FIRST AMENDMENT TO LANDFILL POST-CLOSURE
OPERATION AND MANAGEMENT AGREEMENT
This FIRST AMENDMENT TO LANDFILL POST-CLOSURE OPERATION AND MANAGEMENT AGREEMENT (this “First Amendment”) is made as of this ____ day of _________________, 2022 (the “1st Amendment Reference Date”), 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”). Each of the City and the Master Developer is referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, City and Master Developer entered into that certain Landfill Post- Closure Operation and Management Agreement, dated as of May 26, 2020, and a memorandum of agreement was recorded in the official records of Santa Clara County on June 23, 2020, as Document No. 24515176 (the “Landfill O&M ”) with respect to the City Landfill Parcels described in Exhibit A attached to the Landfill O&M;
WHEREAS, all capitalized terms used but not otherwise defined herein shall have their meanings as set forth in the Landfill O&M; and
WHEREAS, the Landfill O&M sets forth certain insurance requirements for each phase of the Project, as more particularly set forth in Exhibit D thereof (the “Insurance Requirements”); and
WHEREAS, the Insurance Requirements contemplated that the first two phase s of the Project would commenc e substantially concurrently such that it would be reasonable t o secure higher insurance levels at the outset; and
WHEREAS, the Master Developer may elect to execute a Ground Lease for and /or begin construction of Phase 1 of the Project ahead of Phase 2 , but it is not yet known precisely when such actions will be undertaken; and
WHEREAS, the entirety of the Phase 1 ground leased property is planned to be off the Landfill, and the higher insurance requirements are not appropriate for this portion of the Project; and
WHEREAS, the Parties desire to enter into this First Amendment to update the Phase 1 Insurance Requirements and to clarify the definition of “Pre-Phase Approved Activities” by replacing in its entirety Exhibit D to the Landfill O&M (including Schedule 1 thereof); and WHEREAS, the Parties agree that all other insurance requirements and limits set forth within the Landfill O&M will remain unchanged.
First Amendment to Landfill O&M
1 AGREEMENT
NOW, THEREFORE, for the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Master Developer hereby agree as follows:
1. Recitals. The foregoing recitals are true and correct and are incorporated herein by this reference as if fully set forth herein.
2. E xhibit D to Landfill O&M. Exhibit D (Insurance Requirements) to the Landfill O&M is hereby replaced in its entirety with a new Exhibit D (Insurance Requirements) attached hereto, to amend the Owner or Contractor Controlled Insurance Program limits of liability for Phase 1 set forth in Section II (d) of that exhibit from $100 ,000,000 to $50,000,000 and to clarify certain requirements relating to any policies placed with Master Developer’s captive insurance company.
3. Sch edule 1 of Exhibit D to Landfill O&M . Schedule 1 (Pre-Phase Approved Activities) of Exhibit D to the Landfill O&M is hereby replaced in its entirety with a new Schedule 1 (Pre - Phase Approved Activities) attached hereto, to amend the approved activities to include: “ Any other activities expressly approved by the City in writing and evidenced by one or more Permits to Enter or similar permits or licenses.”
4. E ntire Agreement. This First Amendment, and the Landfill O&M, contain all of the representations and the entire agreement between the parties with respect to the subject matter of this agreement. Any prior correspondence, memoranda, agreements, warranties, or written or oral representations relating to the subject matter of this First Amendment are superseded in their entirety by this First Am endment. No prior drafts of this First Amendment or changes between those drafts and the executed version of this First Amendment shall be introduced as evidence in any litigation or other dispute resolution proceeding by any party or other person, and no court or other body should consider such drafts in interpreting this First Amendment.
5. A
greement Unmodified; Amendments . Except as expressly set forth in this First Amendment, the Agreement shall remain unmodified and in full force and effect, and is hereby affirmed and ratified. No amendment to the Landfill O&M nor this First Amendment or any part thereof shall be valid unless it is in writing and signed by all of the parties thereto. In the event of any inconsistency between the terms of the Landfill O&M and the terms of this First Amendment, the terms of this First Amendment shall govern and control in all respects. All references to the Landfill O&M shall be deemed references to the Landfill O&M as amended hereby.
6. S
everability . If any provision of this First Amendment or the application thereof to any person, entity or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this First Amendment, or the application of such provision to persons, entities or circumstances other than those as to which is invalid or unenforceable, shall not be affected thereby, and each other provision of this First Amendment shall be valid and be enforceable to the fullest extent permitted by law.
7. C
ounterparts . For convenience, the signatures of the parties to this First Amendment may be executed and acknowledged on separate pages which, when attached to this First Amendment, First Amendment to Landfill O&M
2 shall constitute as one complete First Amendment. This First Amendment may be executed in any number of counterparts each of which shall be deemed to be an original and all of which shall constitute one and the same First Amendment.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Master Developer and City have executed this Agreement as of the 1st Amendment Reference Date.
