Rancho Cordova City Council
July 18, 2022

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(b) Wage Rate Penalty ................................................................................41 (c) Work Hour Penalty .................................................................................41 (d) Registration of Contractors.....................................................................42 (e) Payroll Records......................................................................................42 (f) Apprentices ............................................................................................43

6.PERMITS. .................................................................................................................. 43 Permits ................................................................................................................. 43 Costs .................................................................................................................... 43 Schedule and Delays........................................................................................... 43

7.CONSTRUCTION. ..................................................................................................... 44 Commencement of Construction ....................................................................... 44 Delays................................................................................................................... 44 (a) Time Extensions.....................................................................................44 (b) Liquidated Damages ..............................................................................44 Guaranteed Maximum Construction Price Contract ......................................... 44 Construction Contracts....................................................................................... 45 (a) Labor Code §1700..................................................................................45 (b) Safety.....................................................................................................45 (c) Indemnity................................................................................................46 (d) Assignment ............................................................................................46 Protection of Persons and Property................................................................... 46 (a) Safety.....................................................................................................46 (b) Damage .................................................................................................46 (c) Notices ...................................................................................................46 Insurance During Construction.......................................................................... 46 Use of Developer Contingency........................................................................... 46 Completion of Construction ............................................................................... 47 Warranties............................................................................................................ 47 Correction of Work .............................................................................................. 48 Stop Work by Corporation .................................................................................. 49 Developer Default................................................................................................ 49 Work by Separate Contractors ........................................................................... 49 Compliance with Requirements of Law ............................................................. 50

8.CHANGES TO THE WORK....................................................................................... 50 ITEM 19.1. ATTACHMENT 2

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No Changes Without Corporation Approval...................................................... 50 Developer Approved Changes in the Work ....................................................... 50 Change in the Work Initiated by Corporation .................................................... 51 Claims by Developer ........................................................................................... 51 Lump Sum Change Orders ................................................................................. 52 Time and Materials Change Orders.................................................................... 53 Unilateral Change Orders ................................................................................... 54 No Extension of Time Without Impact to Critical Path...................................... 55 No Additional Compensation for Early Completion.......................................... 55 No Changes After Substantial Completion........................................................ 55 Credits.................................................................................................................. 55 Overhead and Profit ............................................................................................ 55 Compensation for Delay ..................................................................................... 56 Modifications ....................................................................................................... 56 Minor Field Changes ........................................................................................... 56 Conditions Affecting the Work. .......................................................................... 57 (a) Existing Site Conditions..........................................................................57 (b) Site Investigation and Representation ....................................................57 (c) Topographic Maps..................................................................................57 (d) Differing Site Conditions .........................................................................57 (e) Corporation Investigation........................................................................58 (f) Disputes .................................................................................................58 Changes in Requirements of Law ...................................................................... 58

9.PAYMENT OF PROJECT COSTS............................................................................. 59 Applications for Payment ................................................................................... 59 Payment Procedures........................................................................................... 61 Requisition to the Trustee................................................................................... 63 Initial Draw ........................................................................................................... 63 Other Corporation Costs..................................................................................... 63 Lump Sum Work and Unit Prices ....................................................................... 63 Allowances........................................................................................................... 63 Retention Payment.............................................................................................. 64 ITEM 19.1. ATTACHMENT 2

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Final Payment...................................................................................................... 65 Stop Payment Notices......................................................................................... 65

10.OTHER SERVICES BY DEVELOPER..................................................................... 65

11.DEVELOPER’S FIXED FEE AND REIMBURSABLE EXPENSES.......................... 66 Developer’s Fixed Fee......................................................................................... 66 Reimbursable Expenses ..................................................................................... 66 Payment of Developer’s Fixed Fee..................................................................... 66 (a) Equal Monthly Installments.....................................................................66 (b) Application..............................................................................................66

12.COMPLETION OF THE PROJECT. ........................................................................ 66 Substantial Completion of the Project ............................................................... 66 Notice of Substantial Completion....................................................................... 67 Completion of Punch List Items ......................................................................... 67 Final Acceptance................................................................................................. 67 (a) AHJ Approval .........................................................................................68 (b) Conditional Waivers ...............................................................................68 (c) Punch List Complete ..............................................................................68 (d) Final Pay App.........................................................................................68 (e) Project Costs Report ..............................................................................68 (f) Title Policy Endorsement........................................................................68 (g) LEED Application ...................................................................................68 (h) Final Acceptance Obligations .................................................................69 Approval of Final Project Application for Payment........................................... 69 Requisition of Final Payment.............................................................................. 69 Disbursement of Developer Contingency.......................................................... 69 Notice of Completion........................................................................................... 70 Partial Occupancy ............................................................................................... 70

13.MISCELLANEOUS DEVELOPER OBLIGATIONS ................................................. 71

14.DEVELOPER’S FINAL ACCEPTANCE OBLIGATIONS......................................... 71 As-Built Plans ...................................................................................................... 71 Manuals................................................................................................................ 71 Warranties............................................................................................................ 71 ITEM 19.1. ATTACHMENT 2

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Permits and Licenses.......................................................................................... 72

15.INDEMNIFICATION. ................................................................................................ 72 Developer’s Indemnification............................................................................... 72 Corporation’s Indemnification............................................................................ 73

16.INSURANCE REQUIREMENTS. ............................................................................. 73 Developer’s Insurance ........................................................................................ 73 Corporation’s Insurance ..................................................................................... 73 Verification of Coverage ..................................................................................... 73 Builders Risk Insurance...................................................................................... 73 Notice of Cancellation......................................................................................... 74

17.REPRESENTATIVES. ............................................................................................. 74 Developer Representatives................................................................................. 74 Corporation’s Representative............................................................................. 75 Construction Manager’s Representative ........................................................... 75 Emergency Contacts........................................................................................... 76 Communications ................................................................................................. 76 Timely Decisions ................................................................................................. 76

18.ACCOUNTING, INSPECTION AND AUDIT. ........................................................... 76 Accounts.............................................................................................................. 76 Inspection and Audit........................................................................................... 76

19.CONSTRUCTION LIENS......................................................................................... 77

20.PRIORITY AGREEMENTS...................................................................................... 77

21.DAMAGE AND DESTRUCTION; CONDEMNATION.............................................. 78 Damage and Destruction .................................................................................... 78 Condemnation ..................................................................................................... 78

22.PAYMENT OF TAXES/ASSESSMENTS................................................................. 79 Real Property Taxes ............................................................................................ 79 Other State and Local Taxes............................................................................... 79 ITEM 19.1. ATTACHMENT 2

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23.DEFAULT AND TERMINATION.............................................................................. 79 Developer Default................................................................................................ 79 (a) Material Default ......................................................................................79 (b) Persistent Failure ...................................................................................79 (c) Misappropriation.....................................................................................79 (d) Disregarding Laws..................................................................................80 (e) Failure to Pay .........................................................................................80 (f) Permit Revoked......................................................................................80 (g) Liens ......................................................................................................80 (h) Defective Work.......................................................................................80 (i) Assignment ............................................................................................80 (j) Bankruptcy .............................................................................................80 Corporation Remedies upon Developer Event of Default................................. 80 (a) Completion of the Project .......................................................................81 (b) Specific Performance .............................................................................81 (c) Withhold .................................................................................................81 (d) Damages................................................................................................81 (e) Termination ............................................................................................81 Corporation Default............................................................................................. 81 (a) Failure to Pay .........................................................................................81 (b) Assignment ............................................................................................81 (c) Material Default ......................................................................................81 Developer Remedies Upon Corporation Event of Default ................................ 81 Remedies Not Exclusive ..................................................................................... 82 Termination for Convenience of Corporation.................................................... 82 Equitable Adjustment for Extended Delay......................................................... 82

24.DISPUTES ............................................................................................................... 83

25.MISCELLANEOUS. ................................................................................................. 83 Waiver; Modification............................................................................................ 83 Neutral Authorship.............................................................................................. 84 Severability .......................................................................................................... 84 Relationship of Parties........................................................................................ 84 Third Party Rights ............................................................................................... 84 Assignment; Encumbrance or Pledge ............................................................... 84 Notices ................................................................................................................. 85 Entire Agreement................................................................................................. 86 ITEM 19.1. ATTACHMENT 2

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Time Is of the Essence........................................................................................ 86 Employees of Developer..................................................................... 86 Exhibits ................................................................................................ 86 Compliance with Civil Rights Laws.................................................... 87 Public Records Act ............................................................................. 87 Patent Infringement............................................................................. 88 Governing Law; Venue........................................................................ 88 Securing Worker’s Compensation Insurance Certification.............. 88 Employee Eligibility Verification ........................................................ 88 Section 179D Allocation...................................................................... 89 Employment of Corporation and Developer Personnel.................... 89 EXHIBIT A .................................................................................................................... 91 Legal Description of Land.......................................................................................... 91 EXHIBIT B .................................................................................................................... 92 Facility Lease.............................................................................................................. 92 EXHIBIT C .................................................................................................................... 93 Site Plan...................................................................................................................... 93 EXHIBIT D .................................................................................................................... 94 Breakdown of Project GMP........................................................................................ 94 EXHIBIT E..................................................................................................................... 95 Index of Approved Design Development Documents.............................................. 95 EXHIBIT F..................................................................................................................... 96 Project Schedule ........................................................................................................ 96 EXHIBIT G .................................................................................................................... 97 Developer’s Insurance Requirements....................................................................... 97 EXHIBIT H .................................................................................................................... 98 Dispute Resolution Procedure .................................................................................. 98 EXHIBIT I...................................................................................................................... 99 ITEM 19.1. ATTACHMENT 2

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Developer’s GMP Qualifications, Exclusions, and Allowances .............................. 99 EXHIBIT J................................................................................................................... 100 Final Completion Form............................................................................................. 100 EXHIBIT K .................................................................................................................. 101 Special Inspections and Testing ............................................................................. 101 EXHIBIT L................................................................................................................... 102 Certificate of Substantial Completion Form ........................................................... 102 EXHIBIT M .................................................................................................................. 103 Form of Bonds and Dual Obligee Rider.................................................................. 103 EXHIBIT N .................................................................................................................. 104 Form of Project Application For Payment .............................................................. 104 EXHIBIT O .................................................................................................................. 105 List of Geotechnical Reports, Topographic Maps, and Other Project-Related Documents................................................................................................................ 105 EXHIBIT P................................................................................................................... 106 Corporation-Approved Procurement Plan.............................................................. 106 EXHIBIT Q .................................................................................................................. 107 Basis for Offsite Improvement Allowance .............................................................. 107 EXHIBIT R .................................................................................................................. 108 Basis of Design ........................................................................................................ 108 ITEM 19.1. ATTACHMENT 2

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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this “Agreement”) dated as of ___________, 2022 is by and between _______________ CORPORATION, a California _______________ (“Corporation”), and GRIFFIN / SWINERTON LLC, a Delaware limited liability company (“Developer”).

RECITALS
A. On July 23, 2019, City of Rancho Cordova, a municipal corporation (“Tenant”) issued a Request for Proposals for the Project (as defined in Recital D). Developer responded to the Request for Proposals and submitted a proposal to Tenant. After a multi-step developer solicitation process that included the Request for Proposals, meetings and interviews, on or about July 20, 2020, Tenant selected Developer to developer the Project.

B. Developer and Tenant previously entered into the Pre-Development Agreement, dated ____________, 2022 (the “PDA”), whereby Developer provided the PHASE 1 Services (as defined in the PDA) relating to the Project. Developer will provide the PHASE 2 Services (as defined in the PDA) under this Agreement with Corporation as a public-private partnership whereby Developer will design and construct the Project, and Tenant may elect to be reimbursed by Corporation from Bond proceeds in accordance with the Indenture on or before the 60th day after the Bond Closing (as defined in Section 1) for the funds it advanced for the PHASE 2 Services and other reimbursable costs.

C. Corporation is the lessee under that certain Ground Lease (“Ground Lease”), in which Tenant is the lessor and pursuant to which Corporation leases that certain real property located in the City of Rancho Cordova, California (“Land”), that is more specifically described in the attached Exhibit A.

D. On July 23, 2019, Tenant issued the Mills Station District P3 Master Development Opportunity requesting Letters of Interest to develop a mixed-use site anchored by an Mixed Use Community Building and Public Plaza to be enjoyed by the Rancho Cordova community, including nearby Mather Field/Mills Station transit riders and Folsom Lake College (“RFP”).

Corporation desires to construct on the Land a Mixed Use transit oriented development (TOD) consisting of (1) community-commercial facilities including an modern community arts center, health and wellness center, and flexible community building; (2) residential use of at least 100 units on the Property, with at least 25% of those residential units to be restricted to lower income households; and (3) Community Building and Public Plaza and community green space to be enjoyed by the Rancho Cordova community, including nearby Mather Field/Mills Station transit riders and Folsom Lake College (collectively, the “Mills Crossing Project”). The proposed Mills Crossing Project is more fully described in the approved Design Development Documents (as defined in Section 1). The design, permitting and construction of the Mills Crossing Project are together referred to in this Agreement as the “Project.” ITEM 19.1. ATTACHMENT 2

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E. On August 17, 2020, Developer and Tenant entered into an Exclusive Negotiating Rights Agreement (“ENA”) with a one year term plus City Manager’s option to extend the term by six-months, which option was exercised by the City Manager extending the term to February 17, 2022. Under the ENA, Developer funded and executed project activities including due diligence and developed multiple development alternatives, concept designs, tenant mixes with programming partners, financing approaches, and performed community outreach culminating with a preferred development concept approved by the City Council on December 6, 2020.

F. On February 7, 2022, Developer and Tenant entered into the First Amendment to the Exclusive Negotiating Rights Agreement (collectively referred to as the “ENA”) to provide an additional six months to complete negotiations and commence to execute the Project per the RFP through a two-step contract process, with the PDA being for PHASE 1 and this Development Agreement being for PHASE 2.

G. Tenant desires to have Corporation engage Developer to implement the Project as envisioned in the RFP and refined during the ENA term, and to provide the services as described herein and subject to the terms hereof.

H. Corporation, as landlord, and Tenant are parties to that certain Facility Lease dated of even date with the Ground Lease (“Facility Lease”), whereby Tenant has agreed to lease the Premises (as defined in Section 1) upon substantial completion of the Project, at the rent and subject to all of the terms, covenants and conditions set forth in the Facility Lease, a copy of which is attached hereto.

I. Corporation desires to engage Developer to develop and administer the design, permitting and construction phases of the Project in accordance with the terms and conditions of this Agreement. Developer desires to perform development and construction management services in connection with the construction of the Project in accordance with the terms and conditions of this Agreement. Subject to the terms and conditions hereof, Developer will warrant to achieve Substantial Completion (as defined in Section 1) of the Project no later than the Developer Obligation Date (as defined in Section 1) and for a total price not to exceed the Project GMP (as defined in Section 1).

J. Corporation understands that Developer will not personally perform any design or construction services. The parties intend for Developer to contract directly and separately with (i) the Construction Manager (as defined in Section 1) who is to be engaged to construct the Project, (ii) the Architect (as defined in Section 1) and engineers and related design consultants designing the Project, and (iii) such other Contractors (as defined in Section 1) or consultants who may be engaged to perform discrete elements of design or construction work on the Project to the extent not covered by the CMAR Contract (as defined in Section 1) or Architect’s Agreement (as defined in Section 1). If, during the performance of this Agreement, Developer determines that additional construction service consultants or contractors must be retained in order to meet the terms of this Agreement, the Developer will contract with them directly.

ITEM 19.1. ATTACHMENT 2

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K. Corporation anticipates that financing for the Project will be obtained through the issuance of tax-exempt bonds (the “Bonds”) by the California Municipal Finance Authority (the “Authority”) for the benefit of the Corporation by agreement between the Corporation and the Authority. Upon payment in full of the Bonds, Corporation will convey the Project to Tenant for no additional consideration.

NOW, THEREFORE, to fulfill the foregoing objectives, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Corporation and Developer desire to enter into this Agreement and proceed in accordance with its terms.

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:
“ADA” means the Americans with Disabilities Act of 1990, as amended from time to time. “AHJ” means an Agency Having Jurisdiction with respect to the Project, which includes any governmental or quasi-governmental agencies, bodies, authorities and courts having jurisdiction over the Project or any portion thereof, including but not limited to Sacramento County Public Works, Sacramento County Building & Safety Department, and Sacramento County Fire Authority.
“Allowance” means additional resources included in Developer’s estimate to cover the cost of known but undefined requirements for an individual activity, work item, account or subaccount expressly identified as such in Exhibit I. There are no Allowances except as specifically identified in Exhibit D or Exhibit I. When Developer is capable of determining the actual cost associated with the Allowance, an appropriate additive or deductive change order shall be issued as and when necessary as reasonably determined by Developer as further described in Section 9.8.

The drawings attached as Exhibit Q were the basis for Developer’s Allowance for the ____________ improvements.
“Architect” means LPA, Inc., the architect for the Project, or any successor architect for the Project.
“Architect’s Agreement” means the agreement between Developer and the Architect with respect to the Project.
“Bond Closing” refers to the date the Bond proceeds are made available to the Trustee. “Bonds” means those tax-exempt bonds to be issued by the Authority for the benefit of the Corporation as more particularly described in Recital F above, from the proceeds of which Corporation intends to pay, among other things, the cost of PHASE 2 Services, the Project GMP, the Financed FF&E, and any bonds issued to refund such Bonds. “CMAR Contract” means the agreement between Developer and the Construction Manager for construction of the Project through the delivery method of Construction Manager atRisk (“CMAR”).

ITEM 19.1. ATTACHMENT 2

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“Commencement of Construction” means the date Corporation executes and delivers to Developer the written Notice to Proceed (Construction). “Commodities” mean finished goods, products, or materials that are purchased (directly or indirectly) by Developer or Construction Manager that are intended to be installed in or incorporated into the work including, without limitation, the Financed FF&E. “Construction Contracts” means collectively (i) the CMAR Contract, (ii) the subcontracts between Construction Manager and its Trade Contractors, and (iii) all other contracts for construction services entered into between Developer and any Contractor, for construction of any portion of the Project not covered by the CMAR Contract. “Construction Documents” means the Construction Drawings and Detailed Specifications approved by the Corporation, for construction of the Project, including technical drawings, schedules, diagrams, plans and specifications setting forth in detail the requirements for construction of the Project and providing information customarily required for the use of the building trades.
“Construction Drawings” means Drawings setting forth the requirements for the construction of the Project approved by the Corporation. As used herein, “Drawings” include all graphic and pictorial documents depicting the design, location and dimensions of the elements of the Project (including Tenant Improvements) and include plans, elevations, sections, details, schedules and diagrams for the Project, all of which shall be consistent with the Project Requirements. Construction Drawings may, if applicable, consist of separate Drawings for the Mills Crossing Project, and Tenant Improvements.
“Construction Manager” means Swinerton Builders, the Construction Manager at Risk for the Project selected by Developer and any replacement or successor construction manager. The Construction Manager is providing its professional services for a fixed fee. Developer may, at its election, replace the Construction Manager with a replacement construction manager with the consent of Corporation, which consent will not be unreasonably withheld, conditioned, or delayed provided that there is no increase to the Project Cost or to the Corporation. “Contract Documents” means this Agreement (including all exhibits attached hereto), the Construction Documents, the Construction Contracts and the other documents identified as Contract Documents in the CMAR Contract and all modifications and amendments to the foregoing issued after the date of execution of this Agreement, including amendments and change orders.
“Contractors” means the Construction Manager, any Trade Contractors and their subcontractors (of any tier), and any other construction trade contractors with whom Developer enters into Construction Contracts for the Project.
“Corporation” means _________________________ Corporation, a California nonprofit public benefit corporation, its successors and permitted assigns.

ITEM 19.1. ATTACHMENT 2

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“Corporation-Caused Delay” means any period of Critical Path delay in the overall progress of design, finance, construction, and completion of the Project, including Tenant Improvements, that is caused by (a) Corporation-initiated changes to the Construction Documents, (b) Corporation’s failure to approve, disapprove, decide, or otherwise respond to Developer in the time indicated in this Agreement for such item with respect to a particular item for which Corporation’s response is required hereunder or under the CMAR Contract or Architect’s Agreement, (c) Corporation’s failure to deliver plans, information, specifications, or other information within the time frames required under this Agreement, the Project Schedule, or the CMAR Contract or Architect’s Agreement, (d) Corporation’s failure to timely fund Project Costs or Other Corporation Costs, (e) failure of Corporation and/or Tenant to cause Corporation or Tenant provided FF&E or Tenant’s Personal Property, if any, to be procured and installed in a timely manner, (f) any interference or other acts or omissions of Corporation or Tenant, (g) delays caused by Tenant which are not intended to include any period of time provided in the Facilities Lease, the Project Schedule, or this Agreement for Tenant to review and respond to any submission, (i) delays caused by items for which Corporation is responsible, including but not limited to Corporation Deliverables, or (j) Differing Site Conditions not reasonably identified by Developer prior to the date of this Agreement in the exercise of its commercially reasonable due diligence (which the parties have agreed that Developer’s due diligence was reasonable based on the reports identified in Exhibit O). In the absence of a particular time frame in the Project Schedule for Corporation to provide plans, information, approvals, etc., Corporation will have five (5) business days to provide such plans, information, approvals, etc. after Developer’s written request. However, Corporation-Caused Delay shall not include delay to the extent caused by Developer’s failure to provide, within the time frames allowed hereunder, draw requests, architect’s certifications, progress completion certifications, copies of change orders and reasonable supporting documentation, shop drawings, schedules, costs, invoices, job progress reports, or any other documents or information which Corporation is entitled to receive hereunder or which is reasonably requested by Corporation in connection with any such decision or response.

To facilitate timeliness in Corporation’s communications with Developer over matters relating to design or construction of the Project and to minimize the possibility of Corporation-Caused Delay, Developer shall alert Corporation to deadlines for approvals, decisions or other responses that Corporation must provide hereunder, including, among other methods, attachment of “deadline cover sheets” on any submissions to Corporation that require response by a particular deadline or distribution of weekly calendars that show deadlines imposed on Corporation. If Developer at any time believes that an instance of Corporation-Caused Delay has occurred that has directly caused or will directly cause an increase in Project Costs or extension of the Developer Obligation Date, then Developer shall send a written notification to Corporation in accordance with Section 8.4.

Any disputes between Developer and Corporation over delays or Project Costs attributable to Corporation-Caused Delay shall not be a reason to stop or delay construction of the Project and shall be resolved by the parties as expeditiously as possible, either by mutual agreement of the parties or in accordance with the dispute resolution mechanisms described in Section 24 hereof.

ITEM 19.1. ATTACHMENT 2

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“Corporation Contingency” means a fund to cover cost growth during the Project used at the discretion of the Corporation usually for costs that result from Corporation directed changes or Corporation-Caused Delays. The amount of the Corporation’s Contingency will be set by the Corporation and will be included as a line item in the Project GMP (below the line), but will be for Corporation’s exclusive use. Corporation Contingency will be added to the GMP amount provided by the Developer, the sum of which will be the full contract price for design, permitting and construction. Markups for insurance, bonds, fee, taxes, and general conditions will be applied by the Developer at the time that Corporation Contingency is used. Any Corporation Contingency not utilized shall revert to the Corporation after Project completion. Corporation may or may not elect to include a Corporation Contingency, and may elect the amount of any Corporation Contingency. Corporation’s election to not include a Corporation Contingency or election to have an insufficient Corporation Contingency is at Corporation’s sole risk. The Corporation Contingency will be treated like an Allowance (but to be used exclusively by the Corporation), and the amount of the Corporation Contingency (which is determined solely by the Corporation in its sole discretion) will not act as a limit on costs that Corporation is required to pay under this Agreement.
“Corporation Deliverables” means and refers to (a) all reviews and approvals by Corporation required under this Agreement, (b) Corporation’s responses to questions from Developer required under this Agreement, (c) Corporation’s design and installation of its information technology in accordance with the Project Schedule, (d) Corporation providing the Tenant Personal Property in accordance with the Critical Path Project Schedule, and (e) any FF&E or Tenant’s Personal Property that Corporation or Tenant desires that is not included in the approved Construction Documents as Developer’s responsibility in accordance with the Project Schedule.
“Costs Not to Be Reimbursed” means, except as specifically provided in Section 11 hereof (relating to Developer’s Fixed Fee) or as set forth in Exhibit D, (a) salaries or other compensation of Developer’s personnel normally situated at Developer’s principal office or branch offices; (b) except as otherwise provided in the Construction Contract, salaries or other compensation for any of Contractor’s personnel normally situated at such Contractor’s principal office or branch offices; (c) salaries or other compensation for any officer of Developer or Contractor; (d) expenses of Developer’s or Contractor’s principal office; (e) overhead or general expenses, except as expressly provided in the definition of Project Costs; and (f) Project Costs in excess of the Project GMP.
“Costs Resulting from Corporation-Caused Delay” means any increase in costs of constructing the Project to the extent resulting from Corporation-Caused Delay. Where additional costs are incurred as a result of a combination of Corporation-Caused Delay and failure of Developer to provide, within the time frames allowed hereunder, draw requests, architect’s certifications, progress completion certifications, copies of change orders and supporting documentation, shop drawings, schedules, costs, invoices, job progress reports, or other documents ITEM 19.1. ATTACHMENT 2

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or information which Corporation is entitled to receive hereunder or which is reasonably requested by Corporation in connection with any such decision or response required hereunder, then Costs Resulting From Corporation- Caused Delay shall be only the portion of such costs attributable to Corporation-Caused Delay.
“Critical Path” means the sequence of Activities in a network analysis such that the total duration equals the sum of the durations of the individual Activities in the sequence. There is no time leeway or slack (float) in Activities along the Critical Path (that is, if the time to complete one or more Activities in the Critical Path increases, the total production time increases). The Project Schedule shall include the Critical Path. As used in this definition, the term “Activities” refer to basic elements of work, or tasks that must be performed in order to complete the Project.

