Document(s) declaring modifications
thereof recorded February 05, 1992 in
Book M035, Page 1868 of Official
Records.
13 (Original
TC 10)
An easement for sewer lines and pipes
and incidental purposes, recorded April
17, 1957 in Book 3777, Page 474 of
Official Records.
Yes No None
14 (Original
TC 11)
An easement for installation and
maintenance of sewer lines and incidental
purposes, recorded May 21, 1957 in Book
3802, Page 365 of Official Records.
Yes No None
15 (Original
TC 12)
Abutter's rights of ingress and egress to or
from State Highway 237 have been
relinquished in the document recorded
June 10, 1960 in Book 4820, Page 641 of
Official Records.
Yes No None
16 (Original
TC 13)
A waiver of any claims for damages by
reason of the location, construction,
landscaping or maintenance of a
contiguous freeway, highway, roadway or
transit facility as contained in the
Yes No None
5 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
document recorded June 10, 1960 in Book
4820, Page 641 of Official Records.
17 (Original
TC 14)
An easement for sewer lines and
incidental purposes, recorded October 19,
1960 in Book 4954, Page 133 of Official
Records.
Yes No None
18 (Original
TC 16)
An easement for gas, oil and water pipe
lines and incidental purposes, recorded
February 5, 1969 in Book 8425, Page 726
of Official Records.
Yes No None
19 (Original
TC 17)
An easement for pipelines, streets and
utilities and incidental purposes, recorded
April 26, 1973 as Instrument No. 4503719
in Book 0346, Page 667 of Official
Records.
Yes No None
20 (Original
TC 19)
The terms and provisions contained in the
document entitled “Indenture” recorded
July 01, 1974 as Instrument No. 4800146
in Book 0971, Page 104 of Official
Records. By and between Southern
Pacific Transportation Company and the
City of Santa Clara.
Yes No None
21 (Original
TC 20)
The terms and provisions contained in the
document entitled “A Resolution
Dedicating Lands of the City of Santa
Clara to Particular Public Uses” recorded
Yes No None
6 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
October 01, 1974 as Instrument No.
4864639 in Book B111, Page 1 of Official
Records. By City of Santa Clara.
22 (Original
TC 21)
An easement for slope purposes and
incidental purposes, recorded October 01,
1974 in Book B111, Page 31 of Official
Records.
Yes No Related’s Phase 1 work includes backfilling the area occupied by this slope easement, which will
eliminate the need for the slope easement. The City
agrees to quitclaim this easement after Related
completes the backfill work, which is expected to
occur after the Ground Lease is entered but during
Phase 1 construction. The City’s obligation to
quitclaim this easement will be documented in the
Phase 1 Ground Lease.
23 (Original
TC 23)
The terms and provisions contained in the
document entitled “Street or Highway
Easement” recorded October 28, 1982 as
Instrument No. 7503245 in Book H110,
Yes No None
24 (Original
TC 24)
The terms and provisions contained in the
document entitled “Agreement” recorded
November 21, 1984 as Instrument No.
8258862 in Book J059, Page 714 of
Official Records. By and between
Southern Pacific Transportation Company
and the City of Santa Clara.
Yes No None
25 An easement for electric generation,
transmission facilities and incidental
Yes No None
7 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
(Original
TC 30)
purposes, recorded July 24, 1985 in Book
J407, Page 615 of Official Records.
26 (Original
TC 31)
The effect of a map purporting to show
the land and other property, filed January
07, 1987 in Book 570, Page 5 of Record
of Surveys.
Yes No Related accepts this exception, provided that
Related reserves the right to request that this
exception be removed from title in the future (if,
e.g., it is superseded by a subsequent survey or
map), in which case City will reasonably cooperate
with those efforts.
27 (Original
TC 33)
An easement for electrical transmission
lines, poles and incidental purposes,
recorded September 17, 1987 as
Instrument No. 9435091 in Book K297,
Terms and provisions contained in the
above document.
Document(s) declaring modifications
thereof recorded March 05, 2002 as
Instrument No. 16140681 of Official
Records.
Yes No None
28 (Original
TC 34)
The terms, provisions and easement(s)
contained in the document entitled “Joint
Use Agreement” recorded May 02, 1988
in Book K520, Page 1137 of Official
Records.
Document(s) declaring modifications
thereof recorded February 05, 1992 in
Yes No Related accepts this exception, provided that if Related requests that this exception be removed
from title, City will reasonably cooperate with those
efforts in accordance with DDA Section 13.2.2.
8 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
Book M035, Page 1868 of Official
Records.
29 (Original
TC 37)
An easement for pipe lines and incidental
purposes, recorded February 05, 1992 in
Book M035, Page 1868 of Official
Records.
Yes No None
30 (Original
TC 40)
Abutter's rights of ingress and egress to or
from State Highway 237 have been
relinquished in the document recorded
February 10, 1997 as Instrument No.
13607857 of Official Records.
Yes No None
31 This item has been intentionally deleted. N/A N/A N/A 32 (Original
TC 42)
An easement for public utilities, including
public communication services and
incidental purposes, recorded September
25, 1998 as Instrument No. 14415534 of
Official Records.
Yes No None
33 (Original
TC 43)
An easement shown or dedicated on the
map filed or recorded February 15, 2001
in Book 737, Page 1 of Maps.
For: private landscape, sanitary sewer,
recycled water and incidental purposes.
Per the filed map, said easements shall be
kept open and free from buildings, and
structures of any kind except public utility
Yes No Related accepts this exception, provided that the City reasonably cooperates in the exercise of its
rights under this easement to require the removal or
relocation of the landscape and recycled water
improvements as reasonably necessary to allow the
future construction of the access road from Parcel 4
into Parcel 3.
9 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
structures, irrigation systems and
appurtenances thereto and lawful fences.
No private utility shall be placed in said
easements except for purpose of crossing.
The City of Santa Clara shall have right of
access for the purpose of maintaining,
replacing, adding to or removal of said
facilities.
34 (Original
TC 45)
The terms, provisions and easement(s)
contained in the document entitled
“Easement Agreement” recorded
February 16, 2001 as Instrument No.
15563491 of Official Records.
Yes No Related accepts this exception, provided that the Ground Lease for any property affected by the
easement will relieve the Phase Developer from any
obligation or liability related to the City’s
maintenance obligations under the subject Easement
Agreement.
35 (Original
TC 46)
An easement for transmission of electric
energy and communication and incidental
purposes, recorded September 26, 2002 as
Instrument No. 16502193 of Official
Records.
The terms and provisions contained in the
document entitled “Bridge Consent
Agreement” recorded October 18, 2017 as
Instrument No. 23779481 of Official
Records.
Yes No None
36 Terms and provisions of an unrecorded
lease dated February 12, 2008, by and
between City of Santa Clara, a chartered
Yes No None
10 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
(Original
TC 47)
California municipal corporation as lessor
and Ameresco Santa Clara LLC, a
Delaware limited liability company as
lessee, as disclosed by a Memorandum of
Lease recorded February 10, 2009 as
Instrument No. 20126485 of Official
Records.
Defects, liens, encumbrances or other
matters affecting the leasehold estate,
whether or not shown by the public
records are not shown herein.
37 (Original
TC 48)
“Resolution No. 10-7719, A Resolution of
the City of Santa Clara, California,
Granting Certain Portion of Real Property
Owned by the City of Santa Clara
Located at 5401 Lafayette Street to the
City of Santa Clara for Use as an
Underground Electric Easement [APN 97-
01-073 (2008-09)]”, recorded May 14,
2010 as Instrument No. 20712467 of
Official Records.
Yes No None
38 (Original
TC 49)
An easement for public right-of-way and
incidental purposes, recorded June 02,
2011 as Instrument No. 21195719 of
Official Records.
Yes No None
39 The terms and provisions contained in the
document entitled “City of Santa Clara
No Yes None
11 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
(Original
TC 51)
Parking Rights Agreement” recorded
March 29, 2012 as Instrument No.
21605287 of Official Records by and
between the City of Santa Clara and Santa
Clara Stadium Authority.
40 (Original
TC 52)
The terms and provisions contained in the
document entitled “City of Santa Clara
Parking Rights Agreement” recorded
March 29, 2012 as Instrument No.
21605289 of Official Records by and
between the City of Santa Clara and Forty
Niners Santa Clara Stadium Company,
LLC
No Yes None
41 (Original
TC 53)
The terms, provisions and easement(s)
contained in the document entitled
“Easement Agreement” recorded October
31, 2012 as Instrument No. 21926019 of
Official Records.
Yes No Related accepts this Exception, provided that the City reasonably cooperates in the exercise of its
rights under this Easement to require the removal or
relocation of the landscape and recycled water
improvements as reasonably necessary to allow the
future construction of the access road from Parcel 4
to Parcel 3.
42 The terms and provisions contained in the
document entitled “Disposition and
Development Agreement (City Place
Santa Clara)” recorded October 07, 2016
as Instrument No. 23456796 of Official
Records. By and between the City of
Santa Clara, a chartered municipal
corporation and Related Santa Clara,
Yes No None
12 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
LLC, a Delaware limited liability
company.
43 The terms and provisions contained in the
document entitled “Development
Agreement (City Place Santa Clara)”
recorded October 07, 2016 as Instrument
No. 23456797 of Official Records. By
and between the City of Santa Clara, a
chartered municipal corporation and
Related Santa Clara, LLC, a Delaware
limited liability company.
Yes No None
44 An easement for underground electric
utility and incidental purposes, recorded
October 09, 2019 as Instrument No.
24300318 of Official Records.
Yes No The City agrees to quitclaim this easement after Related demolishes the electrical facilities in the
easement area that support the existing recycled
water pump station and the temporary traffic signal
at the intersection of Great America Parkway and
the Temporary Road.
45 The terms and provisions contained in the
document entitled “Multimodal
Improvement Funding Agreement (City
Place Santa Clara)” recorded December
24, 2019 as Instrument No. 24365032 of
Official Records.
Yes No None
46 Any facts, rights, interests or claims
which would be disclosed by a correct
ALTA/NSPS survey.
No (if Related
provides a
survey); Yes
(if Related
No None
13 Exception
No.
Description Approved as
Permitted
Exception?
City required to
remove prior
execution of
applicable
Ground Lease?
Qualifications
does not
provide a
survey)
47 (Original
TC 54)
Rights of parties in possession. No Yes (City to
provide
Owner’s
Declaration)
None
48 This item has been intentionally deleted. N/A N/A N/A 49 This item has been intentionally deleted. N/A N/A N/A 50 This item has been intentionally deleted. N/A N/A
51 The terms, provisions and easement(s)
contained in the document entitled
“Interim Parking Rights Agreement
(Stadium Authority; City Place Buildout)”
recorded January 15, 2021 as Instrument
No. 24789169 of Official Records.
Yes No None
52 The terms, provisions and easement(s)
contained in the document entitled
“Interim Parking Rights Agreement
(StadCo Place Buildout)” recorded
January 15, 2021 as Instrument No.
24789170 of Official Records.
Yes No None
Agreed to and accepted by:
RELATED SANTA CLARA, LLC,
a Delaware limited liability company
By: _____________________________________ Dated: _____________________________________ Name: _____________________________________
Its: _____________________________________
Agreed to and accepted by:
THE CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
By: _____________________________________ Dated: _____________________________________ Name: _____________________________________
Its: _____________________________________
This document is exempt from payment of a
recording fee pursuant to California
Government Code Section 27383
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Santa Clara
City Clerk's Office
1500 Warburton Avenue
Santa Clara, CA 95050
CITY CLERK FILE COPY
Recorder's Stamp
DISPOSITION AND DEVELOPMENT AGREEMENT
(CITY PLACE SANTA CLARA)
by and between
THE CITY OF SANTA CLARA,
a public body, corporate and politic, of the State of California and
RELATED SANTA CLARA, LLC,
a Delaware limited liability company
TABLE OF CONTENTS
Page
1. THE PROJECT ............................................................................................................... 3
1.1 Overview ................................................................................................................ 3
1.2 Property .................................................................................................................. 3
1.3 hnprovements ........................................................................................................ 4
1.4 Project Development Generally ...................................................... ; ...................... 4
1.5 Master Developer's Role Generally ....................................................................... 4
1.6 Phase Development Generally ............................................................................... 5
1. 7 Schedule of Perfonnance ....................................................................................... 6
1.8 Development Agreement ....................................................................................... 6
2. TERM ................................................................................................................................ 6
3. PROJECT PHASING ...................................................................................................... 6
3.1 Phasing Plan .................................................................................. : ........................ 6
3.2 Sequence of Development ..................................................................................... 6
4. EXERCISE OF PHASE OPTION ................................................................................. 7
4.1 Phase Option Notice .............................................................................................. 7
4.2 Partial Phases ......................................................................................................... 8
4.3 Special Procedures for BMX Track ....................................................................... 9
4.4 City Approval Process ........................................................................................... 9
4.5 Designation of Phase Developer .......................................................................... 10
4.6 Effect of Failure of Master Developer to Exercise Phase Option ........................ 10
4.7 Requested Change Notice Procedure ................................................................... 10
4.8 Special Procedures for Phase 2A ......................................................................... 11
5. DEVELOPMENT AREA PLANS ................................................................................ 14
5.1 Submittal ofDAP Application ............................................................................. 14
5.2 Effect of Failure of Developer to submit DAP Application ................................ 14
5.3 Development Obligations .................................................................................... 15
5.4 Satisfaction of Multi-Phase Development Obligations ........................................ 19
5.5 Parking and Access .................................................................................... .......... 20
6. GROUND LEASES ....................................................................................................... 20
6.1 Form of Ground Leases ....................................................................................... 20
6.2 Conditions Precedent to Execution of Ground Leases ........................................ 23 -1-
TABLE OF CONTENTS
(continued)
Page
6.3 Ground Leases for Partial Phases ........................................................................ 26
6.4 Memorandum of Ground Lease and Revised Phasing Plan ................................. 27
6.5 Effect of Failure of Master Developer to Take Down a Phase ............................ 27
6.6 Concurrent Events ................................................................................................ 27
7. FAILURE TO MEET PHASE OUTSIDE DATES .................................................... 27
7.1 Notice of Intent to Terminate ............................................................................... 27
7.2 Offer of Development Opportunity ..................................................................... 28
8. PERMITS TO ENTER .................................................................................................. 30
9. CONSTRUCTION OBLIGATIONS ........................................................................... 30
9.1 Timing for Commencement and Completion of Certain Improvements ............. 30
9.2 Compliance with Standards ............................................. .................................... 32
9.3 Conditions to Commencement of Improvements ................................................ 32 9 .4 Conditions for Benefit of City ............................................................................. 33
9.5 Phase Developer Efforts to Satisfy City Conditions ............................................ 34
9.6 Effect of Failure of Condition .............................................................................. 34
10. DETERMINATION OF ALLOWED SQUARE FOOTAGE ................................... 34
10.1 Calculation of Allowed Square Footage .............................................................. 34
10.2 Partial Phases ....................................................................................................... 35
11. ISSUANCE OF AUTHORIZATIONS ......................................................................... 36
11.1 Generally .............................................................................................................. 36
11.2 Compli~nce with Laws ........................................................................................ 36
11.3 Additional Costs or Fees ...................................................................................... 36
12. CERTIFICATES OF COMPLETION ........................................................................ 36
12.1 Generally .............................................................................................................. 36
12.2 Effect · of Certificate of Completion on Master Developer and the applicable Phase Developer ................................................................................. 37
12.3 Effect of Certificate of Completion on Any Person ............................................. 37
12.4 City Cooperation Regarding Certain Certificates of Completion ........................ 37
12.5 City Refusal to Issue a Certificate of Completion ............................................... 38
12.6 Use of Public Improvements Before Certificate of Completion .......................... 38 -ii-
TABLE OF CONTENTS
(continued)
Page
12.7 Acceptance of Public Improvements ................................................................... 38
12.8 Certain Certificates of Completion ...................................................................... 38
12.9 Arbitration ............................................................................................................ 38
13. CONDITION OF TITLE .............................................................................................. 38
13. I Condition of Title ................................................................................................. 3 8
13.2 CityObligations ............................................................................................ : ...... 40 13 .3 New Exception Prohibition ....................................................................... ,. .......... 40
13.4 Post-Closing Boundary Adjustments ................................................................... 41
13.5 Title Clearance ..................................................................................................... 41
14. LANDFILL OBLIGATIONS ....................................................................................... 42
14.1 Landfill Operation and Management Agreement ................................................ 42
14.2 Apportionment of Costs .......................................................... ............................. 42
14.3 lnde1nnification .................................................................................................... 42
15. PROJECT DEVELOPMENT AND MAINTENANCE RESPONSIBILITIES ....... 43 J 5 .1 Construction Obligations ..................................................................................... 43 15 .2 Maintenance, Repair, and Replacement Obligations; Public Services ................ 43
15.3 Station Area ......................................................................................................... 45
16. PREMIUM COSTS AND SHARED INFRASTRUCTURE COSTS ........................ 46 16 .1 Premium Costs ..................................................................................................... 46
16.2 Shared Infrastructure Costs .................................................................................. 47
16.3 Documentation of Premimn Costs and Shared Infrastructure Costs ................... 47
16.4 Survival ................................................................................................................ 48
17. PROPERTY CONDITION ........................................................................................... 48
17.I Asis .................................................................................................................. ... 48
17.2 Hazardous Substance Indemnification ................................................................. 50 17 .3 Damage and Destruction ....................................................................................... 5 I
18. COMPLIANCE WITH PLANS AND POLICIES ...................................................... 51
18.1 Compliance with Plans and Obligations .............................................................. 51
18.2 Relocation Assistance .......................................................................................... 51 18 .3 Compliance with CEQA Mitigation Measures .................................................... 52 -iii-
TABLE OF CONTENTS
(continued)
Page
18.4 Restrictions on Competition ................................................................................ 52
18.5 Survival ................................................................................................................ 52
19. INSURANCE .................................................................................................................. 52 19 .1 Required Insurance .............................................................................................. 5 2
20. DISPUTE RESOLUTION ............................................................................................. 52
20.1 Arbitration Matters ............................................................................................... 52
20.2 Good Faith Meet and Confer Requirement.. ........................................................ 53
20.3 Dispute Resolution Procedures ............................................................................ 53
21. EVENT OF DEFAULT; REJVIEDIES ......................................................................... 56
21.1 General ................................................................................................................. 56
21.2 Particular Breaches by the Parties ........................................................................ 56
21.3 Remedies .............................................................................................................. 60
21.4 Termination .......................................................................................................... 61
21.5 Conflicting Law; Developer's Right to Terminate .............................................. 62
21.6 Rights and Remedies Cumulative ........................................................................ 62
21.7 No Implied Waiver .............................................................................................. 62
22. ASSIGNMENT ............................................................................................................... 62
22.1 Limitations on Master Developer's Right to Transfer ......................................... 62
22.2 Phase Assignments ............................................................................................... 63
22.3 Consent Transfers Defined .................................................................................. 63
22.4 Conditions Precedent to Consent Transfers ......................................................... 64
22.5 Procedures for Consent Transfer ......................................................................... 65
22.6 Permitted Transfers and Procedure ...................................................................... 66
22.7 Release ................................................................................................................. 68
22.8 Rights of Phase Developers ................................................................................. 68
22.9 Liability for Default ............................................................................................. 68
23. FINANCING; RIGHTS OF MORTGAGEES ............................................................ 68
23.1 Right to Mortgage; Conditions ............................................................................ 68
23.2 Notice of Mortgages ............................................................................................ 69
23.3 Mortgagee Right to Notices ................................................................................. 69
TABLE OF CONTENTS
(continued)
Page
23.4 Mortgagee Right to Cure ..................................................................................... 70
23.5 Obligation to Construct After Foreclosure .......................................................... 71
23.6 Restrictions on City During Mortgagee Cure Period ........................................... 71
23.7 Foreclosure Not a Default .................................................................................... 71
23.8 Limitation on Liability of Mortgagee .................................................................. 71
23.9 More Than One Mortgagee .................................................................................. 72 23 .10 Bankruptcy .......................................................................... ................................. 72
23.11 New Agreement ................................................................................................... 72
23.12 Additional Mortgagee Protections ....................................................................... 73
23.13 Rights of Phase Developers ................................................................................. 73
24. FORCE MAJEURE; EXCUSABLE DELAY; EXTENSION OF TIMES OF PERFORMANCE .......................................................................................................... 74
24.1 Force Majeure and Excusable Delay ................................................................... 74
24.2 Period of Excusable Delay or Force Majeure ...................................................... 75
24.3 Limitations ........................................................................................................... 75
25. REPRESENTATIONS AND WARRANTIES ............................................................ 76
25.1 Developer's Representations ............................................................................... 76 25 .2 City's Representations ....................................................... .................................. 77
26. PAYMENT OF CITY COSTS ...................................................................................... 78
26.1 Payment of City Costs and Administrative Fees ................................................. 78
27. DEVELOPER INDEMNIFICATION ......................................................................... 78
27.1 General Developer Indemnification ..................................................................... 78
27.2 Other Remedies .................................................................................................... 79
27.3 Defense ofClainls ................................................................................................ 79
27.4 Limitations of Liability ........................................................................................ 79
28. ADEQUATE SEClJRITY ............................................................................................. 80
28.1 Certain Definitions ............................................................................................... 80
28.2 Requirement for Adequate Security for Public Improvements ............................ 80
28.3 Requirement for Adequate Security for Secured Phase Improvements ............... 80
28.4 Substitution of Adequate Security ....................................................................... 81 -v-
TABLE OF CONTENTS
(continued)
Page
28.5 Reduction, Return and Release ............................................................... ~ ............ 81
28.6 Enforcement of the Phase Security ...................................................................... 81
29. MISCELLANEOUS PROVISIONS ............................................................................. 82
29. 1 Entire Agreement; Amendment ........................................................................... 82 29 .2 Waiver .................................................................................................................. 82
29.3 Captions and Table of Contents ........................................................................... 82
29.4 Extensions of Time .............................................................................................. 82 29 .5 Interpretation ........................................................................................................ 82
29.6 More than One Person ............................................................................... 1 . ........ 83
29. 7 Time of Performance ........................................................................................... 83
29.8 No Third Party Beneficiaries ............................................................................... 84 29 .9 No Brokers ........................................................................................................... 84
29.10 Governing Law .................................................................................................... 84
29.11 Successors and Assigns .......................................................... .............................. 84
29.12 Relationship of the Parties ................................................................................... 84 29 .13 Construction ......................................................................................................... 84
29.14 Incorporation of Exhibits ..................................................................................... 84 29 .15 Further Assurances ............................................................................................... 84
29.16 Numbers ............................................................................................................... 84
29.17 No Gift or Dedication .......................................................................................... 85
29.18 Correction of Technical Errors ..................... · ....................................................... 85
29.19 Severability .......................................................................................................... 85
29.20 Legal Representation ........................................................................................... 85
29.21 Counterparts ................................................... : .. ······ ............................................. 85 29 .22 Survival ................................................................................................................ 86
29.23 Estoppel Certificates ............................................................................................ 86
29.24 Approvals ............................................................................................................. 87
29.25 Recordation .......................................................................................................... 87
29.26 Nondiscrimination ................................................................................................ 87
29.27 Successors and Assigns; No Third-Party Beneficiary ......................................... 88 -vi-
TABLE OF CONTENTS
(continued)
Page
29.28 ENA; Tenn Sheet; Supplements .......................................................................... 88
29.29 Plans on Record with City ................................................................................... 88
29.30 Notice of Termination .......................................................................................... 89
29.31 Extensions of Time .............................................................................................. 89
29.32 Attorneys' Fees .................................................................................................... 89
29.33 Notices ................................................................................................................. 90
29.34 Limitations on Disclosure .................................................................................... 91
29.35 Fees and Sales Taxes ................................................................................ ........... 91
29.36 Wages and Working Conditions .......................................................................... 92 29 .3 7 Hiring Efforts ....................................................................................................... 92 -vii-
LIST OF EXHIBITS
Exhibits highlighted in grey will be attached to this Agreement upon agreement of the parties in accordance with tenns of this Agreement.
Exhibit A
Definitions
Exhibit B-1
Legal Description of the Landfill Parcel
'_;~~h~:it~~~i-f.It:::/'7tl/fL?_~·~-.~~-·
- --· .____, ,,. . - . . '· . -- ...... ~ --
j_:"tlr···• ,:.i}efaiDescriptio~-ohhe 0Airsp-ace P;r.c~ls' . . .
Exhibit B-3
Legal Description of the Tasman Parcel
Exhibit B-4
Map of Project Site
Exhibit C
Mitigation Monitoring and Reporting
Program (MMRP)
Exhibit D
Pro_iect Approvals
Exhibit E
Phasing Plan
Exhibit F
Schedule of Performance - General
- ]:xhibit F-1 - . ·. --- - - • - .•,C: .. - -· ~
--- s'." -- -· . - -- a
- -- - -- --- -- - - - ':c . . -., "::"' .. Form-.of Phas-e Scliedule"of Perform~nce· ' - -··- - ·- -- - - Exhibit G-1 Form of Ground Lease - Phase 11
Exhibit G-2
Form of Ground Lease - Phases 2-71
Exhibit H
Minimum Requirements for CC&Rs
Exhibit I
Form of Financing Plan
Exhibit J
Form of Permit to Enter
Exhibit K
Form of Certificate of Completion
Exhibit L_- - -
-- -- - - - ·-- - - - - -
-
, Permitted Exceptions - -· -
ExhibitM
Landfill Operation and Management Term
Sheet
1 As of the Reference Date.
-viii-
Exhibit N
Definition ~f Premium Costs
Exhibit 0
List of Pre-Approved Arbiters
Exhibit P
Form of Assignment, Assumption and
Release A~reement
Exhibit Q
Form of Citv Completion Guaranty
Exhibit R
Addresses for Notices
Exhibit S
Form of Architect's Certificate
Exhibit T
Form of Emtineer's Certificate
Exhibit U
Provisions Relating to ConStruction Sales
and Use Tax Allocations
-ix-
DISPOSITION AND DEVELOPMENT AGREEMENT
(CITY PLACE SANTA CLARA)
This DISPOSITION AND DEVELOPMENT AGREEMENT (CITY PLACE SANT A CLARA) (including all Exhibits and as amended from time to time, this "Agreement"), dated for reference purposes only as of August 12, 2016 (the "Reference Date"), is made by and between Related Santa Clara, LLC, a Delaware limited liability company ("Master Developer"), and the City of Santa Clara, a chartered municipal corporation ("City").
RECITALS
Master Developer and City enter into this Agreement with reference to the following facts and circumstances:
A. Capitalized terms used herein are defined or referenced in Exhibit A of this Agreement.
B. City owns a fee interest in the real property generally located in the North of Bayshore Area in Santa Clara, California, consisting of approximately two hundred and thirty (230) acres shown on the Phasing Plan (the "City Landfill Parcels"). Subsequent to the Reference Date, Master Developer will seek approval of a tentative subdivision map (the "Tentative Map") and a first phased final map (the "First Final Map") that will subdivide the City Landfill Parcels to create two sets of vertical parcels: (i) one parcel (the "Landfill Parcel") which, in general, constitutes City's fee interest in the Landfill and (ii) multiple parcels· comprising the "Airspace Parcels," which constitute City's fee interest in the airspace parcels above the Landfill Parcels. The legal description of the City Landfill Parcels is provided as Exhibit B-1. Upon the recordation of the First Final Map, the legal description of the Landfill Parcel and the outer boundaries of the Airspace Parcels will be appended to this Agreement as Exhibit B-2 in accordance with Section 3 hereof.
C. City also owns a fee interest in the real property generally located immediately south of the City Landfill Parcels and north of Tasman Drive on the east and west sides of Centennial Boulevard (APNs 104-03-03 8 and -039) and a portion of another parcel (104-03-036) located immediately northward of those other parcels, consisting of approximately 9.48 acres (the "Tasman Parcels"). The legal description of the Tasman Parcels is in Exhibit B-3. The City Landfill Parcels and the Tasman Parcels are collectively referred to herein as the "Project Site" as shown on Exhibit B-4 attached hereto. The portions of the Airspace Parcels and the Tasman Parcels that will be ground leased to Master Developer in accordance with this Agreement are collectively referred to herein as the "Development Parcels".
D. City and Master Developer entered into that certain (l) Exclusive Negotiation Rights Agreement in April 2013 for development of the City Landfill Parcels (the "ENA"), and (2) Term Sheet dated as of February 11, 2014 (City Council Resolution No. 14-8112) (the "Term Sheet"). City and Master Developer entered into a Term Sheet Supplement dated as of July 1, 2014 (City Council Resolution No. 14-8157) and a Term Sheet Supplement No. 2 dated as ofJune 16, 2015 (City Council Resolution No. 15-8245).
E. On June 26, 2012, the City and the Montana Property Group ("MPG") entered into (1) an Exclusive Negotiating Rights Agreement, as subsequently extended and amended, and (2) a Term Sheet dated as of February 11, 2014, for the development of the Tasman Parcels.
Subsequently, Master Developer entered into a joint venture agreement with MPG to jointly develop the Tasman Parcels concurrently with the City Landfill Parcels, as reflected in a Term Sheet Supplement between the City and MPG, dated June 16, 2015. Under such Term Sheet Supplement, the City and MPG agreed that the site planning efforts and negotiations for the Tasman Parcels would be included as part of the site planning efforts and negotiations for the City Landfill Parcels, which understanding is reflected in the terms of this Agreement.
F. The City has analyzed potential environmental impacts of the Project and identified mitigation measures in the Environmental Impact Report for the City Place Santa Clara Project (the "Project EIR") and Mitigation Monitoring and Reporting Program attached hereto as Exhibit C (the "Project MMRP"), in accordance with the requirements of CEQA. On June 28, 2016, the City Council adopted Resolution No. 16-8337, certifying the Project EIR in accordance with the requirements of CEQA, which attached CEQA Findings and the MMRP.
G. Concurrently with certification of the Project EIR, the City Council (i) adopted amendments to its General Plan, including an amendment to create a new "Urban Center Entertainment District" General Plan classification for the Project Site, an amendment to the Climate Action Plan setting forth vehicle trip reduction targets for the new classification and an amendment revising city-wide limitations on office development, and (ii) rezoned the Project Site to PD-MC and adopted the Master Community Plan for the Project (such Master Community Plan, together with the Master Community Plan Supplement, the "Master Community Plan" or "MCP"), including an Infrastructure Master Plan (the "Infrastructure Master Plan" or "IMP"), in accordance with the requirements of CEQA.
H. The MCP includes an "Enhanced Open Space" variant ("EOS Variant") for the Project, in which most of one of the parcels (APN 104-01-102) would be retained as a public park, and the development previously planned for that parcel would be redistributed to the other parcels in the development. This DDA contemplates the development of the EOS Variant in which the public park is represented by Phase 2A. As a public benefit to the Project, this DDA contemplates development of the EOS Variant by providing special procedures for Phase 2A, which will be reserved for park, recreation and open space uses that are complementary to, and do not unreasonably interfere with, the City Center Phases.
I. City has determined that the development and use of the Project Site under this Agreement are included within the scope of the Project EIR in that the potential environmental impacts of the development and use of the Project Site under this Agreement and the MCP are addressed in the Project EIR.
J. Concurrently with the actions listed above, the City Council took other actions consistent with the Project, including approving this Agreement, and the Development Agreement, together with other approvals (the "Project Approvals"). The Project Approvals are listed on Exhibit D hereto.
2 K. The principal objective of the Project Approvals is to create a new mixed-use development on the Project Site that is anchored by a "city center," consistent with the elements shown in the Phasing Plan attached hereto as Exhibit E and permitted under the Master · Community Plan (such development, the "Project"). This objective is intended to be achieved through the ground lease by City to Phase Developers, from time to time, of the Development Parcels, and the construction and operation by Phase Developers of the Improvements.
AGREEMENT
NOW, THEREFORE, in reliance on the foregoing and in consideration of the mutual covenants, agreements and · conditions set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Parties hereby agree as follows:
L The Project. This Article l is intended to serve as an overview of the rights and obligations of the Parties with respect to the Project. To the extent that any provision in this Article 1 conflicts with a provision elsewhere in this Agreement, the provision that is elsewhere shall control.
1.1 Overview. This Agreement contemplates development of the Project, which will entail Developer entering into ground leases of the Development Parcels from the City on a phased basis for the purposes of: (i) constructing Infrastructure to support the Project, such as roads, utilities and geotechnical improvements required for development on the Landfill (e.g. a structural slab on which other Improvements will be constructed); (ii) constructing and improving certain public parks and open spaces; and (iii) constructing and operating Buildings within each ground lease premises, all in accordance with the Project Approvals, Subsequent Project Approvals and the Schedule of Performance to the extent applicable, as more particularly described in this Agreement.
1.2 Property.
l .2.1 Subdivision. Master Developer intends to submit to the City an application for the Tentative Map in accordance with CSCC Chapter 17 .05 (Subdivisions), as may be amended from time to time, in order to create the Airspace Parcels and the Landfill Parcels. The Airspace Parcels as shown on the Tentative Map will consist of those Development Parcels that are congruent with the footprint of the City Landfill Parcels but located above the top of the fill layer of the landfill cap, as more particularly described in the Landfill Operation and Management Term Sheet attached hereto as Exhibit M (the "Landfill O&M Term Sheet"), but excluding any public streets. Within thirty (30) days after recordation of the First Final Map creating the Airspace Parcels, the Parties shall prepare an Exhibit B-2 that will be appended to this Agreement and become a part thereof that shall set forth the legal description of the Landfill Parcel and the Airspace Parcels. Each Phase of development will be conveyed to the Phase Developer by reference to a subsequent phased Final Map or a metes and bounds description that in either case is consistent with the corresponding Airspace Parcel as shown on the Tentative Map; provided, however, that if the Phase is conveyed by a metes and bounds description, the applicable Phase Developer will be required to record a phased Final Map covering the applicable Phase prior to Commencement of Infrastructure within the applicable Phase. Each 3 Ground Lease requires the parties to process a boundary adjustment through a lot line adjustment or other legal process upon Completion of the applicable Infrastructure in order to finally determine the boundaries of the applicable Airspace Parcel that is subject to the Ground Lease.
The Parties anticipate that each Final Map will identify the Building parcels that are anticipated to be divided into and operated as separate condominium projects.
1.2.2 Property Subject to this Agreement. The property that is the subject of this Agreement consists of the (i) Landfill Parcel (described in Exhibit B-2 to be attached hereto) that will continue to be owned and controlled by the City, subject to various rights granted to Developer for infrastructure, support facilities, utilities and other penetrations, installations, equipment and/or improvements from the Airspace Parcels into (or through) the Landfill Parcel as necessary to develop the Project contemplated under the Project Documents; (ii) the Tasman Parcels, as described in Exhibit B-3 attached hereto that will be ground leased to Developer in Phase I of the Project; and (iii) the Airspace Parcels (described in Exhibit B-2 to be attached hereto), some or all of which will be conveyed to Developer in accordance with this Agreement.
1.3 Improvements. The Project will be developed consistent with the Phasing .
Plan (as may be amended from time to time), the Project Documents and the Project Approvals and Subsequent Project Approvals, including, without limitation, the MCP, the IMP, and the DAPs that are Approved with respect to each Phase. Developer shall have the right and,- with regard to certain Improvements identified in this Agreement and upon the satisfaction of certain conditions set forth in this Agreement, the obligation, to construct the Improvements in accordance with the Project Documents. Unless otherwise specifically provided herein, all references to building square footages in this Agreement shall be deemed to refer to Gross Square Footages.
1.4 Project Development Generally. The Project will be constructed in up to eight Phases, as illustrated in the Phasing Plan attached hereto as Exhibit E, including the Phases numbered 1 through 7 and Phase 2A. Phases 1, 2 and 3, collectively, are designated in the Master Community Plan as "City Center Mixed Use" (sometimes referred to herein as the "City Center Phases"). The Phases depicted in the Phasing Plan are conceptual, and as appropriate, Phases 1 through 7 may be consolidated or otherwise modified through the Phase Option process described in Article 4.
1.5 Master Developer's Role Generally. Master Developer shall be the master developer for the Project, coordinating the development of the Project in cooperation with City, Phase Developers and others as more fully provided herein. Either Master Developer or an assignee of Master Developer pursuant to a "Permitted Transfer," as described in Section
22.6. l(b) shall have the obligation to serve as the Phase Developer for Phase 1 and 2, as shown on the Phasing Plan attached hereto as Exhibit E. Subject to its timely Take Down of Phases 1, 2 and 2A, Master Developer, on behalf of itself or an Affiliate, retains the exclusive option to Take Down Phases 3 through 7 as the Phase Developer thereof in accordance with the terms of this Agreement; provided, however, that the failure of Master Developer to Take Down any Phase other than Phases 1, 2 and 2A shall not affect its option to Take Down future Phases. In addition to Master Developer's other rights and obligations under this Agreement, Master Developer remains obligated to City for the payment of all Financial Obligations hereunder. 4 1.6 Phase Development Generally. The procedure for developing each Phase shall generally be as follows, as described in more detail in the following sections of this Agreement:
1.6.1 Phase Option Notice Approval. Master Developer shall exercise each Phase Option by submitting to City a Phase Option Notice for the applicable Phase ( or portion thereof), in accordance with the terms of Article 4 hereof. Once each Phase Option Notice is Approved by City, Master Developer (or an approved Transferee) shall be deemed to be the "Phase Developer" of that Phase.
1.6.2 Assignment. Subject to the terms of this Agreement, Master Developer shall have the right in certain circumstances to Assign its rights and obligations to other Persons. In the event that the Assignment is a Consent Transfer and is Approved by City, then Master Developer, the Transferee, and City will enter into an AA&R for the applicable rights and obligations to be assigned.
1.6.3 DAP Approval. Following City's Approval of the Phase Option Notice, the Phase Developer shall submit to City an application for a Development Area Plan (each, a "DAP") for the applicable Phase (or portion thereof), in accordance with Article 5 hereof.
1.6.4 Ground Lease Execution. Following City's Approval of the DAP(s) for the applicable Phase ( or portion thereof) and satisfaction of all other terms and conditions discussed in Section 6.2, City and the Phase Developer shall enter into a Ground Lease for that Phase (or portion thereof), in accordance with Article 6 hereof. The Phase Developer shall be deemed to have Taken Down each Phase ( or portion thereof) upon the effective date of the applicable Ground Lease.