CITY:
CITY OF SANTA CLARA, a municipal corporation
By:
Name: RAJEEV BATRA
Title: CITY MANAGER
Approved as to form:
By: ______________________________
Name: STEVE NGO
Interim City Attorney
Approved on ____________, 2022
City Council Resolution No. 22-__________
MASTER DEVELOPER:
RELATED SANTA CLARA, LLC, a Delaware
limited liability company
By:
Name:
Title:
INSURANCE EXHIBIT
(City Place)
1 EXHIBIT D TO LANDFILL O&M
[ATTACHED]
INSURANCE EXHIBIT
(City Place)
2 EXHIBIT D
INSURANCE REQUIREMENTS
Master Developer shall maintain, with unaffiliated insurers, the policies of insurance described in this Exhibit D in form and substance reasonably satisfactory to the City (collectively, the “Project Insurance Programs”). Notwithstanding anything to the contrary herein, the parties acknowledge and agree that the intent of this Exhibit D is to provide anticipated minimum limits, baseline coverage parameters and material terms for the Project Insurance Programs based on information available at the time of execution of the O&M Agreement about what is reasonably commercially available and appropriate in light of the risks associated with the Parties’ obligations under the Agreement. If coverage meeting the limits, parameters and terms set forth in this Agreement is not reasonably commercially available for any particular Project Insurance Program at the time such policy is required to be in place under this Exhibit, Master Developer and City shall meet and confer in good faith to determine what alternative coverage is reasonably commercially available and Master Developer shall be required to obtain and maintain policies providing such coverage.
Section I de
scribes the Project Insurance Programs required during the performance of Pre-Phase Approved Activities (as defined on Schedule 1 attached hereto). Section II describes the Project Insurance Programs required upon execution of the Ground Lease for the Tasman Parcels (as defined in the DDA) (the “Phase 1 Activities ”). Section III describes the Project Insurance Programs required upon the earlier of (i) execution of a Ground Lease for any real property that includes any portion of any Landfill Parcel; or (ii) commencement of physical work on, at, above or under any portion of any Landfill Parcel (except in connection with Pre -Phase Approved Activities) (“Landfill Phase Activities”). Section IV describes the operational Project Insurance Programs required after completion of Infrastructure, Developer Improvements (including Developer Landfill Systems), City Landfill Systems and/or Buildings (collectively, “Improvements”), as applicable, as evidenced by either (i) a temporary or permanent Certificate of Occupancy for such Developer Improvement and/or Building (or portion thereof); or (ii) the placement of any Infrastructure, Developer Improvement (including Developer Landfill Systems), City Landfill System and/or Building (or portion thereof) into its intended use in accordance with the terms of the Project Insurance Programs (“Substantial Completion”)
1. Capitalized terms used in this Exhibit D not otherwise defined herein shall have the same meaning as such terms in the Landfill Post -Closure Operation and Management Agreement (the “O&M Agreement”) or as are commonly and presently defined in the insurance industry. For
1 Master Developer shall prepare and maintain a matrix detailing the specific coverages applicable to specific Improvements (the “Improvements Coverage Summary”) including, without limitation, the status of Substantial Completion on the Improvements within any Phase or Partial Phase. The Improvements Coverage Summary shall be updated regularly during the term of the Project and Master Developer shall work in good faith with the City to maintain monthly status calls to discuss the Improvements Coverage Summary (or at such other reasonable intervals as requested by the City).
INSURANCE EXHIBIT
(City Place)
3 purposes of this Exhibit G, the term “ Project Parcel” shall include the Tasman Parcels that will be ground leased to Master Developer in accordance with the terms of the DDA.
I. PRE-PHASE APPROVED ACTIVITIES. The Project Insurance Programs for any Pre -Phase Approved Activities shall be governed by the insurance terms set forth on the applicable Permit to Enter or other document authorizing such Pre -Phase Approved Activity as approved in writing by the City.
II. P HASE 1 ACTIVITIES . Prior to execution of the Ground Lease for the Tasman Parcels and at all times during Phase 1 Activities (except as otherwise expressly set forth below), the Master Developer shall obtain and maintain, or cause to be maintained, the following Project Insurance Programs until Substantial Completion has been achieved for the applicable Improvements on the Tasman Parcels or until commencement of Landfill Phase Activities, as specified herein.
(a) B
uilder’s Risk Insurance . Master Developer shall obtain and maintain site-specific2 builder’s risk insurance with respect to Phase 1 Activities and otherwise consistent with the Builder’s Risk Program described in Section III(a) below. (b) Terrorism Insurance. The insurance required in this Section II, subsections (a), (d), (g) and (h) shall include, or the Master Developer shall obtain on a stand- alone basis, terrorism coverage for the Tasman Parcels on terms (including amounts) consistent with those required under those subsections.