Activities may occur over time.
“Design Development Documents” means drawings and related specifications that are a consistent development of the Schematic Documents and further define and describe all important aspects of the Project and includes measured CAD drawings at a scale required to convey and describe the design intent. The approved and accepted Design Development Documents will serve as the basis for the Construction Drawings as approved by the Corporation and Tenant. The Design Development Documents were previously prepared under the PDA and have been approved by Corporation and Tenant, and the approval acknowledges that the Design Development Documents are in conformance with the Schematic Documents and the Basis of Design (Exhibit R). An index of all of the approved and accepted Design Development Documents as of the date of this Agreement is included in Exhibit E.
“Detailed Specifications” means all written detailed requirements for materials, equipment, construction systems, standards and workmanship for the construction of the Project. “Developer” means the entity identified as Developer in the preamble, and its successors and permitted assigns hereunder.
“Developer Contingency” means the Developer contingency line item set forth in Exhibit D which will be set formulaically at time of establishment of the GMP to be a factor of 5% of all Project Costs. The Developer Contingency is a fund to pay Project Costs during the Project which are not the Corporation’s responsibility. Developer may use the Developer Contingency at the reasonable discretion of Developer for Project Costs that fall within any of the following categories: (a) voluntary acceleration, (b) costs that are not recovered from sureties of retaining replacement or supplemental Contractors, (c) gaps in Trade Contractors’ scopes of work, including interfacing omissions between and among the work categories, (d) Unavoidable Delays, (e) delays and costs attributable to Developer, excluding costs arising from Developer’s gross negligence or willful misconduct, (f) labor disputes, (g) material or equipment price changes, (h) costs related to the coordination of modifications, amendments or updates to the completed Construction Documents that are required by an AHJ or otherwise at no fault of either party to this Agreement, excluding costs arising from errors or omissions that are a breach of the Architect’s standard of ITEM 19.1. ATTACHMENT 2

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care, (i) correcting defective or non-conforming work that Developer cannot reasonably recover from the responsible Trade Contractor(s), or (j) settling the contractual claims of Contractors when doing so is deemed by the Developer to be in the best interests of the Project to keep the Project progressing, subject to such settlement amounts being within limits of the Project GMP. The foregoing categories are referred to as the “Pre-Approved Developer Contingency Uses.” Developer may use the Developer Contingency for Project Costs that do not fall within the PreApproved Developer Contingency Uses only with the consent of the Corporation, which consent will not be unreasonably withheld. The Developer Contingency will not be subject to additional markup by Developer, but may include markup for Contractors for their direct and indirect overhead costs and profit. The amount of the Developer Contingency will be a separate line item in Exhibit D. Any unused Developer Contingency, at the completion of the Project, will be subject to the terms of Section 12.7.
“Developer Obligation Date” means the scheduled date for issuance of the Certificate of Substantial Completion as set forth in the Project Schedule attached as Exhibit F, as it may be extended pursuant to this Agreement. The Developer Obligation Date shall be extended day-forday to the extent (a) Bond Closing has not occurred on or before ______________, (b) Corporation has not executed this Agreement on or before ______________, (c) Corporation has not issued its Notice to Proceed (Construction) in accordance with the Project Schedule, or (d) of CorporationCaused Delays and (e) of Unavoidable Delays. “Developer’s Fixed Fee” means the fixed fee to be paid by Corporation to Developer pursuant to Section 11.1 and subject to the terms and conditions set forth in Sections 7.2, 11 and 12 of this Agreement for Developer’s Project related program management, development management, and construction management services to be performed by Developer under this Agreement. This fee is inclusive of all of Developer’s overhead, administrative costs, development/program management and construction management costs for the scope of work included in the Project. This fee is exclusive of any fees or costs of Developer’s Construction Manager, the Architect or other design professionals, consultants, Contractors, laborers, materials, equipment, or Reimbursable Expenses, and which amounts are included as Project Costs within the Project GMP. In addition to Developer’s Fixed Fee, Developer is also entitled to share in the unused Developer Contingency as set forth in Section 12.7. Developer’s Fixed Fee was not calculated based on Developer’s Contingency. To the extent that Developer’s Contingency is expended for any reason, then Developer shall receive additional fee compensation calculated at ___% at the time of those expenditures (if any). Developer’s expenditure of Developer’s Contingency, plus the additional fee applied thereto as provided in the previous sentence, will be deducted from the Developer’s Contingency line item and, therefore, will not be included in any final shared participation in unused Developer’s Contingency. “Differing Site Conditions” are: (a) subsurface or latent physical conditions at the Project Site differing materially from those conditions indicated from a reasonable evaluation in accordance with industry custom or (b) unknown or unforeseen physical conditions at the Project ITEM 19.1. ATTACHMENT 2

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Site of an unusual nature, differing materially from conditions normally encountered and generally recognized as inherent in work of the nature provided for in the Construction Documents. The parties acknowledge that they have agreed upon the reasonable due diligence that Developer is to undertake pursuant to the PDA. Therefore, Differing Site Conditions are, as defined above, but only to the extent that the conditions were not revealed by the mutually agreed upon due diligence performed by Developer. Developer is responsible for (and may not make a claim for) any conditions identified by the due diligence performed by Developer. “Facility Lease” means the Facility Lease to be executed between Corporation and Tenant for occupancy of the Project, in the form attached hereto as Exhibit B. “FF&E” means furniture, fixtures, equipment and movable property. “Financed FF&E” means all furniture, fixtures, equipment and movable property as set forth in the Detailed Specifications, the costs of which will be (a) included in Project Costs, and (b) financed through the Bonds. It is the intent of Corporation and Developer that they will cooperate to make any decisions on Financed FF&E such that the total cost of the Financed FF&E will not exceed the line item for Financed FF&E in Exhibit D for the Financed FF&E. If Corporation or Tenant adds items to the Financed FF&E or selects items that are more expensive than the aggregate budgeted amount for the Financed FF&E, then such additional costs of Financed FF&E in excess of the budgeted line item for Financed FF&E shall be deemed to be an Other Corporation Cost. The Financed FF&E will be designed, provided and installed in accordance with the Detailed Specifications and Developer shall have no other obligations in connection therewith. “Final Acceptance” means the Corporation’s written approval and concurrence that certain events, more fully defined in Section 12 of this Agreement, have occurred prior to Final Payment being made.
“Final Completion” is the date when Construction Manager has completed all construction activities required by the Contract Documents, excluding executory warranty obligations. Corporation and Developer will complete and sign the Final Completion form attached as Exhibit J in a timely manner.
“Final Payment” means payment to Developer following Final Acceptance of the Project pursuant to Section 12 of this Agreement.
“Financing Costs” means all financing and other related costs authorized to be paid pursuant to the Indenture in connection with the issuance of the Bonds. “Guaranteed Maximum Construction Price” means the maximum cost for construction of the Project, as guaranteed by the Construction Manager pursuant to the terms of the CMAR Contract.
“Guaranteed Maximum Price of Project” and “Project GMP” mean and refer, interchangeably, to the amount of $___________ to be paid by Corporation for Project Costs. The Guaranteed Maximum Construction Price is just one element of the Guaranteed Maximum Price ITEM 19.1. ATTACHMENT 2

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of Project. A detailed description of all Project Costs included in the Project GMP, broken down by line item and category, is set forth in Exhibit D. Where applicable, the terms “Guaranteed Maximum Price of Project” and “Project GMP” shall each include adjustments thereto made in accordance with this Agreement. The Guaranteed Maximum Price of Project specifically excludes the following costs (all of which are Corporation’s responsibility): (1) Corporation’s Other Costs; and (2) costs associated with work that is not included in the Construction Documents.

Additionally, the Project GMP is subject to the express qualifications, exclusions and Allowances set forth in Exhibit I. Nothing in this Agreement or its exhibits is intended to create a line item guaranty (only the Project GMP is guaranteed), and Developer may, in its sole and absolute discretion, allocate any savings from any individual line item or the Developer Contingency, except Allowances, to any Project Costs for any Project work required from the Contract Documents for the Project, except that Developer must obtain Corporation’s consent to use Developer Contingency for Project Costs that are not included in the Pre-Approved Developer Contingency Uses.
“Indenture” means the trust indenture pursuant to which the Authority will issue the Bonds, a copy of which shall be provided to Developer by Corporation at Bond Closing. “Initial Draw” refers to Developer’s first application for payment of Project Costs, which shall not occur before Bond Closing.
“Land” means the real property located in the City of Rancho Cordova, Sacramento County, California, more specifically described on Exhibit A hereto. “Laws” means any constitution, statute, ordinance, regulation, rule, resolution, judicial decision, administrative order or other requirement of any federal, state, county, municipal or other governmental agency or authority having jurisdiction over the parties or the Premises, including without limitation, any regulation or order of a quasi-official entity or body (e.g. board of fire examiners or public utilities) and all rules, laws and regulations issued thereunder, as the same may be amended from time to time.
“Mills Crossing Project” means the mixed use project as described in Recital D to be constructed on the Land. The Mills Crossing Project is expected to contain approximately ______ gross square feet of area, as more fully described in the approved and accepted Design Development Documents, and includes the Tenant Improvements constructed therein. A site plan of the Project showing the Mills Crossing Project is attached hereto as Exhibit C. “Notice to Proceed (Construction)” means the notice to be delivered in writing by Corporation to Developer, at or following the Bond Closing, whereby Corporation authorizes the Commencement of Construction.
“Notice to Proceed (Design)” means the date of execution of this Agreement by the Corporation which shall serve as authorization for Developer to continue preparing the Design Development Documents and to prepare the Construction Documents.

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“Other Corporation Costs” means all costs that are stated in this Agreement to be the responsibility of Corporation or Tenant. Other Corporation Costs shall include, without limitation, Tenant’s Personal Property and any taxes thereon, any costs of Financed FF&E to the extent that Corporation’s decisions in adding FF&E or selecting FF&E causes the total cost of the Financed FF&E to exceed the FF&E line item in Exhibit D, Financing Costs and any other costs associated with the Bonds, costs for the ground lease by Corporation of the Land and all improvements thereon (including title, escrow and recording costs), debt service on the Bonds, attorneys’ fees and costs incurred by Corporation or Tenant, brokerage and leasing commissions or finders’ fees incurred by Corporation or Tenant, property taxes and assessments of any nature with respect to the Land or any improvements located on the Land, costs associated with any licensee, subtenant or other occupant of the Land, expenses resulting from Corporation-Caused Delays or Unavoidable Delays (including, without limitation, expenses incurred in connection with a casualty) except as otherwise provided in Section 7.2, consulting fees for any consultants engaged by Corporation, Tenant or Trustee as permitted under Section 9.3, costs associated with any lawsuit, claim or other action pending or threatened against Corporation or Tenant, except as otherwise provided in Sections 13, 15 and 24.
“Permits” means all land use approvals, permits and approvals to be obtained by Developer from the AHJ that are required for construction of the Project. “Permitted Use” means the intended use of the Project by Tenant for its building, parking and any other lawful use consistent with the provisions of the Facility Lease and maintaining the exclusion of interest on any obligation issued to finance the Project where such interest was intended to be excludable from taxpayer gross income.
“Premises” means the entirety of the Land and the Mills Crossing Project that are to be leased to Tenant under the Facility Lease.
“Prequalification Questionnaires” are questionnaires for pre-qualifying certain trade Contractors for the Project developed by Developer and/or Construction Manager and approved by the Corporation in compliance with all applicable Requirements of Laws prior to any actual pre-qualification of contractors, bid solicitation or construction. “Project” means the total design, permitting and construction, and other professional services, and all labor, materials and equipment used or incorporated in such design and construction of the Mills Crossing Project, and the Tenant Improvements to be constructed within the Mills Crossing Project, but specifically excludes any work not included in the Contract Documents (e.g., Corporation or Tenant provided FF&E, Tenant’s Personal Property, Corporation or Tenant provided information technology). The Project shall be consistent with the approved Project Requirements. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, the Financed FF&E will be designed, provided and installed in accordance with the Detailed Specifications and Developer shall have no other obligations in connection therewith or in connection with Tenant’s Personal Property.

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“Project Application for Payment” means the procedures by which requests for payment for Project Costs and other costs shall be made in accordance with Section 9 of this Agreement.

The Project Application for Payment will be in the form of Exhibit N. “Project Costs” means all direct and indirect costs incurred by Developer for any Project work required by the Contract Documents for the completion of the development, planning, designing, engineering, permitting, financing, estimating, bidding, and constructing of the Project, including, without limitation, all labor, materials, equipment, Financed FF&E, Reimbursable Expenses, Developer Fixed Fee, Developer Contingency, Architect costs, Construction Manager costs, Contractor costs, consultant and professionals costs, bond costs, warranty costs, close-out document costs, and taxes. Notwithstanding anything to the contrary herein, Project Costs (including, without limitation, the Tenant Improvements) do not include and Developer shall have no responsibility for (a) Tenant’s Personal Property and any taxes thereon (which shall be paid by Tenant at its sole cost and expense); (b) Corporation Contingency; (c) Costs Resulting from Corporation-Caused Delay; (d) any increase in the cost of the Project resulting from Corporation Contingency use; (e) real property taxes and assessments with respect to the Land and the improvements thereon; (f) Other Corporation Costs; (g) maintenance or operation of the Mills Crossing Project after Substantial Completion of the Project; or (h) costs associated with Tenant vacating the land, if any, including temporary office and parking arrangements for Tenant workers or visitors.
“Project Fund” means the fund of that name established under the Indenture for the purpose, among others, of paying Project Costs.
“Project Requirements” means the approved Design Development Documents, Requirements of Law and any other requirements for the Project specifically agreed to by Corporation and Developer.
“Project Schedule” means the schedule for development, design, and construction of the Project as set forth on attached Exhibit F to this Agreement, as revised from time to time in accordance with this Agreement; provided, however, that in no event shall the Project Schedule provide for Substantial Completion of the Project to occur later than the Developer Obligation Date.
“Punch List” means a list of items required to be completed prior to Final Acceptance that are minor items which do not affect Corporation’s ability to lease the Premises to Tenant and do not affect Tenant’s ability to use the Premises for the Permitted Use. “Reimbursable Expenses” means direct and indirect costs (e.g., submittal exchange, etc.) incurred by Developer in developing, planning, designing, financing, and constructing the Project pursuant to this Agreement which costs are not included in other line items in Exhibit D, but which amounts are included within the Guaranteed Maximum Price of Project and are considered to be Project Costs. Reimbursable Expenses are paid at cost without markup.

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“Requirements of Law” means all requirements relating to land and building construction (including those specifically applicable to Tenant’s contemplated use of the Premises), including, without limitation, if and to the extent applicable, planning, zoning, subdivision, environmental, air quality, flood hazard, fire safety, accessibility, public contracting and other governmental approvals, permits, licenses and/or certificates as may be necessary from time to time to comply with all the foregoing and other applicable statutes, rules, orders, regulations, laws, ordinances, and covenants, conditions and restrictions, which now apply to and/or affect the design, construction, existence, intended use, operation and/or occupancy of the Land, the Premises or any part thereof.
“Retention” means a percentage of the amount due to the Developer on a Project Application for Payment for a progress payment, that is deducted from the amount due and retained by Corporation.
“Retention Payment” means the Corporation’s payment to Developer, following Substantial Completion, of the Retention (or a portion thereof) being held by Corporation. “Sale of the Bonds” means execution and delivery by Corporation and a bond underwriter of an agreement providing for the purchase and sale of the Bonds on terms consistent with the terms of the Facility Lease and with no conditions to the underwriter’s obligation to pay for and accept delivery of the Bonds other than those conditions contained in said agreement between Corporation and the responsible bond underwriter.
“Savings” means the difference (if a positive number) obtained by subtracting (a) the total aggregate sum of allowed Project Costs from (b) the authorized Project GMP (as revised pursuant to the terms of this Agreement but less any unused Developer Contingency, as unused Developer Contingency is subject to Section 12.7). Developer will separately track all Savings (whether inuring from the buy-out process, from cash discounts, or otherwise). With each application for payment, Developer will provide Corporation with its accounting of these Savings, if any.

Developer may, in its sole discretion, allocate Savings between and among its line items for any Project Cost; provided that Developer advises Corporation in writing of its use, and provided further that Developer may not, in any event, allocate any Savings to increase its Developer Fixed Fee or its Construction Manager’s fixed fee. Until Final Completion, any Savings are fully available to Developer to pay for any Project Costs including Developer Contingency costs, but excluding increases in the Developer Fixed Fee (except to the extent that Developer is entitled to a share of Developer Contingency under Section 12.7).
“Schedule Update” means a periodic update of the Project Schedule. The Schedule Update shall reflect Developer’s assessment of completion. Developer shall identify any events that will delay the completion of an interim milestone or the completion of the overall Project in the monthly Schedule Update, to the extent known at the time. Corporation must submit written notice to Developer within five (5) business days of receipt of the Schedule Update stating that the Corporation objects to the Schedule Update (and provide written objections to Developer within a ITEM 19.1. ATTACHMENT 2

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reasonable time after the Corporation’s notice of objection); failure of Corporation to timely submit a written notice objecting to the Schedule Update will be deemed Corporation’s acceptance of the monthly Schedule Update, and the monthly Schedule Update shall become the current accepted Project Schedule. Any request for an extension of the Contract Time must be based on the accepted Project Schedule.
“Schedule of Values” means a detailed statement outlining the portions of the Project GMP that allocates values for the various parts of the Work and is also used as the basis for submitting and reviewing Project Applications for Payment. “Schematic Documents” means drawings and related outline specifications establishing the general scope, conceptual design, design intent and scale and relationship among the components of the Project. The Schematic Documents were previously prepared under the PDA and have been approved by Corporation and Tenant.
“Separate Contractors” means the contractors, if any, retained by Corporation to perform any work on the Project that is not included in Developer’s scope of work, including their trade contractors of any tier.
“Special Testing and Inspections” means special testing and inspections for structural components (e.g., earthwork compaction, shoring, concrete, reinforcing steel, CMU, welding, and other structural related installed systems), as set forth in Exhibit K. “Substantial Completion” or “Substantial Completion of the Project” means that the Project has been constructed in substantial accordance with the Contract Documents (with the exception of any Punch List items) and AHJ has issued a temporary or final certificate of occupancy or other approval (e.g., final building inspection by building officials) sufficient for initial occupancy of the Mills Crossing Project such that Corporation or Tenant is permitted to and could occupy the Mills Crossing Project for its Permitted Use, including installation of the Financed FF&E identified in the Detailed Specifications; provided, however, if the delay in the issuance of the certificate of occupancy or other approval necessary to allow occupancy is attributable to an obligation of Corporation or Tenant, then this condition shall be deemed satisfied.

A “Certificate of Substantial Completion” in the form attached as Exhibit L signed by the Architect shall evidence this date; the date will not be altered by the Architect making subsequent modifications to or reissuing the Certificate of Substantial Completion (e.g., striking “Tentative” or adding items to the Punch List) to address Corporation concerns regarding the work to be completed.
“Substantially Complete” or “Substantially Completed” means that the Project, or portion thereof, has achieved Substantial Completion.
“Tenant” means City of Rancho Cordova, a municipal corporation, and its successors and permitted assigns as tenant under the Facility Lease.

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“Tenant Improvements” means any improvements to the interior of the Mills Crossing Project as specifically described in the Construction Documents to be completed by Developer. “Tenant’s Personal Property” means Tenant’s furniture, equipment, and movable personal property placed in the Premises. Tenant shall provide and install Tenant’s Personal Property at Tenant’s sole cost and expense. Tenant’s Personal Property does not include Financed FF&E.
“Title Policies” shall mean the leasehold policy of title insurance issued to Corporation upon its acquisition of a leasehold interest in the Land pursuant to the Ground Lease (“Corporation’s Title Policy”) and the lender’s policy of title insurance issued to the Trustee upon the recording of the Facility Lease (“Lender’s Title Policy”). “Trade Contractor” shall mean construction trade contractors providing labor, materials, and/or services with whom Developer or its Construction Manager enters into Construction Contracts.
“Trustee” shall mean a state banking corporation, national banking association or other financial institution with trust powers selected by Corporation to serve as the bond trustee under the Indenture or any duly authorized successor thereto appointed pursuant to the Indenture. “Unavoidable Delays” means any delay in the performance by Developer or the Construction Manager of its obligations with respect to construction of the Project caused by strikes or labor disputes (other than those caused by Developer’s acts, omissions or failure to negotiate in good faith), acts of God, unavoidable casualties, adverse weather conditions which prevent or delay Critical Path construction activities as and when scheduled by the Contractors, acts of terrorists, delays by AHJ (including, but not limited to, unanticipated delays in providing inspections or approvals by AHJ), governmental embargo restrictions, pandemic related delays, governmental declared emergency or other governmental action, or other causes beyond the reasonable control of Developer or the Construction Manager, which, after the exercise of due diligence to mitigate the effects thereof, delay design or construction of the Project. Unavoidable Delays are not delays resulting from (a) Developer’s or the Construction Manager’s failure to comply with the terms and provisions of this Agreement or the CMAR Contract, (b) increased prices, or (c) unavailability of funds, provided the Project Costs (and all other funds payable by Corporation under this Agreement) are timely paid by Corporation in accordance with Section 9 of this Agreement. Unavoidable Delays will entitle Developer and the Construction Manager to an extension of the Developer Obligation Date, but will in no way entitle Developer to additional compensation except as provided in Section 23.7. Nothing contained herein shall prevent Developer from allocating the Developer Contingency to increased costs of constructing the Project caused by Unavoidable Delays. Any disagreements with regard to Unavoidable Delays that cannot be resolved by Developer and Corporation shall be resolved in accordance with Section 24 hereof, but (subject to Corporation’s continued funding of the Project Costs up to the amount of the Project GMP) work shall continue pending resolution of such dispute.

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“Warranty Period” shall mean that period commencing on the date of Substantial Completion of the Project and expiring three hundred sixty five (365) calendar days thereafter.

2. Development of the Project.

Guaranteed Maximum Price of Project. Corporation hereby retains Developer and Developer shall, in accordance with the terms of this Agreement, develop and administer the design, permitting and construction phases of the Project in accordance with the terms and conditions of this Agreement. Subject to the terms of this Agreement, and provided the Project Costs are paid as and when due in accordance with Section 9 of this Agreement, Developer warrants Substantial Completion of the Project (a) constructed in a good and workmanlike manner, (b) in substantial accordance with the Contract Documents, (c) on or before the Developer Obligation Date, (d) for the Project GMP (excluding any components of the Project that are not Project Costs), and (e) free and clear of all liens. Project Costs exceeding the Project GMP shall be paid by Developer.

Corporation Contingency Costs. Corporation Contingency costs shall not be considered Project Costs but shall be included in the Project GMP for Corporation’s use and implemented by the Developer.

Diligent Efforts; Relationship of the Parties. Developer agrees that in providing the services set forth in this Agreement, Developer shall use its diligent efforts and shall furnish its best skill and judgment and shall cooperate with, coordinate, and require that the Construction Manager, Architect, all other Contractors, all other engineers, design consultants, managers and other persons retained in connection with the design, permitting, development and construction of the Project cause Substantial Completion of the Project for the Project GMP in an expeditious and economic manner consistent with the best interests of Corporation, and otherwise in a good and workmanlike manner and in substantial accordance with the Contract Documents, on or before the Developer Obligation Date, free and clear of all liens (provided the Project Costs are paid as and when due in accordance with Section 9 of this Agreement). Developer shall perform its services in accordance with the terms of this Agreement, including, without limitation, all services to be provided by Developer as described in Section 5 herein. Developer shall not, itself, perform any construction services in connection with this Agreement, as all construction services will be performed by the Contractors, but Developer is responsible for the construction services being properly and timely performed.

Mutual Cooperation; Liability of Corporation. Developer and Corporation shall fully and in good faith cooperate with each other to accomplish each of the activities provided herein. Corporation shall have no liability or responsibility whatsoever with respect to the activities to be performed by Developer herein, except to timely pay the Project Costs as and when due and to timely perform all obligations of ITEM 19.1. ATTACHMENT 2

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Corporation set forth in this Agreement pursuant to the terms and conditions contained herein.

Term. The rights and obligations of the Developer and Corporation hereunder shall commence on the date of execution of this Agreement and shall continue until expiration of the Warranty Period.

Scope of Work. Developer shall perform, or cause to be performed, all work as required by, and in accordance with, the Contract Documents. Developer shall provide and furnish, or cause to be provided and furnished, all labor, project management, supervision, funding administration, planning, scheduling, materials, testing, commissioning, inspection, quality control, tools, equipment, services and all transportation services in adequate quantity and quality to accomplish completion of the work as specified as necessary within the time period set forth. The work shall conform to the Construction Documents and all codes, regulations, laws, etc. referenced in the Contract Documents or by industry standard, including Division 01 of the Detailed Specifications. Throughout this Agreement, there are references to both Developer and Construction Manager. When a provision provides that Construction Manager is to perform some obligation under this Agreement, it is done in order to identify a specific obligation that Construction Manager will be performing; however, it is agreed that Developer is responsible for all of Construction Manager’s obligations under this Agreement. Therefore, any reference in this Agreement to Construction Manager is for convenience, but it is understood and agreed that Construction Manager is not a party to this Agreement and the obligations in this Agreement are solely those of Developer and Corporation. Thus, if a provision states that Construction Manager will do or refrain from doing some act, Construction Manager will do so but Developer is liable to Corporation if Construction Manager violates the provision.

Services. Developer will (a) provide general administration of the Project; (b) manage and coordinate the Construction Manager and Consultants; (c) manage and coordinate the processing of the Construction Documents for the Project; (d) manage bidding all components of construction for the Project, including requiring that any competitive bidding requirements applicable to the Project are complied with in accordance with the bidding requirements of this Agreement and any Corporation approved procurement plan (including the Corporation-approved procurement plan attached as Exhibit P), pre-qualification or best value process; (e) enter into a contract with Construction Manager to construct the Project, oversee the Contractors, and to complete the Project Work in accordance with the Construction Documents; and (f) manage and coordinate the services provided by its Construction Manager, for the purpose of causing the Project to be completed within the Project GMP, in accordance with the Construction Documents, and within the time periods set forth in the Project Schedule.

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3. Project Financing.

Issuance of Bonds. Corporation intends to cause the issuance of Bonds by Authority in one series for sale on one date in a principal amount sufficient to pay the Project Costs, Financing Costs and other costs payable pursuant to the terms of the Indenture.

Disbursal of Proceeds. A portion of the proceeds from the sale of the Bonds in an amount sufficient to pay the Project GMP shall be deposited into the Project Fund held by the Trustee and shall be used to pay Project Costs and other costs in accordance with the terms of the Indenture and this Agreement.

4. Project Design. Developer shall cause design services to be performed by qualified and licensed (as applicable) architects, engineers and other professionals retained by Developer, and paid as part of the Project Costs.

