amounts on deposit in the Construction Fund and the Insurance and Condemnation Fund will be invested by providing the Developer with ten (10) days’ notice prior to directing the Trustee to change the investment of such funds.
9.4. Calculation of Specified Default Rate. All interest at the Specified Default Rate shall compound on a monthly basis on the first day of eac h full calendar month in which such interest is payable.
9.5. Redemption of the Authority Bonds. If Developer ha s not received the full Developer’s Phase 1A Contract Sum, or has not recei ved the Convention Center Contract Sum, pursuant to this Article IX at the time that the Au thority Bonds have been redeemed in full and the proceeds of the Authority Bonds and County Funds ar e held by the Authority and not the Trustee, then the Authority shall make disbursements to the Developer for Convention Center Costs and Developer’s Phase 1A Infrastructure Improvements Co sts, as applicable, at the times and in the
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amounts required by this Article IX. Notwithstandi ng the foregoing, the Authority agrees not to terminate the Authority Indenture while any Authori ty Bond proceeds or County Funds could become due to the Developer under this Agreement un less the Authority enters into an escrow agreement or account control agreement in a form re asonably approved by the Developer pursuant to which the Authority Bond proceeds and County Funds, as applicable, will be held and disbursed on substantially the same terms as set forth in the Authority Indenture and this Article IX.
9.6. Survival. With respect to any amounts that constit ute part of Developer’s Phase 1A Contract Sum or the Convention Center Contract Sum that have been incurred by Developer but have not been paid or reimbursed to Developer pursuant to this Article IX, this Article IX and Section 21.7 shall survive the prior expiration and/or termination of this Agreement.
ARTICLE X
ACCEPTANCE OF IMPROVEMENTS
10.1. Developer’s Phase 1A Infrastructure Improvements. If Developer’s Phase 1A Infrastructure Improvements are Completed by Develo per substantially in accordance in all material respects with the Approved Drawings and Specificati ons, if they comply with all Laws and Construction Requirements, and if Developer has sat isfied all conditions of Acceptance set forth in Section 10.1.1, the City and the Port District shal l Accept their respective Developer’s Phase 1A Infrastructure Improvements. Section 10.3, not thi s Section 10.1, governs Acceptance of the Remaining Phase 1A Infrastructure Improvements.
10.1.1. Conditions of Acceptance. Prior to Acceptance of a ny portion of Developer’s Phase 1A Infrastructure Improvements, Developer shall, as applicable:
10.1.1.1. Complete all punch-list items from the City’s inspe ction of Developer’s Phase 1A Infrastructure Improvements.
10.1.1.2. Record a Notice of Completion (NOC) with the County Recorder of San Diego County at least thirty-five (35) days prior to Acceptance of such portion of Developer’s Phase 1A Infrastructure Improvements.
10.1.1.3. Submit to Port District and to the City, as applica ble, the following with respect to such portion of Developer ’s Phase 1A Infrastructure Improvements, as applicable:
a. Record drawings or “as-builts” in the form of final as- built CAD files; and
b. Copies of the signed as-built mylars that are submi tted to the City (a copy of which shall be provided to the Port District). c. With respect to City, evidence that adequate funds are available in City’s deposit account to cover City’s project close out costs with respect to permitting; d. With respect to City, record drawings or “as-builts ” in the form of signed as-built mylars, and with respect to Port District, copies of such signed “as-builts”;
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e. One set of final soils reports (“as-graded” Geotech report);
f. Completed City Form 5519 Certification;
g. Completed City Form 5522 Statement of Substantial
Conformance;
h. Operations and maintenance manuals; and
i. Warranty documentation.
10.1.1.4. Submit to Port District or City, as applicable, doc umentation and information reasonably necessary for Port District or City, as applicable, to provide the following items to Developer with respect to such portion of Developer’s Phase 1A Infrastructure Improvements, as applicable:
a. Approval from Port District’s or City’s Land Survey or, as applicable, confirming survey monuments are set and verified (as applicable); b. Confirmation that street lights are fully functional; and c. Written approval from Port District’s or City’s NPD ES section, as applicable, confirming stormwater requirements have been satisfied.
Subject to Section 2.1.6.4, upon receipt of the doc umentation and information set forth in this Section 10.1.1.4, City and Port District, as applic able, shall take all actions reasonably required to provide the foregoing items to Developer.
10.1.2. Acceptance Notice and Confirmation of Acceptance. When Developer reasonably determines that the conditions for Acceptance of any component of Developer’s Phase 1A Infrastructure Improvements have been satisfied, De veloper will provide written notice thereof to Authority, with a copy to the Administrative Agent (an “ Acceptance Notice ”). Each of the City and the Port District, as applicable, shall either conf irm its Acceptance (in its reasonable discretion) o f such component of Developer’s Phase 1A Infrastructu re Improvements or set forth the reasons for denying its Acceptance within ten (10) Business Day s after Authority’s receipt of such Acceptance Notice. If the City or the Port deny Acceptance, t hen Developer shall take such steps as may be reasonably necessary to address the City’s reasons or the Port District’s reasons (as applicable) for denying its Acceptance and submit a new Acceptance Notice to Authority and the foregoing process shall continue on an iterative basis (and City and the Port District, as applicable, shall have ten (1 0) Business Days to respond to each Acceptance Notice) until the City or the Port District, as applicable, have confirmed that Acceptance of such component has occurred.
10.2. Convention Center. When Developer determines that the Convention Center is Complete, Developer will provide a copy of its cert ificate of occupancy or temporary certificate of occupancy to Authority, with a copy to the Administ rative Agent, and the Authority shall confirm its Acceptance of the Convention Center within five (5) Business Days after Authority’s receipt of such copy of such certificate of occupancy or temporary certificate of occupancy.
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10.3. Sweetwater Park. This Section applies only if Deve loper exercises a Sweetwater Park Option.
10.3.1. When Developer reasonably determines that the condi tions for Sweetwater Park to be Sufficiently Complete have been satisfied, Developer will provide written notice thereof to Port District (a “ Sufficient Completion Notice ”). Port District shall either confirm Sufficient Completion (in its sole and good faith discretion) of Sweetwater Park or set forth the reasons for denying that Sweetwater Park is Sufficiently Comple te within ten (10) Business Days after Port District’s receipt of such Sufficient Completion No tice. If Port District denies that Sweetwater Park is Sufficiently Complete, then Developer shall take such steps as may be reasonably necessary to address the Port District’s reasons for such denial and submit a new Sufficient Completion Notice to Port District and the foregoing process shall conti nue on an iterative basis (and Port District shall have ten (10) Business Days to respond to each Suff icient Completion Notice) until the Port District has confirmed that Sufficient Completion of Sweetwater Park has occurred.
10.3.2. Following Sufficient Completion and prior to Accept ance, Developer shall complete any remaining punch-list items, record a n otice of completion with the County Recorder of San Diego County, and deliver to the Port District (i) “as-built” or record drawings, (ii) final soils report (“as-graded” Geotech report), (iii) operatio ns and maintenance manuals (if applicable), and (iv) all applicable warranty documentation. When De veloper reasonably determines that Sweetwater Park has been Sufficiently Completed and the condit ions to Acceptance described above in this Section have been satisfied, Developer will provide written notice thereof to the Port District (an “Acceptance Notice ”). Port District shall either confirm its Acceptance (in its reasonable discretion) of Sweetwater Park or set forth the reasons for den ying its Acceptance within ten (10) Business Days after Port District’s receipt of such Acceptance No tice. If Port District denies Acceptance, then Developer shall take such steps as may be reasonabl y necessary to address the Port District’s reasons for denying its Acceptance and submit a new Accepta nce Notice to Port District and the foregoing process shall continue on an iterative basis (and P ort District shall have ten (10) Business Days to respond to each Acceptance Notice) until the Port D istrict has confirmed that Acceptance of such component has occurred. Developer may provide an A cceptance Notice in addition or in lieu of providing a Sufficient Completion Notice pursuant to Section 10.3.1.
ARTICLE XI
WARRANTIES
11.1. Enforcement of Warranties. Upon Acceptance of each applicable Developer’s Phase 1A Infrastructure Improvement, Developer shal l assign any manufacturer’s warranties to the Public Entity accepting ownership of such applicabl e Developer’s Phase 1A Infrastructure Improvements. Until such improvements are assigned to the applicable Public Entity, Developer shall enforce for the Authority’s benefit all warra nties provided in the Contract Documents with respect to such improvements and any other explicit warranties with respect to such improvements.
11.1.1. Materials and Workmanship. Developer shall require its General Contractor and Subcontractor(s) to warrant all work on the Project against Defective Work for a period of one (1) year following the date of Completion.
11.1.2. New Materials and Equipment. Developer shall requi re its General Contractor and Subcontractor(s) to warrant and guar antee to Authority that all materials and equipment incorporated into the Project are new unless otherwise specified.
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11.1.3. Documentation. Developer shall furnish, or cause i ts General Contractor to furnish, the Public Entities with all warranty and guarantee documents prior to Acceptance.
11.2. Term of Warranties. Unless otherwise specified or provided by Law, warranties shall extend for a term of one (1) year following the dat e of Completion, except that, with respect to the Convention Center, the warranties shall extend for one year after the Convention Center is substantially complete in accordance with the Contr act Documents (excluding, for the avoidance of doubt, punch list items, so that the Convention Center can be occupied or utilized for its intended use (the “ Warranty Period ”).
11.3. Additional Warranties. In addition to the warranti es set forth in this Article, following Acceptance, Developer or its General Contractor shall assign to the Public Entities any and all other manufacturer’s or installer’s warranties for equipment or materials not manufactured by the General Contractor provided as part of the work rel ated to the Developer’s Phase 1A Infrastructure Improvements, to the extent that such third-party w arranties are assignable and extend beyond the Warranty Period. Developer shall furnish, or cause its General Contractor to furnish, the Public Entities with all warranty and guarantee documents with respect to Developer’s Phase 1A Infrastructure Improvements prior to Acceptance.
ARTICLE XII
DEFECTIVE WORK
12.1. Correction, Removal, or Replacement. The Developer shall require that if, within the Warranty Period, the Authority determines the Devel oper’s Phase 1A Infrastructure Improvements contain Defective Work and provides written notice thereof to the Developer, the Developer’s General Contractor or applicable Subcontractor, as applicable, shall promptly correct, repair, or both remove and replace the Defective Work as determined by Developer in its sole discretion.
12.2. Extension of Warranty. With respect to the Develop er’s Phase 1A Infrastructure Improvements (excluding plant materials), when Defe ctive Work, or damage therefrom, has been corrected, repaired, replaced or removed, as applic able, during the initial Warranty Period, the Warranty Period for such Defective Work will be extended for an additional time period equal to that of the initial Warranty Period, after the date of t he satisfactory completion of the correction, repai r, replacement or removal, as applicable, but, in no event, beyond the earlier to occur of (a) one (1) year after the date of the expiration of the initial War ranty Period or (b) two (2) years after Acceptance of the applicable Improvement.
12.3. Right of Authority to Correct. In the event of the Developer’s failure, its General Contractor’s failure, or such Subcontractor’s failu re, as applicable, to adhere to Section 12.1 within thirty (30) days after Developer receives notice of such Defective Work from the Authority (provided that, if the nature of such Defective Work is such that the same cannot reasonably be corrected, repaired or replaced within such thirty (30) day pe riod, and Developer diligently commences to perform such work within such thirty (30) day perio d and thereafter diligently proceeds with such work, then such thirty (30) day period shall be ext ended for as long as reasonably necessary to complete such work) or in the event of an emergency or immediate threat to public safety, Developer shall as promptly as practicable correct, remove, o r replace the Defective Work or, if Developer does not do so, the Authority may, in its sole and absol ute discretion, notify Developer in writing and then the Authority may correct, remove, or replace the D efective Work. In such circumstances, the costs
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payable to the Developer shall be reduced by the ac tual cost incurred by the Authority to correct, remove or replace the Defective Work.
12.4. No Limitation on Other Remedies. Exercise of the r emedies for Defective Work pursuant to this Article XII shall not limit the re medies the Authority may pursue under this Agreement or at law or equity.
12.5. Disputes. If Developer and Authority are unable to reach agreement on disputed work, the Authority may direct Developer to proceed with the work and compensate Developer for undisputed amounts. Payment of disputed amounts sh all be as later determined in accordance with Section 26.12. Developer shall maintain and keep a ll records relating to disputed work for a period of three (3) years in accordance with Article XVI.
12.6. Applicability. This Article XII shall not apply with respect to the Convention Center.
ARTICLE XIII
SECURITY FOR CONSTRUCTION
13.1. Bonds. The Contract Documents for the Developer’s Phase 1A Infrastructure Improvements shall require each General Contractor to provide a performance bond on a form reasonably acceptable to the Authority for the cons truction of the Developer’s Phase 1A Infrastructure Improvements and the aggregate amoun t of such bond will be no less than the amount payable pursuant to the General Contracts with resp ect to Developer’s Phase 1A Infrastructure Improvements. Developer shall cause each of the Au thority, the Trustee, the Senior Permitted Mezzanine Lender, and the Building Loan Administrat ive Agent to be named as a co-obligees of such performance bond. Developer shall provide a payment bond on a form reasonably acceptable to Authority for the construction of the Developer’s P hase 1A Infrastructure Improvements in the total amount set forth on the Developer’s Phase 1A Infras tructure Improvements Budget. Developer shall deliver copies of the payment bond and performance bond to the Authority and each other co-obligee prior to commencement of construction for the Devel oper’s Phase 1A Infrastructure Improvements.
With respect to any portion of the Developer’s Phas e 1A Infrastructure Improvements, Developer shall ensure that (a) the payment bond is maintaine d though the period of time required by California Civil Code Section 9558 and (b) the performance bon d is maintained for at least one (1) year following Acceptance of such portion of the Develop er’s Phase 1A Infrastructure Improvements, provided however that Developer may replace a perfo rmance bond with a warranty bond which shall remain in effect for the initial Warranty Period, s ubject to reasonable approval of the form of such warranty bond by the Public Entity accepting such Developer Phase 1A Infrastructure Improvements.
The Contract Documents for the Convention Center sh all require each General Contractor to provide a performance bond on a form reasonably acc eptable to the Authority for the construction of the Convention Center and the aggregate amount of s uch bonds will be no less than the amount payable pursuant to the General Contracts with resp ect to the Convention Center. Developer shall cause each of the Authority, the Trustee, the Senio r Permitted Mezzanine Lender, and the Building Loan Administrative Agent to be named as a co-obligees of such performance bond. Developer shall provide a payment bond on a form reasonably accepta ble to Authority for the construction of the Convention Center in the total amount set forth on the Convention Center Budget. Developer shall deliver copies of the payment bond and performance bond to the Authority and each other co-obligee prior to commencement of construction for the Conve ntion Center. Developer shall ensure the payment bond is maintained though the period of tim e required by California Civil Code Section
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9558. Developer shall ensure the performance bond is maintained until such time as the Convention Center is Complete.
If the estimated amount payable to a General Contra ctor pursuant to its General Contract is increased, the Developer shall advise such General Contractor and the surety of the increased amount and the payment bond shall be increased accordingly . Under no circumstances shall the payment bond surety be released from liability to those for whose benefit such bond has been given, by reason of any breach of contract between the Developer and such General Contractor or on the part of any obligee named in such bond, but the sole conditions of recovery shall be that claimant is a person described in Civil Code Section 9100, and has not been paid the full amount of such person’s claim.
13.2. Insolvency or Bankruptcy. If the surety on any of the above-mentioned bonds pertaining to Developer’s Phase 1A Infrastructure I mprovements is declared bankrupt, becomes insolvent (as defined in Insurance Code Section 985 ), or its right to do business is terminated in the State of California, Developer shall, within fiftee n (15) Business Days after Developer’s actual knowledge or receipt of notice from the Authority, substitute or require the substitution of another bond and surety, reasonably acceptable to the Autho rity, to the extent a replacement bond is commercially available.
If the surety on any of the above-mentioned bonds p ertaining to the Convention Center is declared bankrupt, becomes insolvent (as defined in Insurance Code Section 985), or its right to do business is terminated in the State of California, Developer shall within fifteen (15) Business Days after Developer’s actual knowledge or receipt of no tice from the Authority substitute or require the substitution of another bond and surety, reasonably acceptable to the Authority, to the extent (i) a replacement bond is commercially available and (ii) the cost of such replacement bond does not exceed one hundred ten percent (110%) of the portio n of the cost of the original bond that is fairly allocable to the portion of the Convention Center t hat has not then been completed. The Parties acknowledge that the bonds required by Section 13.1 must be in place throughout the period of time required by Section 13.1 and, to that end, in the e vent replacement bonds are needed for the reasons described in the immediately preceding sentence but the thresholds set forth in clauses (i) and (ii) o f the immediately preceding sentence are not met, the Parties shall meet and confer to determine how the Parties can replace the subject bonds or potent ially obtain an alternative form of security; provided that Developer shall not be required to ob tain any such replacement bond or alternative security unless the Parties mutually agree, and in no event shall the cost to the Developer of any replacement bond or alternative security exceed the cost threshold set forth in clause (ii) of the immediately preceding sentence.
13.3. Calling a Bond.
13.3.1. Developer acknowledges and agrees that if Developer ’s construction of Developer’s Phase 1A Infrastructure Improvements ha s not been performed in accordance with Section 5.1 or if the Developer has failed to cure any Defective Work within a commercially reasonable time after Developer’s receipt of notice pursuant to Section 12.1 (subject to the notice and cure periods set forth in Section 12.3), and, in ea ch case, such failure constitutes a breach by the General Contractor under the applicable Contract Do cuments, the Authority may use the performance bond referenced in Section 13.1 above to complete Developer’s Phase 1A Infrastructure Improvements. This remedy is not a limitation on r emedies of the Authority, as applicable. and is in addition to any other remedy that the Authority may have at law or in equity.
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13.3.2. Developer acknowledges and agrees that if Developer ’s construction of the Convention Center has not been completed in accorda nce with Section 5.1 or if the Developer has failed to cure any Defective Work within a commerci ally reasonable time after Developer’s receipt of notice pursuant to Section 12.1 (subject to the notice and cure periods set forth in Section 12.3), and, in each case, such failure constitutes a breac h by the General Contractor under the applicable Contract Documents, the Authority may use the perfo rmance bond referenced in Section 13.1 above to complete the Convention Center. This remedy is not a limitation on remedies of the Authority and is in addition to any other remedy that the Authority may have at law or in equity.
ARTICLE XIV
INDEMNITY AND DUTY TO DEFEND
14.1. General Indemnity. To the maximum extent allowed b y law, Developer hereby indemnifies and shall defend the Authority, the Por t District Parties and the City Parties, at Developer’s sole cost and expense and with counsel reasonably selected by the Public Entities and reasonably approved by Developer, and hold the Auth ority, the Port District Parties, and the City Parties harmless from any and all claims (including claims under negligence and strict liability), demands, liability, losses, causes of actions and s uits of any kind, administrative or judicial proceedings, orders, judgments, and all Related Cos ts arising directly or indirectly out of (i) the performance by Developer of its obligations under t his Agreement, (ii) the construction of any Improvements and (until Acceptance) the Developer’s Phase 1A Infrastructure Improvements, (iii) any breach by Developer of its obligations un der this Agreement, (iv) any accident, injury or damage whatsoever caused to any Person or the prope rty of any Person on or about the Project Site or at the Improvements or (until Acceptance) the De veloper’s Phase 1A Infrastructure Improvements; or (v) the use, occupancy, possession or operation of the Project Site and the Improvements and (until Acceptance) the Developer’s Phase 1A Infrastructure Improvements by any Developer Party or Hotel Operator, or any acts or o missions of any Developer Party or Hotel Operator, in each case, except for claims or litiga tion arising through the sole gross negligence or willful misconduct of the Authority, any Authority Party, any Port District Party (including, without limitation, with respect to the Remaining Phase 1A Infrastructure Improvements) or City Party (but subject to Section 15.4); provided, that the sole g ross negligence or willful misconduct of one Public Entity Party with respect to any Public Entity shal l not be attributed to or affect the rights of any Public Entity Party with respect to any other Publi c Entity under this Section 14.1. The foregoing indemnity, defense and hold harmless obligations of Developer shall not include any claims (including claims under negligence and strict liabi lity), demands, liability, losses, causes of action s and suits of any kind, administrative or judicial proceedings, orders, judgments, and all Related Costs arising directly or indirectly out of (w) the Proje ct’s failure or alleged failure to comply with Section 15 and Exhibit 3 of the Settlement Agreemen t or any other document implementing or duplicating Section 15 and Exhibit 3 of the Settlem ent Agreement, provided that Developer has satisfied its obligations under Section 5.8, Exhibi t O, and any other agreement entered into between the Port District and/or City with Developer regard ing the subject of this subsection (w), (x) any Person’s failure to comply with any applicable prov isions of the PWL with respect to any work performed by, or on behalf of, any Port District Pa rty (other than by a Developer Party or Hotel Operator, or on behalf of a Developer Party or Hote l Operator, or by any Person acting directly or indirectly under a contract with a Developer Party or Hotel Operator), (y) the Remaining Phase 1A Infrastructure Improvements or any development, con struction or use thereof or activity thereon other than by Developer or a Developer Party or (z) any use, development or construction of any portion of the Developer’s Phase 1A Infrastructure Improvements after Acceptance thereof, excluding (1) claims pursuant to Articles XI and XI I and (2) claims that arise directly or indirectly
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out of any act or omission of a Developer Party or Hotel Operator. If a Public Entity determines in its reasonable discretion that there is a conflict of i nterest with Developer’s counsel representing such Public Entity and Developer, or that there is a con flict of interest with counsel representing such Public Entity and the other Public Entities, then s uch Public Entity, at its election, may conduct its own defense with its own counsel that is reasonably selected by the Public Entity, reasonably approved by Developer, and independent from Developer’s counsel (and in that event Developer will select its own counsel) and the reasonable costs in curred by the applicable Public Entity in such defense shall be covered by the foregoing indemnifi cation, hold harmless and defense obligations and be subject to reimbursement pursuant to the Reimbursement Procedure. The terms of this Section
14.1 shall survive the expiration or earlier termin ation of this Agreement. The foregoing indemnity obligations of Developer are in addition to, and no t in limitation of, any other indemnity obligations of Developer contained in this Agreement or any oth er agreement between any of the Public Entities and Developer. Notwithstanding the foregoing, Secti on 19.2.3, and not this Section 14.1, shall apply to the reimbursement of any fees or expenses incurr ed by Public Entities in connection with a Tax Claim. Notwithstanding anything to the contrary in this Section, Developer shall have no obligation to pay or reimburse any Public Entity for costs inc urred by such Public Entity that such Public Entity would have been obligated to pay without any expres s right to reimbursement by Developer, or for which such Public Entity would have been obligated to reimburse Developer, pursuant to this Agreement or the Sublease.
14.2. Damage to Other Properties. The indemnification and agreement to hold harmless set forth in Section 14.1 shall extend to damages, incl uding without limitation monetary claims based on allegations of takings or inverse condemnation, res ulting from diversion of waters, change in the volume of flow, modification of the velocity of the water, erosion or siltation, or the modification o f the point of discharge as the result of, and to the extent of and proportion caused by, the negligence by Developer, its officials, officers, the General Contractor, Subcontractor(s), agents, or employees in the construction of the Project. The foregoing i ndemnification obligations of Developer shall not include any claims (including claims under negligen ce and strict liability), demands, liability, losse s, causes of actions and suits of any kind, administrative or judicial proceedings, orders, judgments, and all Related Costs arising directly or indirectly ou t of (x) the sole gross negligence or willful misconduct of any Public Entity Party (except that the sole gross negligence or willful misconduct of one Public Entity Party with respect to any Public Entity shall not be attributed to or affect the rig hts of any Public Entity Party with respect to any other Public Entity under this Section 14.2), (y) Public Entity conduct in connection with construction, mai ntenance, or operation of the Remaining Phase 1A Infrastructure Improvements or any develop ment, construction or use thereof or activity thereon other than by Developer or a Developer Part y, or (z) any use of the Developer’s Phase 1A Infrastructure Improvements after Acceptance thereo f, excluding any claims pursuant to Articles XI or XII.
14.3. Hazardous Materials Indemnity.
14.3.1. Developer hereby assumes for itself and shall indem nify, defend the Authority, the Port District Parties, and the City Parties, and hold the Authority, the Port District Parties, and the City Parties harmless from any and all claims, demands, liability, losses, causes of actions and suits of any kind, administrative or ju dicial proceedings, orders (judicial or administrative), judgments, and all Related Costs ( whether or not based upon personal injury, negligence, strict liability, property damage, or c ontamination of, or adverse effects upon, the environment, waters or natural resources, including any loss of or damage to any Public Entity’s real or personal property), which occur or arise during or after the Term relating to, or resulting from, any
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Hazardous Materials Activity, any Tenant Hazardous Material, any Material Exacerbation of Pre- Existing Hazardous Material by a Developer Party or Hotel Operator, or any breach by Developer of its obligations under this Section 14.3, at Develop er’s sole cost and expense and with counsel and experts selected by the Public Entities in their re asonable discretion, and reasonably approved by Developer, and who act according to the Public Enti ties’ reasonable direction, with reasonable input and cooperation from Developer. Developer’s obligat ions under Section 6.20 of the Sublease (and the indemnification of the Authority, the Port Dist rict Parties, and the City Parties by Developer under this Section 14.2) include, without limitatio n, any Environmental Cleanup required by this Agreement, costs incurred in connection with any in vestigation of site conditions or any cleanup, treatment, remedial, removal, or restoration work r equired by this Agreement or any federal, state or local government agency because of Hazardous Materi als present in the air, soil or ground water above, on, or under the Site or Improvements or (un til Acceptance of the applicable Developer’s Phase 1A Infrastructure Improvements) the Developer ’s Phase 1A Infrastructure Improvements and the Developer’s Phase 1A Infrastructure Improvement s Site. The Public Entities shall have a direct right of action against Developer even if no third party has asserted a claim. If a Public Entity determine in its reasonable discretion that there i s a conflict of interest with Developer’s counsel representing such Public Entity and Developer, or t hat there is a conflict of interest with counsel representing such Public Entity and the other Publi c Entities, then such Public Entity, at its electio n, may conduct its own defense with its own counsel th at is reasonably selected by the Public Entities, reasonably approved by Developer and independent fr om Developer’s counsel (and in that event Developer will select its own counsel) and the reas onable costs incurred by the applicable Public Entity in such defense shall be covered by the fore going indemnification, hold harmless and defense obligations and be subject to reimbursement pursuan t to the Reimbursement Procedure. The indemnification and Environmental Cleanup requireme nts under Section 6.20 of the Sublease and this Section 14.3 include, but, are not necessarily limited to:
14.3.1.1. Losses attributable to diminution in the value of t he Site, Improvements or (with respect to occurrences or con ditions existing prior to Acceptance of the applicable Developer’s Phase 1A Infrastructure Impr ovements) the Developer’s Phase 1A Infrastructure Improvements Site;
14.3.1.2. Losses of rental or other income from the Site, Imp rovements or (with respect to occurrences or conditions existing prior to Acceptance of the applicable Developer’s Phase 1A Infrastructure Improvements) the Developer’s Phase 1A Infrastructure Improvements Site;
14.3.1.3. Loss of or damage to natural resources regarding wh ich Port District is the lawfully designated trustee;
14.3.1.4. Loss or restriction of use of rentable space(s) in the Site, Improvements or (with respect to occurrences or con ditions existing prior to Acceptance of the applicable Developer’s Phase 1A Infrastructure Impr ovements) the Developer’s Phase 1A Infrastructure Improvements Site;
14.3.1.5. Adverse effect on the marketing of any space(s) in the Site, Improvements or (with respect to occurrences or con ditions existing prior to Acceptance of the applicable Developer’s Phase 1A Infrastructure Impr ovements) the Developer’s Phase 1A Infrastructure Improvements Site; and
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14.3.1.6. All other liabilities, obligations, penalties, fine s, claims, actions (including remedial or enforcement actions of any k ind and administrative or judicial proceedings, orders, or judgments), damages (including consequential and punitive damages), and costs (including reasonable attorney, consultant, and expert fees and expenses).
Notwithstanding anything to the contrary in this Se ction, Developer shall have no obligation to pay or reimburse any Public Entity for costs incurred b y such Public Entity that such Public Entity would have been obligated to pay without express right to reimbursement by Developer, or for which such Public Entity would have been obligated to reimburs e Developer, pursuant to this Agreement.
Further, notwithstanding anything to the contrary i n this Section, Developer shall have no indemnity obligation to the Authority, the Port District Part ies, and the City Parties resulting from Pre-Existi ng Hazardous Material other than a Material Exacerbati on of Pre-Existing Hazardous Material by a Developer Party or Hotel Operator.
14.4. Illegal Discharge to Storm Drains. Developer shall defend, indemnify, protect, and hold harmless each of the Public Entity Parties fro m and against all claims asserted, or liability established for damages or injuries to any person o r property resulting from a discharge to public storm drains in violation of applicable laws to the extent arising out of the construction of the Proj ect (an “ Illegal Discharge ”) caused by any action or failure of Developer, it s officials, officers, the General Contractor, Subcontractor(s), agents, or employees to take reasonable measures to prevent an Illegal Discharge or any Illegal Discharge by any s uch persons or entities. Developer shall also be responsible for payment of any fines or penalties a ssessed against any Public Entity for an Illegal Discharge. Developer’s duty to indemnify and hold harmless shall not include any claims (including claims under negligence and strict liability), dema nds, liability, losses, causes of actions and suits of any kind, administrative or judicial proceedings, o rders, judgments, and all Related Costs arising directly or indirectly out of (x) the sole negligen ce or willful misconduct of any Public Entity Party , (y) Public Entity conduct in connection with constr uction, maintenance or operation of the Remaining Phase 1A Infrastructure Improvements or any development, construction or use thereof or activity thereon other than by the Developer or a D eveloper Party, or (z) any use of the Developer’s Phase 1A Infrastructure Improvements after Acceptan ce thereof, excluding any claims pursuant to Articles XI or XII.
14.5. Implementation of Authority Resolution 2020-002. W ithout limitation of the Developer’s other obligations under this Agreement, the Developer agrees, at its sole cost and expense, and with counsel reasonably selected by th e Public Entity Parties, each in its reasonable discretion, and reasonably approved by Developer, t o indemnify, defend and hold harmless each of the Public Entity Parties, and their officers, dire ctors, employees, partners, affiliates, agents, contractors, successors and assigns from any Claims , Related Costs, and amounts paid in settlement of any claims or actions brought by any third party and related to the subject matter of the Related Costs (as determined by the Developer and the Publi c Entity Parties), arising out of any action taken by the Authority, the Port District, or the City, a s applicable, in implementation of Authority Resolution 2020-002; provided, however, such indemn ity, defense and hold harmless obligations of the Developer under this Section 14.5 shall not inc lude any Claims and Related Costs arising solely out of (a) the sole or collective negligence, or wi llful misconduct of the Authority, the Port Distric t and/or the City, as applicable, (b) the failure of the Authority Board to follow the procedures of the Authority in adopting Authority Resolution 2020-002 , or (c) the lack of authority of the Authority Board to adopt Authority Resolution 2020-002, but s hall include Claims and Related Costs arising from the Developer’s delivery of incorrect, misleading, or inaccurate information to the City, the Port District, or Authority, officers of the City, the P ort District or the Authority, or the Authority Boa rd,
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which any of the aforementioned parties relied upon to adopt, or recommend the adoption of, Authority Resolution 2020-002. The indemnification , defense, and hold harmless obligations of the Developer under this Section 14.5 shall exist so lo ng as a challenge or claim can be made against the Authority, the Port District of the City.
14.6. Costs of Defense and Award. 5 Developer shall immediately accept all tenders an d defend, at Developer’s own cost, expense and risk, any and all claims, demands, suits, actions, or other legal or administrative proceedings that may be brought or instituted against each Public Entity, its officials, officers, employees and/or agents an d that appear to be covered by the defense obligation defined in Sections 14.1, 14.2, 14.3, 14 .4 and 14.5. Developer acknowledges and agrees that its obligation to accept tender and defend eac h Public Entity, its officials, officers, employees , and/or agents as provided in this Section 14.6 is a bsolute and not subject to any limitations in Sections 14.1, 14.2, 14.3, 14.4, and 14.5 of this A greement, or elsewhere. Developer shall pay and satisfy any judgement, award, or decree that may be rendered against any Public Entity or its officials, officers, employees and/or agents, for a ny and all related legal expense and costs incurred by each of them subject to the limitations in Secti ons 14.1 through 14.5 and only to the extent Section 14.1 through 14.5 requires Developer to do so. If a court of competent jurisdiction determines by a final judgment that any Public Enti ty was not entitled to indemnification or defense by Developer pursuant to this Article XIV, then suc h Public Entity shall pay to Developer the cost incurred by Developer in providing such indemnifica tion or defense (including, without limitation, the reasonable costs of Developer’s internal legal counsel). Where outside counsel has been retained, reasonable costs of Developer’s internal legal counsel shall be limited to (x) supervising such outside counsel and (y) such other customary work performed by in-house counsel in connection with proceedings of this type where outside counsel is e ngaged; provided that Developer shall use reasonable efforts to avoid duplicating work perfor med by its outside counsel and its internal legal team. For the avoidance of doubt, “supervising such outside counsel” shall include, without limitation, review and revision of any documents pr epared by outside counsel, preparation of memoranda or other similar correspondence to be pro vided to Developer, correspondence with regarding status of matter, review of billing matte rs, negotiation of contracts with outside counsel, and any other activities that would be reasonably p erformed by in house counsel in connection with such supervision.
14.7. Insurance Proceeds. Developer’s obligation to inde mnify shall not be restricted to insurance proceeds, if any, it receives.
14.8. Declarations. Developer’s obligations under Articl e XIV shall not be limited by any prior or subsequent declaration by Developer.
14.9. Survival. Developer’s obligations under Article XI V shall survive the expiration and/or termination of this Agreement.
ARTICLE XV
INSURANCE REQUIREMENTS
15.1. Insurance Requirements. During the Construction Pe riod, and with respect to any portion of the Developer’s Phase 1A Infrastructure Improvements (including Sweetwater Park if the Developer exercises the Sweetwater Park Option), un til Acceptance of the applicable Developer’s
5 We reviewed this and do not understand why 14.5 wo uld be excluded from the provisions of Section 14.6.
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Phase 1A Infrastructure Improvements, Developer sha ll maintain the policies of insurance described in Sections 15.2 and 15.3 in full force and effect. Insurance requirements applicable to Alterations are set forth in the Sublease; however, if any Alte rations are constructed during the Construction Period, the Developer shall comply with the insuran ce requirements set forth in this Article XV with respect to such Alterations.
15.2. Forms and Amounts of Coverage. The policies for sa id insurance shall, as a minimum, provide the following:
15.2.1. Commercial General Liability. “Occurrence” form Co mmercial General Liability covering the Project Site, the Improvemen ts, and Developer’s Phase 1A Infrastructure Improvements, operations and contractual liability assumed by Developer in this Agreement and the Sublease in the amount of not less than as set fort h in Section 15.2.1.1. Developer’s indemnification obligations under this Agreement and the Sublease s hall in no event be limited by the terms or qualifications to the contractual liability coverage under such insurance.
15.2.1.1. Commercial General Liability Policy Amount: Not le ss than Twenty Million Dollars ($20,000,000) per occurrence limit for bodily injury and property damage.
The general aggregate limit shall be not less than Forty Million Dollars ($40,000,000) unless a Twenty Million Dollars ($20,000,000) per location a ggregate limit is provided by separate endorsement. All such limits may, at Developer’s op tion, be satisfied by limits set forth in primary policies and excess policies.
15.2.2. Builder’s Risk Property Coverage.
15.2.2.1. During the Construction Period, builder’s risk comp leted value form insurance covering the perils insured under th e ISO special causes of loss form, including collapse, water damage and transit, covering the to tal value of work performed and equipment, supplies and materials furnished (with an appropria te limit for soft costs in the case of construction ) and covering the full insurable value (exclusive of the cost of noninsurable items) of all equipment, supplies and materials at any off-site storage loca tion used with respect to the Project or in transit .
Specific limits of insurance for flood shall be det ermined at the joint discretion of Developer and Authority. Earthquake limits shall, at a minimum, cover 250 year maximum probable loss or such other limits as are agreed to by Developer and the Authority. The damage coverage shall be endorsed with a Loss Payee endorsement in favor of the Trustee. Notwithstanding anything to the contrary herein, the builder’s risk insurance requi red by this Agreement may not be terminated until property insurance policies required by the Subleas e are in effect. Net Proceeds shall be assigned by the Authority to the Trustee pursuant to the Indenture.