(c) F
lood Insurance . Master Developer shall obtain and maintain flood insurance on the Tasman Parcels consistent with the flood insurance requirements described in Section III(c) below.
(d) Owner’s Interest Liability Insurance. Master Developer shall obtain and maintain commercial general liability insurance and umbrella and/or excess liability insurance (the “Owner’s Interest GL Program”), including coverage for personal injury, bodily injury, death, accident and property damage, which insurance shall: (1) be on a site-specific “occurrence” form; (2) be the primary insurance for third-party bodily injury and property damage at, on or under the Tasman Parcels; and (3) collectively provide minimum coverage limits of at least (A) $25,000,000 per occurrence, (B) $25,000,000 general aggregate, and (C) $25,000,000 products completed operations aggregate over the term of the policy; provided, however, that upon commencement of vertical construction on the Tasman Parcels, Master Developer shall satisfy the foregoing requirements by obtaining and maintaining (including reinstatement of limits as set forth in Section III(d) below) an Owner or Contractor Controlled Insurance Program (“OCIP/CCIP”) with limits of liability of at least $50,000,000 per occurrence and in the aggregate. The products and completed operations coverage shall be maintained for the entire statute of repose for construction defect claims in California. Master Developer shall exercise commercially reasonable efforts to avoid an exclusion for earth
2 Except as otherwise expressly provided hereunder the term “site-specific” shall refer to a policy specifying that the covered location is the Project Parcel for which the coverage is r equired and for no other property, i.e. , for the insurance required by this Section II, the term “site specific” means the covered location must be only the Tasman Parcels.
INSURANCE EXHIBIT
(City Place)
4 movement or subsidence under the Owner’s Interest GL Program. The City will be scheduled as an additional insured under the Owner’s Interest GL Program. (e) Commercial Auto Liability Insurance. Master Developer shall obtain and maintain commercial auto liability insurance covering liability arising out of the ownership, maintenance or use of any owned, hired, borrowed and non-owned vehicle, if any, with minimum limits of not less than $1,000,000 combined single limit for bodily injury and property damage, together with umbrella and/or excess liability insurance which is at least as broad as the commercial automobile liability insurance, with limits of not less than $25,000,000. (f) P
rofessional Liability Insurance . Master Developer shall cause any party involved in the design of Improvements on the Tasman Parcels to obtain and maintain Professional Liability Insurance consistent with the requirements described in Section III(f) below.
(g) C ontractor’s Pollution Liability . Master Developer shall continue to maintain the Contractor’s Environmental Legal Liability Policy, No. 004130100 delivered to the City for the Pre-Phase Approved Activities provided that the insured “contracted operations” thereunder will be expanded to include all construction related activities on, at or under the Tasman Parcels.
(h) P
ollution Legal Liability Insurance. Master Developer shall maintain site - specific Pollution Legal Liability insurance with respect to the Tasman Parcels with limits of liability equal to at least $10,000,000 per incident and in the aggregate and a self-insured retention of no more than $250,000 per incident, until the Pollution Legal Liability Insurance required under Section III(i) below is obtained. The City and the Master Developer (and their respective affiliates) will be named insureds thereunder. The City shall have the right to review quotes, policy forms and endorsements for the Pollution Legal Liability insurance.
III. LANDFILL PHASE ACTIVITIES. Upon the earlier of (i) execution of a Ground Lease for any real property that includes any portion of any Landfill Parcel; or (ii) commencement of Landfill Phase Activities and at all times during Landfill Phase Activities, the Master Developer shall obtain and maintain the following Project Insurance Programs until Substantial Completion has been achieved for the applicable Improvements in that particular Project Parcel (except as otherwise expressly provided hereunder):
(a) Builder’s Risk Insurance. Master Developer shall maintain site-specific3 builder’s risk insurance (the “Builder’s Risk Program”) for each Project Parcel that includes a Landfill Parcel for not less than 100% of the completed project insurable replacement cost value of the Improvements and Earth Movement with a sublimit no less than the Probable Maximum
3 Consistent with footnote 2 and except as expressly provided hereunder, for the insurance required by this Section III, the term “site specific” means the covered location must include the specific Project Parcel that encompasses some or all of the applicable Landfill Parcel until such time that Substantial Completion has been achieved for such specific Project Parcel, and no other property.
INSURANCE EXHIBIT
(City Place)
5 Loss (“PML”) as determined by an independent third-party professional (inclusive of property damage and soft costs/business interruption), which PML is reasonably acceptable to the City.