1.6.5 Construction of Phase Improvements. Upon the effective date of the Ground Lease for a Phase, the Phase Developer shall thereupon have the obligation to Commence construction of, and diligently pursue to Completion, the Infrastructure set forth in the applicable DAP and shall have the right (subject to certain terms and conditions) to construct the other Improvements shown in the OAP, all in accordance with the terms of this Agreement.
In addition, the Phase Developer shall (1) have the obligation to construct the Minimum Initial Buildings and Minimum Retail Buildings among Phases 1, 2 and 3, as more particularly described in Sections 5.3.2 and 5.3.4, and (2) use best efforts to construct and/or deliver the Additional Initial Buildings, Additional Retail Buildings and Major Department Stores among Phases 1, 2 and 3, as more particularly described in Sections 5.3.3, 5.3.5, 5.3.6, and 5.3.7.
1.6.6 Certificate of Completion. Once the Initial Improvements for the applicable Phase ( or portion thereof) are Complete, City shall issue a Certificate of Completion for such Initial Improvements in accordance with Article 12 hereof.
1.6.7 Post-Completion. Upon issuance of the Certificate of Completion for the Initial Improvements for a particular Phase, the applicable Phase Developer will thereafter use and operate the Phase in accordance with the applicable Ground Lease and any terms of this Agreement that survive the termination of this Agreement. 5 1. 7 Schedule of Performance. The Schedule of Performance attached hereto as Exhibit F sets forth the Outside Dates for several actions contemplated by this Agreement, including (but not limited to): (i) the exercise of the Phase Option for each Phase or Partial Phase; (ii) the submittal of a Substantially Complete DAP application for each Phase or Partial Phase; (iii) the Take Down of each Phase, and (iv) the Commencement of the Infrastructure with respect to each Phase, as any of the foregoing Outside Dates may be extended by Excusable Delay, where applicable. Master Developer (and any applicable Phase Developer) shall also be required to comply with Phase Schedules of Performance for the Minimum Initial Buildings and Minimum Retail Buildings in accordance with Section 9.1.2 of this Agreement, as any of the foregoing Outside Dates therein may be extended by Excusable Delay, where applicable.
1. 8 Development Agreement. Concurrently herewith, City and Master Developer have executed and delivered the Development Agreement, which confirms the vesting of the Project Approvals and applicable City laws and fees and sets forth the City's commitment regarding staffing devoted to the Project.
2. Term. The term of this Agreement (the "Term") shall commence upon the Effective Date and, except with respect to those terms that expressly survive the termination of this Agreement, shall terminate, unless earlier terminated as provided below, upon the issuance of a Certificate of Completion for all of the Initial Improvements with respect to the last Phase Taken Down pursuant to the Schedule of Performance. However, on the date that a Certificate of Completion for all Initial Improvements with respect to a Phase has been issued, the obligations of the Phase Developer under this Agreement with respect to such Phase shall automatically and conclusively terminate, subject to the sections that survive pursuant to Section
29.22 of this Agreement.
3. Project Phasing.
3.1 Phasing Plan. The development of the Project will take place over a total of up to eight (8) Phases, each of which is conceptually illustrated on the Phasing Plan attached hereto as Exhibit E. The Phasing Plan illustrates on a conceptual level the size, and order of the Phases, given City's and Master Developer's best estimates of the conditions forecast for the expected development period; however, this Agreement anticipates that other than Phases 1, 2 and 2A, the subsequent Phases as shown on the Phasing Plan may be reconfigured, re~ordered and/or developed in partial Phases, subject to the provisions of Article 4 hereof.
Notwithstanding the foregoing, Master Developer's rights and obligations with respect to Phase 2A shall be as set forth in Section 4.8 below.
3.2 Sequence of Development. Subject to Section 4.7 below, City hereby grants to Master Developer the exclusive option to elect to develop each Phase (such option for each Phase being referred to herein as a "Phase Option").
3.2.1 Phases 1, 2 and 2A. Master Developer (acting as Phase Developer) shall exercise Phase Options for, and shall Take Down, Phase 1, Phase 2 and Phase 2A in accordance with the Schedule of Performance and all other applicable terms and conditions of this Agreement. Failure to Take Down Phase 1, Phase 2 and/or Phase 2A in 6 accordance with this Agreement shall constitute an Event of Default pursuant to Section
21.2.l(b).
3.2.2 All Subsequent Phases. Subject to the fulfillment of its obligations under Section 3.2.1 above for Phases 1, 2 and 2A, Master Developer shall have the right, but not the obligation, to exercise Phase Options for, and to Take Down, Phases 3 through
7. The Take Down of the remainder of the Phases and subsequent development of each Phase may occur in any sequence or order Master Developer chooses, including concurrently, subject to compliance with the provisions of this Agreement.
4. Exercise of Phase Option.
4.1 Phase Option Notice. The Parties intend that each Phase shall allow for planning oflarge mixed-use areas or neighborhoods within the Project Site. Accordingly, from time to time, Master Developer shall submit to City written notice that it intends to exercise a Phase Option for a Phase ( each, a "Phase Option Notice") prior to the Outside Date to Take Down the applicable Phase, as set forth in the Schedule of Performance.
4.1.1 Each Phase Option Notice shall include the following information ( collectively, the "Phasing Information"):
(a) The proposed geographic boundaries of the Phase,
consistent with the Phasing Criteria outlined in Section 4.1.2, below, including, at a conceptual plan level, the proposed public street and open space network and any other community facility parcels on which public improvements will be constructed but ownership will remain in the City; (b) A revised conceptual Phasing Plan that shows the
boundaries and anticipated order of development of all remaining Phases of development in the context of the proposed Phase boundaries, plus the boundaries of all Phases that have already been Taken Down ( depending on the size of the applicable Phase, the number of subsequent Phases may be consolidated or reduced in size), subject to the requirement that all portions of the Project Site except for the retention pond, public streets, and (if elected by City pursuant to Section 15 .3) all or part of the Station Area, must be shown as part of a Phase; (c)
pursuant to Section 4.2.3 hereof).
A revised Allowed Square Footage Table (if required
( d) A textual description of the conceptual scope of
development for the Phase, which shall include: (i) the anticipated types and amounts of uses; (ii) maximum anticipated development density; and (iii) the amount and timing of Infrastructure anticipated to be constructed as part of the Phase; and (iv) a general overview of the parking and loading facilities anticipated to be provided as part of the Phase. With the exception of Phases 1 and 2, to the extent that Master Developer has not yet determined the conceptual scope of development for the Phase, Master Developer shall have the option of so stating in the Phase Option Notice, in which case Master Developer shall be deemed to have complied with this Section 4.1.l(d).
7 (e) An updated Best Efforts Report m accordance with
Section 5.3.7(a) below).
4.1.2 Phasing Criteria. The parties acknowledge and agree that many factors, including, but not limited to, general economic conditions, the local housing market, capital markets, general market acceptability, the adequacy of municipal services, and local tax burdens, will detennine the rate at which various product types within the Project can be developed and absorbed. Therefore, with the exception of Phases I, 2 and 2A, the boundaries and order of development for each Phase shall be established by Master Developer in connection with its exercise of each Phase Option, so long as any change in Phase boundaries meets the following criteria (collectively, the "Phasing Criteria"): (i) all Phase boundaries depicted in the Phasing Plan remain consistent overall with the Phase boundaries for the EOS Variant as shown in the MCP, provided, however, that with the exception of Phases 1, 2 and 2A, each designated Phase is not required to be consistent with the conceptual phasing descriptions set forth in Section 2.3 of the MCP; (ii) any proposed changes to the Phasing Plan shall not change the dates set forth in the Schedule of Performance (unless extended as permitted hereunder for Excusable Delay); and (iii) no Phase shall be reconfigured such that more than twenty percent (20%) of its land area is reallocated to another Phase or Phases and further provided that Phase 2A shall not be reconfigured without the prior written consent of City, in its sole discretion.
4.2 Partial Phases. Upon Master Developer's election, Master Developer shall have the option to submit a Phase Option Notice in accordance with Section 4.1 above for less than all of the land within the boundaries of a particular Phase ( as applicable, a "Partial Phase"), except for Phase 2A, for which Master Developer shall not have a Partial Phase option and which shall governed by the provisions of Section 4.8, below.
4.2.1 Partial Phase Criteria. In addition to the requirement that the overall Phase meet the Phasing Criteria set forth in Section 4.1.2, above, any such proposed Partial Phase must meet the following criteria (the "Partial Phase Criteria"), except to the extent otherwise Approved by the City Manager:
(a) The total acreage of such Partial Phase shall be no less than twenty (20) acres; and
(b) City shall have determined that any remaining portion of the Phase, as shown in the Phasing Plan proposed as part of the applicable Phase Option Notice, constitutes a developable area.
4.2.2 Nomenclature. The first Partial Phase within a Phase shall be referred to in the Phasing Plan and known as "[Phase Number]-A," the second Partial Phase shall be referred to in the Phasing Plan and known as "[Phase Number]-B," and so forth.
4.2.3 Modifications to Allowed Square Footage Table. If any Phase Option Notice is delivered to City for a Partial Phase after the date upon which City and Master Developer have conclusively determined the Allowed Square Footage Table pursuant to Article lQ, below, then concurrently with the Phase Option Notice, Master Developer shall deliver to City a modified Allowed Square Footage Table in accordance with Section 10.2, below. City 8 and Master Developer shall work together to finalize the modified Allowed Square Footage Table in accordance with the Approval procedure outlined in Section 10.1, below.
4.2.4 Timing. The failure to meet a Phase Outside Date (as such tenn is defined in Article 7, below) for any portion of a Phase shall be governed by Article 7. below; provided, however, that submittal of a Phase Option Notice for the first Partial Phase in Phases 4 through 7 shall adjust the Phase number and Phase Outside Date for all future Phases.
By way of example only, and not limitation, if Phase 6 were partially Taken Down prior to any portion of Phase 5 being taken down, then Phase 6 would become Phase 5 for the purposes of this Agreement, and the Phase Outside Dates formerly applicable to Phase 5 would apply to the Phase 6 boundaries instead; however, if Phase 5 were partially Taken Down and subsequently Phase 6 were partially Taken Down, then the Phase Outside Dates applicable to Phase 5 would apply to the property within the boundaries of Phase 5, and the Phase Outside Dates applicable to Phase 6 would apply to the property within the boundaries of Phase 6.
4.2.5 Partial Phases for City Center Phases. The City Center Phases may be Taken Down as Partial Phases subject to the foregoing Partial Phase Criteria, provided, however, that a Partial Phase Take Down any of such City Center Phases shall not adjust the Phase numbers or the Phase Outside Dates for those Phases and the Base Rent for a Partial Phase within such Phases shall be calculated in accordance with Section 6.3.3 hereof.
4.2.6 Terminology. For the purposes of this Agreement, any use of the tenn "Phase" shall be deemed to mean one or more Partial Phases, as the context requires.
4.3 Special Procedures for BMX Track.
4.3.1 Phase Option Notice Timing. In order to provide the City with adequate advance notice to discontinue the BMX Track located on Parcel 1 and deliver the applicable Phase free of all tenants in accordance with Section 13.2.1, for any Phase or Partial Phase on which the BMX Track is located and operational, Developer shall provide a Phase Option Notice no earlier than the date on which the BMX track has been relocated or . discontinued or the second (2nd) anniversary of the Effective Date, whichever is earlier, and no later than eighteen (18) months prior to the Outside Date for Take Down of Such Phase or Partial Phase.
4.3 .2 Good Faith Efforts to Relocate. Commencing upon the Effective Date and ending upon the first (1st) anniversary of the Effective Date, Master Developer and City shall work together in good faith to determine a site to which the BMX track may feasibly be relocated. If Master Developer and City ·are unable to identify such a site prior to the first (1st) anniversary of the Effective Date, then until the second (2nd) anniversary of the Effective Date, Master Developer and City shall continue work together in good faith to determine a site to which the BMX track may feasibly be relocated.
4.4 City Approval Process. Subject to the conditions precedent set forth in Section 4.1 and (if applicable) Section 4.2, above, within thirty (30) days of receiving a complete Phase Option Notice, City shall review such information and documentation and render a decision regarding its Approval of the Phase Option Notice. If City objects in writing within 9 such thirty (30) day period, City shall include a reasonably detailed description of its reasons for objecting, and Master Developer shall have the opportunity to revise and re-submit the Phase Option Notice, which shall again be subject to the City Approval process set forth in this Section
4.4. If Master Developer disagrees with the statements or requests made in City's objection letter, Master Developer shall have the right (but not the obligation) to submit the dispute to arbitration as an Expedited Arbitration Matter in accordance with Article 20 hereof. If City fails to render a decision regarding its Approval of the Phase Option Notice within the thirty day period, then the Phase Option Notice shall be deemed approved upon satisfaction of the further notice procedures set forth in Section 29.33.4 hereof.
4.5 Designation of Phase Developer. Master Developer shall have the right, simultaneously with its submittal of a Phase Option Notice, to submit a proposal (the "Phase Developer Designation") to designate another Person as the Phase Developer for the Phase (or Partial Phase) in question in accordance with the provisions set fo1th in Article 22 hereof, and shall notify City whether the Phase Developer Designation is a Pennitted Transfer or will require a Consent Transfer. ·
4.5.l If the Phase Developer Designation would require a Consent Transfer pursuant to Article 22 and if City disapproves of the proposed Phase Developer in accordance with the terms and provisions thereof, then, except to the extent that Master Developer elects to dispute such disapproval in accordance with the dispute resolution provisions of Article 20 hereof, Master Developer shall at its option, exercisable within ten ( 10) days after its receipt of City's disapproval, notify City in writing of Master Developer's election to:
(i) become the Phase Developer for such Phase (or Partial Phase); (ii) designate another Person as the Phase Developer for such Phase (or Partial Phase); or (iii) elect to rescind its exercise of the Phase Option in question. If Master Developer does not elect an option in clause (i) or clause (ii) above within such ten (I 0) day period, Master Developer shall be deemed to have elected the option in clause (iii). If Master Developer elects the option in clause (ii) above, then such a designation shall again be a proposed assignment and processed in accordance with the terms of this Section 4.5. This process shaJI repeat itself until the earliest to occur of the following: (a) Master Developer elects to become the Phase Developer for such Phase (or Partial Phase); (b) City approves the proposed Assignment; and (c) Master Developer is deemed to have rescinded its exercise of the Phase Option in question.
4.6 Effect of Failure of Master Developer to Exercise Phase Option. Except with respect to Phases 1, 2 and 2A, if Master Developer fails to submit a Substantially Complete Phase Option Notice to City for any portion of a Phase by the applicable Outside Date (as it may be extended by Excusable Delay, if applicable), such failure shall not constitute a default hereunder by Master Developer but City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the terms of Article 7 hereof.
4.7 Requested Change Notice Procedure. The Parties acknowledge that Project development will take place over many years and that the circumstances affecting such development may change during that period. If Master Developer reasonably determines that the development of any Phase in accordance with this Agreement other than Phases I, 2 and 2A has become commercially infeasible for reasons other than the financial condition of Master Developer, then before the applicable Outside Date for Developer's submittal of any Phase Option Notice (as may be extended for Excusable Delay), Master Developer may notify City that Master Developer is willing to exercise the Phase Option and proceed with the applicable Phase only if City agrees to specified changes to the requirements of this Agreement to make the proposed development commercially feasible (the "Requested Change Notice"). The Requested Change Notice shall include a detailed description of all the terms and conditions of this Agreement that Master Developer proposes to change and the reasons why Master Developer believes that development of the applicable Phase is infeasible without the proposed changes. If Master Developer submits a Requested Change Notice and there is no uncured Material Breach by Master Developer, then all dates in the Schedule of Performance relating to that Phase shall be tolled, the City shall not terminate all or any part of this Agreement relating to that Phase and Master Developer shall retain all of its rights to· exercise the Phase Options until the Parties have negotiated proposed changes to this Agreement for a period of not less than ninety (90) days, subject to any extensions agreed to by Master Developer and City (each in its sole discretion). If City staff and Master Developer are able to agree to changes, then they shall promptly prepare a proposed amendment to this Agreement, including an extension of the Schedule of Performance permitting Master Developer a reasonable time to submit any requrred applications for amendments to the Project Approvals for review and consideration by the City Council. Any such changes shall be subject to the Approval of City in its sole and absolute discretion, following, if required, additional environmental analysis and review. If City staff and Master Developer are unable to agree on the changes to this Agreement within the time period set forth above, or if the City Council to the extent required does not Approve the proposed changes to this Agreement, then City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase ( or portion thereof) in accordance with the terms of Article 7 hereof.
4.8 Special Procedures for Phase 2A. The MCP identifies the EOS Variant for the parcel shown on the Phasing Plan as Phase 2A ("Phase 2A"). As a public benefit to the Project, the Parties have agreed to proceed with the EOS Variant in which Phase 2A will be reserved for park, recreation and open space uses that are complementary to, and do not unreasonably interfere with, the City Center Phases. In order to implement the EOS Variant in connection with the rest of the Project, Phase 2A shall be subject to the following provisions, notwithstanding anything to the contrary in this Agreement, including this Article 4:
4.8.1 Developer Rights and Obligations.
(a) Master Developer or a Phase Developer permitted
hereunder shall Take Down Phase 2A in accordance with the Schedule of Performance and at the rent set forth in Section 6.1.8 hereof.
(b) The form of Ground Lease for Phase 2A shall be
modified to reflect the following terms:
(i) The permitted uses shall be limited to interim uses that will not unreasonably interfere with the City's ability to implement the EOS Variant upon the Ground Lease termination. By example and without limitation, permitted uses shall include construction staging, temporary special events and surface parking. In addition, Phase Developer shall have 11 the right to regrade and lower the contours of Phase 2A and to export and use clean topsoil from Phase 2A for use as needed within Parcel 4 (as shown on the Phasing Plan) or elsewhere within the Project Site.
(ii) As a condition to the effectiveness of the Phase 2A Ground Lease, unless otherwise approved in connection with the Phase 2 DAP, Master Developer shall have entered into an agreement on terms reasonably satisfactory to the City governing Master Developer's obligation to provide an access road to Parcel 3 from Parcel 4 (the "Parcel 3 Access Road"), including schedule, scope of development and procedures for City approval and acceptance. Without limiting the foregoing, the improvements to be constructed under the agreement shall be consistent with the requirements of the MCP and IMP, including, without limitation, the Parcel 3 Access Road improvements described in the MCP Enhanced Open Space "EOS" Variant, and shall require Substantial Completion of the Parcel 3 Access Road no later than the effective date of the Phase 2A Lease Termination Notice (defined below). (iii) The Phase Developer shall return the Phase 2A premises to City in accordance with the requirements of the Ground Lease (including construction of the Parcel 3 Access Road); provided, however, that if Developer exports topsoil from Phase 2A, then it shall return the Phase 2A premises to the City in a rough-graded condition. (c) Upon (30) thirty days' prior written notice by the
Phase Developer to the City (the "Phase 2A Lease Termination Notice"), City and the Phase Developer shall execute a Ground Lease termination agreement in recordable form that will terminate the Phase 2A Ground Lease as of the date for termination identified in the Termination Notice, but in no event later than twenty-four (24) months after the effective date of the Phase 2A Ground Lease, subject to Section 4.8.1 (d) below.
( d) It is the intent of the Parties that the Base Rent payable under the Phase 2A Ground Lease as of the termination date will be re-allocated to the Base Rent payable under one or more Ground Lease(s) then in effect (as determined by Developer in its sole discretion to be identified in the Termination Notice). Therefore, in no event shall the termination of the Phase 2A Ground Lease become effective without the City and the applicable Phase Developer(s) entering into a concurrent amendment(s) to the Ground Lease(s) identified in the Phase 2A Lease Termination Notice that adjusts the Base Rent thereunder to fully account for the Base Rent payable to the City under the Phase 2A Ground Lease as of the termination date. In the event Developer wishes to again reallocate the Base Rent originally payable under the Phase 2A Ground Lease to future Ground Leases upon their effectiveness, City shall accommodate such request through appropriate documentation as necessary to implement the increase or decrease in Base Rent as applicable, subject to the agreement of the tenant under the applicable Ground Lease.
(e) Master Developer shall pay to the City up to Five
Million Dollars ($5,000,000) for the design and construction of the City Place Park, as described in the MCP (the "City Place Park"), of which Five Hundred Thousand Dollars ($500,000) may be used by the City for planning and design work for the initial concept design (the "City Place Park Design Contribution"), with the remaining amount to be used for construction of the Phase 2A park (the "City Place Park Construction Contribution"). City shall include its 12 anticipated City Place Park planning and design costs in its Semi~Annual Budget .and Master Developer shall advance funds for the City Place Park Design Contribution in accordance with the procedures for payment of City Costs set forth in Section 26 up to the maximum amount payable of Five Hundred Thousand Dollars ($500,000). Master Developer shall pay to City the City Place Park Construction Contribution within thirty (30) days after request by City, but in no event earlier than the City's Commencement of the City Place Park improvements. City shall use the City Place Park Construction Contribution solely for Hard Costs for construction of the City Place Park and shall provide Master Developer with quarterly invoices showing its expenditure of the City Place Park Construction Contribution up to the maximum amount. (f) Upon termination of the Phase 2A Lease, Master
Developer shall have no further liability or obligations with respect thereto except for its funding commitment under Section 4.8.l(e) above.
4.8.2 City Rights and Obligations.
(a) Upon termination of the Phase 2A Lease, City will be solely responsible for the development, maintenance and operation of City Place Park. In connection therewith, City hereby agrees to Indemnify Master Developer, each Phase Developer, and their respective Mezzanine Lenders and Mortgagees, if any, and each officer, director, Affiliate, direct or indirect interest holder, manager, trustee, contractor, agent or representative of any of the same (collectively, "Indemnified Parties") from and against any and all loss, cost, liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses (including engineers', architects' and attorneys' fees and charges) asserted against or incurred by any Indemnified Party related to the development, use, operation or maintenance of Phase 2A from and after the termination of the Phase 2A Lease except to the extent that such failure is caused by the breach of this Agreement by Master Developer, any Phase Developer, or any tenant or occupant of a Phase, or any negligence or misconduct by any Indemnified Party or any tenant or occupant of a Phase. The terms of this Section 4.8.2 shall survive the termination of this Agreement and shall survive as to each Phase of the Project Taken Down by a Developer through the expiration of the applicable Ground Lease for that Phase. (b) City, in consultation with Master Developer, shall
diligently undertake the planning and design work for the City Place Park in an expeditious manner and will use best efforts to obtain on or before the effective date of the Phase 2A Termination Notice all required local regulatory approvals (including completion of environmental review to the extent required and approval by the Planning Commission and/or the City Council) necessary to Commence construction of City Place Park improvements. (c) City shall be responsible for a community engagement process related to the development of City Park pursuant to this Section 4.8.2. (d) Upon termination of the Phase 2A Lease, City shall
restrict the use of City Place Park to park, passive and participatory recreation (such as athletic fields) and open space uses, which may include special events, fairs and festivals. Without limiting the foregoing, City shall not develop or permit the development of the City Place Park under a lease or otherwise for any residential, commercial or industrial use ( other than ancillary 13 ī
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Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the terms of Article 7 hereof.
5.3 Development Obligations. The following development obligations (collectively, the "Development Obligations") shall be included in the DAP(s) for the relevant Phases (or Partial Phases), and shall be implemented and funded by Master Developer. Each DAP shall indicate which specific Improvements are intended to fulfill each of the Development Obligations. Master Developer shall have the right to allocate the Development Obligations to the applicable Phase Developers; however, Master Developer shall remain jointly and severally liable for any failure to meet the Development Obligations in accordance with the timing and terms set forth in Section 9. I hereof.
5,3.1 Relocation of Fire Station. Development of the Project will necessitate the relocation of the existing Fire Station I 0, located at 5111 Stars and Stripes Drive (the "Fire Station"). This relocation may entail a move first to a temporary fire station location (the "Temporary Station Site") and then to a new permanent fire station location (the "Final Station Site"), or it may entail a move directly to the Final Station Site. Neither the Temporary Station Site nor the Final Station Site have been conclusively selected as of the Reference Date.
The process for review and approval of the Temporary Station Site and Final Station Site shall be as follows:
(a) Temporary Station Site Improvements.
(i) The DAP Application for Phase 1 shall include the
following information related to the temporary Fire Station: (i) the location of the Temporary Station Site, which may be on land provided by a Developer Party, City, or a third party that is not on the Project Site; and (ii) a conceptual design and construction schedule for the temporary fire station (together, the "Temporary Station Site Improvements") (if applicable). (ii) Master Developer shall Complete the Temporary Station Site Improvements Approved in accordance with the Phase DAP no later than the first Certificate of Occupancy for any Building within Phase 1; however, the City may require completion of the Temporary Station Site Improvements earlier than such date if City reasonably determines that construction of fufrastructure and/or Buildings within Phase I could interfere with access to, and/or operations of, the existing Fire Station.
(b) Final Station Site Improvements.
(i) As a condition to Commencement of fufrastructure within Phase 2, Developer shall have obtained City Council Approval of the conceptual design, location, and construction schedule for the final station (together, the "Final Station Site Improvements").
(ii) Subject to the terms of Section 5.3.l(b)(iii), below, Master Developer shall Complete the Final Station Site Improvements no later than the issuance of the first Certificate of Occupancy for any Building within Phase 2. 15 (iii) City and Master Developer may, by mutual agreement, elect to have the City construct the Final Station Site Improvements itself in lieu of Master Developer. Such election shall be made, if at all, through a separate construction funding agreement mutually agreeable to both Parties that must be executed prior to Developer's Commencement ofinfrastructure within Phase 2. If City undertakes the construction of the Final Station Site Improvements in accordance with this Section 5.3.I(b)(iii), (A) Master Developer shall not be subject to the timing requirements set forth in Section 5.3.l(b)(ii), above, and (B) in no event shall City withhold a Certificate of Occupancy for any Building within Phase 2 on the sole basis that the Final Station Site Improvements are not yet Complete. ( c) Scope of Improvements and Security. The Temporary
Station Site Improvements and the Final Station Site Improvements shall be of a size and design suitable to meet the City's needs for the time frame in question. The Final Station Site Improvements shall include a minimum of three (3) truck bays. The Temporary Station Site Improvements and Final Station Site Improvements shall be considered part of the Secured Public Improvements or Secured Phase Improvements for the Phase in which they are required to be constructed. As such, construction of the Temporary Station Site Improvements and Final Station Site Improvements must be secured by Adequate Security pursuant to Article 28 hereof.
5.3.2 Minimum Initial Buildings. The "Minimum Initial
Buildings" shall consist of the following: (i) not less than six hundred thousand (600,000) square feet of office, hotel and/or Retail Buildings in Phase 1, which shall include a minimum of a three hundred (300) key (or larger) hotel other than an extended stay hotel and fifty thousand (50,000) square feet of Retail uses; (ii) not less than seven hundred thousand (700,000) square feet of Buildings in Phase 2, consisting of (x) five hundred thousand (500,000) square feet of Retail, and (y) two hundred thousand (200,000) square feet of office and/or a three hundred (300) key (or larger) hotel; and (iii) not less than two hundred (200) residential units in the aggregate in Phases 1 and 2 (the "Minimum Residential Buildings"). The Minimum Initial Buildings may be submitted in one or more DAPs within Phases 1 and 2 and may be constructed over time, so long as all of the Minimum Initial Buildings are Completed by the Outside Dates therefor set forth in the applicable Phase Schedule of Performance, in accordance with Article 9 hereof (as such Outside Dates may be extended for Excusable Delay).
5.3.3 Additional Initial Buildings. In addition to the Minimum Initial Buildings, the Master Developer shall use best efforts to build an additional two hundred thousand (200,000) square feet of office, Retail and/or residential Buildings in Phase I, and shall use best efforts to build an additional two hundred and thirty thousand (230,000) square feet of office, Retail and/or residential Buildings in Phase 2 (collectively, the "Additional Initial Buildings"). The Additional Initial Buildings may be included in one or more DAPs within Phases 1 and 2, as applicable, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.
5.3.4 Minimum Retail Buildings. The "Minimum Retail
Buildings" shall consist of the following: (i) not less than fifty thousand (50,000) square feet of Retail Buildings in Phase 1; and (ii) not less than seven hundred and fifty thousand (750,000) square feet of Retail Buildings in the aggregate in Phases 2 and 3. The total square feet of the Minimum Initial Buildings and Additional Initial Buildings intended for such Retail uses within 16 the applicable City Center Phase(s) shall be included in any calculation of Minimum Retail Buildings. The Minimum Retail Buildings may be included in one or more DAPs within each of the City Center Phases and may be constructed over time, so long as all of the Minimum Retail Buildings are Completed by the Outside Date therefor set forth in the applicable Phase Schedule of Performance, in accordance with Article 9 hereof (as such Outside Dates may be extended for Force Majeure).
5.3.5 Additional Retail Buildings. Developer shall use best efforts to build an aggregate of one million five hundred thousand (1,500,000) square feet of Retail, within Phases 2 and 3 ( collectively, the "Additional Retail Buildings"). The total square footage of the Minimum Retail Buildings within Phases 2 and 3 shall be included in any calculation of the Additional Retail Buildings. The Additional Retail Buildings may be included in one or more DAPs within Phases 2 and 3, as applicable, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.
5.3.6 Department Stores. Without limiting the foregoing provisions regarding the Minimum Retail Buildings and Additional Retail Buildings, Developers shall use best efforts to Complete and ensure the opening of two (2) to three (3) department stores of one hundred thousand (100,000) gross square feet or larger with middle to high price points in terms of caliber of merchandise (each, a "Major Department Store"), at least two (2) of which would be stores that are not presently located within the City, unless otherwise reasonably approved by City. Examples of the contemplated caliber of "Major Department Stores" include Nordstrom and Neiman Marcus. The Major Department Stores may be included in one or more DAPs within each of Phase 1, Phase 2, and/or Phase 3, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.
5.3.7 Best Efforts for Additional Buildings and Additional Retail Buildings. For purposes of Sections 5.3.3, 5.3.5, and 5.3.6 hereof, "best efforts" shall mean the following:
(a) Required Efforts. The applicable Phase Developer
shall engage in diligent marketing efforts reasonably designed to identify and obtain creditworthy tenants at market rates sufficient to justify the construction of the Additional Buildings, Additional Retail Buildings, or Major Department Stores, as applicable. On the earlier of (i) the date that is sixty (60) days after the Effective Date of this Agreement or (ii) the submission of a Phase Option Notice for any Phase, Master Developer shall submit to the City Manager a report that describes the efforts undertaken by Master Developer and each applicable Phase Developer to achieve the development of the Additional 'Buildings, Additional Retail Buildings, or Major Department Stores within Phase I, Phase 2 and Phase 3, as applicable (the "Best Efforts Report"). Master Developer shall subsequently submit an updated Best Efforts Report to the City Manager according to the following schedule: (a) every six (6) months after submission of the first Best Efforts Report; (b) as part of the submission of a Phase Option Notice for Phase I, Phase 2, and/or Phase 3; (c) as part of the submission of a DAP for Phase 1, Phase 2, and/or Phase 3; and (d) as part of any request to implement an Alternate Leasing Plan (as described in Section 5.3.7{b) below). The Best Efforts Report shall include a description of the leasing plan for the applicable Phase, marketing and leasing outreach efforts designed to identify and obtain tenants as necessary to justify the construction and/or tenanting of the Additional Buildings, 17 Additional Retail Buildings, or Major Department Stores, a description of the success or failure of such efforts and a list of brokers engaged to market the property, if any, recognizing that the majority of Master Developer's leasing efforts may be conducted in-house. Master Developer's obligation to submit updated Best Efforts Reports shall continue until Master Developer has either achieved the development of the Additional Buildings, Additional Retail Buildings, and Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, or has obtained relief from all or a portion of such requirement, as described in Section 5.3 .7(b) below. (b) Alternate Leasing Plan/Relief from Best Efforts. The Parties recognize that, despite best efforts, many factors could contribute to Developer's failure to achieve some or all of the Additional Buildings, Additional Retail Buildings, or Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, including a lack of market demand, financial infeasibility based on construction and entitlement costs (including availability of labor and materials), prevailing market rents and the availability of financing at commercially reasonable terms. If, any time after Take Down for the applicable Phase, Developer reasonably determines that despite its best efforts, it will be unable to achieve some or all of the Additional Buildings, Additional Retail Buildings, or Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, and that an alternative leasing plan would enable the Phase Developer to feasibly develop the Development Parcels with other uses that may not satisfy, in part or in full, the achievement of the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores (the "Alternate Leasing Plan"), Developer may pursue an Alternate Leasing Plan and be relieved of the obligation to undertake best efforts for all or a portion of the Additional Buildings, Additional Retail Buildings, or Major Department Stores for the applicable Phase in accordance with the process set forth in this Section 5.3.7{b). In order to be relieved of the best eff01ts obligation, Developer shall first submit to the City a written request that it be relieved of all or a portion of its best efforts obligations, which request will include the following: (i) a written request as to the nature and scope of the requested relief, including the applicable Phase(s) and square footage of improvements; (ii) a copy of its Alternate Leasing Plan for the applicable Phase(s); and (iii) an updated Best Efforts Report covering a minimum period of twenty-four (24) months (starting with the April 2013 execution of the ENA) that will include a description of factors that have contributed to Developer's inability to develop the applicable Additional Buildings, Additional Retail Buildings, or Major Department Stores for which it seeks relief. Such factors may include market studies showing a lack of demand, pro formas, case histories describing negotiations with major tenants and the reasons that such tenants were unable or unwilling to lease the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores, the availability of financing at commercially reasonable terms and/or costs of construction (including availability of labor and materials). Upon receipt, City and Developer shall meet and confer in good faith for a period of up to ninety (90) days to review and discuss the updated Best Efforts Report and the Alternate Leasing Plan. The parties' rights and obligations during such ninety (90) day period shall be as follows:
(i) Within the first forty-five (45) days of the ninety (90) day period, the City Manager shall present an informational report to the City Council concerning the Master Developer's Best Efforts Report, Alternate Leasing Plan, and request for relief pursuant to this Section 5.3.7{b). The Master Developer shall be invited to participate in the presentation, and the City Council will be invited to provide feedback on the request. 18 (ii) During the ninety (90) day meet and confer period, City shall have the right to suggest additional marketing efforts or revisions to the Alternate Leasing Plan, to which Developer shall be obligated to respond in good faith by (a) taking any specific steps requested by City, including but not limited to contacting certain potential tenants, and (b) reasonably exploring any other options suggested by City. Notwithstanding the foregoing, however, the updated Best Efforts Report and Alternate Leasing Plan shall not be subject to City approval, nor shall Developer be obligated to adopt or institute changes thereto proposed by the City.
(iii) Prior to the expiration of the ninety (90) day period, so long as Developer has complied with the substantive and procedural requirements set forth in this Section 5.3.7(b), the City Manager shall issue a letter relieving Developer of the applicable best efforts requirement.
Nothing herein shall relieve Developer of its obligation to obtain the approvals specified in the DAP Procedures for the Alternate Leasing Plan (which shall be processed in accordance with the DAP Procedures and not withheld for failure to include the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores) or any amendment to the MCP to the extent required (which may be given or withheld by City in its sole discretion). ( c) The issuance of a Certificate of Occupancy for any portion of the Additional Initial Buildings or Additional Retail Buildings, or the opening for business of the Major Department Stores shall satisfy the best efforts requirements under Sections 5.3.3, 5.3.5, and/or 5.3.6 hereof, as applicable, as to those improvements.
5.4 Satisfaction of Multi-Phase Development Obligations.
5.4.1 Because the Minimum Residential Buildings can be satisfied between Phases 1 and 2, the DAP for Phase 1 shall indicate whether or not such Development Obligation will be met by Improvements constructed as part of Phase 1 or if all or a portion of such Development Obligation will be deferred to Phase 2 (which will include verification that residential uses will be petmitted by environmental regulatory plans to be constructed on Phase 2 and that Developer deems the conditions of such residential development on Phase 2 consistent with environmental regulatory plans to be feasible). If all or a portion of the Development Obligation will be deferred to Phase 2, then the DAP for Phase 2 shall demonstrate how such Development Obligation will be satisfied within Phase 2.
5.4.2 For all other Development Obligations that can be satisfied between two (2) or more of the City Center Phases (i.e., the Minimum Retail Buildings, the best efforts requirements for the Additional Retail Buildings, and the best efforts requirements for Major Department Stores), the DAP for Phase 2 shall indicate whether or not all of each such Development Obligation will be met by Improvements constructed as part of Phase 2, or if part of such Development Obligation will be deferred to Phase 3. If some of the Development Obligation will be deferred to Phase 3, then the DAP for Phase 2 shall also include a preliminary construction schedule that shall demonstrate how such Development Obligation will be satisfied between Phase 2 and Phase 3.
19 5.4.3 The DAP for Phase 3 shall indicate how any Development Obligations that may be allocated to Phase 3 will be met with construction of City Center Phase 3, to the extent that such Development Obligations have not been previously satisfied by the inclusion of Improvements within the DAPs for Phases 1 and/or 2, as applicable.
5.4.4 If any portion of the Development Obligations allocable between the Phases is deferred to Phase 3 pursuant to Section 5.4.2, above, but Phase 3 is not Taken Down by the applicable Outside Date set forth in the Schedule of Performance, then such Development Obligations shall be re-allocated to Phase 2, and the Phase Developer for Phase 2 shall take all necessary actions to ensure that such Development Obligations are Completed in accordance with a revised Phase Schedule of Performance Approved by the City in accordance with Section 9. l .2(a).