Selection of Development Team for Project. Developer shall have the right in its reasonable discretion with Corporation’s Representatives approval to select professionals as necessary or desirable for the design, permitting, construction, and development of the Project. Except as otherwise provided in this Agreement, all amounts paid to the entities outlined above and any others hereinafter engaged by Developer in connection with the performance of its duties and responsibilities under this Agreement shall be part of the Project Costs and Project GMP.

Design Contracts. Developer has entered into the Architect’s Agreement with the Architect. Developer will enter into contracts with other design professionals such as waterproofing, Special Testing and Inspections, etc.

Assignment of Certain Agreements. Upon written notice from the Trustee to Developer of the occurrence of an Event of Default under the Indenture, Developer shall assign this Agreement, the Architect’s Agreement and the CMAR Contract, together with such other Construction Contracts as the Trustee may request, to Trustee for such time as the Event of Default in the sole judgment of the Trustee remains uncured.

Project GMP Breakdown. Exhibit D sets forth by line item and category all Project Costs, including the Developer Contingency and Developer’s Fixed Fee.

Drawings. Under a separate contract, Developer has caused the Architect to prepare the Design Development Documents, which are complete and have been approved by Corporation and Tenant. Developer shall cause the Architect to prepare the Construction Drawings and Detailed Specifications for the Project, except where noted (e.g., design/build and deferred approval elements) for Corporation’s approval. The intention of the parties is to cooperate in good faith to provide a completed design which meets all Requirements of Law and is consistent with all Project Requirements and the ITEM 19.1. ATTACHMENT 2

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building quality reflected therein. The Construction Drawings and Detailed Specifications for the Project shall include, at a minimum, all architectural services set forth under Basic Services in the Architect’s Agreement and such other architectural services as may be necessary to provide Construction Documents for the Project. The Construction Drawings and Detailed Specifications will be prepared in accordance with the approved Basis of Design (“Basis of Design”), which is attached as Exhibit R), and which Attachment is incorporated herein by reference.

LEED Certification. Developer shall use commercially reasonable efforts to obtain a Leadership in Energy and Environmental Design (“LEED”) Silver certification from the U.S. Green Building Council (“USGBC”) with respect to the Mills Crossing Project. Corporation acknowledges that the design decisions made by it and by Tenant will have an impact on the LEED certifications received and will work in good faith with Developer when making those decisions to consider their potential impact on LEED certifications. Developer shall keep Corporation apprised throughout the design process of any design decisions that may affect the LEED certifications of the Mills Crossing Project and with respect to any preliminary determinations made by the USGBC with respect to the LEED certification of those improvements. It is anticipated that the final determination by the USGBC of the LEED certification of the Mills Crossing Project will not occur until after Final Acceptance, and such final determination by the USGBC of the LEED certification will not be a condition precedent to Final Acceptance or Final Payment.

Corporation’s Review. Corporation and Tenant may participate in all design meetings with Developer, Architect, and other design professionals as appropriate in the course of the development of the Construction Documents in order to facilitate the approval of such Construction Documents in accordance with the terms of this Agreement.

Corporation and Tenant shall promptly review Exhibit D and all Construction Drawings and Detailed Specifications submitted in accordance with this Agreement and shall give Developer written notice within the time frame for such decision in accordance with the Project Schedule (or if no such time is provided in the Project Schedule then within five (5) business days following its receipt of Exhibit D and/or Construction Drawings and Detailed Specifications) of its approval or disapproval thereof, specifying in the case of its disapproval, each specific reason therefor. Corporation shall have the right to disapprove such Construction Drawings and Detailed Specifications which (a) do not meet the Project Requirements, (b) do not comply with Requirements of Law, (c) with respect to Drawings, are not consistent developments of the previous drawings approved by Corporation and Tenant, or (d) propose changes in work or materials that would result in a material change in appearance or diminution in quality of the Project. The parties acknowledge that the Construction Documents are intended to add additional detailing to the approved Design Development Documents, and are not intended to change the design intent. Consequently, Corporation and Tenant may object or comment on the Construction Documents only to ITEM 19.1. ATTACHMENT 2

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the extent that they are inconsistent with or were not previously included in the approved Design Development Documents, or the comments are for non-material changes (i.e., changes that do not increase Developer’s costs or time). If no written objections or comments are received by Developer from Corporation within such the applicable time period, then the submittals shall be deemed approved. Corporation’s Representative and Tenant will have twenty (20) business days to review and approve the Construction Documents. The parties acknowledge that Developer will concurrently submit the Construction Documents for building department plan check during the Corporation and Tenant’s review. Corporation and Tenant will review the Construction Documents revised after the first building department plan check and provide written comments or approval to Developer within five ten (5) business days of receipt from Developer. If subsequent reviews are necessary, Corporation and Tenant will review resubmitted plans within five (5) business days for the second review, and five (5) business days for a third and final review. If Corporation or Tenant fail to provide written comments or approval within the above time frames, then Corporation and Tenant will be deemed to have approved the Construction Documents.

Resubmittals. If objections or comments are submitted in writing within the time frame and in accordance with the requirements set forth in the preceding subsection, Developer shall cause the Architect to make changes in the Construction Drawings and/or Detailed Specifications consistent with reasonable objections or comments made by the Corporation or Tenant and shall resubmit the same to Corporation and Tenant in accordance with the foregoing schedule for further review. The process of resubmittal and review shall continue until the submittals have been approved by all the parties. The final Construction Drawings and Detailed Specifications setting forth in detail the requirements for the construction of the Project which have been approved by Corporation and Tenant are called the Construction Documents. There shall be no material change in the Construction Documents except as set forth in Section 8 below.

Permit and Construction Documents. Developer shall cause the Architect and other design professionals to prepare Construction Documents as required for submittal of the Permits to the AHJ(s) in accordance with Section 6 hereof, and as required for construction of the Project by the Contractors.

5. Construction Management Services. Developer shall, through its Construction Manager, provide Corporation with all construction administration and construction management services necessary or desirable to cause Substantial Completion of the Project on or before the Developer Obligation Date, all in a good and workmanlike manner and in substantial accordance with the Contract Documents, including, without limitation, the following:

Preconstruction Phase. The Preconstruction Phase is the time period from the execution of this Agreement until the Commencement of Construction. During the Preconstruction Phase, Developer will have the following duties:

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(a) Design: Developer shall review all design work done by Architect and other design professionals for the design and development of the Project.

Developer shall expeditiously review design documents during their development and advise Corporation on proposed site use and improvements, selection of materials, building systems and equipment and methods of Project delivery.

Developer shall provide recommendations on relative feasibility of construction methods, availability of materials and labor, and time requirements for procurement, installation, construction and factors related to construction costs including, but not limited to, costs of alternative designs or materials, budgets and possible economics.
(b) Schedule: Developer shall prepare and periodically update the Project Schedule for Corporation’s acceptance. Developer shall obtain the Architect’s approval for the portions of the preliminary Project Schedule relating to the performance of their services. Developer shall coordinate and integrate the Architect’s services into the Project Schedule and Developer’s and Corporation’s responsibilities with anticipated construction schedules, highlighting critical and long lead time items.
(c) Constructability: Developer shall consult with Corporation and Architect regarding the Construction Documents and make recommendations whenever design details adversely affect constructability, cost or schedules. (d) Temporary Facilities: Developer shall require that the Construction Manager establishes the assignment of responsibilities for temporary Project facilities and equipment, materials and services for common use of the Contractors.

Developer shall verify that such requirements and assignment of responsibilities are included in the proposed Contract Documents.
(e) Categories of Work: Developer shall require that the Construction Manager determines the division of the Project into individual contracts for various categories of work, including the method to be used for selecting Trade Contractors and awarding Construction Contracts. Developer shall require that the Construction Manager reviews the Construction Documents as required to provide that: (1) the work of the Contractors is coordinated; (2) all requirements for the Project have been assigned to the appropriate Construction Contract; (3) the likelihood of jurisdictional disputes has been minimized; and (4) proper coordination has been provided for phased construction. (f) Construction Schedule: Developer shall prepare a Project Schedule providing for the components of the work and shall consult with the Construction Manager, Corporation and Tenant in connection with the preparation and updating of the Project Schedule, including phasing of construction, times of commencement ITEM 19.1. ATTACHMENT 2

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and completion required of each Contractor, ordering and delivery of products requiring long lead time, and the occupancy requirements of Corporation.

Developer shall provide the current Project Schedule to the Construction Manager for each set of bidding documents. Unless a specific software application is called for elsewhere in the Contract Documents, Developer will require Construction Manager to use Microsoft Project, SureTrak Project Manager, Primavera Project Planner, or other scheduling software acceptable to Corporation to configure all versions of its construction schedule. Developer will require Construction Manager to prepare the construction schedule using the critical path format. Schedule activities shall be of sufficient detail to assure that adequate planning has been done for proper execution of all of the construction work. Developer will provide Corporation with electronic access to pdf versions of the submittals. (g) Weekly Meetings and Look-Ahead Charts: Developer shall chair weekly meetings with Corporation and the construction team during which the parties shall exchange information regarding the actual progress of construction.

Corporation, Developer, and Construction Manager shall attempt to agree upon quantities and percentages of completion that reflect the actual progress of construction. At each meeting Construction Manager shall submit 4 copies of a 2- week look-ahead chart. The 2-week look-ahead chart shall include at a minimum those activities that will be started, in progress, or completed during the next 2- week period. The format of the look-ahead chart shall be subject to Corporation’s approval, which will not be unreasonably withheld.
(h) Long Lead Time Items: Developer shall require the Construction Manager to expedite and coordinate the ordering and delivery of materials requiring long lead times.
(i) Consultants: Developer shall select and coordinate the professional services of surveyors, special consultants and testing laboratories, deputy inspections and other, special inspections under contract with Developer as required for the Project and included in Developer’s scope under the Contract Documents.

Bidding.
(a) Competitive Bidding: Developer will require its Construction Manager to cause the various construction trade elements of the Project to be competitively and publicly bid in accordance with competitive bidding requirements pursuant to this Agreement under separate bid documents for each such construction trade or group of trades to multiple trade contractors, and in accordance with the optional pre-qualification procedure set forth in subsections (b) and (c), subject to subsections (l), (m), and (n). Developer and its Construction ITEM 19.1. ATTACHMENT 2

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Manager will administer the public competitive bidding and, to the extent allowed by law, negotiating procedures. Developer and its Construction Manager may solicit bids for one or more portions of the Project, with additional bid solicitations to follow; provided, however, that Developer and its Construction Manager will not cause the Project to be constructed through incrementally limited contracts with Trade Contractors so as to avoid the competitive bidding laws applicable to the Project, if any. Trade Contractors will enter into written contracts with Developer or its Construction Manager for such work of improvement of the Project.

Developer will ensure that the requirements of this Section 5.2 are incorporated into the CMAR Contract and make the CMAR Contract subject and subordinate to this Agreement.
(b) Pre-Qualification: The Corporation or Corporation’s Representative, Construction Manager, and Developer may jointly determine to pre-qualify contractors to bid on portions of the Project. If Corporation or Corporation’s Representative, Construction Manager, and Developer agree to prequalify certain trades, then Developer and/or Construction Manager will prepare Pre-Qualification Questionnaires for Corporation’s approval. Subsequent to Corporation’s approval of the Pre-Qualification Questionnaires, and within the time period allowed for in the Project Schedule, Developer or its Construction Manager will publish notices soliciting Trade Contractors to pre-qualify to bid on the portions of the Project that Corporation or Corporation’s Representative, Construction Manager, and Developer determined to pre-qualify, all in accordance with applicable Requirements of Law.
(c) Procurement Plan: Within the time period allowed for in the Project Schedule, Developer and Construction Manager will cause bid documents to be prepared for each individual construction trade element of the Project that is to be separately bid (“Bid Documents”) pursuant to the procurement plan attached as Exhibit P, which has been approved by Corporation, subject to subsection (m).

Developer will solicit lump sum or cost plus with a guaranteed maximum price bids for each individual construction trade element or package of the Project that is to be separately bid, pursuant to the approved Bid Documents, from the contractors in that construction trade.
(d) Bid Bonds: The Bid Documents will include a provision requiring that a bid bond accompanying a bid must include a rider naming Developer and Construction Manager as dual obligees.
(e) Bid Process: Developer, Construction Manager, or the Architect will answer questions of bidders and generate addenda to the Bid Documents, as necessary, during the bidding process for each individual construction trade element of the Project that is to be separately bid. Developer or its Construction ITEM 19.1. ATTACHMENT 2

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Manager will open and evaluate all complete bids received. Corporation or Corporation’s Representative may, at its election, attend the opening of bids. (f) Analysis: Developer shall require the Construction Manager to provide an analysis of the types and quantities of labor required for the Project and shall review with the Construction Manager the availability of appropriate categories of labor required for critical phases. Developer shall make recommendations for actions designed to minimize adverse effects of labor shortages.
(g) Bidders Interest: Developer shall require the Construction Manager to develop bidders’ interest in the Project, establish bidding procedures, issue bidding documents to bidders and conduct pre-bid conferences with prospective bidders. Developer shall require the Construction Manager to submit the list of prospective bidders for Corporation’s review. Developer shall assist the Construction Manager with respect to questions from bidders and the issuance of addenda.
(h) Receiving Bids: Developer and the Construction Manager shall receive bids, prepare bid analyses, and award contracts or reject bids. Developer and its Construction Manager have the right to reject all bids for a portion of the work and re-bid the work.
(i) Awarding Contracts: If one or more complete bids for the individual construction trade element of the Project is/are received from a responsive and responsible bidder, as determined jointly by Developer and its Construction Manager, then Construction Manager may enter into a contract with each Trade Contractor for performance of each individual construction trade element of the Project for the fixed-price or cost plus with a guaranteed maximum price on the bid submitted by the Trade Contractor. To the extent consistent with applicable law, Developer and its Construction Manager also have the right to have responsible, responsive bidders submit a best and final offer.
(j) Rejecting Bids: To the extent consistent with applicable law, if Developer and/or its Construction Manager determine that a particular low bidder is non-responsive, is not responsible, or for any other reason should not be awarded the Construction Contract at issue, they will promptly reject the bid and may award the contract to the next lowest responsible, responsive bidder. (k) Bidder Default: To the extent consistent with applicable law, if Developer or its Construction Manager awards a Construction Contract, but the successful bidder fails to execute the Construction Contract, then the following will apply:

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(1) If Developer or its Construction Manager awards the Construction Contract to the second lowest bidder, then the amount of the lowest bidder’s security will be applied by Developer or Construction Manager to the difference between the low bid and second lowest bid, and the surplus, if any, will be returned to the lowest bidder if cash or a check is used, or to the surety on the bidder’s bond if a bond is used.
(2) Developer or its Construction Manager will be entitled to retain the amount of the lowest bidder’s security.
(l) Best Value: In addition to the above procedures for bidding, Trade Contractors may also be selected based on qualifications or a combination of qualifications and price. The selection of Trade Contractors is the responsibility of the Construction Manager. Corporation must timely advise Developer, in accordance with the Project Schedule, if there are any Trade Contractors (including vendors or suppliers) that Corporation specifies to be sole-sourced (including, but not limited to, BMS systems, technology infrastructure, elevators, etc.). Developer will procure the elevators on a best value basis.
(m) Trade Contractor Procurement Plan: Developer and its Construction Manager prepared a Trade Contractor procurement plan which has been approved by Corporation. This Trade Contractor procurement plan identifies those Trade Contractors (including vendors and suppliers) anticipated to be selected by qualifications only per subsection (n) and those Trade Contractors anticipated to be selected by qualifications and competitive bid per subsection (l). However, notwithstanding the Trade Contractor procurement plan attached as Exhibit P, Developer may elect (with Corporation’s consent which will not be unreasonably withheld) on a trade-by-trade basis to select, or direct its CMAR to select, Trade Contractor(s) on a negotiated, sole-source basis if Developer deems it is in the best interests of the Project.
(n) Negotiated Trade Contractors: Developer may select Trade Contractor(s) (including vendors or suppliers) based only on their qualifications when the Developer can demonstrate it is in the best interest of the Project. (1) Qualification based selection of a Trade Contractor should only occur during the design phase services under an approved guaranteed maximum price to achieve maximum benefit of the Trade Contractors’ involvement.
(2) The Developer or its Construction Manager shall apply the approved Trade Contractor procurement plan in the evaluation of the qualifications of a Trade Contractor, subject to subsection (m).

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(3) The Construction Manager will negotiate costs for
services/supplies from each Trade Contractor selected under this method.
(o) Construction Manager Self-Performing: Construction Manager will not be allowed to self-perform any work, including by force account, with the exception of daily safety, clean-up, demolition, and miscellaneous carpentry work, except that Construction Manager (or its affiliates) may bid on specific trade scope(s) of work with the written consent of Corporation provided that the following procedures are implemented for any trade that Construction Manager (or its affiliate) bids:
(1) Developer will advertise and pre-qualify local trade contractors for the particular trade that Construction Manager is bidding. (2) Developer will manage the trade contractor bidding process per the approved procurement process (Exhibit P). The bidding process for the particular scope will be explained in detail and will be part of the trade RFP.
(3) Construction Manager may develop a bid per the same trade bid package as all of the trade contractors. All bids for the trade work shall be sealed bids and must be delivered directly to Developer. (4) Developer will deliver all bids, including Construction Manager’s, to Corporation’s Representative for analysis per the approved procurement process.
(5) If Construction Manager is awarded the particular trade work, Construction Manager will be issued the same trade-contract agreement as all the other trade-contractors (except that change orders would be subject to Subsection (6), below).
(6) If Construction Manager is awarded the trade work, there shall be no change orders for current scope of trade work. In case there is added scope, Construction Manager shall follow required guidelines when submitting cost to Developer for review and shall follow the following protocol:
• Cost submitted by Construction Manager
• Developer will review cost for added scope, quantities, labor, material selection and pricing.
• Developer will contact Construction Manager with
questions/concerns in regards to the added cost.
• Developer will review this cost in person with Construction Manager.

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• Developer will send cost proposal to design team to review added scope.
• If deemed acceptable by design team, Developer will submit this cost proposal to Corporation.
• Developer and Construction Manager will meet with
Corporation and explain added scope, review quantities and potential Change Order details.
(p) Compliance with Requirements of Law. Developer shall be aware of and adhere to and obey all Requirements of Law applicable to the bidding of the Project.

Construction Phase. The Construction Phase is the time period from the Commencement of Construction until Final Acceptance. During the Construction Phase, Developer will have the following duties:
(a) Administer CMAR Contract: Developer shall administer the CMAR Contract for the Project in cooperation with the Architect. (b) Coordination: Developer shall provide administrative, management and related services to coordinate scheduled activities and responsibility of those under contract with Developer with each other and with those of the Developer, Corporation and Architect to manage the Project substantially in accordance with the Project Schedule and Contract Documents.
(c) Project Schedule: Developer shall require the Construction Manager to update the construction schedule incorporating the activities of the Contractors on the Project, including activity sequences and duration, allocation of labor and materials, processing of shop drawings, product data and samples and delivery of products requiring long lead time and procurement. The Project Schedule shall include Corporation’s occupancy requirement showing portions of the Project having occupancy priority. Developer shall update and reissue the Project Schedule as required to show current conditions. If an update indicates that the previously approved Project Schedule may not be met, Developer shall require the Construction Manager to take any necessary corrective action so as to cause the Project to be Substantially Completed on or before the Developer Obligation Date.

Developer shall require the Construction Manager to schedule and coordinate the sequence of construction so as to cause Substantial Completion of the Project on or before the Developer Obligation Date.
(d) Administration of Agreements: Developer shall administer the Architect’s Agreement and Developer shall require the Construction Manager to administer all Construction Contracts with Trade Contractors. Developer shall notify and consult with Corporation and Corporation’s Representative regarding ITEM 19.1. ATTACHMENT 2

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any material breaches or defaults by any party to a Construction Contract relating to the Project.
(e) Cash Flow Reports: Developer shall develop, as and when necessary, cash flow reports and forecasts for the Project (including variances between actual and budgeted costs) and provide Corporation with copies of same. (f) Inspections and Testing: In consultation with the Architect, Developer shall require the Construction Manager to oversee the course of construction and Developer will engage third parties to conduct such inspections and testing of materials to ensure that the work is being performed in substantial accordance with the requirements of the Contract Documents in a good and workmanlike manner, free of defects and deficiencies in work. Developer shall reject Defective Work (as defined in Section 7.9) of which Developer has actual knowledge of the deficiency and cause corrective action to be taken. (g) RFIs: Developer shall transmit to Architect requests for interpretations of the meaning and intent of Construction Drawings and Detailed Specifications and assist in the resolution of questions that arise. (h) Submittals: Developer shall expedite the processing and approval of shop drawings, product data samples and other submittals. (i) Changes: Section 8 of this Agreement shall control with regard to changes in the work.
(j) Progress Reports: Developer shall record the progress of the Project. Developer shall require the Construction Manager to submit written monthly progress reports to Corporation, showing percentages of completion.

Developer shall require the Construction Manager to maintain a daily log, containing a record of weather, each Trade Contractor’s work on the site, number of workers, identification of equipment, work accomplished, problems encountered progress photos, and such other information as Corporation may require. (k) Record Drawings: Developer shall require the Construction Manager to maintain at the Project site or at Developer’s offices in Irvine, California or at Construction Manager’s offices in Irvine, California, for Corporation one record copy of all Construction Documents, addenda, change orders and other modifications, in good order and marked currently to record changes and selections made during construction together with approved shop drawings, product data samples and similar required submittals. Developer shall maintain records, in duplicate, of principal building layout lines, elevations of the bottom of the footings, floor levels and key site elevations certified by a qualified surveyor or professional engineer. All such records shall be made available to ITEM 19.1. ATTACHMENT 2

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Architect and Corporation upon request and, upon completion of the Project, duplicate originals shall be delivered to Corporation.
(l) Contractor Pay Apps: Developer shall develop and implement procedures for the review and processing of applications by Contractors for progress and final payments.
(m) Project Pay Apps: Based on the Developer’s observations and evaluations of each Contractor’s Application for Payment, the Developer shall review and certify the amounts due the respective Contractors. The Developer shall prepare Project Applications for Payment based, in part, on the Contractors’ Applications for Payment.
(n) Certifications: Each Project Application for Payment and certification of the Contractor(s)’ certificates for payment shall constitute a representation to Corporation that, to the best of Developer’s knowledge, information and belief (which may be based on similar representations from the Architect and Construction Manager), the work has progressed to the point indicated and the quality of the work is in substantial accordance with the Contract Documents (subject to minor deviations from the Contract Documents correctable prior to completion and to specific qualifications expressed by Developer in Developer’s Project Application for Payment).
(o) Final Testing and Start-Up: Developer shall supervise the final testing and start-up of utilities, operational systems and equipment, in the presence of Corporation’s maintenance personnel if so requested by Corporation. (p) Punch List: When Developer considers each Contractor’s work or a designated portion thereof Substantially Complete, the Developer shall, jointly with the Architect, prepare for the Contractor a list of incomplete or unsatisfactory items (“Punch List”) and a schedule for their completion. Developer shall assist Architect in conducting inspections to determine whether the work or designated portion thereof is Substantially Complete.
(q) Final Completion: Developer shall require the Construction Manager to coordinate the correction and completion of the work, including all Punch List items, and shall evaluate the completion of the work of the Contractors and make final recommendations to the Architect when the Project or any designated portion thereof has achieved Final Completion. Developer shall require the Construction Manager to maintain a database of all Punch List items or otherwise unsatisfactory items observed and record the resolution of these items.

Developer shall assist Architect in conducting final observations of the work.

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(r) Timely Completion: Developer shall take such other and further action as may be necessary or desirable to cause the Project to be Substantially Completed on or before the Developer Obligation Date.

Costs. Developer shall require the Construction Manager to include in all Construction Contracts that all Trade Contractors shall comply with all applicable requirements of the Labor Code throughout the performance of this Agreement, including but not limited to the following:
(a) Wage Rates: Construction Manager and all Trade Contractors, as the case may be, shall comply with the provisions of California Labor Code Sections 1771 et seq., and shall pay workers employed for construction of the Project on this Agreement not less than the general prevailing rates of per diem wages and holiday and overtime wages as determined by the Director of Industrial Relations. Developer shall require Construction Manager to post all job site notices as required by Labor Code Section 1771.4(a), including a copy of these wage rates for each craft, classification, or type of worker needed in the performance of this Agreement. Copies of these rates are on file at the principal office of Corporation’s Representative, or may be obtained from the State Office, Department of Industrial Relations (“DIR”) or from the DIR’s website at www.dir.ca.gov. If this Agreement is federally funded, Construction Manager and any Trade Contractors shall not pay less than the higher of these rates or the rates determined by the United States Department of Labor.
(b) Wage Rate Penalty: Construction Manager and all Trade Contractors, as the case may be, shall comply with the provisions of Labor Code Section 1775. Developer, Construction Manager and all Trade Contractors shall be subject to a penalty in an amount up to $200, or a higher amount as provided by Section 1775, for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates for any construction work done by the Construction Manager or Trade Contractors under this Agreement.
(c) Work Hour Penalty: As provided by Labor Code Section 1810, 8 hours of labor shall constitute a legal day's work, and 40 hours shall constitute a legal week's work. The time of service of any worker employed for construction work pursuant to this Agreement shall be restricted to 8 hours during any one calendar day, and 40 hours during any one calendar week, except as provided herein. Developer shall forfeit to Corporation $25, or a higher amount as provided by Labor Code Section 1813, for each worker employed in the performance of construction of the Project under this Agreement by Developer or Construction Manager or by any Trade Contractors for each calendar day during which such construction worker is required or permitted to work more than the legal day's or week's work, except as provided by Labor Code Section 1815.