In no event shall the earthquake coverage under the Builder’s Risk Program have a limit of liability of less than the 250-year return period of the PML. The Builder’s Risk Program shall include endorsements providing replacement cost coverage, agreed amount and/or coinsurance waiver. The Builder’s Risk Program shall grant permission to occupy prior to any occupancy of a given building and the Builder’s Risk Program shall cover:
(i) any Improvements on the property, including 100% of the insurable replacement cost value of all tenant improvements and City Landfill Systems and betterments that any agreement requires Master Developer to insure, against risks of loss to the Improveme nts customarily covered by “Cause of Loss - Special Form” policies as available in the insurance market on the date hereof (and against such additional risks of loss as may be customarily covered by such policies after the date hereof);
(ii) loss of mate rials, furniture, fixtures and equipment, machinery, and supplies which become part of the completed project whether on- site, as part of the City Landfill Systems, in transit, or stored off -site, or loss of any temporary structures, sidewalks, retaining walls, and underground property (including the systems comprising the City Landfill Systems); (iii) soft costs, including coverage for interest expense during the period of the construction, and coverage for recurring expenses and delayed completion busine ss income/rental interruption (if any) on an actual loss sustained basis subject to policy limits; and (iv) loss of the value of the undamaged portion of the Improvements, additional expense of demolition, and increased cost of construction arising from operation of building laws or other legal requirements at the time of restoration, subject to a limit reasonably satisfactory to the City.
The Builder’s Risk Program shall automatically reinstate limits upon the occurrence of any loss thereunder. The Builder’s Risk Program shall be primary with respect to all property damage at, on or under the property at each applicable Project Parcel until Substantial Completion for the applicable Improvements in that Project Parcel occurs. The Builder’s Risk Program shall also include affirmative LEG-3 coverage with respect to repair of physical damage to City Landfill Systems arising out of a loss. The City will be named as a “loss payee” on the Builder’s Risk Program and the Master Developer shall have an affirmative obligation to promptly elect whether to commence and diligently pursue re-construction of the City Landfill Systems in the event of any loss thereunder, the terms of which election shall be described in the Insurance Administration Agreement.
(b) Terrorism Insurance. The insurance required in this Section III, subsections (a), (d), (g) and (h) shall include, or the Master Developer shall obtain on a stand- alone basis, terrorism coverage on terms (including amounts) consistent with those required under those subsections. For so long as the Terrorism Risk Insurance Program Reauthorization Act 2019 or any replacement, reauthorization or extension thereof (“TRIPRA”) is in effect, coverage against acts which are “certified” within the meaning of TRIPRA shall satisfy this requirement. In the event TRIPRA is no longer in effect, Master Developer shall obtain and
INSURANCE EXHIBIT
(City Place)
6 maintain such terrorism insurance to the extent such coverage is commercially available and reasonable cost.
(c) Flood Insurance. Flood insurance if any portion of the Project Site or personal property is currently or at any time in the future located in an area designated by the Federal Emergency Management Agency as a special flood hazard area (“SFHA”) and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (and any successor act thereto), but in no event no less than the amount sufficient to meet the requirements of applicable law and governmental regulation. Flood insurance may be included in the Builder’s Risk Program prior to Substantial Completion as an alternative to NFIP. (d) L
iability Insurance . Master Developer shall sponsor, administer and maintain a commercial general liability insurance and umbrella and/or excess liability insurance (the “GL Insurance”) including coverage for personal injury, bodily injury, death, accident and property damage. The GL Insurance shall: (1) be on a site-specific “occurrence” form for each Project Parcel (except as otherwise provided herein); (2) be the primary insurance for third-party bodily injury and property damage at or on any Project Parcel at all times during Landfill Phase Activities at that Project Parcel; and (3) collectively provide minimum coverage limits of at least (A) $50,000,000 per occurrence, (B) $50,000,000 general aggregate, and (C) $50,000,000 products completed operations aggregate over the term of the policy for each Project Parcel. The products and completed operations coverage shall be maintained for the entire statute of repose for construction defect claims in California. Master Developer shall exercise commercially reasonable efforts: (i) to avoid an exclusion for earth movement or subsidence under the GL Insurance; and (ii) to include manuscript changes to the “pollution exclusion endorsement” providing affirmative coverage for concussive risk associated with the installation of piles and the other Landfill Phase Activities. Notwithstanding the foregoing, during the period of construction of improvements on Phase 2 and Phase 3 (each as defined in the DDA), Master Developer shall (and for subsequent phases, Master Developer may), satisfy these coverage requirements by implementing an OCIP/CCIP with limits of liability of at least $100,000,000 per occurrence and in the aggregate for each of Phase 2 and Phase 3. Master Developer may elect to obtain a single OCIP/CCIP for Phase 1 (as defined in the DDA), Phase 2 and Phase 3, in which event the limits of liability for such OCIP/CCIP program shall be at least $200,000,000 per occurrence and in the aggregate. The GL Insurance shall schedule the City as an additional insured, including with respect to both ongoing and completed operations, by endorsements satisfactory to the City. Such insurance shall be primary and any other insurance maintained by the City shall be excess only and not contributing with this insurance. Except for completed operations (which shall be an aggregate limit over the term of the general liability program), the Master Developer shall purchase additional limits of an amount equal to at least forty percent (40%) of the applicable per occurrence and aggregate limits of the GL Insurance for any Phase (or series of Phases to the extent covered under a single OCIP/CCIP) at any time that the applicable aggregate GL Insurance limit for such Phase (or series of Phases, as applicable) has been eroded by eighty percent (80%) or greater.
