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HomeMy WebLinkAbout10 FIRST AMENDMENT TO THE DDA W/ LEGACY VILLAS, LLC1TY O AGENDA REPORT �4*F s-i MEETING DATE TO: FROM: SUBJECT: JUNE 4, 2013 JEFFREY C. PARKER, CITY MANAGER JOHN A. BUCHANAN, PROGRAM MANAGER Agenda Item 10 Reviewed: City Manager Finance Director VtiLA- FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT WITH LEGACY VILLAS, LLC (DEVELOPER) FOR PARCEL 2A SUMMARY: Approval is requested for the First Amendment to the Disposition and Development Agreement (DDA) between the City and Legacy Villas, LLC (Developer, affiliated with The Irvine Company) which will accelerate payment by the Developer of the Backbone Infrastructure Obligation in the amount of $15,300,644 and modify the Developer's obligation for construction of Backbone Infrastructure. RECOMMENDATION: Approve the First Amendment to the DDA and the Infrastructure Construction and Reimbursement Agreement attached thereto, and authorize the City Manager to do the following: 1. Execute the First Amendment to the DDA with Legacy Villas, LLC; and 2. Execute the Infrastructure Construction and Reimbursement Agreement (Attachment No. 25 to the DDA as amended) with the Irvine Community Development Company, LLC; 3. Take such other actions as are necessary to implement those agreements, consistent with terms thereof. FISCAL IMPACT: In accord with the existing DDA, the Developer was not required to make the Backbone Infrastructure obligation payment until building permits were issued by the City, which was estimated to occur 6 to 9 months after the conveyance of Parcel 2A. With the proposed First Amendment, the Developer will make the entire Backbone Infrastructure payment (i.e., $15,300,644) at the close of escrow. The purchase price, under the proposed amendment, will not change. 931071.1 Agenda Report — First Amendment to DDA, Parcel 2A June 4, 2013 Page 2 of 2 BACKGROUND: In November 2012, the City entered into a DDA with the Developer for the construction of 553 rental units on Parcel 2A and the construction of adjacent roadways and utilities including a portion of Warner Avenue, a portion of Legacy Avenue, and a portion of Park Avenue. Under the terms and conditions of the existing DDA, in addition to constructing the roads and certain utility systems adjacent to Parcel 2A, the Developer is responsible for the construction of Barranca Channel and Barranca Parkway including the street, landscaping and certain utilities (Barranca Improvements). Both the Developer and staff have concluded that the Barranca Improvements, an obligation of the Developer under the original DDA, should be constructed by the City, with costs thereof being paid from Developer's backbone infrastructure payment. As a condition of closing, the Developer and the City will enter into an Infrastructure Construction and Reimbursement Agreement (the "Reimbursement Agreement ") for specific Tustin Legacy Infrastructure Backbone improvements. The Irvine Company Development Company (ICDC), an Irvine Company affiliate, will be constructing the roadways per City- approved plans. ICDC will be reimbursed for the construction of City -owned Backbone Infrastructure improvements in accordance with the terms and conditions of the Reimbursement Agreement. All backbone infrastructure constructed by the Developer will be reimbursed to the Developer from the backbone infrastructure obligation (i.e., $15,300,644). The approval of this amendment to the DDA by the City Council will allow the property to be conveyed by the City to the Developer early this month and will accelerate the City's receipt of the Developer's Backbone Infrastructure Obligation payment. nsiomn FIRST AMENDMENT TO TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR PARCEL 2A This FIRST AMENDMENT TO TUSTIN LEGACY DISPOSITION AND DEVELOPMENT AGREEMENT FOR PARCEL 2A (this "First Amendment ") is entered into as of June 4, 2013 (the "First Amendment Effective Date ") by and among the CITY OF TUSTIN (as more fully defined in Section 1.4.1 of the Original DDA (defined below), "City ") and LEGACY VILLAS LLC, a Delaware limited liability company (as more fully defined in Section 1.4.2 of the Original DDA, the "Developer "). The City and the Developer are sometimes referred to in this First Amendment individually as a "Party" and collectively as the "Parties." The Parties agree as follows: RECITALS A. The City and Developer entered into that certain Tustin Legacy Disposition and Development Agreement for Parcel 2A dated as of November 6, 2012 (the "Original DDA ") pursuant to which, among other things, the City agreed to sell, and Developer agreed to purchase the "Property" as defined therein, including the real property defined therein as the Parcel and Developer and the City agreed to a schedule of performance and a scope of development for the Project, as defined therein, to be constructed by Developer upon the Parcel. Initially capitalized terms not defined herein shall have the respective meanings assigned to such terms in the Original DDA. B. The City and Developer desire to amend the Original DDA in order to, among other things: (i) modify the timing of the obligation of Developer to make the Project Fair Share Contribution and (ii) modify the definition of Developer Backbone Improvements, each as set forth below. The Original DDA as amended by this First Amendment is referred to herein as the "Agreement." AGREEMENT NOW THEREFORE, in consideration of the foregoing Recitals, which are hereby incorporated in the operative provisions of this First Amendment by this reference, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties further agree as follows: 1. Modifications to Attachment No. 1 (Glossary of Defined Terms). (a) The following are deleted from Attachment No. 1 to the Original DDA (Glossary of Defined Terms): `"`On- Parcel Building Permits" shall have the meaning set forth in Section 8.1.4." ` "Barranca Improvements" shall have the meaning set forth in Section 9.2.2(a)." (b) The definition of "Construction Period Commencement Date" set forth on Attachment No. 1 to the Original DDA (Glossary of Defined Terms) is hereby deleted and replaced with the following: TIC Tustin First Amendment to DDA 05- 30- 2013.docx 1 City of Tustin/ Legacy Villas LLC " "Construction Period Commencement Date" shall mean the earlier of (a) the first anniversary of the Close of Escrow or (b) the date on which the City issues to Developer all building permits for the construction of the portion of the Project to be located on the Parcel." (c) The following definitions are hereby added to Attachment No. I to the Original DDA (Glossary of Defined Terms): ` "`Administrative DA Amendment" means that certain First Amendment to Development Agreement 2012 -001 in form and substance approved by the City Manager in his governmental capacity and as further described in Section 20 of the First Amendment." " "Director" shall mean the City's Director of Public Works and any designee of said City Director of Public Works." " "First Amendment" shall mean the First Amendment to Tustin Legacy Disposition and Development Agreement for Parcel 2A entered into as of June 4, 2013, by and between Developer and the City." `"`IRWD Reimbursable Facilities" shall have the meaning set forth in the Reimbursement Agreement." " "License Agreement" shall have the meaning set forth in Section 8.1.4 of the Original Agreement (as such section is amended by the First Amendment)." " "Settlement Agreement" shall mean that certain Settlement Agreement and Release entered into as of December 21, 2012, among the City and the Tustin Public Financing Authority, on the one hand, and KeyBank, N.A., U.S. Bank, N.A., J.F. Shea Co., Inc., Shea Homes Limited Partnership, Shea Properties II, LLC, Shea Properties LLC, Roseville Land Holdings LLC, Vantis, LLC and Tustin Legacy Community Partners, LLC, on the other hand." " "Sewer Improvements" shall have the meaning set forth in the Reimbursement Agreement." " "Sewer Plans" means the plans and specifications for the sewer within Warner Avenue, Park Avenue and the Parcel, entitled "Capital Sewer Improvements, Planning Area 2A- Tustin Legacy, Tract No. 17404, Lots 29, 30, 38 and 39, Project No. 4329, IRWD Code 5910," prepared by Fuscoe Engineering Inc. at the direction of Developer." " "Warner Avenue Street & Median Improvements" means the following infrastructure improvements for the segment of Warner Avenue between Legacy Road and Tustin Ranch Road to be constructed by or on behalf of the City: landscape median, roadway paving, curb and gutter for landscape median and roadway borders, and traffic signal upgrade at intersection of Warner Avenue and Tustin Ranch Road, which improvements are referenced on the "Plans for Street and Domestic Water Improvements — Warner Avenue from Legacy Road to Tustin Ranch Road," CIP No. 70202, IRWD Code 5724, prepared by RBF Consulting." TIC Tustin First Amendment to DDA 05- 30- 2013.docx 2 City of Tustin/ Legacy Villas LLC 2. Modification to Section 4.1 of the Original DDA. The first paragraph of Section 4.1 of the Original DDA is hereby deleted in its entirety and replaced with the following: "4.1 Conveyance of Property. Subject to the terms and conditions set forth in this Agreement, including the satisfaction of the Closing Conditions set forth in Section 7 or elsewhere in this Agreement, the City agrees to sell to the Developer and the Developer agrees to purchase from the City the Parcel, together with all existing improvements, if any, presently located on the Parcel, all rights, claims (other than claims under insurance policies maintained by or for the benefit of the City) and appurtenances pertaining to the Parcel or such improvements and all permits, licenses, approvals and authorizations issued by any Governmental Authority in connection with the Parcel (collectively referred to in this Agreement as the "Property "), subject to all Permitted Exceptions. Notwithstanding the foregoing: (A) the City is not hereby transferring, assigning or conveying any rights in or to (i) any of the "Tustin Released Claims" or the "Released Claims" as defined in the Settlement Agreement, (ii) the rights granted to the City under Section 6.4.1 of the Settlement Agreement or (iii) the obligations of the City under Section 6.4.2 of the Settlement Agreement, and (B) ". 