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(d) Registration of Contractors: Construction Manager and all Trade Contractors, as the case may be, must comply with the requirements of Labor Code Section 1771.1(a), pertaining to registration of contractors pursuant to Section 1725.5. Registration and all related requirements of those sections must be maintained throughout the performance of this Agreement. (e) Payroll Records: Construction Manager and all Trade Contractors, as the case may be, shall comply with the requirements of Labor Code Section 1776. Such compliance includes the obligation to furnish the records specified in Section 1776 directly to the Labor Commissioner in an electronic format, or other format as specified by the Commissioner, in the manner provided by Labor Code Section 1771.4. The requirements of Labor Code Section 1776 provide in part:
(1) Construction Manager and all Trade Contractors performing any portion of the construction work under this Agreement shall keep an accurate record, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by Construction Manager or any Trade Contractors in connection with the work.
(2) Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(A) The information contained in the payroll record is true and correct.
(B) The employer has complied with the requirements of Labor Code Sections 1771, 1811, and 1815 for any work performed by his or her employees in connection with this Agreement.
(3) The payroll records shall be certified and shall be available for inspection at the principal office of Construction Manager on the basis set forth in Labor Code Section 1776.
(4) Developer shall inform Corporation of the location of the payroll records, including the street address, city and county, and shall, within five working days, provide a notice of any change of location and address of the records.
(5) Pursuant to Labor Code Section 1776, Developer, Construction Manager and all Trade Contractors, as the case may be, shall have 10 days in which to provide a certified copy of the payroll records subsequent to receipt of a written notice requesting the records described herein. In the event that Developer, Construction Manager or any Trade Contractor fails to comply within the 10-day period, he or she shall, as a penalty to Corporation, forfeit $100, or a higher amount as provided by Section 1776, for each calendar day, or portion thereof, for each construction worker to ITEM 19.1. ATTACHMENT 2

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whom the noncompliance pertains, until strict compliance is effectuated.

Developer acknowledges that, without limitation as to other remedies of enforcement available to Corporation, upon the request of the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement of the California Department of Industrial Relations, such penalties shall be withheld from progress payments then due Developer.
(f) Apprentices: Unless this Agreement involves a dollar amount less than that specified in Labor Code Section 1777.5, this Agreement is governed by the provisions of Section 1777.5. Developer shall require Construction Manager to comply with Labor Code Section 1777.5 for all apprenticeable occupations.

Construction Manager and all Trade Contractor(s), as the case may be, shall comply with Labor Code Section 1777.6, which forbids discriminatory practices in the employment of apprentices on any basis listed in Government Code Section 12940, except as provided in Labor Code Section 3077.

6. Permits.

Permits. Developer shall obtain all Permits necessary to construct the Project pursuant to any and all Requirements of Law. For those Permits yet to be acquired as of the date of the execution of this Agreement, Corporation shall have five (5) business days to review any Permit application Developer intends to submit. Corporation’s failure to object to terms or conditions of a Permit application, after being timely provided by Developer, shall constitute Corporation’s approval of the same and Corporation’s authorization for Developer to submit the Permit application. For those Permit applications already submitted by Developer prior to the execution of this Agreement, Corporation shall receive a copy upon request. Corporation shall join in any application for Permits as required, at the expense of Developer (but subject to Section 8.18 and if there are any additional fees required by an AHJ or any fees imposed by an AHJ exceeds the amount set forth in Exhibit D then the additional or excess fee will be an Other Corporation Cost).

Developer shall pursue issuance of such Permits with reasonable diligence to meet the Project Schedule.

Costs. All costs associated with issuance of the Permits, including the cost of any required off-site improvements, shall be Allowances unless otherwise indicated in Exhibit D or Exhibit I.

Schedule and Delays. Corporation and Developer anticipate issuance of Permits by all AHJ and Commencement of Construction within the time allowance set forth in the Project Schedule set forth as Exhibit F hereto, and any delay in issuing the required permits by AHJ will be an Unavoidable Delay except to the extent that the delay is caused by the fault or neglect of Developer. The Project Schedule shall be updated by mutual agreement of Developer and Corporation from time to time as reasonably required to reflect the status of the Project. Except as otherwise provided in this Agreement, there ITEM 19.1. ATTACHMENT 2

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shall be no increase in the Project GMP as a result of any delay in issuance of the Permits or commencement or completion of construction of the Project unless due to Costs Resulting from Corporation-Caused Delay, but the delay in issuing Permits by the AHJ at no fault of the Developer will be an Unavoidable Delay as set forth above.

7. Construction.

Commencement of Construction. As soon as reasonably practical following Bond Closing, and issuance of Permits by all AHJ, Corporation will issue to Developer a written Notice to Proceed (Construction). Within five (5) business days of Corporation’s issuance of the Notice to Proceed (Construction) (which date will be the commencement date for construction in the Project Schedule), Developer shall require Commencement of Construction to occur and such work is diligently and continuously prosecuted to Final Completion. Developer shall coordinate the sequencing of all construction and shall require all other Contractors to commence construction of that portion of the work covered under their respective Construction Contracts and diligently and continuously prosecute such work to Final Completion. Developer warrants to the Corporation that materials and equipment incorporated into the Project shall be new unless otherwise specified.

Delays.
(a) Time Extensions. The Developer Obligation Date shall be extended to the extent of (1) Unavoidable Delays; and (2) Corporation-Caused Delays.

Extensions of time due to weather or force majeure, when granted, will be on a 1 to 1 day basis of calendar days credit for every Critical Path calendar day lost, with the credit for each separate extension rounded off to the nearest whole calendar day. (b) Liquidated Damages. The parties hereto agree that in the event that the Project is delayed that Corporation’s actual damages are difficult to estimate. As such, and as Corporation’s sole remedy for delay, Developer agrees to forfeit and pay to Corporation the sum of $_______ per day as liquidated damages, and not as a penalty (“Liquidated Damages”) for each calendar day that Substantial Completion of the Project is delayed beyond the Developer Obligation Date, as that may be adjusted pursuant to the terms of this Agreement. Corporation may deduct such sum from any payments due to or to become due to Developer.

Guaranteed Maximum Construction Price Contract. As part of the Project GMP, the Project shall be constructed pursuant to one CMAR Contract for the entire Project which shall contain the Guaranteed Maximum Construction Price. Within ten (10) days after award of the CMAR Contract, Developer shall require Construction Manager to furnish a payment bond for 100% of the amount of the construction portion of the Guaranteed Maximum Construction Price, in accordance with Civil Code Section 9554, ITEM 19.1. ATTACHMENT 2

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and a performance bond for 100% of the amount of the construction portion of the Guaranteed Maximum Construction Price, guaranteeing the faithful performance of the CMAR Contract. Developer shall require Construction Manager to take steps to assure that the penal sum of the bonds shall be increased by the amount of any additive adjustments to the Guaranteed Maximum Construction Price as a result of Corporation Contingency use, if necessary. Developer shall require Construction Manager to have the payment and performance bonds each be issued by a surety that: (a) is authorized by the California Insurance Commissioner to transact surety insurance in the State of California; (b) has assets exceeding its liabilities in an amount equal to or in excess of the amount of the bonds; and (c) acts in compliance with Insurance Code Section 12090. The payment and performance bonds shall be in the form attached hereto as Exhibit M. Developer shall require Construction Manager to have the Developer, Corporation and Trustee be named as obligees under each payment and performance bond pursuant to a rider or riders as set forth in Exhibit M. If any surety upon any bond furnished in connection with this Agreement becomes objectionable to Corporation and fails to submit to Corporation the documents described in California Code of Civil Procedure Sections 995.660(a)(1) through (a)(4) within the time specified in those Sections, then Developershall require Construction Manager to promptly furnish such additional security as may be reasonably required by Corporation to protect the interests of Corporation and of persons entitled to make a claim against the payment bond as of that time. Failure to furnish such additional security shall constitute a material breach of the agreement. Construction Manager may elect to deliver to Corporation, in the amount of 10% of the construction costs for the Project, concurrent with the release of the Performance Bond, a warranty bond conditioned upon Developer or Construction Manager correcting any defective work of improvement or materials incorporated into the Project that is discovered within the Warranty Period. In lieu of a warranty bond, Construction Manager, at its election, may extend the Performance Bond for one year following Substantial Completion of the Project to cover defective materials and workmanship.

Construction Contracts. Developer shall require Construction Manager to include in all Construction Contracts recitations or provisions requiring the following:
(a) Labor Code §1700: Provisions requiring all Contractors employed on the Project to be responsible to pay the prevailing rate of wages as defined in California Labor Code Sections 1700 et seq. and available on the Department of Industrial Relations websites (but expressly excluding the Davis-Bacon Act and any rules and regulations promulgated thereunder), and to indemnify Corporation, Tenant, Developer and Trustee for claims arising out of failure to pay proper wages; (b) Safety: Provisions for initiating, maintaining and providing supervision of safety precautions and programs in connection with the construction of the Project; and
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(c) Indemnity: Provisions for indemnifying Corporation, Tenant, Developer and Trustee for claims arising out of the negligence or willful misconduct of such Contractor and its employees and agents. (d) Assignment: Provisions for assignment to the Trustee upon an Event of Default under the Indenture for which Developer has received written notice from the Trustee.

Protection of Persons and Property.
(a) Safety: Developer shall require the Construction Manager to be responsible for initiating, maintaining and providing supervision of safety precautions and programs in connection with the construction of the Project. (b) Damage: Developer shall require the Construction Manager to take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss to: (1) all persons working on the Project construction site and all other persons who may be affected thereby; (2) the Project and materials and equipment to be incorporated therein; and (3) other property at or adjacent to the site.
(c) Notices: Developer shall require the Construction Manager and all other Contractors to give notices and comply with all applicable laws, ordinances, rules, regulations, and orders of public authorities bearing on the safety of persons and property and their protection from damage, injury or loss.

Insurance During Construction. Insurance shall be provided by Developer, Corporation, Architect and Contractors in accordance with the provisions of Section 16 of this Agreement.

Use of Developer Contingency. The amounts set forth in the various line items of Exhibit D are estimates only of Project Costs to be incurred. To the extent the actual Project Costs in any line item of Exhibit D exceed the amount shown for such line item, Developer shall first allocate amounts in other line items, in which the actual known Project Costs shall have been less than the amount in Exhibit D to the line item in which the excess Project Cost(s) has occurred. Following the allocation by Developer as set forth in the preceding sentence with respect to all line items, except Developer Contingency, Developer shall be fully entitled to draw upon the Developer Contingency line item of Exhibit D and use the Developer Contingency in its entirety, if necessary, to pay the Project Costs that fall within the categories of the Pre-Approved Developer Contingency Uses or, after obtaining consent of the Corporation, which consent will not be unreasonably withheld, for Project Costs that do not fall within the categories of the Pre-Approved Developer Contingency Uses. The allocation of the Developer Contingency for costs within the categories of the Pre-Approved Developer Contingency Uses is at the reasonable ITEM 19.1. ATTACHMENT 2

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discretion of Developer. For Project Costs that do not fall within the categories of the PreApproved Developer Contingency Uses, Developer may use the Developer Contingency for Project Costs as Developer reasonably deems necessary. After buy-out re-allocations, any net remaining money from line items will be moved to the Developer Contingency.

The Developer Contingency is also subject to the provisions of Section 12.7 if there is any unused Developer Contingency following Final Acceptance.

Completion of Construction. Developer shall achieve Substantial Completion of the Project on or before the Developer Obligation Date, provided the Project Costs, as and when due, and any other Corporation costs are timely paid by Corporation in accordance with Section 9 hereof. Following Substantial Completion, Developer shall require the Construction Manager to diligently achieve Final Completion of the Project.

Developer, Architect, and Corporation will complete and execute the Final Completion form (Exhibit J) promptly upon Final Completion. Corporation must provide written notice to Developer within ten (10) business days of receipt of the Final Completion form signed by Developer and Architect of all objections that Corporation has to executing the Final Completion form. Corporation’s failure to timely provide written objections will be deemed to be Corporation’s waiver of any objections.

Warranties. Developer shall require the Construction Manager to secure, for the benefit of Corporation, all warranties and guarantees of the work by Contractors, suppliers and manufacturers of components of the Project. Upon Final Acceptance, Developer shall require the Construction Manager to assign such warranties to Corporation (provided that such warranties shall also be for the benefit of Developer). After Final Acceptance of the Project (including Developer’s obligation under Section 14.3 to provide the written warranties to Corporation) and during the Warranty Period, Developer shall assist Corporation to enforce any warranties or guarantees with respect to the Project upon request. The CMAR Contract shall provide a minimum of a one (1) year warranty for workmanship with respect to the Mills Crossing Project. Without increasing the Project GMP, Developer and Corporation have agreed that Developer shall require the Construction Manager to obtain warranties of equal or longer periods from Trade Contractors and material suppliers for the fixtures, services, or subcontracts only as set forth in the Detailed Specifications that will be included in the Architect’s Project Manual; provided, however, that the Developer shall not be required to assist Corporation to enforce any warranties or guarantees that extend beyond the Warranty Period. Developer warrants that materials and equipment furnished under the Contract Documents will be new, of good quality, and carrying all available manufacturers’ and installers’ warranties; that construction will be of good and workmanlike quality; and that all of the work shall be performed in substantial conformance with the requirements of the Contract Documents, industry standards, and manufacturers’ recommendations. Work not conforming to these requirements shall be considered defective (“Defective Work”). Defective Work does not ITEM 19.1. ATTACHMENT 2

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include damage caused by modifications not executed by Construction Manager or a Contractor, improper operation or maintenance, abuse, or normal wear and tear under normal usage. Unless otherwise provided in the Contract Documents, Corporation’s acceptance of Developer’s work shall be accomplished by Corporation recording a Notice of Completion as promptly as practicable after completion, inspection, and testing of all work required by the Contract Documents. The start date of Developer’s warranty obligations, and of the manufacturers’ and installers’ warranties required by the Contract Documents, will be the issuance of the Certificate of Substantial Completion by the Architect. Corporation’s acceptance of the work shall not be construed to limit Corporation’s rights under the Contract Documents or release Developer from any responsibility for latent defects, for correcting Defective Work, or for honoring any warranty obligations of the Contract Documents.

Correction of Work. During the Warranty Period, Developer (or Construction Manager or the applicable Trade Contractor, on behalf of Developer) shall take immediate action to correct any Defective Work reported by Corporation in writing.

Developer shall initiate corrective action on Defective Work affecting use of a facility, safety, or preservation of property within forty-eight (48) hours after notification.

Developer shall initiate corrective action on other Defective Work within ten (10) calendar days after notification. If Developer fails to initiate corrective action within the specified times or fails to complete the corrective work within a reasonable time, Corporation may take whatever corrective action it deems reasonably necessary after giving written notice to Developer of the default. All reasonable costs incurred by Corporation because of Developer’s failure to correct Defective Work during the Warranty Period shall be due and payable immediately by Developer. The Warranty Period relates only to the specific obligation of Developer to return to the Project site and correct Defective Work. The Warranty Period does not establish a period of limitations with respect to any of Developer’s other obligations under the Contract Documents, including but not limited to Developer’s warranty, and it has no relationship to the time within which Corporation may seek to enforce the Developer’s obligation to comply with the Contract Documents or to the time within which proceedings may be commenced to establish the Developer’s liability with respect to any of the Developer’s obligations. Warranty costs (to the extent not borne by insurance) shall be Project Costs. At Final Acceptance, there shall remain at least $50,000 in the Project Costs Account in the Project Fund to cover these items during the Warranty Period; said $50,000 shall be held by Trustee in trust upon Final Acceptance to be applied toward warranty work (including Developer’s administration costs for the warranty work) in accordance with the CMAR Contract, with any amounts not so expended to be treated as Corporation’s Savings in accordance with, and subject to the limitations in, Section 12.7 below; however if there are no funds left in the Project Costs Account in the Project Fund (including the Developer Contingency) to pay for the corrective action, such costs shall be paid by Developer from its own funds. Notwithstanding anything to the ITEM 19.1. ATTACHMENT 2

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contrary contained in this Agreement (including, without limitation, Sections 7.8, 7.9 and 13), the warranties to be provided or obtained by Developer or Contractors shall not include and shall not be applicable with respect to any of the Financed FF&E except for those items that are expressly set forth in the Detailed Specifications. All manufacturers’ and installers’ warranties received by Developer or its Construction Manager shall be assignable to Corporation (and by Corporation to Tenant), and upon abandonment, termination, or completion of this Agreement shall be deemed, and hereby are, assigned to Corporation. Developer shall take actions within its direct control necessary to preserve the full scope of all manufacturers’ and installers’ warranties for the benefit of Corporation and shall take no action that would impair Corporation’s rights under any such warranties.

Before Corporation’s acceptance of the work, Developer shall deliver to Corporation manufacturers’ and installers’ warranties, guarantees, instruction sheets, and parts lists, which are furnished with certain articles of materials incorporated in the work. All of Developer’s warranty obligations shall survive abandonment, termination, and completion of this Agreement. Neither Final Payment nor any other provision in the Contract Documents shall constitute Corporation’s acceptance of work not performed in accordance with the Contract Documents nor relieve Developer of liability with respect to its warranty obligations or for Defective Work.

Stop Work by Corporation. If Developer fails to correct Defective Work as required, or persistently fails to carry out work in accordance with the Construction Documents, then Corporation, by written order, may order Developer and its Construction Manager to stop the work, or any portion thereof, until the cause for such order has been eliminated.

Developer Default. If Developer defaults or neglects to carry out the work in accordance with the Contract Documents and fails within ten (10) calendar days after receipt of written notice from Corporation to commence and continue correction of such default or neglect with diligence and promptness, then Corporation may, without prejudice to other remedies Corporation may have, act to correct such deficiencies. In such case an appropriate change order shall be issued deducting from the Project GMP the costs of correcting such deficiencies. If the payments then or thereafter due Developer are not sufficient to cover the amount of the deduction, Developer shall pay the difference to Corporation. Such action by Corporation shall be without prejudice to any other rights or remedies to which Corporation may be entitled under this Agreement or applicable law.

Work by Separate Contractors. If requested by Corporation, Developer shall, as part of the Work, provide for the coordination of the Work to be performed by Corporation’s own forces or Separate Contractors, if any, with the Work to be performed by Developer. Developer shall use reasonable efforts to cooperate with Corporation and all Separate Contractors, and Corporation shall use reasonable efforts to cooperate with Developer, Construction Manager, and Contractors. In order to cause the Work and any ITEM 19.1. ATTACHMENT 2

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work to be performed by Separate Contractors to be completed in an expeditious manner, Developer agrees that it will use reasonable efforts in order to ensure that Corporation’s own forces or Separate Contractors have a reasonable opportunity to complete their work as and when required. Developer has no responsibility to supervise or otherwise manage the work of Corporation’s own forces or Separate Contractors or to ensure its proper execution. Corporation shall cause its own forces and each of its Separate Contractors, if any, to maintain commercial general liability insurance (naming Developer and Construction Manager as additional insureds) in amounts reasonably approved by Developer and workmen’s compensation insurance in not less than the minimum required statutory amount, and providing for a waiver of subrogation. Additionally, the Corporation’s own forces and Separate Contractors must comply with Developer’s schedule, safety procedures, site rules, and other reasonable rules and regulations. If the Developer claims that delay or additional cost is involved because of such action by the Corporation or its Separate Contractors, the Developer shall make such Claim as provided in Section 8. The Developer shall afford the Corporation and Separate Contractors reasonable opportunity for introduction and storage of their materials and equipment and performance of their activities. The Developer shall reimburse the Corporation for costs the Corporation incurs that are payable to a Separate Contractor because of the Developer or the Construction Manager’s delays, improperly timed activities or defective construction that impact Separate Contractors. The Corporation shall be responsible to Developer for costs (as an Other Corporation Cost) and delays (as a Corporation-Caused Delay) that Developer or Contractors incur because of delays, improperly timed activities, damage to the work or defective construction by Corporation’s own forces or Separate Contractors.

Compliance with Requirements of Law. Developer shall be aware of and adhere to and obey all Requirements of Law applicable to the construction of the Project.

8. Changes to the Work.

No Changes Without Corporation Approval. Following approval of the Construction Documents by Corporation there shall be no changes in the work except in accordance with this Section 8.

Developer Approved Changes in the Work. It is anticipated that there will be field orders and change orders which shall result in minor changes or field adjustments to the scope of work. Developer shall use its reasonable efforts to apprise Corporation of proposed changes in the work and its recommendations regarding them prior to any action being taken. It is anticipated that it may not always be possible to receive Corporation’s prior approval to these changes in a timely manner. Therefore, minor non-substantial field orders and change orders may be approved by the Developer, without prior Corporation approval (but with notice to the Corporation’s Representative), but only if the changes authorized by these field orders and change orders shall not have the effect ITEM 19.1. ATTACHMENT 2

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of extending the Developer Obligation Date or materially altering the work or increasing any Project Cost. As soon as practical, but no later than with the next Project Application for Payment, Developer shall provide Corporation with all field orders and/or change orders approved by Developer. For the purposes of this Section an alteration shall be deemed to be “material” if it would reduce the intended quality of the Project, result in an increase of Corporation’s operational costs over time, result in a substitution of any of the systems in the Project (including but not limited to HVAC, plumbing, electrical, elevators, roofing, fire and life safely, security systems, and infrastructure components) or increasing any Project Cost. In the case of either a material alteration or a change that would result in failure to Substantially Complete the Project by the Developer Obligation Date, prior written approval by the Corporation’s Representative of the proposed change must be received.

Change in the Work Initiated by Corporation. If Corporation desires to initiate a change by using Corporation Contingency, then Corporation shall issue a written request (“Change Request”) which shall set forth in reasonable detail the nature of the change and the type of quote requested (lump sum or time-and-materials with a not-toexceed amount) and whether such change involves additions, deletions, or other revisions to the Contract Documents. Within seven (7) calendar days of receiving Corporation's Change Request (or such longer time if approved by Corporation because the scope of the requested change reasonably requires more time to analyze the cost and time impacts, such approval not to be unreasonably withheld), Developer shall present to Corporation a detailed proposal for change in Project GMP and/or a change in the Developer Obligation Date, if any. If such change causes an increase or decrease in Developer’s cost or the time required for performance of the work, an equitable adjustment shall be made and the Project GMP and/or Developer Obligation Date modified in writing accordingly by a writing signed by Corporation and Developer. Corporation may initiate a change only if the costs thereof are available in the Corporation Contingency or if the parties identify and agree on a source of funds to pay for the change prior to execution of the change.

Claims by Developer. If Developer believes that it has a claim for a change in Project GMP or Developer Obligation Date, then Developer shall submit, within 14 business days of the event giving rise to the proposed change, a written request (“Request for Change”) to Corporation to issue a Change Order. Timely written notice to Corporation (including meetings where Corporation or Corporation’s Representative is present) is essential to Corporation’s identification, prioritization, and response to claimed changes, including any claimed delays. Developer’s Request for Change shall include a description of the proposed change in the Contract Documents, the event or circumstance giving rise to the need for the change, and any proposed change in the Project GMP and/or Developer Obligation Date associated with the Request for Change, to the extent known at the time. If the Request for Change includes a proposal to extend the Developer Obligation ITEM 19.1. ATTACHMENT 2

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Date, then Developer shall (to the extent known), provide to Corporation a description of:
(a) the cause(s) for the proposed extension of time; (b) the dates (or anticipated dates) of performance of the changed work; (c) activities on the Project Schedule affected by the change, any new activities created by the change, and their relationship with existing activities; (d) the anticipated extent of any claimed increase to the Developer Obligation Date; and (e) recommended action to avoid or minimize the increase. If Developer fails to take reasonable steps to mitigate a claim, then the claim will be limited or denied to the extent that such reasonable mitigation efforts would have limited or avoided the claim. If Corporation agrees that a change in the Contract Documents is appropriate, then Corporation may use the same options described in the “Lump Sum Change Orders” and “Time-and-Materials Change Orders” Sections below in response to Developer’s Request for Change, to be paid for out of Corporation Contingency funds. In the event of a claim or litigation arising from any disagreement involving Developer’s Request for Change, Developer’s compensation (if any) shall be limited to an amount calculated in accordance with the “Time-and-Materials Change Orders” Section below. If Corporation does not agree that a change in the Contract Documents is appropriate, Corporation will direct Developer how to proceed by unilateral change order as discussed below.

Lump Sum Change Orders. For a lump sum change, Developer’s proposal shall be itemized and supported with sufficient substantiating data (including but not limited to detailed Trade Contractor estimates, supplier quote sheets, prices, invoices, and rate sheets) to permit evaluation with respect to the following costs:
(a) Labor (showing hourly rate multiplied by estimated hours); (b) Payroll taxes on labor;
(c) Materials, supplies, and equipment (include unit costs and estimated quantities);
(d) Machinery and equipment rental (include rental rates and estimated durations);
(e) Sales, use, or similar taxes related to the work;
(f) Other Items: Corporation may authorize other items that may be required for the changed work. Such items include labor, services, material, and equipment that are different in their nature from those required for the work and that are of a type not ordinarily available from Developer or any of its Contractors; (g) Reasonable overhead and profit associated with the change, calculated as follows:
(1) For changed work performed by Construction Manager’s own forces: 15% on the direct material and labor components for Construction Manager, plus Construction Manager’s markup per contract on the total change order work, plus Developer’s markup of 6% for overhead and profit on the foregoing; and/or
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(2) For changed work performed by Trade Contractors: 15% for Trade Contractors, plus Construction Manager’s markup per contract on the Trade Contractors’ change order, plus Developer’s markup of 6% for overhead and profit on the foregoing; and
(3) For changed work performed by Consultants: 15% for Consultants, plus Developer’s markup of 6% for overhead and profit on the foregoing. (h) Premiums for all bonds and insurance (bond to be billed at actual cost, insurance to be billed at the agreed Reimbursable Expenses insurance rate, and Developer shall provide documentation demonstrating it will actually incur an increase in bond costs directly attributable to the change).

Corporation may reject Developer’s lump sum proposal, may negotiate with Developer a revision of the requested change and associated lump sum proposal, or may approve the Developer’s lump sum proposal and incorporate it into a Change Order.

Time and Materials Change Orders. For a time-and-materials change, Corporation shall determine (if Corporation and Developer cannot agree, in which case the Corporation’s determination is a Unilateral Change Order) the adjustment to the Project GMP on the basis of actual costs as follows:
(a) Cost of materials and supplies (show actual unit cost multiplied by actual quantity). The cost of materials shall be at invoice price, plus freight and delivery. (b) Tool and equipment rental. Regardless of ownership, the equipment rental rates shall be based upon the edition of equipment rental rates published by the Caltrans Division of Construction, or locally available rate or other reference acceptable to Corporation current as of the date the changed work is performed.