(e) C
ommercial Auto Liability Insurance . Commercial auto liability insurance covering liability arising out of the ownership, maintenance or use of any owned, hired, borrowed and non-owned vehicle, if any, with minimum limits of not less than $1,000,000 combined single limit for bodily injury and property damage, together with umbrella and/or
INSURANCE EXHIBIT
(City Place)
7 excess liability insurance which is at least as broad as the commercial automobile liability insurance, with limits of not less than the applicable GL Insurance limits for such Project Parcel. (f) Professional Liability Insurance. Master Developer shall cause any party involved in the design of Improvements to obtain and maintain Professional Liability Insurance during the period commencing on the date of such party’s agreement and continuously renewing for or having an extended reporting period of not less than the statute of repose for design defects in California, with limits of insurance not less than: (1) $10,000,000 per claim and $20,000,000 in the aggregate for designers of record (which shall include any designer of piles penetrating any Landfill Parcel); (2) $5,000,000 per claim and in the aggregate for any designers of record for any components of the City Landfill Systems; (3) $2,000,000 per claim and in the aggregate for any other design professionals for any components of the City Landfill Systems; and (4) $1,000,000 per claim and in the aggregate for all other design professionals. Master Developer shall provide the City with certificates evidencing such insurance as each designer is contracted and thereafter, annually on a going forward basis or as otherwise requested by the City. The parties agree that the Insurance Administration Agreement shall describe the process of claims administration against design professionals between the City and Master Developer. (g) O
wner’s Protective Professional Indemnity Insurance . At all times that any Landfill Phase Activity is ongoing in a particular Project Parcel, Master Developer shall obtain and maintain an Owner’s Protective Professional Indemnity (Design Team Errors and Omissions) Policy (“OPPI”) having a limit of liability of not less than $20,000,000 per claim and in the annual aggregate for Phases 1, Phase 2 and Phase 3; provided, however, Master Developer may, at its discretion, elect to implement a single OPPI program for Phase 1, Phase 2 and Phase 3 collectively, in which event the limits of liability for such OPPI program shall be at least $40,000,000 per occurrence and in the aggregate. City reserves the right to establish minimum OPPI limits for any real property that is not part of Phase 1, Phase 2 or Phase 3 prior to the execution of any Ground Lease on such real property. The OPPI shall provide the City (as owner of the City Landfill Systems) with affirmative coverage for defense and payment of loss for third-party claims resulting from design errors and omissions relating to the City Landfill Systems. Each OPPI program shall have a retro-active date coinciding with the execution of the earliest design agreement with respect to such Project Parcel and shall extend to cover the statute of repose for design defects in California for all Improvements on such Project Parcel. The parties agree that the Insurance Administration Agreement shall describe the process of claims administration for any professional liability losses at the Project Site. The City shall have the right to review, quotes, policy forms and endorsements (but not underwriting submissions) for the OPPI.
(h) C
ontractor’s Pollution Liability Insurance . Master Developer shall maintain a Contractor’s Pollution Liability (“CPL”) insurance program covering cleanup costs and bodily injury and property damage claims through and including Substantial Completion for the applicable Improvements in that particular Project Parcel. The City shall have the right to review underwriting submissions, quotes, policy forms and endorsements for the CPL. (i) The CPL shall have a limit of liability of at least $50,000,000 per incident and in the aggregate and coverage under the CPL shall be extended to third-party contractors performing work at the Project, including, without limitation, contractors performing
INSURANCE EXHIBIT
(City Place)
8 operation and maintenance of the City Landfill Systems until Substantial Completion of all City Landfill Systems being constructed by Master Developer on any Project Parcel. The City will be a named insured under the CPL.