3. Modification to Section 4.3.3 of the Original DDA. Section 4.3.3 of the Original DDA is hereby deleted in its entirety and replaced with the following: "4.3.3 Payment at Close of Escrow. No later than one (1) Business Day prior to the Close of Escrow, the Developer shall deposit with Escrow Holder an amount (the "Developer Closing Payment ") which shall be equal to the sum of the following: (i) the Purchase Price less the Purchase Price Deposit, plus (ii) the entire amount of the Project Fair Share Contribution, plus (iii) such additional amount as is necessary to cover all outstanding City Transaction Expenses and all closing costs to be paid by the Developer pursuant to Section 7.4.1(b) and (c) and Section 7.4.4, as adjusted for any net credits or debits to the City for closing costs and /or prorations in accordance with Section 7.4.1(a) and (c) and Section 7.4.4." 4. Modification to Section 7.2.1 of the Original DDA. (a) Section 7.2.1(a)(x) of the Original DDA is hereby deleted and replaced with the following: "(x) the Reimbursement Agreement in the form attached to the DDA as Attachment 25 and the License Agreement attached thereto." (b) Section 7.2.1(f) of the Original DDA is hereby deleted and replaced with the following: "(f) Permits. The City shall have approved the rough grading permits for the development of the Project." TIC Tustin First Amendment to DDA 05- 30- 2013.docx 3 City of Tustin/ Legacy Villas LLC 5. Modification to Section 7.2.2 of the Original DDA. (a) Section 7.2.2(a) of the Original DDA is hereby deleted and replaced with the following: "(a) Developer Closing Pam. Not later than one (1) Business Day prior to the Close of Escrow, the Developer shall deliver to Escrow (i) the Developer Closing Payment (including, for avoidance of doubt, (x) the Purchase Price less the Purchase Price Deposit plus (y) the entirety of the Project Fair Share Contribution) and (ii) any other costs explicitly set forth in this Agreement as costs to be paid by Developer at the Close of Escrow." (b) Section 7.2.2(b)(v) of the Original DDA is hereby deleted and replaced with the following: "(v) the Reimbursement Agreement in the form attached to the DDA as Attachment 25 and the License Agreement attached thereto, each executed by ICDC. 6. Modification to Section 7.4.5(a) of the Original DDA. Section 7.4.5(a) of the Original DDA is hereby deleted and replaced with the following: "(a) Funds. Debit or credit all matters addressed in Section 7.4.1 and prorate all matters addressed in Section 7.4.4 and disburse to the City the Purchase Price and the Project Fair Share Contribution (as adjusted by the foregoing debits, credits and prorations) deposited with Escrow Holder by the Developer." 7. Modification to Section 8.1.4 of the Original DDA. "8.1.4 Developer Backbone Improvements. Developer and City acknowledge and agree that, in connection with Developer's development of the Project, Developer shall cause ICDC to construct the Developer Backbone Improvements and certain Horizontal Improvements, including the IRWD Reimbursable Facilities. The City has negotiated with ICDC and Developer has caused ICDC to negotiate with the City (a) a reimbursement agreement in the form attached hereto as Attachment 25, with respect to the Developer Backbone Improvements including certain rights and obligations of the parties with respect to the IRWD Reimbursable Facilities (the "Reimbursement Agreement ") and (b) a License Agreement providing access for construction of the Developer Backbone Improvements and the IRWD Reimbursable Facilities on the Public Parcels and certain additional access rights as described therein, in the form attached as an exhibit to the Reimbursement Agreement (the "License Agreement "). The execution and delivery of the License Agreement and the Reimbursement Agreement by ICDC and the City shall be a Closing Condition for the benefit of both Developer and the City. Upon execution of the License Agreement and Reimbursement Agreement by City and ICDC and subject to the terms of Section 8.5.2 below, Developer shall be responsible for causing ICDC to Complete all of the Improvements upon the Public Parcels which are the responsibility of Developer pursuant to this Agreement, including the Developer Backbone TIC Tustin First Amendment to DDA 05- 30- 2013.docx 4 City of Tustin/ Legacy Villas LLC Improvements and the IRWD Reimbursable Facilities, and Completion of such Improvements shall be a Condition Precedent to issuance of a Certificate of Compliance by the City. The City acknowledges that Developer intends to retain ICDC to carry out Developer's construction obligations under this Agreement with respect to the Improvements to be located on the Public Parcels and that ICDC, rather than Developer, shall act as the general contractor with respect to such Improvements that are to be located on the Public Parcels. The Parties agree that the obligations of Developer with respect to construction of the Developer Backbone Improvements shall be satisfied by the performance by ICDC of its obligations under the Reimbursement Agreement and the Acceptance by the City of such Improvements under the terms of that agreement. Accordingly, for the term of the Reimbursement Agreement and provided that ICDC is not in default thereunder, the Reimbursement Agreement shall govern the construction of the Developer Backbone Improvements. The initial estimate for the cost of construction of the Developer Backbone Improvements is shown on Attachment 2 1 C to this Agreement." 8. Modification to Section 8.5.2 of the Original DDA. Section 8.5.2 of the Original DDA is hereby deleted and replaced with the following: 8.5.2 Proiect's Fair Share Contribution. The fair share of the Tustin Legacy Backbone Infrastructure Program to be contributed by the Developer with respect to the Project shall be Fifteen Million Three Hundred Thousand Six Hundred Forty -Four Dollars ($15,300,644) (the "Project Fair Share Contribution ") and notwithstanding any other provision of this Agreement shall be payable by Developer in full to the City at Close of Escrow. The payment of the Project Fair Share Contribution at Close of Escrow shall be a condition to Close of Escrow for the benefit of the City. Upon its receipt of the Project Fair Share Contribution, the City shall establish a separate account in the City's accounts, books and records in the amount of Five Million Dollars ($5,000,000.00) to be used for payment of amounts that will be due to ICDC pursuant to the Reimbursement Agreement, which amounts shall be disbursed in accordance with the provisions of the Reimbursement Agreement and following the payment in full of all such amounts due to ICDC pursuant to the Reimbursement Agreement shall be fully available to the City. For purposes of clarity, the foregoing sentence shall in no way be deemed to limit ICDC's right to reimbursement pursuant to the Reimbursement Agreement and shall only be construed to limit the amount that the City is required to deposit in the separate account described therein." 9. Modification to Section 8.5.3 of the Original DDA. A new Section 8.5.3(e) is hereby added to the Original DDA following Section 8.5.3(d), as follows: "(e) Developer hereby agrees that CFD 13 -01 for Affordable Moderate Multi - Family Units and the First Amended Rate and Method of Apportionment of Special Tax for Multi - Family Residential and Affordable Unit - Moderate Multi - Family units approved by the City Council on May 7, 2013 and with second reading on May 21, 2013 (the "Council Approved CFD "), is consistent with the requirements of Section 8.5.3(a), (b) and (c) of the DDA. Developer hereby waives its rights: (x) to require that the Council Approved CFD ordinance be TIC Tustin First Amendment to DDA 05- 30- 2013.docx 5 City of Tustin/ Legacy Villas LLC effective as a condition to Close of Escrow (it being acknowledged and agreed by Developer that the vote to approve and second reading shall satisfy in full the closing condition set forth in Section 7.2.10) of the Original DDA and (y) to protest formation of the Council Approved CFD, provided, however, nothing herein shall constitute a waiver of Developer's rights following the Close of Escrow to challenge the levy of the special taxes of the Council Approved CFD in any year in accordance with the process set forth in Section H of the First Amended and Restated Rate and Method of Apportionment for the Council Approved CFD. City hereby waives its rights to require that the Council Approved CFD ordinance be effective as a condition to Close of Escrow (it being acknowledged and agreed by the City that the vote to approve and second reading shall satisfy in full the closing condition set forth in Section 7.2.2(f) of the Original DDA)." 