The rental rates paid shall include the cost of fuel, oil lubrication, supplies, small tools, necessary attachments, repairs and maintenance of any kind, depreciation, storage, insurance, and all incidents. Necessary loading and transportation costs for equipment used on the changed work shall be included. If equipment is used intermittently and, when not in use, could be returned to its rental source at less expense to Corporation than holding it at the work site, it shall be returned, unless Developer elects to keep it at the work site at no additional expense to Corporation (i.e., Corporation still responsible for cost that Developer would have incurred by returning the equipment and then bringing it back to the site). All equipment shall be acceptable to Corporation, in good working condition, and suitable for the purpose for which it is to be used. Manufacturers' ratings and approved modifications shall be used to classify equipment and it shall be powered by a unit of at least the minimum rating recommended by the manufacturer. The reported rental time for equipment already at the work site shall be the duration of its use on the changed work, commencing at the time it is first put into actual operation on the changed work, plus the time required to move it from its previous site and back or to a closer site. Developer shall submit invoices for tool and equipment rental costs.

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(c) Cost of labor (show actual total hourly rate multiplied by actual hours spent on changed work). The costs of labor shall not exceed the wages prevailing for each craft or type of workers performing the changed work at the time the changed work is done. The costs of labor shall include the actual basic hourly rate, plus employer's actual regular payments for health and welfare, pension, vacation or holiday, training, and other direct costs resulting from federal, State or local laws, as well as assessments or benefits required by lawful collective bargaining agreements and shall be supported by payroll records. The costs of labor shall not include any amount for bonuses or extraordinary vacation or holidays. The use of a labor classification that would increase the changed work cost will not be permitted unless Developer establishes the necessity for such additional costs. Labor costs for equipment operators and helpers shall be reported only when such costs are not included in the invoice for equipment rental. The labor cost for foremen shall be proportional to all of their assigned work and only that applicable to changed work shall be paid. Non-direct labor costs including superintendence shall be considered part of the markup for overhead and profit below.
(d) Sales taxes on materials (percentage of item (a), above). (e) Payroll tax on labor (percentage of item (c), above). (f) Insurance (workers' compensation and liability insurance). (g) Other Items. Corporation may authorize other items that may be required for the changed work. Such items include labor, services, material, and equipment that are different in their nature from those required for the work and that are of a type not ordinarily available from Developer or any of its Contractors. Developer shall submit invoices covering all such items in detail. (h) Overhead and profit computed as set forth in 8.5(g). (i) Bond and insurance (bond to be billed at actual cost, insurance to be billed at the agreed Reimbursable Expenses insurance rate, and Developer shall provide documentation demonstrating it will actually incur an increase in bond costs directly attributable to the change).

Developer shall keep and present an itemized accounting of the costs or savings attributable to the changed work, together with appropriate supporting data. Upon request by Corporation, Developer shall permit Corporation to inspect Developer’s original estimate for the Project, subcontract agreements, or purchase orders relating to the change. Upon completion of the changed work ordered to be performed on a time and materials basis, Corporation will then issue a Unilateral Change Order adjusting the Project GMP according to the actual costs incurred and, if appropriate, adjusting the Developer Obligation Date.

Unilateral Change Orders. If Corporation and Developer cannot reach an agreement on a proposed change, Corporation may issue a Unilateral Change Order directing work on a time-and-materials basis as set forth above, and Developer reserves the right to dispute any determination made by Corporation in accordance with the procedures set forth in Exhibit H.

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No Extension of Time Without Impact to Critical Path. Developer shall not be entitled to an extension of the Developer Obligation Date unless Developer demonstrates a delay to the Critical Path shown on the most recent Project Schedule. If Corporation and Developer do not agree on either entitlement to, or the amount of, the extension of the Developer Obligation Date, then the disagreement will be resolved by the dispute resolution procedures set forth in Section 24.

No Additional Compensation for Early Completion. Nothing contained in the Contract Documents creates any contractual right, express or implied, on the part of Developer to receive additional compensation for early completion of the Project.

No Changes After Substantial Completion. If Corporation issues additive change orders after Substantial Completion for the Project, then such additive change orders will be considered Additional Services, and the work to be performed under those change orders will not delay the release of Retention to Developer for the Project (which will become due without regard to the status of the work that constitutes Additional Services), regardless of whether the applicable Notice of Completion has been recorded.

Corporation and Developer will enter into a new contract for the Additional Services, and the Developer (or its Construction Manager) shall enter into new contracts with Contractors to perform such Additional Services or shall take other steps necessary to insure that the Additional Services do not extend the date by which Contractors for the original services can file mechanic’s liens or stop payment notices. Corporation will pay Developer compensation for Additional Services consisting of (a) the actual costs incurred by Developer for the Additional Services, (b) Developer’s hourly rates then in effect for the time Developer’s personnel spend on the Additional Services, and (c) Reimbursable Expenses at actual cost incurred by Developer in performing the Additional Services.

Credits. Regardless of whether the equitable adjustment associated with changed work is recorded through a lump sum or time-and-materials Change Order: (a) if the net value of a change to the work results in a credit from Developer, then the credit given shall include costs as well as overhead and profit; or (b) if the net value of a change to the work results in additional costs, then overhead and profit will only be applied to the amount by which the added costs of the change exceed the credited amount. When a change proposed by Corporation results in the deletion of work and the Corporation and Developer are unable to agree upon the cost, overhead, and profit thereof, the Corporation's estimate of the cost, overhead, and profit shall be deducted from the Project GMP by a Change Order unless within 15 days of receiving the Corporation’s estimate Developer presents proof that the Corporation’s estimate is in error.

Overhead and Profit. Overhead and profit on change orders shall be computed as set forth in Section 8.5(g). Regardless of whether the equitable adjustment associated with changed work is recorded through a lump sum or time-and-materials Change Order, the amount Corporation pays for overhead and profit shall be Developer’s ITEM 19.1. ATTACHMENT 2

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only compensation for: all costs of supervision, superintendence, and scheduling; wages of timekeepers, watchmen, and clerks; incidentals; any and all field and home office expenses; costs of estimating and preparing change orders; all impact costs including but not limited to lost productivity associated with “learning curves,” “productivity factors,” and “ripple effects;” and all other expenses not included in itemized costs.

Compensation for Delay. Developer shall be compensated for its substantiated actual, direct expenses, together with the markup for overhead and profit described in “Overhead and Profit” above, resulting from Corporation-Caused Delay.

Under no circumstances shall Corporation compensate Developer for extended home office overhead or profit based on an “Eichleay formula” or any other proportionate allocation of Developer’s overhead expenses or profit, all of which shall be deemed to have already been included in the above-described markup. If Corporation believes that it is entitled to delay damages, then Corporation must submit, within 14 business days of the event giving rise to the claim, a written claim to Developer describing the delay and the amount of delay damages. Corporation’s written notice is a condition precedent to Corporation’s claim and to the commencement of delay damages.

Modifications. Upon execution of this Agreement, Developer will commence its services under this Agreement. It is understood and agreed that as work proceeds on the Project, certain clarifications and modifications may need to be made, including adjustments in floor plans, circulation, site work, and elevations, as well as detailing of materials, colors, and finishes. Modification of the scope of Work, and any interpretations of the Project documents having a substantial impact on the Project, may be approved by the Corporation’s Representative; provided, however, that except as authorized in writing by Corporation, under no circumstances will the cost of the Project work exceed the Project GMP. Any approvals by the Corporation’s Representative required under this Section 8.14 must be made in a reasonably timely manner so as not to impact the Project work or Project Schedule; failure to respond in a reasonably timely manner will result in a Corporation Caused Delay.

Minor Field Changes. Developer has the right during the course of construction of the Project to make “minor field changes,” without seeking the approval of Corporation, except to the extent that any such changes increase the cost of the Project GMP to Corporation (or Other Corporation Costs) or individually or cumulatively delay the completion of the Project beyond the Developer Obligation Date. “Minor field changes” are defined as those changes from the approved Construction Drawings and Detailed Specifications that have no material effect on the Project and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this section will be deemed to constitute a waiver of or change in the applicable building code requirements governing any such “minor field changes” or in any approvals by Corporation otherwise required for any such “minor field changes.” “Minor field changes” ITEM 19.1. ATTACHMENT 2

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will be documented, in writing, in daily field logs, record drawings, or equivalent, and will be made available for Corporation inspection.

Conditions Affecting the Work.
(a) Existing Site Conditions: Information regarding the work site represented in the geotechnical reports (identified in Exhibit O) is believed to be correct; Corporation does not warrant either the completeness or accuracy of such information, but Developer may rely on the completeness and accuracy of such geotechnical reports identified in Exhibit O.
(b) Site Investigation and Representation: Developer acknowledges satisfaction as to the nature and location of the work; the general and local conditions, particularly those bearing upon availability of transportation and access to the site; disposal, handling and storage of materials; availability of labor, water, electric power, telephone, and roads; uncertainties of weather or physical conditions at the site; the conditions of the ground; the character of equipment and facilities needed prior to and during the performance of the work; and all matters that can in any way affect the work or the cost thereof under this Agreement.

Developer and Corporation have mutually agreed on the amount and types of onsite investigation (limited solely to the parceled area of the _______, with no investigation performed for off-site work that Developer may be required to perform) to be done by Developer, and Developer has performed the mutually agreed on-site investigation. Therefore, if Differing Site Conditions (including, but not limited to, soil conditions, archeo-paleo artifacts, regulated items, environmental issues, etc.) are found either on-site or off-site, then Developer may make a claim for additional costs and/or schedule delay. (c) Topographic Maps: Topographic maps, if provided by Corporation or Tenant (see Exhibit O), were used in the Project design, bidders may inspect such maps upon request to the Developer, or may obtain copies upon payment of the cost to reproduce the copies. Notwithstanding the foregoing, the Sacramento Public Works, on behalf of Corporation or Tenant, may have provided or caused to be provided the topographic maps and other Project-related documents (see Exhibit O)for the Project site, and Developer, Architect, and Construction Manager have reviewed same and are relying on their accuracy for the preparation, planning, and performance of their services and work.
(d) Differing Site Conditions: Developer shall promptly, but in no event more than 7 days after the condition is first observed, notify Corporation in writing of the following site conditions and shall leave such conditions undisturbed until otherwise directed by Corporation:

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(1) Subsurface or latent physical conditions at the site differing materially from those represented in the Contract Documents listed in Exhibit E or Exhibit O;
(2) Unknown physical conditions at the site differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract; and (3) Material differing from that represented in the Contract Documents which Developer believes may be hazardous waste pursuant to Health & Safety Code Section 25117.
(e) Corporation Investigation: Upon written notice of Differing Site Conditions from Developer, Corporation shall promptly investigate such conditions. If Corporation finds that such conditions do materially differ and cause an increase or decrease in the cost of or the time for performance of the work, Corporation may, at its discretion: (a) terminate all or part of this Agreement in accordance with Section 23.7; (b) issue a written change to this Agreement in accordance with Section 8; or (c) make any other appropriate arrangements to address the Differing Site Conditions. Any claim by Developer for adjustment hereunder shall not be allowed unless Developer has given proper notice. (f) Disputes: If a dispute arises between the parties hereto as to whether the conditions constitute Differing Site Conditions or affect the price or time for performance of any part of the work: (a) Developer shall submit a written notice of potential claim to Corporation including all information relating to the Differing Site Conditions that Developer has available to it at the time Developer delivers the notice of potential claim (and, if Developer decides to make a formal claim, then Developer will make a separate, formal claim pursuant to and in accordance with the requirements in Section 8.4); (b) Developer shall then proceed with all work to be performed under this Agreement; and (c) pending resolution of the claim, Developer shall not be excused from any scheduled completion date provided for by this Agreement. Developer shall retain any and all rights provided either by this Agreement or by law which pertain to the resolution of disputes between the parties hereto.

Changes in Requirements of Law. Corporation and Developer shall negotiate a Change Order to equitably adjust the Project GMP and/or Project Schedule if:
(a) the completion of the Project is adversely affected by the enactment, adoption, promulgation, modification or repeal of any Requirements of Law applicable to the design or construction of buildings or facilities leased by public agencies after the execution of this Agreement; or (b) there are any costs incurred resulting from (1) new or increased government fees or assessments (including fees not included in Exhibit D) or (2) from rulings on the part of state or local public officials beyond code and industry practice which ITEM 19.1. ATTACHMENT 2

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are not known or anticipated at the date of execution of this Agreement and/or not included in the Contract Documents. Developer shall give notice to Corporation of any such conditions in accordance with this Section 8.

9. Payment of Project Costs. Trustee will act as disbursing agent and hold and disburse money on deposit in the Project Fund to pay Project Costs and other costs in accordance with the Indenture and this Agreement. Corporation will direct the Trustee to make monthly disbursements from the Project Fund to Developer for Developer to then pay Project Costs. So long as there has not occurred an Event of Default by Developer under this Agreement, such disbursements from the Project Fund shall continue until the full Project GMP has been disbursed (except as provided in Sections 11 and 12 hereof) or the Project has been completed.

Disbursements received by Developer from the Project Fund shall, except as otherwise expressly provided herein, be used solely to pay the Project Costs. Upon Developer’s compliance with its obligations under this Agreement regarding Project Applications for Payment, Corporation shall take all such action as is necessary and required to obtain such disbursements by the Trustee in accordance with the Indenture.

Applications for Payment. On or before the twenty-fifth (25th) day of the month immediately preceding a month in which Developer will submit a Project Application for Payment, the Corporation, Tenant, Developer, and Construction Manager will meet to review a preliminary draft of such Project Application for Payment prepared by Developer (hereinafter referred to as a “Pencil Draw”). During the Pencil Draw meeting, the parties will agree on the percentage complete for each line item, which may be projected to the last day of the month. Developer will revise the Pencil Draw in accordance with any reasonable objection or recommendation of Corporation that is consistent with the requirements of the Contract Documents. Such revised Pencil Draw will be resubmitted by Developer to Corporation as the Project Application for Payment due on the tenth day of the month immediately following the month in which the Pencil Draw was first submitted. The Project Application for Payment will be in the form of Exhibit N. Developer will also submit with each Project Application for Payment a written narrative describing the basis for any item set forth in the Project Application for Payment that does not conform to instructions of Corporation in connection with any applicable Pencil Draw. Developer shall submit to Corporation on or before the tenth day of the following month for which it is seeking payment a Project Application for Payment signed by Developer, which shall also include a pay application submitted by the Construction Manager consistent with the terms of the CMAR Contract. The Project Application for Payment shall request payment of a specified dollar amount, which shall constitute a portion of the Project GMP, reasonably detailed to reflect the amount of the Project Costs actually expended in each category of Exhibit D. Such Project Application for Payment shall request the appropriate amount of hard or soft costs based on a percentage of completion basis with respect to such work as of the date of such Project Application for ITEM 19.1. ATTACHMENT 2

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Payment, less retainage being withheld by the Construction Manager from any of the Contractors. When Retention that has been previously withheld from a pay application submitted by the Construction Manager is to be paid by the Construction Manager to a Contractor, it shall be added to the next pay application of the Construction Manager submitted to Developer and included in the next Project Application for Payment.

Project Costs other than hard and soft construction costs that are incurred or paid on a schedule that is not related to percentage of completion (e.g., Developer Contingency paid only as allocated by Developer to specific costs incurred, Developer’s Fixed Fee paid as described in Section 11.3, Developer’s Reimbursable Expenses paid as described in Section 11.2, reserves for warranty work paid only after Substantial Completion, the 150% holdback for uncompleted Punch List items, payment of unutilized contingency accounts or construction savings to Corporation and/or Developer, etc.) shall be included in the Project Application for Payment only when such items are to be paid in accordance with other provisions of this Agreement, without regard to the percentage completion of the Project. Developer may also include in a Project Application for Payment the full amount (with no Retention withheld) for deposits for Commodities or for purchases of Commodities that require advance payment (e.g., the Financed FF&E) that will be paid by Developer within thirty (30) calendar days of Developer’s receipt of the payment of the requested deposit or advance payment.

Developer shall also provide a reconciliation between the total of all draw amounts requested (including such draw request) under a Project Application for Payment and the then-current Exhibit D and include all the information and documentation required to be provided by the Construction Manager to the Corporation pursuant to the CMAR Contract, as well as a conditional partial lien release from the Construction Manager and from such laborers, contractors and Trade Contractors performing work on site as Corporation may require, to become effective upon payment to the Construction Manager or such other payees of the amount of the payment specified in said Contractor’s Application for Payment, and an endorsement to the Lender’s Title Policy and a similar endorsement to the Corporation’s Title Policy showing no liens or claims of lien; provided, that if a lien has been filed, Developer and/or its Construction Manager may resolve such lien in accordance with Section 19 below. Developer shall provide copies of all conditional partial lien releases to the title company issuing the Title Policies and shall execute an indemnity agreement with the title company in a form sufficient to enable the title company to issue the foregoing endorsements. Each Application for Payment must include:
(a) An accepted Schedule of Values and Schedule Update with a narrative report (if requested), all approved in writing by Corporation and all developed in accordance with Section 5.1(f), to the extent that they are required. Developer’s submissions of an accepted Project Schedule, Schedule Updates, and Schedule of Values are conditions precedent to Corporation’s processing of Applications for Payments that request payment of construction costs;
(b) Photographic documentation of completed work (as requested); (c) If requested, Developer shall within a reasonable time (estimated to be 60 days) provide three copies of certified payrolls from Developer and all Contractors ITEM 19.1. ATTACHMENT 2

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for the period covered by the Application for Payment, with one copy having all pertinent information visible and two copies having the workers’ names, addresses, and social security numbers blacked out or proof that the certified payrolls were electronically submitted to the DIR’s eCPR system, if acceptable to Corporation; (d) Evidence satisfactory to Corporation that Developer is fulfilling its obligations under the Contract Documents with respect to preparing daily reports and maintaining up-to-date As-Built Plans;
(e) Conditional waivers and releases on progress payment or final payment (as applicable) from Developer, those Contractors of any tier, and those suppliers claiming funds covered by the Application for Payment, and unconditional waivers and releases on progress payment or final payment from Developer, Construction Manager, those Contractors of any tier, and those suppliers who received funds through the preceding applications for payment, all in the form prescribed by Civil Code Sections 8120 through 8138 (provided, however, that with respect to Contractors and suppliers, unconditional waivers and releases will exclude the prior two months’ payments); and
(f) Any other administrative documentation reasonably required by Corporation or as agreed upon.

The Application for Payment shall show the total value of work completed or partially completed as of the date of submission of the Application for Payment, including 100% of the value of materials delivered to the Project site and not yet incorporated into the construction and long-lead time items, items specifically fabricated for the Project or specialized items (e.g., steel, curtain wall and glass, HVAC, generator, switch gear, light fixtures, etc.), and 100% of the value of materials delivered to Developer and stored at locations other than the Project site (“Stored Materials”), provided that Developer furnishes Corporation satisfactory evidence that Developer has acquired title to the Stored Materials, the Stored Materials will be used on the Project, the Stored Materials are properly stored at a secure off-site location reasonably acceptable to Corporation, the Stored Materials at each storage location are segregated from any other materials there that are not intended for use on the Project, and the Stored Materials are covered by insurance against loss, damage, theft or vandalism. Corporation reserves the right to adjust an Application for Payment if a prior Application for Payment is determined to have been overstated or understated.

Payment Procedures. Corporation and Tenant shall have the opportunity to attend all meetings between Developer and Contractors at which applications for payments are to be discussed (e.g. Developer shall be available and shall require the Construction Manager to be available for a monthly meeting for review of the current month’s application for payment, if requested by Corporation). Corporation shall receive with the Project Application for Payment any documentation submitted to Developer supporting the Construction Manager’s application for payment. So long as Corporation and Trustee shall have received the Project Application for Payment, including all required Developer certifications, lien releases, and other required supporting documentation, on or before the tenth day of a calendar month, Corporation shall make any objections regarding ITEM 19.1. ATTACHMENT 2

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such Project Application for Payment in writing as soon as practicable, but in any event no later than five (5) business days after receiving it or the Corporation shall be deemed to have waived its right to object to such Project Application for Payment.

Within ten (10) business days of Corporation receiving an undisputed, properly completed Application for Payment, Corporation will submit a requisition (Exhibit B to the Indenture) to request that Trustee pay to Developer a sum equal to the value of the work completed since the commencement of the work, less all previous payments, plus a like percentage of the value of material delivered on the ground or stored subject to, or under the control of, Corporation, and unused; provided, however, that Trustee shall hold 5% of the value of the construction work under the CMAR Contract (but will not withhold Retention on soft costs, Construction Manager’s Fixed Fee, Developer’s Fixed Fee, Commodities or deposits for Commodities (e.g., the Financed FF&E), or exceptions to Retention specifically set forth in the CMAR Contract) completed as Retention until the Retention Payment is made pursuant to Section 9.8. Upon request of Developer and at Corporation’s sole and absolute discretion, when the Work is 50% complete (by cost), as evidenced by Corporation’s approval of Project Applications for Payment showing the Work at least 50% completion, no further Retention may be withheld. If Corporation fails to receive the Project Application for Payment on or before the tenth (10th) day of the month, Corporation shall have a period of five (5) calendar days from its receipt of such Project Application for Payment to review and approve such application, and a period of ten (10) business days to pay amounts as to which there is no objection. If Corporation objects to any portion of a Project Application for Payment, Corporation shall provide detailed written comments explaining the nature of the disapproval as provided in the preceding paragraph, whereupon (i) for Project Costs which are approved by Corporation, Corporation shall request payment from the Trustee and (ii) Developer and Corporation shall meet within two (2) business days to determine mutually acceptable revisions to the Project Application for Payment. If Corporation delays timely progress payment from Trustee through Corporation’s breach, negligence or misconduct and not due to a deficient Application for Payment, and as a direct result of that failure Developer is required to pay to its Construction Manager, Consultants, vendors, or Contractors additional amounts equivalent to statutory penalties or late charges (collectively, “late charges”), then Corporation will pay to Developer those late charges in addition to the amount unpaid (and such late charges will result in an adjustment of the Project GMP in an amount equal to the amount of the late charges). Late charges will only be paid upon presentation to Corporation of written evidence that the late charges were in fact owed and paid by Developer. No progress payment by Corporation shall be considered to be Corporation’s acceptance of any part of the work.

Failure of Developer and Corporation to determine mutually acceptable revisions to the Project Application for Payment within the two (2) business day period shall entitle either Corporation or Developer to commence the dispute resolution process described in Section 24 hereof or, if necessary, litigation. Failure to reach agreement on an Application for Payment shall not relieve Developer from its duties and obligations under this Agreement or relieve Corporation from its duties and obligations under this Agreement (including, but not limited to, paying undisputed amounts).

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Requisition to the Trustee. Corporation shall execute and deliver each requisition to the Trustee for the amount of the Project Application for Payment, or such undisputed portion thereof under Section 9.2. Corporation shall undertake good faith efforts to cause Trustee to disburse the amount shown on such requisition to Developer for disbursement to applicable Contractors and others in accordance with the Indenture.

Initial Draw. The Initial Draw shall include a mutually agreed amount to reimburse Developer for Project Costs actually incurred or paid by those parties (including, without limitation, fees and costs incurred prior to this Agreement for the Construction Manager, Architect and other design professionals) on and before the date of Bond Closing.

Corporation may include in the Initial Draw and/or subsequent draws amounts paid by Tenant for the PHASE 2 Services to reimburse Tenant for such costs, all or in part.

Developer and Corporation shall agree on the maximum amount of the Initial Draw and shall notify Tenant of that agreed maximum amount by no later than three (3) business days prior to the Sale of the Bonds; in addition, Developer and Corporation shall agree on the exact amount of the Initial Draw and shall notify Tenant of that agreed Initial Draw amount by no later than seven (7) business days prior to the Bond Closing.

Other Corporation Costs. Notwithstanding anything to the contrary contained in this Agreement, all costs of every nature that constitute Other Corporation Costs shall be the sole responsibility, cost and expense of Corporation. Corporation further agrees that Developer shall have no responsibility or liability for any of the Other Corporation Costs and Corporation shall timely fund all Other Corporation Costs.

Lump Sum Work and Unit Prices. Corporation shall pay for work shown on the schedule of values as "Lump Sum", "L.S.", or "Job" at the lump sum price shown.

Any contract work for which a unit price has been agreed upon, will be paid for at the actual quantities constructed in accordance with the Contract Documents. Upon completion of the work, if the actual quantities show either an increase or decrease from the quantities stated in this Agreement, the unit price stated will apply unless a change to the unit price is warranted under the Section 8.

Allowances. Payment for any Allowance identified in the Schedule of Values shall be for direct cost reimbursement only, unless the Schedule of Values identifies it as a “Time and Materials” or “T&M” item. Reimbursable direct costs shall be verified by invoices and shall include any amounts paid to third parties, and do not include markups, including but not limited to supervision, labor, overhead, or profit related to the item.

Payment for Allowances based on T&M pricing shall be proposed by Developer subject to Corporation’s acceptance using the same criteria and proposal breakdown as that specified in the “Time-and-Materials Change Orders” subsection of Section 8. Any costs that exceed the maximum amount of any Allowance line item shall be addressed as a change to this Agreement consistent with Section 8, but in such event there shall be no markup for overhead and profit on the additional actual costs. Upon completion of the Project, each ITEM 19.1. ATTACHMENT 2

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Allowance will be corrected for unused balances and a credit to the Project GMP will be issued by Change Order to reflect the actual sums authorized for work as Allowance items; provided, however, that if a particular Allowance is exceeded by a significant amount (as reasonably determined by Developer in its discretion), then the parties will issue a Change Order for that particular Allowance instead of netting all Allowances later so that Developer is not financing the excess cost. The following terms apply to Allowances:
(a) Include in the Project GMP all Allowances named in the Contract Documents. The amount of each Allowance includes:
(1) The cost of the Product to Developer, less any applicable trade discounts.
(2) Delivery to the site including handling, unloading, uncrating and storage.
(3) Protection from the elements from damage.
(4) Labor for installation and finishing.
(5) Other expenses required to complete installation.
(6) Applicable taxes.
(7) Overhead and profit.
(b) Developer shall file a “No Collusion Affidavit” with Corporation in regards to the actual cost price of Allowance items, and allow any requested examination of his accounts and those of his materials.
(c) Allowances are included in the scope of the Contract Documents. (d) Payment for Allowances shall be based on direct costs actually incurred by Developer for labor, materials, equipment, or other expenses required to accomplish the allowance. All payments shall be based on Developer’s actual expense less any applicable trade discounts as verified by invoice(s), delivery to the site including handling, unloading, uncrating and storage, protection from the elements of damage, labor for installation and finishing, other expenses required to complete installation, applicable taxes, and charge for overhead and profit. (e) Except as set forth above with respect to Allowances that significantly exceed their value, upon completion of the Project, all of the Allowances will be corrected (netted out to an aggregate add or deduct) by a written change order signed by Corporation and Developer to reflect the actual sums authorized for work as Allowance items.
(f) A list of Allowances is included in Exhibit D.