(ii) Coverage Parameters. The CPL shall: (a) provide site specific coverage for pollution conditions resulting from any contracted operations at any Project Parcel (whether on, at, under or above any Landfill Parcel), the definition(s) for which contracted operations shall include the realignment and reconstruction of City Landfill Systems by Master Developer, the construction of foundation systems and building protection systems/vapor mitigation systems, and operation and maintenance activities associated with the City Landfill Systems to be performed by the City on such Project Parcel; (b) provide site specific coverage 4 for operation and maintenance activities associated with City Landfill Systems to be performed by the City on any portion of a Landfill Parcel that is not part of a Project Parcel (the “City Non- Project Parcel O&M”) until Substantial Completion of all of the City Landfill Systems being constructed by Master Developer on all Landfill Parcels, subject to Section III (h)(iii) below; (c) provide coverage for cleanup of groundwater pollution conditions existing as of the date hereof to the extent such pollution conditions are exacerbated by Project contractors, Master Developer activities or City Non-Project Parcel O&M; (d) have no retroactive or reverse retroactive date; (e) have ten (10) years of “completed operations” coverage; and (f) be subject to a maximum self-insured retention of no more than $250,000 per incident. There shall be no exclusion or limitation of coverage to the City or Master Developer with respect to claims made against each other, notwithstanding the insured status of the parties. Issues related to the primacy of the CPL shall be addressed in the Insurance Administration Agreement. (iii) City Non-Phase O&M Sublimit. The parties agree that the CPL shall be subject to a sublimit of $5,000,000 with respect to all losses arising out of the City Non-Phase O&M. Issues related to the implementation of such sublimit will be addressed in the Insurance Administration Agreement.
(iv) City Reimbursement Obligation. Within sixty (60) days of the binding of the CPL and any endorsements thereafter, the City shall reimburse Master Developer for ten percent (10%) of the total premium, surplus lines taxes and applicable brokerage fees required to purchase the CPL up to a maximum reimbursement amount of $200,000. (i) Pollution Legal Liability Insurance. Master Developer shall maintain site- specific5 Pollution Legal Liability insurance (“PLL”) for the entire Project Site (including all Landfill Parcels and the Tasman Parcels) with limits of liability equal to at least $75,000,000 per incident and in the aggregate, a self-insured retention of no more than $250,000 per incident and an initial term of at least ten (10) years. Upon the expiration of the term of the PLL or such
4 Notwithstanding footnotes 2 and 3, for this portion of the CPL coverage, “site specific” shall mean the entire Project Site except for the Tasman Parcels, including all Project Parcels and Landfill Parcels that are not yet a Project Parcel except for the Tasman Parcels. 5 Notwithstanding footnotes 2 and 3, “site specific” for the PLL coverage required by this Section II(h) shall mean the entire Project Site is the covered location, including each Project Parcel, any Landfill Parcel that is not yet subject to a Ground Lease and the Tasman Parcels.
INSURANCE EXHIBIT
(City Place)
9 earlier date as Master Developer may elect, Master Developer shall exercise commercially reasonable efforts to obtain (subject to pollution insurance market conditions), a new policy of pollution legal liability insurance (the “PLL Renewal”) having substantially the same coverage terms as the PLL with limits of liability of at least $75,000,000 per incident and in the aggregate, a self-insured retention no greater than $250,000 and a term of five (5) years or such longer term as would be necessary to ensure the PLL Renewal remains in place until a date that is fifteen (15) years from the inception date of the initial PLL policy. The City shall have the right to review underwriting submissions, quotes, policy forms and endorsements for the PLL and the PLL Renewal programs.
(i) No Cancellation. No insured may cancel or terminate the PLL or the PLL Renewal before the expiration of its term without the consent of both Master Developer and the City; provided, however, that the Master Developer may cancel and re-write the PLL and/or the PLL Renewal at Master Developer’s discretion with materially the same terms upon commencement of any new Phase or Partial Phase.
(ii) Coverage Parameters. Subject to market availability and Project Site conditions, the PLL and the PLL Renewal shall include affirmative coverage for known and unknown pre-existing conditions regulatory re-openers and new pollution conditions. The PLL and the PLL Renewal shall provide affirmative coverage for third-party bodily injury and property damage claims (including natural resource damages). The Master Developer shall use commercially reasonable efforts to obtain coverage under the PLL and the PLL Renewal for: (x) off-site cleanup costs related to the known groundwater plume; (y) losses and on-site cleanup costs relating to a governmental order or directive requiring the City or Master Developer to perform active remedial measures for pollution conditions which have migrated into groundwater from the landfill including, without limitation, related site investigations, which coverage may contain a higher self-insured retention than $250,000 per incident. The PLL and the PLL Renewal shall be primary and non-contributory to any other insurance carried by the City and the “insured vs. insured” exclusion shall not be applicable to claims between the Master Developer and the City. Issues related to the primacy of the PLL shall be addressed in the Insurance Administration Agreement. The City and Master Developer (and their respective affiliates) shall be included as named insureds on the PLL and the PLL Renewal with the ability to directly make claims to the insurance carrier thereunder and no third-parties other than affiliates of the City and Master Developer shall have an insurable interest under the PLL. (iii) City Reimbursement Obligation. Within sixty (60) days of the binding of the PLL and PLL Renewal, as applicable, the City shall reimburse Master Developer for twenty percent (20%) of the total premium, surplus lines taxes and applicable brokerage fees for the PLL and PLL Renewal, as applicable, up to a maximum reimbursement of $250,000 for each of the PLL and PLL Renewal.