5 .5 Parking and Access. Parking and access generally shall be governed by the DAPs and the Master CC&Rs. In addition, Master Developer, Phase Developers and City will cooperate and manage portions of the Tasman Parcel, Airspace Parcels and City Landfill Parcels so that approximately three thousand (3,000) parking spaces ("Non-NFL Event Parking Spaces") will be available to serve non-NFL events at Levi's Stadium. Concurrently with the first DAP application, to be updated concurrently with each subsequent DAP application, Master Developer and City will work cooperatively on preparing a Parking Management Plan (the "Parking Management Plan") that will show how the Non-NFL Event Parking Spaces will be accommodated on all remaining City-owned property within the Project, and, if all of the Non-NFL Event Parking Spaces cannot be accommodated on City-owned property (e.g., as future Phases are Taken Down and City-owned property is reduced), within the non-reserved retail parking developed for any Phases. The Parking Management Plan, which shall survive the termination of this Agreement, will incorporate the following underlying principles: (1) NonNFL Event Parking Spaces will be prioritized on City-owned property that has not been Taken Down; (2) City will take reasonable measures at its sole cost and expense to locate the Non-NFL Event Parking Spaces on property not then Ground Leased to Developer at the time in question, including any paving, striping, operation and management that City deems to be necessary in its sole discretion; and (3) Non-NFL Event Parking Spaces that are proposed on Development Parcels that are subject to a Ground Lease will be available on a first-come, first-serve basis within non-reserved retail parking developed for the applicable Phase.
6. Ground Leases. Following satisfaction of the conditions set forth in Section 6.2 hereof, and prior to the applicable Outside Date set forth in the Schedule of Performance (as such Outside Date may be extended due to Excusable Delay, if applicable), City and the applicable Phase Developer shall enter into a Ground Lease for a Phase. A Phase Developer shall be deemed to have Taken Down the Development Parcel(s) within a Phase upon the effective date of the Ground Lease for the applicable Phase.
6.1 Form of Ground Leases . The form of Ground Lease to be executed for Phase 1 shall be the form attached hereto as Exhibit G-1, and the form of Ground Lease to be executed for Phases 2 through 7 (as depicted in the Phasing Plan as of the Reference Date) shall be the form attached hereto as Exhibit G-2, in each case modified or supplemented as follows:
20 6.1.1 The Phase Developer shall be inserted into the caption to the Ground Lease and as a signatory, in each case as "Tenant" thereunder, and the proper Phase shall be identified in all places where the term is used.
6.1.2 The dates of all documents referred to in the Ground Lease shall be inserted and any other minor, administrative changes shall be made, as appropriate.
6.1.3 The Commencement Date and Expiration Date (as defined in the Ground Lease) shall be updated, as applicable, and consistent with the dates directed in the forms of Ground Lease attached as Exhibit G-1 and Exhibit G-2.
6.1.4 For Phases 2 through 1; the legal description of and reference to the Development Parcel(s) (or portions thereof) encompassing the Phase in question shall be inserted where required.
6.1.5 For Phase 2A, the Ground Lease shall reflect the terms described in Section 4.8 hereof.
6.1.6 The definition of Project Documents shall be amended to reflect any other additional project documents pertaining to the development and use of the Phase that were entered into after the Reference Date and were Approved by City and Master Developer or any amendments to existing Project Documents.
6.1.7 The definitions and other provisions of Article 3 of the Ground. Lease that require revision to reflect dates as directed in the form of Ground Lease attached as Exhibit G-1 and Exhibit G-2 shall be updated to reflect the applicable dates as so directed.
6.1.8 For Phases 2 through 7, subject to the terms of Section 6.1.9, below, the initial annual "Base Rent" for each Ground Lease shall be inserted into Article 3 thereof, and shall be, for each applicable Phase, as shown in the Phasing Plan for the Project as of the Reference Date (such original Phase boundaries being referred to herein as the "Original Phase Boundaries"):
Phase 2 - One Million Five Hundred Thousand Dollars ($1,500,000); Phase 2A - Seven Hundred Fifty Thousand Dollars ($750,000); Phase 3 - Five Hundred Thousand Dollars ($500,000);
Phase 4- Seven Hundred Fifty Thousand Dollars ($750,000); Phase 5 - Seven Hundred Fifty Thousand Dollars ($750,000); Phase 6 - Eight Hundred Seventy-Five Thousand Dollars ($875,000); and Phase 7 -Eight Hundred Seventy-Five Thousand Dollars ($875,000). 21 6.1.9 Notwithstanding the Base Rent amounts provided in Section
6.1.8, above, the following modifications shall be made to the initial annual Base Rent for a particular Phase:
(a) If the Phasing Plan has been altered such that the gross square footage of the overall Phase has changed, then the initial annual Base Rent for the Phase in question shall be determined by multiplying the Base Rent for the applicable Phase as set forth in Section 6.1.8 by a fraction, the numerator of which is the gross square footage of the altered footprint of the Phase (calculated based upon the Final Tract Map for the Phase) and the denominator of which shall be the gross square feet of the original footprint of the Phase, as shown in the Phasing Plan for the Project as of the Reference Date. (b) Notwithstanding the terms· of Section 6. l .9(a). above, if the altered Phase encompasses portions of more than one (1) Phase pursuant to the Original Phase Boundaries, then the initial annual Base Rent for the altered Phase shall be calculated separately for each portion of the altered Phase that is located within different Original Phase Boundaries, based on the Base Rent for the Original Phase Boundaries in question as set forth in Section 6.1.8.
(c) No reallocation of square footages of Buildings
pursuant to a DAP shall result in a change in the amount of Base Rent due under the Ground Lease for the Phase in question.
( d) To the extent that the Phase Option for any of Phases 3 through 7 has not been exercised within ten (10) years after the execution and delivery of a Ground Lease for Phase 2, then the initial annual Base Rent for each such Phase shall increase at the rate of three percent (3%) per annum from the end of such period until the date that the Phase Option is exercised with respect to such Phase.
6.1. l O The construction obligations described in Article 9 of this Agreement shall be incorporated into the Ground Leases as specified therein to the extent applicable.
6.1.11 The Ground Lease for each Phase shall reserve easements as necessary for public utilities and rights of way.
6.1.12 Except for the Phase 2A Ground Lease, the Ground Lease for each Phase shall require the Phase Developer to construct the applicable Infrastructure and open space facilities approved in connection with the applicable Phase DAP application in accordance with the MCP and IMP. Notwithstanding the foregoing, the Parties recognize that the City Center North Neighborhood Park is included with Phase 2A for which no OAP application will be submitted. Therefore, if the Phase 3 DAP Application (or the Phase 2 OAP Application if required for compliance with CSCC Chapter 17.35, as it may be amended from time to time) does not include the relevant information required under the OAP Procedures pertaining to the City Center North Neighborhood Park (as described in the MCP), Developer shall include the proposed terms for an agreement regarding the timing and procedures for approval and 22 development of the City Center North Neighborhood Park, which agreement shall be a condition of approval to the applicable DAP Application.
6.1.13 If the approved Phase would allow the development of fractional interest units, the Ground Lease must include a mechanism establishing a transient occupancy in-lieu fee running with the land, payable in the same manner and subject to the same tenns and conditions as the City's Tax on Transient Occupancy of Hotel Rooms (CSCC Chapter
3.25 (as it may be amended from time to time)).
6.1.14 The Ground Lease shall set forth all of the Mitigation Measures set forth in the Project .MMRP that are applicable to the Phase in question, and obligate the Phase Developer to perform, or cause to be performed, all such Mitigation Measures.
6.1.15 The Landfill related costs described in Section 12.2 of the Ground Lease attached as Exhibit G-2 and allocated to such Phase shall be finalized.
6.1.16 If the approved Phase would allow for the development of Retail uses other than restaurants, the Ground Lease for such Phase shall require the Tenant thereunder to use commercially reasonable efforts to (i) focus on mid-to-high level price points, and (ii) include either national stores or local enterprise that have a demonstrated track record of providing unique and high quality merchandise and service.
6.1.17 If the approved Phase would allow for the development of Retail uses, the Ground Lease for such Phase shall require the Tenant thereunder to prepare a leasing plan that will be finalized after consultation with (but not approval by) the City. The leasing plan will be updated every two (2) years, or more frequently as reasonably determined by the Tenant, and will contemplate a variety of brands and merchandise in order to appeal to a wide demographic of customers.
6.1.18 If the approved Phase contains all or any part of the Station Area, the Ground Lease for such Phase shall provide that the Tenant thereunder shall reconvey that part of the Station Area to City upon City's request, in accordance with the terms of Section
15.3, with no corresponding reduction in Base Rent.
6.1.19 Such other matters as are Approved by both Master Developer and the City Manager.
Conditions Precedent to Execution of Ground Leases.
6.2.1 Phase Developer Conditions to Execution of Ground Leases.
The following are conditions precedent to the execution and delivery of a Ground Lease by a Phase Developer with respect to a particular Phase (or Partial Phase), to the extent not waived by such Phase Developer by notice to City:
(a) City shall have performed in all material respects all obligations under this Agreement and the Development Agreement that relate to the Phase in question and are required to be performed by City on or before the date of execution of such Ground Lease;
23 (b) Prior to execution of the Ground Lease for the. first Phase to be Taken Down, City and Master Developer shall have executed a Landfill Operation and Management Agreement in accordance with Section 14.1, below; (c) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have agreed upon the form of Master Conditions, Covenants and Restrictions (the "Master CC&Rs") that shall contain at a minimum, the provisions set forth in Exhibit H attached hereto, and such form shall have been recorded against the title of the City Landfill Parcels, the Airspace Parcels, and the Tasman Parcels prior to or concurrently with the delivery of the Ground Lease for the first Phase to be Taken Down; (d) In accordance with Article 13, below, the
Title Company shall be irrevocably committed to issue to the Phase Developer a CL TA leasehold title insurance policy (or at the Phase Developer's option an ALTA leasehold title insurance policy), with such endorsements, reinsurance and direct access agreements as the Phase Developer shall reasonably designate and the Title Company shall accept; provided, however, that the applicable Phase Developer shall have used commercially reasonable efforts to secure such insurance policy. The title policy will be in an amount reasonably designated by the Phase Developer and acceptable to the Title Company, and will insure that leasehold title to the property at issue and all appurtenant easements are vested in the Phase Developer, subject only to the Permitted Exceptions. If the Phase Developer elects to obtain an ALTA leasehold policy, such Phase Developer shall be responsible for securing any and all surveys, engineering studies and other documents required to obtain an ALTA leasehold policy in sufficient time to permit execution of the Ground Lease as required by this Agreement. A title insurance policy complying with this paragraph (d) is referred to herein as the "Phase Title Policy"; (e) Except for Phase 2A, the applicable Phase Developer shall have obtained all requisite Authorizations necessary to Commence construction of the Infrastructure for the applicable Phase in accordance with the terms of this Agreement and the applicable Schedule of Performance, and such Authorizations shall have become final, binding and non-appealable; and
(f) In the event there are tenants or other occupants
lawfully occupying any portion of the Phase who are entitled by Applicable Law (including, to the extent applicable, the California Relocation Act (sections 7260 et seq. of the California Government Code)) to relocation assistance, such tenants or other occupants shall have been relocated in accordance with the terms of Section 18.2 hereof.
6.2.2 City Conditions to Execution of Ground Leases. The following are conditions precedent to the execution and delivery of a Ground Lease by City with respect to a particular Phase (or Partial Phase), to the extent not waived by City by notice to the applicable Phase Developer:
(a) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have executed a Landfill Operation and Management Agreement in accordance with Section 14.1, below; 24 (b) Prior to execution of the Ground Lease for Phase 1, the City Council shall have Approved all required documentation related to the relocation of the existing Fire Station, pursuant to Section 5 .3 .1 hereof; ( c) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have agreed upon the form of the Master CC&Rs that shall contain at a minimum, the provisions set forth in Exhibit H attached · hereto, and such form shall have been recorded against the title of the City Landfill Parcels, the Airspace Parcels, and the Tasman Parcels prior to or concurrently with the delivery of the Ground Lease for the first Phase to be Taken Down. The Master CC&Rs shall name City as a third party beneficiary with respect to the provisions thereof benefitting City; ( d) Except for Phase 2A, City shall have approved a DAP that encompasses all of the area to be Taken Down pursuant to the Ground Lease, in accordance with the terms of this Agreement;
(e) A Tentative Subdivision Map shall have been
Approved that includes the applicable Phase in accordance with City's Subdivision Code; (f) Except for Phase 2A and further subject to Section
29.34 (Limitations on Disclosure), the Phase Developer shall have provided to City for informational purposes an updated Financing Plan for the applicable Phase. (g) Except for Phase 2A, the Phase Developer shall have provided to City an anticipated construction schedule for all Improvements depicted in the DAP(s) for such Phase, including any Improvements that are intended to meet those Development Obligations set forth in Sections 5.3.2, and 5.3.4. If the Phase subject to this Section 6.2.2 is Phase 2 or Phase 3, the construction schedule shall also include any updates to the allocation of Development Obligations previously provided pursuant to Section 5.4 hereof. (h) Master Developer and the Phase Developer shall have. performed in all material respects all other obligations under this Agreement (including all Exhibits) that relate to the Phase in question and are required to be performed by Master Developer and the applicable Phase Developer on or before the date of execution of the Ground Lease for such Phase, including paying the Annual Landfill Costs and all City Costs then due and owing from Master Developer to City;
(i) Phase Developer shall have furnished to City
certificates of insurance or duplicate originals of insurance policies as and to the extent required under the Ground Lease; and
(i) In the event there are tenants or other occupants
lawfully occupying any portion of the Phase who are entitled by Applicable Law (including, to the extent applicable, the California Relocation Act (sections 7260 et seq. of the California Government Code)), to relocation assistance, such tenants or other occupants shall have been relocated in accordance with the terms of Section 18.2 hereof. 25 6.3 Ground Leases for Partial Phases. Master Developer shall have the option to Take Down one or more Partial Phases instead of a full Phase, so long as the conditions set forth in Section 4.2.1 and Section 6.2 are met or waived by the applicable Party with respect to such Partial Phase.
6.3.1 Subsequent Partial Phases. To the extent that the conditions set forth in Section 6.2 are later met or waived by the applicable Party with respect to another Partial Phase within the same Phase by the applicable Outside Date (as such date may be extended for Excusable Delay, if applicable), then City and the applicable Phase Developer shall enter into a Ground Lease for the subsequent Partial Phase. The Phase Developer shall be deemed to have Taken Down such Partial Phase upon the effective date of the Ground Lease for the applicable Partial Phase.
6.3.2 Initial Base Rent for Partial Phases. Notwithstanding the provisions of Sections 6. l.9(a) and 6.l .9(b ), above, the initial annual Base Rent for any Partial Phase other than the City Center Phases shall be detennined by multiplying the Base Rent for the applicable Phase as set forth in Section 6.1.8 (as increased, if applicable, pursuant to Section
6.1.9(d) hereof) by a fraction, the numerator of which is the gross square feet of the land area of the Partial Phase and the denominator of which shall be the gross square feet of the land area of the Phase, as shown in the Phasing Plan for the Project as of the Reference Date.
Notwithstanding the foregoing, however, if the altered Phase encompasses portions of more than one Phase pursuant to the Original Phase Boundaries, then the initial annual Base Rent for the altered Phase shall be calculated separately for each portion of the altered Phase that is located within different Original Phase Boundaries, based on the Base Rent for the Original Phase Boundaries in question as set forth in Section 6.1.8.
6.3.3 Initial Base Rent for Partial Phases within City Center Phases.
If Master Developer delivers a Phase Option Notice for a Partial Phase within one of the City Center Phases, the Base Rent for the first Partial Phase with such Phase shall be as set forth in Section 3 .1.2 of the form of Ground Lease attached hereto as Exhibit G-1 for Phase 1 and as set forth in Section 6.1.8 hereof for City Center Phases 2 and 3 without adjustment (in each case, the "Initial Phase Base Rent"). Notwithstanding the foregoing, at Master Developer's request, the Base Rent payable under each Ground Lease for a Partial Phase within the City Center Phases may be adjusted after the initial Ground Lease within that Phase to allocate Base Rent proportionally among the Pattial Phases with that Phase, so long as the total amount of Base Rent attributable to the Phase is never less than the Initial Phase Base Rent at any time from and after the first Take Down of the Partial Phase (as such Initial Phase Base Rent may be increased over time in accordance with Section 6.1.9(d) hereof). For example, if Master Developer exercises its Phase Option for fifty percent (50%) of the land area of Phase 1 as a Partial Phase, the Base Rent under the initial Ground Lease will be one million, five hundred thousand dollars ($1,500,000), as required in Section 6.1.8. When Master Developer exercises its Phase Option for the remaining Partial Phase within Phase 1, Article 3 of the first Partial Phase Ground Lease will amend the Base Rent to seven hundred fifty thousand dollars ($750,000) (subject to agreement by the first Phase Developer) and the Base Rent for the second Partial Phase Ground Lease pursuant to Article 3 will be set at $750,000.
26 6.4 Memorandum of Ground Lease and Revised Phasing Plan. Upon the execution and delivery by City and the Phase Developer of the Ground Lease for a Phase, City shall execute and deliver (i) a Memorandum of Ground Lease in recordable form in substantially the form attached to the Ground Lease, and (ii) a revised Phasing Plan which shall set forth the updated Phasing Plan that reflects the boundaries of the Phase then being Taken Down. Within five (5) Business Days after execution of the Ground Lease, Master Developer shall record the Memorandum of Ground Lease in the Official Records and shall deliver to City original copies of the fully-executed Ground Lease and Memorandum of Ground Lease. The revised Phasing Plan shall be subject to Section 29.29 hereof (Plans on Record with City).
6.5 , Effect of Failure of Master Developer to Take Down a Phase. Except with respect to Phases 1, 2 and 2A, if Master Developer fails to Take Down any portion of a Phase by the applicable Outside Date (as it may be extended by Excusable Delay, if applicable), such failure shall not constitute a default hereunder by Master Developer but City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the terms of Article 7 hereof.
6.6 Concurrent Events. Concurrently with the execution of each Ground Lease, City, Master Developer, and the applicable Phase Developer, as applicable, shall take the following actions:
6.6.1 The applicable Phase Developer or Master Developer shall cause the Final Map for the Phase to be recorded in the Official Records; and
6.6.2 The applicable Phase Developer and Master Developer shall cause the Master CC&Rs to become applicable to the Phase by causing to be recorded against such Phase an annexation in the form required under the Master CC&Rs, with such changes thereto as Master Developer, the Phase Developer and City shall mutually Approve.
7. Failure to Meet Phase Outside Dates.
7.1 Notice of Intent to Terminate. The Schedule of Performance attached as Exhibit F hereto ·sets forth the Outside Dates for certain events over the life of the Project, including: (i) submission of Phase Option Notices for each Phase; (ii) submission of a Substantially Complete DAP for each Phase; and (iii) Taking Down each Phase (these three Outside Dates together shall be referred to herein as the "Phase Outside Dates"). Except with respect to Phases 1, 2 and 2A, if Developer fails to meet any Phase Outside Date (as it may be extended by Excusable Delay, if applicable) for all or any portion of a Phase, such failure shall not constitute a default hereunder by Developer, but City may notify Developer that City intends to terminate Developer's rights with respect to the portion of the applicable Phase for which Developer has not met the Outside Date in question, based on the Phase boundaries depicted in the Phasing Plan then in effect (the "Phase Termination Notice"). If Developer does not respond to such Phase Termination Notice by (i) submitting the Phase Option Notice, (ii) submitting the applicable DAP, or (iii) Taking Down the applicable Phase, as applicable, within forty-five (45) days after receipt of such notice, City may set a date for a public meeting on such termination and notify Developer of the meeting date, after which City may, with the Approval 27 of the City Council following the public meeting (and subject to Section 7.2.8, below), terminate Developer's rights with respect to the portion of applicable Phase that is the subject of the Termination Notice. Upon any such tennination, Developer's rights and obligations under this Agreement for the affected real property shall, subject to Section 7.2.8, below, terminate and City shall have the right to record a Notice of Termination as set forth in Section 29.30. No such termination shall affect Developer's rights with respect to any Phase or Partial Phase for which Developer has complied with the applicable Outside Dates under any Phase Option already exercised or its rights to exercise any future Phase Option not yet exercised. In the event of such . termination, Developer shall have no further obligation to install Infrastructure required for such Phase(s) (or Partial Phase(s)) as may be necessary to support the other Phases or Partial Phases within the Project, as set forth in the lMP and MCP, except to the extent expressly assumed by Master Developer pursuant to a cost reimbursement agreement entered into between Master Developer and City or a Person other than Master Developer or an Affiliate of Master Developer (a "Third Party") that is offered the applicable Phase as part of a Development Opportunity in accordance with Section 7.2.8, below, each in their sole discretion. In the event of such termination, the Base Rent adjustment in the 45th Project Lease Year, as calculated in Section 3 .3 .2(b) and 3 .3 .3 of the form of Ground Lease, shall be adjusted so that the thirty million dollars ($30,000,000) set forth in those sections shall be thirty million dollars ($30,000,000) multiplied by a fraction, the numerator of which is the gross square footage of the footprint of Phases 2 through 7 less the gross square footage of the footprint of any of Phases 2 through 7 that have been terminated (as such gross square footage is calculated based upon the Final Map for each Phase), and the denominator of which will be the gross square footage of all Phases 2 through 7 (calculated based upon the Final Map for each Phase).
7.2 Offer of Development Opportunity. If City exercises its termination rights as set forth in Section 7 .1, above, City may in its sole discretion offer the development opportunity that was terminated (the "Development Opportunity") to other qualified developers under a request for proposals or other process determined by City in its sole discretion, subject to the following:
7.2.l The boundaries of the land subject to the Development Opportunity shall be as identified on the conceptual Phasing Plan then in effect.
7.2.2 Except as expressly provided under Section 7.2.4 and Section
7.2.5 hereof, City may require that the Development Opportunity conform to the material requirements of this Agreement with respect to the applicable real property or may make such changes to the Development Opportunity as City determines are appropriate under the circumstances.
7 .2.3 lf City offers the Development Opportunity to others following termination under Section 7.1, City must do so as part of an open and competitive process and, so long as Master Developer is not in Material Breach, Master Developer shall have the right to participate in the competitive process.
7.2.4 In formulating the Development Opportunity, City will not permit uses that are incompatible with Developer's development rights under any portion of this Agreement that has not been terminated.
28 7.2.5 The acceptance by a Third Party of the Development Opportunity shall be documented by the execution of a Development Opportunity Lease that, among other things, shall require the Third Party to: (i) conform to the requirements of the MCP (as may be amended from time to time); (ii) be obligated to pay its fair share of Annual Landfill Costs to be determined by a formula in which the total Annual Landfill Costs payment is multiplied by a fraction, the numerator of which is the gross square footage of the footprint of the Phase (calculated based upon the Final Map for the Phase) and the denominator of which shall be the gross square feet of the Landfill Parcel as described on Exhibit B-1; (iii) undertake, at its sole cost and expense, the obligations and costs to construct, maintain, repair, and service elements of the Phase that are allocated to the Developer in Article 15 hereof; (iv) comply at its sole costs and expense with all Mitigation Measures attributable to the Phase that are the responsibility of Tenant under the Ground Lease or Developer, including, without limitation, funding and improvement obligations under the Multimodal Improvement Plan in accordance with the Development Agreement; and (v) execute and deliver such documents as are reasonably required in order for (a) such Phase to be subject to the Master CC&Rs and the Landfill Operation and Management Agreement; and (b) such Person to be obligated to provide Master Developer (and any Phase Developer as applicable) with such rights of access as may be reasonably required to fulfill Master Developer's (and any Phase Developer's) remaining obligations under this Agreement, the Landfill Operation and Management Agreement, and any applicable Ground Lease, such as Developer's obligation to construct the Initial Improvements and any Infrastructure and to allow Master Developer or any Phase Developer to access their property prior to Completion and acceptance of public rights-of-way.
7.2.6 Master Developer and any applicable Phase Developers shall execute and deliver any easements, Master CC&R amendments, or other such documents that are reasonably required in order for the Third Party to develop the applicable property in accordance with the terms of the Development Opportunity Lease offered by the City, so long as such development is not incompatible with the development rights of Master Developer and such Phase Developer(s) under this Agreement and any applicable Ground Leases. Neither Master Developer nor any applicable Phase Developers shall object to any amendments to the MCP so long as such amendments are not incompatible with the development rights of Master Developer and such Phase Developer(s) under this Agreement and any applicable Ground Leases. The terms of this Section 7.2.6 shall survive the expiration or earlier termination of this Agreement.
7.2.7 So long as City offers the Development Opportunity under an open and competitive process that is consistent with the terms of this Article 7, Developer shall have no right to challenge, limit or contest City's process or the offering of the Development Opportunity to others as set forth in this Article 7.
7.2.8 Upon any termination under this Article 7: (i) the termination shall be without any cost reimbursement or other obligation to Developer; and (ii) City shall release Developer from all obligations that relate to the tenninated portions of this Agreement, but excluding any Indemnities, Financial Obligations, or other obligations that survive termination.
29 7.2.9 All references to ''Master Developer" in this Article 7 shall be deemed to include all Affiliates of Master Developer, if applicable, but shall not include Third Parties.
8. Permits to Enter.
For any Infrastructure to be constructed by Master Developer or a Phase Developer pursuant to the DAP for the applicable Phase that is located on land owned by the City that has not been conveyed to Master Developer or the applicable Phase Developer by Ground Lease or easement, City shall enter into a permit to enter with the applicable Phase Developer, substantially in the form attached hereto as Exhibit J (each, a "Permit to Enter").
The Permit to Enter shall become effective no earlier than the effective date of the applicable Ground Lease, unless such requirement is waived by City in its sole discretion. If there is any disagreement between City and the applicable Phase Developer as to the terms of any such easement or Permit to Enter, such matter shall be submitted to dispute resolution in accordance with the terms of Article 20 hereof.
9. Construction Obligations.
9.1 Timing for Commencement and Completion of Certain Improvements.
9.1.1 Commencement and Prosecution oflnfrastructure. Following the Take Down of a Phase, the applicable Phase Developer shall (i) Commence all Infrastructure for such Phase on or before the applicable Outside Date therefor as set forth in the Schedule of Performance (subject to Excusable Delay), as relevant, and (ii) use commercially reasonable efforts to prosecute such Infrastructure to Completion in accordance with this Article 9 (subject to delays due to Force Majeure). Failure to fulfill either of these requirements with respect to any Phase shall constitute a Material Breach of this Agreement under the terms of Section 21.2.5. 9 .1 .2 Additional Timing Obligations With Respect to Phases 1, 2, and 3. Master Developer and the applicable Phase Developers have the following additional timing obligations with respect to the City Center Phases:
(a) Approval of Phase Schedules of Performance. No
later than ninety (90) days prior to Commencement of the Improvements for Phase 1, Phase 2, and Phase 3, Master Developer or the applicable Phase Developer shall submit to City for City's reasonable Approval a schedule of performance for that particular Phase (each, a "Phase Schedule of Performance"), in the form of Exhibit F-1 which shall set forth specific Outside Dates for the satisfaction of the Development Obligations set forth in Sections 5.3.2 and 5.3.4 that are applicable to that Phase (including, if necessary, obligations related to the Temporary Station Site Improvements and/or the Final Station Site Improvements). If City obj ects in writing within thirty (30) days after receiving such revised Phase Schedule of Performance, City shall include a reasonably detailed description of its reasons for objecting, and Master Developer or the applicable Phase Developer shall have the opportunity to revise and re-submit the relevant Phase Schedule of Performance, which shall again be subject to the City Approval process set forth in this Section 9. l .2(a). If City fails to render a decision regarding its Approval of the Phase Schedule of Performance within thirty (30) days, then the revised Schedule of 30 Performance shall be deemed approved upon satisfaction of the further notice procedures set forth in Section 29.33.4 hereof. If Master Developer or the applicable Phase Developer disagrees with the statements or requests made in City's objection letter, Master Developer and/or the applicable Phase Developer shall have the right (but not the obligation) to submit the dispute to arbitration as an Expedited Arbitration Matter in accordance with Article 20 hereof.
Upon mutual Approval of the Phase Schedule of Performance for Phase 1, Phase 2, or Phase 3, the form document attached hereto as Exhibit F-1 shall be replaced with the Approved Phase Schedule of Performance.
(b) Completion of Minimum Initial Buildings and
Minimum Retail Buildings. Following the Take Down of Phase 1, Phase 2, or Phase 3, as applicable, the applicable Phase Developer shall (i) prosecute the Minimum Initial Buildings and Minimum Retail Buildings to Completion on or before the applicable Outside Date in accordance with this Article 9 (subject to delays due to Excusable Delay (if triggered prior to Commencement of Construction) or Force Majeure (if triggered after Commencement of Construction)); and (ii) comply with the requirements of Section 5.3.7 hereof (Best Efforts for Additional Buildings and Additional Retail Buildings) to the extent applicable. (c) Failure to Meet Outside Dates in Phase Schedule of
Performance.
(i) If the Phase Developer foresees that it will not meet one or more Outside Dates set forth in a Phase Schedule of Performance for Completion of the Minimum Initial Buildings and Minimum Retail Buildings, it may request in writing an extension of the applicable Outside Date(s). City shall Approve a reasonable extension of the applicable Outside Date(s) so long as the Phase Developer (a) demonstrates to City's reasonable satisfaction that the Phase Developer is diligently pursuing tenants for and/or construction of the Minimum Initial Buildings and Minimum Retail Buildings in question, and (b) provides to City a revised construction schedule detailing how and when construction of the Development Obligations will be completed. The City Manager may Approve up to a one (1) year extension of the applicable Outside Date(s); any extension (or aggregate of extensions) of the applicable Outside Date(s) by more than one (1) year must be approved by the City Council. For the purposes of this Section 9 .1.2( c ), the term "diligently pursuing" shall not necessarily mean that each of the relevant Improvements must be under construction, but shall require the Phase Developer to demonstrate to City's reasonable satisfaction that the Phase Developer is making good faith efforts to Commence and Complete such Improvements. (ii) If the Phase Developer fails to meet its obligations under the relevant Phase Schedule of Performance, subject to Excusable Delay or Force Majeure, if applicable pursuant to Section 9. l.2(b)(i), and cannot demonstrate to City's reasonable satisfaction that (a) it is diligently pursuing construction of the Minimum Initial Buildings and Minimum Retail Buildings (as relevant), and/or (b) it is complying with the requirements of Section 5.3.7 hereof (Best Efforts for Additional Buildings and Additional Retail Buildings) to the extent applicable, then such failure shall constitute a Material Breach of this Agreement under the terms of Section 21.2.5.
31 (iii) Any disputes with respect to this Section 9. l.2(c) shall be submitted as an Expedited Arbitration Matter pursuant to A11icle 20.
9.1.3 Prosecution of All Other Improvements to Completion. To the extent that a Phase Developer Commences construction of any other Improvements within each Phase other than the Initial Improvements, the applicable Phase Developer shall use commercially reasonable efforts to prosecute such Improvements to Completion in accordance with this Article 9.
9.1.4 Construction Covenants under CC&Rs. Without limiting Section 9.1.3, the Master CC&Rs will include a covenant requiring the construction of all buildings to be prosecuted diligently and continuously, and further requiring the owner of any work of construction that is left in an unfinished state for more than one hundred and twenty (120) consecutive days or a total of one hundred and eighty (180) days to take reasonable measures to protect public health and safety, protect the building structure from the elements and screen unsightly elements from view (such as fencing, painting or attractive screens or coverings) (the "Construction Covenant"). The City shall be a named third party beneficiary of the Construction Covenant. The Master CC&Rs shall provide the master association thereunder with a right of entry to enforce the Construction Covenant and a right to impose special assessments to recover any costs expended in connection with the enforcement thereof.
9.2 Compliance with Standards. In Completing the applicable Improvements, (i) the Phase Developer shall comply with all applicable requirements of the Project Documents (including all Exhibits), and (ii) all such Improvements shall be Completed in a good and workman-like manner, without material defects, in accordance with all applicable Authorizations.
9.3 Conditions to Commencement of Improvements. Before a Phase Developer may Commence any Improvements within a Phase, the following conditions precedent shall be satisfied with respect to such Improvements:
9.3.l To the extent not obtained prior to delivery of the Ground Lease, Phase Developer shall have obtained all Authorizations necessary to Commence such Improvements, including City approval of demolition, grading, and. improvement plans in accordance with the applicable tentative map conditions of approval and, to the extent required under the Subdivision Code for any proposed Infrastructure, providing any subdivision improvement bonds required thereunder;
9.3.2 Subject to Section 29.34 hereof (Limitations on Disclosure), Developer shall have provided to City at least ninety (90) days before Commencement of the Improvements, and City shall have Approved, a detailed financing plan (the "Detailed Financing Plan") that conforms to the allocation of financial responsibilities set forth in Article 15 hereof and includes the following information: (a) a proforma only to the City's economic consultant in an industry-standard form as reasonably agreed by the City's economic consultant that includes in reasonable detail sources, uses, and revenue projections for horizontal and vertical improvements within the applicable Phase by product type; (b) a description of the sources of funds that Developer intends to fund with equity along with information on the 32 identity and experience of equity partners and a general description of the deal structure and relationship between the equity partners and Developer; ( c) bona fide commitments for the fmancing of that portion of the budget that Developer intends to borrow; (d) the amount, sources and anticipated timing of funding that Developer intends to fund through public financing vehicles, including but not limited to CFDs, provided, however, that any such public financing shall not involve the City's general fund; (e) a detailed description of the establishment and timing of public funding mechanisms (such as maintenance CFDs or association dues) for the Developer's project development as well as Developer's maintenance responsibilities for public improvements and public services as set forth in Article 15 hereof; and (f) a detailed description of the establishment and timing of privately funded mechanisms (such as association dues) for Developer's obligations for ongoing maintenance of private improvements to be maintained by Developer or the master association in accordance with the standards set forth in the Master CC&Rs, Infrastructure Master Plan, and MCP. Approval by City of the Detailed Financing Plan shall not constitute final agreement by City as to the establishment of any public financing mechanism identified therein that requires City processes and approval, which sha11 be separately undertaken and subject to City's discretion.
9.3.3 The Phase Developer shall have complied with all provisions within this Agreement (including Exhibits) that pertain to the Improvements in question;
9.3.4 To the extent that such Improvements are to be located outside of the boundaries of the applicable Phase and are not otherwise contemplated within the scope of the rights over City property granted under the applicable Ground Lease and Master CC&Rs, prior to commencing such Improvements, Phase Developer shall have obtained all approvals necessary in order for such Improvements to lawfully encroach on the property located outside of the boundaries of the applicable Phase and shall have entered into a Permit to Enter with City and/or made such arrangements with any other owners of such property as are necessary to Commence and Complete the same;
9.3.5 Prior to Commencement of Construction of the applicable work of Secured Public Improvements, the Phase Developer shall have provided the City with Adequate Security for the Secured Public Improvements in accordance with the requirements of Cal. Government Code Section 66499 et seq. and CSCC Section 17.05.660 and the applicable Public Improvement Agreement (collectively, the "SMA Security Requirements");
9.3 .6 Prior to Commencement of Construction of the applicable work of Secured Phase Improvements, the Phase Developer shall have provided the City with Adequate Security for the Secured Phase Improvements in accordance with the requirements of Article 28; and
9.3.7 Phase Developer shall have fully complied with any requirements of the Subdivision Map Act.
9.4 Conditions for Benefit of City. The conditions set forth in Section 9.3 are solely for the benefit of City and may be waived only by City (except that the requirement to comply with the nonwaivable portions of the Subdivision Map Act shall not be waivable).
Provided that Phase Developer has not committed a Material Breach that remains uncured 33 beyond any applicable cure period, City shall take such actions as are reasonably required of City under the MCP and this Agreement to review, consider and grant Developer's request for necessary Approvals to satisfy the above conditions. If any of the conditions are not timely satisfied, they may be waived by the City Manager or City may extend the time for satisfaction of the conditions, as Approved by the City'Manager in his or her sole discretion (except that any requirement to comply with nonwaivable portions of the Subdivision Map Act shall not be waivable). Notwithstanding the foregoing, the scope of City's approval rights with respect to the Detailed Financing Plan shall be limited to adherence to the form of the development and construction budget (such as categories of uses), compliance of the commitment letters with the Agreement requirements and the commercial reasonableness of the proposed financing sources (including debt, equity and public financing) available or reasonably foreseeable at the time of submittal.
9.5 Phase Developer Efforts to Satisfy City Conditions. Except as otherwise set forth in Article 7 hereof (Failure to Meet Phase Outside Dates), provided that City has not committed a Material Breach with respect to the Phase (or Partial Phase) in question that remains uncured beyond any applicable cure period, Phase Developer shall use its diligent and reasonable efforts, and otherwise take such actions as are required under this Agreement to cause the conditions set forth in Section 9.3 to be satisfied in sufficient time to enable Phase Developer to meet the Outside Dates set forth in the Schedule of Performance.
9.6 Effect of Failure of Condition. The Parties expressly acknowledge and agree that a failure of a condition in Section 9.3 for one Phase shall not be deemed the failure of such a condition for any other Phase, nor shall such failure relieve a Phase Developer or City of an obligation that arose before the failure of such condition. The failure of such a condition shall not, in and of itself, be an Event of Default; provided, however, that the failure of Phase Developer to meet any Outside Date set forth in the applicable Schedule of Performance or Phase Schedule of Performance (if any) due to its failure to meet a condition in Section 9.3 shall be governed by the provisions of Section 9.1.1 or Section 9.l.2(c), as relevant. The failure of City to act upon an Application as and when required under the MCP shall not be a Material Breach but shall give rise to an Excusable Delay.
10. Determination of Allowed Square Footage. The form of Ground Lease for Phases 2 through 7 attached hereto as Exhibit G-2 includes the concept of Allowed Square Footage, which shall be determined in accordance with this Article 10. The calculation of Allowed Square Footage in accordance with this Article only applies to Phases 2 through 7 (and specifically excludes Phase 1 and Phase 2A). Accordingly, references in this Article IO to a "Phase" or "Partial Phase" refer only to Phases 2 through 7 (and any Partial Phases thereof) and exclude Phase I and Phase 2A.