Developer shall if commercially available cause its builder’s risk policy to define “soft costs” to include the costs of issuanc e of the Authority Bonds and capitalized interest o n the Authority Bonds and interest expense related th ereto (“ Expanded Soft Cost Coverage ”). The Developer shall request proposals for builder’s ris k policies including Expanded Soft Cost Coverage, and shall present such proposals to the Public Enti ties for their consideration. If and as needed, Developer and the Public Entities shall meet and co nfer regarding such proposals. Notwithstanding the foregoing provisions of this paragraph, if the Public Entities, in their reasonable discretion, se lect a proposal for the procurement of such builder’s ri sk policy, and Developer (A) determines that procuring such Expanded Soft Cost Coverage will nei ther adversely affect Developer’s procurement of builders’ risk insurance nor adversely affect th e coverage of such builder’s risk insurance or
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(B) determines in its reasonable discretion to proc ure such Expanded Soft Cost Coverage, then Developer shall procure such builder’s risk policy for the applicable policy period with Expanded Soft Cost Coverage (assuming that such builder’s ri sk policy remains commercially available to Developer, and provided, that if there is more than one proposal and Developer determines that the proposal selected by the Public Entities would adve rsely affect Developer’s procurement of builder’s risk insurance or the coverage of such builder’s ri sk insurance, then Developer may, in Developer’s sole discretion, select any proposal that would not adversely affect, or would have lesser adverse effect on, Developer’s procurement of builder’s ris k insurance or the coverage of such builder’s risk insurance), and the Authority shall promptly reimbu rse Developer for the amount by which (x) the aggregate amount expended by Developer in connection with obtaining and maintaining the builder’s risk policy with Expanded Soft Cost Coverage exceed s (y) the amount that Developer would have expended in connection with maintaining a builder’s risk policy without Expanded Soft Cost Coverage. Promptly after any Public Entity so reque sts, Developer shall provide documentation to the Public Entities that reasonably evidences the amount of such excess.
The Public Entities shall be named as additional in sureds under any builder’s risk policy procured by the Developer pursuant to this Agreement.
15.2.2.2. Any Casualty Proceeds shall be paid to the Trustee as “loss payee” under the property insurance policies that a re required to be maintained pursuant to this Agreement or the Sublease and shall be deposited in to the Insurance and Condemnation Fund pursuant to Section 4.5 of the Authority Indenture and Section 6.1(a) of the Facility Lease. Such Casualty Proceeds shall be held in trust by the Tru stee in the Insurance and Condemnation Fund pursuant to the terms of the Indenture and shall be paid and be applied as provided in Section 9.2 hereof, Section 5.2 of the Sublease, and Section 6. 1(a) of the Facility Lease. If there is no Trustee or if there is but the Trustee declines to act as a tr ustee for the disbursement of funds as provided in Section 5.2 of the Sublease, then any Casualty Proc eeds shall be paid and disbursed as provided in Section 5.2 of the Sublease and Section 6.1(a) of the Facility Lease.
15.2.3. Worker’s Compensation. Workers’ compensation insur ance covering all persons employed by Developer at the Project Site, Improvements and Developer’s Phase 1A Infrastructure Improvements and with respect to who m death or bodily injury claims could be asserted against Developer, any Public Entity, the Project Site, the Improvements, or the Developer’s Phase 1A Infrastructure Improvements, with statutor ily required limits, and employer’s liability insurance with minimum limits of not less than One Million Dollars ($1,000,000) for each accident/employee/disease. Workers’ compensation in surance shall include a waiver of subrogation in favor of Public Entity Parties.
15.2.4. Automobile Liability. If Developer owns or leases vehicles, business automobile liability insurance covering liability a rising out of vehicles used on or about the Project Site, Improvements and Developer’s Phase 1A Infrast ructure Improvements by Developer or its employees insuring against liability for bodily inj ury, death and property damage in an amount not less than One Million Dollars ($1,000,000) each accident limit.
15.2.5. Contractor’s Pollution Liability Coverage. If eith er the City or the Port District determines, in its sole and absolute discr etion, that Developer performs or contracts for any work which involves a Hazardous Materials Activity or which has the potential to disturb or result in the release of any Hazardous Material, for which th ere is potential exposure to pollution or Hazardous Materials to Persons or the environment, Developer shall obtain or cause its contractor to
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obtain Contractor’s Pollution Liability, Pollution Legal Liability and/or Asbestos Pollution Liability and/or Errors & Omissions applicable to the work be ing performed or the potential release of any Hazardous Material, with limits of $5,000,000 per c laim or occurrence and $10,000,000 aggregate per policy period of one year or the limits maintai ned by or available to the contractor, whichever is higher. The Public Entities shall also be named as additional insureds on any such policy. During the Construction Period, immediately upon learning of o r reasonably suspecting that a release of Hazardous Materials has occurred on, in, under or a bout the Project Site, Developer shall provide notice of the same to each of the Public Entities.
15.2.6. UST Coverage. To the extent the foregoing coverage s do not cover any underground storage tanks (USTs) located on the Sit e during the Construction Period, Developer shall procure such insurance in amounts and with li mits reasonably acceptable to Developer and the Public Entities.
15.3. General Requirements.
15.3.1. Certificates and Other Requirements. The cost of a ll required insurance shall be borne by Developer. During the Constructio n Period, Developer shall provide the Public Entities with insurance certificates, in the form c ustomary in the insurance industry, issued by the insurer evidencing the existence of the necessary i nsurance policies and certified endorsements effecting coverage required by this Article XV (“ Certificates ”). The Certificates and endorsements for each insurance policy are to be signed by a per son authorized by that insurer to bind insurance on its behalf. Notwithstanding the foregoing, Develope r shall request copies of each insurance policy required under this Article XV and make available t o the Public Entities for inspection at the Project Site or the Improvements any insurance policy it receives.
15.3.2. Additional Insureds and Other Requirements. All li ability insurance policies shall name, or be endorsed to name the Pub lic Entities as additional insureds and protect the Public Entities against any legal costs in defendin g claims. All liability policies shall provide cros s- liability coverage. If Developer receives notice of any cancellation, modification such that the requirements of this Agreement are no longer satisf ied, suspension or voiding of an insurance policy required under this Article XV from the applicable insurance carrier, then Developer shall provide to the Public Entities written notice thereof within f ive (5) Business Days after receipt of such notice.
To the extent the policy is blanket endorsed or is specifically endorsed to provide the same, all insurance policies shall also provide that the subj ect policy shall not be cancelled without thirty (3 0) days’ prior written notice to the Public Entities. All insurance policies shall be endorsed to state t hat Developer’s insurance is primary and not excess or contributory to any insurance issued in the name of the Public Entities. Further, all insurance comp anies must have an S&P or AM Best rating of not less than “A-”.
15.3.3. Deductibles. Any deductibles or self-insured retentions must be declared to each of the Developer and the Public Entities and b e consistent with customary deductibles and self- insured retentions, as applicable, for a convention center or conference center operating in the United States of America that is comparable with the Conve ntion Center; provided, however, if the deductible or self-insured retention is in excess o f Two Hundred Fifty Thousand Dollars ($250,000), Developer shall provide the Public Entities with re asonably satisfactory evidence of its ability to meet the deductible or self-insured retention. The evidence to be provided to the Public Entities must include separate, unconsolidated, audited financial statements to be provided annually or upon any Public Entities’ written request to Developer. If D eveloper does not provide reasonably satisfactory
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evidence of its ability to meet the deductible or s elf-insured retention, then Developer shall have th e option to either: (i) reduce or eliminate such dedu ctible or self-insured retention as respects the Public Entity Parties; (ii) procure a bond guarante eing payment of losses and related investigations, claim administration, and defense expenses; or (iii ) agree to self-insure the risk with form of collateral or written agreement acceptable to the Public Entities.
15.3.4. Updates. If any Public Entity reasonably determine s that the insurance provisions in this Agreement do not constitute Adeq uate Insurance, then such Public Entity shall notify Developer thereof and of the changes to the insurance requirements of this Agreement that any Public Entity reasonably believes are necessary to cause such requirements to constitute Adequate Insurance. The Parties agree that the insurance pro visions will be modified to increase Developer’s insurance obligations to the smallest extent that is consistent with such modified insurance provisions providing for Adequate Insurance. The Parties shall , in the first instance, attempt to agree on any revisions to such insurance provisions so that they provide for Adequate Insurance by entering into good faith negotiations and, if, within seven (7) d ays from the commencement of such negotiations, the Parties do not reach agreement, then, until the dispute is finally resolved by a final judgment rendered by a court of competent jurisdiction, the then-existing insurance requirements of this Agreement shall continue to govern Developer’s obli gations. After the Parties agree on a new insurance program that constitutes Adequate Insuran ce or such final judgment of a court of competent jurisdiction establishes a new insurance program, such new insurance program shall bind the Parties. Developer shall deposit new Certificat es incorporating such changes within thirty (30) days of the Parties agreeing on such new insurance program. Failure by Developer to maintain insurance or deposit insurance Certificates as requ ired in this Article XV, where such failure is not cured by Developer within ten (10) days following w ritten notice thereof to Developer, shall constitute an Event of Default. Without limitation of the foregoing, Developer agrees that if Developer does not take out and maintain such insur ance or furnish the Public Entities with Certificates in a timely manner, the Public Entitie s may, but shall not be required to, procure said insurance on Developer’s behalf and charge Develope r the cost thereof, which amount shall be payable by Developer to the Public Entities pursuant to the Reimbursement Procedure.
15.3.5. No Limit on Liability. The procuring of such requi red policies of insurance shall not be construed to limit Developer’s liabili ty hereunder, nor to fulfill the indemnification provisions and requirements of this Agreement.
15.3.6. Compliance with Insurance Requirements. Developer agrees not to keep on the Project Site or permit to be kept, used, or sol d thereon, anything prohibited by any fire or other insurance policy covering the Project Site. Develop er shall, at its sole expense, comply with all reasonable requirements for maintaining fire and ot her insurance coverage on the Project Site and represents to the Public Entities that Developer wi ll confirm that it is in compliance with such requirements at all times.
15.4. Waiver of Subrogation. Developer hereby releases t he Public Entities from any and all liability or responsibility to Developer or any one claiming through or under Developer by way of subrogation or otherwise for any loss or damage to the Project Site, any Improvements, and Developer’s Phase 1A Infrastructure Improvements, o r any of Developer’s personal property or business caused by or arising from a fire or any ot her event that is covered by the insurance required to be carried pursuant to this Agreement or is actu ally carried, even if such fire or other event shal l have been caused by the fault or negligence of any of the Public Entities.
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15.5. Authority Obligation to Maintain Insurance. Until the earlier of (a) Full Payment or (b) the earlier termination of the Sublease and thi s Agreement, the Authority shall maintain crime insurance, or its equivalent, with respect to condu ct by officers and staff of the Authority and employees of the City and Port District relating to the transfer and requisition of Authority Bond proceeds and County Funds and processing of Develop er’s Phase 1A Payment Requests and Convention Center Payment Requests, in the minimum coverage amount of $5 million (“ Crime Insurance ”). In the event of the occurrence of any insurabl e event under such Crime Insurance, Authority shall pursue recovery under such Crime In surance. The Crime Insurance shall name, or be endorsed to name the Developer as an additional ins ured or loss payee, as reasonably and commercially appropriate and available. If Authorit y receives notice of any cancellation, modification such that the requirements of this Sec tion 15.5 are no longer satisfied or suspension or voiding of an insurance policy required under this Section 15.5 from the applicable insurance carrier, then Authority shall provide to the Developer writt en notice thereof within five (5) Business Days after receipt of such notice.
ARTICLE XVI
RECORDS AND AUDITS
16.1. Retention of Project Records. Developer shall use commercially reasonable efforts to maintain the Project Records (defined below) for a period of not less than seven (7) years after the date such record is created (or such longer period as Developer may decide in its sole discretion).
Developer shall make available to the Public Entiti es any of the Project Records upon request of any of the Public Entities. “ Project Records ” means the following documents and materials, but only if such documents and materials are related to the Pro ject: Contract Documents, plans and specifications, inspection reports, invoices relate d to Project Costs, and documents that evidence payment of Project Costs or the basis for such paym ents. Project Records also means such other documents that (a) are reasonably necessary to eval uate (i) whether the Project has been or is being constructed in accordance with the requirements of this Agreement; (ii) whether the certifications that have been made in any Developer Phase 1A Payme nt Request or Convention Center Payment Request are true and correct; (iii) whether Develop er is in compliance with Article XIII; (iv) the existence of any Force Majeure Event that Developer asserts exists and the duration of any delay in connection therewith; or (vi) the amount of Project Costs that have been or will be incurred; and (b) are reasonably requested by the Public Entities ; provided, however, that “Project Records” with respect only to such other documents under clauses (a) and (b) above shall not include any of the following: proprietary documents and information, d ocuments and information that are subject to confidentiality agreements which do not permit their disclosure to the Public Entities, documents and information that are subject to the attorney client privilege, tax advisor privilege, internal communications among Developer, its Affiliates or a ny of their respective officers, employees or agents (including, without limitation, attorneys an d tax advisors and consultants), communications among Developer, Marriott, any lender, any direct o r indirect owner of Developer or any of their respective officers, employees or agents. Develope r may redact from documents provided under clauses (a) and (b) above any information that is n ot reasonably necessary for the purposes of such clauses.
16.2. Audit of Records. At any time during normal busine ss hours, with 48 hours’ advanced notice and as often as the Public Entities reasonably deem necessary, Developer shall make available, or shall cause its General Contractor or any Subcontractor to make available, to the Public Entities for examination at the Project Site, the C onvention Center, or at such other location in San Diego County, California as is reasonably acceptable to the Public Entities all of the Project Records.
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Developer, the General Contractor and Subcontractor s will permit the Public Entities to make audits of the Project Records. If any Project Records are not made available at the Project Site, the Convention Center, or at such other location in San Diego County, California as is reasonably acceptable to Authority, then Developer shall pay a ll the travel related costs of the Authority to aud it such Project Records at the location where the records are maintained. Such costs will not be Project Costs.
16.2.1. Costs. Developer and Developer’s agents shall allo w the Public Entities to audit and examine the Project Records and any and a ll accounting procedures and practices that the Public Entities reasonably determine are necessary to discover and verify all costs of whatever nature, which are claimed to have been incurred, an ticipated to be incurred, or for which a claim for additional compensation or for extra work have been submitted under this Agreement.
ARTICLE XVII
TITLE TO ALTERATIONS AND IMPROVEMENTS
17.1. Title to Project. The Improvements constituting th e Project which may be installed, constructed or placed in, on, over or under the Pro ject Site, from time to time by Developer in accordance with this Agreement, the Sublease, and o ther agreements, (a) shall, subject to Developer’s obligations under Section 6.6 of the Sublease or such other agreements, as applicable, be so installed, constructed or placed at the Authorit y’s, the City’s or Port District’s, as applicable, sole cost and expense, and (b) shall remain the Authorit y’s, the City’s or Port District’s, as applicable, property during the Term; provided that Developer’s trade fixtures (that is fixtures relating uniquely to Developer and which are removable without non-re pairable damage to the other Improvements), furnishings, moveable equipment and other personal property of Developer shall remain the property of Developer. Notwithstanding the foregoing, at le ast ninety (90) days before the last day of the Sublease Term or, in the case of earlier terminatio n of the Sublease, within ten (10) days after such termination, unless the City expressly elects withi n the same time periods to require Developer to remove the same, any artworks that constitute perso nal property and that were provided to comply with Developer Art Investment but which are not gov erned by a separate agreement between Developer and the artist relating to the removal of such artworks at the end of the Sublease Term, shall not be removed and shall remain located on th e Site or the Convention Center, as applicable.
Prior to the Expansion Date, any and all expenditur es made by Developer with respect to the Project shall be treated as supplemental Rent for all purpo ses under the Sublease; provided that, for the avoidance of doubt, such expenditures shall not mod ify, reduce, substitute or credit any of Developer’s other Rent obligations under the Sublease.
17.2. Survival. The terms of this Article XVII shall sur vive the expiration or earlier termination of this Agreement and the Sublease.
ARTICLE XVIII
LIENS
18.1. No Right to Bind Port District. Neither Developer, any Developer Party, nor the Hotel Operator shall have any power or authority to do any act or thing, or to make any contract or agreement which shall bind Port District in any way whatsoever, and Port District shall have no responsibility to Developer, Developer Party, the H otel Operator, or other Person who performs, causes to perform, engages in or participates in an y construction of any Developer’s Phase 1A Infrastructure Improvements, Improvements, Alterati ons or any other work on the Project Site at the
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request of Developer, Developer Party, Hotel Operat or, or other Persons. Port District shall not be required to take any action to satisfy any such con tract or agreement or to remove or satisfy any lien resulting therefrom.
18.2. Notice of Non-Responsibility. Developer shall give written notice to all contractors, subcontractors and materialmen of Port District’s n on-responsibility in connection with any construction of the Developer’s Phase 1A Infrastruc ture Improvements, Convention Center, Alterations or any other construction work on the P roject Site, and shall immediately provide Port District with true copies of such notices not less than ten (10) days prior to the commencement of any work on the Project Site. The Port District Parties shall have the right to post and keep posted thereon notices of non-responsibility, or such other notices which Port District may deem to be proper for the protection of Port District’s interest in the Project Site. Developer shall provide Port District with any information required by Port District to complete the notice of non-responsibility.
18.3. Mechanics’ Liens. Developer shall pay or cause to be paid all costs for work, labor, services or materials supplied to or performed on t he Project Site that might result in any mechanics’ lien or similar lien as and when Developer is requi red to do so under Developer’s agreement with the respective provider thereof. If Developer receives notice that any mechanics’ lien or any similar lien is recorded against the Project Site and Developer is not contesting such lien in accordance herewith, then Developer shall cause such lien to be released and removed of record within thirty (30) days after Developer receives notice of the recordation of the mechanics’ lien or similar lien. Developer shall indemnify, defend, release and save Port District free and harmless from and against any and all claims of lien of laborers or materialmen or others for work performed or caused to be performed or for materials or supplies furnished for or at the P roject Site, the Improvements or the Developer’s Phase 1A Infrastructure Improvements by or for any Developer Party and the Hotel Operator and all Related Costs.
18.4. Contest of Lien. If Developer in good faith wishes to contest the amount or validity of any lien (other than any lien with respect to ta xes), then Developer shall have the right to do so; provided that (a) Developer shall first provide Por t District with at least ten (10) Business Days’ written notice prior to any such contest, (b) Devel oper shall first record a surety bond sufficient to release such lien; and (c) Developer shall cause th e following conditions to remain satisfied during such contest:
18.4.1. such contest shall not place the fee estate of the Project Site in material danger of being forfeited or lost;
18.4.2. such contest shall be without cost, liability, or expense to Port District;
18.4.3. Developer shall prosecute such contest with reasona ble diligence and in good faith; and
18.4.4. no Event of Default shall exist under this Agreemen t at the time of or during such contest.
18.5. Port District’s Right to Pay. If Developer shall b e in default in paying any charge for which a lien claim has been filed, and if Developer has not contested such lien in accordance with Section 18.4, then Port District may, but shall not be so obliged to, pay said lien claim and any cost s incurred in connection therewith, and the amount so paid, together with reasonable attorneys’ fees
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incurred in connection therewith, shall be immediat ely due and owing from Developer to Port District, and Developer shall pay the same to Port District pursuant to the Reimbursement Procedure, together with interest on the full amount thereof a t the Default Rate from the date of Port District’s payments until paid.
18.6. Notice of Liens. Should any claims of lien be file d against the Project Site or any Improvement or any action affecting the title to th e Project Site, the Improvements or the Developer’s Phase 1A Infrastructure Improvements be commenced, the Party receiving notice of such lien or action shall give the other Party writ ten notice thereof within five (5) Business Days of receipt.
18.7. Right of Entry. Nothing herein shall imply any con sent on the part of Port District to subject Port District’s estate to liability under a ny mechanics’ lien or other lien. Without limiting Developer’s obligations under Section 18.2 above, t he Port District Parties shall have the right, but not the obligation, to enter upon and inspect the p ortions of the Developer’s Phase 1A Infrastructure Improvements, Alterations, and Convention Center that are generally accessible to the general public or the portions of the Project Site where the opera tion of the Developer’s Phase 1A Infrastructure Improvements, Alterations, and Convention Center is ongoing, during normal business hours and upon a three (3) Business Days’ prior notice to Dev eloper (except in the case of an emergency in which case no prior notice shall be required but ea ch of such Port District Parties shall notify Developer and, prior to the Completion of the Resor t Hotel and the Parking Improvements, Developer’s Risk Construction Manager thereof by ph one prior to entering the Project Site) and Port District shall, and shall cause each of such Port D istrict Parties to: (a) comply with all applicable security and safety procedures of Developer of whic h Developer informs Port District in writing and with which such Port District Party can reasonably comply, and (b) use commercially reasonable efforts to minimize any interference with Developer ’s operation and use of the Project Site, the Improvements, the Ground Lease Property, the Resort Hotel and the Parking Improvements, while on the Project Site and at the Improvements. Notwithst anding the foregoing, nothing herein shall limit the Port District’s right to enter the Project Site , the Improvements or the Developer’s Phase 1A Infrastructure Improvements at any time to exercise its police powers.
ARTICLE XIX
TAXES
19.1. Reporting.
19.1.1. The Public Entities and Developer acknowledge and a gree that they have delivered the Ground Lease and the Convention Cente r Leases with the understanding that (i) during the Ground Lease Term, the Resort Hotel and Parking Improvements are owned by Developer, (ii) during the Term, the Convention Center is owned by the Authority, (iii) from and after the Expansion Date, the Convention Center is owned by Port Distri ct, (iv) Developer has only the right to the possession and use of the Convention Center during the Term upon the terms and conditions of the Sublease, and from and after the Expansion Date upon the terms and conditions of the Ground Lease, (v) each of the Ground Lease and the Sublease is a “true lease” for all applicable legal and federal state and local tax purposes and is not a financing lease, capital lease, mortgage, equitable mortgage , deed of trust, trust agreement, security agreement or other financing or trust arrangement, and the economic realities of the Ground Lease and the Subl ease are those of a true lease, (vi) all amounts paid by Developer pursuant to Article 5 of the Grou nd Lease, and with respect to the Convention Center pursuant to Article 7 and Article 15 of the Ground Lease, are Rent (as defined in the Ground
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Lease) for all applicable tax purposes, subject to Section 5.9 of the Ground Lease, (vii) all amounts paid by Developer pursuant to Article III of the Sublease and with respect to the Facility, are Rent for all applicable tax purposes, subject to Section 3.6 of the Sublease, (viii) the Ground Lease and the Convention Center Leases have been entered into by each of Port District, City, Authority, and Developer in reliance upon the mutual covenants, co nditions and agreements contained therein; and (ix) none of the covenants, conditions or agreements contained herein or therein is intended, nor shall the same be deemed or construed, to create a partne rship between or among the Port District, City, Authority, and Developer, to make them joint ventur ers, or to make Developer an agent, legal representative, partner, subsidiary or employee of Port District, the City, or the Authority.
19.1.2. The Public Entities and Developer agree not to (i) file or submit any tax return or other document with any Governmental Auth ority; (ii) enter into any contract with any Person; or (iii) release any financial statements, in each case, that takes a position other than that (x) both the Ground Lease and the Sublease are “true leases” for federal, state and local tax purposes, (y) the Authority is the owner of the Convention Ce nter during the Sublease Term, and (z) Port District is the owner of the Convention Center from and after the Expansion Date, in each case, unless otherwise required by a final “determination” within the meaning of Section 1313 of the Code.
The Parties agree that the foregoing includes their agreement that (x) Developer will not claim depreciation deductions under Sections 167 or 168 of the Code with respect to the Convention Center and (y) Developer will report all payments describe d in Sections 19.1.1(vi) and (vii) as rent expense under Section 162 of the Code, subject to Section 5 .9 of the Ground Lease or Section 3.6 of the Sublease, as applicable.
19.1.3. The terms of this Section 19.1 shall survive the ex piration or earlier termination of this Agreement.
19.2. Tax Claims. Each Party agrees to (A) promptly noti fy the other Parties of any audit, examination or other proceeding with respect to any tax, tax return (including any schedule attached thereto) or information reporting related to the Gr ound Lease or the Sublease, the Improvements, the Resort Hotel, the Parking Improvements, or the Proj ect, including without limitation, the agreed positions described in Sections 19.1.1 and 19.1.2 (collectively, the “ Tax Claims ”, and individually, a “Tax Claim ”) and (B) reasonably cooperate with the other Parties in connection with any Tax Claim.
In the event that any Tax Claim is asserted against a Public Entity Party, Developer agrees to indemnify and defend such Public Entity Party, at D eveloper’s sole cost and expense, and hold such Public Entity Party harmless from any and all Tax Expenses and documented Related Costs arising in connection with such Tax Claim; provided, that the Related Costs with respect to such Tax Claim shall be determined in accordance with the following principles:
19.2.1. Related Costs arising from the work of an employee of a Public Entity during a particular calendar year shall not exceed the product of (x) the salary of such employee and (y) the percentage of such employee’s time in such year which such employee was solely engaged on the Tax Claim (to be substantiated by time records in form and substance reasonably acceptable to Developer), plus, for the avoidance of doubt, any r easonable, out-of-pocket expenses incurred by such employee with respect to the Tax Claim in such calendar year. For example, if an employee of City earns $160,000, spends 25% of her time in the calendar year on the Tax Claim and incurs $100 of reasonable, out-of-pocket expenses, City would b e entitled to no more than $40,100 of Related Costs with respect to the work of such employee during such calendar year.
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19.2.2. A Public Entity shall not engage any outside counsel with respect to the Tax Claim without the prior written consent of Develope r (not to be unreasonably withheld, conditioned or delayed; provided, that Port District, Authority and Developer acknowledge and agree that consent from Developer shall not be required if the counsel selected by Port District or the Authority is Orrick Herrington & Sutcliffe LLP; provided, furthe r, that the City and Developer acknowledge and agree that consent from Developer shall not be requ ired if the counsel selected by the City is Stradling Yocca Carlson & Rauth, P.C.). For the avo idance of doubt, there shall be no cap on the Related Costs incurred by outside counsel approved or deemed approved by Developer and such Related Costs shall include all legal fees and out of pocket expenses; and
19.2.3. in the event that a Public Entity engages outside c ounsel, then, notwithstanding Section 19.2.1 above, such Public E ntity shall not be entitled to recovery of Related Costs with respect to the work performed by employees of the Public Entity except to the extent such work is limited to (x) supervising such outside counsel and (y) such other customary work performed by in-house counsel in connection with audits, exam inations or other proceedings of this type where outside counsel is engaged; provided that such Publ ic Entity shall use reasonable efforts to avoid duplicating work performed by its outside counsel. For the avoidance of doubt, “supervising such outside counsel” shall include without limitation, review and revision of any documents prepared by outside counsel, preparation of memoranda or other similar correspondence to be provided to the governing board or other executives of the relevant Public Entity, correspondence with the general counsel or other executive members of the relevant Public Entity regarding status of matter, review of billing matters, negotiation of contract with ou tside counsel, and any other activities that would be reasonably performed by the office of the general c ounsel in fulfillment of its fiduciary duties to th e relevant Public Entity.
This Section 19.2 shall survive the early terminati on or expiration of this Agreement.
Notwithstanding anything to the contrary herein, (i ) this Section 19.2 shall not apply to, and Developer shall have no responsibility with respect to, any taxes payable based on income or profits of the Public Entity Parties (for the avoidance of doubt, such exclusion shall not apply to the extent such Tax Claim relates to withholding or informatio n reporting with respect to the taxable income of the Developer), and (ii) Section 19.4 and either Section 4.6 of the Ground Lease or Section 6.19(b) of the Sublease, as applicable, and not this Section 1 9.2, shall govern all Tax Claims with respect to Property Tax Expenses.
19.3. Property Expenses. Without limitation of Developer ’s other obligations under this Agreement and the Sublease, Developer agrees to pay , on or before the date due, all Property Expenses. As used herein, “ Property Expenses ” shall include, without limitation, all costs and expenses of any nature incurred or payable, or aris ing in connection with, the ownership, management, maintenance, construction, repair, repl acement, restoration or operation of the Site and/or the Improvements, including, without limitat ion, any amounts paid for: (i) the cost of supplying any utilities, the cost of operating, mai ntaining, repairing, renovating and managing any utility systems, mechanical systems, communications systems, sanitary and storm drainage systems, and the cost of supplies and equipment and maintena nce and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections; (iii) the cost of any ins urance carried or required to be carried by Developer purs uant to this Agreement, the Sublease, the Ground Lease, and the Hotel Management Agreement with resp ect to the Site and/or the Improvements including without limitation any premiums and deductibles except the cost of any Facility Lease Lost Rental Insurance (as defined in the Sublease) and t he incremental cost of any Expanded Soft Cost Coverage; (iv) the cost of landscaping, supplies, t ools, equipment and materials, and all fees, charge s
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and other costs incurred in connection with the man agement, operation, repair and maintenance of the Site and/or the Improvements; (v) payments unde r any easement, license, permit, operating agreement, declaration, or covenant or instrument p ertaining to the Site that exist as of the Commencement Date or that are created or consented to by Developer; and (vi) the cost of any Improvements, capital repairs, capital alterations, or capital equipment, required by Laws, the Hotel Management Agreement or otherwise required under th is Agreement, the Sublease, or the Ground Lease. Notwithstanding anything to the contrary in this Agreement or the Sublease, Property Expenses shall not include (a) Property Tax Expenses, (b) any amounts that constitute Advance Rent, or (c) any other amount that a Public Entity has ex pressly agreed to pay without reimbursement from Developer under this Agreement or any Contemporaneo us Agreement or that this Agreement or any Contemporaneous Agreement expressly provides that the Developer is not required to pay.
19.4. Property Tax Contest Cooperation. Subject to its c onsent under the Ground Lease or Sublease, as applicable, and subject to any conditi ons which it has imposed thereunder, a Public Entity shall join in a Property Tax Contest if such Property Tax Contest is legally required to be initiated or prosecuted in such Public Entity’s name. In such case, such Public Entity shall cooperate , as Developer reasonably requests, and at Developer’ s sole cost and expense, to permit the Property Tax Contest to be prosecuted in such Public Entity name. The Public Entities shall give Developer any publicly available documents requested by Devel oper in writing that are in their control and Developer determines are reasonably necessary for D eveloper to prosecute its Property Tax Contest except where (i) the document is subject to an exem ption or exception under the California Public Records Act (California Government Code Sections 62 50 et seq.); (ii) the document is confidential pursuant to another agreement between the relevant Public Entity and another Person; (iii) the document is protected by the attorney-client privilege or work-product protections; (iv) the disclosure or release of such document would result in a breac h of an agreement to which the relevant Public Entity is a party; or (v) the disclosure or release of the document would result in a violation of Law s.
Developer shall pay all costs and expenses, includi ng any legal costs, of any Property Tax Contest, including, without limitation, any costs and expenses resulting from the withdrawal of a Property Tax Contest. If Developer requests that a Public Entity assist Developer with any Property Tax Contest in accordance with the Ground Lease or the Sublease, a nd such assistance is consistent with the requirements of Section 4.6 of the Ground Lease or Section 6.19 of the Sublease, as applicable, and this Section 19.4, then the Public Entity shall, wi thin fifteen (15) days after receipt of such reques t, notify Developer of the total amount of Anticipated Assistance Costs. Developer may, but shall have no obligation to, fund the Anticipated Assistance C osts (“ Developer Funding ”). If Developer does not notify the Public Entity that Developer will pr ovide Developer Funding to the Public Entity, then the Public Entity shall have no obligation to assis t Developer with such Property Tax Contest. If Developer notifies the Public Entity that Developer will provide Developer Funding to the Public Entity and Developer pays to the Public Entity an a mount that is equal to or greater than the Anticipated Assistance Costs, then the Public Entit y shall reasonably assist Developer with such Property Tax Contest as Developer reasonably requir es. If the actual amount of Assistance Costs in connection with such assistance is at any time grea ter than the Developer Funding provided before and at such time, then the Public Entity shall pro mptly notify Developer thereof and the Parties shall follow the process set forth in the preceding three sentences. Port District shall have no obligation to reimburse Developer for Developer Funding up to the amount of Assistance Costs. A Public Entity shall have no liability to Developer if the Public Entity does not assist, or continue to assist, with any Property Tax Contest if Developer refuses to provid e Developer Funding or the amount Developer has advanced is not sufficient to cover the Assista nce Costs or the Property Tax Contest is not in compliance with this Section 19.5.2 and Section 4.6 of the Ground Lease or Section 6.19 of the Sublease, as applicable. A Public Entity shall retu rn to Developer any portion of Developer Funding
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that the Public Entity receives from Developer and does not use for the Property Tax Contest within thirty (30) days after the Public Entity receives n otice from Developer that the Property Tax Contest is concluded or Developer is withdrawing the Property Tax Contest.
ARTICLE XX
EQUAL EMPLOYMENT OPPORTUNITY/NONDISCRIMINATION AND OFAC
20.1. Nondiscrimination. Developer shall comply with Tit le VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the California Constitution; the California Fair Employment and Housing Act; the ADA; and any other applicable Laws now existing or hereinafter enacted, requiring equal employment opportunities o r prohibiting discrimination. This shall include, without limitation, Laws prohibiting discrimination because of race, color, religion, sex, national origin, ancestry, physical or mental disability, ve teran status, medical condition, marital status, ag e, sexual orientation, pregnancy, or other non-job rel ated criteria. In complying with all such Laws, including, without limitation the ADA, Developer sh all be solely responsible for such compliance and required programs, and there shall be no alloca tion of any such responsibility between Port District and Developer. Developer shall contractua lly require the General Contractor, all Subcontractors, and Developer’s consultants, subcon sultants, and contractors to comply with the requirements of this Article XX.
20.1.1. Equal Employment Opportunity Certification. Develo per shall require all bidders to submit signed equal employment opportuni ty certifications, in substantially the form attached as Exhibit W, with their bid packages.
20.1.2. Equal Opportunity Contracting Nondiscrimination. D eveloper shall not discriminate on the basis of race, gender, religion , national origin, ethnicity, sexual orientation, a ge, or disability in the solicitation, selection, hirin g, or treatment of bidders, the General Contractor, Subcontractors, vendors, or suppliers. Developer s hall provide equal opportunity for bidders, contractors, the General Contractor, and Subcontrac tors to participate in contracting and subcontracting opportunities. Developer understand s and agrees that violation of this Section 20.1.2 shall be considered a material breach of this Agree ment and may result in termination of this Agreement or other sanctions. The language in this Section 20.1.2 shall be inserted in contracts between Developer, the General Contractor, any Subc ontractors, vendors, and suppliers awarded in accordance with Section 6.6.
20.2. Compliance with Employment and Labor Requirements. Developer shall comply with the Federal Fair Labor Standards Act of 1938; the Federal Labor-Management Reporting and Disclosure Act of 1959; the Occupational Safety and Health Act of 1970; the California Constitution; and any other Laws now existing or hereinafter enac ted, regarding employment and labor practices.
Developer shall also comply with the National Labor Relations Act, including the provisions with respect to the rights of employees to organize.
20.3. OFAC Compliance. Developer represents and warrants as of the Effective Date that (i) Developer and, to the best of Developer’s knowl edge, the Persons that directly or indirectly hold an interest in Developer (collectively, “ Developer’s Members ”, each a “ Developer Member ”) (other than any such Person that owns an interest i n Developer through publicly traded securities) is not now a Person with whom Port District or any cit izen of the United States is restricted from doing business with under the Uniting and Strengthening A merica by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, H.R. 3162, Public Law 107-56
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(commonly known as the “ USA Patriot Act ”) and regulations promulgated pursuant thereto, or under any successor statutes or regulations, includ ing, without limitation, persons and entities (“ Prohibited Persons ”) named on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“ OFAC ”) or a Person (also, a “ Prohibited Person ”) with whom a citizen of the United States is proh ibited to engage in transactions by any trade embargo, econom ic sanction, or other prohibition of United States law, regulation, or Executive Order of the P resident of the United States, (ii) to the best of Developer’s knowledge, none of the funds or other a ssets of Developer constitute property of, or are beneficially owned, directly or indirectly, by any Prohibited Persons (iii) to the best of Developer’s knowledge, no Prohibited Person directly or indirec tly Controls Developer, or any of Developer’s Members, either individually or in the aggregate an d (iv) to the best of Developer’s knowledge, none of the funds of Developer have been derived from an y unlawful activity with the result that the investment in Developer is prohibited by Laws or th at the Agreement is in violation of Laws.
Developer covenants and agrees that at no time duri ng the Term shall a Developer Member with a twenty percent (20%) or more direct or indirect int erest in Developer be a Prohibited Person.