10. Modification to Section 9.2.2 of the Original DDA. Section 9.2.2.(a) of the Original DDA is hereby deleted and replaced with the following: "(a) final inspection of the Property by or on behalf of the City and determination by the City that all Improvements have been Completed in conformance with this Agreement and the Reimbursement Agreement, including the Approved Plans and all Governmental Requirements (in each case, subject to Section 1.6); ". 11. Modification to Section 17.5.3 of the Original DDA. Section 17.5.3 of the Original DDA is hereby deleted and replaced with the following: "17.5.3 Special Circumstances Where Damages may be Payable by the City. Subject to Section 17.5.1, the limitations on damages set forth in Section 17.5.2 shall not limit the liability of the City, if any, for damages which arise out of (a) a breach of the City's representations and warranties contained in Sections 3.3 or 17.12 of this Agreement, provided, however, that the amount of any damages payable pursuant to this clause (a) shall be the lesser of (i) actual damages, or (ii) One Million Dollars ($1,000,000) less the amount of any Claim awarded to ICDC for a breach of a representation or warranty by the City under the Reimbursement Agreement (or ultimately determined by the trier of fact or in the course of settlement to be paid to ICDC for a breach of a representation or warranty by the City under the Reimbursement Agreement), (b) the indemnity set forth in Section 8.7, (c) the exercise of any of the rights reserved to the City pursuant to Section 4.1(a)(i) or (ii) and as the same shall be included in the Quitclaim Deed, or (d) any indemnity set forth in the Reimbursement Agreement." 12. Modifications to Attachment No. 8 to the Original DDA (Scope of Development). (a) Section 2.1.2 is hereby amended by adding thereto a new clause (e), as follows: "(e) the IRWD Reimbursable Facilities." (b) Section 2.1.3(a) of Attachment No. 8 to the Original DDA (Scope of Development) is hereby deleted in its entirety and replaced with the phrase "Intentionally Omitted ". TIC Tustin First Amendment to DDA 05- 30- 2013.docx 6 City of Tustin/ Legacy Villas LLC (c) Section 2.1.3(b) of Attachment No. 8 to the Original DDA (Scope of Development) is hereby deleted in its entirety and replaced with the following: "(b) the improvement of Warner Avenue from Legacy Road east to Tustin Ranch Road. Improvements include master planned systems including the street lighting, domestic water lines, gas, storm drainage, telephone, electricity, cable TV, sewage and reclaimed water, telemetry and any necessary telecommunication systems and as shown in the MCAS Tustin Specific Plan and /or Irvine Ranch Water District Sub Area Master Plan for Tustin Legacy, and /or as approved by the City and responsible private utility purveyors. Scope of work for construction includes all surveying, rough and precise grading, import and export of dirt as required, dewatering, sidewalks (adjacent to the Parcel only), landscaping (adjacent to the Developer site only) and other work to construct improvements in accordance with Tustin City standards. A portion of the storm drain improvements will also include a section that transitions from a 60 -in line into six 72 -inch lines to be used for storage as it nears Tustin Ranch Road. The Developer will be responsible for constructing the entire Warner Avenue storm drain. All storm drain improvements shall comply with the City's ROMP. For purposes of clarity, and notwithstan ding anything to the contrary set forth herein, Developer shall have no obligation to construct the Warner Avenue Street & Median Improvements." 13. Replacement of Attachment 14 to the Original DDA (Public Parcels). The document labeled "Attachment No. 14" and attached to this First Amendment is hereby incorporated by reference into the Agreement and replaces Attachment No. 14 attached to the Original DDA. 14. Modification of Attachment 21 to the Original DDA (Developer Backbone Improvements). (a) The document labeled "Attachment No. 21A" and attached to this First Amendment is hereby incorporated by reference into the Agreement and replaces Attachment No. 2 1 A attached to the Original DDA. (b) The document labeled "Attachment No. 2113" and attached to this First Amendment is hereby incorporated by reference into the Agreement and replaces Attachment No. 2 1 B attached to the Original DDA. (c) The document labeled "Attachment 21C" and attached to this First Amendment is hereby incorporated by reference into the Agreement as Attachment 21C to the Agreement. 15. Modifications to Attachment 15 to the Original DDA (Certificate of Compliance). (a) The bracketed language in Section 1 of Attachment 15 to the Original DDA is hereby deleted in its entirety. The revised Section 1 shall read as follows: "1. This Certificate of Compliance covers and applies to the Parcel and the entirety of the Improvements and the Project." TIC Tustin First Amendment to DDA 05- 30- 2013.docx 7 City of Tustin/ Legacy Villas LLC (b) Section 2 of Attachment 15 to the Original DDA is hereby deleted in its entirety and replaced with the following: "2. This Certificate of Compliance shall be deemed conclusive evidence of the City's determination that the Developer has satisfactorily Completed construction and development of all of the Improvements and has satisfied all Conditions Precedent set forth in Section 9.2 of the DDA for issuance of this Certificate of Compliance." 16. Matters Relating to Sewer Plans. (a) Preparation of Plans. Developer shall cause the Sewer Plans to be prepared by licensed engineers in the State in a competent, professional and satisfactory manner in accordance with (i) all standards prevalent in the industry and (ii) all applicable laws, ordinances, resolutions, statutes, rules and regulations of applicable Governmental Authorities in effect at the time the Sewer Plans were prepared. Developer shall rely on its own design professionals to ensure that the Sewer Plans conform to the conditions of the land upon which the Sewer Improvements will be constructed and engineering practices consistent with the standard of care followed by licensed engineers in the design of similar improvements in Orange County, California. Developer shall provide the City and ICDC with two (2) paper copies of the complete set of Sewer Plans, together with an electronic copy of the Sewer Plans in PDF and AutoCad format. (b) Access License. Prior to commencement of construction of any portion of the Improvements to be constructed by ICDC on the Parcel, Developer shall provide ICDC with access, via license, entry permit or otherwise, to the portion of the Parcel required for the construction of such Improvements. (c) Indemnification. Developer shall protect, indemnify, defend (with counsel reasonably acceptable to the City) and hold the City and the City Indemnified Parties harmless from and against any and all Claims, whether incurred by or made against or recovered or obtained from any of the City Indemnified Parties, that arise as a result of or by reason of or as a consequence of the Sewer Plans prepared by or on behalf of Developer. The provisions of this Section 16(c) shall survive the termination of the Agreement and the Close of Escrow until, with respect to each portion of the Sewer Improvements, the earlier of (i) the expiration of the applicable statute of limitations, or (ii) that date on which IRWD has accepted such portion of the Sewer Improvements. 17. 1031 Exchange. The City acknowledges that Developer is intending to enter into an Assignment Agreement ( "Assignment ") with First American Exchange Company, LLC ( "Intermediary ") wherein Developer will assign its rights to acquire the Property under the DDA, but not its obligations under the DDA, to Intermediary for the sole purpose of consummating a tax deferred exchange pursuant to Section 1031 of the Internal Revenue Code ( "1031 Exchange "). In the event that Developer in fact proceeds with the 1031 Exchange, the Assignment will be executed by Developer immediately prior to the Close of Escrow, but notwithstanding such Assignment, the Property will be deeded by the City directly to Developer pursuant to the Quitclaim Deed. City consents to the assignment TIC Tustin First Amendment to DDA 05- 30- 2013.docx 8 City of Tustin/ Legacy Villas LLC of such rights for the limited purpose of the 1031 Exchange, under the following conditions to which Developer agrees: (a) Intermediary is not an approved transferee and shall not become the Developer under the DDA for any purposes, and (b) that such assignment will not release, diminish, alter or affect in any manner, Developer's obligations under the DDA or any other document referred to in the DDA, including the Other Agreements. Accordingly, Developer hereby reaffirms for the benefit of the City, that: (a) all agreements, representations, covenants and warranties, express and implied, made by Developer with respect to Property, including, without limitation, those made in the DDA and the Other Agreements, shall survive the assignment of the rights under the DDA to Intermediary and the conveyance of the Property to Developer to the extent the DDA so provides; (b) upon transfer of the Property to Developer, all rights arising from the DDA and the Other Agreements shall be deemed to have been assigned and transferred by Intermediary to Developer; and (c) Legacy Villas LLC is and shall remain Developer under the DDA and the Other Agreements and Legacy Villas LLC hereby specifically reaffirms that it retains all liabilities and obligations of Developer under the DDA and the Other Agreements which liabilities and obligations are expressly agreed by Legacy Villas LLC to survive the transfers of the rights under the DDA to Intermediary and to continue to be binding upon Legacy Villas LLC, as Developer, notwithstanding the Assignment. 