Retention Payment. To the extent allowed by applicable law, when the Work is 50% complete (by cost), as evidenced by Corporation’s approval of Project Applications for Payment showing the Work at least 50% completion, Corporation will release a portion of the Retention to pay the Retention for the Trade Contractors who have ITEM 19.1. ATTACHMENT 2

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completed their work. In order for Corporation to release Retention as set forth in the preceding sentence, the Work must be on schedule (as evidenced by the most recent approved Project Schedule) and on budget (as evidenced by the most recent Project Application for Payment). Corporation will pay the remaining Retention (less 150% of the cost of outstanding Punch List work) within thirty (30) days of AHJ issuing a Temporary Certificate of Occupancy so that the Construction Manager and Trade Contractors can be paid prior to the expiration of time to record mechanic’s liens or stop payment notices. If the Retention Payment is made before Developer has complied with all of its obligations under this Agreement, then payment of Retention shall not be interpreted as Final Payment, and shall not relieve Developer of its obligations under the Final Payment provisions.

Final Payment. The Final Payment (which will include the remaining Retention, if any, less 150% of the cost of outstanding Punch List work) shall be made no later than 30 days after Developer Substantially Completes the work and submits an Application for Final Payment in proper form and suitable for payment. Developer’s work will not be complete until Developer has delivered electronic versions of: (a) record drawings for the Project; (b) all operations and maintenance manuals; (c) manufacturers’, suppliers’, and installers’ warranties, guarantees, instruction sheets, and parts lists; and (d) any other documents or information required by the Contract Documents as a condition to completion of the work. Developer’s Application for Final Payment shall include:
(1) Developer's affidavit that payrolls, bills for materials and equipment, and other indebtedness connected with the Project have been paid or otherwise satisfied by Developer; and
(2) Conditional waivers and releases on Final Payment in the form prescribed by Civil Code Section 8136 from Developer, its Contractors of any tier, and its suppliers who will receive funds from the Final Payment, listing with specificity any and all claims under or arising out of this Agreement or the Project that remain unsettled.

Stop Payment Notices. If stop payment notices are filed against the Project or state, federal, or other governmental agency claims or liens are filed, then Corporation may withhold the amount required by law from progress payments until such claims and liens have been resolved pursuant to applicable law. However, if the cause of the stop payment notice is due to Corporation’s unexcused failure to timely and fully pay Developer in accordance with the terms of this Agreement, then (a) Corporation may not withhold and (b) Developer is entitled to make a claim for direct damages incurred as a result of or arising out of the withholding.

10. Other Services by Developer. Services may be performed by the Developer at the written request of Corporation which are not included as part of the Project. Such services shall be performed pursuant to a separate written agreement between Corporation and Developer.

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11. Developer’s Fixed Fee and Reimbursable Expenses.

Developer’s Fixed Fee. The Project GMP (Exhibit D) includes a fixed fee payable to Developer in the amount set forth in Exhibit D as the Developer’s Fixed Fee for Phase 2 Services under this Agreement, which is subject to adjustment as provided in this Agreement and is payable as set forth in Section 11.3. Any Corporation-initiated change orders shall increase the Developer’s Fixed Fee in an amount calculated as set forth in Section 8.5 or 8.6, as applicable.

Reimbursable Expenses. Developer’s Reimbursable Expenses will be paid as incurred, without regard to the percentage complete of the Project. With respect to insurance, Corporation shall reimburse Developer, as a Reimbursable Expense, Developer’s expense (acknowledged and agreed to be $10.00 per $1,000 of contract value) for the Commercial General Liability, Employer’s Liability, Auto Liability, and Professional Liability insurance required to be maintained by Developer under this Agreement. All other Reimbursable Expenses will be billed at cost without markup.

Payment of Developer’s Fixed Fee. As part of the monthly Project Application for Payment, Developer shall be entitled to a ratable portion of the Developer’s Fixed Fee. The total amount of Developer’s Fixed Fee is set forth in Exhibit D.

Corporation will pay to Developer the Developer Fixed Fee compensation, in the amount identified in Exhibit D, as follows:
(a) Equal Monthly Installments: The Developer Fixed Fee for Developer’s services under this Agreement will be paid in equal monthly installments (the number of installments equal to the number of months for the Project duration under the Project Schedule); provided, however, that if Developer completes the Project in less time, then the unpaid balance of the Developer Fixed Fee is due with the Final Payment to Developer under this Agreement (i.e., the equal monthly installments are for billing purposes, but the intent is that Corporation will pay the full amount of Developer’s Fixed Fee). If the Project takes more time, then Developer is not entitled to additional Developer Fixed Fee compensation (except as expressly provided in Section 8). (b) Application: Developer will submit to Corporation its request for payment of the Developer Fixed Fee as part of the Project Application for Payment under this Agreement.

12. Completion of the Project.

Substantial Completion of the Project. Developer shall achieve Substantial Completion of the Project by the Developer Obligation Date. Until Substantial Completion of the Project has occurred, Corporation shall not occupy the Project and shall prohibit Tenant or any other party from occupying the Project; provided, however, that ITEM 19.1. ATTACHMENT 2

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limited use of the Project for storage, move-in or installation of Tenant’s Personal Property by either Corporation or Tenant when such use is approved by Developer, such approval not to be unreasonably withheld, shall not be deemed to be occupancy. Notwithstanding that Substantial Completion of the Project shall have occurred, Corporation shall be entitled to provide Developer with a Punch List, in accordance with the provisions of this Section

12. Notice of Substantial Completion. When Architect considers that the Work is ready for its intended use, Developer shall require Architect to prepare and deliver to Corporation a tentative certificate of Substantial Completion in the form of Exhibit L.

The tentative Certificate of Substantial Completion will include by attachment a tentative list of items to be completed or corrected. Developer shall give notice in writing to Corporation that the Project is Substantially Complete (except for Punch List items specifically listed as incomplete) in accordance with the Contract Documents (“Developer’s Notice of Completion”). Promptly thereafter (but in no event exceeding three (3) business days), Corporation, Developer, Architect, Construction Manager and Tenant shall inspect the Project Work to determine the status of completion. If Corporation does not consider the Work substantially complete or Corporation objects to the Punch List, then Corporation must notify Developer in writing within five (5) business days of the inspection giving all of Corporation’s specific reasons that the Project is not Substantially Complete or the Punch List is inaccurate; if Corporation does not provide written notice within such time, then the Corporation will be deemed to have no objection.

Once Developer addresses all of Corporation’s reasonable objections, Architect will then issue a definitive Certificate of Substantial Completion (with the potential of a revised Punch List) agreed to by the Architect, Developer, and Corporation. The Certificate of Substantial Completion will include by attachment the (revised) Punch List. The completion of the Punch List, installation of Corporation’s IT, and completion of any other Corporation work (e.g., Corporation installation of Tenant’s Personal Property) shall not be required in order for the Project to be Substantially Complete.

Completion of Punch List Items. Following Substantial Completion, Developer shall diligently cause all Punch List items to be completed promptly in accordance with the Contract Documents. Developer shall coordinate the performance of any such Punch List work to avoid any unreasonable hindrance to Tenant’s installation of Tenant’s Personal Property and its full occupancy of the Project.

Final Acceptance. Upon Final Acceptance, Developer shall be entitled to payment of the balance of Developer’s Fixed Fee and all other Project Costs incurred in connection with the work, but not to exceed the Project GMP, which will be invoiced pursuant to Section 9, above. “Final Acceptance” means that each of the following items shall have occurred with respect to the Project:

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(a) AHJ Approval: AHJ has issued a temporary or final certificate of occupancy or other approval (e.g., final building inspection by building officials) for the Project permitting Tenant to occupy and use the Project for its Permitted Use; provided, however, if the delay in the issuance of the certificate of occupancy or other approval is attributable solely to the Corporation’s or Tenant’s work including, without limitation, Tenant’s Personal Property, or an obligation of Corporation or Tenant, then this condition shall be deemed satisfied; (b) Conditional Waivers: Developer and each Contractor shall have provided its final conditional waivers and releases of lien in the statutory form. (c) Punch List Complete: All Punch List items shall have been completed, but if Corporation consents to Final Acceptance without completion of all Punch Lists items, the parties shall have agreed upon the estimated costs of any Punch List items remaining to be completed and 150% of such estimated cost shall be withheld by the Trustee in the Project Costs Account until the Punch List items have been completed to the reasonable satisfaction of Corporation. When the Punch List items have been completed, Developer shall notify Corporation and, upon Corporation’s reasonable satisfaction that the Punch List items have been completed, Corporation shall deliver its requisition to the Trustee for payment of the funds withheld by the Trustee under this Section 12.4(c); (d) Final Pay App: Developer shall have submitted its final Project Application for Payment together with evidence reasonably satisfactory to Corporation that all construction costs have been paid in full or will be paid in full with payment of the final Application for Payment;
(e) Project Costs Report: Developer shall have delivered to Corporation a written report showing the allocation of Project Costs among the categories of Exhibit D and the remaining specified dollar amount of the Developer Contingency and the undisbursed portion of the Developer’s Fixed Fee; (f) Title Policy Endorsement: Corporation and Trustee shall each have received an endorsement to its respective Title Policy dated as of and issued on the date of Final Acceptance, which shall insure Corporation and Trustee respectively (1) against any liens for labor or materials, whether or not of record, which may have arisen in connection with the construction of the Project, and (2) show no additional exceptions to the Corporation’s Title Policy other than those approved by or arising through Corporation;
(g) LEED Application: Developer shall have submitted the initial applications, supporting documents, and other materials needed to obtain Silver LEED certification; and
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(h) Final Acceptance Obligations: Developer shall have completed and delivered the matters set forth in Section 14.

Approval of Final Project Application for Payment. Upon delivery of Developer’s final Project Application for Payment and other materials set forth above, Corporation shall, acting reasonably and in good faith, review and approve the final Project Application for Payment on or before that period expiring five (5) business days after receipt of the final Project Application for Payment, receipt of notice from Developer that the Punch List matters are complete (except those items permitted to remain outstanding pursuant to Section 12.4(c)), and Corporation’s receipt of the materials set forth in Section 14 of this Agreement. In the event no written comments from Corporation are received by Developer within said five (5) business day period, Corporation shall be deemed to have waived its right to comment on the Final Application for Payment or to disapprove the completion of the Punch List, except those items permitted to remain outstanding pursuant to Section 12.4(c). If Corporation disapproves the final Project Application for Payment or completion of the Punch List, or any portion thereof, Corporation shall provide detailed written comments explaining the nature and specific reason for each disapproval; whereupon, Developer and Corporation shall meet within two (2) business days to determine mutually acceptable revisions to the final Project Application for Payment and the completion of the Punch List. Failure of Developer and Corporation to determine mutually acceptable revisions to final Project Application for Payment and the completion of the Punch List within the two (2) business day period, shall entitle either Corporation or Developer to commence the disputes resolution process described in Section 24.

Requisition of Final Payment. Corporation shall execute and deliver the requisition for Final Payment to the Trustee within one (1) business day following expiration of said five (5) business day period, or if Corporation disapproves of the final Project Application for Payment, then within one (1) business day after the date of approval of the mutually acceptable revisions to the final Project Application for Payment or the determination of the disputes resolution process, if applicable. Subject to the provisions for disbursement of unused contingency funds in Section 12.7 below, Corporation shall take all steps to cause the Trustee to disburse the remaining money in the Project Costs Account, except for (1) any money withheld for completion of the Punch List items under Section 12.4(c), and (2) the $50,000 reserved for warranty work as provided for in Section

7.9, but in any event not more than the Project GMP, in the amount shown on such requisition. In addition, Corporation shall in such requisition direct payment of the remaining Developer’s Fixed Fee in accordance with the provisions of Section 11.3.

Disbursement of Developer Contingency. Subject to allocation of the Developer Contingency by Developer to pay for Project Costs pursuant to Section 7.7, if all or some portion of the Developer Contingency is not used for Project Costs, then 50% of the unused Developer Contingency shall be paid to Developer.

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Notice of Completion. Developer may record a Notice of Completion in accordance with Requirements of Law upon completion of the Project. If, after receipt of written notice that Developer intends to record or has recorded a Notice of Completion, Corporation determines that the Project is not in compliance with this Agreement, then Corporation must, within five (5) business days of Developer’s written request, provide to Developer a written statement setting forth all of the reasons for Corporation’s determination that a Notice of Completion is premature. The statement must also specify the action(s) that Corporation believes that Developer must take to properly record a Notice of Completion. After addressing the issues set forth in Corporation’s written notice, Developer will again notify Corporation of Developer’s intent to record a Notice of Completion and the parties hereto will continue to repeat the inspection and notice procedures until Corporation agrees that the Notice of Completion may properly be recorded. Notwithstanding the foregoing, the parties agree that the Requirements of Law, and not Corporation’s or Developer’s particular belief, will determine the validity of any recorded Notice of Completion.

Partial Occupancy. Corporation reserves the right to enter and install equipment within each portion of the Project as it is ready to receive same, upon the condition that (a) Developer shall not be responsible for equipment so placed other than loss or damage caused by the acts or omissions of Developer or those in Developer's employ, and (b) Corporation does not interfere with Developer’s performance of work or damage any work in place. Corporation may, only with Developer’s consent (which Developer may withhold in its sole and absolute discretion), take possession of or use all or part of any work prior to completion and final acceptance of all the work upon condition that (1) Corporation’s possession or use does not interfere with Developer’s performance of work, and (2) such possession or use is allowed by the applicable insurance policy(ies).

If Developer allows partial occupancy, then Developer shall be relieved of liability for loss or damage to completed portions of the work other than loss or damage caused by the acts, omissions, or breaches of warranty by Developer. Such taking of possession by Corporation shall not relieve Developer from any other provisions of the Contract Documents, shall not constitute a final acceptance of any such work or of work not completed in accordance with the Contract Documents, and shall not relieve Developer from responsibility for correcting defective workmanship or materials in the area so occupied. Corporation may, only with Developer’s consent (which Developer may withhold in its sole and absolute discretion), during the performance of the work enter the work area for the purpose of performing any necessary work by Corporation’s labor or Separate Contractors, but only for the purpose of the installation of Tenant’s Personal Property. In doing so, Corporation shall not interfere with Developer, and Developer shall not interfere with other work being done by or on behalf of Corporation. If Corporation’s acts or omissions cause damage or delay to Developer or the Project, then Developer shall be entitled to a claim for additional cost and/or time in accordance with Section 8.

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13. Miscellaneous Developer Obligations. In addition to Developer’s obligations listed elsewhere in this Agreement, Developer agrees to:
(a) Except as specifically noted, provide and pay for (as a Project Cost):
(1) Labor, materials, and equipment.
(2) Tools, construction equipment, and machinery.
(3) Water, heat, and utilities required for construction including any metering and connection fees or charges, except Corporation or Tenant will provide and pay for electric power and pay for water acreage assessment charges. If any utilities are in place and in use by the Corporation or Tenant at the site, Developer, to the extent available, at no cost may utilize such utilities (excluding telephone).
(4) Other facilities and services necessary for proper execution and completion of work to provide a facility capable of operation. (5) Legally required sales, consumer, and use taxes.
(b) Secure and pay (as Allowances) for: Permits, government fees, and licenses.

Developer must pay the permit fees (as an Allowance) and fulfill the conditions of the permit from the Sacramento County Planning & Development Services Department. (c) Give required notices.
(d) Comply with the edition of California Building Code in effect at the time of issuance of the building permit and other codes, ordinances, rules, regulations, orders, and legal requirements of public authorities which bear on performance of work. (e) Enforce strict discipline and good order among employees. Do not employ on work:
(1) Unfit persons.
(2) Persons not skilled in assigned task.

14. Developer’s Final Acceptance Obligations. On or before Final Acceptance of the Project, Developer shall obtain and electronically submit to Corporation, the following:

As-Built Plans. A complete set of final as-built plans and specifications prepared by the Construction Manager for the Project. Tenant Improvements will be provided in pdf and CAD.

Manuals. All technical and service, instruction and procedure manuals relating to the operation and maintenance of all HVAC systems and other mechanical devices and equipment installed in the Project, except insofar as relating to Tenant’s Personal Property.

Warranties. An assignment (on a non-exclusive basis) and delivery of all warranties, guarantees, maintenance contracts, and machinery and equipment warranties ITEM 19.1. ATTACHMENT 2

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received by Developer from the Construction Manager or any Trade Contractor, or any supplier, materialmen or manufacturer relating to the Project; provided, however, that so long as Developer’s warranty set forth in Section 13 herein remains in effect, Developer reserves the right, notwithstanding the assignment and delivery of such warranties hereunder to Corporation, to fully enforce all such warranties in the place and stead of Corporation.

Permits and Licenses. The originals (if not posted at the Project) of all Permits, licenses and other approvals necessary for the occupation, use and operation of the Project.

15. Indemnification.

Developer’s Indemnification.
(a) To the maximum extent allowable by law, Developer shall indemnify and defend with counsel reasonably approved in writing by each of the respective Indemnitees (as defined below) and save harmless the Corporation, Trustee, Tenant, and their respective elected and appointed officials, officers, employees, agents, and those special districts and agencies for which Tenant’s __________ acts as the governing Board (“Corporation Indemnitees”) from any loss, injury, liability, claims, demands, costs and expenses whether incurred by or made against Indemnitees of any kind or nature, including but not limited to personal injury or property damage (hereinafter “Liabilities”), excluding professional negligence Liabilities, to the extent arising from or related to the negligent acts, omissions or defective services, products or other performance provided by Developer pursuant to this Agreement or any breach or default by Developer of its obligations under this Agreement. This indemnity applies even in the event of Indemnitees’ concurrent fault, except that nothing in this indemnification provision shall be construed to require Developer to indemnify Indemnitees for Liabilities to the caused by Indemnitees’ negligence, willful misconduct, or defects in design furnished by Indemnitees. If judgment is entered against Developer and Corporation by a court of competent jurisdiction because of the concurrent negligence of Developer and Corporation Indemnitees, Developer and Corporation agree that liability will be apportioned as determined by the court.

Neither Party shall request a jury apportionment. Furthermore, Corporation and Developer hereby mutually release each other from liability and waive all rights of recovery against each other for any loss from perils insured against under the builders risk insurance policy to be carried by Developer or its Construction Manager pursuant to Exhibit G.
(b) For professional negligence Liabilities, to the maximum extent allowable by law, Developer shall indemnify and hold harmless Corporation Indemnitees from any Liabilities, to the extent that the Liabilities arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of such professional for the performance of professional services pertaining to the Project.

Developer shall reimburse Corporation Indemnitees for their reasonably incurred ITEM 19.1. ATTACHMENT 2

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defense fees and costs to the extent Liabilities for professional negligence are determined to have been caused by the negligence of Developer. In no event shall the cost to defend charged to Developer exceed Developer’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Developer shall meet and confer with the other parties regarding unpaid defense cost. The parties intend for the provisions set forth in this Subsection (b) to be in compliance with Civil Code §2782.8, and this Subsection (b) will be interpreted in a manner that complies with Civil Code §2782.8
Corporation’s Indemnification. To the maximum extent allowable by law, Corporation agrees to indemnify, defend with counsel reasonably approved in writing by each of the respective Project Indemnitees (as defined below), and hold Developer, Construction Manager, Contractors, Architect, consultants retained by Developer for the Project, and Trustee, and their respective officers, directors, employees, and agents (“Project Indemnitees”) harmless from any Liabilities whether incurred by or made against Project Indemnitees of any kind or nature, including but not limited to personal injury or property damage, to the extent arising from or related to the negligent acts or omissions of Corporation or Tenant or any breach or default by Corporation of its obligations under this Agreement. This indemnity applies even in the event of Project Indemnitees’ concurrent fault, except that nothing in this indemnification provision shall be construed to require Corporation to indemnify Project Indemnitees for Liabilities to the extent caused by Project Indemnitees’ negligence, willful misconduct, or defects in design furnished by them.

16. Insurance Requirements.

Developer’s Insurance. Developer shall procure and maintain, at a minimum, for the duration of this Agreement the insurance as set forth in Exhibit G. The cost of such insurance shall be a Project Cost.

Corporation’s Insurance. Corporation or Tenant shall procure and maintain upon the delivery of the Certificate of Substantial Completion the property insurance as required in the Facility Lease.

Verification of Coverage. Each party shall furnish the other with certificates of insurance and endorsements required by this Agreement. The certificates and endorsements for each policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on forms reasonably approved by the other party and are to be received and approved by such other party prior to the commencement of activities associated with this Agreement.

Builders Risk Insurance. If directed by Corporation in writing, Developer shall procure and maintain, or will direct its Construction Manager to procure and maintain, ITEM 19.1. ATTACHMENT 2

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for the duration of this Agreement, the builder’s risk insurance as set forth in Exhibit G.

The cost of such builder’s risk insurance shall be a Project Cost.

Notice of Cancellation. Developer and Corporation, respectively, shall take steps to provide notification to Corporation, Authority, or Trustee in the event of insurance policy cancellation or material modification that is adverse to the interests of Corporation, Authority, or Trustee. Such notice shall be sent by Developer and Corporation in writing at least 30 days in advance of such intended cancellation or modification (10 days for cancellation due to non-payment of premium).

17. Representatives.

Developer Representatives. Corporation agrees that the person with overall responsibility for the work for the Project for the Developer shall be __________ and ___________ (“Developer’s Representative”). The “Developer’s Project Manager” shall be ____________. Developer may also appoint an additional representative by giving written notice to Corporation of the onsite representative. Corporation shall have the right to approve any changes in the personnel named above, such approval not to be unreasonably withheld. Corporation may rely on such representatives as having the authority to execute Change Orders in any amount unless Developer identifies to Corporation in writing the officer(s) or employee(s) with such authority. Any written order or communication given to this representative shall be deemed delivered to Developer. In the absence of Developer’s Representative in case of emergency, instructions or directions may be given by Corporation to the Construction Manager’s project manager or superintendent. Such order shall be complied with promptly and referred to Developer or its representative. Developer’s Representative must be able to read, write, and speak English fluently. Developer’s Project Manager, if different than Developer’s Representative, shall represent Developer in the absence of Developer’s Representative, and all directions given to the Project Manager shall be binding as if given to Developer.

Developer’s onsite representative, if different than the Project Manager, shall represent Developer in the absence of Developer’s Representative and Project Manager, and all directions given to the Developer’s onsite representative shall be binding as if given to Developer. Corporation may require Developer to replace the Project Manager or onsite representative whose conduct or performance is unsatisfactory. Developer shall not change its Project Manager or onsite representative without Corporation’s consent unless the Project Manager or onsite representative is unsatisfactory to Developer or ceases to be in Developer's employ. If Developer’s Project Manager or onsite representative leaves the Project, Developer shall replace him or her within two business days (unless additional time is agreed upon by Corporation) with a new, qualified project manager or onsite representative.

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Corporation’s Representative. Corporation designates the ________________ [title] (________ or his successor) as “Corporation’s Representative,” authorized to act on the Corporation’s behalf with respect to the Project, and the decisions of Corporation’s Representative will be binding on Corporation. The “Corporation’s Project Manager” shall be __________, who is authorized to act on the Corporation’s behalf with respect to the Project (including but not limited to approving Applications for Payment), and the decisions of Corporation’s Project Manager will be binding on Corporation. Corporation may also appoint an additional representative by giving written notice to Developer of the onsite representative. Corporation’s Representative and/or Project Manager shall promptly render decisions to avoid delay in the orderly process of design and construction of the Project. Corporation may communicate with the Contractors and the Architect only through Developer’s Representative or Project Manager. Corporation’s Representative and Project Manager may be changed by Corporation from time to time by written notice to Developer. Unless otherwise expressly stated in the Contract Documents, Corporation’s Representative and/or Project Manager will issue and receive all written communications on behalf of Corporation for the Project. Developer may rely on Corporation’s Representative and Project Manager as having the authority to execute Change Orders in any amount unless Corporation identifies to Developer in writing the person(s) with such authority. Any written order or communication given to Corporation’s Representative or Corporation’s Project Manager shall be deemed delivered to Corporation. Disbursement of bond proceeds for project payments require the additional approval of the _____________ or ______________, acting on behalf of the Corporation. Developer reserves the right to appeal any decisions rendered by the Director to the Corporation Board for final determination.

Construction Manager’s Representative. Developer shall require its Construction Manager to provide the services of the superintendent(s). A superintendent shall be present at the work site whenever work is in progress including whenever weather conditions necessitate its presence to take measures necessary to protect the work, persons, or property. In case of emergency, Construction Manager’s superintendent shall represent Developer in the absence of Developer’s designated representative or Project Manager, and all written directions given to the superintendent(s) shall be binding as if given to Developer. The superintendent must read, write, and speak English fluently. Corporation may require Developer to require its Construction Manager to replace a superintendent whose conduct or performance is unsatisfactory. Construction Manager shall not change its superintendent without Corporation’s consent unless the superintendent is unsatisfactory to Construction Manager or ceases to be in Construction Manager’s employ.

If Construction Manager’s superintendent leaves the Project, Construction Manager shall replace him or her within two business days (unless additional time is agreed upon by Corporation) with a new, well-qualified superintendent acceptable to Corporation.

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Emergency Contacts. Developer shall provide Corporation with a list of names and telephone numbers at which Developer’s representative, superintendent, and other key personnel can be reached during non-working hours in the case of an emergency.

Communications. All Corporation communications to Developer, Construction Manager, Architect, or any of the Contractors or their employees must be issued solely by the Corporation’s Representative or Corporation’s Project Manager and delivered exclusively to Developer. All communications from Developer, Construction Manager, or any of Developer’s consultants or their employees to Corporation must be issued solely by Developer’s Representative or Developer’s Project Manager and delivered exclusively to the Corporation’s Representative or Corporation’s Project Manager.

Timely Decisions. Corporation will, in a timely manner consistent with the Project Schedule, provide full information regarding its requirements for the Project. The Corporation’s Representative or Project Manager will render in a timely manner consistent with the Project Schedule all decisions requested by Developer’s Representative or Project Manager which may be necessary to perform the Project in accordance with the Project Schedule. Corporation or Corporation’s Representative’s or Project Manager’s failure to timely provide required information will result in a Corporation-Caused Delay.