Developer shall reimburse Port District for all rea sonable costs, including, without limitation, attorneys’ fees, resulting from Developer’s failure to comply with this Section 20.3. If Developer receives written notice that any of Developer’s Mem bers (other than any such Person that holds an interest in Developer through publicly traded secur ities) is a Prohibited Person, then Developer shall promptly use Developer’s best and commercially reas onable efforts to cause such Person to divest such Person’s interests in Developer. Notwithstandi ng any limits set forth in this Section 20.3, any Person who is blocked under the USA Patriot Act sha ll be blocked to the full extent required under the USA Patriot Act and any regulations promulgated thereunder.
ARTICLE XXI
EVENTS OF DEFAULT AND REMEDIES
21.1. Events of Default. The occurrence of any one (1) o r more of the following events shall constitute an event of default by Developer hereunder (each, an “ Event of Default ”):
21.1.1. Failure to Pay. Failure by Developer to pay, when due, any payment, and/or charge that Developer is required to pay her eunder, where such failure continues for a period of five (5) days after written notice thereof from another Party to this Agreement.
21.1.2. Failure to Perform. Failure by Developer to perform any express or implied covenants or conditions in this Agreement (other th an as provided in the other subsections of this Section 21.1), where such failure continues for thi rty (30) days after written notice thereof from another Party to this Agreement; provided that, if the nature of such failure is such that the same cannot reasonably be cured within such thirty (30) day period, and Developer diligently commences such cure within such thirty (30) day period and th ereafter diligently proceeds to rectify and cure such failure, then such failure shall not constitut e an Event of Default; and provided, further, that if such failure is due to a Force Majeure Event in acc ordance with Section 5.5, then such failure shall not constitute an Event of Default for so long as t he Force Majeure Event or the actual collateral effects of such Force Majeure Event exists.
21.1.3. Bankruptcy Event. The occurrence of a Bankruptcy Event.
21.1.4. Cross-Defaults During the Term. The occurrence or existence of an Event of Default as defined in and in accordance with the Sublease or an Event of Default as defined in and
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in accordance with the Ground Lease, in each case, at any time during the Term; provided that in the event an Event of Default under the Sublease is cur ed pursuant to the terms of the Sublease, such Event of Default shall be deemed cured hereunder an d in the event an Event of Default under the Ground Lease is cured pursuant to the terms of the Ground Lease, such Event of Default shall be deemed cured hereunder.
21.1.5. Breach of a Representation or Warranty.
21.1.5.1. Any representation or warranty by Developer under t his Agreement or the Exhibits attached hereto, includin g any representation or warranty made in any payment request or certification provided or delive red by Developer pursuant to this Agreement, is not true, correct or complete in any material respe ct and Developer does not cure such deficiency within ten (10) Business Days after it actually kno ws about such deficiency, or within ten (10) Business Days after Developer receives written noti ce thereof; provided that, if the nature of such breach is such that the same cannot reasonably be c ured within such ten (10) Business Day period, and Developer diligently commences such cure within such ten (10) Business Day period and thereafter diligently proceeds to rectify and cure such breach, then such failure shall not constitute an Event of Default.
21.1.5.2. Any representation or warranty by the Completion Gu arantor under the Completion Guaranty is not true, correct or complete in any material respect and Developer does not, or does not cause the Completion Guaranto r to (as the case may be), cure such deficiency within ten (10) Business Days after it actually kno ws about such deficiency, or within ten (10) Business Days after Developer receives written noti ce thereof; provided that, if the nature of such breach is such that the same cannot reasonably be c ured within such ten (10) Business Day period, and Completion Guarantor diligently commences such cure within such ten (10) Business Day period and thereafter diligently proceeds to rectify and c ure such failure, then such breach shall not constitute an Event of Default; provided that without limiting the Public Entities’ rights and remedies with respect to the original undersigned Developer under this Agreement or the Completion Guarantor, during the effectiveness of any New Agre ement or the while any Foreclosure Purchaser has assumed and is holding Developer’s interest und er this this Agreement or is holding the controlling interest in Developer, no failure or br each by the Completion Guarantor under the Completion Guaranty shall constitute a breach, default or Event of Default under this Agreement.
21.1.6. Specified Defaults. The occurrence of any event ex pressly stated to constitute an Event of Default under this Agreement.
21.2. Remedies for Events of Default. Upon any Event of Default but subject to Section 21.2.4, the Public Entities may, in additio n to all other rights and remedies afforded to the Public Entities hereunder or by law or in equity, take any one or more of the following actions:
21.2.1. Termination of Agreement. Terminate this Agreement by giving Developer written notice thereof. Failure by the Public Enti ties to enforce one or more of the remedies herein provided upon an Event of Default shall not be deem ed or construed to constitute a waiver of such Event of Default.
21.2.2. Perform Acts on Behalf of Developer. Perform any a ct that Developer is obligated to perform under this Agreement (and ente r upon the Site (and, until Acceptance of the applicable Developer’s Phase 1A Infrastructure Impr ovements, the Developer’s Phase 1A
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Infrastructure Improvements Site) in connection the rewith if necessary) in Developer’s name and on Developer’s behalf, without being liable for any cl aim for damages therefor, and Developer shall reimburse each Public Entity on demand for any expe nses which such Public Entity may incur in thus effecting compliance with Developer’s obligati ons under this Agreement (including, but not limited to, collection costs and legal expenses), plus interest thereon at the Default Rate.
21.2.3. Assignment of Plans and Other Matters. Require Dev eloper to, in which case Developer shall, (i) at Developer’s sole cost and expense, assign and transfer to the Authority all of Developer’s right, title and interest in and to all plans, drawings, specifications, permits, approvals, warranties, entitlements, and other simi lar property and instruments relating to the Site, free and clear of liens and claims by third parties , in connection with and (ii) execute and deliver t o the Authority, within five (5) Business Days of the Authority’s request, in a form provided by and acceptable to the Authority, an instrument confirmi ng the Assignment and transfer of such property and interests to the Authority and, within such fiv e (5) Business Day period, to deliver the originals of such plans, drawings, specifications, permits, approvals, warranties, entitlements, and other similar property and instruments relating to the Site to th e Authority. Developer agrees to reasonably cooperate with the Authority at no cost or expense to the Authority in seeking any consent from the preparer of any plans, drawings, specifications, pe rmits, approvals, warranties, entitlements, and other similar property and instruments relating to the Site, which may be required for the Authority to rely on such plans, drawings, specifications, permi ts, approvals, warranties, entitlements, and other similar property and instruments relating to the Site.
21.2.4. Certain Limitations. The Public Entities shall not have the right to terminate this Agreement as a result of any Event o f Default arising solely under Section 21.1.2 or Section 21.1.4 of the Agreement that is susceptible to cure (but will retain all other remedies) if th e following conditions apply: (i) (A) the Developer h as, in good faith, by written notice served on the Public Entities within thirty (30) days of receipt of any notice from any Public Entity of such Event of Default, contested that (x) Developer has failed to perform any covenant or condition required to be performed by it under this Agreement or (y) an E vent of Default as defined in the Sublease or an Event of Default as defined in the Ground Lease has occurred or is continuing, as applicable, and (B) there has been no final determination by a court wi th jurisdiction that (x) the Developer has in fact failed to perform any covenant or condition require d to be performed by it under this Agreement and that such failure has had a material adverse effect on one or more of the Public Entities or the Proje ct or (y) an Event of Default as defined in the Sublea se or an Event of Default as defined in the Ground Lease has occurred or is continuing, and that such Event of Default has had a material adverse effect on one or more of the Public Entities or the Project, as applicable; or (ii) after any final determination by a court with jurisdiction that (x) the Developer has in fact failed to perform any covenant or condition required to be performed by it under this Agreement and that such failure has had a material adverse effect on one or more of the Publi c Entities or the Project or (y) an Event of Defaul t as defined in the Sublease or an Event of Default a s defined in the Ground Lease has occurred or is continuing, and that such Event of Default has had a material adverse effect on one or more of the Public Entities or the Project, as applicable, Deve loper promptly (and in all events, within thirty (3 0) days of such final determination), cures such failure, such Event of Default as defined in the Sublease or such Event of Default as defined in the Ground L ease, as applicable. Without limiting the foregoing, the Public Entities shall not have the r ight to terminate this Agreement as a result of any Event of Default arising solely under Section 21.1. 4 unless the Sublease or the Ground Lease, as applicable, has been terminated in accordance with its terms. For purposes of this Section 21.2.4, a “final determination by a court with jurisdiction” shall mean the entry of a final judgment by the tri al court or equivalent tribunal in any such proceeding . For clarification, the thirty day cure period
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following such “final determination” within which D eveloper’s failure to perform must be cured in order to avoid the Public Entities’ right to termin ate pursuant to this Section shall commence immediately upon entry of such judgment by the tria l court and shall not be stayed, delayed or otherwise postponed during any appeal periods or ot her post-judgment proceedings (e.g., Motion for New Trial or JNOV) that Developer might pursue following entry of such judgment.
For purpose of this Section 21.2.4, “ material adverse effect on one or more of the Publi c Entities or the Project ” shall mean, but shall expressly not be limited to, (i) a failure to comply with any provision of the Port Act, including but not li mited to Port Act provisions limiting use of the Project Site or the Improvements, (ii) a material failure to comply with any CDP (as may be amended from time to time) applicable to the Project Site a nd Improvements, (iii) a material failure to comply with the Port Master Plan, or any amendment thereto , (iv) a material failure to comply with any provision of this Agreement related to Hazardous Ma terials, (v) [reserved], (vi) a failure to comply with any provision of this Agreement relating to PW L requirements, (vii) a failure to comply with any provision of this Agreement that results or cou ld reasonably be expected to result in a public health or safety issue, (viii) a failure to comply with any provision of this Agreement the effect of which may be that any Public Entity Party has incur red or could reasonably be expected to incur criminal liability, (ix) a failure by Developer to comply with any provision of this Agreement that could reasonably be expected to result in a default by the Authority with respect to payment of debt service on the Authority Bonds or under the Indenture, a default by the City under the Facility Lease, a default by the Port District under the Support Ag reement, or a default by the Financing District under the Loan Agreement, or (x) a failure to compl y with any provision of this Agreement that could reasonably be expected to result in significa nt irreparable harm or injury to any Public Entity.
Nothing in this Section 21.2.4 shall prejudice Developer’s ability to appeal any decision of any court, provided, that, Developer’s appeal shall not limit the Public Entities’ ability to pursue any remedies available to the Public Entities under this Agreement.
21.3. Sweetwater Park. Port District shall not be deemed in default or breach for failure to Sufficiently Complete Sweetwater Park on or prior t o the Sweetwater Park End Date. Developer’s exercise of either the First Sweetwater Park Option or the Second Sweetwater Park Option shall be Developer’s sole and exclusive remedy for any failu re of Port District or Developer to Sufficiently Complete Sweetwater Park. Developer, Authority, Sp ecial Tax District, and City acknowledge and agree that the Port District shall not be liable to Developer, Authority, Special Tax District, or City or any other Person for monetary damages (including bu t not limited to contract damages, consequential, incidental or punitive damages, lost profits, lost business opportunity, or any other type of monetary damage regardless of form) for Por t District’s failure to Sufficiently Complete Sweetwater Park. This Section 21.3 is not intended to limit (i) Developer’s ability to recover its costs from Authority that are Developer’s Phase 1A Infras tructure Improvements Costs (including, for the avoidance of doubt, costs incurred by Developer to Sufficiently Complete Sweetwater Park or otherwise construct Sweetwater Park in accordance w ith the Sweetwater Park Materials) or (ii) Developer’s right to the remedy of specific pe rformance of the Port District’s obligations under Section 2.3.2.2 and 2.3.3.2.
21.4. Reserved.
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21.5. Authority Events of Default. The occurrence of any one (1) or more of the following events shall constitute an event of default by Auth ority hereunder (each, an “ Authority Event of Default ”):
21.5.1. Failure to Pay. Failure by Authority to pay, when due, any payment, and/or charge that Authority is required to pay hereunder, where such failure continues for a period of five (5) days after written notice thereof from Developer.
21.5.2. Failure to Perform. Failure by Authority to perfor m any express or implied covenants or conditions in this Agreement (other th an as provided in the other subsections of this Section 21.5), where such failure continues for thi rty (30) days after written notice thereof from Developer; provided that, if the nature of such fai lure is such that the same cannot reasonably be cured within such thirty (30) day period, and Autho rity diligently commences such cure within such thirty (30) day period and thereafter diligently pr oceeds to rectify and cure such failure, then such failure shall not constitute an Event of Default.
21.6. Remedies for Authority Events of Default (Rent Offs et). Upon any Authority Event of Default, Developer may, in addition to all other rights and remedies afforded to Developer hereunder or by law or in equity, offset against Re nt (excluding Advance Rent under the Sublease) under the Sublease any amount that Authority has fa iled to pay when due hereunder and that has not been paid by the Port District or the City under Section 21.7.
21.7. Payment Sources for Convention Center. In the even t Authority fails to pay any Convention Center Contract Sum to Developer pursuan t to Section 9.2 of this Agreement or any interest due to Developer pursuant to Sections 9.2. 3 and 9.2.4.2(b) of this Agreement (collectively, the “ Specified Obligations ”), then such Convention Center Contract Sum or int erest, as applicable, will be payable (a) from any amounts remaining on d eposit in the 2022A Construction Account, including the 2022A Bond Proceeds Subaccount and th e Public Entity Contribution Subaccount maintained therein (collectively, the “ Indenture Funds ”); (b) in the event such failure to pay is a result of the misappropriation of Indenture Funds t hat are in the possession or control of the City or that have been directed for City purposes by affirm ative action of the City Council, then to the exten t of such misappropriated Indenture Funds, from any s ource of funds legally available to the City, including general fund monies, to make such payment s; (c) in the event such failure to pay is a result of the misappropriation of Indenture Funds that are in the possession or control of the Port District or that have been directed for Port District purposes by affirmative action of the BPC, then to the exten t of such misappropriated Indenture Funds, from any s ource of funds legally available to the Port District to make such payments; (d) with respect to the Authority, the City or the Port District, respectively from amounts received thereby or other wise available to the applicable Public Entity, if any, from the proceeds of a fidelity bond or crime insurance policy covering acts by their respective officers or employees that cause a misappropriation from the 2022A Construction Account or subaccounts therein, or amounts recovered from the Person that misappropriated such moneys; and (e) from amounts on deposit in the Authority Surplu s Fund, if and when available from time to time.
The City shall promptly pay to the Developer the am ounts set forth in the foregoing clauses (b) and (d), if any, to the extent such amounts relate to t he City. The Port District shall promptly pay to t he Developer the amounts set forth in the foregoing cl auses (c) and (d) if any, to the extent such amounts relate to the Port District. The Authority shall promptly pay to the Developer the amounts set forth in the foregoing clause (d), if any, to t he extent such amounts relate to the Authority. Th e Parties intend that the Port District and the City be deemed principal obligors (and not guarantor) with respect to any payment obligations they may ha ve pursuant to the terms of this Section and
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(without limiting the express obligations of the Po rt District and the City under this Agreement) the Parties agree not to assert that the Port District or City are guarantors or sureties of the Authority ’s obligation hereunder under applicable law; provided , however, in an abundance of caution, in case, contrary to such intention, it is determined that t he Port District and City are guarantors with respe ct to the foregoing payment obligations, each of Port District and City hereby waive (i) until Full Payment, any rights of subrogation, reimbursement, indemnification, and contribution with respect to the Authority and (ii) any other rights and defense s that are or may become available to Port District or City, as applicable, by reason of California Civ il Code §§ 2808, 2809, 2810, 2819, 2832, 2839 (but only to the extent of a mere offer of performa nce in full by Authority without the capacity to perform or actual tender of performance, or where D eveloper has rejected an Authority offer to perform as inadequate), 2845 and 2855 (but only wit h respect to Specified Disputes). Port District and City expressly reserve the right to assert, each on their own behalf, any defense(s) Authority may have under the terms of this Agreement to excuse or reduce any Authority obligation to pay Indenture Funds to Developer. The Authority shall use commercially reasonable efforts to pursue recovery from (a) individuals responsible for misap propriation of Indenture Funds and (b) any crime insurance maintained by the Authority in connection with misappropriation of Indenture Funds. Port District shall use commercially reasonable efforts to pursue recovery from (a) individuals employed by the Port District who are responsible for misapp ropriation of Indenture Funds and (b) any crime insurance maintained by the Port District in connec tion with misappropriation of Indenture Funds.
City shall use commercially reasonable efforts to p ursue recovery from (a) individuals employed by the City who are responsible for misappropriation o f Indenture Funds and (b) any crime insurance maintained by the City in connection with misapprop riation of Indenture Funds. The City and the Port District’s only obligation to pay the Specified Obligations is set forth in this Section 21.7.
ARTICLE XXII
ASSIGNMENT PARTICIPATION FEE
22.1. Assignment Participation Fee. 6 Upon each (a) Assignment of the Sublease pursuant to Section 10.7 of the Sublease, (b) a change in the composition of the direct or indirect ownership of Developer, and (c) a sublease under the Sublease of all or Substantially All of the Facility (defined in the Sublease), Developer shall pay to the Port Dist rict, as the owner of the Site, a fee (the “Assignment Participation Fee ”) in an amount equal to one percent (1%) of the As signment Proceeds of such transaction; provided, however, th at Developer shall not pay the Assignment Participation Fee (i) if one or more of the members of Developer (as of the date of Completion of the Convention Center and the City’s issuance of the fi nal certificate of occupancy for the Convention Center) which shall include, as applicable (A) each sibling of such Person, the spouse of such Person, and each parent, child, grandchild or great-grandch ild of such Person (including relatives by marriage); (B) any trust for the benefit of such Pe rson or any of the foregoing members of his or her family; (C) where such Person is a trust, any benef iciary of the trust of any of the foregoing family members of a beneficiary of the trust, or any other trust established for the benefit of any of the foregoing; and (D) each Person that Controls, is Co ntrolled by, or in under common Control of, such Person or any of the foregoing Persons (each, an “ Original Member ”), collectively, directly or indirectly, owns at least a ten percent (10%) owner ship interest in the Initial Project Improvements (including through direct or indirect ownership in Developer), (ii) in the case of any Transfer in connection with any foreclosure on the Permitted En cumbrance or any action in lieu of foreclosure by a Permitted Lender or to a Foreclosure Purchaser , which is a Permitted Lender or an SPE Lender
6 To be conformed to Ground Lease and Sublease.
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Affiliate or the immediately subsequent Transfer by such Foreclosure Purchaser that is a Permitted Lender or an SPE Lender Affiliate to any other Pers on permitted by the terms of Article IX of the Sublease and this Agreement, (iii) in the case of a change in the composition of the direct or indirec t ownership of Developer as a result of an Equity Col lateral Enforcement Action by a Permitted Mezzanine Lender or (iv) in the case of a change in the composition of the direct or indirect ownership of Developer resulting from a transfer of ownership interests traded on a recognized public exchange. Prior to any Public Entity’s cons ent to any transaction subject to an Assignment Participation Fee, Developer shall deliver to the P ort District a written statement showing the calculation of the Assignment Participation Fee owe d to the Port District from Developer based on the terms of the transaction and an organizational chart showing all Persons holding at least a twenty percent (20%) direct or indirect ownership interest in the Initial Project Improvements prior to such transaction and after such transaction. The statem ent of the calculation of the Assignment Participation Fee shall contain such detail as may be reasonably requested by the Port District to verify the calculation of the Assignment Participat ion Fee. Developer shall pay in full to the Port District the Assignment Participation Fee that is d ue to the Port District concurrent with the completion of the transaction. The obligation to pay the Assignment Participation Fee shall be a joint and several obligation of the transferee and transferor.
For the purposes of this Section 22.1, the term “ Assignment Proceeds ” shall mean the purchase price or other consideration that is: (a) paid (either in cash or by an assumption of debt o r other consideration and, if paid over time, the pre sent value of the total consideration using the discount rate of the Federal Reserve Bank of San Fr ancisco at the time of award plus one percent (1%)) to the Developer and/or holders of direct or indirect interests in Developer and (b) fairly attributable to Developer’s interest in the Subleas e and the Initial Project Improvements in connection with the subject transaction less the sum of (x) any reasonable prorations, closing costs or other customary deductions to the purchase price fo r which the seller is responsible, (y) the certifie d cost of designing, developing and constructing the Initial Project Improvements as of the time of the Completion of the Initial Project Improvements and (z) one hundred (100) times the amount of any Assignment Proceeds that have been previously paid to the Port District, which sum shall be prorated in the case of an assignment of a portion of the In itial Project Improvements, which sum shall be prorated in the case of an assignment of a portion of the Initial Project Improvements.
Notwithstanding the foregoing, if at any time an As signment Participation Fee is payable pursuant to this Agreement and an Assignment Participation Fee (as defined in the Ground Lease) is payable pursuant to the Ground Lease, then Developer shall, in its reasonable discretion, determine the allocation of the assignment proceeds between the A ssignment Proceeds with respect to this Agreement and the Assignment Proceeds (as defined i n the Ground Lease) with respect to the Ground Lease.
Upon the request of the Port District from time to time (which request shall not be made more frequently than once per year), except in the case of Completion of the Convention Center, in which case Developer shall deliver to the Port Dist rict such schedule, and such evidence, without request from the Port District, within five (5) day s of Completion of the Convention Center, Developer shall provide the Port District with a sc hedule listing the name and mailing address of each Person holding at least twenty percent (20%) o f the direct or indirect ownership interests in Developer or the Initial Project Improvements and, if then true, evidence that one or more Original Members collectively holds at least ten percent (10 %) of the direct or indirect ownership interest in Developer or the Initial Project Improvements. In the event that such Person is a trust, Developer shall include in such schedule the name and mailing address of each trustee of said trust, together with the name and mailing address of each beneficiary of said trust.
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22.2. Assignment and Collateral Assignment. 7 No Party shall assign its interest in this Agreement except to a permitted assignee to which s uch Party has assigned all of its interests in the Convention Center Leases entered into by such Party . No Party shall assign its interest in any of the Convention Center Leases unless the assignee assume s all of such Party’s obligations under this Agreement arising from and after the date of such a ssignment pursuant to an assignment and assumption agreement reasonably acceptable to the o ther Parties. Notwithstanding anything to the contrary in this Section 22.2, the Developer may as sign all or a part of its entire rights, interests and obligations hereunder, or create a security interes t over its rights and interests hereunder, to the Permitted Lenders to whom Developer has assigned or collaterally assigned, or granted a lien or leasehold deed of trust in, the Sublease and the G round Lease for the purpose of securing financing for the Convention Center, Parking Improvements, an d the Resort Hotel. The Public Entities hereby consent to the granting by the Developer to such P ermitted Lenders of security interests in this Agreement. Each Public Entity acknowledges that a Permitted Lender may require that each Public Entity execute a consent to collateral assignment o f this Agreement in connection with the Public Entity’s consent or deemed consent to a Permitted F inancing Encumbrance. As part of such collateral assignment, each Public Entity shall agr ee, in a manner materially and substantially consistent with the rights afforded to Permitted Le nders under Article IX of the Sublease and Article X of the Ground Lease, (i) to provide such Permitte d Lenders notice of and opportunity to cure the Developer’s defaults hereunder, (ii) to allow such Foreclosure Purchaser, including a Permitted Lenders or SPE Lender Affiliates or any successful bidder that is not a Permitted Lenders or SPE Lender, to assign and reassign all of the Developer ’s rights hereunder, (iii) to provide for the Publi c Entities and the Foreclosure Purchaser to enter int o a new agreement on the terms and conditions set forth in this Agreement in connection with a New Le ase pursuant to Section 10.3.2 of the Ground Lease or a New Sublease pursuant to Section 9.3(b) of the Sublease; and (iv) to provide for other customary lender protection provisions that are not in violation of applicable laws or regulations.
Each Public Entity shall, upon reasonable request o f the Developer, shall execute such consents to or acknowledgements of such assignments by the Develop er and other customary documents as Developer or its Permitted Lenders reasonably requi re in connection with this Agreement and the financing of the Convention Center, Parking Improve ments, and the Resort Hotel provided they are materially and substantially consistent with the pr ovisions of Article X of the Ground Lease and Article IX of the Sublease and do not conflict with , modify, or amend any of the terms of this Agreement, the Sublease, or the Ground Lease. As a condition to acquiring title in connection with a foreclosure proceeding (or assignment in lieu there of) or any assignment following a foreclosure of the tenant’s interest under the Ground Lease, sub-s ublessee’s interest in the Sublease, or Developer’s interest in the Project Implementation Agreement, P ermitted Lender, SPE Lender Affiliate or Foreclosure Purchaser, as and if applicable, shall assume in writing the Ground Lease, Sublease, and this Agreement, and such Ground Lease, Sublease, an d this Agreement, shall continue in full force and effect, in each case, subject to the terms ther eof (including, without limitation, Section 10.6.2 of the Ground Lease). Without limiting the forgoing p rovisions of this Section 22, a foreclosure (or assignment in lieu thereof) of the tenant’s interes t in the Ground Lease, sub-subtenant’s interest in the Sublease, or Developer’s interest in this Agre ement by the Permitted Lender must be accompanied by a foreclosure (or assignment in lieu thereof) of all such interests, and following such foreclosure (or assignment in lieu thereof), tenant ’s interest in the Ground Lease, sub-subtenant’s interest in the Sublease, or Developer’s interest i n this Agreement may only be assigned to the same Person. Following a foreclosure of Developer’s int erest in the Site, Developer’s interest in this Agreement may only be assigned to a permitted assignee that has acquired Developer’s interest in the
7 To be conformed to Ground Lease and Sublease.
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Sublease and who expressly assumes the Developer’s obligations under the Sublease and this Agreement in an assumption agreement reasonable acceptable to the City and the Port District.
22.3. Non-Disturbance Agreement. 8 With regard to the Hotel Management Agreement with Marriott International, Inc., a Delaware corpo ration, that has been consented to by the Port District and consented to or deemed to be consented to by the City, on the Commencement Date, and prior to or concurrently with the execution of any other Hotel Management Agreement consented to by the Port District and consented to or deemed to be consented to by the City, the Port District, the City and the Authority shall enter into a non-distu rbance agreement with the Hotel Operator substantially in the form attached hereto as Exhibit Y and, if the Hotel Operator is not Marriott, based on terms reasonably acceptable to the Port District , the City, the Authority and Hotel Operator at tha t time.
ARTICLE XXIII
NONDISTURBANCE
23.1. Port District Nondisturbance of Lessee and Sublesse e Rights under the Convention Center Leases. In the event the Site Lease termina tes, is rejected in any Bankruptcy Case or otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Port District shall reco gnize the Facility Lease as, and the Facility Lease shall be deemed to be, a direct lease between the P ort District, as lessor, and the City, as lessee, a nd the Port District shall not disturb the City’s leas ehold interest or possession of the Site (as define d in the Facility Lease) or the Convention Center under, and on the terms and conditions set forth in, the Facility Lease, and the Port District shall continu e to recognize and treat the Sublease as a sublease between the City, as sublessor, and the Developer, as sublessee, and the City shall attorn to and recognize the Port District as the City’s lessor un der, and on the terms and conditions set forth in, the Facility Lease. In the event the Facility Lease te rminates, is rejected in any Bankruptcy Case or otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Port District shall reco gnize the Sublease as, and the Sublease shall be deemed to be, a direct lease between the Authority, as lessor, and the Developer, as lessee, and the Developer shall attorn to and recognize the Authori ty as the Developer’s lessor under, and on the terms and conditions set forth in, the Sublease. I n the event both the Site Lease and the Facility Lease terminate, are rejected in any Bankruptcy Cas e and/or otherwise cease to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default b y the Developer thereunder), (i) the Port District shall recognize the Sublease as, and the Sublease s hall be deemed to be, a direct lease between the Port District, as lessor, and the Developer, as les see, and the Port District shall not disturb the Developer’s leasehold interest or possession of the Site (as defined in the Sublease) or the Convention Center under, and on the terms and condi tions set forth in, the Sublease, and the Developer shall attorn to and recognize the Port Di strict as the Developer’s lessor under, and on the terms and conditions set forth in, the Sublease. E ach Permitted Lender is an express third party beneficiary of this Section 23.1 and is entitled to enforce this Section 23.1.
23.2. Authority Nondisturbance of Lessee and Sublessee Ri ghts under the Convention Center Leases. In the event the Facility Lease ter minates, is rejected in any Bankruptcy Case or
8 To be conformed to Ground Lease and Sublease.
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otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Authority shall recogniz e the Sublease as, and the Sublease shall be deemed to be, a direct lease between the Authority, as lessor, and the Developer, as lessee, and the Authority shall not disturb the Developer’s leaseho ld interest or possession of the Site (as defined i n the Sublease) or the Convention Center under, and o n the terms and conditions set forth in, the Sublease, and the Developer shall attorn to and rec ognize the Authority as the Developer’s lessor under, and on the terms and conditions set forth in , the Sublease. Each Permitted Lender is an express third party beneficiary of this Section 23.2 and is entitled to enforce this Section 23.2.
ARTICLE XXIV
OPERATION OF THE SITE AND THE CONVENTION CENTER
24.1. Approved Agreements. Pursuant to the Sublease, Dev eloper shall take possession of the Site subject to the agreements, licenses, right of entry agreements, and other documents set forth in Exhibit S attached hereto and incorporated herein by reference (“ Approved Agreements ”).
24.2. Reservations. The Port District Parties and any th ird party requested by Port District shall have the right to enter the Site and the Impr ovements for the purpose of constructing, installing, maintaining, repairing, replacing or removing monit oring wells during normal business hours and upon a three (3) Business Days’ prior notice to Dev eloper (except in the case of an emergency in which case no prior notice shall be required but ea ch of such Port District Parties and each of such third parties shall notify Developer and, prior to the Completion of the Resort Hotel and Parking Improvements, Developer’s Risk Construction Manager thereof by phone prior to entering the Site) and Port District shall, and shall cause each of such Port District Parties and each of such third parties to: (a) comply with all applicable security and saf ety procedures of Developer of which Developer informs Port District in writing and with which suc h Port District Party and such third party can reasonably comply, and (b) use commercially reasona ble efforts to minimize any interference with Developer’s operation and use of the Site, the Impr ovements, the Resort Hotel, the Parking Improvements, and the Ground Lease Property, while on the Site and at the Improvements, and, so long as such Port District Parties and such third p arties comply with such requirements and do not cause damage to the Site or any Improvements, separ ate and apart from the construction, installation, maintenance, repairing, replacing, and removal of t he monitoring well in or from the Site, Developer shall not be entitled to any monetary payment or ot her remuneration for incidental costs imposed on Developer resulting from, any such access to the Si te or the Improvements by such Port District Parties or such third parties. The Port District Pa rties shall not cause any damage to the Site or any Improvements in connection with the construction, installation, maintenance, repairing, replacing and removal of any monitoring wells in or from the Site that adversely affects the use, operation or appearance of the Site or any of the Improvements. Port District shall reasonably cooperate with Developer in determining the location of any new mo nitoring well that is required by an order of the SDRWQCB. Except in the case of an emergency, Port District shall consult with Developer to ensure that the interference with Developer’s operation an d use of the Site, the Improvements, the Resort Hotel, the Parking Improvements, and the Ground Lea se Property is minimized to the extent commercially reasonable efforts permit.
Port District and Developer shall independently hav e the right to grant on reasonable terms and notice to the other, a license or easement or o ther access agreement to Rohr, Inc., a United Technologies Aerospace Systems Company (together wi th its successors and assigns, “ Rohr ”) for Rohr and its authorized contractors and agents to a ccess the Site upon reasonable prior notice to
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Developer for sampling, operation, maintenance, rel ocation, replacement, removal and closure of groundwater monitoring, soil vapor or extraction we lls or other Remediation Facilities (as defined in the Relocation Agreement); provided, however, that if Port District grants a license or easement or other access agreement to Rohr, it shall first cons ult with Developer to attempt reasonably and in good faith, and shall use reasonable efforts, to av oid interference with Developer’s day-to-day operations on the Site which interference is (a) un reasonable or (b) both material and reasonably avoidable. Developer shall have the right to coord inate with Rohr to install, relocate, and/or remove any Remediation Facilities (as defined in the Reloc ation Agreement), subject to (a) Rohr securing any necessary approvals from the SDRWQCB and (b) De veloper providing advance notice to Port District that describes the proposed installation, relocation and/or removal of the Remediation Facilities and requests Port District’s approval th ereof (“ Remediation Facilities Notice ”) and receiving Port District’s written approval thereof (which approval shall not be unreasonably withheld, conditioned or delayed); provided, howeve r, that, within twenty (20) days after Developer provides any Remediation Facilities Notice to Port District, Port District shall provide notice to Developer (“ Remediation Facilities Response ”) that (i) approves the activities described in su ch Remediation Facilities Notice or (ii) denies Port D istrict’s approval of some or all of the activities described in such Remediation Facilities Notice and describes in reasonable detail the reasonable basis for such denial; and provided, further, that if Port District fails to provide a Remediation Facilities Response to Developer within such twenty - (20-) day period, then Developer may re- deliver its Remediation Facilities Notice to Port D istrict and, if Port District fails to provide a Remediation Facilities Response thereto within ten (10) days after Developer provides such re- delivered Remediation Facilities Notice to Port Dis trict, then Port District’s approval of such Remediation Facilities Notice shall be deemed grant ed. Developer and Port District acknowledge and agree that neither Developer nor Port District shall be responsible to the other for any incidenta l costs or expenses (e.g., security, overtime, inspec tion, or management-related expenses) incurred by the other Party arising from or related to providin g Site access to Rohr and its authorized contractor s and agents for the sampling, operation, maintenance , relocation, replacement, removal and closure of the groundwater monitoring, soil vapor or extractio n wells or other Remediation Facilities (as defined in the Relocation Agreement).
Port District shall present to the BPC for its reas onable consideration any reasonable request by Developer in writing for an easement on, over, u nder or across the Site to others, including, without limitation, any Governmental Authority, for the purpose of constructing, installing, maintaining, repairing, replacing and removing util ity systems in connection with the development, construction, use or operation of the Site and the Improvements; provided, however, that, in each case, (A) the term of such easement shall not excee d the Term; (B) Port District shall not be responsible for any cost or expense relating to suc h easement, including without limitation, maintenance thereof; (C) Port District shall have t he right to terminate such easement at no cost or expense to Port District in the event of an early t ermination of this Agreement; (D) Port District sha ll have the right to relocate such easement, at any time, in Port District’s sole and absolute discretion, at the grantee’s sole cost and expense with respect to the first relocation of such easement and at Port District’s sole cost and expense with respect to an y subsequent relocation of such easement, unless agreed to otherwise by Port District and the grante e (provided that Port District shall not consider whether the prospective grantee has agreed to bear such costs for any relocation of such easement after the first relocation in determining whether t o grant such an easement); (E) Port District shall have the right to approve the location and dimensio ns of the easement in Port District’s reasonable discretion; and (F) at Port District’s election, th e grantee shall (at the grantee’s own cost and expense) remove any utility system constructed or i nstalled pursuant to such easement at the
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expiration or earlier termination of the Ground Lea se. The City and the Authority hereby consent to any such easement granted by the Port District.
No Public Entity shall, without the prior written c onsent of Developer and, while any Permitted Financing Encumbrance remains outstanding or during any New Lease Period, each Permitted Lender, which consent shall not be unreas onably withheld, conditioned or delayed, encumber the Site or the Improvements during the Te rm or during any New Lease Period, except for (i) any documents effectuating public financing by the Port District, the City, and the Authority, including any refinancing thereof, of the Site or t he Developer’s Phase 1A Infrastructure Improvements that Developer has agreed to prior to the Commencement Date, or the Convention Center that Developer has agreed to prior to the Ex pansion Date, or that Developer agrees to, in Developer’s reasonable discretion, during the Term, except for any such document that may impose any new obligation, limitation or prohibition on De veloper, the Site, the Improvements, the Convention Center prior to the Expansion Date, the Developer’s Phase 1A Infrastructure Improvements, this Agreement or any Contemporaneous Agreement, in which case Developer’s consent shall be in Developer’s sole discretion, (i i) the Special Tax District and any modifications thereto that Developer agrees to, in Developer’s re asonable discretion, (iii) as permitted under this Section 24.2, or (iv) with respect to Port District only, as required by Laws (provided, that, any suc h encumbrance under this subsection (iv) shall not re sult in an encumbrance that is senior in right of priority to that of any Convention Center Lease).