10.1 Calculation of A11owed Square Footage. Promptly following the later of (i) Completion of all Infrastructure depicted in the approved DAP(s) for all of Phase 3, and (ii) the date that at least fifty percent (50%) of all Buildings depicted within the approved DAP(s) for all of Phase 3 are constructed and open for business, Master Developer shall prepare and deliver to City an analysis of the Building square footage in each Phase that sets forth the maximum total amount of Gross Square Footage for Buildings that can be constructed within each Phase based on the reasonably anticipated maximum amount of square footage for each Phase or Partial 34 Phase, taking into account the total density and mix of uses permitted under the MCP and the economic viability of constructing, leasing and operating the same in light of site constraints, but not based upon market viability (referred to in total as the "Allowed Square Footage"). Based on the foregoing and in such analysis, Master Developer shall propose a table showing the Allowed Square Footage for each Phase (the "Allowed Square Footage Table"), which shall in no event show for Phase 2 less than the square footage for the Minimum Initial Buildings required in Phase 2, and for Phase 2 and Phase 3 together, less than the aggregate Gross Square Footage for the Minimum Retail Buildings minus the gross square footage allocated to Minimum Retail Buildings within Phase 1. Within sixty (60) days after its receipt of the Allowed Square Footage Table, City shall (i) Approve such Allowed Square Footage Table, in which case the Allowed Square Footage for all Phases shall be as set forth in Master Developer's analysis, or (ii) disapprove the Allowed Square Footage Table, in which case City shall within such sixty (60)-day period so notify Master Developer and explain the reasons for its disapproval and its proposal for the Allowed Square Footage Table. If City fails to render a decision regarding its Approval of the Allowed Square Footage Table within sixty (60) days, then the Allowed Square Footage Table shall be deemed approved upon satisfaction of the further notice procedures set fotth in Section 29.33.4 hereof. If City disapproves the Allowed Square Footage Table, Master Developer may submit the matter as an Expedited Arbitration Matter as provided in Article 20, provided, however, that the scope of the Arbiter's review shall be the consistency of the Master Developer's proposed Allowed Square Footage Table with the requirements of this Section 10.1, taking into account the fact that Phases may have future development potential in addition to that shown in the applicable DAP(s). The Allowed Square Footage Table, as finally determined under this Article 10, shall be memorialized in an amendment to the Memorandum of Ground Lease in recordable form signed by both Parties and recorded against title to the applicable Phase. Such amendment ( as revised from time to time pursuant to Section 10.2, below) shall cite this Article 10 and shall be binding upon City and each Phase Developer in respect of the Allowed Square Footage in the Phase in question for purposes of determining Base Rent in the 45th and 70th Lease Years (as such terms are used in the Ground Lease shown in Exhibit G2) under Section 3 of the Ground Leases.
10.2 Partial Phases.
I 0.2.1 Before Memorialization of AHowed Square Footage Table. If any Partial Phases have been incorporated into the Phasing Plan for the Project prior to the date that the Allowed Square Footage Table has been memorialized pursuant to Section 10. 1, above, then the Allowed Square Footage Table shall allocate Allowed Square Footages between such Partial Phases.
10.2.2 After Memorialization of Allowed Square Footage Table. If any Partial Phases are incorporated into the Phasing Plan for the Project after the date that the Allowed Square Footage Table has been memorialized, then Developer shall submit to City as part of the Phase Option Notice for such Partial Phase a revised Allowed Square Footage Table, which shall show the Allowed Square Footage as a number to be determined by multiplying the Allowed Square Footage for the overall Phase by a fraction, the numerator of which is the total Allowed Square Footage for Partial Phase and the denominator of which shall be the total Allowed Square Footage for the total Phase (each as determined as of the date such Allowed Square Footage was established pursuant to Section 10.1, above). The revised Allowed Square 35 Footage Table shall be subject to the same review and Approval process as set forth in Section
10.1, above, for the original Allowed Square Footage Table.
11. Issuance of Authorizations.
11.1 Generally. Each Phase Developer must obtain from City or any other . Governmental Authority having jurisdiction over all or a portion of the applicable Phase all permits, approvals, entitlements, agreements, permits to enter, utility services, subdivision maps (including under the City's Subdivision Code), Building Permits or other authorization(s) required under Applicable Law for the work it is required to perform under this Agreement and as may be necessary or desirable to effectuate and implement such work (each, an "Authorization"). Authorizations required for the Project from City shall be consistent with the Applicable Regulations and the Development Agreement. City will reasonably cooperate with Phase Developer on request in obtaining these Authorizations, including executing any such Authorizations to the extent City is required to execute the same as co-applicant or co-permittee, or as otherwise Approved by City Manager, so long as such Authorizations are consistent with this Agreement and all applicable Administrative Fees are paid as and when due. City and each Phase Developer will not agree to the imposition of any conditions or restrictions in connection with obtaining any such Authorization if the same would create any obligations on City's part not otherwise contemplated under this Agreement, without the Approval of City, which may be given or withheld in City's sole discretion.
11.2 Compliance with Laws. Master Developer and each Phase Developer shall be solely responsible for ensuring that the design and construction of the Improvements within the Phase for which it is responsible comply with any and all Applicable Laws and conditions or restrictions imposed by any City agency or other Governmental Authority in connection with any Authorization, whether such conditions are to be performed on the Project Site or require the construction of Improvements or other actions off the Project Site. Any fines, penalties or corrective actions imposed as a result of the failure of Master Developer or a Phase Developer to comply with the terms and conditions of any such Authorization shall be paid or otherwise discharged by the Master Developer or the applicable Phase Developer, and (i) City shall have no liability, monetary or otherwise, for such fines and penalties, and (ii) such fines or penalties shall not constitute Premium Costs. Master Developer or any Phase Developer shall have the right to appeal or contest the applicability of any law or the conditions imposed by any Authorization in any manner permitted by Applicable Law.
11.3 Additional Costs or Fees. Notwithstanding anything to the contrary above, City shall have no obligation to execute any application for any Authorization that would impose costs or fees on City not otherwise permitted by the Project Approvals unless the applicant arranges a reimbursement arrangement Approved by City.
12. Certificates of Completion.
12. l Generally. When a Phase Developer reasonably believes that it has Completed the Infrastructure component approved pursuant to a DAP for a Phase, or a portion thereof, the Phase Developer may request the Engineer to issue an Engineer's Certificate verifying that the specified Infrastructure, or a portion thereof, has been completed. When the 36 applicable Phase Developer reasonably believes that it has Substantially Completed the Required Buildings or the Additional Buildings or a portion of any of the foregoing, the applicable Phase Developer may request the Architect to issue an Architect's Certificate verifying that the specified Required Buildings or Additional Buildings have been Substantially Completed. Upon issuance, such Phase Developer shall deliver to City the Engineer's Certificate or the Architect's Certificate, as applicable. Within thirty (30) days after City's receipt of any such Engineer's Certificate or Architect's Certificate, as applicable, City shall either issue to Phase Developer a Certificate of Completion substantially in the form of Exhibit K for the applicable Initial Improvements or comply with Section 12.5. Upon issuance of a Certificate of Completion for all of the Initial Improvements of a particular Phase (and City's approval or deemed approval of a Best Efforts Report with respect to any Additional Buildings that are not constructed within the Phase), and except as otherwise specified by this Agreement, this Agreement will terminate with respect to such Phase, and the applicable Phase Developer will thereafter use and operate the Phase in accordance with the applicable Ground Lease, except as provided in those provisions of this Agreement that survive termination hereof.
12.2 Effect of Certificate of Completion on Master Developer and the applicable Phase Developer. For purposes of this Agreement, the issuance of a Certificate of Completion shall be a conclusive determination of the Completion of the applicable Initial Improvements in accordance with this Agreement, including without limitation with respect to the obligations to Complete the applicable Initial Improvements in accordance with Section 9.1 hereof, however, such determination shall not impair City's right to Indemnity under Article 27 or City's right to require correction of any defects in accordance with City's Subdivision Code.
Master Developer or a Phase Developer shall record the Certificate of Completion in the Official Records within forty-five (45) days following receipt thereof.
12.3 Effect of Certificate of Completion on Any Person. Following recordation of the Certificate of Completion, any Person then owning or later purchasing, leasing or otherwise acquiring any interest in the applicable Phase shall not, solely by virtue of such ownership, purchase, lease, or acquisition, or by virtue of such Person's actual or constructive knowledge of the contents of this Agreement, incur any obligation or liability under this Agreement for the Completion of Improvements with respect to which the Certificate of Completion was recorded; provided, that such Person shall be subject to any Agreement to which it is a party, obligations of record and any other applicable Project Approvals. City's issuance of any Certificate of Completion shall not relieve Master Developer, Phase Developer or any other Person from any applicable building, fire or other construction code requirement, conditions to occupancy of any Improvement, or other Applicable Laws.
12.4 City Cooperation Regarding Certain Certificates of Completion. The Parties acknowledge and agree that City will forward all Engineer's Certificates for Public Improvements and the results of any inspection thereof to City's Department of Public Works for its review and potential acceptance of such Public Improvements in accordance with City's Subdivision Code and any applicable subdivision improvement agreement entered into by Master Developer or Phase Developer and the City. City shall use commercially reasonable efforts to cause the Department of Public Works to expeditiously review and the City Council to accept such Public Improvements. The Parties acknowledge and agree that City will forward all Architect's Certificates for other Buildings and the results of any inspection thereof to the 37 Building Department for its review in accordance with applicable City Authorizations. City will use commercially reasonable efforts to cause the Building Department to expeditiously review and Approve such other Buildings.
12.5 City Refusal to Issue a Certificate of Completion. If City refuses or fails to issue a Certificate of Completion in a timely manner under Section 12.l, then City shall promptly provide to the applicable Phase Developer a written statement setting forth the basis for such refusal or failure and the reasonable acts or measures that must be taken by the Phase Developer to obtain a Certificate of Completion. Thereafter, upon Completion of such reasonable acts or measures, as certified by the Engineer or the Architect, as applicable, City shall issue the Certificate of Completion to the applicable Phase Developer.
12.6 Use of Public Improvements Before Certificate of Completion. The Parties acknowledge and agree that a Phase Developer shall not be obligated to allow use of any Public Improvements by any Person, including City, any City agencies, any other Governmental Authority or any third parties, before the acceptance of such Public Improvements by City and the issuance of a Certificate of Completion for such Public Improvements by City.
12.7 Acceptance of Public Improvements. Except as may otherwise be specified in the Infrastructure Plan, all Public Improvements will be dedicated as public improvements for their intended purpose to the City by the applicable Phase Developer. Upon the issuance of a Certificate of Completion for any Public Improvements, City will accept the subject Public Improvements offered for dedication in accordance with City's Subdivision Code and any applicable facilities acquisitions agreement or other similar agreement entered into in connection with the formation of a community facilities district or other public financing vehicle.
12.8 Certain Certificates of Completion. City shall have the right to withhold a Certificate of Completion if the following conditions have not been met (as applicable):
12.8.1 For Public Improvements, on receipt of a certificate of completion from the City Engineer with respect to such Public Improvements delivered in accordance with any applicable subdivision improvement agreement; and
12.8.2 For Buildings, a temporary Certificate of Occupancy.
12.9 Arbitration. Any disputes arising under this Article 12 relating to the issuance or non-issuance of Certificates of Completion .shall be subject to the arbitration provisions of Article 20 hereof.
13. Condition of Title.
13.l Condition of Title.
13.1.1 Prior to the Effective Date, Master Developer caused the Title Company to deliver to City and Master Developer a preliminary title report (the "Preliminary Title Report") for the Project Site, together with copies of all documents relating to title exceptions shown in the title reports.
38 13.1.2 Attached as Exhibit L is a copy of the Preliminary Title Report, marked to show those title exceptions to which Master Developer objects (together, the "Disapproved Exceptions") and those title exceptions to which Master Developer has no objection (together, the "Initially Approved Exceptions").
13.1.3 Promptly after the Effective Date, City and Master Developer shall meet and confer in good faith to determine how to address each of the Disapproved Exceptions.
13 .1.4 Within sixty ( 60) days after the Effective Date, City shall give Master Developer written notice (the "City Title Notice") either stating that the City agrees to remove all of the Disapproved Exceptions from title pursuant to the terms of Section 13.2.1, or identifying which of those Disapproved Exceptions City is unwilling or unable after reasonable and good faith efforts to have eliminated from title (as so identified, the "Retained Exceptions"). If City fails to provide the City Title Notice to Master Developer within such sixty (60) day period, then Master Developer may simultaneously submit a request to the City Manager, the Director of Planning, and the City Attorney at the addresses set forth in Exhibit R attached hereto (or such substitute address as may be provided by City from time to time) by delivery in the manner specified in Sections 29.33.l(a) or (hl, which request shall be labelled prominently: "Request for City Title Notice: Deemed Approval Matter." If City fails to respond to the subsequent request within fifteen (15) days following the date when given (as determined under Section 29.33.2(a), then City shall be deemed to have agreed to remove all of the Disapproved Exceptions from title pursuant to the terms of Section 13.2.1.
13.1.5 If City has identified any Retained Exceptions in the City Title Notice, Master Developer shall have fifteen (15) days from receipt of the City Title Notice to notify City in writing that either (1) Master Developer is willing to continue with the Project, subject to the Retained Exceptions, or (2) Master Developer elects to terminate this Agreement and the Development Agreement. Failure of Master Developer to take either one of the actions described in clause (1) or (2) in the previous sentence which failure is not cured within ten (10) days after a second written notice from City shall be deemed to be Master Developer's election to take the action described in clause (1). If Master Developer elects to terminate this Agreement and the Development Agreement, then this Agreement and the Development Agreement shall automatically be deemed to be null and void, and City and Master Developer shall have no further obligations or rights to one another under this Agreement or the Development Agreement.
13 .1.6 lf City does not identify any Retained Exceptions in the City Title Notice to Master Developer, or Master Developer elects to continue with the Project subject to the Retained Exceptions, then the current Exhibit L to this Agreement shall automatically be deemed to be replaced by a new Exhibit L, which shall consist of a copy of the Preliminary Title Report, marked to show that Master Developer has "approved" the Initially Approved Exceptions and the Retained Exceptions, subject to Section 13.5 hereof (Title Clearance).
13.1.7 The "Permitted Exceptions" are (i) those exceptions that are marked as "approved" on the replacement Exhibit L pursuant to Section 13.1.6, (ii) exceptions created by or with the written consent of Master Developer, (iii) exceptions for 39 the easements and rights of entry granted to Master Developer and Phase Developers under this Agreement and (iv) exceptions for the Project Documents and any amendments thereto; provided, that there shall be no Permitted Exception for any violation of a Project Document related to the Landfill. Once a Phase Developer has been designated, no further exceptions shall be Permitted Exceptions with respect to such Phase Developer's Phase without the Approval of such Phase Developer.
13.2 City Obligations.
13.2.1 Removal of Non-Permitted Exceptions. Except as set forth in Section 13.3, below, City shall be obligated hereunder to convey the leasehold interest in the applicable Airspace Parcel subject only to the Pennitted Exceptions and free of all tenants, leases, and occupants. If any exceptions to title to any Phase are not Permitted Exceptions, City sha11 cause the removal of such exceptions prior to execution and delivery of the applicable Ground Lease or otherwise cause the Title Company not to show such exceptions in the Phase Title Policy, and any such delay shall be an event of Excusable Delay applicable to a11 times for performance by Master Developer or the applicable Phase Developer under this Agreement, including the extension of the Outside Dates for the Take Down of the applicable Phase. City's efforts with respect to the removal of exceptions pursuant to this Section 13.2 shall be at City's sole cost and expense, except as otherwise specified in this Agreement.
13.2.2 Removal of Permitted Exceptions. The Parties acknowledge that the Permitted Exceptions include various easements and agreements in favor of the City and PG&E relating to public streets and various public utilities, including gas, oil, sewer, water and electrical (coilectively, the "Street and Utility Easements"), the presence of which could adversely affect or delay the Commencement or the Completion of the Initial Improvements of a particular Phase. However, in the absence of an approved DAP Application and Final Map, the Parties are unable to identify all Permitted Exceptions that might interfere with the development of the Project. Therefore, in connection with each Final Map and DAP Application, the Parties will work cooperatively to identify those Street and Utility Easements that should be abandoned, removed, relocated, amended or otherwise modified to permit the construction of the Initial Jmprovements within the Phase (collectively, the "Easement Actions"). To the extent that the Easement Actions will require action by the City, such as a quiet title action or City Council action to abandon, vacate or relocate (temporarily or permanently) the applicable Street and Utility Easement, City shall, at Developer's sole cost and expense, take all such reasonable measures to implement the required Easement Actions.
13.3 New Exception Prohibition. City agrees that it shall not voluntarily permit or cause to be created during the period between the Reference Date and the execution and delivery of the Ground Lease for a Phase any exceptions to title to that Phase other than the Permitted Exceptions (the "City's Title Covenant"). If, during the period between the Reference Date and the execution and delivery of the Ground Lease for any Phase, any new exceptions to title arise for such Phase, then the applicable Phase Developer may object to such new exception by notice to City given within ten (10) Business Days after Phase Developer receives written notice from the Title Company of the new exception. If the applicable Phase Developer fails to object within such period, then the new exception will be deemed to be a Permitted Exception. If the Phase Developer does object, then City may elect in City's sole and 40 absolute discretion, at its cost, to remove any new exceptions that are not Permitted Exceptions prior to Take Down of the Phase, or to remove or otherwise cause the Title Company to eliminate any such new exception m the Phase Title Policy, which may include obtaining an endorsement insuring over such exception subject to such conditions and requirements imposed by Title Company. If City does so elect, it will notify Phase Developer within thirty (30) days after receipt of Phase Developer's objection. If such exception is caused by the City's breach of City's Title Covenant set forth above, such breach shall be subject to the terms of Section 2 l.2.4(b) below. If City elects not to remove or cause to be eliminated the exception, or fails to respond within the thirty (30) day period, then the applicable Phase Developer shall have the right to: (i) terminate this Agreement as to the affected Phase by notice to City delivered within ten (10) days after Phase Developer receives City's notice that it has elected not to remove or cause to be eliminated the exception or expiration of the thirty (30) day period, whichever occurs earlier, in which case City can offer the Phase (or a portion thereof) to Third Parties as a Development Opportunity in accordance with Section 7.2, above, without any cost reimbursement or other obligation to Developer; (ii) upon written notice provided to City within ten (10) days of City's election not to remove or cause to be eliminated the exception or failure to respond, diligently proceed to talce such actions necessary to remove the exception, which may include obtaining an endorsement insuring over such exception subject to such conditions and requirements imposed by Title Company (and so long as the applicable Phase Developer is diligently proceeding with removal of the title exception, such delay in close of Escrow shall be considered an event of Excusable Delay); or (iii) Take Down the Phase in question subject to such exception. If the applicable Phase Developer fails to so terminate or elect to cure within the ten (I 0) day period, then it shall be deemed to have elected clause (iii) above. Exceptions that City elects not to remove or cause to be eliminated, or is deemed to have elected not to remove or cause to be eliminated, and that the Phase Developer elects to accept, or is deemed to have accepted, are also Permitted Exceptions.
13.4 Post-Closing Boundary Adjustments. The Parties acknowledge that as development of the Project advances, the description of the premises under each Ground Lease may require further refinements, including minor vertical and horizontal boundary adjustments, to reflect the actual boundaries of the leased Premises thereunder. City agrees to cooperate (at no cost to City) with Master Developer, Phase Developers and any lender to any of them in effecting any such boundary adjustment consistent with this Agreement, including by executing and delivering in recordable form corrective exhibits to applicable Ground Leases and other Project Documents.
13.5 Title Clearance. Without limiting Section 13.2.2 hereof (that relates to Permitted Exceptions), if the Phase Title Policy issued to .a Phase Developer upon the execution of a Ground Lease contains exceptions that are not Permitted Exceptions and that would, in the reasonable judgment of the applicable Phase Developer, adversely affect or delay the Commencement or the Completion of the Initial Improvements of such Phase, and such exceptions may be removed by means of a quiet title action or street vacation, then the Parties agree to take reasonable actions to eliminate such exceptions, at City's sole cost, by means of quiet title action or a supplemental street vacation ordinance. The period of any such delay shall constitute Excusable Delay.
41 14. Landfill Obligations.
14.1 Landfill Operation and Management Agreement. City and Master Developer shall enter into a Landfill Operation and Management Agreement (the "Landfill Operation and Management Agreement") that is consistent with the Landfill O&M Term Sheet attached hereto as Exhibit M and contains such other provisions as are mutually satisfactory to City and Master Developer. The Landfill Operation and Management Agreement shall be executed within ninety (90) days after the Effective Date, or within thirty (30) days after the date on which a11 necessary Authorizations upon which the execution of the Landfill Operation and Management Agreement is contingent have issued, whichever is later. Upon execution of the Landfill Operation and Management Agreement, the Landfill Operation and Management Agreement shall be deemed to have replaced the Landfill O&M Term Sheet and shall serve as Exhibit M to this Agreement. ·
14.2 Apportionment of Costs. The Parties acknowledge that the City will incur costs related to its operation and maintenance of the landfill due to the Project that will exceed its current baseline landfill operation and maintenance costs as of the date of this Agreement. The Parties have agreed that the amount of the Landfill Baseline Costs is deemed to be Four Hundred Fifty Thousand Dollars ($450,000) per year, which amount will be increased by a CPI Adjustment on each anniversary of the Reference Date of this Agreement (the "Anniversary Date") (such costs, as increased from time to time, the "Landfill Baseline Costs"). On an annual basis, commencing sixty (60) days after the first Anniversary Date, City shall provide to Master Developer a written report that includes the actual costs (the "Annual Landfill Costs") incurred by City in connection with its obligations pursuant to this Article 14 (including "open book" backup of such costs), an analysis of the same by a reputable engineering company or consultant and the amount by which the Annual Landfill Costs exceed the Landfill Baseline Costs determined for the applicable twelve (12) month period. Within sixty (60) days following its receipt of such report, Master Developer shall deliver to City (a) reimbursement for all uncontested Annual Landfill Costs set forth in such report, plus (b) to the extent that any Annual Landfill Costs set forth in such report are contested, a written response to the report, which written response shall include an analysis of the contested Annual Landfill Costs by Master Developer's reputable consultant or engineering company. City and Master Developer shall, for sixty (60) days after Master Developer's submittal of such written response, attempt to resolve their differences concerning any contested Landfill Costs; if they are unable to do so, either of them may submit the matter to arbitration as provided in Article 20. Each year, Master Developer's obligation to reimburse City for that year's Annual Landfill Costs pursuant to this Section 14.2 shall be limited to the lesser of (i) the amount by which the Annual Landfill Costs exceed the Landfill Baseline Costs and (ii) an amount originally equal to (x) One Million Dollars ($1,000,000), increased by a CPI Adjustment on each Anniversary Date, minus (y) the Landfill Baseline Costs. Master Developer may assign this obligation without prior consent of City to the Master Owners' Association established for the Project Site, which obligation may be documented in the Master CC&Rs or other appropriate instrument recorded against the Airspace Parcels. The provisions of this Section 14.2 shall survive any expiration or termination of this Agreement with respect to Master Developer and all Phase Developers.
14.3 Indemnification. City agrees to Indemnify and hold haimless the Indemnified Parties from and against any and all loss, cost, liabilities, suits, obligations, fines, 42 damages, penalties, claims, costs, charges and expenses (including engineers', architects' and attorneys' fees and charges) asserted against or incurred by any Indemnified Party directly related to City's sole negligence or willful misconduct that results in a failure to perform its obligations under this Article 14, except to the extent that such failure is caused by the breach of this Agreement by Master Developer, any Phase Developer, or any tenant or occupant of a Phase, or any negligence or misconduct by Master Developer, any Phase Developer, or any tenant or occupant of a Phase.
15. Project Development and Maintenance Responsibilities. The obligations and costs to construct, maintain, repair, and service elements of the Project shall be as allocated below; provided, however, that to the extent that anything in this Article 15 conflicts with any specific provisions in this Agreement or any other Project Document, such specific provisions shall control.
15. I Construction Obligations. Except as otherwise specifically provided in this Agreement or any of the other Project Documents, all Improvements (including any Public Improvements) constructed as part of the Project shall be constructed at Developer's sole cost and expense. Notwithstanding the foregoing, Developer's obligations with respect to Phase 2A shall be governed exclusively by Section 4.8 hereof.
15.2 Maintenance, Repair, and Replacement Obligations; Public Services. The obligation to maintain, repair, and replace Improvements and to provide Public Services shall be as set forth below. To the extent that Developer bears the obligation to maintain, repair, and replace any category of Improvements, subject to City Council approval, Developer may pursue formation of a community facilities district, landscape lighting district, or other form of special tax assessment to fund that obligation, and City shall reasonably cooperate with such formation.
Master Developer may assign its obligations under this Section 15.2 without prior consent of City to the Master Owners' Association, which obligation may be documented in the Master CC&Rs or other appropriate instrument recorded against the Airspace Parcels. The provisions of Sections 15.2.2 shall survive any expiration or termination of this Agreement with respect to Master Developer and all Phase Developers.
15.2.1 Buildings. City shall be responsible at its sole cost and expense for the ongoing maintenance, repair, and replacement of (a) the Temporary Station Site Improvements until the Final Station Site Improvements are completed and operational, and (b) the Final Station Site Improvements. Developer shall be responsible for the ongoing maintenance, repair, and replacement of all other Buildings at its sole cost and expense.
15.2.2 Infrastructure. City shall be responsible for the ongoing maintenance, repair, and replacement of all publicly-owned and accepted Infrastructure (including, without limitation, all improvements constructed within Phase 2A) at its sole cost and expense, and Master Developer shall be responsible for the ongoing maintenance, repair, and replacement of all privately-owned Infrastructure at its sole cost and expense, except as otherwise set forth in this Section 15 .2.2.
(a) Public Streets. City shall be responsible for the
ongoing maintenance, repair, and replacement of (a) any public streets (including, without 43 limitation, curbs, sidewalks, street lighting and street furniture within the public right-of-way) that currently exist and are improved as part of the Project, (b) any new public streets that are dedicated to the City in the future, and (c) curbs, sidewalks, street lighting and street furniture to the extent that any of the foregoing are located within the public right-of-way (subsections (a), (b) and (c), collectively, the "Public Streets"). Notwithstanding the foregoing, Master Developer shall be responsible for the incremental costs for maintenance, repair and replacement of Public Streets to the extent that such costs exceed the typical and customary costs incurred by the City for the maintenance of public streets built to City standards located elsewhere in the City, including, without limitation, by reason of the Project's location with respect to the Landfill (e.g., repairs warranted due to settlement of roads), higher costs resulting from physical improvements that are of a different and more costly variety than those otherwise required by the City (e.g., enhanced light standards) or higher costs resulting from Developer's request for enhanced maintenance, repair or replacement of Public Streets than would otherwise be provided by City (e.g., street cleaning more than once per week). The procedures for establishment of the Master Developer share of costs for Public Streets shall be established in connection with the first DAP application for Phase 1 and shall be reflected in the Master CC&Rs. Such procedures may include the submittal and approval of a public facilities financing plan with periodic updates that establishes the City's baseline costs, the excess costs to be borne by Master Developer and the manner of payment.
(b) Parks and Open Space. City shall be responsible for the ongoing maintenance, repair, and replacement of the public parks and open space program elements within the City Center area ("Park Maintenance") for those publicly dedicated parks described in the MCP as the City Center East Neighborhood Park, the City Center North Neighborhood Park and the City Center West Neighborhood Park (collectively, the "Neighborhood Parks"). Notwithstanding the foregoing, City and Developer may mutually agree that Developer or its successors and assigns (including the Master Owners' Association established for the Project Site) will undertake the Park Maintenance obligations, in which case, such work shall be at the sole cost and expense of Developer and in accordance with a scope of work, maintenance standards and level of funding as may be agreed-upon by the Parties. lf City undertakes the Park Maintenance work, Developer or its successors and assigns (including the Master Association) will fund the Park Maintenance costs in amounts and for such purposes as reasonably determined by City, and shall include but not be limited to the following, all to the end that City shall not need to expend its own funds to maintain the Neighborhood Parks: all personnel or third party costs related to such maintenance; costs of maintaining irrigation systems and other equipment directly related to such maintenance; maintenance or replacement as needed of landscape areas, water features, bathrooms, trash receptacles, park benches, play structures, planting containers, picnic tables and other equipment or fixtures installed in areas to be maintained; insurance costs; and any other related overhead costs, along with City personnel, administrative and overhead costs related to such maintenance or to contracting for and managing third parties in connection with such maintenance. The procedures for establishment of the Developer's costs and the Party responsible for the Park Maintenance shall be established in connection with the first DAP application for Phase 2 (which procedures may be adjusted in subsequent DAP applications by mutual agreement) and the ongoing funding obligation shall be reflected in the Master CC&Rs.
44 (c) Public Services.
(i) Police. City shall provide at its sole cost and expense one Police Beat to the Project, primarily to address issues within the City Center portion of the Project. Master Developer shall pay for the cost of additional police officers ( or off-duty police officers) as reasonably detennined by the City to be necessary to service the Project ("Police Services") on an on-going, periodic or one-time basis. For purposes hereof, a "Police Beat" means eight (8) full-time employees ("FTEs"). The procedures to establish the manner, timing and payment by Master Developer for its Police Services obligation hereunder shall be established in connection with the first DAP application for Phase I (as may be updated with subsequent DAP applications) and shall be reflected in the Master CC&Rs. Such procedures shall include preparation by Developer and review by the City of an annual security plan for the applicable Phase and/or Project that identifies the appropriate level of Police Services, private security services and off-duty police officers to be provided and will include an estimate of costs to be borne by Master Developer for the applicable year. (ii) Fire. City will provide appropriate fire protection services and equipment to the Project at its sole cost and expense, except as otherwise provided in this subsection (ii). At any time (at Master Developer's election) after approval of the PCLUP for the Project but in no event later than in connection with the DAP application for Phase 2, City will commission at Master Developer's expense an independent study by a third party expert jointly selected by City and Master Developer (the "Fire Protection Assessment Study") that will provide an assessment and recommendations for the level of fire protection services (equipment, FTEs and equipment replacement costs and timing) to address hazardous materials issues on the Landfill Parcel (collectively, "Fire Protection Services Obligations"). The study will also include recommendations for the timing of such equipment and FTEs in relation to the development of the Project. Developer shall be obligated to pay the costs for Fire Protection Services Obligations at the level and in accordance with the timing set forth in the Fire Protection Assessment Study up to a maximum of 4.5 fire protection FTEs annually, one piece of equipment if recommended by the study and replacement costs for such equipment at such times as indicated by the study.
15.3 Station Area. The Parties acknowledge that the area that is designated as the "Station Area" in one or more exhibits to the Parcel Development Plan for Block 4H (City Center Southeast) (the "Station Area") may at some time in the future be improved with enhancements to Great America station as part of a separate project by City or a Third Party.
Therefore, at any time prior to the effective date of a Ground Lease for a Phase that contains any part of the Station Area, City may elect to reserve such portion of the Station Area from future Ground Leases by notifying Developer of such election in writing. At any time after the effective date of a Ground Lease for a Phase that contains any part of the Station Area, City shall have the right to require Developer to reconvey its interest in such portion of the Station Area to City within sixty ( 60) days after Developer's' receipt of notice from City. Notwithstanding anything to the contrary in this Agreement, including but not limited to the terms of Section 6.1.9 hereof, no such retention or reconveyance of any p011ion of the Station Area shall cause any decrease in the annual Base Rent payable for the Phase in which the Station Area is located. 45 16. Premium Costs and Shared Infrastructure Costs.
16.1 Premium Costs.
16.1.1 Premium Costs Defined. The Parties acknowledge that development of the Project will necessitate many extraordinary and unusual additional on-site and off-site development costs to be incurred by Master Developer and any Phase Developer, including costs on account of the Landfill, the lack of customary infrastructure on the Project Site, and the need to acquire necessary rights and access to Phases 2 through 7 of the Project Site. Therefore, the form of Ground Lease for Phases 2 through 7 attached hereto as Exhibit G-2 includes the concept of Premium Costs, which shall be tracked, verified, and allocated to the Development Parcels for use in calculating rent in the 45th Lease Year and 70th Lease Year (as defined in the Ground Lease). "Premium Costs" is defined as the categories of development costs set forth in Exhibit N and associated with development of Phases 2 through 7. In no event shall Premium Costs include any of the following: (i) direct costs of Master Developer or any Phase Developer (e.g., wages and benefits of employees, administrative overhead, management fees, etc.); (2) costs associated with the development of Phase I (with the exception of costs associated with the relocation of Stars and Stripe Drive, Phase 1 tenant relocation costs and costs associated with the proximity of Phase 1 to the Landfill); (3) costs that will be reimbursable at any time to Master Developer or any Phase Developer by the City or by owners of land not included within the Project Site; and (4) costs financed through public financing mechanisms.
16.1.2 Approval of Premium Costs. Within twelve (12) months after the later of (i) Completion of all Infrastructure within a Phase Taken Down by Master Developer or its assignee(s) (including all Partial Phases comprising such Phase) in accordance with the Approved DAP (s) for such Phase, or (ii) the date by which of at least fifty percent (50%) of all Building square footage within such Phase (including all Partial Phases comprising such Phase) in accordance with the Approved DAP(s) for such Phase is open for business, Master Developer will provide City with a written report that includes the actual Premium Costs incurred in connection with such Phase (including "open book" backup of such costs), plus an analysis of the same by a reputable engineering company or consultant. The Premium Costs shall be divided into Hard Costs and Soft Costs. Within sixty (60) days following its receipt of such report, City will deliver to Master Developer its Approval of or its written response to the report, which written response shall include an analysis of the report by City's reputable consultant or engineering company. If City does not Approve such report in its reasonable discretion, City and Master Developer shall for sixty (60) days attempt to resolve their differences concerning Master Developer's report; if they are unable to do so, either of them may submit the matter to arbitration as provided in Article 20.
16.1.3 Determination of Premium Costs Allocation.
(a) Premium Costs Allocation Per Phase. Every time the
Premium Costs for a Phase have been determined in accordance with Section 16.1.2, Master Developer shall submit to City a proposed allocation (the "Premium Costs Allocation") of such Premium Costs (both Hard Costs and Soft Costs) among the Phases ( and Partial Phases) that have been Taken Down by Developer in such manner as Master Developer determines in its discretion. Master Developer wiU update the Premium Costs Allocation each time a Premium 46 Cost detennination occurs under Section 16.1.2 so that all Premium Costs incurred to date will be allocated or re-allocated among the Phases that have been Taken Down as of the date of the Premium Costs Allocation. Each Ground Lease Taken Down by Developer shall permit a future re-allocation of Premium Costs to the extent approved by the applicable tenant thereunder. (b) Final Reconciliation. After Approval of Premium
Costs for the last Phase Taken Down by Developer, Master Developer shall submino the City a final Premium Costs Allocation that shows all Premium Costs (Hard Costs and Soft Costs) incurred by Developer and the final Premium Costs Allocation for all Phase Ground Leases Taken Down by Developer. The final Premium Costs Allocation shall constitute the final detennination of Premium Costs and shall be allocated among each applicable Ground Lease Taken Down by Developer as permitted thereunder for purposes of determining the Base Rent adjustment and as otherwise provided thereunder.
16.2 Shared Infrastructure Costs. City and Master Developer acknowledge and agree that the Infrastructure for a Phase, whether constructed by Master Developer, a Phase Developer or any third party on behalf of either of them, may benefit more than one Phase. To . the extent that the costs of constructing and completing such Infrastructure are not included in Premium Costs (the portion not so included, "Shared Infrastructure Costs"), Master Developer shall have the right to require Phase Developers who did not construct and complete the Infrastructure to which the Shared Infrastructure Costs relate to share in such cost as follows:
16.2.1 As to portions of the Project Site Taken Down by Master Developer pursuant to a Phase Option Notice, Master Developer may require such Phase Developers to reimburse a portion of such costs to the Person who constructed and completed the same, on such terms as Master Developer shall require. Master Developer may implement such requirement as part of the AA&R or otherwise; provided, that no Phase Developer may become obligated for such a reimbursement under this Section 16.2 after its execution of a Ground Lease to the extent not otherwise provided for in the AA&R or Ground Lease. '
16.2.2 As to portions of the Project Site Taken Down by a Third Party pursuant to a Development Opportunity lease in accordance with Section 7.2.5 hereof, no such Third Party shall become obligated to reimburse Master Developer or any other Person for Shared Infrastructure Costs. Any Shared Infrastructure Costs that would have been allocable to such Third Party shall instead be added to the Premium Costs calculated in Section 16.1, above, and the Premium Cost Allocation most recently prepared for a Phase shall be amended to include such Shared Infrastructure Costs, subject to Approval of the City pursuant to the process set forth in Section 16.1.3 above.
16.3 Documentation of Premium Costs and Shared Infrastructure Costs. The Premium Costs, as finally determined and allocated under Section 16.1 and the Shared Infrastructure Costs, as finally determined and allocated under Section 16.2, shall be memorialized in documents executed by Master Developer and City from time to time. Such documents shall cite this Article 16 and shall be binding upon City and each Phase Developer with respect to the Premium Costs and Shared Infrastructure Costs incurred by Master Developer and such Phase Developer (including those Premium Costs and Shared Infrastructure Costs paid by such Phase Developer to another Phase Developer). The Premium Costs so allocated (and 47 updated from time to time) shall be binding upon the Phase Developers for purposes of determining Base Rent adjustments under Article 3 of the Ground Leases, as more particularly described therein.
16.4 Survival. The provisions of this Article 16 shall survive any expiration or termination of this Agreement with respect to Master Developer and all Phase Developers.
17. Property Condition.
17.1 As Is.
17 .1.1 Except as otherwise provided in this Agreement (including subject to the requirement that City convey the leasehold interest in the applicable Development Parcel(s) and grant the easements described in the Ground Lease, pursuant to a Ground Lease executed and delivered in accordance with this Agreement in the condition described in Section
13.1) or in the other Project Documents, City shall convey each Development Parcel to the applicable Phase Developer strictly in its "as is, where is" condition with all faults and defects and neither party shall take any actions that materially exacerbate the environmental condition of such Phase between the Effective Date of this Agreement and the date each applicable Phase is Taken Down. No representations or warranties, express or implied, have been made by or on behalf of City in respect of any real property to be leased by City to any Phase Developer or the status of title or the physical condition thereof, including the environmental condition.thereof and the zoning or other laws, regulations, rules and orders applicable thereto, the amount of taxes or other charges that may be assessed against such real property or the use that may be made of such real property. Master Developer and each Phase Developer acknowledge that all necessary physical and title due diligence with respect to a Phase shall have been performed by the applicable Phase Developer in accordance with this Agreement as of the date that such Phase Developer executes and delivers the Ground Lease for the Development Parcel(s) within such Phase.