18. Definition of DDA Contained in Development Agreement. Developer hereby requests that the City and Developer enter into the Administrative DA Amendment and the City agrees to such request. The City Manager has determined that the proposed terms of the Administrative DA Amendment described below meet the requirements for an administrative amendment to the DA that may be entered into by the City Manager pursuant to the authority granted to the City Manager under Section 2.6 of the DA. The Administrative DA Amendment shall, as its sole substantive modification, amend the definition of "DDA" contained in the DA to incorporate into such definition the First Amendment and future amendments to the DDA by amending Recital B of the DA to read as follows: "B. CITY and DEVELOPER entered into that certain Tustin Legacy Disposition and Development Agreement For Parcel 2A dated as of November 6, 2012 (the "Original DDA "; and as amended by that certain First Amendment to Tustin Legacy Disposition and Development Agreement For Parcel 2A dated as of June 4, 2013, and as the same may hereafter be further amended, modified or supplemented from time to time pursuant to Section 17.3 of the Original DDA, the "DDA ") pursuant to which CITY agreed to sell, and DEVELOPER agreed to buy and develop, certain real property, all as more specifically set forth in the DDA." 19. Conditions of Approval. Developer and the City acknowledge that pursuant to the Reimbursement Agreement, the City has agreed to undertake the Warner Avenue Street & Median Improvements, which Improvements constituted "Developer Backbone Improvements" prior to the execution of this First Amendment. Developer is hereby TIC Tustin First Amendment to DDA 05- 30- 2013.docx 9 City of Tustin/ Legacy Villas LLC relieved of its obligation to construct the Warner Avenue Street & Median Improvements. Accordingly, upon completion by the City, Developer or any other Person of the Warner Avenue Street & Median Improvements, the following components of the "conditions of approval" set forth in the Entitlements shall be deemed to have been satisfied to the extent such conditions describe or require performance of the Warner Avenue Street & Median Improvements, but in each case, the deemed satisfaction of the conditions shall specifically exclude all work described in such condition that does not constitute part of the Warner Avenue Street & Median Improvements: (a) The component of Condition 6.13 of Resolution 912 -93 of the City Council, requiring Developer to "complete full width improvements "; (b) The component of Condition 6.20 of Resolution 912 -93 of the City Council, requiring Developer "to construct full width improvements to Warner Avenue from Tustin Ranch Road to Legacy Road "; and (c) The component of Condition 6.22 of Resolution 912 -93 of the City Council, requiring Developer to "design and construct the Warner Avenue median". 20. Additional Matters Relating to Warner Avenue Street & Median Improvements. The Reimbursement Agreement establishes a Construction Schedule (as defined in the Reimbursement Agreement) that sets forth (a) the final day for commencement of construction and the final day for Completion of construction of the Developer Backbone Improvements and the IRWD Reimbursable Facilities for which ICDC is responsible, and (b) the commencement and completion dates for the Warner Avenue Street & Median Improvements to be constructed by the City. The City and Developer acknowledge that the completion of the foregoing work impacts Developer's ability to Complete the Improvements. Accordingly, (x) if the City fails to complete the Warner Avenue Street & Median Improvements (which determination shall be made by the Director) by the Warner Completion Date (defined below) and (y) such failure prevents Developer from obtaining certificates of occupancy for any Units or from completing any element of Developer's work on the Project, then Developer shall be entitled to an extension of its obligation to Complete the Improvements and any other construction- related interim deadlines equal to the number of days between the Warner Completion Date and the actual date of completion of such Warner Avenue Street & Median Improvements as determined pursuant to the Reimbursement Agreement. Developer further agrees that its sole additional remedy (i.e., in addition to the extension provided for in this Section 20) for the failure of the City to timely complete the Warner Avenue Street & Median Improvements shall be the right to require ICDC to exercise the self -help rights set forth in Section 2.14(c) of the Reimbursement Agreement. TIC Tustin First Amendment to DDA 05- 30- 2013.docx 10 City of Tustin/ Legacy Villas LLC The "Warner Completion Date" shall mean the later of (i) the date shown on the Construction Schedule for the City's completion of the Warner Avenue Street & Median Improvements, as extended by any time period authorized by Section 2.2.3 of the Reimbursement Agreement, or (ii) December 30, 2014 (unless a later date is agreed to in writing by Developer). 21. Miscellaneous. (a) Agreement Ratified. Except as specifically amended or modified herein, each and every term, covenant, and condition of the Original DDA is hereby ratified and shall remain in full force and effect. Each and every reference to the "Agreement" in the Original DDA shall be deemed to refer to the Original DDA as amended by this First Amendment. (b) Governing Law. This instrument shall be interpreted and construed in accordance with the laws of the State of California. (c) Binding Agreement. This First Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, representatives, successors and permitted assigns. (d) Counterparts. This First Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. (e) City Cost Reimbursement. Developer hereby acknowledges that the costs and expenses, including attorneys' fees, third party fees and staff costs, incurred by the City in connection with the preparation, processing and approval of this First Amendment, the Reimbursement Agreement, the Administrative DA Amendment and the License Agreement shall constitute "City Transaction Expenses" as provided in Section 1.8 of the Original DDA. {signatures on following page) TIC Tustin First Amendment to DDA 05- 30- 2013.docx 11 City of Tustin/ Legacy Villas LLC IN WITNESS WHEREOF, the Parties have executed this Agreement as of the First Amendment Effective Date. Dated: ATTEST: Erica Rabe City Clerk Services Supervisor APPROVED AS TO FORM: David Kendig, City Attorney Armbruster Goldsmith & Delvac LLP Special Real Estate Counsel to the City Amy E. Freilich "CITY" CITY OF TUSTIN, a California municipal corporation By: Jeffrey C. Parker, City Manager (signatures continued on following page) TIC Tustin First Amendment to DDA 05- 30- 2013.docx 12 City of Tustin/ Legacy Villas LLC "DEVELOPER" LEGACY VILLAS LLC, a Delaware limited liability company Date: By:_ Name: Title: By: Name: Title: TIC Tustin First Amendment to DDA 05- 30- 2013.docx 13 City of Tustin/ Legacy Villas LLC JOINDER OF ESCROW HOLDER The undersigned is joining this First Amendment to evidence its agreement to receive, hold and disburse the Purchase Price Deposit in accordance with the terms of the Original DDA, as hereby amended and otherwise to comply with the escrow instructions set forth in the Original DDA, as hereby amended. FIRST AMERICAN TITLE INSURANCE COMPANY Name: Title: TIC Tustin First Amendment to DDA 05- 30- 2013.docx 14 City of Tustin/ Legacy Villas LLC ATTACHMENT 14 PUBLIC PARCELS o be attached. TIC Tustin First Amendment to DDA 05- 30- 2013.docx City of Tustin/ Legacy Villas LLC � a §( - - - -!0 \ /\ ! > \((!!!!0 2:!l = = = = =_ ;: / / /)))) /§ )) � �j �G\ � a I2;) \ � ,lob AOV031 §( - - - -!0 \ /\ ! > 2:!l = = = = =_ ;: / / /)))) /§ \{ � I2;) \ � ,lob AOV031 } \ ) % », O - - - -�- �< a � ! R �s�l \. ��- §( - - - -!0 \ /\ ! > 2:!l = = = = =_ ;: \/}_ } \ ) % », O - - - -�- �< a � ! R �s�l \. ��- \ § ) \ ) � \ \ 2 \ cL \ � � \ z &� ° 7- �L_ � . 3nN3 ,; Jt, 038 _ _ _ f/w 3�a t ƒ } wz w Co c _M ea_ LLI O \2: %A �.»x LL. rF, » ( \ \ j \�§ \ ! \ § ) \ ) � \ \ 2 \ cL \ � � \ z &� ° 7- �L_ � . 