[The Port District and Developer agree to use comme rcially reasonable efforts to finalize and record that certain “Easement for Utility Purposes” between the San Diego Gas & Electric Company, a California corporation (“SDG&E”) and the Port Dis trict (“SDG&E Easement”) consistent with the direction given to Port District staff by the Board of Port Commissioners (Board) at the May 10, 2022 meeting of the BPC. The City, the Developer, and the Authority hereby consent to the SDG&E Easement [and agree to subordinate their leasehold interests in this Agreement and the Convention Center Leases to the SDG&E Easement.]]9
24.3. Cooperation in connection with Condemnation. Each Party shall cooperate in good faith to ensure an award of fair market value is ob tained in the event of any taking by eminent domain or condemnation with respect to the Conventi on Center. Each Party shall use commercially reasonable efforts to perform its respective obligations under the Convention Center Leases related to condemnation and casualty proceeds.
ARTICLE XXV
“AS-IS” LEASE AND WAIVERS
25.1. Developer’s Acknowledgment. Developer acknowledges that prior to entering into this Agreement and the Sublease, Port District has given Developer sufficient opportunity to consider, inspect and review, to Developer’s comple te satisfaction: (1) any and all rights, appurtenances, entitlements, obligations, and liabi lities concerning the Site, including without limitation any Existing Improvements; (2) the physi cal condition of the Site, including, without limitation, the condition and value of any Existing Improvements and the soils, subsoil media, and ground waters at or under the Site; (3) the risk of climate change and the possible adverse consequences thereof, including, without limitation , rises in sea level and possible damage to and destruction of the Site; (4) the development potential of the Site including, without limitation, as may
9 Port to confirm.
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be affected by the preceding clause (3); (5) the effect of all Laws, including, without limitation, those concerning land use, environmental quality and main tenance, endangered species, and traffic regulation; (6) the financial prospects of the Site and local market conditions; (7) Developer’s determination of the feasibility of Developer’s int ended use and enjoyment of the Site; (8) the presence of any Pre-Existing Hazardous Material and any other contamination of the Site, including any Existing Improvements, soils, groundwater, wate r adjacent to San Diego Bay and sediment adjacent to San Diego Bay; and (9) all other facts, circumstances, and conditions affecting, concerning or relating to the Site. The land use; the environmental, biological, physical and legal condition of the Site; the risks associated with po ssible climate change; the feasibility of Developer’s intended use and enjoyment of the Site; and such ot her facts, circumstances and conditions being collectively referred to herein as the “ Condition of the Site ”; and, without limitation on any other provision of this Agreement or the Sublease, Develo per expressly assumes the risk that adverse conditions affecting the Site have not been revealed by Developer’s investigations.
25.2. Only Express Written Agreements Binding. Each Part y acknowledges and agrees that no Person acting on behalf of a Party is authorized to make, and that except as expressly set forth in this Agreement and the Contemporaneous Agreement s to which such Party is a party, none of the Public Entity Parties, the Developer Parties nor an yone acting for or on behalf of a Party has made, any representation, warranty, agreement, statement, guaranty or promise to any other Party, or to anyone acting for or on behalf of any other Party, concerning the Condition of the Site or any other aspect of the Site. Each Party further acknowledges and agrees that no representation, warranty, agreement, statement, guaranty or promise, if any, made by any Person for or acting on behalf of a Party which is not expressly set forth in this Agre ement and the Contemporaneous Agreements as of the Commencement Date will be valid or binding on such Party.
25.3. As-Is. Developer further acknowledges and agrees that Developer’s execution of this Agreement shall constitute Developer’s representati on, warranty and agreement that as of the Commencement Date the Condition of the Site has bee n independently verified by Developer to its full satisfaction, and that, except to the extent o f the express covenants of the City set forth in th e Sublease, Developer will be developing the Site and subleasing the Site based solely upon and in reliance on its own inspections, evaluations, analy ses and conclusions, or those of Developer’s representatives; and that DEVELOPER IS DEVELOPING T HE SITE AND SUBLEASING THE SITE IN ITS “AS-IS, WITH ALL FAULTS” CONDITION AND STATE OF REPAIR INCLUSIVE
OF ALL FAULTS AND DEFECTS, WHETHER KNOWN OR UNKNOWN , AS MAY EXIST AS OF THE DEVELOPER’S EXECUTION OF THIS AGREEMENT AND THE SUBLEASE, INCLUDING ANY EXISTING IMPROVEMENTS. Without limiti ng the scope or generality of the foregoing, Developer expressly assumes the risk tha t the Site does not or will not comply with any Laws now or hereafter in effect.
25.4. Waivers, Disclaimers and Indemnity.
25.4.1. Waiver and Disclaimer. Developer hereby fully and forever waives, and Port District hereby fully and forever disclaims, a ll warranties of whatever type or kind with respect to the Site, whether expressed, implied or otherwis e including, without limitation, those of fitness f or a particular purpose, tenantability, habitability or use.
25.4.2. Port District’s Materials. Developer acknowledges that any information and reports, including, without limitation, any eng ineering reports, architectural reports, feasibilit y reports, marketing reports, soils reports, environm ental reports, analyses or data, or other similar
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reports, analyses, data or information of whatever type or kind which Developer has received or may hereafter receive from Port District Parties (colle ctively, the “ Port District’s Materials ”) have been furnished without warranty of any kind (other than that Port District has delivered true and correct copies of each of the items set forth on Exhibit T attached hereto as filed in the Office of the Port District Clerk (“ District Documents ”)) and on the express condition that Developer wil l make its own independent verification of the accuracy, relia bility and completeness of such Port District’s Materials and that Developer will not rely thereon. Accordingly, subject to terms of Section 25.4.3 below, Developer agrees that under no circumstances will it make any claim against, bring any action, cause of action or proceeding against, or a ssert any liability upon, Port District Parties or any of the Persons that prepared or furnished any of th e Port District’s Materials as a result of the inaccuracy, unreliability or incompleteness of, or any defect or mistake in, any such Port District’s Materials, and Developer hereby fully and forever r eleases, acquits and discharges Port District Parties and each Person furnishing such Port Distri ct’s Materials of and from, any such claims, actions, causes of action, proceedings or liability , whether known or unknown (other than in connection with Port District’s breach of its repre sentation and warranty set forth in this Section 25.4.2 that Port District has delivered to Developer true and correct copies of each of the District Documents.
25.4.3. Release and Waiver.
25.4.3.1. Release. Except to the extent of Claims (as define d below) against Port District arising from any breach by Po rt District of its covenants and obligations expressly provided in this Agreement or the Site Lease, or Port District’s representation and warranty set forth in Section 22.4.2 of the Ground Lease or Section 18(d)(ii) of the Site Lease, Developer, on behalf of Developer, its successors and assigns, he reby fully and forever releases, acquits and discharges Port District of and from, and hereby fu lly, and forever waives and agrees not to assert any and all claims, actions, causes of action, suit s, proceedings, demands, rights, damages, Related Costs, losses, judgments, provisional relief, fines , penalties, and fees, including, without limitatio n, any and all claims for compensation, reimbursement, or contribution whatsoever (individually and collectively, “ Claims ”), whether known or unknown, direct or indirect, f oreseeable or unforeseeable, absolute or contingent, that any Developer Party, H otel Operator or any of Developer’s successors or assigns now has or may have or which may arise or be asserted in the future arising out of, directly or indirectly, or in any way connected with: (i) any act or omission of Port District (or any Person acting for or on behalf of Port District or for whose cond uct Port District may be liable), whether or not such act be the active, passive or sole negligence of Port District (or any Person acting for or on behalf of Port District or for whose conduct Port D istrict may be liable), in connection with prior ownership, maintenance, operation or use of the Sit e; (ii) any condition of environmental contamination or pollution at the Site (including, without limitation, any Pre-Existing Hazardous Material or other contamination or pollution of any soils, subsoil media, surface waters or ground waters at the Site and any clean-up or abatement or der effecting the Site); (iii) to the extent not already included in clause (ii) above, the prior, p resent or future existence, release or discharge, o r threatened release, of any Hazardous Materials at t he Site (including, without limitation, the release or discharge, or threatened release, of any Hazardo us Materials into the air at the Site or into any soils, subsoils, surface waters or ground waters at the Site); (iv) the violation of, or noncompliance with, any Environmental Law or other applicable Law now or hereafter in effect, however and whenever occurring; (v) the condition of the soil a nd groundwater at the Site; (vi) the Condition of the Site, including, without limitation, the condit ion of any improvements located on the Site including, without limitation, the structural integ rity and seismic compliance of such improvements; (vii) any matters which would be shown on an accura te ALTA land survey of the Site (including,
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without limitation, all existing easements and encr oachments, if any); (viii) all applicable Laws now or hereafter in effect; (ix) matters which would be apparent from a visual inspection of the Site; or (x) to the extent not already covered by any of the foregoing clauses (i) through (ix) above, the use, maintenance, development, construction, ownership o r operation of the Site by Port District (or any Person acting for or on behalf of Port District or for whose conduct Port District may be liable) or any predecessor(s)-in-interest in the Site of Port District.
25.4.3.2. Waiver of Civil Code Section 1542. With respect to all releases made by Developer under or pursuant to Section 6.12 of the Sublease and this Article XXV, Developer hereby waives the application and benefit s of California Civil Code § 1542 and hereby verifies that it has read and understands the following provision of California Civil Code § 1542:
“A general release does not extend to claims that t he creditor or releasing party does not know or suspect to exist i n his or her favor at the time of executing the release and that, if know n by him or her, would have materially affected his or her settlemen t with the debtor or released party.”
Developer: _____________________
25.5. Survival. The terms of this Article XXV shall surv ive the expiration or earlier termination of this Agreement.
ARTICLE XXVI
MISCELLANEOUS PROVISIONS
26.1. Notices. All notices and demands given pursuant to this Agreement shall be written.
They shall be deemed served (i) immediately, upon p ersonal delivery; (ii) the next Business Day, if sent prepaid by recognized overnight service such a s FedEx for delivery the next Business Day; or (iii) three (3) Business Days after deposit in the United States mail, certified or registered mail, return receipt requested, first-class postage prepaid.
Each Party to this Agreement shall be provided with a copy of each notice given to any other Party under this Agreement.
Until notice of a change of address is properly giv en, notice shall be given at the following addresses:
To the Authority: Chula Vista Bayfront Facilities F inancing Authority PO Box 5296
Chula Vista, CA 91912
Attention: Executive Director
To the City: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: City Manager
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With a copy to: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Finance Director
With a copy to: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: City Attorney
To the Trustee: Wilmington Trust, National Associat ion 650 Town Center Drive, Suite 800,
Costa Mesa, California 92626
Attention: Corporate Trust Services
Fax No.: (714) 384-4151
To the Administrative Agent: [ ]
[ ]
[ ]
Attention: [ ]
With a copy to: [ ]
[ ]
[ ]
Attention: [ ]
To the Port District: Executive Director
San Diego Unified Port District
Post Office Box 120488
San Diego, CA 92112-0488
With a copy to: Director, Real Estate Department
San Diego Unified Port District
Post Office Box 120488
San Diego, CA 92112-0488
Port Attorney
San Diego Unified Port District
Post Office Box 120488
San Diego, CA 92112-0488
To the Financing District: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: City Manager
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To Developer: RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Ira Mitzner
With copy to: RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Luke Charlton
and
Latham & Watkins
12670 High Bluff Drive
San Diego, CA 92130
Attention: Steven Levine
Notices to the Trustee shall be given initially eit her telephonically or by written telecommunication or electronic mail and shall then be confirmed in writing delivered by first class mail, postage prepaid. The Authority, the City, th e Port District, the Financing District, the Developer, and the Trustee, by notice given hereund er, may designate different addresses to which subsequent notices, certificates or other communications will be sent.
26.2. Captions. Captions in this Agreement are inserted for convenience of reference.
They do not define, describe or limit any term of this Agreement.
26.3. No Merger. At any time during the Term, if any of Port District’s, Authority’s, City’s, or Developer’s estates in the Site become v ested in the same owner, none of the Site Lease, the Facility Lease, or the Sublease shall be terminated by application of the doctrine of merger except at the express consent of all remaining parties to the Convention Center Leases and with the consent of any Permitted Mortgage Lender.
26.4. Recording. Unless the Parties agree otherwise in w riting in advance, on or before the Commencement Date, the Parties shall execute a Memo randum of Agreement substantially in the form of Exhibit R attached hereto (the “ Memorandum of Agreement ”). Any Party may cause the Memorandum of Agreement to be recorded at such Part y’s sole cost and such Party shall be solely responsible for any transfer taxes or fees required to be paid in connection with the recording of the Memorandum of Agreement.
26.5. Port District Transfer. The Authority, the City, a nd the Developer each acknowledges that, subject to the Port Act and the oversight of the California State Lands Commission, Port District may be required by applic able law to transfer all or any portion of its interest in the Site and in the Site Lease, and the Authority, the City, and the Developer each agrees that in the event of any such transfer and the expr ess assumption of Port District’s obligations hereunder and under each of the documents set forth on Exhibit Q attached hereto (a “ Port District Transfer ”) by the transferee, Port District shall automatic ally be released from all liability under the Site Lease and this Agreement for periods after the date of such Port District Transfer, and the Authority, the City, and the Developer each agrees to look solely to such transferee for the performance of Port District’s obligations hereunde r that arise after the date of such Port District
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Transfer. Each Person constituting the Lessor under the Site Lease or the Port District under this Agreement shall be liable only for those obligation s arising during its period of ownership of the Sit e and shall be released from further obligations after it completes a Port District Transfer.
26.6. Time of Essence. Time is of the essence with respe ct to this Agreement and each of its provisions.
26.7. Partial Invalidity. If any term, provision, covena nt or condition contained in this Agreement shall, to any extent, be invalid or unenf orceable, the remainder of this Agreement, or the application of such term, provision, covenant or co ndition to persons or circumstances other than those with respect to which it is invalid or unenfo rceable, shall not be affected thereby, and each an d every other term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent possible permitted by Law.
26.8. Entire Agreement. It is understood and acknowledge d that there are no oral agreements between the Parties affecting this Agree ment and this Agreement supersedes and cancels any and all previous negotiations, arrangements, ag reements and understandings, if any, between the Parties with respect to the subject matter hereof, except for the Prior Agreements, the Contemporaneous Agreements and the Approved Agreeme nts. This Agreement contains all of the terms, covenants, conditions, warranties and agreem ents of the Parties relating in any manner to the construction of the Convention Center, the Develope r’s Phase 1A Infrastructure Improvements, and (as between the Port District and the Developer) th e Remaining Phase 1A Infrastructure Improvements and shall be considered to be the only agreement between the Parties and their representatives and agents, except for the applicab le Prior Agreements, the applicable Contemporaneous Agreements and the applicable Appro ved Agreements; and none of the terms, covenants, conditions or provisions of this Agreeme nt can be modified, deleted or added to except in writing signed by the Parties. All negotiations a nd oral agreements acceptable to the Parties have been merged into and are included herein. There are no other representations or warranties between the Parties, and all reliance with respect to repre sentations is based totally upon the representation s and agreements contained in this Agreement. Howeve r, Developer acknowledges and agrees that other documents may restrict Developer’s use of the Project Site and the Improvements or impose other obligations not specifically referenced in th is Agreement, including, but not limited to, conditions of approval of a CDP or mitigation measures under CEQA.
26.9. Joint and Several. If there is more than one Perso n constituting Developer (i) the obligations imposed upon such persons or entities u nder this Agreement shall be joint and several and (ii) the act or signature of, or notice from or to, any one or more of them with respect to this Agreement shall be binding upon each and all of suc h persons and entities with the same force and effect as if each and all of them had so acted or signed, or given or received such notice.
26.10. Developer’s Authority. Developer hereby represents and warrants as of the Effective Date that Developer is a duly formed and existing entity qualified to do business in the state in which the Project Site is located and that Developer has full right and authority to execute and deliver thi s Agreement and that each Person signing on behalf of Developer is authorized to do so.
26.11. Interaction with Sewer Agreement. The Parties agre e that with respect to the sewer improvements specifically described in the Sewer Ag reement (“ City Sewer Improvements ”) only, because such City Sewer Improvements are being paid for solely out of City funds, they will be constructed by Developer within City rights of way, and will be accepted, owned, and maintained by
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the City, the Sewer Agreement shall govern the terms for the construction and reimbursement of such City Sewer Improvements. Notwithstanding the foreg oing, Developer acknowledges and agrees that (a) Developer’s obligations under Section 3.1 (Term – as it relates to the Developer’s Phase 1A Infrastructure Improvements Site), Section 5.1.1.1 (Construction of Project), Section 5.7 (Entitlements), Section 7.2 (Compliance with Laws ( except Section 7.2.1)), Section 8.1.2 (Other), Section 8.1.3 (Environment), Section 8.1.4 (Access to Project Site), Section 8.2 (Public Right-of- Way), Article XIV (as to Port District and Authorit y only), Article XV (as to Port District and Authority only), Article XVIII (as to the Port Dist rict and Authority only), Article XX (as to Port District and Authority only), and Article XXI (as t o Port District and Authority only), shall govern and control as to the Port District and Authority w ith respect to the City Sewer Improvements and any portion of the Project Site upon which the City Sewer Improvements shall be constructed and the Port District and Authority shall have all of its r ights to enforce such rights herein; (2) the Completion of the City Sewer Improvements shall not be considered in the definition of Developer’s Phase 1A Infrastructure Improvements for purposes o f determining the Outside Construction Completion Date for purposes of assessing Construct ion Late Charges; (3) with respect to the City Sewer Improvements only, Developer shall comply wit h the applicable requirements of the Sewer Agreement to provide payment bonds, performance bon ds, and/or warranty bonds; and (4) this provision shall not restrict, modify, or amend, any rights of the Port District pursuant to any easement with the City for any public right of way in which any of the City Sewer Improvements shall be constructed.
26.12. Resolution of Specified Disputes.
26.12.1. Specified Disputes. This Section (other than Secti on 26.12.10) shall apply only to, and shall be the Parties’ exclusive method of dispute resolution for, the following specified disputes (“ Specified Disputes ”), defined as:
26.12.1.1. (a) Disputes over amounts that Developer included i n a Developer’s Phase 1A Payment Request pursuant to Se ction 9.1.2.1 that Authority (i) did not approve per Section 9.1.2.4, (ii) contested pursuan t to Section 9.1.4.3 to the extent the Developer or Authority are unable to agree or settle such disput e within the time period set forth in Section 9.1.4.3(a) or (iii) did not pay within the time set forth in Section 9.1.3, or (b) disputes regarding the Final Accounting or the Authority’s P hase 1A Final Review pursuant to Section 9.1.6 and 9.1.6.1.
26.12.1.2. Disputes over the amount of any reduction in the co sts payable to Developer as a result of Authority’s correction, re moval or replacement of Defective Work pursuant to Section 12.2.1 or Section 12.2.2.
26.12.1.3. (a) Disputes over amounts that Developer included i n a Convention Center Payment Request pursuant to Secti on 9.2.1 that Authority (a) did not approve per Section 9.2.2.3, (b) contested pursuant to Section 9.2.4.2 to the extent the Developer or Authority ar e unable to agree or settle such dispute within the t ime period set forth in Section 9.2.4.2(a) or (c) d id not pay within the time set forth in Section 9.2.3 or (b) disputes regarding the Final Accounting or the Authority’s Convention Center Final Review pursuant to Section 9.2.6 and 9.2.6.1.
26.12.1.4. Disputes over any amounts that Authority has paid t o Developer that Authority alleges were not properly paid to Developer, except that this Section does not preclude
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Authority or any other Public Entity from bringing an action in court under the False Claims Act, or for fraud, or for similar actions.
26.12.1.5. Disputes pursuant to Section 26.12.4 as to whether a Demand is subject to arbitration.
26.12.2. Notice. Developer and Authority shall endeavor to reasonably inform the other Party of any Specified Disputes that they res pectively believe may be the subject of formal dispute resolution proceedings.
26.12.3. Initiation of Dispute Resolution. Developer or Aut hority may initiate the dispute resolution process by providing notice and making a written demand to the other Party to initiate formal dispute resolution (“ Demand ”). The Demand shall include documentation support ing the claimed right to payment, or if the documentati on has already been provided, a specific reference to the documents and their location. Upon the fili ng of a Demand, Developer and Authority shall engage in good faith in executive-level negotiation s to attempt to resolve the Specified Dispute.
Negotiation shall commence within (a) with respect to disputes under Sections 26.12.1.1(b) or
26.12.1.3(b), five (5) Business Days from Developer ’s or Authority’s Demand, and (b) otherwise three (3) Business Days from Developer’s or Authori ty’s Demand. Developer and Authority may mutually agree to mediation of the Demand in lieu o f or in addition to negotiation of a Specified Dispute. The reasonable costs of mediation will be shared evenly between Developer and Authority.
26.12.4. Binding Arbitration. Specified Disputes that remai n unresolved within six (6) Business Days after the Demand (the “ Negotiation Deadline ”) shall be submitted to binding arbitration. The arbitration shall be inclusive of all Specified Disputes that have been initiated pursuant to Section 26.12.3 at the time Developer o r Authority initiates arbitration, unless the Developer and Authority stipulate otherwise. The co mplaint in arbitration shall identify all Specified Disputes that are part of the arbitration as well a s the amount in controversy. To the extent that th e Developer and Authority do not agree in good faith whether a Demand is a Specified Dispute subject to arbitration, the question of whether a Demand is subject to arbitration shall be resolved by the arbitrator. Developer or Authority shall initiate arbitration of a Demand no later than six (6) month s after the Cutoff Date.
26.12.5. Selection of Arbitrator. The Parties have approved each of the arbitrators (the “ Approved Arbitrators ”) listed on Exhibit N-1 (the “Approved Arbitrator List ”). After the Negotiation Deadline, Developer or Authority may contact the Approved Arbitrator that is highest on the Approved Arbitrator List to determine whether h e/she is available to serve as the arbitrator. If such Approved Arbitrator responds that he/she is un available or does not indicate that he/she is available to serve as the arbitrator within three ( 3) Business Days after the date on which contacted, then such Approved Arbitrator shall be deemed unava ilable. Developer or Authority may then contact the Approved Arbitrator that is next on the Approved Arbitrator List, and such process shall continue on an iterative basis until an Approved Arbitrator has confirmed their availability or until all of Approved Arbitrators on the Approved Arbitrator List are deemed unavailable. If none of the Approved Arbitrators is available, then Developer a nd Authority shall, within two (2) Business Days after Developer or Authority determines that none of the Approved Arbitrators is available, exchange a list of five preferred arbitrators, each of whom must be experienced in construction law and resolving construction claims, and each of whom sha ll be a retired judge or an attorney, located in Southern California. The Developer and Authority s hall mutually agree on an arbitrator. In the event that an agreement cannot be reached within tw o (2) Business Days after receipt of such lists,
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each side shall strike one of the other parties’ ar bitrators until only four names remain. Any of the remaining four who are unable to take on the Specified Dispute shall be stricken. If an agreement still cannot be reached, the arbitrator shall be selected by lot from the remaining names.
26.12.6. Selection of Arbitration Rules. The arbitration sh all proceed in accordance with the JAMS Expedited Construction Arbitration Ru les (the “ JAMS Rules ”). The JAMS Rules shall apply except to the extent inconsistent with this Section 26.12, and even though the amount of the dispute may be greater than $100,000. Any arbi tration pursuant to this Section 26.12 shall be completed (whether by settlement or the issuance of an award by the arbitrator) within twenty (20) Business Days after the arbitrator is selected.
26.12.7. Arbitrator’s Jurisdiction. The arbitrator’s jurisd iction shall be limited to determining whether a Demand is subject to arbitrat ion as well as the amount due from one Party to other under this Agreement and ordering the payment of such amounts due from one Party to the other Party by a date certain.
26.12.7.1. For a Specified Dispute arising from a Demand invol ving a Developer’s Phase 1A Payment Request, the arbitrato r shall only have jurisdiction to determine whether any amount is owed to Developer in accordan ce with this Agreement and to order payment to Developer of the amount owed.
26.12.7.2. For a Specified Dispute arising from a Demand invol ving Defective Work, the arbitrator shall only have juri sdiction to determine the amount of the reduction, if any, in costs payable to Developer and to order payment to allocate such costs.
26.12.7.3. For a Specified Dispute arising from a Demand invol ving a Convention Center Payment Request, (a) the arbitrat or shall only have jurisdiction to determine whether any amount is owed to Developer in accordan ce with this Agreement and to order payment to Developer of the amount owed, and (b) the arbitrator shall have no power to order the Authority or any other Public Entity to pay any amount to Develo per in excess of the sum of the Project Public Investment Amount (not paid to Developer pursuant t o this Agreement (other than default interest in accordance with this Agreement)) and the proceeds o f Advance Rent (to the extent received by any Public Entity and not paid to Developer pursuant to this Agreement), to order any adjustment to the Project Public Investment Amount, or to order any payment of the Project Public Investment Amount before it is due and payable under this Agreement.
26.12.7.4. For a Specified Dispute arising from a Demand invol ving an overpayment by Authority, the arbitrator shall only have jurisdiction to determine whether any amount is owed to Authority in accordance with this Agreement and to order payment to Authority of the amount owed.
26.12.7.5. For all Specified Disputes, the costs necessary to retain and commence arbitration shall be shared evenly between Developer and Authority, but the arbitrator may order the non-prevailing party to pay the reaso nable attorney’s fees and costs of the prevailing party as part of an award.
26.12.7.6. For all Specified Disputes, the arbitrator shall have no authority or power to do any of the following: (i) award payment of any amount that is not consistent with this Agreement or expressly authorized within the terms of this Agreement; (ii) award any consequential,
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incidental or punitive damages or any amounts relat ing to lost profits, lost business opportunity or similar damages; (iii) commit errors of law; (iv) d ecide any matter related to this Agreement that is not specifically identified as a Specified Dispute arising from a Demand; (v) except with respect to disputes under Section 26.12.1.5, order injunctive relief or (vi) order any Public Entity to perform any discretionary act.
26.12.7.7. For the resolution of Demands arising under all Spe cified Disputes, the arbitrator shall issue a written dete rmination containing the arbitrator’s findings and the basis of the award.
26.12.8. Judgment. Judgment on any award rendered by an arb itrator may be entered in any court having jurisdiction thereof.
26.12.9. Interpretation. This procedure for resolution of Specified Disputes shall not limit the rights of the Public Entities to initiate a claim against Developer or any other person:
(a) arising from latent and/or patent deficiencies in workmanship, equipment or materials; (b) arising from guarantees to repair or warranty obligations; (c) for defense and indemnity pursuant to Article XIV of this Agreement (d) under any securit y for Developer’s performance, including calling a bond per Article XIII of this Agreement or enforc ing the Completion Guaranty per Section 5.6; or (e) for any remedy under any other agreement between Developer and any of the Public Entities.
26.12.10. Resolution of Other Disputes. Any dispute, controv ersy or claim arising out of or relating to this Agreement or any Convent ion Center Lease, or the breach hereof or thereof, shall be subject to a non-binding mandatory mediati on, other than (i) a Specified Dispute; (ii) any action of a Party to seek emergency, immediate, or preliminary relief; (iii) any action of a Public Entity in its governmental or regulatory capacity; or (iv) any action involving fraud, false claims or similar actions. The mediator shall be a qualified mediator mutually acceptable to the Parties involved in the dispute. The Parties have approved each of the mediators (the “ Approved Mediators ”) listed on Exhibit N-2 (the “ Approved Mediator List ”). The Port District and Developer may elect to use the Approved Mediator Li st for any non-binding mediation elected or required under the Ground Lease. The Parties invol ved in the dispute shall each pay an equal share of the cost of the mediation and each such Party sh all pay its own costs and expenses, including any attorneys’ fees, related to the mediation.
26.13. Attorneys’ Fees. Should any suit or action be comm enced to enforce, protect, or establish any right or remedy of any of the terms a nd conditions hereof or under the Convention Center Subleases to which a Party hereto is a party or a third party beneficiary, including without limitation a summary action commenced by the Partie s under the laws of the state of California relating to the unlawful detention of property, the prevailing party shall be entitled to have and recover from the losing party reasonable attorneys’ fees and costs of suit, including, without limitation, any and all costs incurred in enforcing, perfecting and executing such judgment.
26.14. Transaction Costs. To the extent Developer request s any approval, consent or other action by Port District, Authority, or the City und er this Agreement, or Port District, Authority, or City, need to approve, consent, or perform another action for any of the Port District, Authority, or City, to process an approval, consent, or other act ion for Developer, Developer shall pay or reimburse Port District, Authority, or City, as app licable, upon written demand therefor, all of Port District’s, Authority’s, or City’s, as applicable, reasonable attorneys’ fees and other third party co sts incurred by Port District, Authority, or City in co nnection therewith, together with Port District’s,
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Authority’s, and City’s, then current processing or cost recovery fee for, Port, Authority, or City similar transactions consistent with any schedule o f such fees then utilized by Port District, Authority, or City. Port District, Authority, or C ity, as applicable, shall provide Developer with a copy of any such fee schedule following written req uest therefor from Developer. Such costs and fees shall be payable to Port District, Authority, or City, as applicable, whether or not Port Distric t, Authority, or City, as applicable, grants such appr oval or consent, or undertakes the action requested by Developer or performed by Port District, Authori ty, or City, to approve, consent, or perform another action for any of the Port District, Author ity, or City, to process such approval, consent, or action for Developer. Notwithstanding anything to the contrary in this Section, (i) Section 19.2 and not this Section 26.14 shall apply to any Tax Claim , (ii) Developer shall have the right to seek reimbursement of any amount paid under this Section 26.14 that qualifies as a Developer’s Phase 1A Infrastructure Improvements Costs and the Authority shall process such request in the same manner as any other payment request under Section 9.1, and (iii) Developer shall have no obligation to pay Port District, Authority, or City for any cost that the Port District, Authority, or City has expressl y agreed to pay in this Agreement or Contemporaneous Agreement.
26.15. Provisions Regarding Authority Operations. Until t he earlier of (a) Full Payment or (b) the earlier termination of the Sublease and thi s Agreement, the Authority agrees to comply with the following:
26.15.1. The Authority will not engage in any transactions o r operations other than (i) issuing the Authority Bonds, and (ii) engaging in the transactions described in this Agreement, the Convention Center Leases and the Indenture.
26.15.2. The Authority will neither incur nor guaranty any i ndebtedness other than the Authority Bonds (including additional Authority Bonds issued to refinance outstanding Authority Bonds).
26.15.3. The Authority will have a mailing address separate from the Public Entities.
26.15.4. The Authority will maintain financial books and rec ords separate from those of any other Person.
26.16. Replacement Trustees. Until Full Payment or the ea rlier termination of this Agreement, Authority shall not approve or effect th e replacement of the Trustee under the Authority Indenture unless the Developer first provides its w ritten consent, which consent shall not unreasonably withheld, conditioned or delayed, and such approval shall not be required if US Bank National Association or The Bank of New York Mellon Trust Company, N.A., will be the replacement Trustee. Authority will provide Develo per with written notice of any proposed replacement of the Trustee under the Authority Inde nture promptly after Authority learns of such proposed replacement.
26.17. Effect of Section 365(h)(1) Election. If Port Dist rict becomes a debtor in a Bankruptcy Case and rejects the Site Lease under Se ction 365 of the Bankruptcy Code, then the Authority shall exercise its right under Section 36 5(h)(1) of the Bankruptcy Code to remain in possession of the Site under and as defined in the Site Lease. If the Authority becomes a debtor in a Bankruptcy Case and rejects the Facility Lease as t erminated under Section 365 of the Bankruptcy Code, then the Port or the City, as then applicable , shall exercise its right under Section 365(h)(1) of
99 4825-3218-1203v34/024036-0079
the Bankruptcy Code to remain in possession of the Site and the Improvements, in each case under and as defined in the Facility Lease.
26.18. Financial Information Regarding Continuous Operatio ns. To assist Developer in making any determination described in 6.1(c)of the Sublease, the Authority, the other Public Entities and the Financing District shall deliver to Develop er, within fifteen (15) Business Days after Developer’s reasonable request therefor, (i) a writ ten and reasonably detailed forecast of the sources and amounts of Revenues (as defined in the Indentur e) that will accrue during the next twelve (12) month period, (ii) a description of all funds and a ccounts established pursuant to the Indenture (including the amounts deposited therein) and (iii) such other financial information as Developer shall reasonably request regarding revenues held, p aid or to be paid by any Public Entity or the Financing District to the Authority or the Trustee pursuant to the terms of this Agreement, the Convention Center Leases and the Indenture, as appl icable. If the Public Entities or Financing District do not provide information reasonably requ ested by Developer within such fifteen (15) Business Day period, the Developer will provide wri tten notice to the Public Entity or Financing District, as applicable, describing the information that was not provided and the applicable Public Entity or Financing District shall provide such inf ormation to Developer within five (5) Business Days from the date such notice was received (or, with respect to information reasonably requested by Developer under clause (iii) in the immediately pre ceding sentence, such additional time as may reasonably be required by the Public Entities or Fi nancing District to compile and provide such information).
26.19. Governing Law. Venue for any legal proceeding shal l be in San Diego County, California. This Agreement shall be construed and enforced in accordance with the Laws of the State of California.
26.20. Modification. This Agreement may not be amended, m odified, terminated or rescinded, in whole or in part, except by written i nstrument duly executed and acknowledged by the Parties hereto, their successors or assigns. Neith er the Facility Lease nor the Site Lease shall be terminated or rescinded, or amended or otherwise mo dified in any manner that could reasonably be expected to have an adverse effect on Developer or any Permitted Lender, without Developer’s prior written consent and the consent of each Permitted Lender.
26.21. Counterparts. This Agreement may be executed in an y number of counterparts, each of which shall be deemed an original, but all of wh ich taken together shall constitute one and the same agreement.
26.22. Drafting Presumption; Review Standard. The parties acknowledge that this Agreement has been agreed to by each of the Parties , that each of the Parties have consulted with attorneys with respect to the terms of this Agreeme nt and that no presumption shall be created against the drafting Party. Any deletion of language from this Agreement prior to its execution by the Parties shall not be construed to raise any presump tion, canon of construction or implication, including, without limitation, any implication that the parties intended thereby to state the converse of the deleted language. Unless otherwise specified in this Agreement, any approval or consent to be given by Port District, BPC, City, or the City Coun cil, may be given or withheld in Port District’s, BPC’s, City’s, or the City Council’s, sole and absolute discretion.
26.23. Administrative Claims. No suit or arbitration (oth er than arbitration pursuant to Section 26.12) shall be brought arising out of this Agreement against the Authority or the Port
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District unless a claim has first been presented in writing and filed with the Authority or the Port District, as applicable, and acted upon by the Auth ority or the Port District, as applicable, in accordance with the procedures set forth in Section 910, et seq., of the California Government Code, as same may from time to time be amended (the provi sions of which are incorporated by this reference as if fully set forth herein), and such p olicies and procedures used by the Authority or the Port District, as applicable, in the implementation of same. No suit or arbitration (other than arbitration pursuant to Section 26.12) shall be bro ught arising out of this Agreement against the City unless a claim has first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chap ter 1.34 of the CVMC, as same may from time to time be amended (the provisions of which are incorp orated by this reference as if fully set forth herein), and such policies and procedures used by t he City in the implementation of same. For the avoidance of doubt, this Section 26.22 shall not ap ply to prevent or delay the initiation of mediation or arbitration as permitted by Section 26.12.
26.24. Non-liability of Public Entity Officials and Employees. No officer, director, member, official, employee, consultant, or member of the go verning board of any Public Entity shall be personally liable to Developer in the event of any default or breach by such Public Entity, or for any amount which may become due to Developer, or on any obligations under the terms of this Agreement.
26.25. Authority Executive Director; Authority Approvals a nd Actions. Authority shall maintain authority of this Agreement and the author ity to implement this Agreement on behalf of Authority through Authority’s Executive Director (o r his/her duly authorized representative). The Executive Director and his/her duly authorized repr esentative(s) shall have the authority to make approvals, issue interpretations, waive provisions, request issuance of warrants and make payments authorized hereunder, make and execute further agre ements and/or enter into amendments of this Agreement on behalf of Authority so long as such ac tions do not materially or substantially change or modify the uses or development permitted on the Project Site, or materially or substantially add to the costs, responsibilities, or liabilities incurre d or to be incurred by Authority as specified herei n, and such interpretations, waivers and/or amendments may include extensions of time to perform. All material and/or substantive interpretations, waiver s, or amendments shall require the consideration, action and written consent of the Authority Board. Further, the Executive Director shall maintain the right to submit to the Authority Board for consider ation and action any non-material or non- substantive interpretation, waiver or amendment, if in his/her reasonable judgment he/she desires to do so.
26.26. Further Assurances. From time to time upon the req uest of a Party, the other Parties shall, at the requesting Party’s expense, promptly execute, acknowledge and deliver such further documentation and do such other acts and things as the requesting Party may reasonably request in order to effect fully the purposes of this Agreemen t in such a manner that is consistent with and does not contradict, modify, or amend this Agreement.