INSURANCE EXHIBIT
(City Place)
10 IV. FOLLOWING SUBSTANTIAL COMPLETION . Following Substantial Completion for any Improvement, Partial Phase or Phase, as applicable, and, except as expressly provided to the contrary, while any Ground Lease remains in effect, Master Developer shall maintain, or cause to be maintained:
Property Insurance. Property insurance covering against risks of loss customarily covered by “Cause of Loss – Special Form” policies together with coverage for earthquake as may be commercially available in the insurance market at the completion date (and against such additional risks of loss as may be customarily covered by such policies after the completion date) (“Property Insurance”). Such insurance shall include:
100% of the insurable replacement cost value of the Improvements which for purposes of this Exhibit shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with an agreed amount endorsement without margin clause except as may be reasonably agreed by the City, and/or a coinsurance waiver endorsement and a replacement cost value endorsement without reduction for depreciation; 100% of the insurable replacement cost value of all tenant improvements and betterments that any agreement requires Master Developer to insure; loss of the value of the undamaged portion of the Improvements, additional expense of demolition, and increased cost of construction arising from operation of building laws or other legal requirements at the time of restoration; and “Cause of Loss – Special Form” insurance policy which shall cover at least the following perils: building collapse; fire; flood; back -up of sewers and drains; water damag e; windstorm, earthquake, landslide, mudslide and subsidence, inclusive of property damage and soft costs/business interruption with a maximum deductible of 5% of the loss and flood may have a sublimit of such amount not less than the replacement cost of the replacement value of the improvements and contents of the two floors above grade. Such insurance policy(ies) shall name Master Developer as the Insured and shall also name the City as an additional named insured with the unrestricted ability to make a claim thereunder.
Terrorism Insurance. The insurance required in this Section IV, subsections (a), (f) and (j) shall include, or the Master Developer shall obtain on a stand- alone basis, terrorism coverage on terms (including amounts) consistent with those required under those subsections.
For so long as TRIPRA is in effect, coverage against acts which are “certified” within the meaning of TRIPRA shall satisfy this requirement. In the event TRIPRA is no longer in effect, Master Developer shall obtain and maintain such terrorism insurance to the extent such coverage is commercially available and reasonable cost.
Flood Insurance. F
lood insurance if any portion of the Property or personal property is currently or at any time in the future located in an area designated by the Federal Emergency Management Agency as a SFHA and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (and any successor act thereto) in an amount no less than the amount sufficient to meet the requirements of applicable law and governmental regulation.
INSURANCE EXHIBIT
(City Place)
11 Equipment Breakdown Insurance. If not included in the Property Insurance policy retained in accordance with Section IV (a), Master Developer shall maintain equipment breakdown insurance covering all mechanical and electrical equipment, including pressure vessels and piping, against physical damage, and loss of income or rents (if any), extra expense, and expediting expense. Master Developer shall provide Equipment Breakdown Insurance on a replacement cost value basis in an amount consistent with insurance maintained by owners of similarly situated commercial real estate.
Business Income and Rent Loss Insurance.
As an extension to its Property
Insurance, Earth Movement Insurance, Flood Insurance, Terrorism Insurance, Boiler and Machinery Insurance, and any other required property insurance policy, Master Developer shall maintain, or cause to be maintained, business income and rent loss insurance in an amount equal to one hundred percent (100%) of the net rental income together with continuing expenses and containing an unlimited indemnity period pertaining to the time to repair or rebuild (subject to the policy limit). In addition, Business Income and Rent Loss Insurance shall be endorsed to include an extended period of indemnity of three hundred sixty five (365) days.
Commercial General Liability Insurance.
Commercial general liability insurance
on an “occurrence” form including coverage for personal injury, bodily injury, death, and property damage on a per location basis, if available, with limits of not less than $1,000,000 per occurrence and in the aggregate.
Commercial Auto Liability Insurance.
Commercial auto liability insurance
covering liability arising out of the ownership, maintenance or use of any owned, hired, borrowed and non-owned vehicle, if any, with minimum limits of not less than $1,000,000 combined single limit for bodily injury and property damage.
Workers’ Compensation Insurance. W
orkers’ compensation as required by
applicable law and employer’s liability insurance.
Umbrella/Excess Liability Insurance. Umbrella/excess liability insurance with limits of at least $200,000,000 per occurrence and in the annual aggregate sitting excess of the commercial general liability, commercial auto liability and employer’s liability insurance. The commercial general liability, commercial auto liability and umbrella/excess liability insurance shall name the City as an additional insured. Such insurance shall be primary and any other insurance maintained by the City shall be excess only and not contributing with this insurance.