3nN3 ,; Jt, 038 _ _ _ f/w 3�a t ƒ } wz w Co c _M ea_ LLI O \2: %A �.»x LL. rF, » ( ATTACHMENT 2 1 A DESCRIPTION OF DEVELOPER BACKBONE IMPROVEMENTS AND IRWD REIMBURSABLE FACILITIES (All as further shown in Attachment 21B to the DDA) A. Developer Backbone Improvements: No. Facility 1. Warner Avenue Rough Grading & Improvements a. Rough Grading (Plans by RBF for City of Tustin R- 1913A) b. Storm Drain (Plans by RBF for City of Tustin D- 1913A) c. Dry Utilities (Plans by Moran Utilities for City of Tustin) d. Domestic Water (Plans by RBF for City of Tustin: IRWD 5724) ** 2. Park Avenue Rough Grading and Improvements a. Rough Grading (Plans by RBF for City of Tustin R -1914) b. Storm Drain (Plans by RBF for City of Tustin D -1914) c. Dry Utilities (Plans by Moran Utilities for City of Tustin) d. Street Improvements (Plans by RBF for City of Tustin R -1914) e. Domestic Water (Plans by RBF for City of Tustin: IRWD 5724) ** f. Traffic Signal Upgrade (Plans by RBF for City of Tustin: TE 534) ** Denotes an "Other IRWD Facility" B. IRWD Reimbursable Facilities: Reimbursement Source City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin City of Tustin 1. IRWD Reimbursable Facilities In Warner Avenue a. Domestic and Reclaimed Water (Plans by RBF for City of Tustin: IRWD 5725) Irvine Ranch Water District b. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) Irvine Ranch Water District 2. IRWD Reimbursable Facilities In Park Avenue a. Reclaimed Water (Plans by RBF for City of Tustin: IRWD 5725) Irvine Ranch Water District b. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) Irvine Ranch Water District 3. IRWD Reimbursable Facilities (Within the Apartment Site Parcel) a. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) Irvine Ranch Water District TIC Tustin First Amendment to DDA 05- 30- 2013.docx City of Tustin/ Legacy Villas LLC ATTACHMENT 21 B DEPICTION OF DEVELOPER BACKBONE IMPROVEMENTS AND IRWD REIMBURSABLE FACILITIES [Same as Exhibit A -1 to Reimbursement Agreement] [To be attached.] TIC Tustin First Amendment to DDA 05- 30- 2013.docx City of Tustin/ Legacy Villas LLC Z LU L LU O rr n LU Z O m m Y rU N Q co W rr 2 w I..L Lu O LU LU 0 U Q LU J 'I U) w s W LO Z N tz H w z «� O _ Z 0 0003 m o� O N W �F•(,� Fe Fe �^ Fe Fe Fh � 3 Z ryry -o -o 6 6 o o oaC +zazazaza N C w w z, - w O + o0 00 m 00 0 Z oN Z +www - �G >N O� 3 $ Z z I I jo j = V wU p0 0 _U DO O ZO ° ' N Z V OO �z w_ Fn Fn i i 0 :z5 33 3 V 3_- C w s L�GVOH AOV037 0; No .0 No smalm Z � W Q a� 0 2 zw Afift Q � e q A'n � 34V nw Oil 0 Np O E° �M Z ° 31 - 2 3 a O ° Sz PP�S�PO�G FJ II � W LO Z N tz H w z «� O _ Z 0 0003 a R CCC O N W �F•(,� Fe Fe �^ w� s% 3 Z ryry -o -o 6 6 On GaG 6 On 'Q �NWO N C Z Z Z y c c LL + �o go go �N oN Z +www - �G >N Zw$s Z ° N II O j = V wU p0 o _U ZO ° X71 V OO z e Fn Fn i i 0 :z5 33 3 V aZ L�GVOH AOV037 0; No .0 No smalm Z � W Q a� 0 2 zw Afift Q � e q A'n � 34V nw Oil 0 Np O E° �M Z ° 31 - 2 3 a O ° Sz PP�S�PO�G FJ II � W LO Z N tz H � Y O z o O _ Z 0 0003 a R j w J H Z QYOWL N W �F•(,� yo U =LL 9m w� s% 3 Z 3 =U Z N = u �w �NWO N s�1 W N Q wok J N Q s - �G >N L�GVOH AOV037 0; No .0 No smalm Z � W Q a� 0 2 zw Afift Q � e q A'n � 34V nw Oil 0 Np O E° �M Z ° 31 - 2 3 a O ° Sz PP�S�PO�G FJ II � C = o ¢ o �zo o a W 3 a o o z W d y F 6 F o -aF u Q ~ �wO LL u °o i u o tx� z�m V1 0Z W OQ 02 Zw In V a W V N 13 w Z N tz H o O _ Z 0 0003 C = o ¢ o �zo o a W 3 a o o z W d y F 6 F o -aF u Q ~ �wO LL u °o i u o tx� z�m V1 0Z W OQ 02 Zw In V a W V N 13 w Z N tz H o O _ Z 7 0 a R j w N O % 3 Z 3 = u �w N J N Q - �G >N Zw$s Z V Q Q = V wU p0 _ ZO ° X71 0 m 0.a = = 3 3 u a 2' w 3 V C >G r IV A1? — I > 010 U �1� W V d J Q Z H H 3n N3AV 771H 03d 3 Y a ¢ U Z m Zw gz 0$ U w� N 0 M_ O N W Z D son MOMF 9 ATTACHMENT 21 C DEVELOPER BACKBONE IMPROVEMENTS INITIAL COST ESTIMATES [To be attached.] TIC Tustin First Amendment to DDA 05- 30- 2013.docx City of Tustin/ Legacy Villas LLC a ] � ] k { m � \ ID / v k 0 m a � 0 K_ � 0 < 2 § � k M � r+ � n q / / 2 E + . e / _ _ 0) a I m / Ln / ¢ \ g m < 7 m m ƒ E / / / § � � ] % k \ ƒ v m w 2 / 7 � $ $ 0 0 0 £ 9 m m A i E Do \ � v / \ § 7 $ m \ _ � ) ; \ r3 m ƒ ] r3 7 r3 7 \ k O'Q E E 0 \ \ E } CL m _ ) E \ m k m / \ \ Z Z Z 0 ® / / / / m , , , $ $ $ $ e \ \ j \ [ _ � c � � � _ ] _ [ o � � k k --j � M fu / / / / f 2 m o » a) � o # M E f t E \ 2 a ] � ] k { m � \ ID / v k 0 m a � 0 K_ � 0 < 2 § � k M � r+ � n ATTACHMENT 25 FORM OF REIMBURSEMENT AGREEMENT o be attached. TIC Tustin First Amendment to DDA 05- 30- 2013.docx City of Tustin/ Legacy Villas LLC INFRASTRUCTURE CONSTRUCTION AND REIMBURSEMENT AGREEMENT by and between THE CITY OF TUSTIN and IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, A DELAWARE LIMITED LIABILITY COMPANY Dated June 4, 2013 TABLE OF CONTENTS INFRASTRUCTURE CONSTRUCTION AND REIMBURSEMENT AGREEMENT RECITALS................................................................................................................................... ..............................1 ARTICLEI DEFINITIONS ........................................................................................................ ............................... 2 Section1.1 Definitions ........................................................................................................ ..............................2 ARTICLE II CONSTRUCTION OF FACILITIES .................................................................... .............................10 Section 2.1 Preparation of Plans ........................................................................................ .............................10 Section 2.2 Duty of ICDC to Construct ............................................................................. .............................10 Section 2.3 Contract Requirements .................................................................................... .............................11 Section2.4 Changes ........................................................................................................... .............................14 Section 2.5 Bonding Requirements .................................................................................... .............................15 Section 2.6 Inspection; Completion of Construction ......................................................... .............................16 Section 2.7 Maintenance of Facilities; Transfer of Interest and Warranties ...................... .............................16 Section 2.8 Insurance Requirements .................................................................................. .............................17 Section 2.9 Liens and Stop Notices .................................................................................... .............................18 Section 2.10 Facility Project Coordination .......................................................................... .............................19 Section2.11 Access License ................................................................................................ .............................19 Section 2.12 Warranties and Guarantees .............................................................................. .............................19 Section 2.13 IRWD Reimbursable Facilities ....................................................................... .............................19 Section 2.14 Warner Avenue Street & Median Improvements .......................................... ............................... 20 Section 2.15 Disclaimer of Responsibility ......................................................................... ............................... 21 ARTICLE III ACQUISITION OF FACILITIES ...................................................................... ............................... 21 Section 3.1 Transfer of Ownership of Facilities to City ................................................... ............................... 21 Section 3.2 City Acceptance Process ............................................................................... ............................... 22 Section3.3 Release of Bonds ........................................................................................... ............................... 24 ARTICLE IV PAYMENTS, REIMBURSEMENT PROCEDURES AND RECONCILIATION .......................... 24 Section 4.1 Progress Payments for Facilities ................................................................... ............................... 24 Section4.2 Payee ............................................................................................................. ............................... 26 Section 4.3 Survival of Provisions ................................................................................... ............................... 26 ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION .................. 26 Section 5.1 Representation and Warranties of ICDC ....................................................... ............................... 26 Section5.2 Covenants of ICDC ....................................................................................... ............................... 26 Section 5.3 Representations and Warranties of the City .................................................. ............................... 27 Tustin ICDC Reimbursement 05- 29- 2013(2).docx i City of Tustin/ Irvine Community Development Company LLC Section 5.4 Indemnification by ICDC .............................................................................. ............................... 28 Section 5.5 Indemnification by City ................................................................................ ............................... 29 ARTICLE VI REMEDIES; TERMINATION; DAMAGES .................................................... ............................... 30 Section 6.1 Termination for Cause by City ...................................................................... ............................... 30 Section 6.2 Termination of Construction Contracts ......................................................... ............................... 