CONTRACTOR’S LICENSE NOTICE. CONTRACTORS ARE REQUI RED BY LAW TO
BE LICENSED AND REGULATED BY THE CONTRACTORS STATE LICENSE BOARD,
WHICH HAS JURISDICTION TO INVESTIGATE COMPLAINTS AG AINST
CONTRACTORS IF A COMPLAINT REGARDING A PATENT ACT O R OMISSION IS FILED WITHIN 4 YEARS OF THE DATE OF THE ALLEGED VIO LATION. A
COMPLAINT REGARDING A LATENT ACT OR OMISSION PERTAI NING TO STRUCTURAL DEFECTS MUST BE FILED WITHIN 10 YEARS OF THE DATE OF THE
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ALLEGED VIOLATION. ANY QUESTIONS CONCERNING A CONTR ACTOR MAY BE
REFERRED TO THE REGISTRAR, CONTRACTORS STATE LICENS E BOARD, P.O. BOX 26000, SACRAMENTO, CA 95826.
[End of page. Signature page follows this page.]
S-1
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IN WITNESS WHEREOF, this Project Implementation Agr eement is executed as of the day and year first set forth above.
CITY DEVELOPER
CITY OF CHULA VISTA, a California charter
city and municipal corporation
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
California Contractor License Number: 1039979
By:
Maria Kachadoorian, City Manager
By: *
ATTEST:
By:
Kerry Bigelow, City Clerk
APPROVED AS TO FORM:
By:
Glen R. Googins, City Attorney
[Signatures continue on following page]
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[Signatures continue from previous page.]
PORT DISTRICT AUTHORITY
SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation
CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY, a joint exercise of
powers authority
By:
By:
APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FO RM AND LEGALITY:
By:
Thomas A. Russell, General Counsel
By:
Co-Counsel, Thomas A. Russell, General
Counsel of the San Diego Unified Port
District
By:
Co-Counsel, Glen Googins, City Attorney
of the City of Chula Vista
FINANCING DISTRICT BAYFRONT
PROJECT SPECIAL TAX FINANCING
DISTRICT
By:
* Signatories to provide signature authority for signatory
4825-3218-1203v34/024036-0079
[Definitions Addendum to be inserted.]
Exhibit A-1
Legal Description of the Site
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CHULA VISTA,
IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
ALL THAT CERTAIN PORTION OF LAND CONVEYED TO THE SAN DIEGO UNIFIED
PORT DISTRICT BY THAT CERTAIN ACT OF LEGISLATURE OF THE STATE OF CALIFORNIA PURSUANT TO CHAPTER 67, STATUTES OF 1962, 1ST EXTRAORDINARY
SESSION, AS AMENDED AND DELINEATED ON THAT CERTAIN MISCELLANEOUS MAP NO. 564, FILED IN THE OFFICE OF THE SAN DIEGO COUNTY RECORDER ON MAY 28, 1976, FILE NO. 76-164686, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO AND THAT PORTION OF “G” STREET, AS SAID “G” STREET WAS DEDICATED AND
ESTABLISHED AS AND FOR A PUBLIC STREET BY THE CITY OF CHULA VISTA COUNSEL RESOLUTION NO. 4205, DATED 4TH OF OCTOBER 1966, (SAN DIEGO UNIFIED PORT DISTRICT DOCUMENT NO. 2249, DATED 14TH OF OCTOBER 1966) AND THAT
PORTION OF TIDELANDS AVENUE, SUBSEQUENTLY RENAMED MARINA PARKWAY BY THE CITY OF CHULA VISTA COUNCIL RESOLUTION NO. 12338, WAS ALSO
ESTABLISHED AS AND FOR A PUBLIC STREET BY THE SAID DOCUMENTS OF
CONVEYANCE, TOGETHER WITH THAT PORTION OF PROPERTY DESCRIBED IN THE FINAL ORDER OF CONDEMNATION RECORDED JUNE 26, 2018 AS INSTRUMENT NO. 2018-0259561, OF OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT STATION NO. 107 ON THE MEAN HIGH TIDE LINE OF THE BAY OF SAN DIEGO, AS SAID MEAN HIGH TIDE LINE IS SHOWN ON MISCELLANEOUS MAP NO. 217, FILED IN THE RECORDER'S OFFICE OF THE COUNTY OF SAN DIEGO; THENCE ALONG SAID MEAN HIGH TIDE LINE SOUTH 58°27'22" EAST (RECORD SOUTH 58°28'01" EAST), 105.95 FEET TO THE INTERSECTION WITH THE RIGHT-OF-WAY OF MARINA PARKWAY,
FORMERLY TIDELANDS AVENUE AS DEDICATED PER DOCUMENT RECORDED OCTOBER 10,1966 AS FILE NO. 163052 AND THE BEGINNING OF A NON TANGENT 20.00
FOOT RADIUS CURVE, CONCAVE SOUTHEASTERLY, A RADIAL LINE TO SAID CURVE BEARS NORTH 33°15'14" WEST; THENCE ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 49° 04' 34" A DISTANCE OF 17.13 FEET TO THE TRUE POINT OF BEGINNING. THENCE CONTINUING SOUTHERLY ALONG SAID CURVE AND RIGHT-OF- WAY OF MARINA PARKWAY THROUGH A CENTRAL ANGLE OF 22°02'58" A DISTANCE OF 7.70 FEET; THENCE CONTINUING ALONG SAID RIGHT OF WAY THE FOLLOWING THREE COURSES: 1) SOUTH 14°22'45" EAST, 269.73 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY HAVING A RADIUS OF 4,740.00 FEET; 2) THENCE ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 03°32'06" A DISTANCE OF 292.44 FEET; 3) THENCE SOUTH 17°54'50" EAST, 705.69 FEET; THENCE LEAVING SAID RIGHT-OF-WAY SOUTH 72°12'12" WEST, 14.67 FEET; THENCE SOUTH 67°45'00" WEST, 64.39 FEET;
THENCE SOUTH 72°12'12" WEST, 72.20 FEET;
THENCE NORTH 88°19'10" WEST, 23.16 FEET;
THENCE NORTH 78°16'38" WEST, 13.37 FEET;
THENCE NORTH 74°05'34" WEST, 21.14 FEET;
THENCE NORTH 79°25'36" WEST, 27.73 FEET;
THENCE NORTH 87°11'55" WEST, 23.86 FEET;
THENCE NORTH 03°28'36" EAST, 8.00 FEET;
THENCE NORTH 87°00'15" WEST, 23.79 FEET;
THENCE NORTH 88O14'32" WEST, 31.74 FEET;
THENCE NORTH 89°22'43" WEST, 32.40 FEET;
THENCE SOUTH 89°25'59" WEST, 24.07 FEET;
THENCE SOUTH 88°15'34" WEST, 32.25 FEET;
THENCE NORTH 37°33'31" WEST, 5.60 FEET;
THENCE NORTH 56°17'05" WEST, 8.85 FEET;
THENCE NORTH 76°31'40" WEST, 12.98 FEET;
THENCE NORTH 86°10'39" WEST, 16.09 FEET;
THENCE NORTH 86°35'34" WEST, 18.27 FEET;
THENCE NORTH 80°35'22" WEST, 17.55 FEET;
THENCE NORTH 72°42'50" WEST, 19.41 FEET;
THENCE NORTH 62°34'06" WEST, 24.53 FEET;
THENCE NORTH 63°24'30" WEST, 68.58 FEET;
THENCE NORTH 70°4r58" WEST, 17.06 FEET;
THENCE NORTH 84O56'52" WEST, 14.79 FEET;
THENCE SOUTH 85°45'23" WEST, 11.10 FEET;
THENCE SOUTH 74°10'06" WEST, 9.39 FEET;
THENCE NORTH 17°34'06" WEST, 22.65 FEET;
THENCE NORTH 72°52'32" EAST, 14.25 FEET;
THENCE NORTH 17°34'06" WEST, 346.24 FEET;
THENCE SOUTH 72°45'10" WEST, 45.60 FEET;
THENCE NORTH 62°34'06" WEST, 33.81 FEET;
THENCE NORTH 17°47'38" WEST, 193.43 FEET;
THENCE SOUTH 72°26'06" WEST, 121.66 FEET;
THENCE NORTH 17°34'06" WEST, 1.81 FEET;
THENCE SOUTH 72°25'54" WEST, 118.07 FEET;
THENCE NORTH 17°34'06" WEST, 100.27 FEET;
THENCE NORTH 72°25'54" EAST, 84.95 FEET;
THENCE NORTH 17°47'46" WEST, 372.75 FEET;
THENCE NORTH 63°11'58" EAST, 366.02 FEET;
THENCE SOUTH 26°48'02" EAST, 11.00 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 83.00 FEET, A RADIAL LINE TO SAID CURVE BEARS NORTH 26°48'02" WEST; THENCE ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 39°43'43" A DISTANCE OF 57.55 FEET TO THE
BEGINNING OF A REVERSE CURVE CONCAVE NORTHERLY HAVING A RADIUS OF
77.00 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 12°55'41" WEST; THENCE ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 25°46'25" A DISTANCE OF 34.64 FEET; THENCE SOUTH 17°34'06" EAST, 279.27 FEET; THENCE NORTH 72°25'54" EAST, 305.50 FEET; THENCE NORTH 17°34'06" WEST, 237.50 FEET; THENCE NORTH 72°19'26" EAST, 54.89 FEET TO THE TRUE POINT OF BEGINNING.
EXCEPTING THEREFROM ALL DEPOSITS OF MINERALS, INCLUDING OIL AND GAS, IN
SAID LAND, TOGETHER WITH THE RIGHT TO PROSPECT FOR, MINE AND REMOVE
SUCH DEPOSITS FROM SAID LANDS, AS RESERVED BY THE STATE OF CALIFORNIA IN STATUTES 1962 FIRST EXTRAORDINARY SESSION, CHAPTER 67, SECTION 87; STATUTES OF 1963 REGULAR SESSION, CHAPTER 673, SECTION 40.
ALSO EXCEPTING THEREFROM TO THE STATE OF CALIFORNIA, IN ALL THE LAND
DESCRIBED HEREIN, ALL MINERAL AND MINERAL DEPOSITS, INCLUDING BUT NOT
LIMITED TO, OIL AND GAS, OTHER GASES, INCLUDING, BUT NOT LIMITED TO
NONHYDROCARBON AND GEOTHERMAL GASES, OIL SHALE, COAL, PHOSPHATE,
ALUMINA, SILICA, FOSSILS OF ALL GEOLOGICAL AGES, SODIUM, GOLD, SILVER,
METALS AND THEIR COMPOUNDS, ALKALI, ALKALI EARTH, SAND, CLAY, GRAVEL,
SALTS AND MINERAL WATERS, URANIUM, TRONA, AND GEOTHERMAL RESOURCES,
TOGETHER WITH THE RIGHT OF THE STATE OR PERSONS AUTHORIZED BY THE
STATE TO PROSPECT FOR, DRILL FOR, EXTRACT, MINE AND REMOVE SUCH DEPOSITS
OR RESOURCES, AND TO OCCUPY AND USE SO MUCH OF THE SURFACE OF THE
LANDS AS MAY BE NECESSARY THEREFORE AS RESERVED IN THAT CERTAIN GRANT DEED RECORDED DECEMBER 30, 1999 AS INSTRUMENT NO. 1999-0845740 OF OFFICIAL RECORDS.
A-2-1
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Exhibit A-2
Legal Description of the Ground Lease Property
[To come prior to Closing.]
A-3-1
4825-3218-1203v34/024036-0079
Exhibit A-3
Legal Description of Developer’s Phase 1A Site
[To come prior to Closing.]
B-1-1
4825-3218-1203v34/024036-0079
Exhibit B-1
Depiction of the Site
B-1-2
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B-1-3
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B-1-4
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B-1-5
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B-1-6
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B-2-1
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Exhibit B-2
Depiction of the Ground Lease Property
[To come prior to Closing.]
B-3-1
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Exhibit B-3
Depiction of the Developer’s Phase 1A Infrastructure Improvements Site [To come prior to Closing.]
C-1-1
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Exhibit C-1
Sources for Developer’s Phase 1A Infrastructure Improvements Cost [Amounts to be filled in prior to Closing.]
Source Amount
County Funds $
Series 2022A Bond Proceeds
Total $
C-2-1
4825-3218-1203v34/024036-0079
Exhibit C-2
Developer’s Phase 1A Infrastructure Improvements Budget [To be provided by Developer prior to Closing.]
NOTE: Harbor Park is not included in Developer’s Phase 1A Infrastructure Improvements.
NOTE: Amounts available to be reimbursed to Develo per under the Sewer Agreement or credited to Developer under the BFDIF Program are e xcluded from the Developer’s Phase 1A Contract Sum.
D-1-A
4825-3218-1203v34/024036-0079
Exhibit D-1-A
Remaining Phase 1A Infrastructure Improvements
(Sweetwater Park)
Sweetwater Park
[A 21-acre signature park on Parcel S-2 (defined in the PMP) with passive use, meadow-type open space with amenities such as: landscaping, lighting, restrooms, drinking fountains, bicycle racks, children play areas, picnic areas, benches, trash receptacles, interpretive signage, landscaped berms, public art, decomposed granite paving, and parking. The park is to be passive in nature, be low- impact and contain minimal structures. Allowed structures include restrooms, picnic tables, shade structures and overlooks, and are limited to single-story heights. No athletic field amenities or unattended food vending will be allowed. The park will utilize low water-use ground cover alternatives where possible and trails will not be paved. Due to the immediate adjacency to sensitive habitat areas, amplified sound equipment and issuance of park use permits for group events will be prohibited. Development of the park also includes the development within the Transition Buffer Areas and Limited Use zones of parcel SP-1 and the fencing of the No Touch Buffer Area of parcel SP-1, all as described in the certified PMP.]
D-1-B
4825-3218-1203v34/024036-0079
Exhibit D-1-B
Sources for Remaining Phase 1A Infrastructure Improvements Cost [Amounts to be filled in prior to Closing.]
Source Amount
2022B Bond Proceeds $
County Funds
Other Port District Funds
Total $
E-1
4825-3218-1203v34/024036-0079
Exhibit E
Construction Requirements
1. GENERALLY. DEVELOPER SHALL COMPLY WITH THE PROVI SIONS OF THIS EXHIBIT E AS FOR THE CONVENTION CENTER AND DEVELOPE R’S PHASE 1A
INFRASTRUCTURE IMPROVEMENTS (AS APPLICABLE), THOSE CERTAIN CONDITIONS OF PROJECT APPROVAL FOR THE CONVENTION CENTER AND D EVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS (AS APPLICABLE ) (District Clerk No. [ ]) (AS APPLICABLE), AND THE PROVISIONS OF THE PROJ ECT
IMPLEMENTATION AGREEMENT IN CONNECTION WITH ALL CON STRUCTION OR DEMOLITION WORK FOR THE CONVENTION CENTER AND DEVEL OPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS (AS APPLICABLE) (“ CONSTRUCTION WORK ”).
2. Contractors. Authority shall have the right to a pprove the general contractor for Construction Work, in its reasonable discretion. All contractors and subcontractors performing any Construction Work must be licensed in the State of California.
3. Architects and Engineers. All architects and eng ineers must have an active license to practice in the State of California.
4. Reserved.
5. Construction Barricades. Developer shall install a construction barricade around the area of Construction Work, and erect such other protective measures as may be reasonably required by Authority.
6. Dust and Trash Control. Developer shall take com mercially reasonable steps to minimize dust resulting from any Construction Work, and shal l promptly dispose of all trash generated from the Construction Work.
7. Performance Bond and Payment Bond. Article XIII of the Agreement shall govern requirements relating to Performance and Payment Bo nds for the Convention Center and Developer’s Phase 1A Infrastructure Improvements.
8. Financial Assurances. At least ten (10) days pr ior to commencing any Construction Work, Developer shall deliver to Authority evidence reaso nably demonstrating to Authority that Developer has obtained or retains financial resources and cap abilities in an amount sufficient to complete the Construction Work.
9. Construction Schedule. The Agreement governs pro visions relating to the schedule for the Construction Work.
10. Contractor Insurance. Developer shall ensure th at all contractors and subcontractors performing Construction Work shall obtain and there after maintain so long as such Construction Work is occurring, at least the minimum insurance c overages set forth below, which insurance coverages may be modified by Authority from time to time in its reasonable discretion:
(i) Workers’ compensation and employer’s liability insurance:
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(a) Workers’ compensation insurance as required by any applicable law or regulation.
(b) Employer’s liability insurance in the amount of $1,000,000 each accident/employee/disease.
(ii) General liability insurance: Commercial Genera l Liability insurance covering all operations by or on behalf of the contractor, which shall include the following minimum limits of liability and coverages:
(a) Required coverages:
(1) Premises and Operation;
(2) Products and Completed Operations;
(3) Contractual Liability;
(4) Broad Form Property Damage (including Completed Operations); (5) Explosion, Collapse and Underground Hazards; an d
(6) Personal Injury Liability.
(b) Minimum limits of liability:
(1) $2,000,000 each occurrence (for bodily injury a nd property damage); (2) $2,000,000 for Personal Injury Liability;
(3) $2,000,000 aggregate for Products and Completed Operations (which shall be maintained for a three (3) year period fol lowing final completion of the Work); and
(4) $2,000,000 general aggregate applying separatel y to this Project. (iii) Automobile Liability Insurance: Automobile li ability insurance including coverage for owned, leased, rented, hired, and/or non-owned automobiles. The limits of liability shall not be less than $1,000,000 for each accident limit for bodily injury, death and property damage. (iv) Umbrella/Excess Liability Insurance: The Gener al Contractor shall also carry umbrella/excess liability insurance in the amount o f $5,000,000. If there is no per project aggregate under the Commercial General Liability policy, the limit shall be $10,000,000. (v) Contractor’s Pollution Liability Coverage: If e ither the City or the Port District determines, in its sole and reasonable discretion, that Developer performs or contracts for any work which involves a Hazardous Materials Activity or wh ich has the potential to disturb or result in the release of any Hazardous Material, for which there is potential exposure to pollution or Hazardous Materials to Persons or the environment, Developer shall obtain or cause its contractor to obtain Contractor’s Pollution Liability, Pollution Legal L iability and/or Asbestos Pollution Liability and/or
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Errors & Omissions applicable to the work being performed or the potential release of any Hazardous Material, with limits of $5,000,000 per claim or oc currence and $10,000,000 aggregate per policy period of one year.
Any and all of the insurance described above may be obtained and maintained by Developer through an owner-controlled insurance program instead of by a contractor and/or a subcontractor. Public Entity Parties shall be named as an additional insu red on the forgoing insurance, and such insurance shall provide that the same shall not be canceled, or reduced in amount or coverage below the requirements of this Agreement, nor shall it be all owed to expire, without at least thirty (30) days prior written notice to Authority. The foregoing in surance shall include a waiver of subrogation in favor of Public Entity Parties.
11. Notice of Completion. Within ten (10) days afte r Completion of any Construction Work, Developer shall record a Notice of Completion in th e office of the San Diego County Recorder and furnish a copy thereof to Authority upon such recordation.
12. Copy of Record Set of Plans and Certificate of Completion. Following the conclusion of any Construction Work, deliver to Authority (i) with re spect to the Convention Center, a set of “as-built drawings” and (ii) a copy of the certificate of com pletion issued by the applicable government agency, if any such certificate of completion must be issued.
13. Conflict. In the event of conflict between the terms of these Construction Requirements and terms of the Agreement, the terms of the Agreement shall control.
F-1
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Exhibit F
Convention Center Plans
[List of Convention Center Plans to be provided by Developer prior to Closing.]
G-1-1
4825-3218-1203v34/024036-0079
Exhibit G-1
Approved Subcontractor Bid and Award Process
I. GENERAL CONTRACTOR
Developer has selected as the general contractor fo r the construction of the Developer’s Phase 1A Infrastructure Improvements a joint ventur e (“MMJV”) comprising M.A Mortenson Company (“Mortenson”) and McCarthy Building Compani es, Inc. (“McCarthy”). Mortenson, a leader in the industry with a wealth of experience in similar large scale projects, was a natural fit for the construction of Gaylord Rockies Resort and Conv ention Center (the “Rockies Project”), a project developed by Developer’s affiliate (“RIDA Rockies”) . Throughout the construction of the Gaylord Rockies Project, RIDA Rockies gained extensive expe rience with Mortenson. When possible, Developer’s development process involves bringing f orward the general contractor who constructed a prior similar project (with the experience gained ), and teaming them up with a general contractor that has a strong local presence. McCarthy’s prese nce is strong locally, as well as within the sub- contractor community. In addition to McCarthy’s local presence and positive reputation, McCarthy’s resume of large scale developments make MMJV an ideal partner for the Project.
II. SUBCONTRACTORS
A brief description of the process to be followed for the selection of subcontractors follows:
Initial Invitation to Propose
MMJV conducts research on potentially qualified sub contractors. This includes review of both Mortenson and McCarthy relationships and datab ases for local and regional subcontractors. For larger packages this may include major national subcontractors. Consultants that are retained by Developer and/or M MJV to assist in the preparation of bids or contract documents (including, without limitatio n, preliminary / concept designs), or to assist in the solicitation, may submit a bid for or be awarded a subcontract, subject to the satisfaction of the other criteria set forth in this Exhibit G-1. Developer may designate specific persons or entitie s from whom MMJV will obtain bids or competitive proposals, subject to those persons or entities entering into written subcontracts acceptable to MMJV and Developer.
Direct contact is made with identified potential su bcontractors to gauge their interest and brief them on the opportunity. In many cases this is a continuation of on-going discussions related to subcontractor input for budget estimates based on earlier design packages.
RFQ stage
Identified potential subcontractors (typically mini mum of five for each package) are invited to submit qualifications data. This includes infor mation regarding past relevant / similar project experience, customer feedback from those pr ojects, current backlog, available trades personnel resources, proposed supervisory / managem ent personnel, financial capability, and design capabilities (for design-build subcontracts).
MMJV and Developer review RFQ responses to identify those subs to be invited to RFP stage.
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RFP stage
Where practical, MMJV will obtain a minimum of thre e bids/competitive proposals from all subcontractors and from suppliers of materials or e quipment directly to MMJV, for subcontracts or purchase orders in excess of $75,00 0, and a minimum of two bids from the subcontractors, and from suppliers of materials or equipment (but only materials and equipment which will be incorporated into the work) for the work, for such subcontracts or purchase orders having a value less than $75,000.00, and will deliver such bids to Developer. Subcontractors deemed qualified are invited to submit detailed proposals including – o Qualitative factors
Supervisory personnel commitments and organization chart Schedule management plan
Quality management plan
Plan for providing adequate qualified trades personnel Pre-construction / design phase services approach a nd staffing (for “early- engagement” subs)
o Quantitative factors
Pricing for the detailed subcontract package scope of work description as provided by MMJV. This includes further breakdown as directed by MMJV to allow for detailed pricing evaluation.
Estimated trades work-hours
Schedule detail and projected trades crew size graphs Proposed rates for labor, equipment, insurance etc. (for use in future change order negotiations, or for billing purposes in the case of cost-plus/GMP subcontracts)
o Contract terms – Subcontractors are required to ide ntify any exceptions to the subcontract documents and project manual provided b y MMJV, as well as any clarifications or exceptions to the scope of work definition provided. Proposals are evaluated jointly by MMJV and Develop er. In general, quantitative factors are given the most weight, but significant differences in evaluation of qualitative factors could overcome a difference in pricing. MMJV and Develop er may also consider other factors such as the maintenance of labor peace.
The highest rated proposers (typically target three each) are invited for in-depth interviews.
Interview & BAFO stage
In-depth interviews are conducted with the short-li sted subcontractors. The interviews are focused on proposed supervisory personnel qualifica tions, the subcontractors’ project plan, and insuring there is a complete understanding of t he required scope and schedule for the subject package as well as regulatory requirements (i.e. prevailing wage, DDA and Coastal Development Permit constraints, etc.).
Following interviews, subcontractors are provided w ith a list of MMJV and Developer comments or questions to be addressed, feedback on any proposed exceptions to the contract documents, and are invited to provide a “best and final offer” price proposal.
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Final selection & award process
MMJV and Developer jointly review updated, final pr oposals and make tentative selection for award based on their determination of the overall value for the Project. Selected subcontractor is informed of their status, and any additional conditions for award by MMJV, in consultation with Developer.
After confirmation of the selected subcontractor’s acceptance of any additional conditions, unsuccessful subcontractors are notified and provid ed a debrief regarding evaluation of their proposal.
No subcontract will be awarded if either MMJV (in i ts reasonable determination) or Developer objects thereto.
MMJV will provide to Developer, prior to commenceme nt of the work and updated as changes may occur, a listing of all subcontractors and suppliers who MMJV has retained to complete the work.
From time to time after any subcontracts have been awarded, Developer will deliver a notice to the Authority with a list of such subcontracts a nd a confirmation that the subcontractors have been selected in accordance with the procedure set forth in this Exhibit G-1. If any subcontractor is not expected to be selected in acc ordance with the procedure set forth in this Exhibit G-1, then, prior to awarding the relevant subcontract, Developer will deliver a request to the Authority for the Authority to waive the rel evant provisions of the Authority Procurement Policy with respect to the selection of such subcontractor in accordance with the waiver process set forth in the Authority Procurement Policy.
Clarifications and exceptions to the subcontractor selection process:
The portions of the work that will be identified on an exhibit to the construction contract and the contract amount for which will not, in the aggr egate, exceed $12 million, will not be required to be bid to others.
MMJV will not be required to obtain bids for work t hat contractors customarily self-perform (which is traditionally referred to as “General Con ditions”, “General Requirements” or “Site Support Service” work), such as management, quality assurance, scheduling, security, traffic control, safety, supervision and accounting, etc.
Except for subcontracts and work that are covered b y another exception, if bids are received from Mortenson, McCarthy or any company affiliated with any of them, all bids for the portion of the work involved, including bids from M ortenson, McCarthy or such affiliated company, will be sealed bids which are to be opened in the presence of Developer.
Whenever with Developer’s prior written consent MMJ V plans to self-perform any aspect of the work without using the sealed bid procedure sta ted in the preceding sentence, including a sealed bid from Mortenson, McCarthy or an affiliate d company, then MMJV, as a condition precedent, will provide Developer a detailed cost a nd fee estimate for such planned self- performed work together with two bids from subcontractors, or an independent estimate from a third-party cost estimating firm as selected by D eveloper. In advance of any such self- performed work, and within sufficient time so as no t to create schedule delays, MMJV will review all such pricing with Developer and obtain D eveloper’s informed written consent for such self-performed work.
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MMJV may self-perform minor or incidental portions of the work without bidding such work to other subcontractors so long as MMJV only charge s MMJV’s cost of such work and no additional fee, overhead or general conditions for such self-performed work. Other work self-performed by MMJV will be treated a s lump sum subcontracted work under the contract documents for the purposes of bidding, award and payment except as mutually agreed by MMJV and Developer. If the parties agree that such self-performed work is to be completed on a “cost plus a fee” basis, the applicable fee percentage will be 15%.
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Exhibit G-2
Subcontractor Bids Awarded Prior To Effective Date 10
1. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and Sierra Pacific West, Inc.
2. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and Hazard Construction Engr LLC
3. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and QSB Construction, Inc.
4. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and Castle Contracting, LLC
5. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and Brightview Landscape Development, Inc.
6. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and Summit Enterprises, Inc.
7. Subcontract Agreement between Mortenson/McCarthy Chula Vista Resort and SB&O, Inc.
10 Provided by Achraf on 5/6/22. Subject to approval by all RIDA, Port, and City.
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Exhibit G-3
Approved Construction Contracts 11
1. AIA A133 – Standard Form of Agreement between Owner and Construction Manager as Constructor – Cost of the Work Plus a Fee with Guaranteed Maximum Price (Convention Center) and AIA A201 – General Conditions of the Contract for Construction.
2. AIA A133 – Standard Form of Agreement between Owner and Construction Manager as Constructor – Cost of the Work Plus a Fee with Guaranteed Maximum Price (Phase 1A Infrastructure) and AIA A201 – General Conditions of the Contract for Construction.
11 Provided by Achraf on 5/6/22. Subject to approval by all RIDA, Port, and City.
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Exhibit H
Form of Completion Guaranty 12
[conform to final Completion Guaranty form]
THIS COMPLETION GUARANTY (“ Guaranty ”), is made as of _______________, by _______________ (“ Guarantor ”), to and for the benefit of the San Diego Unified Port District, a public corporation (“ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority, a joint exercise of powers authority (“ Authority ”), and the City of Chula Vista, a chartered munici pal corporation (the “ City ,” and, together with the Port District and the Aut hority, the “ Public Entities ”).
RECITALS
A. RIDA Chula Vista, LLC, a Delaware limited liabil ity company (together with any successors and assigns, “ RIDA ”), is party to that certain ground lease, dated as of the date hereof, by and between Port District and RIDA (as amended, ame nded and restated, supplemented or otherwise modified from time to time, the “ Hotel Ground Lease ”).
B. The Hotel Ground Lease requires RIDA to develop and construct the “Resort Hotel” (as defined in the Hotel Ground Lease) and the “Par king Improvements” (as defined in the Hotel Ground Lease) in accordance with the Hotel Ground Lease.
C. RIDA is a party to that certain Sublease Agreeme nt (Chula Vista Bayfront Convention Center), dated as of the date hereof, by and between the City and RIDA (as amended, amended and restated, supplemented or otherwise mod ified from time to time, the “ Convention Center Sublease ”).
D. RIDA is a party to that certain Project Implemen tation Agreement, dated as of the date hereof, by and among Authority, City, Port Dis trict and RIDA (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ PIA ” and, collectively with the Hotel Ground Lease and the Convention Center Sublea se, the “ Project Documents ” and each, a “Project Document ”).
E. The PIA requires RIDA to develop and construct ( i) the “Convention Center” (as defined in the PIA) in accordance with the PIA and (ii) “Developer’s Phase 1A Infrastructure Improvements” (as defined in the PIA, and collectiv ely with the Resort Hotel, the Parking Improvements and the Convention Center, the “ Project ”) in accordance with the PIA, for the benefit of the Public Entities.
F. Guarantor is [an affiliate of RIDA] and thus wil l benefit from the development of the Project in accordance with the terms of the Project Documents.
12 Update to reflect final Completion Guaranty.
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G. Each Public Entity has relied on the statements and agreements contained herein in agreeing to enter into the Project Documents to which it is a party.
GUARANTY
NOW, THEREFORE, intending to be legally bound, Guar antor in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, hereby covenants and agrees for the benefit of the Public Entities and their successors and assigns as follows:
1.1 Guaranty . Guarantor hereby warrants and guarantees to the Public Entities RIDA’s obligation to:
(a) Complete (as defined in the Hotel Ground Lease) the Resort Hotel and the Parking Improvements, and procure and insta ll furniture, fixtures and equipment and operating supplies and equipment that is generally necessary to open the Resort Hotel and the Parking Improvements for business (i) within the co rresponding time allowed by the Hotel Ground Lease, including any time extensions authorized the reunder; (ii) in accordance with the terms and conditions of the Hotel Ground Lease that are appli cable to the construction of the Resort Hotel and the Parking Improvements, including without limitat ion the procurement of a certificate of occupancy for the Resort Hotel and the Parking Impr ovements and delivery and acceptance by the Port District; (iii) substantially in accordance, i n all material respects, with the Plans (as defined in and revised in accordance with the Hotel Ground Lea se) with respect to the Resort Hotel and the Parking Improvement Plans (as defined in and revise d in accordance with the Hotel Ground Lease); and (iv) free of any mechanics’ liens and materialm en’s’ liens with respect to the Resort Hotel and the Parking Improvements;
(b) Complete (as defined in the PIA) the Convention Center and procure and install furniture, fixtures and equipment and o perating supplies and equipment that is generally necessary to open the Convention Center for busines s (i) within the corresponding time allowed by the PIA, including any time extensions authorized t hereunder; (ii) in accordance with the terms and conditions of the PIA that are applicable to the co nstruction of the Convention Center, including without limitation the procurement of a certificate of occupancy for the Convention Center and delivery and acceptance by the applicable Public En tities; (iii) substantially in accordance, in all material respects, with the Convention Center Plans (as defined in and revised in accordance with the PIA); and (iv) free of any mechanics’ liens and mat erialmen’s’ liens with respect to the Convention Center;
(c) Complete (as defined in the PIA) the Developer’ s Phase 1A Infrastructure Improvements and procure acceptance of the Developer’s Phase 1A Infrastructure Improvements by the applicable Public Entity (i) wi thin the corresponding time allowed by the PIA, including any time extensions authorized thereunder; (ii) in accordance with the terms and conditions of the PIA that are applicable to the construction of the Developer’s Phase 1A Infrastructure Improvements, including without limitation delivery and acceptance by the applicable Public Entities; (iii) substantially in accordance, in all material respects, with the Contract Documents (as defined in and revised in accordance with the PIA); and (iv) free of any mechanics’ liens and materialmen’s’ liens with respect to Developer’s Phase 1A Infrastructure Improvements; and
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(d) Pay any amounts owed by RIDA in connection with its “Election to Terminate” pursuant to the terms set forth in Secti ons [ ] of the Convention Center Sublease (collectively, the “ Guaranteed Obligations ”). RIDA’s satisfaction of Section 1.1(a) – (d) sh all constitute “ Completion of the Project ”.
1.2 Consideration . Guarantor acknowledges that it has made this Gua ranty to induce each Public Entity to enter into the Project Documents to which it is a party and contribute to the Project, either directly or indirectly through one of the other Public Entities, a portion of the development costs of the Convention Center and Deve loper’s Phase 1A Infrastructure Improvements as set forth in the PIA (the “ Project Public Investment ”), and each Public Entity is entering into such Project Documents and contributing directly or indirectly to the Project Public Investment in reliance upon this Guaranty, and the Public Entitie s would not have agreed to enter into such Project Documents and would not have agreed to contribute t he Project Public Investment without the Guarantor’s execution and delivery of this Guaranty.
1.3 Obligations of Guarantor Upon Default . In the event RIDA fails to perform any part of the Guaranteed Obligations when due, after any cure period applicable to RIDA and the first priority Permitted Mortgage Lender (a s defined in the Hotel Ground Lease) has expired, or the Foreclosure Purchaser that assumes the Proje ct Documents elects not to complete the Resort Hotel, Parking Improvements, Convention Center, or Phase 1A Infrastructure Improvements, Guarantor shall, upon demand of the Port District, as it relates to the Resort Hotel and the Parking Improvements, and the Authority, as it relates to t he Convention Center and Developer’s Phase 1A Infrastructure Improvements, and the City and Port District as it relates to the proposed ownership of each in Developer’s Phase 1A Infrastructure Improve ments: (i) promptly cure such failure to perform the applicable part of the Guaranteed Oblig ations by performing or causing the performance of such obligation; and (ii) pay to the Public Enti ties (A) all reasonable costs and expenses, including reasonable attorneys’ fees and expenses, they incur in enforcing the performance of the Guaranteed Obligations, and (B) any amounts owing under Sectio n 5.1.2 of the PIA. In the event RIDA defaults in the performance of its obligations under any Pro ject Document, provided Guarantor undertakes to cure such defaults, each Public Entity agrees to ac cept the performance by Guarantor of such obligations under such Project Document, and accord Guarantor all of the rights and benefits due to RIDA under such Project Document to the extent nece ssary for the Guarantor to fully satisfy its obligations hereunder.
1.4 RIDA Acknowledgment . RIDA hereby acknowledges that any payment made by any Public Entity to Guarantor of any amoun t that such Public Entity owes to RIDA shall satisfy such Public Entity’s obligation to pay such amount to RIDA.
2. CHARACTER OF GUARANTY .
2.1 Guarantee of Performance . This Guaranty is not a guarantee of collection, but rather of performance. Guarantor hereby covena nts and agrees that Guarantor is liable for the Guaranteed Obligations as primary obligor. Any Gua ranteed Obligation may be enforced by any Public Entity that is entitled to enforce such Guar anteed Obligation separately without enforcing compliance with any other Guaranteed Obligation to which such Public Entity is entitled to enforce and without waiving its right or the right of any o ther of the Public Entities to subsequently enforce or concurrently enforce any other Guaranteed Obligation hereunder.