Pollution Legal Liability Insurance .
City and Master Developer agree to meet in
good faith at the expiration of the PLL Renewal to discuss obtaining additional pollution legal liability programs.
V. G ENERAL .
(a) Insurer Ratings. Master Developer shall obtain all required insurance (and reinsurance) from insurers authorized to do business in the State where the Property is located with an “A-: VIII” rating by A.M. Best or an alternative insurance company rating bureau acceptable to the City. The City may in its discretion permit Master Developer to maintain required insurance policies with insurance companies which do not meet the foregoing requirements.
INSURANCE EXHIBIT
(City Place)
12 (b) Documentation. For the types of insurance where this Exhibit provides the City with a right to review quotes, policy forms or endorsements, Master Developer agrees to provide the City with a reasonable opportunity to review and to consider in good faith the City’s comments. Master Developer shall provide certificates of insurance as may be requested by the City, in a form reasonably acceptable to the City for all required insurance, certified as true and complete by the carrier or its authorized representative. (c) S
ite -Specific Programs. Except where this Exhibit expressly provides that a type of insurance must be site -specific, as defined in footnotes 2, 3, 4 and 5 above, the requirements of this Exhibit (including without limitation the requirements for first- party terrorism, commercial auto liability insurance, worker’ s compensation insurance and all of the Project Insurance Programs described in Section IV hereof) may be satisfied through coverage applicable to both the Project Site and other properties insured by Master Developer. (d) C aptive . Master Developer shall have the right to satisfy all or part of its insurance obligations with respect to first -party terrorism and any deductible or self -insured retention for the OCIP by means of a policy or policies placed with its captive insurance company Relsure Vermont Inc. (the “Captive”) provided that the use of the Captive is in compliance with all laws and regulations applicable to the Project.
(e) S
everability . All Project Insurance Programs shall provide that coverage under each Project Insurance Program shall apply as if each insured were the only insured and separately to each insured so that any misrepresentation, act or omission that is in violation of a term, duty or condition or results in the application of an exclusion under any program by or on behalf of one insured shall not prejudice the coverage rights of another insured under such program.
(f) W
aiver of Subrogation. The CPL, PLL and PLL Renewal shall each include a waiver of subrogation in favor of the City so that the insurance company waives its right s of subrogation with regard to all claims covered by such programs. (g) M inimum Limits . Notwithstanding anything to the contrary herein, the limits of coverage for all types of Project Insurance Programs required under this Exhibit D shall be the greater of (i) the minimum limits set forth in this Exhibit D or (ii) the limits provided to Master Developer under all primary, excess, umbrella and blanket policies covering operations under the O&M Agreement on a site-specific basis.
(h) A
udit . The City sha ll have the right: (i) at least once per year; (ii) at any time that the City has a reasonable basis of actual or suspected non -compliance by Master Developer of the O&M Agreement; or (iii) during the pendency or administration of any claim under the Project Insurance Programs, to conduct an audit of some or all policies and certificates of insurance to confirm the Master Developer’s compliance with the terms hereof. If any audit reveals discrepancies or non -compliance with the terms hereof, the cost of such audit shall be at Master Developer’s expense.
(i) A
mortization of City Reimbursement Obligations . Notwithstanding anything in the DDA or the O&M Agreement to the contrary, for purposes of calculating the
INSURANCE EXHIBIT
(City Place)
13 Annual Landfill Costs (as defined in the DDA), the City may, at its election, amortize: (i) the total or any portion of the premium, surplus line taxes and broker commissions contributed by the City hereunder for any Project Insurance Program over the applicable term of such Project Insurance Program, notwithstanding that the entire premium, surplus line taxes and broker commission will be actually paid at binding of the applicable Project Insurance Program; and (ii) capital repairs or replacements of new equipment that cost in excess of $50,000 and are made or purchased by or on behalf of the City after the effective date of this O&M Agreement in connection with the City’s operation and maintenance obligations on any Landfill Parcel, which may, at the election of the City, be amortized over the shorter of (x) the useful life of such capital repair or replacement on a straight-line basis or (y) a fifteen (15) year period.
Schedule 1
Pre-Phase Approved Activities
“Pre-Phase Approved Activities” shall mean the following:
1. Construction of the “Public Improvements” as approved by the City under that Permit to Enter between the City and Master Developer dated July 5, 2019, effective July 8, 2019 to May 31, 2020.
2. Construction of the “Fire Station Improvements” as approved by the City under that Permit to Enter between the City and Master Developer dated July 5, 2019, effective July 8, 2019 to March 1, 2020.
3. Any other activities expressly approved by the City in writing and evidenced by one or more Permits to Enter or similar permits or licenses.