32 Section 6.3 Remedies in General; Damages Limited ....................................................... ............................... 32 Section6.4 Survival ........................................................................................................... .............................33 - Form of Payment Request .................................................................... ARTICLE VII MISCELLANEOUS ......................................................................................... ............................... 33 Section 7.1 Independent Contractor ................................................................................. ............................... 33 Section 7.2 Binding on Successors and Assigns .............................................................. ............................... 33 Section7.3 Amendments ................................................................................................. ............................... 33 Section7.4 Counterparts .................................................................................................. ............................... 33 Section 7.5 Incorporation of DDA Provisions by Reference ........................................... ............................... 33 Section7.6 Notices ............................................................................................................. .............................34 EXHIBIT M Section 7.7 Duplicate Originals ....................................................................................... ............................... 34 Section7.8 Entire Agreement .......................................................................................... ............................... 35 EXHIBIT A - Facilities Included in Developer Backbone Improvements ................... ............................... A -1 EXHIBIT B - Form of Potential Change of Work ....................................................... ............................... B -1 EXHIBIT C - Form of Concurrence Letter .................................................................. ............................... C -1 EXHIBIT D - Form of Assignment Agreement ........................................................... ............................... D -1 EXHIBIT E - Form of Request for Acceptance ........................................................... ............................... E -1 EXHIBIT F - Construction Schedule .............................................................................. ............................F -1 EXHIBIT G - Form of Payment Request .................................................................... ............................... G -1 EXHIBIT H - Map of Access And Staging Areas ........................................................ ............................... H -1 EXHIBIT I — Form of Access Agreement/Staging Area License ..................................... ............................I -1 EXHIBIT J — Construction Contract Terms .................................................................. ............................... J -1 EXHIBIT K — Subcontractor Insurance Requirements ................................................ ............................... K -1 EXHIBIT K -1 — Professional Insurance Requirements .................................................. ..........................K -1 -1 EXHIBIT L — Lien Release Requirements ................................................................... ............................... L -1 EXHIBIT M — Payment Request Submittal Requirements ......................................... ............................... M -1 EXHIBIT N — Form of Payment Bond ............................................................................ ............................N -1 EXHIBIT O — Form of Performance Bond .................................................................. ............................... 0-1 EXHIBIT P — ICDC Bid and Award Procedures ............................................................. ............................P -1 Tustin ICDC Reimbursement 05- 29- 2013(2).docx ii City of Tustin/ Irvine Community Development Company LLC INFRASTRUCTURE CONSTRUCTION AND REIMBURSEMENT AGREEMENT THIS INFRASTRUCTURE CONSTRUCTION AND REIMBURSEMENT AGREEMENT ( "Agreement ") is entered into as of June 4, 2013 (the "Effective Date "), by and between the CITY OF TUSTIN, a California municipal corporation ( "City "), and IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, a Delaware limited liability company ( "ICDC "). City and ICDC are sometimes referred to in this Agreement individually as a "Party" and collectively as the "Parties." RECITALS A. The City and Legacy Villas LLC, a Delaware limited liability company ( "Developer ") entered into that certain Tustin Legacy Disposition and Development Agreement for Parcel 2A on November 6, 2012, as amended by that certain First Amendment to DDA dated June 4, 2013 ( "First Amendment ") and as thereafter amended (as so amended, the "DDA "), after the City's selection of Developer pursuant to a competitive request for proposal process as the winning bidder to (a) purchase and develop approximately 21.735 acres of land in Tustin, California as depicted on Attachment 2A to the DDA (the "Parcel ") for the development of residential apartments, and (b) construct certain infrastructure improvements as more fully described in Recital B below. B. In connection with Developer's execution of the DDA and acquisition of the Parcel, Developer agreed (i) to pay to the City the sum of Fifteen Million Three Hundred Thousand Six Hundred Forty -Four Dollars ($15,300,644) referred to in the DDA and in this Agreement as the "Project Fair Share Contribution" as Developer's contribution with respect to the Project's fair share of the cost of the Tustin Legacy Backbone Infrastructure Program; (ii) to cause the construction by ICDC (which is an affiliate of Developer and under common ownership and control with Developer), of certain public infrastructure improvements described on Attachment 21A of the DDA as "Developer Backbone Improvements," which improvements constitute a portion of the public infrastructure improvements included within the Tustin Legacy Backbone Infrastructure Program, all in accordance with the Plans (defined below) for same prepared by or on behalf of the City; and (iii) to cause said Developer Backbone Improvements to be maintained until the City's acceptance of such completed Developer Backbone Improvements. C. The "Developer Backbone Improvements" to be constructed by ICDC pursuant to this Agreement are listed on Exhibit A to this Agreement and include all of the Developer Backbone Improvements described in the DDA. Each Developer Backbone Improvement listed on Exhibit A is referred to herein individually as a "Facility" and collectively as the "Facilities." The Facilities shall be described more specifically prior to construction by reference to the Plans. D. Pursuant to this Agreement, ICDC agrees (i) to construct all Developer Backbone Improvements and all portions of the IRWD Reimbursable Facilities other than the Sewer Improvements (each as defined below) in accordance with the Plans, (ii) to construct the Sewer Improvements in accordance with the Sewer Plans (defined below) and (iii) with respect to such Work (defined below) to comply with all other requirements of this Agreement, for the benefit of Tustin ICDC Reimbursement 05- 29- 2013(2).docx 1 City of Tustin/ Irvine Community Development Company LLC the City all as more particularly described herein. The IRWD Reimbursable Facilities shall be described more specifically prior to construction by reference to the Plans and the Sewer Plans. E. This Agreement is entered into by the City and ICDC in order to, among other things; (i) establish certain obligations regarding the construction of the Developer Backbone Improvements and the IRWD Reimbursable Facilities by ICDC, (ii) establish a schedule for the construction of the Warner Avenue Street & Median Improvements by the City, and (iii) establish the procedures under which the City shall reimburse ICDC for its construction of the Facilities, accept the Facilities and confirm the completion of the IRWD Reimbursable Facilities. NOW, THEREFORE, for and in consideration of the mutual premises and covenants contained herein, the Parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 Definitions Unless the context otherwise requires, the following terms utilized in this Agreement shall have the meanings herein specified: "Acceptance Date" has the meaning set forth in Section 3.2.1(c). "Actual Cost" means the following costs of ICDC with respect to a Facility: (a) the Construction Cost with respect to such Facility; (b) any fees to Governmental Authorities in order to obtain permits, licenses or other necessary governmental inspections, approvals and reviews for such Facility; (c) the actual cost of professional services directly related to the construction of such Facility, which services are provided pursuant to any Professional Services Agreement approved by the City pursuant to Section 2.3.3, including without limitation surveying, engineering, inspection, materials testing and similar professional services, and insurance required in connection with such services; (d) costs of obtaining and maintaining payment and performance bonds and insurance as required under this Agreement in connection with construction of such Facility; and (e) costs of maintaining such Facility between completion thereof and the Acceptance Date; provided, however, that each item of cost shall include only amounts actually paid by ICDC to third parties and shall not include costs of Developer, overhead or other internal expenses of Developer or ICDC. "Approved PCOW" has the meaning set forth in Section 2.4.1. "Assignment Agreement" means the agreement provided by ICDC to the City pursuant to Section 2.6 under which ICDC (a) transfers to the City all right, title and interest in a completed Facility and (b) assigns to the City the warranties and guaranties provided by the Subcontractor under the Construction Contract for the completed Facility. The Assignment Agreement shall be in the form of Exhibit E attached hereto. "Authorized Extension" has the meaning set forth in Section 2.2.3. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 2 City of Tustin/ Irvine Community Development Company LLC "Business Day" means any day on which City Hall is open for business and shall specifically exclude Saturday, Sunday and legal holidays. "Cause" has the meaning set forth in Section 6.1.2. "City" means the City of Tustin, a general law city organized and existing under the laws of the State. "City Acceptance" means the approval by the City Council of the Request for Acceptance of each Facility pursuant to Section 3.2. "City Indemnitees" has the meaning set forth in Section 5.4.1. "City Representative" means the individual or individuals authorized by the City to act and coordinate with ICDC on behalf of the City with respect to the matters described in Section 2.10 and elsewhere in this Agreement. "Claim" or "Claims" means any and all claims, actions, causes of action, demands, orders, or other means of seeking or recovering losses, damages, liabilities, costs, expenses (including attorneys' fees, fees of expert witnesses and consultants and court and litigation costs), costs and expenses attributable to compliance with judicial and regulatory orders and requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen. "Complete," "Completed" and "Completion" with respect to each Facility means that: (a) construction of the Facility is complete in conformity with the Plans, this Agreement and the Construction Contracts, with all systems (including mechanical, electrical, structural, communication and other systems, as applicable) in good and proper operating condition and ready for use such that the City may utilize the Facilities for their intended purpose; (b) all Work required by this Agreement and the Construction Contracts with respect to such Facility, including minor corrective work and minor deficient or incomplete work is complete, as evidenced by a certification by the project engineer(s) for the Facility that such Facility has been completed in a good and workmanlike manner and substantially in accordance with the Plans; (c) ICDC shall have obtained fully executed conditional waiver and release forms from all Subcontractors and Sub - subcontractors performing Work on the Facility in the form required by Civil Code Section 8136; and (d) any and all mechanic's liens that have been recorded or stop notices that have been delivered with respect to the Facility have been paid, settled or otherwise extinguished, discharged, released, waived, or bonded (such bonding to be by the provision of bonds satisfying the provisions of Section 2.9). "Concurrence Letter" shall mean a letter in the form of Exhibit C attached hereto under which ICDC notifies the City of a bid requiring approval by the City in connection with the construction of a Facility. "Construction Contract" means the subcontract for construction of each Facility awarded by ICDC to each Subcontractor in accordance with the procedures and meeting the requirements set forth in Section 2.3 and the insurance requirements in Section 2.8. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 3 City of Tustin/ Irvine Community Development Company LLC "Construction Cost" means the cost for constructing each Facility, including without limitation labor, material and equipment costs, and costs of obtaining and maintaining payment and performance bonds and insurance, established in the Construction Contract approved by the City for such Facility, which amount shall only be modified by an Approved PCOW. "Construction Schedule" has the meaning set forth in Section 2.2.3. "Contract Price" has the meaning set forth in Section 2.3.6. "DDA" means the Tustin Legacy Disposition and Development Agreement for Parcel 2A, dated November 6, 2012, by and between the City and Developer, as originally executed and amended by the First Amendment or as the same may be further amended from time to time in accordance with its terms. "Developer" means Legacy Villas LLC, a limited liability company organized and existing under the laws of the State of Delaware, and its successors and assigns as permitted in accordance with the terms and provisions of the DDA. "Developer Backbone Improvements" means the two Facilities described on Exhibit A as (a) the Warner Avenue Rough Grading & Improvements under item A.1, and (b) the Park Avenue Rough Grading and Improvements under item A.2. The Warner Avenue Rough Grading & Improvements consist of the four items listed as A. La through A. Ld. The Park Avenue Rough Grading and Improvements consist of the six items listed as A.2.a through A.2.f. "Director" means the City's Director of Public Works and any designee of said City Director of Public Works. "Effective Date" means the first date set forth on page 1 of this Agreement. "Facility" means each public infrastructure facility required to be constructed as part of the Developer Backbone Improvements specified on Exhibit A to this Agreement. "Facilities" means the two Facilities required to be constructed as part of the Developer Backbone Improvements specified on Exhibit A to this Agreement and specifically includes the Other IRWD Facilities. The term "Facilities" does not include the IRWD Reimbursable Facilities. "Fair Share Earmark Account" shall have the meaning set forth in Section 4.1.1. "Final Approved Cost" means the final Actual Cost of each Facility as approved and determined by the Director in accordance with the procedures set forth in Section 3.2. "Final Acceptance" means that the conditions to approval by the City of the Request for Acceptance set forth in Section 3.2. 1- have been fully satisfied as to the Facility that is the subject of such Request for Acceptance, including without limitation the approval of the Request for Acceptance by the City Council. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 4 City of Tustin/ Irvine Community Development Company LLC "First Amendment" means the First Amendment to Tustin Legacy Disposition and Development Agreement dated as of June 4, 2013 between Developer and the City. "Force Majeure Delay" has the meaning set forth in Section 17.7 of the DDA (except that the term "Party" as used therein shall mean the Parties under this Agreement and the terms "Work" and "Agreement" shall have them meanings set forth in this Agreement), and includes, for purposes of this Agreement only, the following additional clause which shall be deemed to be added to the end of Section 17.7.1 of the DDA for purposes of determining a Force Majeure Delay under this Agreement: "(h) Excessive delay in issuance by Governmental Authorities of permits required to prosecute the Work described in this Agreement, provided that such delays are caused by events or circumstances outside the control of ICDC or its Subcontractors or Sub - subcontractors. For example, if the delay in issuance of a permit is due to the failure of ICDC or its Subcontractor to submit a complete submittal for the required permit, then the time that elapses between the incomplete submittal and the complete submittal shall not be considered to be an "excessive delay " by the applicable Governmental Authority. Further, the time taken for any review or approval by the City as required hereunder shall not be considered to be an "excessive delay" if such review or approval is made within the time period specified in this Agreement or if no specified time period is set forth, is made within ten (10) business days of submittal of such matter to the City. " "General Prevailing Wage Rates" means those rates determined by the Director of the Department of Industrial Relations of the State of California to be "prevailing wage" rates for each of the trades and workers to which prevailing wage rates apply, as such rates are set from time to time by such director for the region in which the City is located. "Governmental Authority" means any and all federal, State, county, municipal and local governmental and quasi - governmental bodies and authorities or departments (including the United States of America, the State of California and any political subdivision, public corporation, district, joint powers authority or other political or public entity) or departments thereof having or exercising jurisdiction over the Parties, the Parcel, the Sites or other property upon which ICDC or the City are obligated to construct the Developer Backbone Improvements, the IRWD Reimbursable Facilities or the Warner Avenue Street & Median Improvements, or such portions of the foregoing as the context indicates. "Governmental Capacity" means the