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2.2 Other Guaranties; Joint and Several Obligations . For purposes of this Guaranty, “ Net Worth ” shall mean, with respect to any Person, such Pers on’s total assets less the amount of such Person’s total liabilities, determin ed in accordance with the Guarantor’s standard accounting principles, as presented in the form att ached hereto as Exhibit A. For purposes of this Guaranty, “ Liquidity ” shall mean, with respect to any Person, such Pers on’s (a) assets that are specified in clauses (1) through (10) of the defini tion of Permitted Investments set forth in the Indenture of Trust dated as the date hereof between the Authority and Wilmington Trust, National Association, without giving effect to the introduct ory clause of such definition and (b) without duplication of (a), publicly traded securities. The Guarantor and each of the Public Entities acknowledge and agree that a guaranty of the Guaran teed Obligations (an “ Other Guaranty ”) may be provided to the Public Entities by any other gua rantor (“ Other Guarantors ”) in accordance with the terms of this Guaranty. If at any time the Gua rantor (which may include an Other Guarantor) has a Net Worth (“ Guarantor Net Worth ”), when taken together with the Net Worth of each Other Guarantor at such time (collectively, “ Other Guarantor Net Worth ”), of less than $200,000,000 or the Guarantor has a Liquidity (“ Guarantor Liquidity ”), when taken together with the Liquidity of each Other Guarantor at such time (collectively, “ Other Guarantor Liquidity ”), of less than $40,000,000, then the Guarantor shall promptly noti fy the Public Entities thereof and shall do one or more of the following to achieve a Minimum Net Wort h and Minimum Liquidity for the Guarantor, no later than 60 days, or 10 Business Days if there is an ongoing Event of Default (under and as defined in the Hotel Ground Lease or the PIA, as ap plicable), after the date that the Guarantor notifies the Public Entities thereof, (a) (i) incre ase the Guarantor Net Worth so that the increased Guarantor Net Worth, when taken together with the Other Guarantor Net Worth at such time, shall be equal to or be greater than $200,000,000 (the “ Minimum Net Worth ”) and/or (ii) increase the Guarantor Liquidity so that the increased Guarantor Liquidity, when taken together with the Other Guarantor Liquidity at such time, shall be equal to or be greater than $40,000,000 (the “ Minimum Liquidity ”), or (b) cause a Qualified Guarantor to execute a n Other Guaranty substantially and materially in the form of this Guaranty; provided, however, that there shall be no more than three Other Guaranties outstanding at any time. Should an y Other Guaranty be provided to the Public Entities by any Other Guarantor, Guarantor and the Other Guarantors agree that the liability of the Guarantor and Other Guarantors hereunder shall be j oint and several and that each provision hereof shall apply to the Guarantor and each Other Guarant or individually and to Guarantor and all Other Guarantors collectively, and the Public Entities ma y seek to enforce this Guaranty against Guarantor or the Other Guarantors (and less than all of the G uarantor and Other Guarantors) without impairing the rights of the Public Entities against Guarantor or any of the Other Guarantors.
2.3 Continuing Guaranty . This is a continuing guaranty, and shall apply t o all of the Guaranteed Obligations and all renewals and extensions thereof, and the fact that at any time, and from time to time, such Guaranteed Obligations may be performed in full or RIDA shall no longer be party to one or more of the Project Docum ents, shall not affect the obligations of the Guarantor hereunder which arise thereafter. In the event that RIDA is no longer a party to one or more of the Project Documents, the term “RIDA” here in shall be automatically interpreted to mean the person or entity that has succeeded RIDA under such Project Document(s), or if RIDA is still a party to one or more of the Project Documents, the term “RIDA” herein shall mean RIDA and the new entity that has succeeded RIDA under the Projec t Documents, without any further action of the Public Entities or Guarantor.
2.4 Independent Obligation . The obligations of Guarantor hereunder are independent of the obligations of RIDA, and Other G uarantor(s) or any other Person (as hereinafter defined), and each of the Public Entities may enfor ce any of their rights hereunder independently of
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any other right or remedy that such Public Entity m ay at any time hold with respect to the Guaranteed Obligations, independently or collectively with the other Public Entities.
2.5 Unsecured Obligation . Except as otherwise provided in this Guaranty, t his Guaranty is not secured.
3. RELATIONSHIP OF PARTIES . Guarantor hereby represents and warrants as of the date hereof that: (a) this Guaranty is execute d at the request of the Public Entities; (b) Guaran tor has reviewed all the terms and provisions of the Pl ans (as defined in the Hotel Ground Lease) for the Resort Hotel, the Preliminary Parking Improvement Plans (as defined in the Hotel Ground Lease) for the Parking Improvements, the Convention Center Pla ns (as defined in the PIA) for the Convention Center, and the Contract Documents (as defined in t he PIA) for Developer’s Phase 1A Infrastructure Improvements, in each case as revised in accordance with the applicable Project Document (collectively, the “ Project Plans ”), and the Project Documents; (c) the Public Entit ies have made no representations to Guarantor with regard to the Pro ject Plans or the Project Documents; and (d) Guarantor has established adequate means of obt aining from RIDA and from other sources, on a continuing basis, financial and other information p ertaining to RIDA’s financial condition, the progress of construction of the Project and the sta tus of RIDA’s performance of its obligations under the Project Documents. Guarantor hereby covenants f or the term of this Guaranty that: (i) Guarantor is and shall continue to be a Person which is not a Prohibited Person (as defined below), which, in the aggregate with the Other Guarantor Net Worth, has a Guarantor Net Worth of at least the Minimum Net Worth and which, in the aggregate with the Other Guarantor Liquidity, has a Guarantor Liquidity of at least the Minimum Liquidity (“ Qualified Guarantor ”); and (ii) Guarantor has not and will not, without the prior written consent of all of the Pub lic Entities in each of their sole and absolute discretion, sell, lease, assign, encumber, hypothec ate, transfer or otherwise dispose of any of Guarantor’s assets, whether in one transaction or a series of transactions, which will result in Guarantor having a Guarantor Net Worth, together wi th the Other Guarantor Net Worth, of less than the Minimum Net Worth or Guarantor having a Guarant or Liquidity, together with the Other Guarantor Liquidity, of less than the Minimum Liqui dity. For purposes of this Guaranty, “Prohibited Person ” shall have the same meaning as the Hotel Ground Lease.
4. CERTAIN AGREEMENTS AND WAIVERS BY GUARANTOR.
4.1 Subject to Section 4.2, Guarantor agrees that n either the rights or remedies of the Public Entities nor any of Guarantor's obligati ons under the terms of this Guaranty, including without limitation, the Guaranteed Obligations, sha ll be released, diminished, impaired, reduced or affected by any one or more of the following events , actions, facts, or circumstances; Guarantor waives any rights, claims or defenses arising from any such events, actions, facts, or circumstances; and the liability of Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(a) any limitation on the liability of, or recourse against, any other person or entity (collectively, “ Person ”) under the Project Documents or arising under any Laws (as defined in the Hotel Ground Lease), except for the limitations on liability set forth in Section 5.1.2 of the PIA as it applies to delay damages only; provided, that the limitations in Section 5.1.2 shall not apply t o any amounts payable under Section 1.3(ii) above;
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(b) any claim or defense that this Guaranty was mad e without consideration or is not supported by adequate consi deration or that the obligations of Guarantor hereunder exceed or are more burdensome than those of RIDA under the Project Documents; (c) the release or taking or accepting of any other security or guaranty for, or right of recourse with respect to, any or all of the Guaranteed Obligations; (d) the operation of any statutes of limitations (u nless each of the Public Entities had written notice of a claim and failed t o pursue their remedies in the legally prescribed time periods) or other Laws regarding the limitatio n of actions, all of which are hereby waived as a defense to any action or proceeding brought by any of the Public Entities against Guarantor, to the fullest extent permitted by Laws;
(e) any homestead exemption or any other exemption under any Laws; (f) any release, surrender, abandonment, exchange, alteration, sale or other disposition, subordination, deterioration, wa ste, failure to protect or preserve, impairment, or loss of, or any failure to create or perfect any li en or security interest with respect to, or any oth er dealings with, any collateral or security at any ti me existing or purported, believed or expected to exist in connection with any or all of the Guarante ed Obligations, or any impairment of Guarantor's recourse against any Person or collateral;
(g) whether express or by operation of Laws, any pa rtial release of the liability of Guarantor hereunder (except to the ext ent expressly so released) or any complete or partial release of RIDA or any other Person liable, directly or indirectly, for the performance of any or all of the Guaranteed Obligations;
(h) the death, insolvency, bankruptcy, disability, incapacity, dissolution, liquidation, termination, receivership, reorganizat ion, merger, consolidation, change of form, structure or ownership, sale of all assets, or lack of corporate, partnership or other power of RIDA o r any other Person at any time liable for the performance of any or all of the Guaranteed Obligations; (i) either with or without notice to or consent of Guarantor, any renewal, extension, modification, supplement, subordination or rearrangement of the terms of any or all of the Guaranteed Obligations and/or the Project Documents , including material alterations of the terms of payment or performance (including changes with resp ect to the construction of the Project) or any other terms thereof, or any waiver, termination, or release of, or consent to departure from any of th e Project Documents or any other guaranty of any or a ll of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or compromise that may be granted from time to time by any of the Public Entities to RIDA or any other Person at any time liable for the performance of any or all of the Guaranteed Obligations;
(j) any neglect, lack of diligence, delay, omission , failure, or refusal of any of the Public Entities to take or prosecute (or in taking or prosecuting) any action for the collection or enforcement of any of the Guaranteed Obligations, or to exercise (or in exercising) any other right or power with respect to any security t herefor, or to take or prosecute (or in taking or prosecuting) any action in connection with the Proj ect Documents, or any failure to sell or otherwise dispose of in a commercially reasonable manner any collateral securing any or all of the Guaranteed Obligations;
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(k) any failure of any of the Public Entities to no tify Guarantor of any creation, renewal, extension, rearrangement, modifi cation, supplement, subordination, or assignment of the Guaranteed Obligations or any part thereof, or of any Project Document, or of any release of or change in any security, or of the occurrence or exi stence of any default or event of default under any Project Document (each, an “ Event of Default ”), or of any other action taken or refrained from being taken by any of the Public Entities against R IDA or any security or other recourse, or of any new agreement between any of the Public Entities an d RIDA, it being understood that none of the Public Entities shall be required to give Guarantor any notice of any kind under any circumstances with respect to or in connection with the Guarantee d Obligations, any and all rights to notice Guarantor may have otherwise had being hereby waive d by Guarantor, and Guarantor shall be responsible for obtaining for itself information re garding RIDA and any collateral, including any changes in the business or financial condition of R IDA or any collateral, and Guarantor acknowledges and agrees that the Public Entities sh all have no duty to notify Guarantor of any information which the Public Entities may have conc erning RIDA, the Project, the Project Documents, or any collateral;
(l) the existence of any claim, counterclaim, setof f or other right that Guarantor may at any time have against RIDA, any of the Public Entities, or any other Person, whether or not arising in connection with this Guaranty or any Project Document; (m) any order, ruling or plan of reorganization em anating from proceedings under Title 11 of the United States Cod e with respect to RIDA or any other Person, including any extension, reduction, composition, or other alteration of the Guaranteed Obligations, whether or not consented to by any of the Public En tities, or any action taken or omitted by any of the Public Entities in any such proceedings, includ ing any election to have any of the Public Entities ' claim allowed as being secured, partially secured o r unsecured, any extension of credit by any of the Public Entities in any such proceedings or the taki ng and holding by any of the Public Entities of any security for any such extension of credit;
(n) any other condition, event, omission, action or inaction that would in the absence of this Section 4.1(n) result in the re lease or discharge of Guarantor from the performance or observance of any obligation, covena nt or agreement contained in this Guaranty or any other agreement; or
(o) enforcement or forbearance by any of the Public Entities from enforcement of the Guaranteed Obligations on a net or gross basis.
4.2 Notwithstanding anything to the contrary in thi s Guaranty, with respect to the Public Entities obligations to Guarantor under Section 1.3 hereof under the Project Documents:
(a) To the extent any of the Public Entities fails to perform any of their respective obligations under any of the Project Documents for Guarantor and such failure to perform any of their respective obligations under any of the Proje ct Documents materially and adversely interferes with or prevents Guarantor’s performance of any of the Guaranteed Obligations (a “ Material Failure to Perform ”), then Guarantor’s time to perform with respect t o the impacted Guaranteed Obligation(s) shall be extended by one day for each day that such Material Failure to Perform delays Guarantor’s performance of such Guaranteed Obligati on(s), if: such Material Failure to Perform is notified by Guarantor to the Public Entities within sixty (60) days of such Failure to Perform. A Material Failure to Perform shall include any alleg ed failure by the Public Entities under Section 1.3
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to make payments to Guarantor of amounts owed under the Project Documents, but shall not include any alleged failure by the Public Entities to make payments to RIDA of amounts owed under the Project Documents. The parties agree upon the writt en request of either party to submit any dispute regarding whether or not a Material Failure to Perf orm exists permitting a Guarantor delay under this Section 4.2(a) to mediation administered by the Ame rican Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. Such mediation shall be held within San Diego County within thirty (30) days after delivery of written notice requesting same. Each party shall bear its own costs in such mediation and shall split 50/50 the costs of the mediator. (b) If a court of competent jurisdiction determines that a breach under the applicable Project Document(s) was a Material Failu re to Perform and that such Material Failure to Perform was not the result of the breach of a Tenan t Party or the Guarantor under the Project Documents or any material and adverse interference by the Hotel Operator (a “Material Failure to Perform Determination” ), and the underlying Material Failure to Perform c ontinues for at least ninety (90) days from the date of the applicable Ma terial Failure to Perform Determination (the “Cure Period ”), then, from and after the date that the applicab le Cure Period expires unless (i) any Public Entity files an action to appeal the Materia l Failure to Perform Determination no later than forty five (45) days from the date of the applicabl e Material Failure to Perform Determination and diligently prosecutes such action, in which case, from and after the date that is the later of (x) the date that the applicable Cure Period expires and (y) thi rty (30) days after the date that the applicable appellate court of competent jurisdiction awards su ch Public Entity(ies) relief); or (ii) the Material Failure to Perform is reasonably capable of cure an d the Public Entities have either (x) cured the Material Failure to Perform, or (y) if the Material Failure to Perform is not capable of cure within t he Cure Period, have commenced taking appropriate step s to cure such failure and are diligently prosecuting same to completion, then the liability of the Guarantor in respect of the Guaranteed Obligation(s) with respect to which such Material F ailure to Perform Determination was made shall automatically terminate, the Guarantor shall be aut omatically released from its obligations under this Guaranty with respect to such Guaranteed Obligation(s), except for any obligations that have accrued and have not been discharged prior to such date, and this Guaranty shall automatically terminate. (c) If RIDA terminates the Hotel Ground Lease due t o a Condemnation (as defined in the Hotel Ground Lease) or any damage to or destruction of the Resort Hotel or any part thereof, as permitted in the Hotel Ground Lease and in accordance with the terms thereof (the “ Hotel Ground Lease Termination ”), then, from and after the date that the Hotel Gr ound Lease Termination occurs (the “ Hotel Ground Lease Termination Date ”), the liability of the Guarantor in respect of the Guaranteed Obligations with respect to the Resort Hotel shall automatically terminate and the Guarantor shall be automatically released f rom its obligations under this Guaranty with respect to the Resort Hotel, except for any obligat ions that have accrued and have not been discharged prior to the Hotel Ground Lease Terminat ion Date. If RIDA terminates the Convention Center Sublease due to a Condemnation (as defined i n the Convention Center Sublease) or any damage to or destruction of the Convention Center o r any part thereof, in each case, as permitted in the Convention Center Sublease and in accordance wi th the terms thereof (the “ Convention Center Sublease Termination ”), then, from and after the date that the Conventi on Center Sublease Termination occurs (the “ Convention Center Sublease Termination Date ”), the liability of the Guarantor in respect of the Guaranteed Obligations with respect to the Convention Center shall automatically terminate and the Guarantor shall be automatically released from its obligations under this Guaranty with respect to the Convention Center , except for any obligations that have accrued and have not been discharged prior to the Conventio n Center Sublease Termination Date. If the
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Hotel Ground Lease Termination occurs, and the Conv ention Center Sublease Termination occurs, and Guarantor does not have any amounts owing to th e Public Entities under this Guaranty (“ Outstanding Payments ”), then, from and after the date that is the later of (x) the Hotel Ground Lease Termination Date, (y) the Convention Center S ublease Termination Date and (z) the payment to the Public Entities of any Outstanding Payments, the liability of the Guarantor in respect of the Guaranteed Obligations shall automatically terminat e, the Guarantor shall be automatically released from its obligations under this Guaranty, except fo r any obligations that have accrued and have not been discharged prior to the Hotel Ground Lease Ter mination Date or the Convention Center Sublease Termination Date, whichever is later, and this Guaranty shall automatically terminate.
4.3 In the event any payment by RIDA or any other P erson to any of the Public Entities that is made to satisfy any of the Guarant eed Obligations is held to constitute a preference, fraudulent transfer or other voidable payment under any bankruptcy, insolvency or similar Law, or if for any other reason any of the Public Entities are required to refund such payment or pay the amount thereof to any other party, such payment by RIDA or any other party to the Public Entities shall not constitute a release of Guarantor from any liabilit y hereunder, and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding a ny prior release, surrender or discharge by the Public Entities of this Guaranty or of Guarantor), as the case may be, with respect to, and this Guaranty shall apply to, any and all amounts that w ere so paid by RIDA or any other Person to satisfy any of the Guaranteed Obligations and so refunded by the Public Entities or paid by the Public Entities to another Person (which amounts shall con stitute part of the Guaranteed Obligations), and any interest paid by the Public Entities and any at torneys’ fees, costs and expenses paid or incurred by the Public Entities in connection with any such event.
4.4 It is the intent of Guarantor and the Public En tities that the obligations and liabilities of Guarantor hereunder are absolute, ir revocable and unconditional under any and all circumstances and that until the Guaranteed Obligations are fully and finally paid and performed, and not subject to refund or disgorgement, but except a s set forth in Section 4.9, the obligations and liabilities of Guarantor hereunder shall not be dis charged or released in whole or in part, by any act or occurrence that might, but for the provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor.
4.5 [Reserved.]
4.6 Guarantor waives notice of acceptance of this G uaranty, any rights, defenses and benefits that may be derived from Sections 2787 to 2855, inclusive, of the California Civil Code or comparable provisions of the Laws of any other j urisdiction, and all other suretyship defenses Guarantor would otherwise have under the Laws of California or any other jurisdiction.
4.7 No provision or waiver in this Guaranty shall b e construed as limiting the generality of any other provision or waiver contain ed in this Guaranty. All of the waivers contained herein are irrevocable and unconditional and are intentionally and freely made by Guarantor.
4.8 This Guaranty may be replaced by a guaranty tha t is substantially and materially in the same form as this Guaranty, cover s all of the same terms and Guaranteed Obligations as this Guaranty whether arising prior to, on or after the date it becomes effective, does not affect the public financing of the Convention C enter and Developer’s Phase 1A Infrastructure Improvements, and is executed by a Person (such Per son, a “ Replacement Guarantor ”) that (a) holds, directly or indirectly, not less than ten percent (10%) of the membership interests in RIDA,
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(b) when taken together with (i) each Other Guarant or under an Other Guaranty that is not being replaced and (ii) each new Other Guarantor under a new Other Guaranty, has a Guarantor Net Worth of at least the Minimum Net Worth, (c) when taken t ogether with (i) each Other Guarantor under an Other Guaranty that is not being replaced and (ii) each new Other Guarantor under a new Other Guaranty, has a Guarantor Liquidity of at least the Minimum Liquidity, (d) is not a Prohibited Person, (e) assumes any liabilities that exist or m ay exist under the Guaranty (including without limitation those arising under Sections 1.3 and 6, unless such liabilities are discharged prior to the effectiveness of the Replacement Guaranty), and (f) is acceptable to each of the Public Entities in their reasonable discretion (collectively, the “ Replacement Guaranty ”). If (x) all of the conditions and requirements set forth in this Section 4.8, inc luding without limitation, clauses (a) through (f) above are satisfied to the reasonable satisfaction of each of the Public Entities, and (y) the propose d replacement Guarantor is reputable (which shall mea n the absence of reputations for dishonesty, criminal conduct or association with criminal eleme nts – “reputable ” shall not mean “ prestigious ”, nor shall the determination of whether one is reput able involve considerations of personal taste or preference), and has no reputation for, either disc riminatory employment practices which violate any Laws or non-compliance with applicable Environmenta l Laws (as defined in the Hotel Ground Lease), then each of the Public Entities shall admi nistratively grant consent to any such proposed Replacement Guarantor. If Guarantor requests in wr iting that the Public Entities consent to a Replacement Guarantor, and after receipt of all inf ormation set forth in this Section 4.8, all of the Public Entities do not within forty-five (45) days after such request provide a response consenting to the request, then such consent will be deemed rejec ted and upon request, the Public Entities shall provide a reasonably detailed explanation of the re ason for rejecting such request. Guarantor’s request to the Public Entities to consent to a Replacement Guaranty shall include financial statements with respect to such prospective Replacement Guaran tor and a certification by such prospective Replacement Guarantor (with any supporting document ation reasonably requested by the Public Entities) that: (1) such proposed Replacement Guara ntor holds, directly or indirectly, not less than ten percent (10%) of the membership interests in RI DA, (2) such proposed Replacement Guarantor, when taken together with (i) each Other Guarantor u nder an Other Guaranty, if any, that is not being replaced and (ii) each new Other Guarantor, if any, under a new Other Guaranty, has a Guarantor Net Worth of at least the Minimum Net Worth, (3) such p roposed Replacement Guarantor, when taken together with (i) each Other Guarantor under an Other Guaranty, if any, that is not being replaced and (ii) each new Other Guarantor, if any, under a new Other Guaranty, has a Guarantor Liquidity of at least the Minimum Liquidity and (4) such proposed R eplacement Guarantor is not a Prohibited Person.
4.9 Provided that there are no Outstanding Payments , the liability of Guarantor in respect of the Guaranteed Obligations shall automat ically terminate and Guarantor shall be automatically released from its obligations under t his Guaranty and this Guaranty shall automatically terminate upon the earliest of the following dates: (i) the date that is six (6) months after the Completion of the Project (as defined in Section 1. 1), (ii) the effective date of a Replacement Guaranty pursuant to and in accordance with Section 4.8 hereof where the Replacement Guarantor has replaced the Guarantor and assumed all of Guaranteed Obligations, and (iii) the date on which all of the following has occurred: (a) Hotel Ground Lea se Termination Date and (b) the Convention Center Sublease Termination Date. Provided that th e necessary conditions under this Section 4.9 have been satisfied, each Public Entity shall execu te an acknowledgement that this Guaranty has terminated promptly after the receipt by the Public Entities of a written request therefore from Guarantor.
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5. REPRESENTATIONS AND WARRANTIES . Guarantor represents and warrants to the Public Entities that:
5.1 Authority; Execution, Delivery and Performance of G uaranty . Guarantor has all requisite power and authority to execute, d eliver and perform all of its obligations under thi s Guaranty. The execution, delivery and performance by Guarantor of all of the obligations under this Guaranty has been duly authorized by all necessary action and do not and will not:
(a) result in or require the creation or imposition of any lien, right of others, or other encumbrance of any nature (other t han under this Guaranty) upon or with respect to any property now owned or leased or hereafter acquired by the Guarantor; or (b) violate any provision of any Laws; or
(c) result in a breach of, constitute a default und er, or cause or permit the acceleration of any obligation owed under any agreement or instrument to which Guarantor is a party or by which Guarantor or any of its property is bound or affected; or (d) require any consent or approval not heretofore obtained; or (e) violate any provision of, or require any consen t under, any operating agreement, certificate of formation, partnership ag reement, articles of incorporation, by-laws or any other governing document or charter applicable to Guarantor.
5.3 Enforceability . This Guaranty, when executed and delivered, shall constitute the valid and binding obligation of Guarantor, enfo rceable in accordance with its terms, subject to bankruptcy laws and other Laws and equitable princi ples affecting creditors rights generally if applicable to Guarantor.
5.4 Financial Information 13 . The statement of financial condition made available to the Public Entities for review with re spect to the Guarantor in connection with the Project Documents and this Guaranty, and to demonst rate that Guarantor is a Qualified Guarantor to the Public Entities, is a true, complete, and corre ct copy of such statement, such statement has been prepared in accordance with the Guarantor’s standard accounting principles, and fairly and accurately represents the financial condition of the Guarantor in accordance with such accounting principles , as of the date it was delivered to the Public Entities.
5.5 No Default . To the best of Guarantor’s knowledge, there is n o condition, event, act or omission that exists which, with the giving of notice or the passage of time, or both, would be an Event of Default under the Project Documents.
6. REMEDIES . If Guarantor shall fail to perform or satisfacto rily commence performance of its obligations hereunder within fou rteen (14) days of a demand by any of the Public Entities for performance thereof, the Public Entiti es shall have the following remedies, in addition t o and cumulative of any other remedies it may have he reunder, under the Project Documents or at law or in equity:
13 NTD: Guarantor to provide updated financial infor mation prior to close of escrow.
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(a) [reserved;]
(b) at its option and without any obligation to do so, complete all or any portion of the Project either before or after the terminati on of the Project Documents or before or after exercising any other remedy against RIDA or Guarant or, with such changes or modifications in the Project Plans as are necessary for completion of th e Project. The amount of any and all expenditures made by the Public Entities for the foregoing purpo ses shall be immediately due and payable to the Public Entities by Guarantor; and
(c) from time to time and without first requiring p erformance on the part of RIDA and without being required to exhaust any or a ll security held by the Public Entities, to look to and require performance by Guarantor of any obligat ion on the part of Guarantor to be performed pursuant to the terms of this Guaranty by action at law or in equity, or both.
7. NOTICE OF CERTAIN EVENTS . Guarantor shall give written notice to each of the Public Entities promptly (and in any event with in five (5) days) after Guarantor learns of any of the following:
(a) the institution of any litigation or legal or a dministrative proceeding or investigation which has a reasonable probability of being adjudicated adversely to RIDA, Guarantor, the Project or any of RIDA’s or Guarantor’s propert ies and which would reasonably be expected, if so adjudicated, to materially and adversely affect RIDA, Guarantor or the Project, or cause Guarantor to no longer be a Qualified Guarantor; and
(b) the occurrence of any Event of Default or event or condition which, with the giving of notice or the passage of time, or both, w ould be an Event of Default under the Project Documents.
8. REASONABLENESS AND EFFECT OF WAIVERS . Guarantor warrants and agrees that each of the waivers set forth in this G uaranty is made with full knowledge of its significance and consequences and that, under the c ircumstances, the waivers are reasonable and not contrary to public policy or Laws. If any of such waivers are determined to be contrary to any applicable Laws or public policy, such waivers shal l be effective only to the maximum extent permitted by Laws.
9. MISCELLANEOUS PROVISIONS .
9.1 Costs of Enforcement . The prevailing party in any legal proceedings concerning the enforcement of this Guaranty shall b e entitled to recovery of its costs and attorneys’ fees from the party that did not prevail.
9.2 Binding Effect . This Guaranty and all the terms, provisions and conditions hereof shall be binding upon the Guarantor and its heirs, legal representatives, successors and assigns, and this Guaranty shall inure to the benef it of the Public Entities and their successors and assigns and all subsequent holders of the Guaranteed Obligations.
9.3 Financial Information . Guarantor shall deliver to the Public Entities, as soon as available, but in no event later than one h undred twenty (120) days after the end of Guarantor’s fiscal year-end, a copy of Guarantor’s statement of financial condition, in the form
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attached hereto as Exhibit A, as of the end of such calendar year, together with a certification that such statement (1) is complete and correct to the b est of Guarantor’s knowledge, (2) presents the financial condition of the entity, (3) presents all liabilities that are required to be reflected, and those liabilities are presented at historical cost, and ( 4) is prepared in accordance with the Guarantor’s standard accounting principles. Additionally, Guar antor shall make available for inspection (but not copying) by any of the Public Entities such other i nformation regarding Guarantor’s assets, liabilities and financial condition generally as (a) the Public Entities may from time to time reasonably request so that the Public Entities can verify the veracity of the certifications set forth in the preceding sentence and (b) exists (unless generation of such financial information will not result in any material additional expense to the Guarantor, in which case the Guarantor will request that such financial information be generated and provided to the Public Entities), at the Project, RIDA’s main business office, any of Hotel Operator’s (as defined in the Hotel Ground Lease) business offices in San Diego County, California or at such other location in San Diego County, California as is reasonably acceptable to the Public Entities, upon such Public Entity’s written notice, which shall specify in reasonable detail the financial information the Pub lic Entities are requesting be made available for inspection and the date when such inspection will t ake place, which date shall not be less than ten business days after the date of such notice. Notwi thstanding the foregoing, if any of the Public Entities are required to include any of the financi al information shared by Guarantor in connection with its respective board or council meetings, Guar antor agrees to provide the Public Entities with a redacted version of such financial information at no cost to the Public Entities and a certification that, except for such redactions, such redacted version o f financial information is a true, correct, and complete copy of the unredacted version of the financial information reviewed by the Public Entities.
9.4 Governing Law . This Guaranty shall be governed by, and construe d in accordance with, the laws of the State of California.
9.5 Notices . All notices demands, approvals and other communi cations provided for herein shall be in writing and shall be deliver ed by overnight air courier, personal delivery or registered or certified U.S. mail with return recei pt requested, postage prepaid, to the appropriate party at its address as follows:
If to Port District:
Executive Director
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488)
With copy to:
Director, Real Estate
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488)
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With a copy to:
Port Attorney
San Diego Unified Port District
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488)
If to City:
City of Chula Vista
Attention: City Manager
276 Fourth Avenue
Chula Vista, California 91910
With a copy to:
City Attorney
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
If to the Authority:
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: Executive Director
With copies to:
City of Chula Vista
Attention: City Manager
276 Fourth Avenue
Chula Vista, California 91910;
City Attorney
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910;
Executive Director
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488);
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Director, Real Estate
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488);
and
Port Attorney
San Diego Unified Port District
3165 Pacific Highway
San Diego, California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego, California 92112-0488)
If to Guarantor:
RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Ira Mitzner
With copy to:
RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Luke Charlton
and
Latham & Watkins
12670 High Bluff Drive
San Diego, CA 92130
Attention: Steven Levine
Addresses for notice may be changed from time to ti me by written notice to all other parties. Any communication given by mail will be effective upon the earlier of (a) three (3) business days following deposit in a post office or other officia l depository under the care and custody of the United States Postal Service or (b) actual receipt, as indicated by the return receipt; if given by telephonic facsimile, when sent; and if given by pe rsonal delivery or by overnight air courier, when delivered to the appropriate address set forth above.
9.6 No Waiver . Any failure by the Public Entities to insist, or any election by the Public Entities not to insist, upon strict perf ormance by Guarantor of any of the terms, provision s or conditions of this Guaranty shall not be deemed to be a waiver of the same or of any other terms, provisions or conditions thereof.
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9.7 Severability . If any provision of this Guaranty or the applica tion thereof to any Person or circumstance shall be invalid or unen forceable, then, neither the remainder of this instrument nor the application of such provision to other persons or circumstances shall be affected thereby, but rather shall be enforced to the greatest extent permitted by Laws.
9.8 Entire Agreement and Modification . This Guaranty contains the entire agreement between the Guarantor and the Public Enti ties relating to the subject matter hereof, except for the Project Plans and the Project Documents. T his Guaranty may not be amended, revised, waived, discharged, released or terminated orally, but only by a written amendment, revision, waiver, discharge, release or termination. Any alleged ame ndment, revision, waiver, discharge, release or termination which is not so documented shall not be effective as to any party to this Guaranty.
9.9 Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, an d shall execute and deliver all such other agreements, certificates, instruments and documents , as the other party may reasonably request in order to carry out the intent and accomplish the pu rposes of this Guaranty and the consummation of the transactions contemplated hereby.
[Signature Page Follows. ]
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IN WITNESS WHEREOF, Guarantor has executed this Gua ranty as of the date first written above.
GUARANTOR
Print Name:
Print Title:
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Accepted and agreed by:
SAN DIEGO UNIFIED PORT DISTRICT APPROVED AS TO FORM AND LEGALITY:
Print Name: Thomas A. Russell, General Counsel
Print Title:
CHULA VISTA BAYFRONT FACILITIES APPROVED AS TO FORM AND LEGALITY:
FINANCING AUTHORITY
Print Name: Thomas A. Russell, Co-Counsel, Genera l Counsel Print Title: San Diego Unified Port District
Glen R. Googins, Co-Counsel, City Attorney
City of Chula Vista
CITY OF CHULA VISTA
Print Name:
Print Title:
RIDA CHULA VISTA, LLC
Print Name:
Print Title:
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EXHIBIT A
FORM OF STATEMENT OF FINANCIAL CONDITION
(to be attached prior to execution.)
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Exhibit I
Listing of Real Estate Agreements 14
[This is copied from the 4 th A&R RSA sent by Elizabeth for the May 10 agenda package.
Port District to confirm this is final and correct.]
1. Amended, Restated and Combined Lease between the San Diego Unified Port District (the “District”) and Marine Group Boat Wor ks, LLC for property at the North Side of G Street at the terminus of both Quay Avenues and San dpiper Way in Chula Vista, which lease is on file in the Office of the District Clerk as Document No. 54509, as amended, restated, and modified as of the Closing Date. Lease expires on January 31, 2030, with an eleven year option to extend to January 31, 2041.
2. Lease between the District and Chula Vista Marin a, LP, dba Chula Vista Marina, for property located at 550 Marina Parkway in Chula Vis ta which lease is on file in the Office of the District Clerk as Document No. 14244, as amended, r estated, and modified as of the Closing Date.
Lease expires on November 30, 2030.
3. Lease between the District and SHM South Bay, LL C, for property located at 640 Marina Parkway in Chula Vista which lease is on fil e in the Office of the District Clerk as Document [No. ______], as amended, restated, and modified as of the Closing Date and expiring on June 30, 2032.
4. Lease between the District and Sun Chula Vista B ayfront RV LLC for property located at 825 E Street in Chula Vista (Costa Vista RV Park) which lease is on file in the Office of the District Clerk as Document No. 70407 (“RV Park Lease”), as amended, restated, and modified as of the Closing Date and expiring on September 16, 2085.
5. Tideland Use and Occupancy Permit between the Di strict and Sun Chula Vista Existing Park RV LLC for property located at 460 Sa ndpiper Way in Chula Vista which tideland use and occupancy permit is on file in the Office of the District Clerk as Document No. 69412 (“RV Park TUOP”), as amended, restated, and modified. TUOP terminated on October 31, 2021.
14 Port to confirm final list.
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Exhibit J
[Reserved]
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Exhibit K-1
Form of Developer’s Phase 1A Payment Request 15
[_______], 202[_]
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: [Executive Director]
Re: Developer’s Phase 1A Payment Request No. [___] under Project Implementation Agreement (the “ Agreement ”), dated as of [ ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Di ego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by th e City and the Port District pursuant to Joint Exercise of Powers Act (defined i n the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“ Developer ”).
Payment Request of $[_________]
Requested Payment Date: [_________], 20[__]
16 Ladies and Gentlemen:
The Developer submits this Developer’s Phase 1A Pay ment Request No. [___] (the “Payment Request ”) pursuant to Section 9.1.2 of the Agreement with respect to the Developer’s Phase 1A Infrastructure Improvements. Capitalized terms used herein without definition shall have the meanings assigned in the Agreement.
The Developer hereby requests that the Authority, o n the requested payment date set forth above (the “Requested Payment Date”), direct the Tr ustee to transfer $ [_____] (the “Requested Payment Amount”) from the [Account] to the [Account ]. The Requested Payment Amount is calculated as set forth on Schedule 1.
In connection with the requested payment, the Devel oper hereby represents, warrants and certifies as of the date hereof as follows:
(a) Schedule 1 accurately reflects for each line it em in the Developer’s Phase 1A Infrastructure Improvements Budget, (i) the current budget amount, (ii) amounts previously funded
15 Revisions to this Exhibit proposed by Latham on Ap ril 5, 2022 are under review by Port and City. 16 To be not less than 10 business days after the dat e of the Developer’s Phase 1A Payment Request.
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by the Authority, (iii) the Requested Payment Amoun t, (iv) hard costs incurred, including retainage and (v) retainage withheld.
(b) Schedule 2 accurately lists, for the Requested Payment Amount, each Person to whom any of the Developer’s Phase 1A Infrastructure Improvements Costs have been or will be paid and, for each line item in such schedule and for ea ch such Person, the following: (i) the name of the payee paid or to be paid, (ii) the invoice date, in voice number and amount that Developer has paid to such Person or intends to pay to such Person during the next 30 days, (iii) a description of the purpose of such payment, specifying the line item relating to each such payment. (c) Schedule 3 accurately lists, since inception of Developer’s Phase 1A Infrastructure Improvements work, each Person to whom any of the D eveloper’s Phase 1A Infrastructure Improvements Costs have been or will be paid and, f or each line item in such schedule and for each such Person, the following: (i) the name of the pay ee paid or to be paid, (ii) the invoice date, invoi ce number and amount that Developer has paid to such P erson or intends to pay to such Person during the next 30 days, (iii) a description of the purpos e of such payment, specifying the line item relatin g to each such payment, (iv) amounts eligible for rei mbursement under the Sewer Agreement, (v) amounts eligible for credit under the BFDIF Pro gram, (vi) amounts to be funded from other sources and (vii) the amounts that have been expend ed and applied to pay Developer’s Phase 1A Infrastructure Improvements Costs in accordance wit h Contract Documents and the Agreement (or, with respect to the Early Work Costs, in accordance with the Early Work Agreement), except for $[_______] and amounts paid in respect of the Stipu lated Developer’s Phase 1A Infrastructure Improvements Overhead Amount. The amounts listed i n Schedule 3 do not include any Non-Project Costs or Excluded Costs. The information set forth in Schedule 3 as noted above is true, correct and complete in all material respects.