18. Accounting, Inspection and Audit.

Accounts. Developer shall keep and will also require its Construction Manager to keep such full and detailed accounts as may be necessary for proper financial management under this Agreement. Developer’s accounting and control system shall be in accordance with standard accounting practices of the construction industry. Developer shall preserve all of its books and records relating to this Agreement, including but not limited to its job cost records, payables/receivables records, accounting books, bids, cancelled checks, receipts, subcontracts, purchase orders, journals, vouchers, payrolls, correspondence, drawings, daily logs, photographs, and memoranda, for a period of four (4) years after Final Payment. Should Developer cease to exist as a legal entity, Developer shall forward its records pertaining to this Agreement to the surviving entity in a merger or acquisition, or, in the event of liquidation, to Corporation upon Corporation’s timely written request.

Inspection and Audit. Corporation (including by request of Tenant), and their contracted representatives, shall have the right to examine and audit Developer’s accounting procedures and internal controls of Developer’s financial systems and to inspect and copy any books and records relating to this Agreement. Such an examination, audit, and/or inspection may be requested at any time during the Project, or four (4) years after Final Payment. If Corporation so elects to conduct such an audit, it shall give notice to Developer, and such audit shall be conducted as soon as is reasonably feasible thereafter, but progress payments to Developer shall not be delayed pending the outcome of the audit.

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Such audit shall be conducted by an auditor selected by Corporation, and Corporation shall, except as hereinafter provided, pay the cost of such audit. Developer shall cooperate fully with Corporation in the conduct of such examinations, audits, and inspections, shall grant full access at all reasonable times to its offices, the Project site, and its books and records relating to this Agreement, and shall allow Corporation to interview Developer’s employees who might reasonably have information related to Developer’s books and records, provided that Corporation has given Developer at least one working day’s advance notice of Corporation’s intent to examine, audit, inspect, and interview employees. All examinations, audits, inspections, and interviews shall be conducted during normal business hours. Developer shall include in all its subcontracts a provision giving Corporation the same rights to examine and audit the Construction Manager’s accounting procedures and internal controls of its financial systems, inspect the Construction Manager’s books and records relating to the Project, and interview Construction Manager’s employees as Developer has given the Corporation in this Section.

19. Construction Liens. Upon Final Acceptance of the Project and upon Corporation’s request during the progress of the Project, Developer shall submit evidence that all payrolls, material bills and other indebtedness relating to the work have been paid (subject to Corporation’s timely funding the Project Costs and all other costs that are the responsibility of Corporation).

If at any time there shall be appropriate evidence of any lien or claim (including stop payment notices) for which, if established, Corporation shall be liable, or which would constitute a lien on the Project or Bond proceeds, and which is chargeable to and the responsibility of Developer, then provided that Corporation has timely funded the Project Costs and all other costs that are the responsibility of Corporation under this Agreement, upon written request by Corporation, Developer or Contractor shall furnish a bond or other assurance in form and amount satisfactory to remove such lien or stop payment notice from the public records. If any potential lien or stop payment notice claimant gives notice to Trustee in accordance with the provisions of applicable law that it has filed a mechanics’ lien or stop payment notice against the Project and such lien or stop payment notice is the responsibility of Developer in accordance with the previous provisions of this Section 19, there shall be no further disbursement of Bond proceeds until Developer shall have provided Trustee and Corporation with a bond or other security in accordance with applicable law, to the amount claimed under the lien or notice until resolution of such dispute and payment of such lien or stop payment notice, agreement with such potential lien claimant that such notice is withdrawn, or a court declaration that such notice is void in accordance with the provisions of applicable law.

Developer shall notify Corporation and Trustee upon Developer’s knowledge of the filing of any lien or the service of any stop payment notice in connection with the Project.

20. Priority Agreements. To the extent permissible under California law, Developer shall require its Construction Manager to subordinate its lien rights, by agreement in form and substance satisfactory to Corporation, to the Ground Lease, Facility Lease, and the Indenture securing ITEM 19.1. ATTACHMENT 2

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the Bonds in favor of Trustee and its respective successors or assigns, and shall use its best efforts to obtain a similar subordination from all Trade Contractors under this Agreement. Any Trade Contractor which refuses to so subordinate its lien rights must be specifically approved in writing by Corporation.

21. Damage and Destruction; Condemnation.

Damage and Destruction. After the happening of any casualty to the Project, Developer shall give Corporation and Trustee prompt written notice thereof generally describing the nature and cause of such casualty and the extent of the damage or destruction to the Project. Developer and Corporation acknowledge, agree and assign all insurance proceeds which Developer or Corporation may be entitled to receive prior to Final Acceptance of the Project with respect to damage or destruction to the Project to Trustee for deposit into the Insurance and Condemnation Proceeds Fund established under the Indenture, and each insurance carrier shall be and is hereby irrevocably instructed in accordance herewith. Such insurance proceeds shall be applied in accordance with the Facility Lease which provides that Tenant and Corporation will cause the net proceeds of any insurance claim to be applied to the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed, or defective portion of the Project or otherwise used to pay Project Costs, including increases in the Project Costs or, at their discretion solely in accordance with the Facility Lease, Tenant and Corporation may elect not to repair, reconstruct or replace the damaged, destroyed, or defective portion of the Project and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of the Indenture. If, prior to the Substantial Completion of the Project, Tenant and Corporation direct that such proceeds be applied to the repair, restoration, modification, improvement or replacement of the damaged, destroyed, or defective portion of the Project, Developer shall proceed diligently to reconstruct and restore the Project in accordance with the Contract Documents and the provisions of this Agreement, and Corporation shall direct that such proceeds deposited in the Insurance and Condemnation Proceeds Fund established under the Indenture, shall be disbursed to Developer in accordance with the provisions of Section 9 herein and the Indenture for payment of progress payments, for payment of the costs to repair and restore the Project in accordance with the Indenture. All costs of such repair or restoration of the Project exceeding the amount of the insurance proceeds shall be paid in accordance with the Facility Lease, and Developer shall not be responsible for any such costs.

Condemnation. In the event of a partial condemnation of the Project to the extent that the Project may still be constructed in accordance with the Contract Documents, or may be constructed in accordance with the Contract Documents as modified by changes acceptable to Corporation and Developer, Developer shall proceed diligently to construct the Project in accordance with the Contract Documents, as modified, if applicable. Any such partial condemnation proceeds shall be deposited in the Insurance and Condemnation ITEM 19.1. ATTACHMENT 2

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Proceeds Fund established under the Indenture and applied in accordance with the Facility Lease and, as applicable, disbursed in accordance with the provisions of Section 9 above.

In the event of a condemnation of all of the Project or so much thereof that the Project may no longer be constructed in accordance with the Contract Documents, this Agreement shall terminate, Developer shall be paid for all costs incurred as of the date of such condemnation (including costs that Developer is obligated to pay third parties as of that date, together with a prorata portion of the Developer’s Overhead and the Developer’s Fixed Fee), and the parties shall have no further obligations hereunder. In such event, after Developer has been paid in accordance with the foregoing sentence, all condemnation proceeds shall be applied by the Trustee pursuant to the Indenture.

22. Payment of Taxes/Assessments.

Real Property Taxes. Any and all real property taxes and assessments (including leasehold excise tax) levied against the Land and the Project or any portion thereof shall be paid by Corporation. Notwithstanding anything to the contrary contained in this Agreement, Developer shall have no liability whatsoever for any real property taxes or assessments (including any leasehold excise tax).

Other State and Local Taxes. Except as otherwise provided in Section

22.1, Developer shall pay any and all state and local taxes assessed in connection with the Project, including, but not limited to, state and local retail sales taxes as part of the Project GMP. Developer shall complete all necessary tax returns relating to such taxes and file the same with the applicable state or local governmental agency and remit, on or before the date such tax payment is due, payment of such state and local taxes to the proper taxing authority.

23. Default and Termination.

Developer Default. The following events shall constitute an “Event of Default” by Developer if the same shall continue uncured after expiration of the applicable notice and cure periods set forth herein, if any:
(a) Material Default: If Developer shall fail to perform any material obligation under this Agreement;
(b) Persistent Failure: If Developer persistently or repeatedly refuses or fails to cause to be supplied to the Project enough properly skilled workers or proper materials to complete the Project, including Tenant Improvements, or if Developer ceases work on the Project for a period of fourteen (14) consecutive days (subject to Unavoidable Delays or Corporation-Caused Delays);
(c) Misappropriation: If Developer misappropriates any funds received by Developer pursuant to the provisions of this Agreement; ITEM 19.1. ATTACHMENT 2

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(d) Disregarding Laws: If Developer persistently disregards and fails to comply with laws, ordinances or rules, regulations or orders of a public authority having jurisdiction over the Project;
(e) Failure to Pay: If Developer fails to make any payments required for the Project to the Construction Manager, Architect or otherwise and such failure is a breach of the CMAR Contract or Architect’s Agreement or other applicable contract;
(f) Permit Revoked: If, due to the wrongful actions of Developer, any Permit required for construction of the Project shall be revoked or canceled; (g) Liens: If there shall occur any lien or other encumbrance on the Land or the Project caused by Developer which is not bonded and removed in accordance with Section 19 above; provided, however, that if the lien or other encumbrance results from Corporation failing to pay the Project Costs or other costs that are the responsibility of Corporation under this Agreement, as and when due, then Developer is not required to bond or remove such lien or encumbrance; (h) Defective Work: If there shall have occurred defective workmanship or materials within the Project which is not cured within the time period provided in Section 7.11 of this Agreement;
(i) Assignment: If Developer shall have assigned, pledged or encumbered its rights, duties or obligations under this Agreement in violation of Section 25.6 of this Agreement; or
(j) Bankruptcy: If Developer files a petition for bankruptcy or if it makes a general assignment for the benefit of Developer’s creditors, or if a receiver is appointed on account of Developer’s insolvency and any such petition or appointment is not dismissed within sixty (60) days.

Corporation Remedies upon Developer Event of Default. Upon any Event of Default by Developer, Corporation shall give Developer written notice of the same, whereupon following receipt of such written notice Developer shall have thirty (30) calendar days within which to commence all necessary action to cure any such Event of Default, (and if such cure is commenced, proceed to diligently complete such cure within a reasonable period of time), except with respect to Events of Default set forth in Section

23.1(c) and (h) for which the cure period shall be ten (10) business days, or Section 23.1(i) for which no cure period exists beyond the time period stated therein; provided however, that such cure period shall not apply to failure of Developer to achieve Substantial Completion of the Project on or before the Developer Obligation Date for the Project. If Developer fails to cure such Event of Default within the time period set forth above, Corporation shall be entitled to the following remedies:

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(a) Completion of the Project: To take over and complete the Project, Corporation is hereby irrevocably appointed attorney-in-fact (the appointment being coupled with an interest) to enforce contracts or agreements theretofore made by Developer and to do any and all things that are necessary and proper to complete the Project and be entitled to use the undisbursed Project Fund proceeds to pay Project Costs;
(b) Specific Performance: In addition to a claim for damages for such breach or default, and in addition to and without prejudice to any other right or remedy available under this Agreement or at law or in equity, to commence an action for specific performance of this Agreement;
(c) Withhold: To withhold approval of further disbursement of Bond proceeds;
(d) Damages: To bring an action for damages; or
(e) Termination: To terminate this Agreement without liability upon ten (10) days written notice. Upon receipt of written notice from Corporation of a termination for cause, Developer shall cease operations as directed by Corporation in the notice and take all actions necessary, or as Corporation directs, for the protection and preservation of the work.

Corporation Default. The following shall constitute an “Event of Default” by Corporation if the same shall continue uncured after expiration of the applicable notice and cure periods set forth herein, if any:
(a) Failure to Pay: Corporation fails to cause Trustee to make disbursements to Developer of any sum of money owed to Developer pursuant to this Agreement as and when due, including without limitation, all monies due and owing from the Project Costs Account unless Developer shall have committed an Event of Default as set forth in Section 23.1 above.
(b) Assignment: Corporation shall have assigned, pledged or encumbered its rights, duties or obligations under this Agreement in violation of Section 25.6; or
(c) Material Default: Corporation shall have failed to perform any other material obligation under this Agreement.

Developer Remedies Upon Corporation Event of Default. Upon any Event of Default by Corporation, Developer shall give Corporation written notice of the same. Upon receipt of such written notice Corporation shall have thirty (30) calendar days to cure any such Event of Default, except with respect to Events of Default set forth in Section 23.3(a) for which the cure period shall be five (5) business days. In the event Corporation fails to cure such Event of Default within said period, Developer shall be ITEM 19.1. ATTACHMENT 2

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entitled to stop all work relating to the Project (and any resulting delays will be a Corporation-Caused Delay), if Developer so desires and shall further be entitled to pursue its rights and remedies at law and in equity under this Agreement, including without limitation, specific performance of Corporation’s obligations hereunder.

Remedies Not Exclusive. No remedy conferred upon either party in this Agreement is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

Termination for Convenience of Corporation. Notwithstanding any other provision of this Agreement, Corporation may at any time and without cause terminate this Agreement, in whole or in part, upon not less than 90 days written notice to the Developer. Such termination shall be effected by delivery of a Notice of Termination to Developer specifying the effective date of the termination, whether this Agreement shall be terminated in whole or in part, and, if applicable, the portion of work to be terminated.

Developer shall immediately stop work in accordance with the Notice of Termination and comply with any other direction as may be specified in the Notice of Termination or as provided subsequently by Corporation. Corporation shall pay Developer for the work completed and accepted by Corporation prior to the effective date of the termination, unpaid but earned portions of fees to Developer, Construction Manager, Consultants, Architect, and Contractors, plus any actual termination costs incurred (such as demobilization costs, costs to protect the work in place, early termination fees for the trailer, equipment, etc.) and such payment shall be Developer’s sole remedy. Under no circumstances will Developer be entitled to anticipatory or unearned profits, consequential damages, or other damages of any sort as a result of a termination in whole or in part under this provision. Developer shall require its Construction Manager to insert in all Construction Contracts with Trade Contractors that (a) the Trade Contractors shall stop work on the date of, and, if applicable, the portion of work to be terminated in a Notice of Termination, (b) under no circumstances will Trade Contractors be entitled to anticipatory or unearned profits, consequential damages, or other damages of any sort as a result of a termination in whole or in part under this provision (but will be entitled to work performed through the date of termination and reasonable demobilization costs), and (c) shall require Trade Contractors to insert the same condition in any lower tier subcontracts.

Equitable Adjustment for Extended Delay. If, through no fault of Developer (e.g., Unavoidable Delays or Corporation-Caused Delays), construction of the work is stopped for (a) ninety (90) or more consecutive calendar days or, (b) in the aggregate, one hundred twenty (120) or more calendar days, then Developer may request that this Agreement be terminated (which the Corporation can approve in its sole discretion). If this Agreement is not terminated by mutual agreement, Developer will be entitled to an equitable adjustment to the Project GMP and/or Developer Obligation Date.

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The foregoing right to an equitable adjustment does not alter Developer’s right to make a claim for increases to the Project GMP and/or extensions of the Developer Obligation Date under Section 8 for delays less than the foregoing time frames, but rather is intended to clarify that an extended delay as provided in the preceding sentence may have significant impacts on time and cost that require an equitable adjustment even if Developer was not otherwise entitled thereto (e.g., for Unavoidable Delays, where Developer typically only receives time but not money). If the Corporation and Developer cannot agree on the equitable adjustment, then the dispute will be resolved pursuant to the dispute resolution procedures set forth in Section 24.

24. Disputes. Corporation and Developer agree to follow the independent resolution process set forth in this Section 24 to resolve disputes regarding preparation of the Construction Drawings and Detailed Specifications and changes to Construction Documents in an economic and time efficient manner so that such documents conform to the requirements of this Agreement, the Project Schedule is not adversely impacted, and the Project as constructed will satisfy the Project Requirements. If a dispute arises between Corporation and Developer during the design or construction of the Project regarding the adequacy of any Drawings or Specifications or the responsibility for any costs associated with any design development, addition or change (e.g., whether any design development is consistent with the Project Requirements), the parties shall attempt to resolve such dispute as expeditiously as possible and shall cooperate so that the progress of the design and construction of the Project is not delayed. If, however, the parties are unable to resolve the dispute within three (3) business days, either party may, by delivering written notice to the other and the Trustee, refer the matter to a dispute resolution mediator as set forth on the attached Exhibit H. If either party to this Agreement brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action or dispute shall be entitled to recover its reasonable attorneys’ fees from the non-prevailing party.

Pending resolution of the claim or dispute, Developer shall continue the work diligently to completion as directed by Corporation. If the claim or dispute is not resolved, Developer agrees that it will neither rescind this Agreement nor stop the progress of the work provided that Corporation continues to pay undisputed amounts.

25. Miscellaneous.

Waiver; Modification. No failure on the part of Corporation or Developer to exercise any right or remedy under the Contract Documents shall operate as a waiver of any other right or remedy that Corporation or Developer may have. A waiver by Corporation or Developer of any breach or failure to perform under the Contract Documents shall not constitute a waiver of any subsequent breach or failure. The failure of Corporation or Developer to enforce a requirement of the Contract Documents in one or more instances shall not preclude Corporation or Developer from subsequently enforcing such requirement(s). No oral statement shall in any manner modify this Agreement. All ITEM 19.1. ATTACHMENT 2

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changes to this Agreement must be in writing approved by both the Corporation and Developer.

Neutral Authorship. In connection with the execution and delivery hereof, each party has been represented by counsel. Each of the provisions of this Agreement has been reviewed and negotiated, and represents the combined work product of both parties hereto. No presumption or other rules of construction which would interpret the provisions of this Agreement in favor of or against the party preparing the same shall be applicable in connection with the construction or interpretation of any of the provisions of this Agreement.

Severability. The provisions of this Agreement are severable. If any portion or portions of this Agreement is declared void or unenforceable, it shall not affect the other provisions of this Agreement.

Relationship of Parties. Developer and Corporation shall not be construed as joint venturers or general partners, and neither shall have the power to bind or obligate the other party except as set forth in this Agreement. Nothing herein shall be construed as reserving to Corporation the right to control Developer’s business.

Third Party Rights. The provisions of this Agreement are intended for the benefit of, and may only be enforced by the parties hereto and their respective successors and assigns, including, as to Corporation, the Trustee. None of the rights or obligations of the parties herein set forth (or implied) is intended to confer any claim, cause of action, remedy, defense, legal justification, indemnity, contribution claim, set-off, or other right whatsoever upon or otherwise inure to the benefit of any Contractor, Architect, subcontractor, worker, supplier, mechanic, architect, insurer, surety, guest, member of the public, or other third parties having dealings with either of the parties hereto or involved, in any manner, in the Project. Notwithstanding the foregoing, if Developer fails to cause Substantial Completion of the Project to be achieved by the date set forth in the Project Schedule (subject to adjustment for Change Orders, Unavoidable Delays and CorporationCaused Delays as provided herein), Tenant shall be deemed a third party beneficiary of this Agreement and may enforce the performance by Developer of its obligations under this Agreement.

Assignment; Encumbrance or Pledge. Neither this Agreement nor any portion thereof may be assigned by Developer without express written consent of Corporation, which consent may be withheld in the exercise of its absolute discretion. If Developer is not a corporation with publicly traded stock, then the transfer of more than 49% (in the aggregate during the entire term of this Agreement) of the stock held by shareholders of the corporation shall be deemed an assignment for purposes of this clause.

Any attempted assignment contrary to the provisions of this Section shall be void.

Notwithstanding the foregoing, claims for monies due or to become due to Developer from ITEM 19.1. ATTACHMENT 2

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Corporation under this Agreement may be assigned with the written consent of the Corporation to a surety, bank, trust company, or other financial institution and may thereafter be further assigned or reassigned to any such institution. To effect such assignments, Developer, or Developer's assignee, shall submit a written request to Corporation enclosing a letter from the proposed assignee indicating that it will accept such assignment. Neither this Agreement nor any rights or duties hereunder nor any benefits derived herefrom may be assigned, delegated, pledged or encumbered to any other person or entity by Corporation without the express written consent of Developer, which consent may be withheld in the exercise of its absolute discretion, except that Corporation may assign its rights under this Agreement either to the Trustee pursuant to the Indenture as security in connection with the financing described in Section 3 above or to the Tenant if the Tenant is legally authorized to accept the assignment and to perform Corporation’s duties and obligations under this Agreement.

Notices. Any notices or other communications required or permitted by this Agreement or by law to be served on, given to, or delivered to either party hereto by the other party, shall be in writing and shall be deemed duly served, given, or delivered when personally delivered to the party to whom it is addressed or in lieu of such personal service, three (3) days after it is deposited in the United States mail, first-class postage prepaid, certified or registered, return receipt requested, addressed as follows, or sent via electronic mail or facsimile transmission with received invoice followed by a “hard copy” mailed, regular mail, within one (1) business day to the email address or fax number listed as follows:

Corporation: _____________
Attention: ____________
c/o _____________
________________
__________, CA 9____
Phone: (___) ___-____
Fax: (___) ___-____
Email: _________@____________
with copy to:
_____________
Attention: ____________
c/o _____________
________________
__________, CA 9____
Phone: (___) ___-____
Fax: (___) ___-____
Email: _________@____________
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Developer: Griffin / Swinerton, LLC
Attention: Roger Torriero
1 Technology Drive, Building I, Suite 829
Irvine, California 92618
Phone: (949) 497-9000 x210
Fax: (949) 497-8883
Email: [email protected]
Either party may change its address for the purposes of this section by giving written notice of such change to the other party in the manner provided in this Section.

Entire Agreement. This Agreement (and the Exhibits referred to herein) constitute the entire agreement between the parties with respect to the subject matter hereof and may be amended only in writing signed by both parties.

Time Is of the Essence. Time is of the essence of this Agreement.

Employees of Developer. Developer is acting under this Agreement as an independent contractor and nothing herein contained, or any acts of Developer or Corporation, nor any other circumstances, shall be construed to establish Developer as an agent of Corporation. Developer shall be responsible for each of Developer’s employees or other persons performing services to be performed by Developer hereunder and for determining the manner and time of performance of all acts to be performed by Developer hereunder. Developer shall maintain all required industrial and worker’s compensation insurance for all employees of Developer and shall cause all Contractors, Architect and all design professionals and other persons, firms and corporations employed to perform services in connection with the Project to provide worker’s compensation and similar insurance with respect to their respective employees.

Exhibits. The Exhibits to this Agreement, which are hereby incorporated by this reference, are:

Exhibit Description Partial Section Reference
A Legal Description of Land Recitals; Section 1
B Facility Lease Agreement Recitals; Section 1
C Site Plan Recitals; Section 1
D Breakdown of Project GMP Sections 1, 4.4, 4.7, 6.1, 7.7,

8.17, 9.1, 9.7, 11.1, 11.3,

12.4 E Index of Approved Design Development
Documents
Sections 1, 8.16
F Project Schedule Sections 1, 6.3
G Developer’s Insurance Requirements Sections 15.1, 16
ITEM 19.1. ATTACHMENT 2

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H Dispute Resolution Procedure Sections 8.7, 24, 25.16
I Developer’s Qualifications, Exclusions, and
Allowances
Section 1
J Final Completion form Sections 1, 7.8
K Special Inspections and Testing Section 1
L Certificate of Substantial Completion Sections 1, 12.2 M Form of Performance and Payment Bonds; Dual
Obligee Rider
Section 7.3
N Form of Project Application for Payment Sections 1, 9.1 O List of Geotechnical Reports and Topographic
Maps and Other Project-Related Documents
Section 8.16
P Corporation-Approved Procurement Plan Sections 2.7, 5.2 Q Basis for Offsite Improvement Allowance Section 1
R Basis of Design Section 4.5
Compliance with Civil Rights Laws. During the performance of this Agreement, Developer shall comply with all federal and applicable state nondiscrimination laws, including but not limited to: Title VII of the Civil Rights Act, 42 U.S.C. § 12101 et seq.; and the ADA; and the provisions of the Facility Lease that are applicable to Developer’s performance of this Agreement. In the performance of this Agreement, Developer shall neither engage in nor permit its Contractors to engage in discrimination against any employee or applicant for employment on any basis listed in California Government Code Section 12940, including but not limited to race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, as those bases are currently defined in Government Code Sections 12926 and 12926.1, or as they may be modified. This prohibition shall pertain to employment, upgrading, demotion, or transfer; recruitment advertising; layoff or termination; rates of pay and other forms of compensation; selection for training, including apprenticeship; and any other action or inaction pertaining to employment matters.

Public Records Act. Pursuant to the California Public Records Act (“CPRA”), Government Code Sections 6250 et seq., all records provided by Developer to Corporation are subject to public disclosure upon request except as otherwise provided by law. Prior to their submission to Corporation, Developer shall identify any records it believes are exempt from disclosure, and identify the applicable CPRA exemption. If the disclosure of such records is subsequently requested, Corporation will notify Developer of ITEM 19.1. ATTACHMENT 2

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such request. Unless Developer obtains a protective order issued by a court restricting disclosure of the requested records, Corporation may disclose the records if Corporation determines that the Public Records Act requires disclosure. Developer shall indemnify and defend Corporation in any action to compel disclosure of such records that Developer has identified as exempt from CPRA and requested Corporation not to disclose.

Patent Infringement. Developer shall promptly report to Corporation any notice or claim of patent infringement arising from the performance of this Agreement.

Developer shall, upon Corporation’s request, furnish to Corporation any and all information in Developer’s possession relevant to such notice or claim. Developer shall indemnify and defend Corporation from any and all claims or lawsuits on account of any alleged patent infringement arising out of the performance of this Agreement, and shall pay any judgment rendered against Corporation, its officers, or its employees resulting from such claim or lawsuit, except in cases where the patent infringement arises from an item specified by Corporation. If the Corporation requires Developer to include a product in the Construction Documents, and the Corporation-required product results in a patent infringement claim against Developer, then Corporation shall indemnify and defend Developer from any and all claims or lawsuits on account of any patent infringement arising out of the Corporation-required product, and shall pay any judgment rendered against Developer, its officers, or its employees resulting from such claim or lawsuit.

Governing Law; Venue. This Agreement and all provisions hereof shall be interpreted in accordance with the laws of the State of California in effect on the date of execution of this Agreement. The Superior Court of Sacramento County, State of California shall have exclusive jurisdiction and venue over any legal action arising under this Agreement, except only to the extent that Exhibit H provides otherwise.