17.1.2 Developer has been given the opportunity to investigate each Phase fully, using experts of its own choosing, and City shall continue to give Master Developer and any Phase Developer an opportunity under a Permit to Enter to investigate each Phase fully, with such reasonable conditions as City may impose for any testing of any Phase. At no cost to City that is not reimbursed by Master Developer or any Phase Developer, City shall cooperate reasonably to afford Master Developer and any Phase Developer access, upon not less than five (5) days' prior notice to City, and otherwise at all reasonable times, to such non-privileged books and records as City shall have in its possession or control relating to the prior use and/or ownership of the Phase in question.
17.1.3 Developer acknowledges that no City Party has made any representation or warranty, express or implied, with respect to the Project Site, and Developer expressly releases the City Parties from all Losses arising out of or relating to the condition of any improvements, the size, suitability or fitness of the land, the existence of Hazardous Substances, compliance with any Environmental Laws, or otherwise affecting or relating to the condition, development, use, value, occupancy or enjoyment of the Project Site, excluding any Losses arising from any Release of a Hazardous Substance to the extent that it is caused, 48 contributed to or exacerbated by a City Party. Developer expressly understands that the portions of the Development Parcels conveyed by City to Developer are being conveyed strictly in their "as is, where is" condition with all faults and defects. The provisions of this Section 17 .1.3 shall survive the termination of this Agreement.
Developer acknowledges that it is familiar with Section 1542 of the California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT TI-IE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
Developer waives and relinquishes any right or benefit that it has or may have under Section 1542 of the California Civil Code or any similar or successor provision oflaw pertaining to the foregoing release.
17 .1.4 City releases Master Developer, the Phase Developers, their partners, Affiliates and owners, and the officers, partners, agents, · employees and members of each of them ( each, a "Developer Party"), for any Losses suffered by City relating to (i) any Release of a Hazardous Substance, or any pollution, contamination or Hazardous Substancerelated nuisance on, under or from the Project Site, to the extent the Release, pollution, contamination, or nuisance arose before the occupation or use of the applicable portion of the Project Site by a Developer Party; provided, however, that this release does not extend to Losses caused by: (A) any Release of a Hazardous Substance to the extent that it is caused, contributed to or exacerbated by a Developer Party or (B) breach of obligations assumed by a Developer Party under any agreement (including this Agreement) under which the Developer Party assumes responsibility for any Environmental Remediation. City reserves its rights to enforce Developer's obligations under this Agreement and any and all of the foregoing agreements and to take such additional actions as may be set forth in such agreements.
City acknowledges that it is familiar with Section 1542 of the California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WIDCH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HA VE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
City waives and relinquishes any right or benefit that it has or may have under Section 1542 of the California Civil Code or any similar or successor provision of law pertaining the foregoing release.
49 17.2 Hazardous Substance Indemnification.
17.2.1 In addition to the Indemnifications set forth in Article 27, Developer shall Indemnify the City Parties from and against any and all Losses incurred by or asserted against any City Patty in connection with, arising out of, or in response to, or in any manner relating to:
(a) Developer's breach of any obligation of Developer
under this Agreement with respect to Hazardous Substances; (b) Developer's violation of any obligation under this
Agreement with respect to its compliance with Environmental Laws on or relative to the Project Site by Developer;
(c) Any Release or threatened Release of a Hazardous
Substance, or any condition of pollution, contamination or Hazardous Substance-related nuisance on, under or from real property at the Project Site (including any Public Improvements) to the extent the Release, threatened Release, condition, contamination or nuisance was caused, contributed to, or exacerbated by Developer or others for whom Developer is responsible (including its contractors and servants) on any portion of the Project Site prior to conveyance under a Ground Lease; provided, that this clause (c) shall not apply as to a City Party to the extent such violation, Release, threatened Release, condition, contamination or nuisance commenced or was created by or caused by a City Party. From and after delivery of the applicable Development Parcel under a Ground Lease, the Phase Developer shall Indemnify the City in accordance with the provisions of the Ground Lease with respect to the Premises leased thereunder.
17.2.2 In each of(a), (b), and (c) in Section 17.2.1, above, the term "Developer" includes Developer's agents, servants, employees or contractors, or any other party for which Developer is responsible or which is acting pursuant to the authority of Developer with respect to this Agreement or the Project. Developer's obligations under Section 17 .2.1 shall: (I) apply regardless of the extent or availability of insurance proceeds; and (2) survive the expiration or other termination of this Agreement. However, if it is reasonable to assert that a claim for Indemnification under Section 17.2.1 is covered by a pollution liability insurance policy, pursuant to which such City Party is an insured party or a potential claimant, then City shall reasonably cooperate with Developer in asserting a claim or claims under such insurance policy or Indemnity but without waiving any of its rights under Section 17 .2.1. Developer specifically acknowledges and agrees that it has an immediate and independent obligation to defend the City Parties from any claim that may reasonably fall or is otherwise determined to fall within the Indemnification provision of Section 17 .2.1, even if the allegations are or may be groundless, false or fraudulent. Developer's obligation to defend under Section 17 .2.1 shall arise at the time such claim is tendered to Developer and shall continue at all times thereafter. Notwithstanding the foregoing, if a City Party is a named insured on a pollution liability insurance policy obtained by Developer, such City Party will not seek Indemnification from Developer under Section
17.2.l unless it has asserted and used commercially reasonable efforts to pursue a claim for insurance under such policy and (if successful in the pursuit of such claim) until any limits from the policy are exhausted, on condition that (i) Developer pays any self-insured retention amount 50 required under the policy and (ii) nothing in this sentence requires any City Party to pursue a claim for insurance through litigation prior to seeking Indemnification from Developer. 17 .3 Damage and Destruction.
17 .3 .I Risk of Loss. From and afterthe Effective Date, and with the exception of disturbance to the real property required by or necessary to implement the Project Documents or otherwise to comply with Applicable Laws, Developer shall assume all risk of damage to or destruction of real property to be leased under a Ground Lease under this Agreement, subject to this Section 17.3. However, City owns and is the sole operator of the Landfill, and the Landftll Parcel is not being leased to any Phase Developer, although it shall be subject to certain easements granted herein and under the Ground Leases. City agrees that it shall meet the obligations with respect to the Landfill set forth under Article 14, above.
17.3.2 Existing Improvements. The Parties agree that any existing improvements in any Airspace Parcels that are not specifically required by the Project Documents to remain on such Airspace Parcels do not have significant value for Master Developer or any Phase Developer, and therefore damage to or destruction of such existing improvements will not affect the Parties' rights and obligations under this Agreement, which will continue in full force and effect without any modification except as set forth below. If permitted by Applicable Law, City shall assign to the applicable Phase Developer, without warranty, upon execution of each Ground Lease all of City's right, title, and interest in and to such existing improvements and all unexpended insurance proceeds and any uncollected claims and rights under insurance policies covering such damage or destruction, if any.
18. Compliance with Plans and Policies.
18.1 Compliance with Plans and Obligations. Developer and City shall each at all times comply with the applicable provisions of the following plans and obligations:
18.1.1 18.1.2
18.1.3 The IMP;
The MCP; and
The Landfill O&M Term Sheet or Landfill Operation and
Management Agreement, as applicable, attached hereto as Exhibit M.
18.2 Relocation Assistance. In the event that there are tenants or other lawful occupants on any portion of the Project Site who require relocation, City shall comply with the requirements of the California Relocation Assistance Law (California Government Code Section 7260, et seq., referred to herein as the "Relocation Act"), to the extent that such Relocation Act is applicable to such tenant, and any other Applicable Laws and regulations regarding the displacement of tenants or other occupants of the Project Site. City shall consult with Master Developer regarding all such relocation proceedings, shall keep Master Developer reasonably informed of legal proceedings, including court dates, settlement conferences and proposed court orders and judgements, and shall provide Master Developer with at least twenty (20) days' advance notice of its intention to expend funds which are subject to reimbursement by Master Developer under this Section 18.2. Except for relocation costs incurred by City if City chooses 51 to relocate the BMX Track located on Parcel 1, Master Developer shall reimburse City for relocation costs that City is required to pay pursuant to the requirements of the Relocation Act within thirty (30) days following receipt of an invoice setting forth in reasonable detail the amount of such cost and the basis for payment under the Relocation Act. City shall not offer any relocation settlement award outside of the prescribed judicial process without Developer's prior review and reasonable approval and Developer shall have no responsibility for reimbursement for any such settlement costs that were incurred by City without involving Developer in prior consultation.
18.3 Compliance with CEOA Mitigation Measures. Developer shall perform, or cause to be performed, all Mitigation Measures applicable to each component of the Project that are identified in the Project MMRP as the responsibility of the Project Developer thereunder (including its successors in interest and contractors). As appropriate, these mitigation measures shall be incorporated by Developer into any AA&R and any other applicable contract or subcontract with Developer related to the construction or operation of the Improvements.
18.4 Restrictions on Competition. City shall use commercially reasonable efforts to avoid approving either of the following proposed projects to be located within two (2) miles of the Project Site: (i) any Major Department Store or (ii) any cinema; provided, that any expansion of the existing cinema at the Mercado Shopping Center shall not be subject to this Section 18.4. This Section 18.4 shall be applicable for a period ending three (3) years after the first opening within the Project of (1) with respect to (i) above, a Major Department Store, or (2) with respect to (ii) above, a cinema.
18.5 Survival. The terms of this Article 18 shall survive the termination of this Agreement with respect to any Phase that has been Taken Down.
19. Insurance.
19 .1 Required Insurance. Each Ground Lease shall include the form, amount, type, terms and conditions of insurance coverages required of Developer in connection with such Phase.
20. Dispute Resolution.
20.1 Arbitration Matters.
20.1.1 Each of the following is an "Arbitration Matter" following notice from one Party to another Party that a dispute exists as to such matter, and shall be resolved by binding arbitration in accordance with the binding arbitration procedures set forth in Section 20.3.3: (i) City Approval of Master Developer's Premium Costs report (Section 16.1); (ii) City Approval of Allowed Square Footage (Article 10); (iii) City's issuance or non-issuance of a Certificate of Completion (Article 12); (iv) whether an event of Excusable Delay or Force Majeure has occurred (Article 24); (v) disputes under provisions set forth in Exhibits to this Agreement that call for or permit arbitration and do not otherwise specify a specific arbitration process; (vi) City failure to Approve a matter as to which it is required by this Agreement to be reasonable; (vii) the characterization of a transfer or proposed transfer hereunder as a Consent Transfer or Permitted Transfer (Article 22); (viii) the sufficiency of Adequate Security provided 52 under Article 28, but not any disputes regarding the right to call or act upon Adequate Security or the failure of an obligor of Adequate Security to perform its obligations under the Adequate Security; and -{ix) any other matter mutually agreed upon by the Parties to be submitted to Arbitration in accordance herewith.
20.1.2 Each of the following is an "Expedited Arbitration Matter" following notice from on Party to another Party that a dispute exists as to such matter, and shall be resolved by binding arbitration in accordance with the expedited dispute resolution procedure set forth in Section 20.3.2: (i) City Approval of any Phase Option Notice (Article 4); (ii) any disagreement as to an objection letter provided by City in accordance with Section 4.4; (iii) any disagreement as to the scope of hnprovements to be included within the DAP in accordance with Section 5.1; (iv) compliance with the "best efforts" obligations (Section 5.3.7); (v) Master Developer's disagreement with the statements or requests made in City's objection letter to the Parking Management Plan in accordance with Section 5.5; (vi) City's failure to respond to a revised Exhibit F-1 within thirty (30) days (pursuant to Section 9.l.2{a)); (vii) any disagreement as to an objection letter provided by City in accordance with Section 9. l.2{a); (viii) any disputes with respect to Section 9.l.2(c) (failure to meet outside dates in Phase Schedule of Performance); (ix) a dispute as to a Consent Transfer under Section 22.5.3; or (x) proposed additions or subtractions to the_ Pre-Approved Arbiters List (pursuant to Section 20.3.1).
20.2 Good Faith Meet and Confer Requirement. With respect to any dispute regarding an Arbitration Matter or an Expedited Arbitration Matter, the Parties shall attempt in good faith to resolve the dispute for a period of thirty (30) days after this Article 20 is invoked.
If the dispute remains unresolved at the end of the thirty day period, any Party shall have the right to refer such dispute to the City Manager. If such dispute remains unresolved for an additional period of twenty-one (21) days after any such referral to City Manager, despite good faith efforts by Developer to resolve the same through discussions with City Manager, then the Parties shall have the right to pursue the expedited dispute resolution process set forth in Section
20.3.2 for Expedited Arbitration Matters and the general dispute resolution process set forth in Section 20.3.3 for Arbitration Matters. Nothing in this Section 20.2 shall require a Party to postpone instituting any injunctive proceeding or to pursue resolution under this Section 20.2 if it -believes in good faith that such postponement will cause irreparable harm to such Party.
20.3 Dfapute Resolution Procedures.
20.3.1 Arbiters. The arbitrator ("Arbiter") of Arbitration Matters and Expedited Arbitration Matters will be selected by mutual agreement of the parties from a list of pre-approved Arbiters attached hereto as Exhibit O (the "Pre-Approved Arbiters List"). The Arbiter will hear all disputes under this Agreement unless the Arbiter is not available to meet the time schedule set forth herein, in which case the Parties may agree to direct the dispute to another Arbiter on the Pre-Approved Arbiters List. lf none of the Arbiters listed is able or willing to serve, the parties shall mutually agree on the selection of an Arbiter to serve for the purposes of this dispute. The Arbiter appointed must meet the Arbiters' Qualifications. The "Arbiter's Qualifications" shall be defined as at least ten (10) years' experience in a real property professional capacity, such as a real estate economist, appraiser, broker, developer or construction manager or professional in the South Bay area. The Parties shall review the PreApproved Arbiters List on an annual basis, determine the continued availability and willingness 53 to serve of each Arbiter, and may at that time or from time to time, seek to add or subtract arbiters from the Pre-Approved Arbiter List, by notice in writing to the other Party. Any such notice will be accompanied by supporting documentation of the new proposed Arbiter's qualifications or with the reasons for seeking to r~move an Arbiter from the Pre-Approved Arbiters List, as applicable. The other Party shall have fifteen (15) Business Days to respond in writing to such request, and failure to respond shall be deemed consent so long as the notice shall include a statement providing that the failure to respond in such fifteen (15) Business Day period shall be deemed consent. If the other Party objects, the Parties shall confer pursuant to Section
20.2 and thereafter such disputes (if still unresolved after conferring) shall be referred to arbitration pursuant to this Section 20.3. Notwithstanding the foregoing, if based upon the annual review or at any time during the Term, the Parties become aware that an Arbiter has become unavailable to serve in any prospective Arbitration or has expressed an unwillingness to continue to serve, the Parties shall replace that Arbiter with a new Arbiter mutually agreed-upon by the Parties.
20.3.2 Expedited Dispute Resolution Procedure. The Party(ies) disputing any Expedited Arbitration Matter shall, within fifteen (15) Business Days after submittal of the dispute to arbitration, submit a brief with all supporting evidence to the Arbiter with copies to all Parties. Evidence may include, but is not limited to, expert or consultant opinions, any form of graphic evidence, including photos, maps or graphs and any other evidence the Parties may choose to submit in their discretion to assist the Arbiter in resolving the dispute. In either case, any interested Party may submit an additional brief within five (5) Business Days after distribution of the initial brief. The Arbiter thereafter shall hold a telephonic hearing and issue a decision in the matter promptly, but in any event within twenty-five (25) Business Days after the initiation of the arbitration, unless the Arbiter determines that fu11her briefing is necessary, in which case the additional brief(s) addressing only those items or issues identified by the Arbiter shall be submitted to the Arbiter (with copies to all Parties) within ten (10) Business Days after the Arbiter's request; and thereafter the Arbiter shall hold a telephonic hearing and issue a decision promptly but in any event within ten (10) Business Days after submission of such additional briefs, and no later than forty-five (45) Business Days after the initiation of the arbitration. The decision of the Arbiter will be final, binding on the Parties and non-appealable.
20.3.3 Arbitration Process.
(a) Election to Participate in Arbitration. For Arbitration Matters and other disputes under this Agreement that the Parties agree to arbitrate in accordance with Section 20.1, the Parties shall submit the dispute to binding arbitration by notifying the Arbiter (selected as described in Section 20.3.1) of the dispute within ten (10) Business Days after expiration of the good faith meet and confer provisions of Section 20.2. Thereafter, within ten (10) Business Days, each Party to the dispute shall submit to the Arbiter and serve on the other Party to the arbitration a short statement of the dispute and a proposed discovery and hearing schedule.
(b) Preliminary Hearing. Within twenty (20) Business
Days after notice of the election to participate in arbitration, the Arbiter shall conduct, either telephonically or in-person, a preliminary hearing. At the preliminary hearing the Arbiter shall 54 decide discovery and briefing issues and set dates, including a hearing date. In resolving discovery issues, the Arbiter shall consider expediency, cost effectiveness, fairness, and the needs of the Parties for adequate information with respect to the dispute. (c) Retention of Consultants. The Parties by mutual
agreement may retain consultants to assist the Arbiter in the course of Arbitration, if requested by the Arbiter. In his or her request, the Arbiter shall provide to all Parties to the dispute an explanation for the need for the consultant, the consultant's identity, hourly rate, and the estimated costs of the service. All Parties to the dispute must approve the retention of the consultant and, if retention of the consultant is approved, how the Parties will share the cost of the consultant. The consultant's cost shall not exceed ten thousand dollars ($10,000) without the prior written consent of the Parties to the dispute.
(d) Commencement of Arbitration. The arbitration
hearing shall commence no later than sixty (60) days after the initial preliminary hearing, unless the Parties to the dispute mutually agree to extend the date or the Arbiter extends the date. (e) Additional Procedural Requirements. The procedural
rules of the arbitration under this Section 20.3.3 shall be supplemented by any non-conflicting arbitration procedures of other alternative dispute resolution providers as may be mutually agreed upon by the Parties from time to time, applicable to commercial binding arbitration, and may be modified by agreement of the Parties.
(f) Decision of Arbiter. The Arbiter shall make a written binding decision, specifying the reasons for the decision, within twenty (20) calendar days after the hearing. The Arbiter's decision shall be binding on the Parties. (g) Time Period to Complete Arbitration. The arbitration shall be completed within eighty (80) calendar days of the preliminary hearing, unless the parties to the dispute mutually agree to extend the date or the Arbiter extends the date.
20.3.4 Additional Provisions Governing Arbitration of Disputes. (a) Disputes Involving Arbitrability of Disputes. The
Arbiter shall decide any dispute involving either the right to have a disputed matter submitted to binding arbitration pursuant to Section 20.3.3 or whether the matter is properly the subject of the expedited dispute resolution procedure pursuant to Section 20.3.2 in accordance with this Section
20.3.4. The Parties to such dispute shall provide notice of the dispute and submit in writing their respective positions regarding the dispute to the Arbiter. No such submission shall exceed ten (10) double-spaced pages. The Arbiter shall make his or her decision within five (5) days of the last submission.
(b) No Ex Parte Communications. No Party or anyone
acting on its behalf shall have any ex parte communication with the Arbiter with regard to any matters in issue. Communications concerning procedural matters such as scheduling shall not be included in this prohibition.
55 (c) Submission. Unless otherwise directed by the Arbiter or agreed by the Parties to a given dispute, the Parties involved in the dispute shall strive to make joint submissions to the Arbiter. The Arbiter shall determine the schedule for the Parties' submissions, the page and form limitations for the submissions, and the schedule and form of any hearing(s).
21. Event of Default; Remedies.
21.1 General. If a Party breaches any of its obligations under this Agreement, the Party to whom the obligation was owed (the "Notifying Party") may notify the breaching Party of such breach. The notice shall state with reasonable specificity the nature of the alleged breach, the provisions under which the breach is claimed to arise and the manner in which the failure of performance may be satisfactorily cured. Failure to cure such breach within the time period specified in Section 21.2 shall be an "Event of Default" by the breaching Party under this Agreement.
21.1.1 Upon delivery of a notice of breach, the Notifying Party and the breaching Party shall promptly meet to discuss the breach and the manner in which the breaching Party can cure the same. If before the end of the applicable cure period the breach has been cured to the reasonable satisfaction of the Notifying Party, the Notifying Party shall issue a written acknowledgement of the other Party's cure of the matter which was the subject of the notice of breach.
21 .1 .2 If the alleged breach has not been cured or waived within the time permitted for cure in accordance with Section 21.2 hereof, the Notifying Party may (i) extend the applicable cure period or (ii) institute such proceedings and/or take such action as is permitted in this Agreement with reference to such breach.
21.2 Particular Breaches by the Parties.
21.2.l Event of Default by Master Developer. The Parties agree that each of the following shall be deemed to be an Event of Default by Master Developer under this Agreement:
(a) Master Developer causes or allows to occur, as to
itself, an Assignment not permitted under this Agreement, and the Assignment is not reversed or voided within thirty (30) days following Master Developer's receipt of notice thereof from City; (b) Master Developer does not Take Down Phase 1, Phase
2 or Phase 2A by the applicable Outside Dates therefor in the Schedule of Performance, subject to Excusable Delay;
(c) An Event of Default by the Master Developer has
occurred under the Development Agreement that results in its termination; provided, however, that no Event of Default by any transferee under the Development Agreement that results in a termination of the Development Agreement as to the applicable Phase or Partial Phase owned by such transferee shall constitute a default by Master Developer or any Phase Developer with 56 respect to any other portion of the Project Site hereunder and shall not entitle City to terminate or · modify this Agreement with respect to such other portion of the Project Site. ( d) Master Developer fails to perform any of its monetary obligations pursuant to Section 4.8 hereof (subject to the notice and cure periods set forth in Section 21.2.He)), fails to perform its obligations under Section 4.8.l(c) to terminate the Phase 2A Lease within the time required, or fails to return the premises to City in the condition required under Section 4.8.l(b)(iii) (subject to the notice and cure periods set forth in Section
21.2. l (f)).
(e) Master Developer fails to pay any amount required to be paid to City under this Agreement, and such failure continues for thirty (30) days following Master Developer's receipt of notice thereof from City; provided, that if Master Developer is disputing in good faith its obligation to pay such amount, such thirty (30) day period shall not begin to run until the dispute is resolved;
(f) Master Developer fails to perform any other agreement or obligation to be performed by Master Developer under this Agreement or any of the Exhibits hereto, and such failure continues past any cure period specified in this Agreement, or if no such cure period is specified, then within sixty ( 60) days after receipt by Master Developer of notice thereof from City (and, for a failure that is not reasonably susceptible of cure within sixty (60) days, if Master Developer fails to promptly commence such cure within thirty (30) days after its receipt of such notice and thereafter diligently prosecute the same to completion within a reasonable time).
21.2.2 Event of Default by a Phase Developer. The Parties agree that each of the following shall be deemed to be an Event of Default by a Phase Developer under this Agreement:
(a) Such Phase Developer causes or allows to occur, as to itself, an Assignment not permitted under this Agreement, and the Assignment is not reversed or voided within thirty (30) days following such Phase Developer's receipt of notice thereof from City;
(b) Such Phase Developer Takes Down any Phase but fails to Commence the Infrastructure by the applicable Outside Date for Commencement, subject to Excusable Delay, and the applicable Phase Developer fails to cure by Commencing construction thereof within ninety (90) days following the Phase Developer's receipt of notice thereof from City;
(c) Such Phase Developer causes a Material Breach under this Agreement as set forth in Section 9 .1.2( c) (Failure to Meet Outside Dates in Phase Schedule of Performance);
(d) Such Phase Developer Talces Down any Phase but
abandons or ceases its work on Infrastructure or Required Buildings without the Approval of City for more than one hundred and twenty ( 120) consecutive days or a total of one hundred and eighty (180) days (not counting any period of Force Majeure), and such failure, abandonment, or 57 cessation continues for a period of forty-five (45) days following such Phase Developer's receipt of notice thereof from City;
(e) Such Phase Developer Takes Down a Phase and
Commences construction of any Improvements other than the Infrastructure or Required Buildings, but then abandons or ceases its work on such Improvements without the Approval of City for more than one hundred and twenty ( 120) consecutive days or a total of one hundred and eighty (180) days (not counting any period of Force Majeure), and such failure, abandonment, or cessation continues for a period of forty-five (45) days following such Phase Developer's receipt of notice thereof from City;
(f) The Development Agreement has terminated as to a
Phase due to an Event of Default by the Phase Developer; (g) The Ground Lease has terminated as to a Phase due to an Event of Default by the Phase Developer thereunder;
(h) Such Phase Developer fails to provide Adequate
Security as required under this Agreement, or once it has provided Adequate Security fails to maintain the same to the extent required under this Agreement, and such failure continues for forty-five (45) days following receipt of notice from the City to such Phase Developer (provided, that such Phase Developer shall immediately, upon receiving notice from the City Manager to such effect, suspend all activities ( other than those needed to preserve the condition of improvements or as necessary for health or safety reasons) on affected portions of the Project Site during any period during which Adequate Security is not maintained as required by this Agreement);
(i) Such Phase Developer fails to pay any amount
required to be paid to City under this Agreement, and such failure continues for thirty (30) days following such Phase Developer's receipt of notice thereof from City; and G) Such Phase Developer fails to perfonn any other
agreement or obligation to be perfonned by such Phase Developer under this Agreement, and such failure continues past any cure period specified in this Agreement, or if no such cure period is specified, then within sixty (60) days after receipt by the applicable Phase Developer of notice thereof from City (and, for a failure that is not reasonably susceptible of cure within sixty (60) days, if Master Developer fails to promptly commence such cure within thirty (30) days after its receipt of such notice and thereafter diligently prosecute the same to completion within a reasonable time.
2L2.3 No Cross-Default. (A) No Event of Default by Master Developer with respect to its obligations under this Agreement shall be deemed to be an Event of Default by any Phase Developer (including any Affiliate of Master Developer) acting in its capacity as a Phase Developer under this Agreement; and (B) no Event of Default by a Phase Developer (including Master Developer and Affiliates of Master Developer when acting as a Phase Developer) shall be deemed to be an Event of Default by Master Developer, an Affiliate of 58 Master Developer or any other Phase Developer with respect to its obligations under this Agreement.
21.2.4 Event of Default by City. The Parties agree that each of the following shall be deemed an Event of Default by City under this Agreement:
(a) City fails to perform its obligations under any Project Document to which it is a party, the time given for cure in such Project Document has expired and such failure continues for thirty (30) days following City's receipt of notice thereof from Developer (and, for a failure that is not reasonably susceptible of cure within thirty (30) days, if City fails to promptly commence such cure within thirty (30) d!iys following its receipt of such notice and thereafter diligently prosecutes the same to completion within a reasonable time, but in no event to exceed ninety (90) days from the receipt of such notice); and (b) City fails to perform any other agreement or obligation to be performed by City under this Agreement, and such failure continues past any cure period specified in this Agreement, or if no such cure period is specified, then within sixty (60) days after receipt by City of notice thereof from Developer (and, for a failure that is not reasonably susceptible of cure within sixty (60) days, if City fails to promptly commence such cure within thirty (30) days after its receipt of such notice and thereafter diligently prosecute the same to completion within a reasonable time, but in no event to exceed one hundred and fifty (150) days from the receipt of such notice).
21.2.5 Material Breach. "Material Breach" means:
(a) For City, an Event of Default (including a failure of City to comply with its obligations pursuant to Article 14 hereof (Landfill Obligations)) that materially adversely affects the ability of Master Developer or a Phase Developer to proceed timely with the Project or any significant portion thereof without substantially increased costs; (b) For Master Developer, (i) an Event of Default under Section 21.2.l(a). 21.2.1 (b), 21.2.l(c) or 21.2. Hd). or (ii) the failure to pay the Landfill Costs or Indemnification obligations as and when such payments are due and such failure continues for a period of thirty (30) days following receipt of notice of such non-payment from City to Developer. The Parties acknowledge and agree that City shall not be required to obtain a final judgment for a Material Breach under this Section 21.2.5(b) as a condition to pursuing remedies under Section 21.3.3(d):
(c) . For a Phase Developer (including Master Developer acting as Phase Developer), an Event of Default under Section 21.2.2(a). 2 l .2.2(b), 21.2.2(c),
21.2.2(d). 21.2.2(f) and 21.2.2(g). The Parties acknowledge and agree that City shall not be required to obtain a final judgment for a Material Breach under this Section 2 l .2.5(c) as a condition to pursuing remedies under Section 21.3.3(c): and (d) For City, Master Developer, and any applicable Phase Developer, an arbitration (including pursuant to Article 20 hereof) or judicial action that results in a final judgment for payment or performance (beyond any applicable appeal period), where the Party against whom the judgment was made fails to make the required payment or perform 59 the required action in accordance with the judgment within sixty (60) days following the final, unappealable judgment or any longer period as may be specified in the judgment itself.
21.3 Remedies.
21.3. l Specific Performance. Upon an Event of Default, the aggrieved Party may institute proceedings in a court of proper jurisdiction to compel injunctive relief or specific performance to the extent permitted by law (except as otherwise limited by or provided in this Agreement) by the Party in breach of its obligations. Nothing in this Section . 21.3. l shall require a Party to postpone instituting any injunctive proceeding if it believes in good faith that such postponement will cause irreparable harm to such Party.
21.3.2 Limited Damages. The Parties have determined that except as set forth in this Section 21.3 .2, (i) monetary damages are generally inappropriate, (ii) it would be extremely difficult and impractical to fix or determine the actual damages suffered by any Party as a result of a breach hereunder and (iii) equitable remedies and remedies at law not including damages are particularly appropriate remedies for enforcement of this Agreement. Except as otherwise expressly provided below to the contrary (and then only to the extent of actual damages and not consequential or special damages, each of which is hereby expressly waived by the Parties), no Party would have entered into or become a Party if it were to be liable in damages under this Agreement. Consequently, the Parties agree that no Party shall be liable in damages to any other Party by reason of the provisions of this Agreement, and each covenants not to sue the other for or claim any damages under this Agreement and expressly waives its right to recover damages under this Agreement, except as follows: actual damages only shall be available as to breaches that arise out of (a) the failure to pay amounts as and when due and owing under this Agreement (including under any Exhibit to this Agreement), (b) the failure to make payment due under any Indemnification in this Agreement, including but not limited to any Permit to Enter, (c) the requirement to pay attorneys' fees and costs as set forth in Section 29.32, or when required by an arbitrator or a court with jurisdiction, (d) to the extent damages are expressly permitted under any agreement among or between any of the Parties other than this Agreement, and (e) Master Developer's or a Phase Developer's violation of any of the Project Documents pertaining to the Landfill. For purposes of the foregoing, "actual damages" means the actual amount due and owing under this Agreement, with interest as provided by law, together with such judgment collection activities as may be ordered by the judgment, and no additional amount.
21.3.3 Certain Exclusive Remedies. The exclusive remedy:
(a) Except as otherwise provided for Phases 1, 2 and 2A, for the failure to meet any Phase Outside Date shall be the remedies of City set forth in Section
7.21;
(b) For the failure to provide Adequate Security upon
Commencement of any Improvements within Phases 1, 2 or 3 in accordance with the terms of Article 28 hereof (subject to the notice and cure provisions of Section 21.2.2(h) above), shall be the remedy of City set forth in Section 2 l.4;
60 (c) For the failure to pay money (other than the Financial Obligations, which failure shall be subject to Section 21.3.3(d)), shall be a judgment (in arbitration or a competent court) to pay such money (with interest as provided by law), together with such costs of collection as are awarded by the judge or arbitrator, subject to Section
21.2.5(c);
(d) For the failure to pay Financial Obligations, Master Developer must make payments under protest while the Parties are pursuing mediation, arbitration or judicial resolution of the dispute. If Master Developer fails to pay any such amounts under protest as required under this Section 21.3.3(d), City shall have the remedies in Section 21.4;
(e) For an Event of Default under Sections 21.2.2(b),
21.2.2(c) and 21.2.2(d), shall be (1) initially, diligent enforcement of the Adequate Security for the applicable Secured Phase Improvements to the extent still available (and further provided that City shall have no right or capacity to terminate this Agreement so long as Adequate Security then remains in effect), and (2) thereafter, the remedies in Section 21.4 (and the City shall return any unused portion of the Adequate Security relating to such Infrastructure following the Authority's exercise of its remedies under Sections 21.4): and (f) For an Event of Default under Sections 21.2.2(e), shall be an action on the Adequate Security for the applicable Secured Phase Improvements to the extent still available, and thereafter, its rights as a third party beneficiary under the Construction Covenant as set forth in Section 9.1.4 (subject to the notice and cure provisions of Section 2l.2.2(h) above).
21.4 Termination. Upon the occurrence of a Material Breach by Master Developer, City may, subject to Section 21.3.3 and the last sentence of Section 21.1, terminate this Agreement in whole or in part as to one or more Phases for which a Ground Lease has not then been executed and delivered upon a City Council determination to terminate following a public meeting. Upon the occurrence of a Material Breach by a Phase Developer, City may, subject to Section· 21.3 .3, terminate this Agreement and the applicable Ground Lease with respect to such Phase Developer and the applicable Phase. Upon the occurrence of a Material Breach by City relating to an obligation owed to Master Developer, Master Developer may terminate this Agreement. Upon the occurrence of a Material Breach by City relating to an obligation owed to a Phase Developer, -such Phase Developer may terminate this Agreement with respect to such Phase Developer and the applicable Phase. In each case, the terminating Party may terminate this Agreement only as to City and the terminating Party. The Party alleging a Material Breach may provide a Notice of Termination to the Party in Material Breach, which Notice of Termination shall state the Material Breach, the portions of the real property covered by this Agreement (or the Phases) to be terminated, and the effective date of the termination (which shall, in no event, be sooner than ninety (90) days from the date of delivery of the Notice of Termination). If such termination occurs, neither the Party in Material Breach nor the Notifying Party shall have any further rights against or liabilities to the other under this Agreement as to the terminated portions of this Agreement except to the extent expressly provided in this Agreement. No Party may terminate this Agreement based on the Material Breach by another Party without frrst giving a Notice of Termination. 61 21.5 Conflicting Law; Developer's Right to Terminate.
21.5 .1 If a Conflicting Law is enacted, then on request of Master Developer or a Phase Developer affected by such Conflicting Law, such Party and City shall meet and confer in good faith for a period of not less than thirty and not more than ninety (90) days to determine the feasibility of any proposed modification to this Agreement in response to the Conflicting Law. If, after the exercise of good faith efforts and due diligence, any affected Party determines in the exercise of its reasonable judgment that there is no feasible modification that is mutually acceptable, then such affected Party may terminate this Agreement as to itself by giving sixty (60) days' prior notice to City; provided, that if such affected Party does not elect to terminate, then there shall be no change to this Agreement (unless such affected Party's performance is precluded in any material way by the Conflicting Law, in which case City can terminate this Agreement with respect to such affected Party by notice to such Party). Nothing in this Agreement shall preclude either City or any affected Party from challenging the validity of the Conflicting Law, and any termination of this Agreement shall be tolled during the period of such challenge.
21.5.2 If an affected Party so notifies City of is intent to terminate this Agreement and the Conflicting Law is susceptible to satisfaction by the payment of a liquidated sum of money within such sixty (60) day period, then City may, in the exercise of its sole discretion, notify the affected Party that City will pay such sum (which sum shall not constitute a City Cost), in which case the affected Party's Notice of Termination shall be void.
21.5.3 The terminating Party may cause its Notice of Termination to be recorded as provided in Section 29.30.
21.6 Rights and Remedies Cumulative. Neither Party shall have any remedies for a breach of this Agreement by the other Party except to the extent that such remedy is expressly provided for in this Agreement, provided, however, that except as expressly limited by this Agreement, the rights and remedies of the Parties contained in this Agreement shall be cumulative, and the exercise by any Party of any one or more of such remedies shall not preclude the exercise by it, at the same or different times, of any other remedies contained in this Agreement for the same breach by the applicable Party. In addition, the remedies provided in this Agreement do not limit the remedies provided in other agreements and documents.
21.7 No fmplied Waiver. No waiver made by a Party for the performance or manner or time of performance (including an extension of time for performance) of any obligations of the other Party or any condition to its obligations under this Agreement shall be considered a waiver of the rights of the Party making the waiver for a particular obligation of the other Party or condition to its own obligation beyond those expressly waived in writing
22. Assignment.
22.1 Limitations on Master Developer's Right to Transfer. Master Developer represents and agrees that its undertakings pursuant to this Agreement are for the purpose of development of the Project and not for speculation in land holding. Master Developer further recognizes that: (a) the qualifications and identity of Master Developer are of particular concern 62 to City in light of the importance of the Project to the general welfare of City residents; (b) City is relying upon the qualifications and ability of Master Developer to serve as the catalyst for development of the Project and to assure the quality of the use, operation, and maintenance in the development of the Project; and (c) such qualifications and identity are material considerations inducing City to enter into this Agreement with Master Developer. Therefore, Master Developer's rights to transfer any right or interest under this Agreement shall be governed · strictly in accordance with the provisions of this Article 22, and no voluntary or involuntary successor in interest of Master Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein.
22.2 Phase Assignments. To the extent that Master Developer effectively assigns to a Third Party or an Affiliate all of the applicable rights and obligations under this Agreement as to a particular Phase in accordance with the provisions of this Article 22, then except as otherwise specifically set forth in this Agreement, the obligations of Master Developer shall be released as to the applicable Phase and the Third Party or Affiliate (as applicable) identified in the Phase Developer Designation shall be deemed to be the Phase Developer for the applicable Phase. Such assignment shall be pursuant to a Consent Transfer or a Permitted Transfer in accordance with this Article 22. Thereafter, such Phase Developer shall have the same rights to transfer its right or interest under this Agreement in accordance with the same standards set forth in this Article 22 that are applicable to a Consent Transfer or Permitted Transfer by Master Developer.