(d) The Developer has delivered or caused to be del ivered to the Authority:
(i) copies of true and complete invoices that have been tendered for all Developer’s Phase 1A Infrastructure Improvements Costs pursuant to any Payment Request, and (ii) statutory lien/stop payment notice conditional waivers and releases associated with all work performed, or supplies provided, for the Developer’s Phase 1A Infrastructure Improvements and for which payment is requested in the appropriate statutory form, other than Excluded Mechanics Lien Waivers, and
(iii) copies of all change orders executed prior to the date of this Payment Request.
(e) To Developer’s actual knowledge, after inquirin g with Developer’s architect or engineer who has a representative at the Project Si te, the construction performed for the Developer’s Phase 1A Infrastructure Improvements as of the date hereof has been performed substantially in accordance in all material respects with the Approv ed Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvement s, or to the extent any such construction has not been performed substantially in accordance in a ll material respects with the Approved Drawings and Specifications, the amount to be disbursed unde r this payment request has been reduced by $[_____] pursuant to the Architect’s Certificate (as defined below) to reflect the reasonably estimated cost of causing such construction to be performed s ubstantially in accordance in all material respects
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with the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements.
(f) To the actual knowledge of Developer (after enq uiring with Developer’s General Contractor), except as described in (e) above, no w ork or component of work has been rejected or disapproved by an inspector or other authorized rep resentative of the City’s building or public works departments or a stormwater inspector representing the Port District. (g) The amount of the Payment Request reflects a re duction of $[_____], being the amount for which the Developer does not intend to pay any General Contractor or any Subcontractor. (h) The Developer’s Phase 1A Infrastructure Improve ments Budget presently in effect is dated [__________] [and has not been amended] [and includes all amendments through Developer’s Phase 1A Infrastructure Improvements Budget Amendme nt No. [___]]. Said budget (i) is based on reasonable assumptions as to all legal and factual matters material to the estimates set forth therein , (ii) has been prepared in good faith and with due c are, (iii) accurately sets forth, for each line ite m in the Developer’s Phase 1A Infrastructure Improvement s Budget, the total costs anticipated to be incurred to achieve Completion, and (iv) fairly rep resents in all material respects the Developer’s reasonable expectation as to the matters covered thereby as of its date. (i) As of the date hereof, no Event of Default exis ts. (j) As of the date hereof, Developer has complied w ith all applicable provisions of Section 7.2.3.1 of the Agreement.
Attached to this Payment Request as Exhibit 1 is a certificate from the Architect (the “Architect’s Certificate”).
[SIGNATURE PAGE FOLLOWS]
K-1-4
4825-3218-1203v34/024036-0079
IN WITNESS WHEREOF, the undersigned has executed th is Developer’s Phase 1A Payment Request as of this [___] day of [_________], 202[_].
DEVELOPER
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
By: *
K-1-5
4825-3218-1203v34/024036-0079
Schedule 1 to Developer’s Phase 1A Payment Request
[See attached]
K-1-6
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Schedule 2 to Developer’s Phase 1A Payment Request
[See attached]
K-1-7
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Schedule 3 to Developer’s Phase 1A Payment Request
[See attached]
K-1-8
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EXHIBIT 1
Certificate of Architect
[_______], 20[__]
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: [Executive Director]
RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Ira Mitzner; Luke Charlton
Re: Developer’s Phase 1A Payment Request No. [___] under Project Implementation Agreement (the “ Agreement ”), dated as of [ ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Di ego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by th e City and the Port District pursuant to Joint Exercise of Powers Act (defined i n the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“ Developer ”).
Payment Request of $[_________]
Requested Payment Date: [_________], 20[__]
Ladies and Gentlemen:
Capitalized terms used herein without definition sh all have the meanings assigned to them in the Agreement.
[ ] (the “ Architect”) hereby certifies as follows:
(a) The Architect has reviewed the above referenced Developer’s Phase 1A Payment Request No. [___] (the “ Payment Request ”) and the Agreement, to the extent necessary to understand the defined terms contained herein and i n the Payment Request that are incorporated by reference from the Agreement and to provide the certification contained herein. (b) The Architect hereby certifies and confirms tha t, pursuant to the observation of the work as required by the [describe Architect Agreeme nt] and in accordance with applicable professional standards, the construction performed for the Developer’s Phase 1A Infrastructure Improvements as of the date hereof has been perform ed substantially in accordance in all material respects with the Approved Drawings and Specificati ons with respect to the Developer’s Phase 1A Infrastructure Improvements, or to the extent any s uch construction has not been performed
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substantially in accordance in all material respect s with the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastruc ture Improvements, the amount to be disbursed under this payment request has been reduced by $[__ ___] to reflect the reasonably estimated cost of causing such construction to be performed substanti ally in accordance in all material respects with Approved Drawings and Specifications with respect t o the Developer’s Phase 1A Infrastructure Improvements. The foregoing certification is subjec t to an evaluation of the Developer’s Phase 1A Infrastructure Improvements for conformance with th e Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements upon Completion, to results of subsequent tests and inspections, and to correction of minor deviations from the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements prior to Completion. This certificate is not a representatio n that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the work, (2) reviewed construction means, methods, techniques, sequences or procedures , (3) reviewed copies of requisitions received from Subcontractors and material suppliers, or (4) made examination to ascertain how or for what purpose the Developer has used money previously pai d on account of the Developer’s Phase 1A Contract Sum.
(c) Except as described in (b) above, no work or co mponent of work has been rejected or disapproved by an inspector or other authorized rep resentative of the City’s building or public works departments or a stormwater inspector representing the Port District. (d) Any representations or certifications by the Ar chitect herein shall mean an expression of the Architect’s professional opinion to the best of its information, knowledge and belief, and does not constitute a warranty or guarantee by the Architect.
The Authority is entitled to rely on the foregoing representations, warranties and certifications in authorizing and making the disbursement requested in the Payment Request.
[SIGNATURE PAGE FOLLOWS]
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4825-3218-1203v34/024036-0079
IN WITNESS WHEREOF, the undersigned has executed th is Certificate of Architect as of this [___] day of [_________], 201[__].
[ ]
By: _____________________________________
Name:
Title:
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Exhibit K-2
Form of Convention Center Payment Request 17
[_______], 202[_]
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: [Executive Director]
Re: Convention Center Payment Request No. [___] und er Project Implementation Agreement (the “ Agreement ”), dated as of [ ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Di ego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by th e City and the Port District pursuant to Joint Exercise of Powers Act (defined i n the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“ Developer ”).
Payment Request of $[_________]
Requested Payment Date: [_________], 20[__]
18 Ladies and Gentlemen:
The Developer submits this Convention Center Paymen t Request (the “ Payment Request ”) pursuant to Section 9.2.2 of the Agreement with res pect to the Convention Center. Capitalized terms used herein without definition shall have the meanings assigned in the Agreement.
The Developer hereby requests that the Authority, o n the requested payment date set forth above (the “Requested Payment Date”), direct the Tr ustee to transfer $ [_____] (the “Requested Payment Amount”) from the [Account] to the [Account ]. The Requested Payment Amount is calculated as set forth on Schedule 1.
In connection with the requested payment, the Devel oper hereby represents, warrants and certifies as of the date hereof as follows:
(a) Schedule 1 accurately reflects for each line it em in the Convention Center Budget, (i) the current budget amount, (ii) amounts previously funded by the Authority, (iii) the Requested Payment Amount, (iv) hard costs incurred, including retainage and (v) retainage withheld.
17 Revisions to this Exhibit proposed by Latham on Ap ril 5, 2022 are under review by Port and City. 18 NTD: To be not less than 10 business days after th e date of the Convention Center Payment Request.
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(b) Schedule 2 accurately lists, for the Requested Payment Amount, each Person to whom any of the Convention Center Costs have been o r will be paid and, for each line item in such schedule and for each such Person, the following: (i) the name of the payee paid or to be paid, (ii) the invoice date, invoice number and amount that Develo per has paid to such Person or intends to pay to such Person during the next 30 days, (iii) a descri ption of the purpose of such payment, specifying the line item relating to each such payment.
(c) Schedule 3 accurately lists, since inception of the Convention Center work, each Person to whom any of the Convention Center Costs have been or will be paid and, for each line item in such schedule and for each such Person, the foll owing: (i) the name of the payee paid or to be paid, and, (ii) amount that Developer has paid to s uch Person, (iii) the invoice date, invoice number and amount that Developer intends to pay to such Pe rson during the next 30 days, (iv) a description of the purpose of such payment, specifying the line item relating to each such payment, and (v) the amounts that have been expended and have been appli ed to pay Convention Center Costs in accordance with Contract Documents and the Agreemen t, except for $[_____] and amounts paid in respect of the Development Fees and Stipulated Convention Center Overhead Amount. The amounts listed on Schedule 3 do not include any Non-Project Costs. The information set forth in Schedule 3 as noted above is true, correct and complete in all material respects. (d) The Developer has delivered or caused to be del ivered to the Authority:
(i) copies of true and complete invoices that have been tendered for all Convention Center Costs pursuant to any Payment Request, and (ii) statutory lien/stop payment notice conditional waivers and releases associated with all work performed, or supplies provided, for the Convention Center and for which payment is requested in the appropriate statutory form, other than Excluded Mechanics Lien Waivers, and (iii) copies of all change orders executed prior to the date of the Payment Request. (e) To Developer’s actual knowledge, after inquirin g with Developer’s architect or engineer who has a representative at the Project Si te, the construction performed for the Convention Center as of the date hereof has been performed su bstantially in accordance in all material respects with the Convention Center Plans, or to the extent any such construction has not been performed substantially in accordance in all material respect s with the Approved Drawings and Specifications, the amount to be disbursed under this payment reque st has been reduced by $[_____] pursuant to the Architect’s Certificate (as defined below) to refle ct the reasonably estimated cost of causing such construction to be performed substantially in accor dance in all material respects with the Convention Center Plans.
(f) [Reserved].
(g) The amount of the Payment Request reflects a re duction of $[_____], being the amount for which the Developer does not intend to p ay General Contractor or any Subcontractor (except to the extent the applicable work has been performed by others the Developer intends to pay). (h) The Convention Center Budget presently in effec t is dated [__________] [and has not been amended] [and includes all amendments through Convention Center Budget Amendment No. [___]]. Said budget (i) is based on reasonable assumptions as to all legal and factual matters material
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to the estimates set forth therein, (ii) has been p repared in good faith and with due care, (iii) accurately sets forth, for each line item in the Convention Center Budget, the total costs anticipated to be incurred to achieve Completion, and (iv) fairly represents in all material respects the Developer’s reasonable expectation as to the matters covered thereby as of its date. (i) As of the date hereof, no Event of Default exis ts. (j) As of the date hereof, Developer has complied w ith all applicable provisions of Section 7.2.3.1 of the Agreement.
Attached to this Payment Request as Exhibit 1 is a certificate from the Architect (the “Architect’s Certificate”).
[SIGNATURE PAGE FOLLOWS]
K-2-4
4825-3218-1203v34/024036-0079
IN WITNESS WHEREOF, the undersigned has executed th is Convention Center Payment Request as of this [___] day of [_________], 202[_].
DEVELOPER
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
By: *
K-2-5
4825-3218-1203v34/024036-0079
Schedule 1 to Convention Center Payment Request
[See attached]
K-2-6
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Schedule 2 to Convention Center Payment Request
[See attached]
K-2-7
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Schedule 3 to Convention Center Payment Request
[See attached]
K-2-8
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EXHIBIT 1
Certificate of Architect
[_______], 20[__]
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: [Executive Director]
RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Ira Mitzner; Luke Charlton
Re: Convention Center Payment Request No. [___] und er Project Implementation Agreement (the “ Agreement ”), dated as of [ ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Di ego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by th e City and the Port District pursuant to Joint Exercise of Powers Act (defined i n the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“ Developer ”).
Payment Request of $[_________]
Requested Payment Date: [_________], 20[__]
Ladies and Gentlemen:
Capitalized terms used herein without definition sh all have the meanings assigned to them in the Agreement.
[ ] (the “ Architect”) hereby certifies as follows:
(a) The Architect has reviewed the above referenced Convention Center Payment Request No. [___] (the “ Payment Request ”) and the Agreement, to the extent necessary to understand the defined terms contained herein and i n the Payment Request that are incorporated by reference from the Agreement and to provide the certification contained herein. (b) The Architect hereby certifies and confirms tha t, pursuant to the observation of the work as required by the [describe Architect Agreeme nt] and in accordance with applicable professional standards, the construction performed for the Convention Center as of the date hereof has been performed substantially in accordance in a ll material respects with the Convention Center Plans, or to the extent any such construction has not been performed substantially in accordance in all material respects with Convention Center Plans, the amount to be disbursed under this payment
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request has been reduced by $[_____] to reflect the reasonably estimated cost of causing such construction to be performed substantially in accor dance in all material respects with Convention Center Plans. The foregoing certification is subjec t to an evaluation of the Convention Center for conformance with the Convention Center Plans upon C ompletion, to results of subsequent tests and inspections, and to correction of minor deviations from the Convention Center Plans prior to Completion. This certificate is not a representatio n that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the work, (2) reviewed construction means, methods, techniques, sequences or procedures , (3) reviewed copies of requisitions received from Subcontractors and material suppliers, or (4) made examination to ascertain how or for what purpose the Developer has used money previously pai d on account of the Convention Center Contract Sum.
(c) [Reserved]
(d) Any representations or certifications by the Ar chitect herein shall mean an expression of the Architect’s professional opinion to the best of its information, knowledge and belief, and does not constitute a warranty or guarantee by the Architect.
The Authority is entitled to rely on the foregoing representations, warranties and certifications in authorizing and making the disbursement requested in the Payment Request.
[SIGNATURE PAGE FOLLOWS]
K-2-10
4825-3218-1203v34/024036-0079
IN WITNESS WHEREOF, the undersigned has executed th is Certificate of Architect as of this [___] day of [_________], 201[__].
[ ]
By: _____________________________________
Name:
Title:
L-1
4825-3218-1203v34/024036-0079
Exhibit L
Sole Source Subcontract Award Approval
(Developer’s Phase 1A Infrastructure Improvements)
Request No.
Reference is made to that certain Project Implementation Agreement (the “Agreement”), dated as of [ ● ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“City”), acting on its behalf and for and on behalf of the Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Diego Unified Port District, a public corporation (the “Port District”), the Chula Vista Bayfront Facilities Financing Authority, a joint exercise of powers entity created by the City and the Port District pursuant to Joint Exercise of Powers Act (defined in the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“Developer”). Capitalized terms used herein without definition shall have the meanings assigned in the Agreement.
The Developer hereby provides notice of intent to award a sole-source subcontract to [insert dba] for Developer’s Phase 1A Infrastructure Improvements. A draft of such subcontract is attached as Exhibit 1 hereto. In connection with this Sole Source Subcontract Award Approval Request, the undersigned hereby certifies, represents and warrants to the Authority, in each case, solely in his or her capacity as [insert title] of Developer and not in his or her individual capacity, as follows:
A. He (she) is a duly authorized representative or signatory of Developer, qualified to execute this Sole Source Subcontract Award Approval Request on behalf of Developer and is knowledgeable as to the matters set forth herein.
B. The proposed subcontractor is as follows:
a. [Corporate Name]
b. [dba]
c. [Mailing Address]
d. [Contact Phone Number]
e. [Contact Email]
f. [California Contractor License Number]
g. [City of Chula Vista Business License Number]
C. The proposed subcontract includes the following scope of work: [insert scope] D. The proposed sole source subcontract is in the a mount of $ .
E. The Developer recommends a sole source contract.
F. The proposed sole source subcontract has been aw arded in accordance with the Agreement, including Exhibit G-1, and the Authority Procurement Policy.
G. The subject commodity or service is reasonably a vailable in a manner consistent with the timely completion of the Developer’s Phase 1A Infrastructure Improvements in accordance with the
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Agreement from only one known source as the result of unique performance capabilities, manufacturing processes, compatibility requirements or market conditions.
By the Authority’s execution of this Sole Source Subcontract Award Approval Request, the Authority hereby waives the provisions of the Authority Procurement Policy to the extent necessary to enable the sole source subcontract described in this Sole Source Subcontract Award Approval Request by Developer’s General Contractor.
[Signature Pages Follow]
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I hereby declare, solely in my capacity set forth below and not in my individual capacity, that the above representations are true and correct.
DEVELOPER:
RIDA CHULA VISTA, LLC, a Delaware limited liability company California Contractor License Number:
1039979
By:
[Name], [Title]
Dated:
L-4
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By the Authority’s execution of this Sole Source Su bcontract Award Approval Request, and in reliance upon the Developer’s representations an d certifications set forth in the above request for approval of Sole Source Subcontract Award, the Authority hereby approves such award.
APPROVED:
AUTHORITY:
CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY,
a joint exercise of powers authority
By:
[Name], [Title]
Dated:
L-5
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Exhibit 1
Draft Subcontract
[See attached]
M-1
4825-3218-1203v34/024036-0079
Exhibit M
Best Qualified Contractor Subcontract Award Approval
(Developer’s Phase 1A Infrastructure Improvements)
Request No.
Reference is made to that certain Project Implementation Agreement (the “Agreement”), dated as of [ ● ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“City”), acting on its behalf and for and on behalf of the Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Diego Unified Port District, a public corporation (the “Port District”), the Chula Vista Bayfront Facilities Financing Authority, a joint exercise of powers entity created by the City and the Port District pursuant to Joint Exercise of Powers Act (defined in the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“Developer”). Capitalized terms used herein without definition shall have the meanings assigned in the Agreement.
The Developer hereby provides notice of intent to award a subcontract to [insert dba] as a “best qualified” contractor (as described in the Authority Procurement Policy). A draft of such subcontract is attached as Exhibit 1 hereto. In connection with this Best Qualified Contractor Subcontract Award Approval Request, the undersigned hereby certifies, represents and warrants to the Authority, in each case, solely in his or her capacity as [insert title] of Developer and not in his or her individual capacity, as follows:
A. He (she) is a duly authorized representative or signatory of Developer, qualified to execute this Subcontract Award Approval Request on behalf of Developer and is knowledgeable as to the matters set forth herein.
B. The proposed subcontractor is as follows:
a. [Corporate Name]
b. [dba]
c. [Mailing Address]
d. [Contact Phone Number]
e. [Contact Email]
f. [California Contractor License Number]
g. [City of Chula Vista Business License Number]
C. The proposed subcontract includes the following scope of work: [insert scope] D. The proposed subcontract is in the amount of $ .
E. The Developer or its General Contractor conducte d a qualification process that considered, among other things, any or all of the following: past relevant/similar project experience, construction experience and capability, labor relations, customer feedback from those projects, current backlog, available trades personnel resources, proposed supervisory/management personnel, financial capability, and design capabilities (for design-build subcontracts).
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F. (select 1 option, delete the other options)
For work estimated to be equal to or in excess of $75,000, [the Developer or its General Contractor solicited three competitive proposals from the pre-qualified list of subcontractors] OR [the Developer determined that soliciting proposals for such work was not practical under the circumstances].
OR
For work estimated to be less than $75,000, [the Developer or its General Contractor solicited two competitive proposals from the pre-qualified list of subcontractors] OR [the Developer determined that soliciting proposals for such work was not practical under the circumstances].
G. The Developer or its General Contractor consider ed, among other things, any or all of the following: qualitative factors (i.e. personnel, schedule management, construction experience and capability, labor relations, experience, expertise and business practices and policies that increase the likelihood that the Project will be completed without disruption, and quality management) and quantitative factors (i.e. price, schedule details, and rate for labor, equipment, and insurance).
H. The Developer conducted a pre-selection in-depth interview with potential “best qualified” subcontractors.
I. [The Developer offered a pre-selection process f or potential subcontractors to present a “best and final offer”.] [Insert if applicable]
J. The Developer determined that the proposed subco ntractor provided the best value for the Project.
K. The proposed subcontract has been awarded in acc ordance with the Agreement, including Exhibit G-1, and the Authority Procurement Policy.
[The Developer hereby requests a waiver pursuant to Section 2(d)(ii) of the Authority Procurement Policy with respect to the proposed subcontractor, and by the Authority’s execution of this Best Qualified Contractor Subcontract Award Approval Request, the Authority hereby grants such waiver.] [NTD: Include if the proposed subcontractor is not the lowest responsive and responsible bidder for a unit of work and the proposed subcontractor’s bid exceeds the engineer’s estimate or other approved estimate for the work by more than ten percent.] [Signature Pages Follow]
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I hereby declare, solely in my capacity set forth below and not in my individual capacity, that the above representations are true and correct.
DEVELOPER:
RIDA CHULA VISTA, LLC, a Delaware limited liability company California Contractor License Number:
1039979
By:
[Name], [Title]
Dated:
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By the Authority’s execution of this Best Qualified Contractor Subcontract Award Approval Request, and in reliance upon the Developer’s representations and certifications set forth in the above request for approval of Best Qualified Contractor S ubcontract Award, the Authority hereby approves such award.
APPROVED:
AUTHORITY:
CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY,
a joint exercise of powers authority
By:
[Name], [Title]
Dated:
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Exhibit 1
Draft Subcontract
[See attached]
N-1-1
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Exhibit N-1
List of Approved Arbitrators
[Please provide the final list of Approved Arbitrators approved by City and Port.]
N-2-1
4825-3218-1203v34/024036-0079
Exhibit N-2
List of Approved Mediators
[Please provide the final list of Approved Mediators approved by City and Port.]
O-1
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Exhibit O
Energy Requirements
The Parties acknowledge that Section 15 of the Sett lement Agreement requires that all “Developments ” within the Proposed Project (as defined in the Se ttlement Agreement) area achieve, in the aggregate, a fifty percent (50%) reduction in annual energy use (the “ 50% Energy Standard ”) compared to that allowed under the Building Energy Efficiency Standards, Title 24, Part 6, of the California Code of Regulations in effect as of May 4, 2010 (“ 2010 Title 24 ”). To implement Section 15 of the Settlement Agreement with respect to the Project, the Parties agree as follows:
(a) Developer represents and warrants that it has p repared the Plans (as defined in the Ground Lease) and the Convention Center Plan s (collectively, the “ Energy Requirement Plans ”) in such a manner that each building will operate at an energy consumption level equal to or better than the more stringent of the following two standards, which shall be referred to herein as, the “Minimum Energy Efficiency Design Standard ”: (i) fifteen percent (15%) less than the amount of energy that each building would otherwise be permit ted to consume under 2010 Title 24; or (ii) the minimum energy efficiency performance standard adop ted by the City at the time a building permit application is submitted for each building.
(b) No later than thirty (30) days prior to the dat e when the first building in the Project is open for business, Developer shall deliv er to Authority for Authority’s approval, a measurement and verification plan for energy effici ency for the Project based on the Energy Requirement Plans (as approved by Authority in accordance with this Agreement or the Port District in accordance with the Ground Lease, as applicable) (the “ M&V Plan ”). Developer shall also provide a courtesy copy of the M&V Plan to the City and Port District concurrently with its delivery to Authority.
(c) Developer shall implement and maintain the M&V Plan throughout the Term. (d) Developer shall cause the performance of, and d eliver to Port District and City, an energy consumption audit for each of the b uildings in the Project no less frequently than every three (3) years after the Completion of the R esort Hotel and the Completion of the Parking Improvements, as applicable, as more particularly s et forth in Section 15.2.2.4 of the Settlement Agreement (the “ Required Energy Audits ”).
(e) If the City and Port District ultimately determ ine that the Energy Requirement Plans do not achieve the 50% Energy Standard as app lied to the Project (as defined in the Ground Lease), Developer, the City and Port District shall work together to identify additional energy savings measures, programs or credits (collectively , “ Additional Energy Savings Measures ”) available to achieve the 50% Energy Standard. Such Additional Energy Savings Measures may include, without limitation, Developer’s participat ion in renewable or “time of use” energy purchase programs, and/or other measures identified in Secti on 15.2 of the Settlement Agreement. Developer agrees to participate in and/or implement the Addit ional Energy Savings Measures so identified at Developer’s cost, to the extent “commercially reaso nable” (as defined below), in order to maximize energy use reduction at the Project (as defined in the Ground Lease), in the aggregate, up to the 50% Energy Standard. If, despite Developer’s efforts, D eveloper cannot reduce the energy use standard at the Project (as defined in the Ground Lease) to ach ieve the 50% Energy Standard, either because it is
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not commercially reasonable to do so, or Developer’ s participation in and/or implementation of the Additional Energy Savings Measures identified by th e City and Port District do not result in the 50% Energy Standard, the City and Port District agree t o identify additional energy savings measures or credits that the City and Port District could imple ment (at a cost to be shared equally by the City an d Port District) or cause third parties to implement (without a public subsidy or rent reduction), throughout the Proposed Project (as defined in the Settlement Agreement) area, to achieve the 50% Energy Standard for the Project (as defined in the Ground Lease). For purposes of this Exhibit O, “commercially reasonable ” Additional Energy Savings Measures are the Additi onal Energy Savings Measures that Developer reasonably determin es can be implemented practicably and cost- effectively at the Project (as defined in the Groun d Lease) and that the implementation of which will not interfere with the operation of any portion of the Project. Developer shall cooperate with the City and Port District in good faith to identify locatio ns for the commercially reasonable Additional Energy Savings Measures on the Premises and shall e nter into any agreements with Port District and/or the City, as reasonably required, to effectu ate the construction of such commercially reasonable Additional Energy Savings Measures on the Premises. (f) Developer shall indemnify and defend the Author ity, the City, and the Port District, at Developer’s sole cost and expense and with counsel reasonably selected by the Public Entities and reasonably approved by Developer, and hold harmless the Authority, the City , and the Port District for any and all claims (including cla ims under negligence and strict liability), demands , liability, losses, causes of actions and suits of a ny kind, administrative or judicial proceedings, orders, judgments, and all Related Costs arising directly or indirectly out of any breach by Developer of its obligations under this Exhibit O, except for claims or litigation arising through the sole gros s negligence or willful misconduct of any Public Enti ty Party (but subject to Section 15.4 of this Agreement); provided, that the sole gross negligence or willful misconduct of one Public Entity Party with respect to any Public Entity shall not be attr ibuted to or affect the rights of any Public Entity Party with respect to any other Public Entity under this clause (f). If a Public Entity determines in its reasonable discretion that there is a conflict of i nterest with Developer’s counsel representing such Public Entity and Developer, or that there is a con flict of interest with counsel representing such Public Entity and the other Public Entities, then s uch Public Entity, at its election, may conduct its own defense with its own counsel that is reasonably selected by the Public Entity, reasonably approved by Developer, and independent from Developer’s counsel (and in that event Developer will select its own counsel) and the reasonable costs in curred by the applicable Public Entity in such defense shall be covered by the foregoing indemnifi cation, hold harmless and defense obligations and be subject to reimbursement pursuant to the Rei mbursement Procedure. The terms of this clause (f) shall survive the expiration or earlier termina tion of this Agreement. Nothing in this Exhibit O shall limit Developer’s obligations to indemnify Po rt District and the City with regard to the Convention Center Plans, the Improvements, or other Developer’s Phase 1A Infrastructure Improvements if and to the extent required under this Agreement. (g) For purposes of the Settlement Agreement, Devel oper’s obligations to comply with Section 15 of the Settlement Agreement are limited to the requirements set forth herein.
So long as Developer has complied with its obligati ons under this Exhibit O and Section 4.10, Developer will not be in default and will not be in breach under this Lease or the Settlement Agreement based upon any alleged failure to comply with the terms of Section 15 of the Settlement Agreement in the design of the Project.
(h) For purposes of this Exhibit O, “Project” shall mean Project as defined in the Ground Lease.
P-1
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Exhibit P
Form of Developer’s Convention Center Budget
[To be provided by Developer prior to Closing.]
Q-1
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Exhibit Q
Port District Transfer Documents
Ground Lease
Site Lease
Project Implementation Agreement
Support Agreement
CVBMP Documents [parties to determine which CVBMP documents will be transferred prior to execution of lease.]
[Insert any other documents that qualify as Port District Transfer Documents prior to Closing.]
R-1
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Exhibit R
Form of Memorandum Agreement and Non-Disturbance Agreement RECORDING REQUESTED BY:
___________________________
___________________________
___________________________
(Above Space for Recorder’s Use Only)
MEMORANDUM OF AGREEMENT AND NON-DISTURBANCE AGREEMENT
This Memorandum of Agreement and Non-Disturbance Ag reement, hereinafter “Memorandum, ” is dated ____________, 20__, among the City of Ch ula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing distric t established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Specia l Tax Financing District Procedural Ordinance (the “ Financing District ”), the San Diego Unified Port District, a public c orporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by the City and t he Port District pursuant to the Joint Exercise of Powers Act (defined herein below), and RIDA Chula V ista, LLC, a Delaware limited liability company (“ Developer ”) (collectively, together with their successors an d assigns, the “ Parties ” and, individually, a “ Party ”), concerning that certain real property described in Exhibits “A-1”, “A-2” and “A-3” and depicted in Exhibits “B-1”, “B-2” and “B-3”, attached hereto and by this reference made a part hereof.
The Parties have entered into that certain Project Implementation Agreement of even date herewith (the “ Agreement ”), which contains various covenants, obligations a nd rights of the Parties, all as more specifically set forth in said Agreemen t (including, without limitation, the provisions se t forth in Annex I attached hereto and by this refere nce made a part hereof). The Agreement is incorporated in this Memorandum by this reference.
The term of the Agreement begins __________, 20__ a nd ends __________, 20__, as set forth in Section 3.1 of the Agreement. In no event shall the Term extend beyond sixty-six (66) years from the Effective Date.
In amplification of the foregoing, Article XXIII (Nondisturbance) of the Agreement is hereby incorporated by reference as if fully set forth her ein and each of the parties hereto acknowledges and reaffirms (i) its respective obligations and agreem ents under such Article XXIII (Nondisturbance) of the Agreement with respect to the Site Lease, the Facility Lease and the Sublease, each as applicable, and (ii) that each Permitted Lender is an express third party beneficiary hereof and thereof.
This Memorandum is not a complete summary of the Ag reement. Provisions in this Memorandum shall not be used in interpreting the Ag reement provisions. In the event of conflict between the terms of this Memorandum and terms of t he Agreement, the terms of the Agreement shall control.
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[Signature Pages Follows]
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IN WITNESS WHEREOF, the Parties have executed this Memorandum of Agreement as of the date first set forth above.
CITY DEVELOPER
CITY OF CHULA VISTA, a California charter
city and municipal corporation
RIDA CHULA VISTA, LLC, a Delaware
limited liability company
California Contractor License Number: 1039979
By:
Maria V. Kachadoorian, City Manager
By: *
ATTEST:
By:
Kerry Bigelow, City Clerk
APPROVED AS TO FORM:
By:
Glen R. Googins, City Attorney
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PORT DISTRICT AUTHORITY
SAN DIEGO UNIFIED PORT DISTRICT,
a public corporation
CHULA VISTA BAYFRONT FACILITIES
FINANCING AUTHORITY, a joint exercise of
powers authority
By:
By:
APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FO RM AND LEGALITY:
By:
Thomas A. Russell, General Counsel
By:
Co-Counsel, Thomas A. Russell, General
Counsel of the San Diego Unified Port
District
By:
Co-Counsel, Glen Googins, City Attorney
of the City of Chula Vista
FINANCING DISTRICT
BAYFRONT PROJECT SPECIAL TAX
FINANCING DISTRICT
By:
* Signatories to provide signature authority for signatory
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EXHIBIT A-1 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
LEGAL DESCRIPTION OF SITE
(to be attached prior to execution.)
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EXHIBIT A-2 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
LEGAL DESCRIPTION OF GROUND LEASE PROPERTY
(to be attached prior to execution.)
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EXHIBIT A-3 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
LEGAL DESCRIPTION OF DEVELOPER’S PHASE 1A
INFRASTRUCTURE IMPROVEMENTS SITE
(to be attached prior to execution.)
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EXHIBIT B-1 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
DEPICTION OF SITE
(to be attached prior to execution.)
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EXHIBIT B-2 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
DEPICTION OF GROUND LEASE PROPERTY
(to be attached prior to execution.)
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EXHIBIT B-3 TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
DEPICTION OF DEVELOPER’S PHASE 1A
INFRASTRUCTURE IMPROVEMENTS SITE
(to be attached prior to execution.)
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ANNEX I TO MEMORANDUM OF AGREEMENT
AND NON-DISTURBANCE AGREEMENT
NONDISTURBANCE PROVISIONS
1. Port District Nondisturbance of Lessee and Suble ssee Rights under the Convention Center Leases. In the event the Site Lease termina tes, is rejected in any Bankruptcy Case or otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Port District shall reco gnize the Facility Lease as, and the Facility Lease shall be deemed to be, a direct lease between the P ort District, as lessor, and the City, as lessee, a nd the Port District shall not disturb the City’s leas ehold interest or possession of the Site (as define d in the Facility Lease) or the Convention Center under, and on the terms and conditions set forth in, the Facility Lease, and the Port District shall continu e to recognize and treat the Sublease as a sublease between the City, as sublessor, and the Developer, as sublessee, and the City shall attorn to and recognize the Port District as the City’s lessor un der, and on the terms and conditions set forth in, the Facility Lease. In the event the Facility Lease te rminates, is rejected in any Bankruptcy Case or otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Port District shall reco gnize the Sublease as, and the Sublease shall be deemed to be, a direct lease between the Authority, as lessor, and the Developer, as lessee, and the Developer shall attorn to and recognize the Authori ty as the Developer’s lessor under, and on the terms and conditions set forth in, the Sublease. I n the event both the Site Lease and the Facility Lease terminate, are rejected in any Bankruptcy Cas e and/or otherwise cease to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default b y the Developer thereunder), (i) the Port District shall recognize the Sublease as, and the Sublease s hall be deemed to be, a direct lease between the Port District, as lessor, and the Developer, as les see, and the Port District shall not disturb the Developer’s leasehold interest or possession of the Site (as defined in the Sublease) or the Convention Center under, and on the terms and condi tions set forth in, the Sublease, and the Developer shall attorn to and recognize the Port Di strict as the Developer’s lessor under, and on the terms and conditions set forth in, the Sublease. E ach Permitted Lender is an express third party beneficiary of this Section 1 and is entitled to enforce this Section 1.
2. Authority Nondisturbance of Lessee and Sublessee Rights under the Convention Center Leases. In the event the Facility Lease ter minates, is rejected in any Bankruptcy Case or otherwise ceases to exist, in each such case, prior to the expiration of the Sublease Term (and the Sublease has not terminated in accordance with its terms as a result of an Event of Default by the Developer thereunder), the Authority shall recogniz e the Sublease as, and the Sublease shall be deemed to be, a direct lease between the Authority, as lessor, and the Developer, as lessee, and the Authority shall not disturb the Developer’s leaseho ld interest or possession of the Site (as defined i n the Sublease) or the Convention Center under, and o n the terms and conditions set forth in, the Sublease, and the Developer shall attorn to and rec ognize the Authority as the Developer’s lessor under, and on the terms and conditions set forth in , the Sublease. Each Permitted Lender is an express third party beneficiary of this Section 2 and is entitled to enforce this Section 2.
3. Defined Terms. Capitalized terms used but not d efined in this Annex I shall have the meanings set forth in the Agreement.
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________________________ )
On ___________________ before me, _________________ ___________________, Notary Public,
personally appeared _______________________________ ______________________, who proved to me on the basis of satisfactory evidence to be t he person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that h e/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or t he entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws o f the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
S-1
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Exhibit S
Approved Agreements
CVBMP Documents
Approved Title Exceptions
Convention Center Plans
Plans
Early Work Agreement
Reimbursement Agreement
Sewer Agreement
[Insert all other documents, including financings documents, that are approved prior to the Commencement Date.]
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Exhibit T
District Documents
[Insert list of documents that were provided by the Office of the District Clerk to Chicago Title Company that are part of the Approved Title Exceptions (as defined in the DDA).] [To come prior to Closing.]