Securing Worker’s Compensation Insurance Certification. Developer, by executing this Agreement, hereby certifies: “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.”
Employee Eligibility Verification. Developer hereby certifies that it complies with all applicable laws and regulations regarding the eligibility of its employees to work in the United States, and that all of its employees performing work under this Agreement meet all citizenship or immigration status requirements to do so. Developer shall obtain all documentation necessary to verify the employment eligibility status of covered employees as described by U.S. Citizenship and Immigration Services Form I-9.

Developer shall retain such documentation for the period prescribed by law. Developer shall indemnify, defend with counsel approved in writing by Corporation, and hold harmless the Corporation, its agents, officers, and employees from any sanctions or liability ITEM 19.1. ATTACHMENT 2

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that may be assessed in connection with any violation of federal or State laws or regulations pertaining to the eligibility for employment of any of Developer’s employees performing work under this Agreement.

Section 179D Allocation. As part of the Energy Policy Act of 2005, Congress enacted Section 179D of the Internal Revenue Code (26 U.S.C. §179D) to encourage the design and construction of energy efficient properties (“Section 179D Deduction”). Subsection (d)(4) of Section 179D allows government building owners to allocate potential Section 179D Deductions for the installation of energy efficient building envelopes, HVAC and hot water systems, and interior lighting systems to “the person primarily responsible for designing the property in lieu of the owner of such property.” Corporation hereby allocates the Section 179D Deduction for the Project solely to Developer as “the person primarily responsible for designing the property,” and Corporation agrees to execute (or to cause Tenant to execute) any documents or tax forms that may be reasonably required or requested by Developer to acknowledge or otherwise effectuate this allocation to Developer of the Section 179D Deduction for tax purposes.

Corporation represents and warrants that it has not agreed to allocate the Section 179D Deduction to another party, and will not do so. Corporation specifically delegates the authority to the Corporation Representative to sign any required documents or forms.

Employment of Corporation and Developer Personnel. Corporation acknowledges and agrees that Developer has invested considerable time and money that would be difficult to quantify in the training and development of its employees. Therefore, without receiving the Developer’s prior written permission, Corporation agrees to not hire, retain or contract with any employee (“covered employee”) of Developer who performs any services for Corporation under this Agreement for a period of three (3) years following the date this Agreement is terminated or for three (3) years following the separation of a covered employee from the Developer’s employment.
[Remainder of page intentionally left blank.]
ITEM 19.1. ATTACHMENT 2

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DATED the day and year first above written.

CORPORATION: _______________________ CORPORATION
a California __________________________
By:

Name:

Its:

DEVELOPER: GRIFFIN / SWINERTON, LLC
a Delaware limited liability company
By:

Name: Roger Torriero
Its: Principal
By:

Name: Korin Crawford
Its: Principal
ITEM 19.1. ATTACHMENT 2

Exhibit A
Page B-91 of 108

EXHIBIT A
Legal Description of Land
ITEM 19.1. ATTACHMENT 2

Exhibit B
Page B-92 of 108

EXHIBIT B
Facility Lease
ITEM 19.1. ATTACHMENT 2

Exhibit C
Page B-93 of 108

EXHIBIT C
Site Plan
ITEM 19.1. ATTACHMENT 2

Exhibit D
Page B-94 of 108

EXHIBIT D
Breakdown of Project GMP
ITEM 19.1. ATTACHMENT 2

Exhibit E
Page B-95 of 108

EXHIBIT E
Index of Approved Design Development Documents
ITEM 19.1. ATTACHMENT 2

Exhibit F
Page B-96 of 108

EXHIBIT F
Project Schedule
ITEM 19.1. ATTACHMENT 2

Exhibit G
Page B-97 of 108

EXHIBIT G
Developer’s Insurance Requirements
ITEM 19.1. ATTACHMENT 2

Exhibit H
Page B-98 of 108

EXHIBIT H
Dispute Resolution Procedure
ITEM 19.1. ATTACHMENT 2

Exhibit I
Page B-99 of 108

EXHIBIT I
Developer’s GMP Qualifications, Exclusions, and Allowances ITEM 19.1. ATTACHMENT 2

Exhibit J
Page B-100 of 108

EXHIBIT J
Final Completion Form
ITEM 19.1. ATTACHMENT 2

Exhibit K
Page B-101 of 108

EXHIBIT K
Special Inspections and Testing
ITEM 19.1. ATTACHMENT 2

Exhibit L
Page B-102 of 108

EXHIBIT L
Certificate of Substantial Completion Form
ITEM 19.1. ATTACHMENT 2

Exhibit M
Page B-103 of 108

EXHIBIT M
Form of Bonds and Dual Obligee Rider
ITEM 19.1. ATTACHMENT 2

Exhibit N
Page B-104 of 108

EXHIBIT N
Form of Project Application For Payment
ITEM 19.1. ATTACHMENT 2

Exhibit O
Page B-105 of 108

EXHIBIT O
List of Geotechnical Reports, Topographic Maps, and Other Project-Related Documents ITEM 19.1. ATTACHMENT 2

Exhibit P
Page B-106 of 108

EXHIBIT P
Corporation-Approved Procurement Plan
ITEM 19.1. ATTACHMENT 2

Exhibit Q
Page B-107 of 108

EXHIBIT Q
Basis for Offsite Improvement Allowance
ITEM 19.1. ATTACHMENT 2

Exhibit R
Page B-108 of 108

EXHIBIT R
Basis of Design
ITEM 19.1. ATTACHMENT 2

Page C-1 of 1

EXHIBIT C
SCHEDULE FOR PHASE 1 SERVICES
See attached Schedule.

ITEM 19.1. ATTACHMENT 2

Exhibit C - SCHEDULE
MILLS CROSSING - PRE-DEVELOPMENT SCHEDULE: PHASE 1-A & PHASE 1-B PHASE 1-A TASKS 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 1 Griffin/Swinerton ENA Extension
2 Griffin/Swinerton Pre-Development Agreement Approval by City 3 Site Remediation Work by City
4 Master Plan: Finalize Needs Assessment/Programming, Site Plan, Parcels/Subdivison 5 Community Outreach
6 Financing Plan - Ongoing: Grant Applications, New Market Tax Credits (NMTC) 7 Schematic Design/Approvals by City
8 Preliminary WQMP/Hydrology Studies
9 Griffin/Swinerton CEQA Documents
10 City of Rancho Cordova CEQA Technical Studies/Documents 11 City of Rancho Cordova CEQA Review Process
12 CEQA Appeal
13 Notice To Proceed for Final Design/GMP/Financing Package PHASE 1-B TASKS
1 Schematic Design/Approvals (Done in Phase A)
2 Design Development/Approvals
3 Developer Guaranteed Maximum Price
4 City Approval of GMP/Financing Documents
5 Developer Financing & Related Documents
6 Notice To Proceed for Construction Documents/Permits
MONTHS
2022 2023 2024 2025 2026
ITEM 19.1. ATTACHMENT 2

EXHIBIT D
SCOPE – PHASE 1 SERVICES
City of Rancho Cordova – Mills Crossing
PHASE 1-A: Due Diligence, Conceptual Design, and Agency CEQA Support The design services described below will be tailored to the specific needs of each building component of the project (e.g. flexible community-commercial building, community arts center, recreation center, health and wellness center) as required in each component’s program, basis of design, tenant/user mix and associated lease terms, and Authority Having Jurisdiction (AHJ) requirements per each building.

1. General PROJECT Responsibilities of the DEVELOPER Throughout all Phases a. The intent is that completion of this Schematic Design and Design Development Scope of Services will culminate in the development of a Guaranteed Maximum Price (“GMP”) for inclusion in the Development Agreement for further development, financing, design, and construction of the PROJECT. b. DEVELOPER shall furnish, or cause to be furnished, all professional services, equipment, facilities, materials and labor necessary to perform in a complete, skillful and professional manner the PROJECT Work as described herein within the time periods set forth in the Schedule attached to this AGREEMENT as Exhibit C and incorporated by this reference, as it may be adjusted pursuant to this AGREEMENT.
c. DEVELOPER, working in close cooperation with the OWNER, shall provide PROJECT leadership, management, direction, and general administration of the entire PROJECT team for the duration of PHASE 1 of the PROJECT.

DEVELOPER shall work with the OWNER to define project goals and shall be responsible to assure team alignment with PROJECT goals at all times. d. Provide consultation and assistance to the OWNER concerning all matters with respect to the Schematic and Design Development of the PROJECT. e. Participate in periodic meetings with senior staff, elected officials, and community representatives as needed or requested to present periodic PROJECT updates and assist in securing required approvals.
f. Understand and implement the PROJECT objectives and act in OWNER’s best interest at all times.
g. Function as liaison and coordinate with OWNER staff as directed. h. Chair and document all team meetings.
i. Retain the entire architect/engineering (“A-E”) project and consulting team and manage and administer their contracts throughout the Schematic Design and Design Development phases.
j. Retain its Construction Manager at Risk and manage and administer the contract throughout the entire Pre-Development phase.
k. Create and regularly update the Master Project Development Schedule to identify and manage all phases of the PROJECT including Pre-Development, ITEM 19.1. ATTACHMENT 2

Preconstruction, Design, Permitting, Construction, Occupancy, Furnishing, Staff Relocations, Facility Training, and Close-Out.
l. Create and regularly update the comprehensive PROJECT Development Budget to include all aspects of total PROJECT costs including design, construction, geotechnical, environmental, testing and inspections, furnishings, utility connections, administration and other related costs.

2. Due Diligence, Conceptual Design, and Agency CEQA Support Retain and manage the activities and services of consultants to complete the following work:
a. Initial protect team meetings and visioning statements b. Programming
c. Public Outreach meetings
d. Conceptual Design
e. Civil Engineering including ALTA, survey, topographic, utility research and GPR, tentative and final parcel mapping
f. Preliminary Grading, WQMP, and Hydrology study
g. Design Review presentation and related documents
h. Conditional Use Permit supporting documents
i. Phase 1 Environmental Site Assessment
j. Geotechnical Investigations and Report
k. Dry Utility Coordination
l. Conceptual Design construction budget
m. Mutual determination of City of Rancho Cordova, Entitlement, Engineering, and Impact Fees to be invoiced, funded by City, and processed by DEVELOPER. n. City required CEQA documents (excludes City CEQA consultant(s) technical studies)
Phase 1-B: Schematic Design and Design Development Scope of Services The design services described below will be tailored to the specific needs of each building component of the project (e.g. flexible community-commercial building, community arts center, recreation center, health and wellness center) as required in each component’s program, basis of design, tenant/user mix and associated lease terms, and Authority Having Jurisdiction (AHJ) requirements per each building.

1. General PROJECT Responsibilities of the DEVELOPER Throughout all Phases o. The intent is that completion of this Schematic Design and Design Development Scope of Services will culminate in the development of a Guaranteed Maximum Price (“GMP”) for inclusion in the Development Agreement for further development, financing, design, and construction of the PROJECT.

ITEM 19.1. ATTACHMENT 2

p. DEVELOPER shall furnish, or cause to be furnished, all professional services, equipment, facilities, materials and labor necessary to perform in a complete, skillful and professional manner the PROJECT Work as described herein within the time periods set forth in the Schedule attached to this AGREEMENT as Exhibit C and incorporated by this reference, as it may be adjusted pursuant to this AGREEMENT.
q. DEVELOPER, working in close cooperation with the OWNER, shall provide PROJECT leadership, management, direction, and general administration of the entire PROJECT team for the duration of PHASE 1 of the PROJECT.

DEVELOPER shall work with the OWNER to define project goals and shall be responsible to assure team alignment with PROJECT goals at all times. r. Provide consultation and assistance to the OWNER concerning all matters with respect to the Schematic and Design Development of the PROJECT. s. Participate in periodic meetings with senior staff, elected officials, and community representatives as needed or requested to present periodic PROJECT updates and assist in securing required approvals.
t. Understand and implement the PROJECT objectives and act in OWNER’s best interest at all times.
u. Function as liaison and coordinate with OWNER staff as directed. v. Chair and document all team meetings.
w. Retain the entire architect/engineering (“A-E”) project and consulting team and manage and administer their contracts throughout the Schematic Design and Design Development phases.
x. Retain its Construction Manager at Risk and manage and administer the contract throughout the entire Pre-Development phase.
y. Create and regularly update the Master Project Development Schedule to identify and manage all phases of the PROJECT including Pre-Development, Preconstruction, Design, Permitting, Construction, Occupancy, Furnishing, Staff Relocations, Facility Training, and Close-Out.
z. Create and regularly update the comprehensive PROJECT Development Budget to include all aspects of total PROJECT costs including design, construction, geotechnical, environmental, testing and inspections, furnishings, utility connections, administration and other related costs.

2. Schematic Design Phase
a. Perform Constructability Reviews and Value Engineering. b. Two design progress presentations to the City Council or its designated representatives.
c. Perform agency consulting, review, and approval services including: Agency consultations, research of critical applicable regulations, preparation of written and graphic explanatory materials, appearances on the OWNER’s behalf at agency meetings.
d. Provide OWNER supplied data coordination services including: Review and coordination of complete as-built drawings, AutoCAD backgrounds and data furnished for the PROJECT as a responsibility of the OWNER. e. Perform and provide Geotechnical investigation and reports.

ITEM 19.1. ATTACHMENT 2

f. Perform potholing and survey existing of underground utilities, if required. g. Prepare and submit PROJECT Schematic Design Documents for the OWNER’s review and approval. Services and tasks will include:
i. Architectural/Engineering services responding to program requirements and consisting of preparation of:

1. Building Shell and Core design.

2. Site, floor and roof plans.

3. Preliminary sections and elevations.

4. Preliminary selection of building systems and materials.

5. Perspective sketches.

6. Interior Design Services consisting of space allocations and utilization plans based on functional relationships, and development of conceptual design solutions in order to establish:
a. Space studies of maximum efficiency bay depths, mullion and columns spacing for the PROJECT.
b. Preliminary finish materials and color selections for shell and core components.
ii. Electrical Engineering Services consisting of consideration of alternate systems, recommendations regarding basic electrical materials, systems and equipment, analyses, and development of conceptual design solutions for:

1. Power service and distribution.

2. Lighting Design.

3. Special electrical systems.

4. General space requirements.

5. Fire detection and alarm requirements.

6. Security requirements.

7. Communication requirements.

8. Emergency power system requirements.
iii. Mechanical and Plumbing Engineering Services consisting of consideration of alternate materials, systems and equipment, and development of conceptual design solutions for:

1. Heating, ventilating and air conditioning.

2. Plumbing.

3. Fire protection.

4. Special mechanical systems.

5. General space requirements.
iv. Structural Engineering Services consisting of recommendations regarding basic structural materials and systems, analyses and development of conceptual design solutions for:

1. A predetermined structural system.

2. Preliminary foundation plan.

3. Preliminary sketches and descriptions of structural work. v. Civil Engineering Services consisting of development of schematic design solutions for site components. Conceptual design solutions will be developed for the following:

ITEM 19.1. ATTACHMENT 2

1. On-site utility exhibit.

2. Fire department access

3. Drainage systems concept.

4. Schematic Grading.

5. Storm water management requirements.
vi. Landscape Architecture services consisting of evaluating alternate materials, systems, equipment and development of conceptual design solutions for the following:

1. Hardscape areas and materials.

2. Plant palette and tree forms.

3. Planting Plan.
vii. Commission independent building code consultant review. viii. Independent window wall and curtainwall review.
ix. Design of automated access control and video surveillance systems. x. Design of AV systems.
xi. Dry utilities coordination.
xii. Interior Architecture. Interior Architecture includes:

1. Initial meeting with OWNER user groups to establish the goals and objectives for the PROJECT. The meeting will be followed up by departmental program interviews in order to obtain and define the OWNER’s program requirements.

2. Programming Services, which will include:
a. Lead the initial meeting with the OWNER’s Project
Manager and user groups’ Senior Management
representatives, to establish the PROJECT objectives and validate macro program requirements including:
i. PROJECT budget objectives for construction,
furniture, fixtures, cabling, equipment, move costs,
etc.
ii. Common or shared support areas and amenities.
iii. Summarize programmatic requirements into a
summarized “Departmental Needs Assessment
Report,” including Departmental Adjacency
Diagrams and an Executive Summary Space
Program provided for the OWNER’s approval.
b. Visioning Services: Conduct a series of Visioning
Workshops with the OWNER and user group senior
management representatives, to provide a forum in which to establish the image for the conceptual design of the PROJECT. Integrated aspects of the PROJECT Shell &
Core, Landscape and Interior Design will be addressed in the Visioning Workshops. Services and tasks will include:
i. Lead the Visioning Workshops to determine the
qualitative nature of the facility through an
interactive “Visual Listening” process, including:

ITEM 19.1. ATTACHMENT 2

ii. Identifying key words that define the OWNER’s
organization and culture.
iii. From a wide selection of diverse imagery,
identifying those that embody the desired “look and
feel” of the brand and culture.
c. Based on the results of the Visual Listening Sessions, develop a Schematic Design direction for the PROJECT
that uniquely embodies the user group’s civic identity and culture.
d. Summarize the requirements in an Executive Summary
Visioning Document for the OWNER’s and user group’s
approval.
e. Revisions include: Up to two (2) minor revisions to the summary Needs Assessment Report, Executive Summary
Space Program and Executive Summary Visioning
Document.

3. Preliminary “Test Fits:” Upon the OWNER’s approval of the Space Program Document, prepare a Preliminary Test Fit Plans and Interiors Schematic Design for OWNER and user group review and approval. Services and tasks will include:
a. Attend a site visit to spot check readily visible conditions to confirm general accuracy of the as-built floor plans
provided by the OWNER, and Revit backgrounds prepared
for the PROJECT.
b. Prepare one (1) Preliminary Test Fit Plan in accordance with the approved Space Program Document and the
OWNER’s adjacency requirements for each building:
c. Based upon space studies of maximum efficiency bay
depths, mullion and columns spacing.

4. Revisions include: One minor revision to the Test Fit Plans to obtain OWNER’s and user group’s approval.

5. Preliminary Space Plans: Upon the OWNER’s approval of the Test Fit Plan Options, develop Preliminary Space Plans for the OWNER’s and user group’s review and approval. Services and tasks will include the following for each building location:
a. Develop Preliminary Space Plans, with conceptual
furniture and equipment layouts, for the OWNER’s review and approval.
b. Include functional layouts for all Specialty Areas and Support Spaces.
c. Distribute Preliminary Space Plans to the OWNER and
user groups for review. Conduct two (2) review meetings to secure comments and approval of the Preliminary Space Plans.

ITEM 19.1. ATTACHMENT 2

6. Preliminary space Plan Revisions include up to two minor revisions to the Preliminary Space Plans to obtain OWNER’s and user group’s approval.

7. Interiors Schematic Design: Upon the OWNER’s approval of the Preliminary Space Plans, develop Interiors Schematic Design Documents for the OWNER’s and user group’s review and
approval. Services and tasks will include the following for each building location:
a. Obtain completed Equipment Survey Forms from the user group, keyed to the approved Space Plan, and clarify any outstanding information.
b. Identify preliminary materials and finishes to confirm quality level for OWNER and user group review and
approval, based upon PROJECT budget, goals and
objectives. Materials will be presented in a loose format.

Three (3) preliminary material palettes will be prepared. c. Prepare preliminary Outline Specifications of tenant improvements including but not limited to; ceiling
treatments, flooring treatments and materials, wall types, door and hardware types, interior glazing, millwork and casework, lighting fixtures, FF&E, interior signage and graphics, AV criteria, acoustical criteria, etc.

8. Provide one Interiors Schematic Design Presentation with the OWNER and Tenant, to obtain comments and secure approval.

9. Finalize the Interiors Schematic Design Documents to include OWNER and Tenant comments.

10. Interiors Schematic Design Revisions include: one minor revision to the Schematic Design Documents.
h. Examine the PROJECT site and surrounding areas to become familiar and ascertain potential issues that may be reasonably determined by a visual inspection that will need to be addressed in the design. i. Prepare and issue a preliminary site logistics plan illustrating construction project ingress and egress, staging, haul routes, management office location, etc. j. Prepare an estimate of PROJECT construction costs based on the Schematic Design Documents. Prepare estimates of all major portions of the work, and obtain preliminary estimates from key trade subcontractors, analyze the differences, and make appropriate adjustments before finalizing the estimate. k. Provide a Value Analysis report based on the issued Schematic Design Documents. Include suggestions for alternative building systems where appropriate. Alternatives to include opinions regarding impact on PROJECT cost, schedule, quality, and operability.
l. Develop a summary level preliminary construction schedule to complement the Schematic Level construction estimate.
m. Deliverables at completion of Schematic Design phase i. One approved Schematic Design documents package including:

ITEM 19.1. ATTACHMENT 2

1. Approved Space Program and Executive Summary Visioning Document.

2. One set of approved Preliminary Interior Test Fit Plans.

3. One set of approved Space Plans.

4. One approved Interiors Schematic Design Document set for each building.
ii. Preliminary site logistics plan.
iii. Summary level construction schedule.
iv. Schematic Design level construction cost estimate.
v. Value Analysis report.
vi. Updated Master Development Schedule.
vii. Updated Master Development Budget.

3. Design Development Phase
a. Perform Constructability Reviews and Value Engineering. b. Two (2) design progress presentations to the City Council or its designated represenatives.
c. Perform agency consulting, review, and approval services including: Agency consultations, research of critical applicable regulations, preparation of written and graphic explanatory materials, appearances on the OWNER’s behalf at agency meetings
c. Based on the OWNER’s approval of the Schematic Design Documents, and on the OWNER’s authorization of any adjustments in the PROJECT requirements, schedule, and the budget for the cost of the work, DEVELOPER shall prepare Design Development Documents for the OWNER’s approval. The Design Development Documents shall illustrate the further development of the approved Schematic Design Documents.
d. Provide Architectural/Engineering services consisting of continued development and expansion of Schematic Design Documents to establish the final scope, relationships, forms, size and appearance of the PROJECT through:
i. Plans, sections and exterior elevations.
ii. Typical construction details.
iii. Final materials selections.
iv. Equipment layouts.
v. Outline Specifications.
vi. Interior Design Services to establish the following shell and core components:

1. Interior construction of the PROJECT.

2. Special interior design features.

3. Final finish materials and color selections.
vii. Electrical Engineering Services consisting of development of Electrical Schematic Design Documents and development of materials list to establish:

1. Criteria for exterior and interior lighting and electrical systems for Architectural components.

2. Approximate sizes and capacities of major components, and basic equipment information.

ITEM 19.1. ATTACHMENT 2

3. Provide preliminary analysis of the building design for compliance with Energy Conservation Standards.

4. Provide outline specifications and keynotes in Engineer's standard format and level of detail.

5. Preliminary equipment and lighting layouts.

6. Required space for equipment.
viii. Mechanical and Plumbing Engineering Services consisting of continued development and expansion of Schematic Design Documents and development of Outline Specifications or materials lists to establish:

1. Approximate sizes and capacities of major components and basic equipment information.

2. Provide outline specifications and keynotes in Engineer's standard format and level of detail.

3. Preliminary equipment layouts.

4. Required space for equipment.

5. Acoustical and vibration control requirements.

6. Visual impacts.

7. Energy conservation measures.
ix. Structural Engineering Services consisting of continued development of the basic structural system and Tenant specific requirements and Schematic Design Documents in sufficient details to establish:

1. Final structural design criteria.

2. Foundation and framing sizes.

3. Lateral load resisting system.

4. Critical coordination clearances.

5. Outline Specifications of materials lists.
x. Civil Engineering Services consisting of preliminary utility layout and storm water management concepts. Continued development and expansion of Schematic Design Documents and development of Outline Specifications or materials lists to establish the final scope and preliminary details for the specified areas.
xi. Landscape Architecture Services consist of the development of Landscape Design Documents and development of materials lists to establish final scope and preliminary details for landscape work, through the preparation of the following exhibits:

1. Hardscape Plan.

2. Typical Construction Details.

3. Applicable Elevations.

4. Planting Plans and Details.
xii. Independent building code consultant review.
xiii. Independent roofing and waterproofing consultant. xiv. Design of automated access control and video surveillance systems. xv. Design of AV systems.
xvi. Dry utilities coordination.
xvii. Outline Specifications.

ITEM 19.1. ATTACHMENT 2

xviii. Provide two Design Development Presentations including final materials, finishes, sketches, elevations and plans for all disciplines noted, and all aspects of the PROJECT.
xix. Upon approval of the Design Development, Documents prepare two sets of color, material and design presentation boards for the OWNER and tenant’s use.
xx. Revisions include: One revision to the Design Development Documents. e. Interiors Design Development: Prepare Interiors Design Development Documents for the OWNER’s review and approval based on the approved Interiors Schematic Design documents and Preliminary Construction Cost Estimate. The documentation will define the final intent of the design and will illustrate all essential components.
i. Develop interior Architectural elements, components and spaces including but not limited to; lighting concepts, ceiling and wall treatments and custom millwork.
ii. Provide up to up to eight (8) ‘Sketch-Up’ sketches of key design features proposed for the PROJECT.
iii. Develop three (3) final color palettes for all materials, finishes and fixtures based upon the approved material palette developed in the prior phase of work.
iv. Provide partial reflected ceiling plans of key design features, and elevations of key Architectural elements.
v. Further develop floor and finish plans to incorporate all design elements. vi. Provide two Interiors Design Development Presentations including final materials, finishes, sketches, elevations and plans.
vii. Finalize the Interiors Design Development Documents, keynoting and outlining the following information:

1. Wall types, doors, and glazing.

2. Sound insulation requirements.

3. Telephone data and electrical requirements.

4. Special lighting and HVAC requirements.

5. Special ceiling, wall and floor treatments.

6. AV requirements.

7. Acoustical requirements.

8. Interior signage and graphics.

9. Finishes and materials.

10. Keynotes to describe key design features.

11. Keynoted outline sheet specifications.

12. Obtain the OWNER’s and user group’s approval.

13. Two (2) Interiors Design Presentations.
f. LEED/Sustainable Design Services
i. Provide LEED/Sustainable consulting services that will occur during the Schematic Design and Design Development phases in the PROJECT’s pursuit of LEED Silver certification from the U.S. Green Building Council.

ITEM 19.1. ATTACHMENT 2