22.3 Consent Transfers Defined. Except as otherwise specifically provided in this Article 22, or Article 23, Master Developer shall not without the Approval of City (each, subject to the exclusions set forth herein, a "Consent Transfer"):
22.3.1 sell, assign, pledge, mortgage or otherwise encumber its interest in this Agreement or in all or any portion of the Project Site (any such action is referred to herein as an "Assignment"); or
22.3.2 sell, assign, transfer, pledge, mortgage or otherwise grant a security interest in any interest of Master Developer in this Agreement or in all or any portion of the Project Site, whether by operation of law· or otherwise, nor shall any sale, Assignment, transfer, pledge, mortgage, or grant of a security interest be effected of all or any part of the issued or outstanding capital stock of a corporation that is Master Developer or of its Controlling Owner, whether held directly or indirectly, and whether made voluntarily, involuntarily, by operation of law or otherwise, if the same shall result in a Change of Control of Master Developer, nor shall there be any merger or consolidation of Master Developer or of such Controlling Owner into or with another corporation, nor shall any of the same be effected with respect to any interest in a partnership that is Master Developer or in· a partnership that is its Controlling Owner, whether directly or indirectly, and whether made voluntarily, involuntarily, by operation of law or otherwise, if the same will result in a Change of Control of Master Developer, nor shall any of the same be effected with respect to any managing member's interest in a limited liability company that is Master Developer or in a limited liability company that is its Controlling Owner, whether directly or indirectly, and whether made voluntarily, involuntarily, by operation of law or otherwise, if the same will result in a Change of Control of Master Developer.
63 Notwithstanding any provision of this Agreement to the contrary, nothing contained in this Article 22 shall restrict in any manner, prohibit, require notice to, or require the Approval of City for (a) any Assignment or any form of transfer in or of the equity interests in any Person whose common stock is quoted on a recognized securities exchange such as the New York Stock Exchange or NASDAQ or (b) an Assignment or any form of other transfer of any equity interests in Master Developer or any other Person that does not, directly or indirectly, result in a Change of Control of Master Developer or such other Person.
22.4 Conditions Precedent to Consent Transfers. Except as otherwise provided in this Article 22, Master Developer shall only have the right to effect a Consent Transfer subject to and upon fulfillment of the following conditions precedent:
22.4.1 No Event of Default. No Event of Default by Master Developer shall be outstanding and uncured as of the effective date of the proposed Consent Transfer, or in the event of a Consent Transfer to or from a proposed Phase Developer, no Event of Default by Master Developer (or any transferee) shall be outstanding and uncured as to such Phase as of the effective date of the proposed Consent Transfer, unless City has received adequate assurances satisfactory to City in its sole discretion that such Event of Default shall be cured in a timely manner either by Master Developer or the transferee under the Consent Transfer.
22.4.2 Timing.
(a) Unless this Section 22.4.2(a) is waived by the City Council in its sole discretion, Master Developer shall not undertake a Consent Transfer for Phase I, Phase 2, or Phase 3 in accordance with the provisions of this Article 22 until all of the following conditions are satisfied: (a) the Infrastructure is Substantially Complete; and (b) the earlier of the date that the Minimum Initial Buildings and the Minimum Retail Buildings for the applicable Phase have (x) been open for business for a minimum of thirty six (36) months or (y) have achieved an occupancy rate of at least eighty percent (80%), but in no event earlier than twenty-four months after the Minimum Initial Buildings and the Minimum Retail Buildings for the applicable Phase have been open for business.
(b) Subject to City's approval of the proposed transferee and all other terms of this Agreement, Developer may engage in a Consent Transfer for any of the other Phases at any time on or after the date of execution of the Ground Lease for the applicable Phase.
22.4.3 Notice to City. If Master Developer desires to engage in a Consent Transfer, then at least thirty (30) days prior to the proposed effective date of the Consent Transfer, Master Developer shall submit to City a request for consent by City (a "Consent Transfer Request Notice") of the proposed Consent Transfer, which request shall include or attach the following:
(a) A statement that precisely sets forth the rights and obligations to be transferred, including the boundaries of any land area that is the subject of the Consent Transfer Request Notice;
64 (b) A statement containing: (i) the name and address of the proposed transferee; (ii) the proposed effective date of the proposed Consent Transfer; and (iii) a description of the experience of the proposed transferee (and members of such transferee's team, by contract or otherwise (the "Transferee Team")) in the ownership, operation, management and, if applicable, development of real estate assets of the use classes represented by the Buildings then located within the portion of the Project that is the subject of the Consent Transfer Request Notice (and/or then planned to be developed within such area); and (c) Additional reasonably sufficient information and
documentation evidencing that (i) the proposed Transferee Team and/or its Controlling Owner (if such Controlling Owner would be financially liable as part of the proposed Transfer) has the financial standing and/or strength (taking into account all of the proposed transferee's other obligations and liabilities) to perform its rental and other obligations under any applicable Ground Lease that would be entered into for the Phase that is the subject of the proposed Consent Transfer, provided, however, that a transferee that meets the Net Worth Requirement (by itself or by providing a Guaranty) for that Phase shall be deemed to satisfy this subsection (c)(i) (in either case, the "Financial Requirement"); and (ii) the proposed Transferee Team and/or its Controlling Owner (a) has a commercially reasonable amount of experience in the ownership, development, operation, leasing and management of real estate assets within the United States of the use classes represented by the then-current Buildings located within the applicable Phase (and, if a material amount of development of the Premises is then planned to occur in the future during the Term, in the development of real estate assets of the use classes then planned to be developed in the Phase in the future during the Term); and (c) has a commercially reasonable amount of experience in the construction and operation of Infrastructure of the same type and quality as that proposed or constructed within the applicable Phase (together, the "Experience Requirement"). Such documentation shall include (but may not be limited to) financial statements, references, and examples of prior development projects; and
( d) A copy of the proposed AA&R substantially in the
form of Exhibit P attached hereto that sets forth the applicable rights and obligations under this Agreement to be assigned to the transferee and the obligations of Master Developer hereunder to be retained and/or released as to the applicable Phase.
22.5 Procedures for Consent Transfer.
22.5.1 City Approval. Subject to the conditions precedent set forth in Section 22.4, above, the City Manager, within thirty (30) Business Days of receiving the information and docmnentation above, shall Approve or disapprove the proposed Consent Transfer.
22.5.2 City's Consent; Standards. The withholding or conditioning of City's consent to any proposed Consent Transfer shall be reasonable and shall be based solely on one or more of the following criteria:
(a) The proposed transferee and/or its Controlling Owner (if applicable) do not meet the Financial Requirement;
65 (b) The proposed transferee and its Transferee Team
together do not meet the Experience Requirement; and
(c) The proposed transferee and/or its Controlling Owner have not provided any Adequate Security as and to the extent required under Article 28, which shall apply to the obligations assumed by the Transferee unless replacement Adequate Security is provided by the proposed transferee and Approved by the City Manager. (d) If approved, the AA&R shall be recorded in the
Official Records concurrently with the consummation of the Consent Transfer, and a copy thereof, certified by the County Recorder as a duplicate copy of the approved assumption agreement with recording information, shall be delivered to City within three (3) days after consummation of the Consent Transfer. Upon City's approval, the Consent Transfer shall be effective upon the effective date of transfer under the fully executed AA&R.
22.5.3 Appeal to City Council. If City Manager withholds or conditions its consent to any proposed Consent Transfer, Master Developer may appeal the decision to the City Council in writing within ten (10) days of the City Manager's decision. The City Council shall hear and decide the appeal at its next regularly scheduled meeting (allowing for legally required agenda notice requirements to be met), but in no event more than thirty (30) days after such request; provided, however, that the City Council may continue the matter to a date no more than twenty (20) days past the original hearing. If the City Council disapproves the Consent Transfer, Master Developer may submit the matter as an Expedited Arbitration Matter in accordance with Article 20.
22.6 Permitted Transfers and Procedure.
22.6. l Pennitted Transfers. Notwithstanding anything to the contrary in this Article 22, so long as Master Developer is not in Material Breach of this Agreement, Master Developer shall have the right at any time to Transfer all or a portion of its rights and corresponding obligations under this Agreement without the Approval of City ( except as set forth in this Section 22.6) as set forth below (each, a "Permitted Transfer"):
(a) Any transaction that would otherwise constitute a
Consent Transfer if such transaction is to one or more Affiliates of Master Developer; provided, that in each case where such transaction is a Direct Assignment (as defined in Section 22.6.2(a)) in which the Affiliate does not meet the Financial Requirement, Master Developer shall remain liable as the Master Developer or Phase Developer, as the case may be, under this Agreement; (b) Any transfer of Phase 1, Phase 2, Phase 2A or Phase 3 to Related-MPG JV, LLC, or an Affiliate of Related-MPG JV, LLC; (c) any grant by Master Developer, any Affiliate of
Master Developer or any Person related to the foregoing (collectively, a "Developer Related Party") to equity or debt providers to or directly or indirectly in Master Developer (or any Developer Related Party) of a participation in the profits and/or losses of the business of Master Developer so long as such providers do not acquire Controlling Ownership in t;,faster Developer; 66 (d) any grant, transfer, creation, amendment, modification, or termination of any Mortgage or Mezzanine Loan by Master Developer or any Master Developer Affiliate;
(e) the exercise by a Mezzanine Lender of (y) any rights it may have under its Mezzanine Loan with respect to obtaining title to the direct or indirect equity interests of Master Developer that may have been pledged to su.ch Mezzanine Lender under its Mezzanine Loan or (z) any foreclosure remedies the Mezzanine Lender may have; provided, that such Mezzanine Loan shall have been made for a valid business purpose and not principally for the purpose of transferring such equity interests and/or the leasehold estate created hereby; and (f) the exercise by a Mortgagee of any foreclosure or
other rights and/or remedies under or with respect to its Mortgage (or related loan documents) (and any transaction entered into by Master Developer and a Mortgagee in lieu of foreclosure or in lieu of the exercise by the Mortgagee of such rights and/or remedies).
22.6.2 subject to the following terms:
All Permitted Transfers that constitute an Assignment shall be (a) In the event of a direct Assignment of this Agreement (for the avoidance of doubt, not including transfers in the equity interests of any Person) (a "Direct Assignment"), not later than ten (10) Business Days after the effective date of any such Direct Assignment, Master Developer shall deliver to City (a) a duplicate original or certified copy of the Direct Assignment instrument, (b) evidence that the transferee meets the Financial Requirement, ( c) evidence that the transferee meets the Experience Requirement and ( d) proof in a form reasonably acceptable to the City Manager that there continues to exist Adequate Security as and to the extent required under Article 28, which shall apply to the obligations assumed by the Transferee unless replacement Adequate Security is provided by the Transferee and Approved by the City Manager;
(b) Any Direct Assignment of less than the entirety of
Master Developer's interest under this Agreement shall not be effective for purposes of this Agreement unless and until the Master Developer and proposed Transferee execute, acknowledge and deliver to City an AA&R substantially in the form of Exhibit P attached hereto, in which the applicable rights and obligations under this Agreement as to that Phase are assigned to the Phase Developer, and, if applicable, the obligations of Master Developer hereunder are released as to the applicable Phase.
(c) Any Direct Assignment of the entirety of Master
Developer's interest under this Agreement shall not be effective for purposes of this Agreement unless and until the Master Developer and proposed Transferee execute, acknowledge and deliver to City an assignment, assumption and release agreement reasonably satisfactory to City in which all of Master Developer's rights under this Agreement are assigned to the Transferee and all obligations of Master Developer are released as to the applicable Phase (except as to any obligations of Master Developer that arose and were to be performed prior to the effective date of the Transfer, unless also expressly assumed by Transferee), which agreement shall be substantially consistent with Exhibit P attached hereto with such revisions as may be necessary 67 to effectuate the Transfer and release of the entirety of Master Developer's interest m this Agreement.
(d) Any Transferee under this Section 22.6 shall be
deemed an Affiliate of Master Developer, and therefore a Developer Party, under this Agreement, and accordingly, Master Developer's Adequate Security (as and to the extent required to secure the obligations assumed by the Transferee pursuant to Article 28) shall apply to the obligations assumed by the Transferee unless replacement Adequate Security is provided by th_e Transferee and Approved by the City Manager.
22.7 Release. Except as may otherwise be provided under Section 22.6.l(a) above and the form of AA&R, if, as and when Master Developer enters into a Direct Assignment and the transferee thereunder assumes all of Master Developer's obligations under this Agreement as set forth above, then from and after the date of such Direct Assignment the Master Developer assigning this Agreement as part of such Direct Assignment (and all prior Master Developers) shall automatically and conclusively be released from all obligations under this Agreement, other than (i) any obligations that arose and were to be perfonned prior to the effective date of such Direct Assignment (unless also assumed in writing, in recordable form, by the transferee); and (ii) any obligations retained by the Master Developer in accordance with the applicable AA&R. Promptly after request by Master Developer, City shall confirm the foregoing release by a writing in form and substance reasonably satisfactory to City and Master Developer.
22.8 Rights of Phase Developers. The rights of and restrictions on each Phase Developer with respect to Transfers of interests in the applicable Ground Lease are governed by the applicable Ground Lease.
22.9 Liability for Default. No Transferee (including any Third Party Transferee) shall be liable for the default by Master Developer or another Transferee in the performance of its respective obligations under this Agreement, and Master Developer shall not be liable for the default by any Transferee in the performance of its respective obligations; provided, that the foregoing provision shall not be applicable to either a Transferee or Master Developer to the extent either has assumed or remains liable for such obligation under the tenns of the applicable AA&R. Except as provided in this Section 22.9 and in Section 21.4, an Event of Default by Master Developer or a Transferee shall not entitle City to tenninate this Agreement, or otherwise affect any rights under this Agreement, for any portion of the Project Site that is not owned or Controlled by the Person that is in default.
23. Financing; Rights Of Mortgagees.
23.1 Right to Mortgage; Conditions. Notwithstanding any provision of this Agreement to the contrary, Developer shall have the right to mortgage or pledge its interest in this Agreement and its interest in the Development Parcels to one or more Mortgagees and/or to permit the direct or indirect interest in Developer to be pledged to a Mezzanine Lender, in each case without City's consent, at any time and from time to time during the Term; provided, that no holder of any Mortgage or Mezzanine Loan, nor anyone claiming by, through or under any such Mortgage or Mezzanine Loan, shall by virtue thereof acquire any greater rights hereunder 68 than Developer has, except the right to cure or remedy Developer's defaults as more fully set forth below in this Article 23 and such other rights as are expressly granted to Mortgagees or Mezzanine Lenders hereunder. Notwithstanding the foregoing, however, no Mortgage or Mezzanine Loan shall be effective, unless:
23.1.1 At the time such Mortgage or Mezzanine Loan becomes effective, there are no existing Events of Default; and provided that, unless otherwise notified in writing by City that there is an existing Event of Default, any actual or prospective Mortgagee and Mezzanine Lender may conclusively rely on a statement to the effect that there is no existing Event of Default on the part of Developer given by City with respect to Developer under this Agreement for a period of thirty (30) days after the delivery thereof;
23.1.2 Such Mortgage shall be subject to all the agreements, terms, covenants and conditions of this Agreement;
23.1.3 Such Mortgage shall contain in substance the following provision (and no provisions inconsistent therewith in any material respect): "This instrument and all rights of the mortgagee hereunder are, without the necessity for the execution of any further documents, subject and subordinate to the rights of City under the Agreement hereby mortgaged, as said Agreement may have been previously modified, amended or renewed, or may hereafter be modified, amended or renewed with the consent of the mortgagee, which consent may not be unreasonably withheld, conditioned or delayed. Nevertheless, the holder of this mortgage agrees from time to time upon request and without charge to execute, acknowledge and deliver any instruments reasonably requested by City to evidence the foregoing subordination."
23.2 Notice of Mortgages. Developer or the Mortgagee or Mezzanine Lender shall give to City written notice of the making of any Mortgage or Mezzanine Loan (which notice shall contain the name and office address of the Mortgagee or Mezzanine Lender and shall contain information in reasonable detail demonstrating that the Mortgagee or Mezzanine Lender is a Mortgagee or Mezzanine Lender as defined in this Lease) no later than ten (10) days after the execution and delivery of such Mortgage or Mezzanine Loan and a duplicate original or certified copy thereof after the recording of any Mortgage executed by Developer and upon the written request of City, Developer shall, at Developer's own cost and expense, record in the Official Records a written request, executed and acknowledged by City, for a copy of any notice of default and a copy of any notice of sale under such Mortgage to be mailed to City at the address specified in the request by City.
23.3 Mortgagee Right to Notices. City shall give to each Mortgagee or Mezzanine Lender, at the address of such Mortgagee or Mezzanine Lender set forth in a written notice from such Mortgagee or Mezzanine Lender or from Developer delivered in the manner provided by Section 29.33, a copy of each notice given by City to Developer under Section 21.2 at the same time as an_d whenever any such notice shall thereafter be given by City to Developer, and, without affecting or extending the commencement of any grace or cure period available to Developer as provided in this Agreement, no such notice by City shall be deemed to have been duly given to such Mortgagee or Mezzanine Lender (and no grace or cure period in favor of such Mortgagee or Mezzanine Lender shall be deemed to have commenced) unless and until a copy thereof shall have been given to each such Mortgagee and Mezzanine Lender. Each Mortgagee 69 and Mezzanine Lender (i) shall thereupon have a period of ten ( l 0) days more in the case of a default in the payment of any fees due under this Agreement (a "Monetary Event of Default") and thirty (30) days more in the case of any other default (each, a "Non-Monetary Event of Default"), after the applicable period afforded Developer for remedying the default or causing . the same to be remedied has expired and (ii) shall, within such period and otherwise as herein provided, have the right (but not the obligation) to remedy such default or cause the same to be remedied. City shall accept performance by or on behalf of a Mortgagee or Mezzanine Lender of any covenant, condition or agreement on Developer's part to be performed hereunder with the same force and effect as though performed by Developer, so long as such performance is made in accordance with the terms and provisions of this Agreement. City shall not object to and shall cooperate with any entry onto the Project Site by or on behalf of a Mortgagee or a Mezzanine Lender to the extent necessary to effect such Mortgagee's or Mezzanine Lender's cure rights, provided such entry is in compliance with Applicable Law.
23.4 Mortgagee Right to Cure. No Non-Monetary Event of Default shall be deemed to exist as long as a Mortgagee or Mezzanine Lender, in good faith, (i) shall have commenced to cure ( or caused to be commenced such cure) such Non-Monetary Event of Default within thirty days after the expiration of the applicable period afforded to Developer for remedying such Non-Monetary Default, and continuously prosecutes or causes to be prosecuted the same to completion with reasonable diligence (subject to Force Majeure) or (ii) if possession or control of the Project Site or any part thereof is required in order to cure such Non-Monetary Event of Default, and Mortgagee or Mezzanine Lender shall have notified City within thirty days after the expiration of the applicable period afforded to Developer for remedying the NonMonetary Event of Default of its intention to institute foreclosure proceedings to obtain possession or control directly or through a receiver, and thereafter promptly commences such foreclosure proceedings, prosecutes such proceedings with all reasonable diligence and continuity (subject to Force Majeure) and, upon obtaining possession, ownership and/or control of Developer's interest hereunder, commences or causes its designee to commence promptly to cure the Non-Monetary Event of Default and prosecutes the same to completion with all reasonable diligence and continuity (subject to Force Majeure); provided that the Mortgagee or Mezzanine Lender or its designee shall have delivered to City, in writing, within the time periods set forth in subclause (i) or (ill herein, its agreement, subject to the last sentence of this Section 23.4, to cause the party obtaining possession, ownership and/or control of Developer's estate hereunder to agree to take the action described in subclause (i) or @herein (the "Lender Notice of Cure"); and provided, further, that during the period in which the actions comprising the Lender Notice of Cure are being performed, all of the other obligations of Developer under this Agreement (other than those that require possession or control of the Project Site in order to cure) are being duly performed within any applicable notice and cure periods (including any applicable notice and cure rights of Mortgagees and Mezzanine Lenders hereunder). In the event that at any time after the delivery of the Lender Notice of Cure, the Mortgagee or Mezzanine Lender notifies City, in writing, that it has relinquished possession or control of the Project Site or that it will not institute foreclosure proceedings or, if such proceedings have been commenced, that it has discontinued them, thereupon, City shall have the unrestricted right· to terminate this Agreement by reason of any Event of Default (and to take any other action it deems appropriate by reason of any Event of Default by Developer).
70 23.5 Obligation to Construct After Foreclosure. A Mortgagee, Mezzanine Lender, assignee or transferee gaining possession, ownership and/or control of the Project Site under a foreclosure or transfer in lieu of foreclosure shall not be bound by any deadline for completion of any construction or alterations required of Developer under this Agreement; provided, however, that such Person gaining possession, ownership, and/or control of Developer's estate hereunder pursuant to a foreclosure or transfer in lieu of foreclosure shall with all reasonable diligence and continuity prosecute completion of same. Notwithstanding anything in this Article 23.5 to the contrary, a Mortgagee, Mezzanine Lender, assignee or transferee gaining possession, ownership and/or control of the Project Site pursuant to a foreclosure or transfer in lieu of foreclosure shall not be required to cure any Events of Default arising from obligations of Developer that are not capable of being cured, and if any Mortgagee, Mezzanine Lender, successor leasehold owner, assignee or transferee shall acquire the Project Site pursuant to a foreclosure or transfer in lieu of foreclosure, then any such Non-Monetary Events of Default arising from an obligation by Developer that is not capable of being cured shall no longer be deemed an Event of Default or Non-Monetary Event of Default.
23.6 Restrictions on City During Mortgagee Cure Period. With respect to an Event of Default, so long as a Mortgagee or Mezzanine Lender shall be diligently exercising its cure rights under this Agreement, City shall not: (i) re-enter the Project Site; (ii) serve a termination notice; or (iii) bring a proceeding on account of such default to (x) dispossess Developer and/or other occupants of the Project Site, (y) re-enter the Project Site, or (z) terminate this Agreement (such rights described in clauses (i), ® and (iii), "City's Termination Rights"). fu addition, with respect to a Monetary Event of Default, City shall not exercise any of City's Termination Rights so long as a Mortgagee or a Mezzanine Lender shall be diligently exercising its cure rights under this Section 23 within the time periods set forth in this Section 23; provided, however, that (A) nothing contained in this Section 23 .6 shall in any way impair the right of City to exercise any of City's Termination Rights or to enforce any other remedy in the event of any other Event of Default by Developer in the performance of its obligations hereunder, subject to a Mortgagees or Mezzanine Lender's rights hereunder with respect to any such Event of Default, and (B) upon any cessation of a Mortgagee or Mezzanine Lender so exercising such rights and undertaking such activities, City may exercise any of City's Termination Rights hereunder. Nothing in the protections to Mortgagees or Mezzanine Lenders provided in this Agreement shall be construed to either (I) extend the Term, or (II) require such Mortgagee or Mezzanine Lender to cure any Event of Default by Developer that is not capable of being cured as a condition to preserving this Agreement.
23.7 Foreclosure Not a Default. The exercise of any rights or remedies of a Mortgagee under a Mortgage or a Mezzanine Lender under a Mezzanine Loan, including the consummation of any foreclosure or transfer in lieu of foreclosure, shall not constitute a default under this Agreement or require the consent of City.
23.8 Limitation on Liability of Mortgagee. No Mortgagee or Mezzanine Lender shall become liable under this Agreement unless and until such time as it becomes, and then only for so long as it remains, the owner of, or has control over, the interest in the Project Site created hereby, and no performance by or on behalf of a Mortgagee or Mezzanine Lender of Developer's obligations hereunder shall cause such Mortgagee or Mezzanine Lender to be deemed to be a "mortgagee in possession" unless and until such Mortgagee shall take possession, 71 ownership and/or control of the Project Site, or such Mezzanine Lender shall take possession or control of Developer, as applicable.
23.9 More Than One Mortgagee. If there is more than one Mortgagee, the rights and obligations afforded by this Article 23 to a Mortgagee shall be exercisable only by the party whose collateral interest in the Project Site is senior in lien (or that has obtained the consent of any Mortgagees whose Mortgage is senior to the Mortgage of such Mortgagee).
23.10 Bankruptcy. This section shall apply in the event of any proceeding by Developer under the United States Bankruptcy Code (Title 11 U.S.C.) as now or hereafter in effect. If this Agreement is rejected or deemed rejected by Developer or its trustee in bankruptcy, and provided, that, the Mortgagee or Mezzanine Lender cures or causes to be cured all outstanding Developer defaults in accordance herewith, Mortgagee or Mezzanine Lender shall have thirty (30) days following such rejection or deemed rejection to, at Mortgagee or Mezzanine Lender's discretion and to the extent permitted by Applicable Law, enter into an assignment and assumption instrument in form and substance reasonably satisfactory to City and such Mortgagee or Mezzanine Lender pursuant to which Developer shall assign to the Mortgagee or Mezzanine Lender, and the Mortgagee or Mezzanine Lender shall assume, all of Developer's interest and obligations under this Agreement whether arising or accruing before or after the date of such assignment and assumption, and this Agreement shall not terminate and the Mortgagee or Mezzanine Lender shall have all rights of the Mortgagee or Mezzanine Lender under this Section 10 as if such bankruptcy proceeding had not occurred. If any court of competent jurisdiction shall determine that this Agreement shall have been terminated notwithstanding the terms of the preceding sentence as a result ofrejection by Developer or the trustee in connection with any such proceeding, the rights of Mortgagee or Mezzanine Lender to a New Agreement from City pursuant to the applicable provisions of Section 23.11 shall not be affected thereby.
23.11 New Agreement. In the event of the termination ofthis Agreement before the expiration of the Term, including, without limitation, the termination of this Agreement by the City on account of an Event of Default or the rejection of this Agreement by a trustee of Developer in bankruptcy, City shall serve upon the Mortgagee or Mezzanine Lender written notice that this Agreement has been terminated, together with a statement of any and all sums which would at that time be due under this Agreement but for such termination, and of all other defaults, if any, under this Agreement then known to City. The Mortgagee or Mezzanine Lender shall thereupon have the option to the assignment of all of Developer's rights and obligations hereunder, in accordance with and upon the following terms and conditions:
(i) Upon the written request of the Mortgagee or Mezzanine Lender, within thirty (30) days after service of such notice that this Agreement has been terminated, City shall enter into a new Agreement with the most senior Mortgagee or Mezzanine Lender giving notice within such period or its designee; and
(ii) Such new Agreement shall be entered into at the reasonable cost of the Mortgagee or Mezzanine Lender thereunder, shall be effective as of the date of termination of this Agreement, and shall be for the remainder of the Term hereof and upon all the agreements, tem1s, covenants and conditions hereof. Such new Agreement shall have the same priority as 72 this Agreement, including priority over any mortgage or other lien, charge or encumbrance on the title to the Project Site. Such new Agreement shall require the Mortgagee or Mezzanine Lender to perform any unfulfilled monetary obligation of Developer under this Agreement that would, at the time of the execution of the new Agreement, be due under this Agreement if this Agreement had not been terminated and to perform as soon as reasonably practicable any unfulfilled non-monetary obligation which is reasonably susceptible of being performed by such Mortgagee or Mezzanine Lender other than obligations of Developer with respect to construction of the Initial Improvements, which obligations shall be performed by Mortgagee or Mezzanine Lender in accordance with the terms of the applicable Ground Lease. Upon the execution of such new Lease, the Mortgagee or Mezzanine Lender shall pay any and all sums which would at the time of the execution thereof be due under this Agreement but for such termination, and shall pay all expenses incurred by City in connection with such defaults and termination and the preparation, execution and delivery of such new Agreement. The provisions of this Section 23 .11 shall survive any termination of this Agreement, and shall constitute a separate agreement by the City for the benefit of and enforceable by the Mortgagee or Mezzanine Lender.
23.12 Additional Mortgagee Protections. ln addition to the other rights, notices and cure periods afforded to Mortgagees, City further agrees that
23.12.1 without the prior consent of each Mortgagee (which consent is not to be unreasonably withheld, conditioned or delayed), to the extent required in the Mortgage, City will neither agree to any modification or amendment of this Agreement ( other than an immaterial modification or amendment), nor accept a surrender or cancellation of this Agreement;
23.12.2 City shall consider in good faith any modification to this Agreement requested by a Mortgagee as a condition or term of granting financing to Developer, so long as the same does not materially increase City's obligations, diminish Developer's or the Phase Developer's obligations, or diminish City's rights and immunities hereunder;
23.12.3 the Mortgagee whose Mortgage is most senior in lien (or that has obtained the consent of any Mortgagees whose Mortgage is senior to the Mortgage of such Mortgagee) shall have the right to participate in any arbitration proceedings under Article 20, although only one Mortgagee shall have such participation rights at any given time;
23.12.4 at the request of Developer from time to time, City shall execute and deliver an instrument addressed to the holder of any Mortgage or Mezzanine Loan confirming that such holder is a Mortgagee or Mezzanine Lender (provided, that City may require such Mortgagee or Mezzanine Lender to provide such reasonably detailed information as is necessary for City to make such determination) and entitled to the benefit of all provisions contained in this Agreement which are expressly stated to be for the benefit of Mortgagees or Mezzanine Lenders.
23.13 Rights of Phase Developers. The rights of and restrictions on Phase Developers with respect to the subject matter of this Article 23 are governed by the Ground Lease.
73 24. Force Majeure; Excusable Delay; Extension of Times of Performance
24.1 Force Majeure and Excusable Delay. In addition to the specific provisions of this Agreement, a Party shall not be deemed to be in default under this Agreement, including all Exhibits, on account of any delay in such Party's performance to the extent the delay results from Force Majeure (as defined below). To the extent that a specific provision of this Agreement refers to "Excusable Delay," such term shall include both Force Majeure and/or Materially Adverse Economic Conditions (as defined below):
24.1.1 "Force Majeure" means any delay suffered by a Party in performing an obligation, exercising a right or meeting a deadline under any of the Project Documents to the extent such delay is caused by any of the following: war; acts of terrorism; insurrection; strikes or lock-outs not caused by, or outside the reasonable control of, the Party claiming an extension; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation not caused by, or outside the reasonable control of, the Party claiming an extension; governmental restrictions or priority; environmental conditions existing or discovered on or affecting the Project Site or any portion thereof, including those resulting from the investigation or remediation of such conditions; litigation that enjoins construction or other work on the Project Site or any portion thereof, causes a lender to refuse to fund a loan or to accelerate payment on a loan, or would cause a reasonably prudent developer either to forbear from commencing construction or other work on the Project Site or any Phase or portion thereof or to suspend construction or other work; disruptions in the public or private financing markets that delay or materially increase the cost of public or private financing for the Project ; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; moratorium, as defined in California Government Code Section 66452.6(f); litigation, ballot measures or referenda challenging City's or another regulatory body's approval of the Project (or any part thereof) or any of the Project Documents; the inability to obtain on a timely basis other approvals required for commencement and completion of the improvements contemplated for the Project (assuming that Developer is using commercially reasonable efforts to obtain such approvals); actions or inquiries by a Governmental Authority that results in a delay; the occurrence of Landfill or other construction cost premiums that render development of a Parcel or portion thereof commercially uneconomic; and delays caused by the City's inability to comply with its obligations regarding title under Article 13 hereof. Without limiting the foregoing, (1) the time for performance of Developer's obligations to submit a Substantially Complete DAP application and to Take Down land for any particular Phase under the Schedule of Performance shall be extended for each day that the City exceeds its review and approval periods for the applicable DAP application as set forth in the DAP Procedures; and (2) the time for performance of Developer's obligations to meet the outside dates set forth in the Phase Schedule of Performance for an applicable Phase shall be extended for each day that the City exceeds its review and approval periods for the applicable architectural review application as set fo11h in the DAP Procedures.
24.1.2 "Materially Adverse Economic Conditions" means (i) with respect to office product, that the Class A Office vacancy as published ill' the Cushman & Wakefield's Marketbeat Office Snapshot-Silicon Valley (or such successor or comparable publication reasonably approved by each of the Parties) is fifteen percent (15%) or higher; and 74 (ii) with respect to retail product, that the comparable vacancy rate is more than ten percent (10%) at Valley Fair Shopping Center and/or Stanford Shopping Center (except that if the vacancy rate is more than ten percent (10%) at only one of those two centers because of circumstances unrelated to market forces, such as bankruptcy, foreclosure or substantial renovation, then such vacancy rate would be required at both centers).
24.1.3 Notwithstanding anything to the contrary in this Section 24.1, the following shall not be Excusable Delay: (1) the lack of credit or financing, unless such lack is the result of Materially Adverse Economic Conditions; or (2) the appointment of a receiver to take possession of the assets of Developer, an assignment by Developer, for the benefit of creditors, or any other action taken or suffered by Developer under any insolvency, bankruptcy, reorganization, moratorium or other debtor relief act or statute.
24.2 Period of Excusable Delay or Force Majeure. The period of an Excusable Delay or Force Majeure shall commence to run from the time of the commencement of the cause and, subject to Section 24.3 hereof, shall run for the duration of the event of Excusable Delay or Force Majeure. The Party claiming Excusable Delay or Force Majeure shall provide notice to the other applicable Parties of such Excusable Delay or Force Majeure within a reasonable time following the commencement of the cause. If, however, notice by the Party claiming such extension is sent to the other Parties more than sixty ( 60) days after the commencement of the cause, the period shall commence to run only sixty (60) days before the giving of such notice, provided that the Party claiming the extension gives notice within a reasonable time following the commencement of the cause. No extension for Excusable Delay or Force Majeure shall cause any future dates in the Schedule of Perfonnance applicable to the Party claiming Excusable Delay or Force Majeure, or other date for performance occurring after the date of the notice, to be extended (in each case as they may otherwise be extended). Notwithstanding anything to the contrary in this Article 24, Master Developer or any applicable Phase Developer shall not be entitled (A) to abandon any portion of the Project Site that it has Taken Down or where it has Commenced Initial Improvements without first taking appropriate measures to leave the property in good and safe condition, (B) to extend the Outside Dates for the Completion of Initial Improvements or other Improvements that have Commenced to the extent that Excusable Delay or Force Majeure is not related to such activities, (C) to cease paying taxes or assessments on any real property it owns within the Project Site, (D) to avoid the obligation to maintain in effect Adequate Security or other financial assurances, (E) to avoid or delay its obligations to construct the Initial Improvements, except to the extent an Excusable Delay or Force Majeure relates to Master Developer's or the applicable Phase Developer's obligations for such construction, or (F) to avoid or delay its payment of the Financial Obligations.
24.3 Limitations.
24.3.1 In the event that the period of an Excusable Delay or Force Majeure exceeds twelve (12) months, City and Developer shall meet and confer in good faith regularly for the duration of the event to discuss mutually acceptable changes to the Project that will allow development of the Project to proceed to the extent possible notwithstanding the event or events causing such Excusable Delay or Force Majeure. 75 24.3.2 Notwithstanding anything to the contrary in this Agreement, in the case of Force Majeure due to litigation, in no event shall an Excusable Delay or Force Majeure extend for a period greater than three (3) months after a final settlement or nonappealable judgment is issued or affirmed; provided, that in the case of litigation that invalidates or voids any existing or future Project Approvals or would otherwise have a material adverse effect on the ability of Developer to Commence or Complete the Improvements (including, without limitation, an adverse ruling under the California Environmental Quality Act), the period of Force Majeure shall extend for such additional time as may be required by the City to prepare additional or revised Project Approvals and/or environmental documents and for the City to consider the revised Project Approvals for re-approval in accordance with the terms of the applicable final settlement or unappealable decision.
24.3.3 Notwithstanding anything to the contrary in this Agreement, no individual event of Excusable Delay due to Materially Adverse Economic Conditions shall extend for more than five (5) years from the date of notice thereof from Developer, provided, however, that City Manager, in his or her reasonable discretion, shall be authorized to approve an additional extension of up to two (2) years for each such event subject to Developer providing reasonable evidence to City that it is diligently pursuing satisfaction of the applicable performance obligations but has been unable to meet the times for performance due to ongoing Materially Adverse Economic Conditions.
24.3.4 Notwithstanding the foregoing provisions of this Article 24, neither Excusable Delay nor Force Majeure shall apply to the Outside Dates for the Take Down of any Phase other than Phases 1 and 2.
25. Representations and Warranties.
25 .1 Developer's Representations. Master Developer hereby represents and warrants to City as of the Reference Date that:
25.1.1 Master Developer is a limited liability company duly organized and existing in good standing under the laws of the State of Delaware, and qualified to do business in the State of California;
25.1.2 Master Developer has the full right, power, authority and legal capacity to execute and deliver this Agreement, to execute and deliver the instruments referred to herein, and to enter into and fully perform the transactions contemplated hereby, or thereby;
25.1.3 All actions and consents required by Master Developer to authorize the transactions contemplated by this Agreement have been duly performed and obtained;
25.1.4 All Persons who execute this Agreement and the instruments contemplated by this Agreement on behalf of Master Developer will be duly authorized and empowered on behalf of Master Developer to do so and to enter into all transactions contemplated by this Agreement, and by such instruments; 76 25 .1.5 The execution, delivery and consummation of the transactions contemplated hereby and performance of this Agreement have not and will not conflict with any provisions of any federal, state laws or regulations to which Master Developer is subject, or conflict with, result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, corporate charter, bylaws or other instrument to which Master Developer is a party or by which Master Developer or its assets may be bound or affected;
25 .1.6 This Agreement is a legal, valid and binding obligation of Master Developer, enforceable against Master Developer in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally; and 25 .1. 7 Master Developer is (i) in compliance with the USA PATRIOT Act, as applicable; (ii) in compliance with the Office of Foreign Assets Control sanctions and regulations promulgated under City granted by the Trading with the Enemy Act, 12 U.S.C. § 95(a) et seq., and the lnternational Emergency Economic Powers Act, 50 U.S.C. § 1701, et seq., in each case as applicable and as amended or replaced from time to time; and (iii) a Person that: (a) is not, and has never been, under investigation by any Governmental Authority for, and has not been charged with or convicted of a crime under, 18 U.S.C. §§ 1956 or 1957 (as amended or replaced from time to time) or any predicate offense thereunder; (b) has never been assessed a civil penalty under, or had any of its funds seized, frozen or forfeited in any action relating to, any anti-money laundering laws or predicate offenses thereunder; ( c) has taken such steps and implemented such policies as are reasonably necessary to ensure that it is not promoting, facilitating or otherwise furthering, intentionally or unintentionally, the transfer, deposit or withdrawal of criminally-derived property, or of money or monetary instruments that are ( or that Master Developer suspects or has reason to believe are) the proceeds of any illegal activity or that are intended to be used to promote or further any illegal activity; and (d) has taken such steps and implemented such policies as are reasonably necessary to ensure that it is in compliance with all laws and regulations applicable to its business for the prevention of money laundering and with anti-terrorism laws and regulations, with respect both to the source of funds from its investors and from its operations, which steps include the development and implementation of an anti-money laundering compliance program within the meaning of section 352 of the Patriot Act, to the extent Master Developer is required to develop such a program under the rules and regulations promulgated pursuant to section 352 of the Patriot Act.