U-1
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Exhibit U
Prior Agreements
Disposition and Development Agreement (Sections 4.1(f), 4.7(c), 4.7(d), 4.17, 8.2, and 8.3) Right of Entry for Pre-Closing Phase 1A Improvements
[Insert any other documents that qualify as Prior Agreements prior to execution of this Lease.]
V-1-1
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Exhibit V-1
Approved Drawings and Specifications for
Developer’s Phase 1A Infrastructure Improvements
[To come prior to Closing.]
V-2-1
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Exhibit V-2
Approved Drawings and Specifications for
Remaining Phase 1A Infrastructure Improvements
[To come prior to Closing.]
W-1
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Exhibit W
Form of Equal Opportunity Employment Certification
EQUAL EMPLOYMENT OPPORTUNITY CERTIFICATION
The bidder ________________________________________ ____________, proposed subcontractor _____________________________________ ___, hereby certifies that he has ___ , has not ___, participated in a previous contract or subcontract subject to the equal opportunity clauses, as required by Executive Orders 10925, 111 14, or 11246, and that, where required, he has filed with the Joint Reporting Committee, the Director of the Office of Federal Contract Compliance, a Federal Government contracting or administering a gency, or the former President’s Committee on Equal Employment Opportunity, all reports due under the applicable filling requirements.
Note: The above certification is required by the Equal E mployment Opportunity Regulations of the Secretary of Labor (41 CFR 60-1.7(b) (1)), and must be submitted by bidders and proposed subcontractors only in connection with contracts and subcontracts which are subject to the equal opportunity clause. Contracts and subcontracts which are exempt from the equal opportunity clause are set forth in 41 CFR 60-1.5. (Generally only contracts or subcontracts of $10,000 or under are exempt.)
Currently, Standard Form 100 (EEO-1) is the only report required by the Executive Orders or their implementing regulations.
Proposed prime contractors and subcontractors who have participated in a previous contract or subcontract subject to the Executive Orders and have not filed the required reports should note that 41 CFR 60-1.7(b) (1) prevents the award of contracts and subcontracts unless such contractor submits a report covering the delinquent period or such other period specified by the Federal Highway Administration or by the Director, Office of Federal Contract Compliance, U.S. Department of Labor.
By: [BIDDER / CONTRACTOR]
Its:
Printed Name:
X-1-1
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Exhibit X-1
Form of Early Work Agreement
[To come prior to Closing.]
X-2-1
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Exhibit X-2
Reimbursement Agreement
[To be attached prior to execution.]
X-3-1
4825-3218-1203v34/024036-0079
Exhibit X-3
Sewer Agreement
[To be attached prior to execution.]
Y-1
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Exhibit Y
Hotel Operator Non-Disturbance Agreement
[To be attached prior to execution.]
Y-1
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Exhibit Z
Construction Standards 19
RIDA Chula Vista, LLC and its contractors, subcontractors, employees and agents are required to comply with the following City of Chula Vista design and construction standards:
For work related to the Developer’s Phase 1A Infrastructure Improvements, the Design and Construction Standards
adopted by the City of Chula Vista for public works projects at the time the City approved the drawings and specifications for the project.
For work related to the Convention Center, the Resort Hotel and the Parking Improvements, the Chula Vista Building
Code.
RIDA is NOT required to comply with any other City of Chula Vista design and construction standards or exceed such City of Chula Vista design and construction standards.
Other public agency standards and regulations may apply.
If any requirement set forth in the applicable City of Chula Vista design and construction standards may be satisfied in more than one manner, RIDA may elect to satisfy such requirement in any such manner.
Please contact [_________________] with any questions.
19 Subject to City and Port approval.
AA-1
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Exhibit AA
In-Balance Certificate
[_______], 20[__]
Chula Vista Bayfront Facilities Financing Authority
PO Box 5296
Chula Vista, CA 91912
Attention: [Executive Director]
RIDA Chula Vista, LLC
1777 Walker Street, Suite 501
Houston, Texas 77010
Attention: Ira Mitzner; Luke Charlton
Re: Convention Center Payment Request No. [___] und er Project Implementation Agreement (the “ Agreement ”), dated as of [ ], 2022, by and among the City of Chula Vista, a chartered municipal corporation (“ City ”), acting on its behalf and for and on behalf of t he Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance, the San Di ego Unified Port District, a public corporation (the “ Port District ”), the Chula Vista Bayfront Facilities Financing A uthority (the “ Authority ”), a joint exercise of powers entity created by th e City and the Port District pursuant to Joint Exercise of Powers Act (defined i n the Agreement), and RIDA Chula Vista, LLC, a Delaware limited liability company (“ Developer ”).
Payment Request of $[_________]
Requested Payment Date: [_________], 20[__]
Ladies and Gentlemen:
Capitalized terms used herein without definition sh all have the meanings assigned to them in the Agreement.
JPMorgan Chase Bank, N.A., (the “ Administrative Agent ”) acting as Administrative Agent under that certain Bond Purchase and Continuing Cov enant Agreement dated as of [______________], 2022, by and among the Authority, the Port District, the City and the Administrative Agent (the “ Bond Purchase Agreement ”) hereby certifies to the Authority and Developer that the Project is In-Balance within the meaning of Section 8.08 of the Bond Purchase Agreement.
The Authority is entitled to rely on the foregoing certification in authorizing and making the disbursement requested in the Payment Request.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has executed th is In-Balance Certificate as of this [___] day of [_________], 20[__].
Administrative Agent:
JPMorgan Chase Bank, N.A.
By: _____________________________________
Name:
Title:
Stradling Draft of 5/7/22
1 4845-4814-1790v29/024036-0079
Definitions Addendum
This Definitions Addendum constitutes a part of tha t certain Project Implementation Agreement (the “Agreement”) entered into as of ____ ___________, 2022 by and among the City, acting on its behalf and for and on behalf the Fina ncing District, the Port District, the Authority, a nd Developer and by reference to the same in the Agree ment, the following definitions are incorporated into and constitute a part of the Agreement.
DEFINITIONS ADDENDUM
2010 TITLE 24: the Building Energy Efficiency Stand ards, Title 24, Part 6, of the California Code of Regulations in effect as of May 4, 2010. 2022A BOND PROCEEDS
SUBACCOUNT:
the 2022A Bond Proceeds Subaccount established with in the 2022A Construction Account and maintained by the Trustee pursuant to the Authority Indenture.
2022A CONSTRUCTION
ACCOUNT:
the 2022A Account of the Construction Fund maintained by the Trustee pursuant to the Authority Indenture.
2022B BOND PROCEEDS
SUBACCOUNT:
the 2022B Bond Proceeds Subaccount established with in the 2022B Construction Account and maintained by the Trustee pursuant to the Authority Indenture.
2022B CONSTRUCTION
ACCOUNT:
2022B Account of the Construction Fund maintained b y the Trustee pursuant to the Authority Indenture.
50% ENERGY
STANDARD:
the requirement in Section 15 of the Settlement Agreement that requires all Developments within the Proposed Project (as de fined in the Settlement Agreement) area achieve, in the aggregat e, a fifty percent (50%) reduction in annual energy compared to that allowed under 2010 Title 24.
ACCEPT / ACCEPTANCE
/ ACCEPTED:
With respect to the Developer’s Phase 1A Infrastructure Improvements or any component thereof, acceptance of the Develop er’s Phase 1A Infrastructure Improvements or such component by th e City and the Port District, as applicable, which shall occur pursuant to Section 10.1 of the Agreement.
With respect to the Convention Center, acceptance o f the Convention Center by the Authority, which shall occur pursuant to Section 10.2 of the Agreement and shall be evidenced by a certificate of the Authority confirming the Authority’s Acceptance of the Convention Center.
With respect to Sweetwater Park, acceptance of Sweetwater Park by the Port District shall occur pursuant to Section 10.3 of the Agreement.
ACCEPTANCE NOTICE: defined in Section 10.2.1.
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ADA: the Americans with Disabilities Act, 42 U.S.C. §12101 (et seq.) and the regulations promulgated thereunder, as the same may be amended from time to time.
ADDITIONAL ENERGY
SAVINGS MEASURES:
energy savings measures, programs or credits availa ble to achieve the 50% Energy Standard. Such Additional Energy Savings Measures may include, without limitation, Developer’s participat ion in renewable or “time of use” energy purchase programs, and/or othe r measures identified in Section 15.2 of the Settlement Agreement.
ADEQUATE
INSURANCE:
insurance that using standards customary in the ins urance industry provides adequate protection for the Site and Improvements (other than the Existing Improvements) and for the Port Distric t Parties and/or members of the public using the Site or Improvement s (other than the Existing Improvements) or using services connected with the use, operation or occupancy of the Site and Improvements (other than the Existing Improvements) by Developer Parties and Hotel Operator.
ADMINISTRATIVE
AGENT:
JPMorgan Chase Bank, National Association, in its c apacity as administrative agent for the Purchasers under the B ond Purchase Agreement.
ADMINISTRATIVE
AGENT EMAIL
ADDRESS:
[Insert initial Administrative Agent Email Address for Convention Center Payment Request notices/links] , and such other electronic mail addresses as shall be provided or substituted by Administrative Agent from time to time by written notice to Developer and Authority.
ADVANCE: defined in the Authority Indenture.
ADVANCE RENT: the rent payable by RIDA pursuant to Section 3.4 of the Sublease to the extent the right to such payment has been assigned by the City to the Authority under the Facility Lease.
ADVANCE RENT SIDE
LETTER:
the letter agreement, dated as of the Effective Dat e, by and among the Parties.
AFFILIATE: with respect to any Person, any Person t hat Controls, is directly or indirectly Controlled by, or is under common owners hip or Control with, such Person.
AGREEMENT: this Project Implementation Agreement be tween the Authority, the City, the Financing District, the Port District and the Developer. The term “Agreement” shall include any amendment to the Agreement properly approved and executed pursuant to the term s of the Agreement.
3 4845-4814-1790v29/024036-0079
ALTERATIONS: any alterations, additions, installati ons, removals, demolitions, improvements or other physical changes to the Site and the Improvements following the Completion of the Conven tion Center, including the addition, installation or removal of any fixtures (other than trade fixtures) but excluding installation, ma intenance, replacement or refreshing of any furniture, trade fixtures or equipment.
ANTICIPATED
ASSISTANCE COSTS:
with respect to any assistance that Developer requests that Port District provide to Developer, the total amount of Assistanc e Costs that Port District reasonably anticipates to incur in connect ion with such assistance.
APPROVED
AGREEMENTS:
defined in Section 24.1.
APPROVED DRAWINGS
AND SPECIFICATIONS:
with respect to the Developer’s Phase 1A Infrastructure Improvements means the drawings and specifications for the Devel oper’s Phase 1A Infrastructure Improvements attached as Exhibit X-1 , as amended or otherwise modified from time to time in accordance with Section 2.1.6 of the Agreement; and (b) with respect to the Remai ning Phase 1A Infrastructure Improvements means the drawings and specifications for the Remaining Phase 1A Infrastructure Improvements attached as Exhibit X-2, as revised by the Port District from t ime to time before Developer exercises a Sweetwater Park Option.
ARCHITECT: HKS Inc. d/b/a HKS Architects Inc. or an y other architect or engineer selected by Developer and approved by Authority (su ch approval not to be unreasonably withheld, conditioned or delayed).
ARCHITECT’S
CERTIFICATE:
a certification from Architect in the form of the Certificate of Architect attached as Exhibit 1 to the Developer Phase 1A Pay ment Request or the Convention Center Payment Request, as applicable.
ASSIGNMENT: any disposition, assignment, sale, conv eyance, exchange or other transfer of all or any portion of Developer’s inter est in the Sublease (including without limitation any easements), the l easehold estate created thereby, the Site or the Improvements, whether by operation of law or otherwise, but, for the avoidance of doubt, excluding any Sub- sublease (as defined in the Sublease).
ASSIGNMENT
PARTICIPATION FEE:
defined in Section 22.1.
ASSIGNMENT
PROCEEDS:
defined in Section 22.1.
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ASSISTANCE COSTS: with respect to any assistance th at Developer requests that Port District provide to Developer, the amount of costs and expen ses reasonably incurred or to be incurred by Port District in providing such assistance.
AUTHORITY: defined in the preamble to the Agreement .
AUTHORITY ACCOUNT: defined in Section 9.1.1.3(b).
AUTHORITY BOARD: the Board of Directors of the Chul a Vista Bayfront Facilities Financing Authority.
AUTHORITY BONDS: defined in recital M of the Agreem ent.
AUTHORITY BYLAWS: the Bylaws of the Chula Vista Bay front Facilities Financing Authority adopted by the Authority Board on July 25, 2019.
AUTHORITY COUNSEL: the Port District General Counse l and the City Attorney acting as co- counsel to the Authority.
AUTHORITY EMAIL
ADDRESSES:
[Insert initial Authority Email Addresses for Payme nt Request notices/links] , and such other electronic mail addresses as shall be provided or substituted by Authority from time to time by written notice to Developer.
AUTHORITY EVENT OF
DEFAULT:
defined in Section 21.5.
AUTHORITY EXISTING
REVENUES ACCOUNT
the Authority Existing Revenues Account established within the Revenue Fund and maintained by the Trustee pursuant to the Authority Indenture.
AUTHORITY
INDENTURE:
the Indenture of Trust, dated as of _____________, 2022, by and between the Authority and Wilmington Trust, National Association, as trustee.
AUTHORITY PARTIES: the Authority and the officers, directors, members of the Authority Board, employees, partners, affiliates, agents, con tractors, successors and assigns of the Authority, City employees and ag ents, and Port District employees and agents, in each case, when a cting only in the capacity of an Authority Party.
AUTHORITY
PROCUREMENT
POLICY:
the “Chula Vista Bayfront Facilities Financing Authority Procurement Policy for Developer-Performed Public Works” ratifi ed by the Authority Board by the adoption of Authority Resolution 2020-002.
AUTHORITY
RESOLUTION 2020-002:
the final form of such resolution as ratified by Au thority Resolution 2020-007.
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AUTHORITY SURPLUS
FUND:
defined in the Authority Indenture.
AUTHORITY TAXABLE
BONDS:
the $_____________ Chula Vista Bayfront Facilities Financing Authority Revenue Bonds (Chula Vista Bayfront Conve ntion Center) Series 2022A (Federally Taxable) issued to finance a portion of the Project Costs.
AUTHORITY TAX-
EXEMPT BONDS:
the $_____________ Chula Vista Bayfront Facilities Financing Authority Revenue Bonds (Phase 1A Infrastructure Im provements) Series 2022B (Tax-Exempt) issued to finance a porti on of the Developer’s Phase 1A Infrastructure Improvements Costs and a portion of the Remaining Phase 1A Infrastructure Improvements.
AUTHORITY’S
CONVENTION CENTER
FINAL REVIEW:
defined in Section 9.2.6.1.
AUTHORITY’S
PHASE 1A FINAL
REVIEW:
defined in Section 9.1.6.1.
BANKRUPTCY CASE: a proceeding initiated under the B ankruptcy Code.
BANKRUPTCY CODE: the United States Bankruptcy Code (11 U.S.C. § 101, et seq.), as amended, and any successor statute.
BANKRUPTCY EVENT: the occurrence with respect to De veloper, any Completion Guarantor(s) or any other Person liable for Developer’s obligati ons hereunder (including without limitation any member or manager of Developer) of any of the following: (a) appointment of a receiver or custodian for any property of such Person, or the institution of a foreclosure or attachment action upon any property of such Person; (b) filing by such Person of a voluntary petition under the provisions of the Bank ruptcy Code; or (c) an involuntary petition under the provisions of the Bankruptcy Code shall be filed and (i) Developer shall have consented to such involuntary petition or failed to contest in a timely and appro priate manner or (ii) such involuntary petition continues undismissed for a period of 60 days or an order for relief shall have been entered; or (d) such Person making or consenting to an assignment for the benefit of c reditors or a composition of creditors.
BFDIF / BFDIF
PROGRAM:
the Bayfront Transportation Development Impact Fee program, as authorized by Chula Vista Municipal Code Chapter 3.54.
BMP: defined in Section 8.1.3.
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BOND PURCHASE
AGREEMENT:
that certain Bond Purchase and Continuing Covenant Agreement dated as of ______________, 2022, by and among the Author ity, the Port District, the City and the Administrative Agent.
BPC: Board of Port Commissioners of the San Diego U nified Port District.
BUSINESS DAY(S): a day (other than a Saturday or Su nday) on which banks in San Diego County, California are open for ordinary banking business.
BUSINESS HOUR(S): an hour occurring during a Busine ss Day.
CASUALTY PROCEEDS: defined in Section 5.2(a) of the Sublease.
CCC: defined in Section 7.2.2.
CDP: defined in Section 7.2.2.
CEQA: defined in Section 7.2.2.
CERTIFICATES: defined in Section 15.3.1.
CHULA VISTA
BUILDING CODE:
Chula Vista Building Standards Code (Title 15 of th e Chula Vista Municipal Code), as amended, and any successor statute.
CHULA VISTA
STANDARD SPECIAL
PROVISIONS
Section 1-2 of Part 1, Part 2, Part 3, and Part 4 o f the City of Chula Vista Standard Special Provisions.
CITY:
the City of Chula Vista, a charter city and municip al corporation.
Unless specifically provided otherwise, whenever th e Agreement requires an action or approval by City, that action or approval shall be performed by the City representative designated by the Agreement.
CITY ATTORNEY: the City Attorney of the City or tha t person’s duly authorized deputy set forth in Schedule 1 of the Authority Bylaws.
CITY COUNCIL: The City Council of the City of Chula Vista.
CITY MANAGER: the City Manager of City or his or he r designee.
CITY PARTIES: the City and the officers, directors, members of the City Council, employees, partners, affiliates, agents, contractor s, successors and assigns of the City, in each case, when acting only in the capacity of a City Party.
CLAIMS: defined in Section 25.4.3.1.
CODE: the Internal Revenue Code of 1986, as amended .
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COMMENCEMENT
DATE:
the date on which the term of the Site Lease commences.
COMPLETE AND
COMPLETION:
(a) with respect to the Convention Center, means that the Developer has obtained and delivered to Authority a certificate o f occupancy or temporary certificate of occupancy for the Convention Center from the City,
(b) with respect to the Developer’s Phase 1A Infras tructure Improvements, means that the Developer’s Phase 1A I nfrastructure Improvements are sufficiently complete in accordanc e with the Contract Documents (excluding, for the avoidance of doubt, punch list items) so that the Developer’s Phase 1A Infrastruct ure Improvements can be utilized for their intended use,
(c) with respect to the Remaining Phase 1A Infrastr ucture Improvements, means that the Remaining Phase 1A Inf rastructure Improvements are sufficiently complete in accordanc e with the Contract Documents (excluding, for the avoidance of doubt, punch list items) so that the Remaining Phase 1A Infrastructur e Improvements can be utilized for their intended use; and
(d) with respect to the Resort Hotel, as defined in the Ground Lease.
COMPLETION
GUARANTOR(S):
defined in each Completion Guaranty.
COMPLETION
GUARANTY:
defined in Section 5.6.
CONDEMNATION AND
CONDEMNED:
defined in Section 5.1 of the Sublease.
CONDITION OF THE
SITE:
defined in Section 25.1.
CONSTRUCTION LATE
CHARGES:
defined in Section 5.1.2.
CONSTRUCTION FUND: defined in the Authority Indentu re.
CONSTRUCTION
PERIOD:
the period between the Commencement Date and the da te when the Project is Complete.
CONSTRUCTION
REQUIREMENTS:
those requirements, conditions and procedures regul ating the installation, construction, modification and repair of applicable Improvements (except the Existing Improvements) and Alterations as described in Exhibit “E” attached to the Agreement.
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CONSULTANT
SERVICES:
defined in Section 5.7.1.
CONTEMPORANEOUS
AGREEMENTS:
generally, any agreements executed on or around the Commencement Date by the Parties with respect to the Development, including, but not limited to the Agreement, the Convention Center Lea ses, the Ground Lease and the Completion Guaranty.
1 CONTRACT
DOCUMENTS:
the following to the extent applicable to the construction of the Project :
the prime construction contract(s), prime construct ion contract(s) exhibits and addenda, subcontract(s), subcontract(s ) exhibits and addenda, and any of the following: notice inviting bids, instructions to bidders, bid (including documentation accompanying bid and any post- bid documentation submitted prior to notice of awar d), the bonds, the general conditions, permits from the Authority, Cit y and/or, the Port District, as applicable, or other agencies, the spe cial provisions, the plans, standard plans, standard specifications and reference specifications that are incorporated into such prim e contract(s) or subcontract(s), the Approved Drawings and Specifica tions, and all modifications issued after the execution of the sub contract(s), in each case, in connection with the Project or the Remaini ng Phase 1A Infrastructure Improvements, as applicable.
CONTROL,
CONTROLLED AND
CONTROLLING:
shall be deemed, with respect to any Person, to be either or both (i) the ownership of more than fifty percent (50%) of the s tock, membership interests or other voting interest of such Person o r the ownership of beneficial interests in such Person, or (ii) the po wer to direct the management of such Person with respect to major dec isions of such Person, whether through voting interests or by way of agreement.
CONVENTION CENTER: defined in Recital B.
CONVENTION CENTER
BUDGET:
a budget for all anticipated Convention Center Cost s, including a contingency reserve, broken down by line item, as amended from time to time.
CONVENTION CENTER
CONTESTED CHARGES:
defined in Section 9.2.4.2.
CONVENTION CENTER
CONTRACT SUM:
the sum of (i) the Convention Center Costs, plus (i i) the Total Convention Center Development Fee, plus (iii) the S tipulated Convention Center Overhead Amount.
1 List of documents to be confirmed prior to executi on of the Agreement. Changed to be consistent with Definition of Contemporaneous Agreements in the Sublease.
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CONVENTION CENTER
COSTS:
the direct and indirect costs (excluding overhead c osts) incurred with respect to the development, design, construction, m aintenance and permitting of the Convention Center; provided, that Convention Center Costs shall not include Non-Project Costs.
CONVENTION CENTER
FINAL AMOUNT:
defined in Section 9.2.6.1.
CONVENTION CENTER
LEASES:
defined in Recital D.
CONVENTION CENTER
PAYMENT REQUEST:
the Convention Center Payment Request in the form s et forth in Exhibit K-2.
CONVENTION CENTER
PLANS:
the plans and specifications described in Exhibit F -1 attached to the Agreement, as amended or otherwise modified from ti me to time in accordance with Section 5.1 of the Agreement.
COUNTY: the County of San Diego.
COUNTY FUNDED
DEVELOPER’S
PHASE 1A
SUBACCOUNT:
the County Funded Developer’s Phase 1A Subaccount e stablished within the 2022B Construction Account and maintained by the Trustee pursuant to the Authority Indenture.
COUNTY FUNDING
AGREEMENT:
defined in Recital F.
COUNTY FUNDS: the amount actually paid by the Count y to the Authority pursuant to the County Funding Agreement.
COUNTY FUNDS
RELEASE DATE:
the latest to occur of (i) the Cutoff Date; (ii) the date on which all claims with respect to Developer’s Phase 1A Infrastructure Improvements Costs have been finally resolved; and (iii) the date on which all amounts that are owing to Developer in respect of the Devel oper’s Phase 1A Infrastructure Improvements Costs have been paid to Developer.
COUNTY SWEETWATER
PARK FUNDS:
defined in Section 9.1.1.3(a) of this Agreement.
CPM: defined in Section 5.4.2.
CUTOFF DATE: with respect to each of the Developer’ s Phase 1A Infrastructure Improvements, two (2) years from the date of Comple tion, and with respect to the Convention Center, two (2) years fro m the date of Completion.
CVBMP: defined in Recital J.
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CVBMP DOCUMENTS: the following documents: (i) the Settlement Agreement; (ii) Chula Vista Bayfront Development Policies (District Clerk No. 59407); (iii) Chula Vista Bayfront Master Plan Natural Resources Management Plan (District Clerk No. 65065), approved by the BP C on May 10, 2016, by Resolution No. 2016-79, and the City Counc il on June 14, 2016, by Resolution No. 2016-119; (iv) Chula Vista Bayfront Master Plan Public Access Program (District Clerk No. 5940 8); (v) Chula Vista Bayfront Design Guidelines (District Clerk No . 67959); (vi) Integrated Planning Vision (District Clerk No. 63989); (vii) Chula Vista Bayfront Master Plan & Port Master Plan Amend ment (District Clerk Nos. 59406); (viii) Mitigation Monitoring and Reporting Program for the Chula Vista Bayfront Master Plan (D istrict Clerk No. 56555) and (ix) the CDP for the Resort Hotel, t he Convention Center and the Parking Improvements.
CVMC: the Chula Vista Municipal Code.
DEFAULT RATE: an annual rate equal to the lesser of (i) the annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical Relea se Publication H.15(519), published weekly (or such other comparab le index as Port District and Developer shall reasonably agree upon if such rate ceases to be published), plus four (4) percentage points, and (ii) the highest rate permitted by applicable Law.
DEFECTIVE WORK: all work, material, or equipment th at does not substantially conform to the Contract Documents.
DESIGN AND
CONSTRUCTION
STANDARDS:
the edition of the Design and Construction Standard s adopted by the City for public works projects that is in effect wh en the Approved Drawings and Specifications are approved by the Cit y for purposes of the bids and which is available in the City’s Department of Engineering and Capital Projects, acting on behalf of the Autho rity, and on the City’s website.
DEVELOPER: RIDA Chula Vista, LLC, a Delaware limite d liability company.
DEVELOPER ART
INVESTMENT:
$4,774,400.
DEVELOPER FUNDING: defined in Section 19.4.
DEVELOPER MEMBER /
DEVELOPER MEMBERS:
defined in Section 20.3.
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DEVELOPER PARTY: RIDA, and the agents, employees, r epresentatives, contractors, subcontractors, suppliers, materialmen, workmen, li censees, concessionaires, Affiliates and successors and assi gns of RIDA, and Subtenants, and the agents, employees, representati ves, contractors, subcontractors, suppliers, materialmen, workmen, co ncessionaires, licensees, Affiliates and successors and assigns of each of such Subtenants, in each case, when acting only in the c apacity of a Developer Party.
DEVELOPER’S PHASE
1A CONTESTED
CHARGES:
defined in Section 9.1.4.3.
DEVELOPER’S
PHASE 1A CONTRACT
SUM:
the sum of (i) the Developer’s Phase 1A Infrastruct ure Improvements Costs, plus (ii) Developer’s Phase 1A Project Administration Fee, plus (iii) the Stipulated Developer’s Phase 1A Infrastructure Improvements Overhead Costs. Amounts available to be reimbursed to Developer under the Sewer Agreement or credited to Developer under the BFDIF Program are excluded from the Developer’s Phase 1A Contract Sum.
DEVELOPER’S
PHASE 1A FINAL
AMOUNT
defined in Section 9.1.6.1.
DEVELOPER’S PHASE
1A INFRASTRUCTURE
IMPROVEMENTS:
the public improvements set forth in Exhibit C attached hereto.
DEVELOPER’S PHASE
1A INFRASTRUCTURE
IMPROVEMENTS
BUDGET:
a budget for all anticipated Developer’s Phase 1A I nfrastructure Improvements Costs, including a contingency reserve, broken down by line item, as amended or otherwise modified from time to time.
DEVELOPER’S PHASE
1A INFRASTRUCTURE
IMPROVEMENTS COSTS:
(a) the direct and indirect costs (excluding overhe ad costs) incurred with respect to the development, design, construction, maintenance and permitting of Developer’s Phase 1A Infrastructure I mprovements and (b) the Early Work Costs; provided, that Developer’ s Phase 1A Infrastructure Improvements Costs shall include nei ther Non-Project Costs nor Excluded Costs.
DEVELOPER’S PHASE
1A INFRASTRUCTURE
IMPROVEMENTS SITE:
the location of the Developer’s Phase 1A Infrastructure Improvements for purposes of pre-construction services and construction.
DEVELOPER’S PHASE
1A PAYMENT REQUEST:
the Developer Phase 1A Payment Request in the form set forth in Exhibit K-1.
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DEVELOPER’S
PHASE 1A PROJECT
ADMINISTRATION FEE:
Five percent (5%) of the Developer’s Phase 1A Project Administration Fee Eligible Costs actually incurred by Developer.
DEVELOPER’S
PHASE 1A PROJECT
ADMINISTRATION FEE
ELIGIBLE COSTS:
hard costs of constructing the components of the Developer’s Phase 1A Infrastructure Improvements that are eligible for r eimbursement under the Sewer Agreement and improvements referenced in the Bayfront Transportation Development Impact Fee Nexus Study d ated October 2014, which is on file in the office of the City Clerk.
DEVELOPMENT: Developer’s development of, collective ly, the Parking Improvements, the Resort Hotel, the Convention Center and Develop er’s Phase 1A Infrastructure Improvements.
DIR: defined in Section 7.2.3.1(d)(ii).
DISCRETIONARY
ENTITLEMENT:
defined in Section 5.7.1.
DISCRETIONARY
PROJECT:
defined in Section 5.7.1.
DISTRICT DOCUMENTS: defined in Section 25.4.2.
DISTRICT SUPPORT
PAYMENT / DSP:
defined in Section 5.1.2.
EARLY WORK
AGREEMENT:
defined in Recital O.
EARLY WORK COSTS: the Work Reimbursement Costs (as defined in the Early Work Agreement).
EFFECTIVE DATE: the Closing Date, as defined in the Authority Indenture.
EIR: final Environment Impact Report “Chula Vista B ayfront Master Plan and Port Master Plan Amendment Final Environmental Impact Report,” (UPD# #83356-EIR-658, SCH #2005081077; Doc ument 56562), including, but not limited to, the “Mitigat ion Monitoring and Reporting Program”, and the resolution certifying s aid final Environmental Impact Report, Resolution No. 2010-79, adopted by the BPC on May 18, 2010.
ENVIRONMENTAL
CLEANUP:
to investigate, remove or remediate such contaminat ion in compliance with all Environmental Laws and in a manner and to the satisfaction of applicable regulatory authority.
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ENVIRONMENTAL
LAWS:
Laws and other requirements in effect during the Te rm that regulate Hazardous Materials or otherwise relate to public h ealth and safety or the protection of the environment.
EVENT OF DEFAULT: defined in Section 21.1.
EQUITY COLLATERAL
ENFORCEMENT
ACTION:
defined in Section 9.2 of the Sublease.
ESTIMATED
CONVENTION CENTER
COSTS:
solely as to the Convention Center, the total cost of development and construction of the Convention Center, as shown in Section 4.2.1.
EXCLUDED COSTS: (a) costs incurred by the Developer in connection with the design, architectural work, and engineering work for the Developer’s Phase 1A Infrastructure Improvements for which the Developer has been reimbursed by the City pursuant to the Reimbursement Agreement and (b) costs incurred by the Developer in connection with the construction of specified sewer improvements included in the Developer’s Phase 1A Infrastructure Improvements for which the Developer has been reimbursed, or is eligible to be reimbursed, by the City pursuant to the Sewer Agreement.
EXCLUDED MECHANICS
LIEN WAIVERS:
statutory lien/stop payment notice conditional waivers and releases that are or would be from any contractor, mechanic, subc ontractor, materialman or other Person if: (a) if the expecte d aggregate amount to be paid to such Person in connection with the Pr oject is less than $200,000 individually; (b) Authority has received a bond or other security that is reasonably satisfactory to the Aut hority with respect to mechanics lien claims and stop payment notices by s uch Person or (c) because of the nature of work, services, materi als or supplies to be provided by such Person in connection with the Project, such Person is not, under California law, entitled to record a mechanics lien or deliver a stop payment notice in connection with the Project.
EXECUTIVE DIRECTOR: the Executive Director of the A uthority or his or her designees. The Executive Director, or his or her designees, may delegate the authority granted in Authority Resolution 2020-002 to two or more members of the staff of the Authority, provided that such dele gation is made to a contingent comprised of an equal number of City and Port District staff members respectively. In making such a delegation, the Executive Director or his or her designees, shall provide notice of such delegation to the Parties hereto pursuant to Section 26.1 hereto.
EXISTING FUNDS / EF: defined in Section 5.1.2 of th e Agreement. 14 4845-4814-1790v29/024036-0079
EXISTING
IMPROVEMENTS:
any Improvements (including utilities, storm drains and park ways) located upon the land (and water, if applicable) that are in existence and located on, in, over or under the Site as of the Co mmencement Date, whether constructed by Port District, a prior tenan t or another third party.
EXPANDED SOFT COST
COVERAGE:
defined in Section 15.2.2.
EXPANSION: defined in Section 1.2 of the Ground Lea se.
EXPANSION DATE: defined in Section 1.2 of the Groun d Lease.
EXPEDITED REVIEW
INDIVIDUAL:
(a) when the Public Entity providing the applicable review is the City, the Expedited Review Individual shall be the City M anager, or an individual expressly authorized by the City Manager to provide approvals and denials under this Agreement, who sha ll be a senior person with knowledge and authority with respect to the Project, including any Deputy City Manager, and (b) when the Public Entity providing the applicable review is the Port Distric t, the Expediated Review Authority shall be the Port District Executi ve Director, or an individual expressly authorized by the Port District Executive Director to provide approvals and denials under this Agreement, who shall be a senior person with knowledge and authority with respect to the Project, including the Vice President of Business Operations.
The Expedited Review Individual for all matters relating to stormwater regulation compliance shall be a representative of the Port District. The Expedited Review Individual for all Phase 1A Infras tructure Improvements (except stormwater regulations) and th e vertical construction of the Convention Center shall be a re presentative of the City.
EXPEDITED REVIEW
PROCESS:
the process for expedited review by an Expedited Re view Individual described in Section 2.1.6.1 of the Agreement.
EXPIRATION DATE: defined in Section 1.1.2 of the Gr ound Lease.
EXTENDED
CONSTRUCTION
PERIOD DEADLINE:
defined in Section 5.1.2.
FACILITY: defined in Recital B.
FACILITY LEASE: that certain Facility Lease, dated as of ____________, 2022 by and between the Authority, as sublessor, and the City a s sublessee, as amended from time to time.
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FACILITY LEASE
ADVANCE RENT
NOTICE:
defined in the Facility Lease.
FINAL ACCOUNTING: (a) with respect to the Developer ’s Phase 1A Infrastructure Improvements, the final accounting of costs prepare d in accordance with Section 9.1.6, and (b) with respect to the Con vention Center the final accounting of costs prepared in accordance with Section 9.2.6.
FINANCING DISTRICT: the Chula Vista Bayfront Projec t Special Tax Financing District.
FINANCING
TRANSACTION:
defined in Section 9.1 of the Sublease.
FIRST DEVELOPER
COMPLETION NOTICE:
defined in Section 2.3.2.1.
FIRST SWEETWATER
PARK END DATE:
defined in Section 2.3.2.
FIRST SWEETWATER
PARK OPTION:
defined in Section 2.3.2.
FISCAL YEAR: a fiscal year of the City ending on Ju ne 30 of each calendar year.
FORCE MAJEURE
EVENT:
defined in Section 5.5(a).
FORCE MAJEURE
NOTICE:
defined in Section 5.5(e).
FORCE MAJEURE
PARTY:
defined in Section 5.5(a).
FORCE MAJEURE
RESPONSE:
defined in Section 5.4(e).
FORECLOSURE
PURCHASER:
defined in Section 9.3(c)(iv) of the Sublease.
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FULL PAYMENT: shall be deemed to have occurred when the following conditions are satisfied: (a) the Port District, the City and the Authority shall have confirmed in writing to RIDA that the Completion Gu aranty has terminated and (b) Developer shall have confirmed i n writing to Authority that Developer has received payment of (i) the Project Public Investment Amount, (ii) the Developer’s Phase 1A Co ntract Sum, (iii) and all interest due to Developer pursuant to Sections 9.2.3 and
9.2.4.2(b) of the Agreement, and (iv) the Payment a nd Performance Bond Reimbursement Amount. For the avoidance of do ubt, the occurrence of “Full Payment” does not require completion of the Final Accounting with respect to the Convention Center or the Developer’s Phase 1A Infrastructure Improvements.
GENERAL CONTRACT: each of the construction contract between the Developer and the General Contractor for the Developer’s Phase 1A Inf rastructure Improvements and the construction contract between the Developer and the General Contractor for the Convention Center.
GENERAL
CONTRACTOR:
with respect to Developer, a party or parties under any contract with the Developer to perform the work or provide supplies for the Developer’s Phase 1A Infrastructure Improvements and/or the Convention Center.
GOVERNMENTAL
AUTHORITY:
each and every governmental agency, authority, bure au, department, quasi-governmental body, or other entity or instrum entality having or claiming jurisdiction over the Site (or any activity the Sublease allows), including without limitation, the Port and the City, United States federal government, the State and County governments and th eir subdivisions and municipalities, and all applicable Government A gencies, governmental authorities, and subdivisions thereof.