25.2 City's Representations. City hereby represents and warrants to Developer as of the Reference Date and as of the date of each AA&R that:
25 .2 .1 City is a municipal corporation duly organized and validly existing under the laws of the State of California and has the full right, power, authority and legal capacity to execute and deliver this Agreement, to execute and deliver the instruments referred to herein, and to enter into and fully perfonn the transactions contemplated hereby, or thereby;
25.2.2 All actions and consents required by City to authorize the transactions contemplated by this Agreement have been duly performed and obtained; 77 25.2.3 All Persons who execute this Agreement and the instruments contemplated by this Agreement on behalf of City will be duly authorized and empowered on behalf of City to do so and to enter into all transactions contemplated by this Agreement, and by such instruments;
25.2.4 The execution, delivery and consummation of the transactions contemplated hereby and performance of this Agreement have not and will not conflict with any provisions of any federal, state laws or regulations to which City is subject, or conflict with, result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, corporate charter, bylaws or other instrument to which City is a party or by which City or its assets may be bound or affected; and
25.2.5 This Agreement is a legal, valid and binding obligation of City, enforceable against City in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally.
26. Payment of City Costs.
26.1 Payment of City Costs and Administrative Fees. Developer shall pay all City Costs and Administrative Fees, including without limitation, costs for environmental review, in accordance with the Development Agreement, whether or not the Development Agreement then remains in effect.
27. Developer Indemnification.
27 .1 General Developer Indemnification. Developer shall Indemnify City and the commissioners, supervisors, elected and appointed officials, officers, employees, attorneys, contractors and agents of City and, as applicable, the partners, Affiliates, members and owners, and the officers, partners, agents, employees and members of each of them ( or of its successors or assigns) (each, a "City Party") from and against all claims, demands, losses, liabilities, damage, liens, obligations, interest, injuries, penalties, fines, lawsuits or other proceedings, judgments and awards and costs and expenses (including reasonable attorneys' fees and costs, consultant fees and costs and court costs) of whatever kind or nature, known or unknown, contingent or otherwise, including the reasonable costs to City of carrying out the terms of any judgment, settlement, consent, decree, stipulated judgment or other partial or complete termination of an action or procedure that requires City to take any action ( collectively "Losses") arising from or as a result of, the adoption and implementation of this Agreement, except to the extent such Losses are directly caused by the act or omission of a City Party. Such Losses may include but are not limited to: (a) the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person that shall occur in or around the Project Site to the extent caused by the act or omission of Developer or its agents, servants, employees or contractors; (b) City's relocation activities pursuant to Section 18.2 hereof, except to the extent that such Losses are directly caused by the sole negligence or willful act of City; ( c) the actual or alleged failure of Developer to comply with all State Labor Code requirements pertaining to public works and payment of prevailing wages; ( d) any Losses arising directly or indirectly out of or connected with contracts or agreements (1) to which no City Party is a party 78 and (2) entered into by Developer in connection with its performance under this Agreement; and ( e) for any action taken, or failure to take any action, now br in the future, related to the adoption or Approval of this Agreement, any of the Project Approvals, any of the Project Documents, or CEQA review related to any aspect of the Project. Developer's Indemnification and defense obligations under this Article 27 shall survive expiration or termination of this Agreement.
27.2 Other Remedies. The agreements to Indemnify set forth in Section 27.1 are in addition to, and in no way shall be construed to limit or replace, any other obligations or liabilities that Developer may have to City under this Agreement.
27.3 Defense of Claims. City agrees to give prompt notice to Master Developer or any applicable Phase Developer (as the case may be, the "Indemnifying Party") with respect to any suit filed or claim made against City (or, upon City's discovery thereof, against any City Party that City believes in good faith is covered by any Indemnification given by Master Developer or Phase Developer under this Agreement) no later than the earlier of (a) ten (10) days after valid service of process as to any filed suit or (b) fifteen (15) days after receiving notification of the assertion of such claim, which City has good reason to believe is likely to give rise to a claim for Indemnification hereunder by the Indemnifying Party. The failure of City to give such notice within such timeframes shall not affect the rights of City or obligations of the Indemnifying Party under this Agreement except to the extent that the Indemnifying Party is prejudiced by such failure. The Indemnifying Party shall, at its option but subject to Approval by City, be entitled to control the defense, compromise or settlement of any such matter through counsel of the Indemnifying Party's choice; provided, that in all cases City shall be entitled to participate in such defense, compromise or settlement (either at City's own expense or, if there is a challenge to any Project Approval or Project Document, at Developer's own expense). If the Indemnifying Party shall fail, however, in City's reasonable judgment, within a reasonable time following notice from City alleging such failure, to take reasonable and appropriate action to defend, compromise or settle such suit or claim, City shall have the right promptly to hire counsel to carry out such defense, compromise or settlement, and the reasonable expense of City in so doing shall be due and payable to City within fifteen (15) days after receipt by the Indemnifying Party of a properly detailed invoice for such expense.
27.4 Limitations of Liability. It is understood and agreed that no City Party shall be personally liable to Master Developer or any Phase Developer, nor shall any direct or indirect partners, members or shareholders of Master Developer or any Phase Developer or its or their respective officers, directors, agents or employees (or of their successors or assigns) be personally liable to City, in the event of any default or breach of this Agreement by City, Master Developer or any Phase Developer or for any amount that may become due to Master Developer, any Phase Developer or City or any obligations under the terms of this Agreement; provided, that · the foregoing shall not release obligations of a Person that otherwise has liability for such obligations, such as (i) the general partner of a partnership that, itself, has liability for the obligation or (ii) the obligor under any security covering such obligation. Further, notwithstanding anything to the contrary set forth in this Article 27, the Indemnifications by Developer in Article 27 shall exclude any Losses relating to the Landfill, which shall be instead governed by Article 14, Section 17.2 and any other applicable agreements. 79 28. Adequate Security
28.1 Certain Definitions. As used herein:
"Adequate Security" means collateral or other security provided by Master Developer or the Phase Developer, as applicable, in accordance with this Agreement to secure completion of the improvements identified therein and to secure payment of the costs required to do so. For all purposes of this Agreement, Adequate Security for Secured Public Improvements includes, without limitation, the SMA Security Requirements mandated by the City's Subdivision Code.
Adequate Security required for Secured Phase Improvements shall conform to the requirements of Section 28.3, below.
"Completion Guaranty" means a guaranty which unconditionally and irrevocably obligates the guarantor identified therein to cause the lien-free Completion of the applicable Secured Phase Improvement and constitutes any of (i) a Lender Guaranty (where the Phase Developer has executed a Mortgage to secure a construction loan to finance for all of the applicable Secured Phase Improvement), (ii) a City Guaranty (where the Phase Developer has not executed a Mortgage to secure a construction loan to finance any portion of the applicable Secured Phase Improvement), and (iii) both a Lender Guaranty and a City Guaranty (where the Phase Developer has executed a Mortgage to secure a construction loan to finance only a portion of the applicable Secured Phase Improvement), under Section 28.3 below. "Secured Phase Improvements" means (i) any Infrastructure to be constructed by a Phase Developer in Phase 1, Phase 2 and Phase 3 pursuant to all applicable Authorizations that is not a Secured Public Improvement; and (ii) Buildings to be constructed by a Phase Developer within Phase 1, Phase 2 and Phase 3 pursuant to all applicable Authorizations. "Secured Public Improvements" means all on- and off-site Infrastructure for which the Developer or applicable Phase Developer is required to provide improvement security in accordance with the SMA Security Requirements.
28.2 Requirement for Adequate Security for Public Improvements. As discussed in Section 9.3 of this Agreement (Conditions to Commencement of Improvements), as a precondition to Commencing construction for any Secured Public Improvements within a Phase (or Partial Phase), the applicable Phase Developer shall provide Adequate Security for the work of Secured Public Improvements.
28.3 Requirement for Adequate Security for Secured Phase Improvements.
28.3 .1 As a condition to Commencing construction of any Secured Phase Improvements in Phase 1, Phase 2 or Phase 3 (or any Partial Phase thereof) (as described in Section 9.3 hereof), the applicable Phase Developer shall submit to City a Completion Guaranty for the applicable Secured Phase Improvements meeting the requirements of this Section 28.3. l. If Phase Developer has executed a Mortgage to secure a construction loan to finance all or any portion of the applicable Secured Phase Improvement, the Completion Guaranty shall constitute the completion guaranty delivered to the applicable Mortgagee for the Secured Phase Improvements so long as the City is identified therein as an express intended beneficiary or obligee (for purposes of clarity, the naming of City as a third party beneficiary is 80 not sufficient to meet this requirement) (in each case, a "Lender Guaranty"). To the extent that any portion of the construction of the applicable Secured Phase Improvements will not be subject to a Lender Guaranty, or during any time prior to the effectiveness of the Lender Guaranty, the Completion Guaranty as to the portion of the construction not subject to a Lender Guaranty, or the Completion Guaranty during any time period prior to the effectiveness of the Lender Guaranty, shall be substantially in the form attached hereto as Exhibit O (in each case, a "City Guaranty"). At least thirty (30) days prior to Commencement of the applicable Secured Phase Improvement, Phase Developer will provide City with the proposed form of Completion Guaranty for its Approval, provided, however, the form of Completion Guaranty shall be Approved if it meets the following criteria: (i) the Completion Guaranty is a Lender Guaranty that identifies the City as a beneficiary or obligee (for purposes of clarity, the naming of City as a third party beneficiary is not sufficient to meet this requirement); or (ii) the Completion Guaranty is a City Guaranty that is (A) substantially in the fonn of Exhibit O attached hereto, and (B) the entity or entities providing the Adequate Security has a Net Worth of at least Three Hundred Million Dollars ($300,000,000).
28.4 Substitution of Adequate Security. Developer shall have the right to substitute any Adequate Security provided to the City hereunder, or any portion thereof, for another form of Adequate Security that meets all of the requirements or Approvals needed for it to be Adequate Security as defmed in this Agreement.
28.5 Reduction, Return and Release. Any Adequate Security provided by Developer in accordance with this Agreement shall be proportionately reduced upon partial satisfaction of the obligations secured thereby to the extent Approved by the City or provided in such Adequate Security. Any Adequate Security shall be fully released upon the complete satisfaction of the obligation secured thereby, as evidenced by the issuance of a Certificate of Completion with respect to the applicable Secured Phase Improvement; provided that if the City terminates this Agreement with respect to such Phase before the issuance of the applicable Certificate of Completion, the Adequate Security shall .be released when the secured construction obligations that relate to the period before such termination have been Completed (or, if applicable, upon and in accordance with a final, unappealable judicial determination).
Notwithstanding anything to the contrary set forth in this Agreement, to the extent that any Adequate Security provided herein for a Phase is given in accordance with the City's Subdivision Code for the purpose of securing Infrastructure obligations required under an approved Subdivision Map, such Adequate Security shall be reduced and released by the City in accordance with the City's Subdivision Code. Upon any release of any Adequate Security under this Agreement, the City shall promptly (and in any event within thirty (30) days following such release) return such released Adequate Security and, if requested by Developer or the applicable obligor, provide a written confirmation of such release and return.
28.6 Enforcement of the Phase Security. City will defer enforcement of any Adequate Security for Secured Phase Improvements until notice of default is given to Master Developer or Phase Developer (as applicable), all cure periods under the loan documents have elapsed, and the construction lender (if any) has had an additional two (2) months to commence enforcement of the Completion Guaranty (as such period may be extended by the pendency of litigation being diligently prosecuted to enforce such Completion Guaranty). 81 29. Miscellaneous Provisions.
29. I Entire Agreement; Amendment. This Agreement and the other Project Documents contain all of the promises, agreements, conditions, inducements and understandings between City and each Developer relative to the matters set forth herein and therein. The only way to amend or otherwise modify this Agreement is for the Parties that are to be bound by such amendment or modification to sign and deliver a written instrument that expresses the intent to amend or otherwise modify this Agreement.
29.2 Waiver. Any waiver of any provision of this Agreement by a Party must be in writing and signed by a Person having authority to do so on behalf of such Party. No waiver made by a Party for the performance or manner or time of performance (including an extension of time for performance) of any obligations of any other Party or any condition to its obligations under this Agreement shall be considered a waiver of the rights of the Party making the waiver for a particular obligation of the other Party or condition to its own obligation beyond those expressly waived in writing.
29 .3 Captions and Table of Contents. The captions of and names of defined terms in this Agreement are for convenience of reference only and are not intended to define, limit or describe the scope or intent of this Agreement or otherwise affect the interpretation of this Agreement. The Table of Contents is for the purpose of convenience of reference only and is not intended to be a part of this Agreement or to be used in interpreting this Agreement. 29 .4 Extensions of Time.
29.4.1 City or Developer may in their sole discretion extend the time for the performance of any term, covenant or condition of this Agreement by a Party owing performance to the extending party, or permit the curing of any related default, upon such terms and conditions as it determines appropriate; provided, however, any such extension or permissive curing of any particular default shall not operate to release any of the obligations of the Party receiving the extension or cure rights or constitute a waiver of the granting Party's rights with respect to any other term, covenant or condition of this Agreement or any other default in, or breach of, this Agreement.
29.4.2 In addition to matters set forth in Section 29.4.1, the Parties may in their sole discretion extend the time for performance by any of them of any term, covenant or condition of this Agreement by a written instrument signed by authorized representatives of such Parties without the execution of a formal recorded amendment to this Agreement, and any such written instrument shall have the same force and effect and impart the same notice to third parties as a formal recorded amendment to this Agreement. For the purposes of this Section 29.4, City's authorized representative shall be' the City Manager.
29.5 Interpretation. Wherever in this Agreement the context requires, the use of a verb in any tense shall be construed as the use of the verb in all other tenses, references to the masculine shall be deemed to include the feminine and the neuter and vice-versa, and references to the singular shall be deemed to include the plural and vice versa. Unless otherwise specified, whenever in this Agreement, including its Exhibits, reference is made to the Table of 82 Contents, any Section, Exhibit or any defined term, the reference shall be deemed to refer to the Table of Contents, Section, Exhibit or defined term of this Agreement. Any reference to a Section includes all subsections and subparagraphs of that Section. The use in this Agreement of the words "including", "such as" or words of similar import when following any general term, statement or matter shall not be construed to limit such statement, term or matter to the specific statements, terms or matters, whether or not language of non-limitation, such as ''without limitation" or "but not limited to", or words of similar import, is used with reference thereto. In the event of a conflict between the Recitals and the remaining provisions of this Agreement, the remaining provisions shall prevail.
29.6 More than One Person. If more than one Person is named as or becomes Master Developer or any Phase Developer hereunder, City may require the signatures of each such Person on any notice given by Master Developer or any such Phase Developer, whichever is applicable, except to the extent that any such Person shall designate to any other such Person the right to act as such Person's attorney-in-fact to act on its behalf, which designation shall be effective until receipt by City of notice of its revocation. Nothing herein shall be construed as conferring on any such Person any rights or obligations to or against any other such Person.
Without limiting the other provisions of this Agreement, each Person named as or that becomes Master Developer or any Phase Developer shall be fully, and jointly and severally, liable for all of Master Developer's or such Phase Developer's, whichever is applicable, obligations hereunder. Nothing herein shall be construed as giving Master Developer or any Phase Developer the right to enforce any Ground Lease; provided, that the foregoing shall not limit any rights that Master Developer or any Phase Developer has under any such Ground Lease as a party thereunder and/or as an express third party beneficiary thereof. Nothing herein shall be construed as giving Master Developer or any Phase Developer the right to enforce this Agreement against Master Developer or any other Phase Developer.
29.7 Time of Performance.
29.7.1 All performance (including cure) dates expire at 5:00 p.m.
Pacific Time on the applicable date for performance (including cure), as such date may be extended pursuant to the effect of any extension of time permitted in this Agreement.
29.7.2 Where the Outside Date (or other date set forth in this Agreement) set forth in the Schedule of Performance is a calendar month without reference to a specific day in such month, or a year without reference to a specific month in such year, then the Outside Date shall be the.last day in such month or year, as applicable.
29. 7 .3 If the last day of any period to give notice, reply to a notice, meet a deadline or to undertake any other action occurs on a day that is not a Business Day, then the last day for undertaking the action or giving or replying to the notice shall be the next succeeding Business Day.
29.7.4 conditions of this Agreement.
Time is of the essence in the performance of all the terms and 83 29.8 No Third Party Beneficiaries. This Agreement is made and entered into only for the protection and benefit of the Parties and their successors and assigns. No other Person shall have or acquire any right or action of any kind based upon the provisions of this Agreement except as explicitly provided to the contrary in this Agreement.
29.9 No Brokers. Each of the Parties warrants and represents to the other Party that neither it nor any of its Affiliates have dealt with any broker, finder or like entity or agent in connection with this Agreement or the transactions contemplated hereby, or on account of introducing the Parties, the preparation or submission of brochures, the negotiation or execution of this Agreement or the execution of the transactions contemplated hereby. If any Person claims to have acted or dealt with Developer or City in connection with this Agreement and claims that it is entitled to a fee of any kind, the Party through which such Person is claiming such entitlement shall indemnify and hold harmless the other Party against any such claim and shall reimburse such other Party for any costs or expenses (including reasonable attorneys' fees and disbursements) incurred in defending itself against any such claim.
29.10 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. All references in this Agreement to California or federal laws and statutes shall mean such laws, regulations and statues as they may be amended from time to time, except to the extent a contrary intent is stated.
29.11 Successors and Assigns. The agreements, terms, covenants and conditions herein shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and (to the extent permitted hereunder) assigns.
29.12 Relationship of the Parties. None of the provisions in this Agreement shall be deemed to render any of the Parties a partner in any other Party's business, or a joint venturer or member in any joint enterprise with any other Party. No Party shall have the right to act as the agent of any other Party in any respect hereunder. 29 .13 Construction. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the Party causing this Agreement to be drafted. In the event of any action, suit, arbitration, dispute or proceeding affecting the terms of this Agreement, no weight shall be given to any deletions or striking out of any of the terms of this Agreement contained in any draft of this Agreement and no such deletion or strike out shall be entered into evidence in any such action, suit, arbitration, dispute or proceeding nor given any weight therein.
29.14 Incorporation of Exhibits. Each Exhibit listed in the List of Exhibits is hereby incorporated into and made a part of this Agreement.
29.15 Further Assurances. Each Party shall execute and deliver such further documents, and perform such further acts, as may be reasonably necessary or desirable to achieve the Parties' intent in entering into this Agreement.
29.16 Numbers.
84 29.16.1 Generally. For purposes of calculating a number under this Agreement where a whole number is required, any fraction equal to or greater than one half (1/2) shall be rounded up to the nearest whole number and any fraction less than one half (1/2) shall be rounded down to the nearest whole number.
29.16.2 Number of Days. References in this Agreement to days shall be to calendar days unless otherwise specified.
29.17 No Gift or Dedication. Except as otherwise specified in this Agreement, this Agreement shall not be deemed to be a gift or dedication of any portion of the Project to the general public, for the general public, or for any public use or purpose whatsoever. Developer shall have the right to prevent or prohibit the use of any portion of the property leased by it, including common areas and buildings and improvements, by any Persons for any purpose inimical to the operation of a private, integrated mixed-use project as contemplated by this Agreement.
29 .18 Correction of Technical Errors. If by reason of inadvertence, and contrary to the intention of Master Developer and City, errors are made in this Agreement in the identification or characterization of any title exception, in a legal description or the reference to or within any Exhibit with respect to a legal description, in the boundaries of any parcel (provided such boundary adjustments are relatively minor and do not result in a material change), in any map or drawing that is an Exhibit, or in the typing of this Agreement or any of its Exhibits, Master Developer and City by mutual agreement may correct such error by memorandum executed by both of them and replacing the appropriate pages of this Agreement, and no such memorandum or page replacement shall be deemed an amendment of this Agreement.
29 .19 Severability. If any term or provision of this Agreement or the application thereof to any Person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
29.20 Legal Representation. Each Party acknowledges, warrants and represents to each other Party that it has been fully informed with respect to, and represented by counsel of its choice in connection with, the rights and remedies of and waivers by it contained in this Agreement and after such advice and consultation has presently and actually intended, with full knowledge of its rights and remedies otherwise available at law or in equity, to waive and relinquish those rights and remedies to the extent specified in this Agreement, and to rely solely on the remedies provided for in this Agreement with respect to any breach of this Agreement by any other Party.
29.21 Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be deemed an original, and all of which together shall constitute one and the same instrument. This Agreement shall become effective when the Parties have duly executed and delivered signature pages to this Agreement to 85 each other. Delivery of this Agreement may be effectuated by hand delivery, mail, overnight courier or electronic communication (including by PDF sent by electronic mail, facsimile or similar means of electronic communication). Any signatures (including electronic signatures) delivered by electronic communication shall have the same legal effect as physically delivered original signatures.
29.22 Survival. Termination of this Agreement shall not affect (i) the right of any Party to enforce any and all Indemnifications or Adequate Security (including any Guaranty) to the extent they relate to the period before termination, (ii) any provision of this Agreement that, by its express term, is intended to survive the expiration or termination of this Agreement, or (iii) the rights and obligations under any AA&R, including Master Developer's or City's right to receive reimbursements, to the extent they relate to the period before termination or are intended to survive the expiration or termination of the AA&R. Termination of this Agreement shall not affect (a) the right of any Party to enforce any and all Indemnifications set forth herein to the extent they relate to the period before termination or (b) any provision of this Agreement that, by its express term, is intended to survive the expiration or termination of this Agreement. 29 .23 Estoppel Certificates.
29.23.l Developer Estoppels. At any time, and from time to time, upon not less than fifteen (15) days' notice by City, Developer shall execute, acknowledge and deliver to City and to any other Person reasonably requested by City a statement certifying:
(a) that this Agreement and each other Project Document specified by City to which Developer is a party is unmodified and in full force and effect ( or, if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications), (b) whether or not any amounts due and owing by Developer to City under this Agreement or the other Project Documents specified by City to which Developer is a party have been paid, (c) whether or not, . to Developer's actual knowledge, City is in default in performance of any covenant, agreement or condition contained in this Agreement or the other Project Documents specified by City to which Developer is a party, and, if so, specifying each such default of which Developer has actual knowledge, and ( d) as to any other matter with respect to this Agreement or the other Project Documents specified by City to which Developer is a party as City may reasonably request.
29.23.2 City Estoppels. At any time, and from time to time, upon not less than fifteen (15) days' notice by Developer, City shall execute, acknowledge and deliver to Developer and to any other Person reasonably requested by Developer a statement certifying:
(a) that this Agreement and each other Project Document specified by Developer to which City is a party is unmodified and in full force and effect ( or, if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications), (b) whether or not any other amounts due and owing by Developer to City under this Agreement or the other Project Documents specified by Developer have been paid, (c) whether or not, to City's actual knowledge, Developer is in default in performance of any covenant, agreement or condition contained in this Agreement or the other Project Documents specified by Developer and, if so, specifying each such default of which City has actual knowledge, ( d) Developer's satisfaction of the "best efforts" requirement under Sections 5.3.3, 5.3.5 and 5.3.6 hereof, and (e) as to any other 86 matter with respect to this Agreement or the other Project Documents specified by Developer as Developer may reasonably request.
29 .24 Approvals.
29.24.1 As used herein, "Approval" and any variation thereof (such as "Approved" or "Approve") refers to the prior written consent of the applicable Party or other Person. When used with reference to a Governmental Authority such terms are intended to refer to the particular form of consent or approval required from such Governmental Authority in order to obtain the Authorization being sought.
29.24.2 Whenever Approval is required or permitted to be given by any Party under this Agreement, it shall not be unreasonably withheld, conditioned or delayed unless the Approval is explicitly stated in this Agreement to be within the "sole discretion" ( or words of similar import) of the Party whose Approval is sought. A Party that denies an Approval under this Agreement, or that gives a conditional Approval, shall in giving such denial or conditional Approval state the reasons therefor in reasonable detail, unless such Approval is explicitly stated in this Agreement to be within the "sole discretion" ( or words of similar import) of the Party whose Approval is sought. It is understood and agreed that the granting of any consent or approval by a Party to another Party under this Agreement to perform any act of requiring such Party's consent or approval under this Agreement, or the failure by a Party to object to any such action taken by any other Party without the former Party's consent or approval, shall not be deemed a waiver by the former Party of its right to require such consent or approval for any further similar act by any other Party. In determining whether to give an Approval, City shall not require changes from or impose conditions inconsistent with the Project Documents, except to the extent that City reasonably determines that such changes or conditions are necessary for important reasons of public health or safety.
29.24.3 Notwithstanding the foregoing, it is specifically acknowledged by all Parties that Section 29.24.2 shall not apply to any Approval given by a public entity in its regulatory capacity. Such Approvals shall be governed by the standards of review generally accorded by the state courts of California.
29.25 Recordation. It is understood and agreed by Master Developer and City that after execution by Master Developer and City, this Agreement (or a memorandum hereof in form and substance Approved by City and Master Developer) will be recorded by City; provided, that the recordation shall affect only Developer's and City's interest in the Project. If this Agreement is terminated in accordance with its terms, Developer or City may record a Notice of Termination as provided in Section 29.30.
29.26 Nondiscrimination.
29.26.1 There shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision ( a) or ( d) of section 129 5 5 of the California Government Code, as those bases are defined in sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of section 12955, and section 12955.2 of the California Government Code, or on the basis of age, race, color, creed, sex, sexual orientation, gender 87 identity, marital or domestic partner status, disabilities (including AIDS or HIV status), religion, national origin or ancestry by Developer or any occupant or user of the Project in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the Project, or any portion thereof. Neither Developer itself (nor any person or entity claiming under or through it), nor any occupant or user of the Project or any transferee, successor, assign or holder of any interest in the Project or any person or entity claiming under or through such transferee, successor, assign or holder, shall establish or permit any such practice or practices of discrimination or segregation in connection with the Project, including with reference to the selection, location, number, use or occupancy of buyers, tenants, vendees or others. Notwithstanding the foregoing, no Person shall be in default of its obligations under this Section 29.26 where there is a judicial action or arbitration involving a bona fide dispute over whether such person is engaged in discriminatory practices and such person promptly acts to satisfy any judgment or award against such person.
29.26.2 Any transferee, successor, assign, or holder of any interest in the Project, or any occupant or user thereof, whether by contract, lease, rental, sublease, license, deed, deed of trust, Mortgage or otherwise, and whether or not any written instrument or oral agreement contains the above prohibitions against discrimination, shall be bound by, and shall not violate in whole or in part, directly or indirectly, the nondiscrimination requirements set forth above. The covenants in this Section 29.26 shall be covenants running with the land and they shall be: (i) binding for the benefit and in favor of City, as beneficiary and the owner of any other land or of any interest in any land in the Project, as beneficiary, and their respective successors and assigns; and (ii) binding against Master Developer, its successors and assigns to or of the Project and any improvements thereon or any portion thereof or any interest therein, and any party in possession or occupancy of the Project or the improvements thereon or any portion thereof.
29.27 Successors and Assigns; No Third-Party Beneficiary. Subject to the provisions of Article 22 and Article 23, this Agreement shall be binding upon and inure to the benefit of the Mortgagees and transferees of Master Developer and any transferee of City. This Agreement is made and entered into only for the protection and benefit of the Parties and their successors and assigns. No other Person shall have or acquire any right or action of any kind based upon the provisions of this Agreement except as explicitly provided to the contrary in this Agreement.
29.28 ENA; Term Sheet; Supplements. After the Reference Date and before the expiration or termination of the ENA, the Term Sheet and the Supplement in accordance with their terms, in the event of a conflict between the ENA, the Tenn Sheet, the Supplements, and/or this Agreement, the provisions of this Agreement shall prevail. The Parties acknowledge and agree that the ENA, the Term Sheet and the Supplement shall terminate as of the full effectiveness of this Agreement and the expiration of any applicable appeal periods (including any appeal period with respect to the Project EIR) without challenge or appeal, or if a challenge or an appeal is filed, such effectiveness shall have been upheld by a final decision in each such challenge or appeal without any material adverse effect on this Agreement.
29.29 Plans on Record with City. The most recent versions of the Exhibits to this Agreement, as such Exhibits may be amended or supplemented from time to time in accordance with this Agreement or the terms of such Exhibits, shall not be required to be 88 recorded but shall be kept on file with City. City and Master Developer shall update or supplement the Schedule of Performance, revised Phasing Plan, Phase Schedules of Performance, and/or Allowed Square Footage Table from time to time to reflect changes to the same as permitted in this Agreement. Full color copies of all recorded documents are also on file with City. All documents on file with City that are not otherwise privileged and confidential under applicable laws shall be made available to members of the public at reasonable times in keeping with City's standard practices.
29.30 Notice of Termination. In the event of any termination of this Agreement in whole or in part in accordance with the terms of this Agreement, the terminating Party shall provide the other Parties and any applicable Mortgagee with a copy of any proposed Notice of Termination at least fifteen (15) days before recording the same. After the expiration of such fifteen days, the terminating Party may cause the Title Company to record such Notice of Termination in the Official Records. Any such "Notice of Termination" shall be in recordable form and describe the portion of the Project Site to which such tennination pertains. Following the recordation of any Notice of Tennination, the tenninating Party shall promptly provide a conformed copy of such recorded Notice of Termination to City, Developer, and any applicable Mortgagee. The recordation of a Notice of Termination shall not affect in any manner the rights of City, Developer, or any applicable Mortgagee to contest the terminating Party's right to cause such recordation.
29 .31 Extensions of Time.
29 .31.1 City or Developer may extend the time for the performance of any term, covenant or condition of this Agreement by a Party owing performance to the extending party, or permit the curing of any related default, upon such terms and conditions as it determines appropriate; provided, however, any such extension or pennissive curing of any particular default shall not operate to release any of the obligations of the Party receiving the extension or cure rights or constitute a waiver of the granting Party's rights with respect to any other term, covenant or condition of this Agreement or any other default in, or breach of, this Agreement.
29.31.2 In addition to matters set forth in Section 24.l, the Parties may extend the time for performance by any of them of any term, covenant or condition of this Agreement by a written instrument signed by authorized representatives of such Parties without the execution of a formal recorded amendment to this Agreement, and any such written instrument shall have the same force and effect and impart the same notice to third-patties as a formal recorded amendment to this Agreement.
29.32 Attorneys' Fees.
29.32.1 Should any Party institute any action or proceeding in court or other dispute resolution mechanism permitted or required under this Agreement, the prevailing party shall be entitled to receive from the losing party the prevailing party's reasonable costs and expenses incurred including expert witness fees, document copying expenses, exhibit preparation costs, carrier expenses and postage and communication expenses, and such amount as may be awarded to be reasonable attorneys' fees and costs for the services rendered the prevailing party 89 \
in such action or proceeding. Attorneys' fees under this Section 29.32 shall include attorneys' fees on any appeal.
29 .32.2 For purposes of this Agreement, reasonable fees of attorneys and any in-house counsel shall be based on the average fees regularly charged by private attorneys with an equivalent number of years of professional experience in the subject matter area of the law for which the in-house counsel's services were rendered who practice in the City in law firms with approximately the same number of attorneys as employed by the City.
29.33 ' Notices.
29.33 .1 Notice Addresses. Whenever this Agreement permits or requires that a notice, demand, request, consent, approval or other communication to be given by a Party (each, a "Notice"), and whenever either Party desires to give or serve a Notice, such Notice must be in writing and shall not be effective for any purpose unless it is in writing and given or served as follows: (a) by personal delivery (including by same day commercial courier or messenger service) with receipt acknowledged, (b) delivered by reputable, national overnight delivery service (with its confirmatory receipt therefor), next Business Day delivery specified, (c) sent by a telephonic facsimile transmitting machine (with the receipt of such transmittal acknowledged in writing or by telephone), with a confirmatory copy to be delivered thereafter by duplicate notice in accordance with any of clauses .(ru, .(hl, or .(0 of this Section 29.33, in each case to the Parties at their addresses set forth on Exhibit R. A Party may change the address(es) to which any Notice is to be delivered to such Party by furnishing ten (10) days' written notice of such change(s) to the other Parties in accordance with the provisions of this Section 29.33. The attorney for any Party may send Notices on that Party's behalf.
To be effective, every notice given to a Pa11y under the terms of this Agreement must be in writing and m_ust state (or must be accompanied by a cover letter that states) substantially the following: (a) the SeGtion of this Agreement under which the notice is given; (b) if applicable, the action or response required; ( c) if applicable, the period of time within which the recipient of the notice must respond thereto; (d) if applicable, the period oftime within which the recipient of the notice must cure an alleged breach; ( e) if applicable, that the failure to object to the notice within a stated time period will be deemed to be the equivalent of the recipient's approval or disapproval of the subject matter of the notice; (f) if Approval is being requested, shall be clearly marked "Request for Approval"; and (g) if a notice of a disapproval or an objection that requires reasonableness, shall specify with particularity the reasons for the disapproval or objection. ·
29.33.2 When Notices Deemed Given. Every Notice shall be deemed to have been given or served (a) if given by hand or overnight delivery service, upon delivery thereof, or (b) if given by telephonic facsimile transmitting machine, upon delivery by such means to the addressee, regardless of the timing of receipt of any confirmatory copy, in each case with failure to accept delivery to constitute delivery for such purpose and with inability to deliver because of changed address of which no Notice was given under this Section 29.33 to constitute delivery for such purpose (provided, that, the sending Party shall use good faith efforts to deliver to any other address of the intended recipient known to the sending Party). 90 29.33.3 Notices to Mortgagees. If a Mortgagee or Mezzanine Lender notifies City in writing, any notice of default given by City hereunder to Developer shall also be given contemporaneously to such Mortgagee or Mezzanine Lender with a copy thereof, if requested, to such Mortgagee's or Mezzanine Lender's attorneys and other Persons, in each case to the addresses specified in the request. No such notice of default shall be valid unless City complies with this Section 29.33.3.
29.33.4 Notices for "Deemed Approval" Matters. For purposes of Sections 4.4, 9. l.2(a) and 10.1 hereof, if City fails to respond to a request for an applicable Approval within the times required thereby, Developer may simultaneously give a subsequent request to the City Manager, the Director of Planning and the City Attorney at the addresses set forth in Exhibit R attached hereto ( or such substitute address as may be provided by City from time to time) by delivery in the manner specified in Sections 29.33.l(a) or (hl, which request shall be labelled prominently: "Second Request: Deemed Approval Matter." If City fails to respond to the subsequent request within fifteen (15) days following the date when given (as determined under Section 28.33 .2(a). then the applicable Approval shall be deemed approved.
29.34 Limitations on Disclosure. City acknowledges that each Financing Plan and Detailed Financing Plan (and amendments, revisions or updates thereto) (collectively, "Confidential Financial Reports") are being provided to the City for review on the condition that such information is kept confidential due to the fact that such information consists of trade secrets of Developer, including nonpublic technical, fmancial and other information, the disclosure of which would harm Developer. In the event that City or any of its representatives is legally required or requested, as advised by written opinion of its outside legal counsel, to disclose all or any portion of the Confidential Financial Reports pursuant to a subpoena, court order, civil investigative demand, request under the California Public Records Act or similar judicial process or _similar request issued by a court of competent jurisdiction or by a governmental or regulatory authority, City shall promptly notify Developer in writing by email or facsimile and certified mail, of the existence, terms and circumstances surrounding such request, so that Developer may seek a protective order or other appropriate remedy or waive compliance with the applicable provisions of this Agreement. Notwithstanding the provisions of this Section 29.34, City shall not be required to keep confidential any information submitted to City that is related to anticipated public financing pursuant to the requirements of Section 5.1.3 or Section 9.3.2(d) • .Wand/or ffi.
29.35 Fees and Sales Taxes. The provisions of this Section 29.35 shall survive the termination of this Agreement.
29.35.l City Development Fees .. Developer shall pay City Costs and Administrative Fees pertaining to the Project as set forth in the Development Agreement.
29.35.2 Sales and Use Tax. Master Developer and each Phase Developer shall use commercially reasonable efforts to adopt sales and use tax reporting procedures allowable under Applicable Law that will provide City (in its capacity as a Governmental Authority) the greatest allocation of California sales and use tax revenues feasible, and they shall cause their general construction contractors, vendors and Building occupants to use commercially reasonable efforts to adopt these procedures, including by designating the 91 Project Site as the place of sale and place of use of materials, goods, and services to be used in connection with the construction and operation of the Project. Master Developer shall propose to City for its Approval a process that will designate the Project Site as the place of sale of fixtures furnished and installed by Master Developer and each Phase Developer for the Project, and to do the same with respect to construction materials used in connection with the Improvements.
Notwithstanding the foregoing, the failure of such general construction contractors, vendors and Building occupants to allocate sales and use tax revenues to any location other than City shall not constitute a breach by Master Developer or any Phase Developer under this Agreement. Master Developer and the Phase Developers shall bear all costs associated with their obligations under this Section 29.35.2. Master Developer and each Phase Developer shall comply with the Provisions Relating to Construction Sales and Use Tax Allocations attached hereto as Exhibit U.
29.36 Wages and Working Conditions. The Parties acknowledge that the development of the Project will necessitate many extraordinary and unusual additional on-site and off-site development costs to be incurred by Master Developer and any Phase Developer, including costs on account of the Landfill, the lack of customary infrastructure on the Project Site, and the need to acquire necessary rights and access to Phases 2 through 7 of the Project Site. Given the extraordinary up-front costs, in approving this Agreement, the City Council made findings that the Project Documents, including this Agreement and the Ground Leases, provide the City with fair market value, taking into account the development and market risk, extraordinary up-front costs and reasonable private development return expectations. The rent structure as set forth in this Agreement and the form of Ground Lease includes an initial Base Rent, periodic rent adjustments and fair market value adjustments in years 45 and 70, taking into account the extraordinary and significant up-front costs required of Developer to position the Property as a developable site. As such, the rent structure under the Lease does not involve any fees, costs, rents, loans or other obligations that would normally be paid under the Ground Lease that are reduced, waived or otherwise charged at less than fair market value by the City or otherwise trigger California's Prevailing Wage Law (Cal. Labor Code, §§ 1720 et seq.).
29.37 Hiring Efforts. Developer and its Contractors and Consultants shall make good faith efforts to (i) recruit, employ, and contract with qualified individuals and businesses that are part of the work force and business community in the City of Santa Clara, and (ii) provide employment, contracting, and business participation opportunities to residents of the City of Santa Clara, including women, minorities, and economically disadvantaged Individuals. 29 .3 7 .1 For the purposes of this Section 29 .3 7.1, "good faith efforts" shall be deemed to be satisfied if written notification is provided to community-based organizations with experience in the administration of diversity programs and any other organizations identified for the Developer, Contractor, or Consultant (as applicable) by City when employment opportunities are available, and a record is maintained of each such written notification and the organizations' responses thereto.
29.37.2 Developer, its Contractors, and its Consultants may participate in voluntary associations which assist in fulfilling their diversity obligations under this Section 29.37.2. The efforts of a contractor association, joint contractor-union, contractorcommunity, or other similar group of which the Developer, Contractor, or Consultant (as relevant) is a member and participant, may be asserted as fulfilling this obligation provided that 92 the Developer, Contractor, or Consultant (as relevant) actively participates in the group, makes good faith efforts to assure that the group has a positive impact on the employment of minority group persons and women in the industry, ensures that the concrete benefits of the program are reflected in the work force composition of Developer, Contractor, or Consultant (as relevant).
The obligation to comply, however, is that of Developer, Contractor, or Consultant (as relevant) and failure of such a group to fulfill an obligation shall not be a defense for the noncompliance of Developer, Contractor, or Consultant (as relevant).
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
101897630.37
93 IN WITNESS WHEREOF, Master Developer and City have executed this Agreement as of the Reference Date.
CITY:
CITY OF SANTA CLARA, a municipal corporation
By:
Name: Rajeev Batra
Title: Interim City Manager
::proved M to 711 ti/ 4
Name: RIC E. NOSKY, JR.,
City Attorney
Approved on June 28, 2016
City Council Resolution No. 16-8340
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
I
City ~ clerk:-=""========-
[Signature Page to Disposition and Development-Agreement (City Place Santa Clara)]
California All-P ose Acknowled ment CIVIL CODE§ 1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA }
ss
COUNTY OF SANTA CLARA
On August 12, 2016, before me, Jose Armas, a Notary Public, personally appeared Rajeev Batra who proved to me on the basis of satisfactory evidence to be the perso~ whose name(s) is~ subscribed to the within instrument and acknowledged to me that he/~ executed the same in his&erlt,betr authorized capacity~ and that by his~~ signaturets)on the instrument the perso~ or the entity upon behalf of which the person~cted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
JOSE ARMAS
~ .- Commission # 2109740
~ · ~'i Notary Public • Calllornla f j · Santa Clara County .. • • • • • 0 • Mi ~OT"} tx~rts ~a1 [9}&1 ef
SS my hand and official seal.
s
TIITS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW:
Disposition and Development Agreement
City Place
Related Santa Clara
•
MASTER DEVELOPER:
RELATED S
By:
Name: ---',<'...!....:le...::..!.-"--'-'-=.:...""--.µ_:'-'-.:.....!.---'-'--_...,._____::_:_ ____ _ Tit1e:
[Signature Page to Disposilion and Development Agreement (City Place Santa Clara)]
State of New York
County of A;;t,J [/uJ( K'.
7 ACKNOWLEDGMENT
)
) ss.
)
On the frjl day of fH/6-(IJ r in the year 2016 before me, the undersigned, a Notary Public in and for said State, persona lly appeared juN!tt'a1t/J/,111,,,,,e/ , personally known to me or proved to me on the basis of satisfactory evidence to be the individual wh ose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individua l acted, executed the instrument.
(Notarial Seal)
YVETTE SCHLESINGER
Notary Public, State of New York
No. 01SC61751DO
Qualified in New York County
Commission .Expr res October 1, 20 l ~
[Nota,y 's Acknowledgment Page to Disposition and Development Agreement (City Place Santa Clara)]
EXHIBIT A
Definitions
The following terms used in this Agreement shall have the meanings ascribed to them below.
"AA&R" means a written consent in the form of Exhibit P attached hereto, with only such changes thereto as may be Approved by Master Developer, the applicable Phase Developer and City.
"Additional Buildings" means the Additional Initial Buildings and the Additional Retail Buildings.
"Additional Initial Buildings" is defined in Section 5.3.3. "Additional Retail Buildings" is defined in Section 5.3.5. "Adequate Security" is defined in Section 28.1.
"Administrative Fee" shall mean a fee imposed City-Wide or Area-Wide in effect at the time and payable upon the submission of an application for any permit or approval or thereafter, which is intended to cover only the estimated actual costs to City of processing that application and inspecting work undertaken pursuant to that application, and is not a Development Fee or Exaction. The term "Administrative Fee" shall not any include City Costs. "Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For purposes of this definition, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting stock, by contract or otherwise.
The possession, directly or indirectly, by another Person of a right to approve or consent to (or otherwise restrict) certain business or affairs of the specified Person only through major decision rights or similar protective approval rights shall not, in and of itself, constitute or indicate "control", nor shall a Person be deemed not to have "control" solely because another Person possesses, directly or indirectly, such major decision rights or similar protective approval rights with respect to the specified Person.
"Agreement" is defined in the Preamble.
"Airspace Parcels" is defined in Recital B.
"Allowed Square Footage" is defined in Section 10.1.
"Allowed Square Footage Table" is defined in Section 10.1. "Alternate Leasing Plan" is defined in Section 5.3.7(b).
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"Anniversary Date" is defined in Section 14.2.
"Annual Landfill Costs" is defined in Section 14.2.
"Applicable Law" means any and all applicable present and future laws, rules, orders, ordinances, regulations, statutes, requirements, directives, permits, consents, certificates, approvals, codes and executive orders of all Governmental Authorities now existing or hereafter created, and of all their departments and bureaus, including City zoning regulations to the extent applicable, and of any applicable fire rating bureau or other body exercising similar functions affecting the Project Site; provided, however, that in all cases the foregoing shall be subject, with respect to the laws, rules, orders, orders, ordinances, regulations, statutes, requirements, directives, permits, consents, certificates, approvals, codes and executive orders of City, to the Development Agreement.
"Approval," "Approve" and "Approved" are defined in Section 29.24.1. "Arbitration Matter" is defined in Section 20.1. l.
"Arbiter" is defined in Section 20.3.1.
"Arbiter's Qualifications" is defined in Section 20.3.1. "Architect" means the licensed architect of record, if any, for any Building as selected by a Phase Developer.
"Architect's Certificate" means a certificate issued by the Architect in ,accordance with Section 12.1 that is in the form attached hereto as Exhibit S with only such changes thereto as may be Approved by Phase Developer and City.
"Area-Wide" shall mean all privately~owned property within any designated geographic district of the City (for example, the "North Bayshore Area") that includes, but does not consist solely of, some or all of the Project Site.
"Assignment" is defined in Section 22.3.1.
"Authorization" is defined in Section 11.1.
"Base Rent" is defined in Section 6.1.8.
"Best Efforts Report" is defined in Section 5.3.7(a).
"Building" means each physical structure located within a Phase that is intended for human occupancy or the conduct of a business, including hotels, retail and office space and apartments.
"Building Permit" means a building permit issued by City. "Business Day" means any day that is not a Saturday, Sunday or a day observed as a holiday by either the State of California or the federal government.
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"CEQA" means the California Environmental Quality Act, California Public Resources Code section 21000 et seq., and the Guidelines for the California Environmental Quality Act, California Code of Regulations, Title 14 section 15000 et seq., as amended from time to time. "Certificate of Completion" means a certificate issued by City in accordance with Article 12 that is substantially in the form attached hereto as Exhibit K. "Certificate of Occupancy" means an instrument issued by City certifying that a Building or portion thereof is fit for occupancy or use in accordance with City's Building Code. "CFDs" is defined in Section 5 .1.3.
"Change of Control" means, as to any specified Person, a change in the Controlling Owner of the specified Person.
"City" has the meaning set forth in the preamble or, depending on the context, may mean the territorial jurisdiction of the foregoing. Where not otherwise specified, the City Manager (or his or her designee) is authorized to act on behalf of City. "City Center Phases" is defined in Section 1.4.
"City Costs" means the actual and reasonable costs incurred by City employees directly, or by third parties hired by City, in performing City's obligations under this Agreement and the other Project Documents, as determined on a time and materials basis, excluding work and fees covered by Administrative Fees. The term "City Costs" shall mean all reasonable and actual costs related to the hiring of third party consultants, attorneys, and/or plan checkers as needed to assist City in performing its obligations under this Agreement and the other Project Documents in order to ensure efficient Project development, including but not limited to the review and (if applicable) Approval of: (i) Premium Costs and Premium Costs Allocations in accordance with Section 16.1 hereof; (ii) financial data and plans submitted as required hereunder; (iii) environmental review relative to a Subsequent Project Approval; (iv) compliance with this Agreement and the other Project Documents, and Project MMRP; and (v) planning, design, building, and/or public works submittals related to the Project. The term "City Costs" shall also include all reasonable and actual costs related to the hiring and ongoing retention of the Priority Project Manager (as described in the DAP Procedures), whether such person is a third party or a City employee.
"City Council" means the Santa Clara City Council, or means any successor governing body of City designated by or under law.
"City Guaranty" is defined in Section 28.3 .1.
"City Landfill Parcels" is defined in Recital B.
"City Manager" means the City Manager of City, or any successor chief executive officer of City designated by or under law.
"City Party" is defined in Section 27.1.
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"City Place Park" is defined in Section 4.8.l(e).
"City Place Park Construction Contribution" is defined in Section 4.8. He). "City Place Park Design Contribution" is defined in Section 4.8.l(e) .. "City-Wide" shall mean all privately-owned property within (1) the territorial limits of the City or (2) any designated use district or use classification of the City so long as (a) any such use district or use classification includes a substantial amount of affected private property other than affected private property within the Project Site, and (b) the use district or use classification includes all private property within the use district or use classification that receives the general or special benefits of, or causes the burdens that occasion the need for, the new City Regulation or Development Fees or Exactions (as those terms are defined in the Development Agreement). "City's Termination Rights" is defined in Section 23.6. "City's Title Covenant" is defined in Section 13.3.
"Commence" and any variation thereof means the commencement of physical construction of Infrastructure or Buildings (as applicable) within the applicable Phase pursuant to an Approved DAP.
"Complete" and any variation thereof means, as applicable, that: (i) a specified scope of work has been completed in accordance with Approved plans and specifications; (ii) Governmental Authorities with jurisdiction have issued all Authorizations required for the contemplated use and, with respect to Buildings, occupancy of the work including, if applicable, Certificates of Occupancy; (iii) the site has been cleaned and all equipment, tools and other construction materials and debris have been removed; and (iv) with respect to Public Property and Public Improvements, (a) all bills for the work have been paid and releases have been obtained from all mechanics and material suppliers or bonds have been provided to secure such liens in a form and amount required by law to cause any such lien to be removed from the applicable portion of the Project Site, (b) no mechanics', materialrnen's or other liens have been recorded (unless they have been bonded as provided above) and the period for recording such liens have expired and (c) all as-built plans and warranties, guaranties, operating manuals, operations and maintenance data, certificates of completed operations or other insurance, and all other close-out items required under any applicable Authorization or Approval have been provided to City.
"Completion Guaranty" is defined in Section 28.1.
"Confidential Financial Reports" is defined in Section 29.34. "Conflicting Law" means legislation enacted by the Congress of the United States, by the legislature of the State or the enactment of a regulation or statute by any Governmental Authority (other than a City Party) with jurisdiction that precludes or substantially increases the cost of performance or compliance with any material provision of this Agreement by Master Developer or a Phase Developer.
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"Consent Transfer" is defined in Section 22.3.
"Consent Transfer Request Notice" is defined in Section 22.4.3. "Construction Covenant" is defined in Section 9 .1.4.
"Consultant" means a person or business which is a party to a professional services contract in excess of$ I 00,000 for the design or construction of any portion of the Project. "Contractor" means any contractors or subcontractors (regardless of tier) having a an agreement in excess of $100,000 with Developer or other Contractors or Consultants to provide or procure labor, materials, or services for the construction of the Project, including a purchase order that requires installation of materials. A "Contract" does not include a loan transaction. "Controlling Owner" means, as to a specified Person, the Person who holds the ultimate Controlling Ownership in the specified Person.
"Controlling Ownership" means, with respect to a specified Person, the ownership, directly or indirectly, of the right to direct the day-to-day business and affairs of the specified Person. The ownership, directly or indirectly, by a Person of a right to approve or consent to ( or otherwise restrict) certain business or affairs of the specified Person only through major decision rights or similar protective approval rights shall not, in and of itself, constitute or indicate "Controlling Ownership" in the specified Person, nor shall a Person be deemed not to have "Controlling Ownership" in the specified Person solely because another Person possesses, directly or indirectly, such major decision rights or similar protective approval rights with respect to the specified Person.
"CPI" means the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor or its successors, All Items (1982-84 = 100), or any successor index thereto designated by the Bureau of Labor Statistics or its successor, appropriately adjusted. If the CPI ceases to be published and there is no such successor index, another comparable index selected by City and Master Developer shall be used.
If such Parties cannot agree within a reasonable time, the successor index and any appropriate adjustments shall be determined pursuant to Article 20 (Dispute Resolution) and shall be substituted for the CPI.
"CPI Adjustment" means an adjustment of each dollar amount that is subject to CPI Adjustment under this Agreement and is made by multiplying the dollar amount being adjusted by the sum of (a) one hundred percent, plus (b) the CPI Increase. "CPI Increase" means the percentage increase, if any (but not decrease, if any) between the CPI for the calendar month that is three months prior to the effective date of adjustment and the CPI for the calendar month that is fifteen months prior to the effective date of adjustment. "CSCC" means the City of Santa Clara Code.
"DAP" is defined in Section 1.6.3.
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"DAP Procedures" is defined in Section 5.
"Department of Public Works" means the Department of Public Works of City, or any successor public agency designated by or under law.
"Detailed Financing Plan" is defined in Section 9.3.2
"Developer" means, individually or collectively as the context requires, Master Developer and each Phase Developer.
"Developer Party" is defined in Section 17.1 .4.
"Developer Related Party" is defined in Section 22.6. l(c). "Development Agreement" means that certain Development Agreement by Developer and City dated for reference purposes as of the Reference Date, as the same may be amended from time to time.
"Development Obligations" is defined in Section 5.3.
"Development Opportunity" is defined in Section 7.2.
"Development Parcels" is defined in Recital C.
"Direct Assignment" is defined in Section 22.6.2(a).
"Easement Actions" is defined in Section 13.2.2.
"Effective Date" means the date that this Agreement becomes effective, which shall be the date this Agreement is executed and delivered by the Parties. Notwithstanding the foregoing, the Parties shall not be required to take any implementation actions in furtherance of the development of the Project Site until the effective date of the Development Agreement and the Master Community Plan.
"ENA" is defined in Recital D.
"Engineer" means the licensed engineer of record for Infrastructure as selected by Phase Developer and Approved by City Manager.
"Engineer's Certificate" means a certificate issued by the Engineer in accordance with Section 12. l that is in the form attached hereto as Exhibit T with only such changes thereto as may be Approved by Phase Developer and City.
"Environmental Laws" means and includes all applicable present and future federal, State and local laws, statutes, rules, regulations, ordinances, standards, directives, and conditions of approval, all administrative or judicial orders or decrees and all permits, license approvals or other entitlements, or rules of common law pertaining to Hazardous Substances, the protection of the environment, natural resources, wildlife, human health or safety, or employee safety or A-6
community right-to-know requirements related to the work being performed pursuant to this Agreement or a Ground Lease.
"EOS Variant" is defined in Recital H.
"Event of Default" is defined in Section 21.1.
"Excusable Delay" is defined in Section 24.1.
"Expedited Arbitration Matter" is defined in Section 20.1.2. "Experience Requirement" is defined in Section 22.4.3(c). "Final Map" means a Final Subdivision Map processed in accordance with the City's Development Code.
"Final Station Site" is defined in Section 5.3.1.
"Final Station Site Improvements" is defined in Section 5 .3 .1 (b). "Financial Obligations" means the reimbursement of Annual Landfill Costs in accordance with Section 14.2 hereof, City Costs in accordance with Article 26 hereof and the City Place Park Design Contribution and City Place Park Construction Contribution in accordance with Section 4.8 hereof.
"Financial Requirement" is defined in Section 22.4.3.(c). "Financing Plan" is defined in Section 5.1.3.
"Fire Protection Assessment Study" is defined in Section 15.2.2(c)(ii). ''Fire Protection Services Obligations" is defined in Section 15.2.2(c)(ii). ''Fire Station" is defined in Section 5.3.1.
"First Final Map" is defined in Recital B.
"Force Majeure" is defined in Section 24.1.1.
"FTEs" is defined in Section 15.2.2(c)(l).
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means all federal, state, local and/or regional governmental and quasi-governmental bodies and authorities including departments, agencies, boards and councils, and any political subdivision, public corporation, district or other political or public entity or depa1tment thereof having or exercising jurisdiction over City, Developer or the Project or the Project Site, or such portions thereof as the context indicates.
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"Gross Square Footage" and any variation thereof shall be calculated in accordance with the definition of "Gross Floor Area" set forth in Section 18.06.01 0(g) of the CSCC. "Ground Lease" means a ground lease in the form attached hereto as Exhibit G-1 or G-2 as applicable, with only such changes thereto as set forth in Section 6.1 and as the applicable Phase Developer and City shall Approve.
"Hard Costs" means out-of-pocket costs actually incurred by the applicable Party, to the extent not included as Soft Costs. Hard Costs include, without limitation, necessary permit fees, bond premiums and similar fees and charges required for the construction of the Infrastructure. "Hazardous Substance" means any material, waste, chemical, compound, substance, mixture, or byproduct that is identified, defined, designated, listed, restricted or otherwise regulated under Environmental Laws as a "hazardous constituent", "hazardous substance", "hazardous waste constituent", "infectious waste", "medical waste", "biohazardous waste", "extremely hazardous waste", "pollutant", "toxic pollutant", or "contaminant", or any other designation intended to classify substances by reason of properties that are deleterious to the environment, natural resources, wildlife or human health or safety, including, without limitation, ignitability, infectiousness, corrosiveness, radioactivity, carcinogenicity, toxicity and reproductive toxicity. Hazardous Substance includes, without limitation, any form ofnatural gas, petroleum products or any fraction thereof, asbestos, asbestos-containing materials, PCBs, PCBcontaining materials, and any substance that, due to its characteristics or interaction with one or more other materials, wastes, chemicals, compounds, substances, mixtures or byproducts, damages or threatens to damage the environment, natural resources, wildlife or human health or safety.
"IMP" is defined in Recital G.
"Improvements" means, with respect to a Phase, individually or collectively as the context requires, all Infrastructure and Buildings required to be included in a DAP for such Phase, or (if a DAP is Approved for the Phase), actually included in the DAP Approved for that Phase.
"Indemnify" means reimburse, indemnify, defend and hold harmless. "Indemnification" has a correlative meaning.
"Indemnified Parties" is defined in Section 4.8.2(a).
"Indemnifying Party" is defined in Section 27.3.
"Infrastructure" means those items identified in the Infrastructure Master Plan including open space improvements (including park improvements and restrooms), streets, rails, sewer and stonn drainage systems, water systems, street improvements (including freeway ramps or other demolition), landfill "podium" (also referred to as a "structural slab" in the Th1P), traffic signal systems, dry utilities and other improvements any of which are to be constructed in or for the benefit of the applicable real property or any other matters described in the Infrastructure Master Plan. "Infrastructure" also includes any improvements required to serve the Project that have A-8
been imposed as conditions of approval through the Project Approvals. " Infrastructure" does not include Buildings.
"Infrastructure Master Plan" or "IMP" is defined in Recital G, as such document may be amended from time to tin)e in accordance with its terms . "Initial Improvements" means, with respect to a Phase, individually or collectively as the context requires, the Infrastructure, the Required Buildings, and the Additional Buildings. "Initial Phase Base Rent" is defined in Section 6.3.3.
"Institutional Lender" means any one or more of the following, whether acting for its own interest and capacity or in an agency, fiduciary or other representative capacity for one or more Persons none of which need be an Institutional Lenders: (i) a savings bank, a savings and loan association, a commercial bank or trust company or branch thereof, an insurance company, a governmental agency, a real estate investment trust, a religious, educational or charitable institution, an employees' welfare, benefit, pension or retirement fund or system, an investment banking, merchant banking or brokerage firm, or any other Person or group of Persons which, at the time a Mortgage is recorded in favor of such Person or Persons, has or is an Affiliate of a Person which has assets of at least $500 million in the aggregate (or the equivalent in foreign currency), and in the case of any Person or group of Persons none of whom is a savings bank, a savings and loan association, a commercial bank or trust company, an insurance company, a governmental agency, or a real estate investment trust, is regularly engaged or is an Affiliate of a Person regularly engaged in the business of commercial real estate (whether as an owner, investor, lender, sponsor or otherwise), or (ii) any special account, managed fund, department, agency or Affiliate of any of the foregoing, or (iii) any person acting in an agency, fiduciary or other representative capacity for any of the foregoing. For purposes hereof, acting in an "agency, fiduciary or other representative capacity" shall be deemed to include acting as a trustee, agent, or in a similar capacity under a mortgage, loan agreement, indenture or other loan document. "Landfill" means the Santa Clara All-Purpose Landfill, which is that portion of the Project Site located within the Landfill-Parcel that was fonnerly used as a sanitary landfill and comprised an approximately two hundred ten acre site with a waste footprint of approximately one hundred thirty six acres.
"Landfill Baseline Costs" is defined in Section 14.2.
"Landfill Operation and Management Agreement" is defined in Section 14.1. "Landfill O&M Term Sheet" is defined in Section 1.2.1.
"Landfill Parcel" is defined in Recital B.
"LEA" means the Santa Clara County Department of Environmental Health - Local Enforcement Agency.
"Lender Guaranty" is defined in Section 28.3.1.
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"Lender Notice of Cure" is defined in Section 23 .4.
''Losses" is defined in Section 27. I.
"Major Department Store" is defined in Section 5.3.6.
"Master CC&Rs" is defined in Section 6.2.1 (c).
"Master Community Plan" or "MCP" is defined in Recital G. "Master Developer" has the meaning set forth in the preamble or, following a permitted transfer of such Person's rights and obligations under this Agreement, means such transferee (but, for the avoidance of doubt, not including a Phase Developer). "Material Breach" is defined in Section 21.2.5.
''Materially Adverse Economic Conditions" is defined in Section 24.1.2. ''Mezzanine Leuder" means the lender under a Mezzanine Loan. "Mezzanine Loan" means any financing secured by interests in Developer or, if the fmancing documents so provide, in any Person controlling Developer (and not by a lien on Developer's interest in this Agreement). ' .
"Minimum Initial Buildings" is defined in Section 5 .3 .2. "Minimum Retail Buildings" is defmed in Section 5.3.4.
"Mitigation Measures" means the mitigation measures identified in the Project EIR that are applicable to the Project and adopted by the City in connection with its approval of the Project, to be implemented as provided in the Project MMRP. ''Monetary Event of Default" is defined in Section 23.3. "Mortgage" means any mortgage, deed of trust, pledge or similar instrument, including any modification, amendment, spreader, consolidation or renewal thereof that constitutes a lien on the Developer's interest in the Project Site under this Agreement and the beneficiary of which is an Institutional Lender. Once any mortgage, deed of trust, pledge or similar instrument qualifies as a Mortgage, no transfer by a Mortgagee of all or any interest in such indebtedness and obligations secured thereby shall affect such qualification so long as the transferee is an Institutional Lender except in the case where the transferee is a purchaser in foreclosure or under a sale in lieu of foreclosure of the Mortgage and such purchaser is not an Affiliate of the Mortgagee under such Mortgage.
"Mortgagee" means the beneficiary under a Mortgage.
"MPG" is de.fined in Recital E.
"Neighborhood Parks" is defined in Section 15.2.2(b).
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"Net Worth" means net worth calculated using GAAP. In the case of a corporation, "Net Worth" shall mean shareholders' equity calculated in accordance with GAAP. Any reference in this Agreement to a minimum Net Worth or a Net Worth Requirement shall mean that the Net Worth must be satisfied and maintained at all times. Upon City's request, a Person required to maintain a minimum Net Worth under this Agreement shall provide to City reasonable evidence that it satisfies the Net Worth Requirement, including a copy of the most recent audit of such Person (which shall in no event be dated more than thirteen (13) months before the date of City's request). Any such audit must have been performed by an independent third-party auditor and must include the opinion of the auditor indicating that the financial statements are fairly stated in all material respects.
"Net Worth Requirement" means: (i) for Transfer of a Phase or portions of a Phase that cumulatively equal or exceed seventy percent (70%) or more of the land area in a Phase, a Net Worth calculated as of the scheduled closing of the proposed Assignee's acquisition of the Ground Lease covering the applicable Phase or Partial Phase, equal to or more than Seventy Five Million Dollars ($75,000,000) increased automatically by ten percent (10%) on each five (5) year anniversary of the Effective Date and (ii) for Transfers of one or more Partial Phases that cumulatively equal less than seventy percent (70%) of the land area in a Phase, a Net Worth · calculated as of the scheduled closing of the proposed Assignee's acquisition of the Ground Lease covering the applicable Phase or Partial Phase equal to or more than the higher of (A) Twenty Five Million Dollars ($25,000,000), increased automatically by ten percent (10%) on each five (5) year anniversary of the Effective Date or (B) the amount determined under c'lause (i) above times the percentage of the total land area in the Phase that is being Transferred. Any entity required to satisfy the Net Worth Requirement can do so either by either meeting the Net Worth Requirement itself or by providing a Guaranty, covering all of that entity's obligations under this Agreement without limitation, from an entity that meets the Net Worth Requirement. "Non-Monetary Event of Default" is defined in Section 23.3. "Non-NFL Event Parking Spaces" is defmed in Section 5.5. "Non-Water Corrective Action Plan" means that plan prepared by City and Master Developer and submitted to the LEA addressing non-aqueous components of the corrective actions to be taken at the Landfill, including non-aqueous aspects of the groundwater monitoring and leachate collection system, Landfill gas extraction system, Landfill cover, and pilings into the waste.
"Notice" is defined in Section 29.33.1.
"Notice of Termination" is defined in Section 29 .30.
"Notifying Party" is defined in Section 21.1.
"Official Records" means the Official Records of City maintained by City's Recorder's Office.
"Original Phase Bonndaries" is defined in Section 6.1.8.
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"Outside Date" means the last date by which a particular obligation may be satisfied, as such date is set forth in the Schedule of Performance.
"Parcel 3 Access Road" is defined in Section 4.8.l(b)(ii). "Park Maintenance" is defined in Section 15 .2.2(b).
"Parking Management Plan" is defined in Section 5.5.
"Partial Phase" is defined in Section 4.2.
"Partial Phase Criteria" is defined in Section 4.2.1.
"Party" or "Parties" means, individually or collectively as the context requires, City, Master Developer and each Phase Developer.
"PCBs" means polychlorinated biphenyls.
"Permit to Enter" is defined in Article 8.
"Permitted Exceptions" is defined in Section 13.1.7.
"Permitted Transfer" is defined in Section 22.6.1.
"Person" means any natural person or a corporation, partnership, trust, limited liability company, limited liability partnership or other entity. "Phase" means, individually or collectively as the context requires, each Airspace Parcel or Parcels designated as a Phase of development by Master Developer from time to time under this Agreement or a Partial Phase thereof as described in Section 4.2. There will be up to eight (8) Phases, as shown in the Phasing Plan, including the Phase 2A. "Phase l" means Phase 1 as shown on the Phasing Plan.
"Phase 2" means Phase 2 is shown in the Phasing Plan.
"Phase 2A" is defined in Section 4.8 and shown as Phase 2A on the Phasing Plan. "Phase 2A Lease Termination Notice" is defined in Section 4.8.l(c). "Phase 3" means Phase 3 as shown on the Phasing Plan.
"Phase Developer Designation" is defined in Section 4.5. "Phase Developer" means, with respect to a Phase (or Partial Phase), the developer thereof (which may include Master Developer) and the tenant under the Ground Lease for such Phase, as such Person is determined under Article 3 or, following a permitted transfer of such Person's rights and obligations under such Ground Lease, means such transferee.
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"Phase Option" is defined in Section 3.2.
"Phase Option Notice" is defined in Section 4.1.
"Phase Outside Dates" is defined in Section 7.1.
"Phase Schedule of Performance" is defined in Section 9.l .2(a). "Phase Termination Notice" is defined in Section 7.1.
''Phase Title Policy" is defined in Section 6.2.l(d).
"Phasing Criteria" is defined in Section 4.1.2.
"Phasing Information" is defined in Section 4.1.1.
"Phasing Plan" means the document attached hereto as Exhibit E, as such document may be amended from time to time.
"Police Beat" is defined in Section l5.2.2(c)(l).
"Police Services" is defined in Section 15.2.2(c)(l).
"Post-Closure Land Use Plan" means that plan prepared by City and Master Developer and submitted to the LEA demonstrating that post-closure activities will not pose a threat to health and safety and the environment.
"Post-Closure Permit" means the permit issued by the LEA following approval of the Revised Post-Closure Maintenance Plan.
"Pre-Approved Arbiters List" is defined in Section 20.3 .1. "Preliminary Title Report" is defined in Section 13.1.1. ''Premium Costs" is defined in Section 16.1.1.
"Premium Costs Allocation" is defined in Section l 6. l.3(a). "Project" is defined in Recital K.
"Project Approvals" is defined in Recital J and as listed in Exhibit D. "Project Documents" means collectively, this Agreement, the MCP, the IMP, the MMRP, the CC&Rs, the Development Agreement, the Revised Closure Plan, the Post-Closure Land Use Plan, the Revised Post-Closure Maintenance Plan, the Post-Closure Permit, the NonWater Corrective Action Plan, the Water CotTective Action Plan, the Waste Discharge Requirements, the Landfill Operation and Management Agreement (once executed), the Ground Leases and any other Authorizations received for any portion of the Project and agreements A-13
entered into pursuant to this Agreement, together with all exhibits thereto, all as may be lawfully amended from time to time.
"Project EIR" is defined in Recital F.
"Project MMRP" is defined in Recital F and attached hereto as Exhibit C. "Pro,ject Site" is defined in Recital C.
"Public Improvements" means Infrastructure that is required under Article VII of City's Subdivision Code, plus any other Infrastructure that is required to be dedicated to the City pursuant to the Project Approvals.
"Public Streets" is defined in Section l 5.2.2(a).
"Reference Date" is defined in the Preamble.
"Release" means any accidental or intentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the air, soil gas, land, surface water, groundwater or environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Substance). The term includes a threatened "Release" but does not include any passive migration of a Hazardous Substance through the air, soil gas, land, surface water or ground water after the Hazardous Substance has been previously spilled, leaked, pumped, poured, emitted, discharged, injected, escaped, leached, dumped or disposed into the air, soil, gas, land, surface water or ground water.
"Relocation Act" is defined in Section 18.2.
"Requested Change Notice" is defined in Section 4.7.
"Required Buildings" means the Minimum Initial Buildings and the Minimum Retail Buildings that are Approved in the DAP for the applicable Phase. "Retail" as that term is defined under the Master Community Plan. "Revised Closure Plan" means the plan prepared by City and Master Developer and submitted to the LEA detailing closure of the groundwater monitoring and leachate collection system, Landfill gas extraction system, Landfill cover, and pilings into the waste. "Revised Post-Closure Maintenance Plan" means the plan prepared by City and Master Developer and submitted to the LEA detailing the maintenance of the Landfill following completion of the Revised Closure Plan.
"Schedule of Performance" means the schedule of performance attached hereto as Exhibit F, as such schedule of performance may be updated under the terms of this Agreement, amended upon the Approval by Developer and City, or extended by any delay permitted under Section 29.31.
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"Secured Phase Improvements" is defined in Section 28.1. "Secured Public Improvements" is defined in Section 28.1. "SMA Security Requirements" is defined in Section 9.3.5. "Shared Infrastructure Costs" is defined in Section 16.2. "Soft Costs" means Developer's out-of-pocket costs actually incurred and paid to Third Parties for (i) Project approvals (including, without limitation, environmental review and obtaining Project entitlements from applicable Governmental Authorities), (ii) architectural, engineering, consultants, attorney and other professional services fees, and (iii) tenant relocations from the Project Site, including, without limitation, relocation site acquisition costs and tenant relocation costs.
"State" means the State of California.
"Station Area" is defined in Section 15.3.
"Street and Utility Easements" is defined in Section 13.2.2. "Subdivision Map" means a subdivision or parcel map as defined in the Subdivision Map Act.
"Subdivision Map Act" means the Subdivision Map Act, sections 66410 et seq. of the California Government Code.
"Subsequent Project Approvals" shall mean any additional project approvals required to implement the Project after the initial Project Approvals, including, without limitation, Development Area Plans, site permits and building permits and all Subdivision Maps. "Substantial Completion" (and any reasonable variation thereof) means, with respect to the .construction of any of the Initial Improvements, that the Architect ( or the general contractor, if there is no Architect) or Engineer therefor certifies in writing that the Improvement is sufficiently complete that it may be occupied ·or otherwise used for the purpose for which it is intended.
"Take Down" or "Taken Down" means the City and Master Developer or a Phase Developer designated by Master Developer entering into a Ground Lease for the Development Parcel(s) within a particular Phase.
"Tasman Parcels" is defined in Recital C.
"Temporary Station Site" is defined in Section 5.3.1.
"Temporary Station Site Improvements" is defined in Section 5.3. 1 (a). "Tentative Map" is defined in Recital B.
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"Term" is defined in Article 2.
"Term Sheet" is defmed in Recital D.
"Third Party" is defined in Section 7 .1.
"Title Company" means First American Title Company, or such other title company determined by Phase Developer.
"Transferee" means any Person to whom Master Developer effectuates an Assignment of any rights and corresponding obligations under this Agreement to the extent permitted, including Transfers to Affiliates of Master Developer.
"Transferee Team" is defined in Section 22.4.3(b).
"Waste Discharge Requirements" means the requirements for discharge of waste materials at the Landfill issued by the California Regional Water Quality Control Board, San Francisco Bay Region on January 23, 2002, as such requirements may be amended or revised from time to time.
"Water Corrective Action Plan" means that plan prepared by City and Master Developer and submitted to the LEA addressing aqueous components of the corrective actions to be taken at the Landfill, including aqueous aspects of the groundwater monitoring and leachate collection system, Landfill gas extraction system, Landfill cover, and pilings into the waste.
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&GtNWIS ,-SU~lltYOIIS1 PLAKN~ll!.
EXHIBITB-1
CITY LANDFILL PARCEL
June 16, 2016
BKF No. 20156041
Pagel of3
All that real prope1ty situate in the City of Santa Clara, County of Santa Clara, State of California, described as follows
BEGINNING at the Southwest comer of that certain parcel designated as, "Remainder l", on that certain Parcel Map recorded in Book 737 of Maps, at Pages 1 through 4, Santa Clara County Records; thence along the Southeasterly boundary of said Remainder 1, and Parcel 2 as shown on said map
1. Not1h 70° 48' 54" East, 800.92 feet, to the common Southerly comer of Parcels 2 and 4 as shown on said map; thence along the Westerly and No11herly boundaries of said Parcel 4 the following eight courses
2. North 8° 10' 00" West, 1070.36 feet, to an angle point; thence
3. North 5° 35' 14" West, 191.73 feet, to the beginning of a tangent curve to the right; thence
4. Along said curve to the right, having a radius of 109.99 feet, through a central angle of 73° 36' 48", and an arc length of 141.32 feet to the end of said curve; thence
5. North 68° 0 l' 34" East, 24 7 .17 feet, to the beginning of a tangent curve to the right; thence
6. Along said curve to the right, having a radius of 159.99 feet, through a central angle of 63° 38' 58", and an arc length of 177.73 feet to the end of said curve; thence
7. South 48° 19' 28" East, 120.04 feet, to the beginning of a tangent curve to the left; thence
8. Along said curve to the left, having a radius of 16.00 feet, through a central angle of 65° 46' 18", and an arc length of 18.37 feet to the end of said curve; thence
9. North 65° 54' 14" East, 452.69 feet, to the Not1heast comer of said Parcel 4, at a point on the Westerly boundary of the lands of the Union Pacific Railroad Company (UPRR); thence
I 0. North 62° 36' 04" East, 50.00 feet, to the Easterly boundary of the lands of the UPRR, also being the Southwesterly sideline of Lafayette Street; thence along said common boundary
11. North 27° 23' 56" West, 383.89 feet, to the Southeasterly boundary of an abandoned pot1ion of the former Santa Clara Alviso Road as said abandonment is shown on the Record of Survey filed in Book 613 of Maps, at Pages 16 through 19, Santa Clara County Records; thence along said Southeasterly boundary
12. North 62° 36' 04" East, 60.00 feet, to the Southeast corner of said abandonment as shown on said map, also being a Southerly corner of the lands of the State of California as shown in Parcel 6-First of the Final Order of Condemnation recorded in Book 4820, at