exercise by the City of its governmental authority with respect to any matter related to this Agreement, including without limitation, the regulation of the Parcel and the Sites pursuant to Governmental Requirements, including enacting laws, inspecting structures, reviewing and issuing permits, and all other legislative, administrative or enforcement functions of each pursuant to federal, state or local law. "Governmental Requirement" means all laws, statutes, codes, ordinances, rules, regulations, standards, guidelines and other requirements issued by any Governmental Authority having jurisdiction over, governing, applying to or otherwise affecting the Parties, the Parcel, the Tustin ICDC Reimbursement 05- 29- 2013(2).docx 5 City of Tustin/ Irvine Community Development Company LLC Sites and /or other property upon which ICDC or the City are obligated to construct the Developer Backbone Improvements, the IRWD Reimbursable Facilities or the Warner Avenue Street & Median Improvements or any component thereof, including without limitation building permits related to construction of such improvements. "Hazardous Materials" shall mean and include without limitation the following (a) "Hazardous Substance ", "Hazardous Material', "Hazardous Waste ", or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and Recovery Act, 42 U.S.C. subsection 6901, et seq.; (b) An "Extremely Hazardous Waste ", a "Hazardous Waste ", or a "Restricted Hazardous Waste ", under subsections 25115, 25117, or 25122.7 of the California Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the California Health and Safety Code; (c) "Hazardous Material', "Hazardous Substance ", "Hazardous Waste ", "Toxic Air Contaminant ", or "Medical Waste" under subsections 25281, 25316, 25501, 25501.1, 117690 or 39655 of the California Health and Safety Code; (d) "Oil' or a "Hazardous Substance" listed or identified pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any other hydro carbonic substance or by- product; (e) A material listed or defined as a "Hazardous Waste ", "Extremely Hazardous Waste ", or an "Acutely Hazardous Waste" pursuant to Chapter I I of Title 22 of the California Code of Regulations; (f) A material listed by the State of California as a chemical known by the State to cause cancer or reproductive toxicity pursuant to Section 25249.9(a) of the California Health and Safety Code; (g) A material which, due to its characteristics or interaction with one or more other substances, chemical compounds, or mixtures, damages or threatens to damage, health, safety, or the environment, or is required by any law or public agency to be remediated, including remediation which such law or public agency requires in order for the property to be put to any lawful purpose; (h) Any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether or not the presence of such material resulted from a leaking underground fuel tank; (i) Pesticides regulated under the Feral Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. subsection 136 et seq.; 0) Asbestos, PCBs and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. subsection 2601 et seq.; Tustin ICDC Reimbursement 05- 29- 2013(2).docx 6 City of Tustin/ Irvine Community Development Company LLC (k) Any radioactive material including any "source material ", "special nuclear material ", "by- product material ", "low -level wastes ", "high -level radioactive waste ", "spent nuclear fuel" or "transuranic waste ", and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California Radiation Control Law, California Health and Safety Code Section 114960 et seq.; (1) A material regulated under the Occupational Safety and Health Act, 29 U.S.C. subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor Code subsection 6300 et seq.; and /or (m) A material regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or pursuant to Division 26 of the California Health and Safety Code. "ICDC" means Irvine Community Development Company LLC, a limited liability company organized and existing under the laws of the State of Delaware. "ICDC Indemnitees" has the meaning set forth in Section 5.5.1. "ICDC Parties" has the meaning set forth in Section 2.3.6. "ICDC Pre - Paving Work" means the following Work: all portions of the "Warner Rough Grading & Improvements" and the "IRWD Reimbursable Facilities in Warner Avenue" described on Exhibit A other than raising of manhole covers and valves, installing sidewalks, installing street lights, and installing the traffic signal at the intersection of Warner Avenue and Legacy Road. "ICDC Representative" means the individual or individuals authorized by ICDC to act and coordinate with the City on behalf of ICDC with respect to the matters described in Section 2.10 and elsewhere in this Agreement, including but not limited to execution of any Request for Acceptance signed by ICDC and delivered to the City. Each Request for Acceptance shall contain an original signature of at least one ICDC Representative. "IRWD" means the Irvine Ranch Water District. "IRWD Reimbursable Facilities" means the improvements described on Exhibit A as IRWD Reimbursable Facilities (Items B.1, B.2 and B.3) to be directly reimbursed by IRWD to ICDC pursuant to an existing reimbursement agreement or other agreement between such entities, and for which the City shall have no responsibility to pay. "IRWD Facilities" means the IRWD Reimbursable Facilities and the Other IRWD Facilities, collectively. Navy" means the United States Department of Navy. "Non- Parcel Site" has the meaning set forth in Section 2.3.9. "Notice of Completion" means a valid notice of completion as defined in California Civil Code Section 8180 et seq. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 7 City of Tustin/ Irvine Community Development Company LLC "Other IRWD Facilities" means IRWD non - capital improvements that shall be subject to reimbursement by the City for the Actual Cost thereof The Other IRWD Facilities shall include: (i) the 10" domestic water line in Warner Avenue, together with any other facilities related thereto (but excluding IRWD Reimbursable Facilities) as shown on the "Plans for Domestic Water Improvements, Park Avenue, from Private Driveway to Tustin Ranch Road, Warner Avenue from Legacy Road to Tustin Ranch Road," IRWD Code 5724, prepared by RBF Consulting, and (ii) the 10" domestic water line in Park Avenue between Tustin Ranch Road and the entry road to the Parcel, together with any other facilities related thereto (but excluding IRWD Reimbursable Facilities) as shown on the "Plans for Domestic Water Improvements, Park Avenue, from Private Driveway to Tustin Ranch Road, Warner Avenue from Legacy Road to Tustin Ranch Road," IRWD Code 5724, prepared by RBF Consulting. Each of the Other IRWD Facilities shall be owned and maintained by IRWD following acceptance thereof by IRWD and payment of the Actual Cost of each Other IRWD Facility by the City. "Parcel" means the approximately 21.735 acres of land in Tustin, California as depicted on Attachment 2A to the DDA being acquired by Developer for the development of residential apartments and construction of certain infrastructure improvements. "Payment Bond(s)" means the bond or bonds issued by a surety authorized to do business in the State of California that guarantees the payment in full of all Subcontractors, Sub - subcontractors, laborers, material suppliers and other Persons performing Work. "Payment Request" has the meaning set forth in Section 4.1.2. "PCOW" has the meaning set forth in Section 2.4.1. "Performance Bond(s)" means the bond or bonds issued by a surety authorized to do business in the State of California and guaranteeing due and punctual performance and completion (within the respective times provided in the Construction Schedule) in accordance with the applicable Plans or Sewer Plans that specifically describe the Work to be performed in sufficient detail for the issuance of such Performance Bond, and including all obligations of Subcontractors, Sub - subcontractors and other Persons with respect to the Work covered by such bond. "Person" means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. "Plans" means the plans and specifications for (a) each Facility and (b) each IRWD Reimbursable Facility other than the Sewer Improvements, all of which plans and specifications have been prepared at the direction of the City and approved by the City's engineer pursuant to Section 2.1 and delivered to ICDC by the Director. "Professional" means a professional consultant to whom a Professional Services Agreement is awarded by ICDC in accordance with the procedures set forth in Sections 2.3.2 and 2.3.3. "Professional Services Agreement" means the agreement for the provision of professional services related to the construction of each Facility awarded by ICDC to each Professional in Tustin ICDC Reimbursement 05- 29- 2013(2).docx 8 City of Tustin/ Irvine Community Development Company LLC accordance with the procedures and meeting the requirements set forth in Section 2.3 and the insurance requirements in Section 2.8. "Project" has the meaning set forth in Section 1.3.2 of the DDA. "Project Fair Share Contribution" has the meaning set forth in Recital C. "Release" (with respect to Hazardous Materials) shall mean any releasing, or threat of releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping into the environment. "Request for Acceptance" has the meaning set forth in Section 3.2.1. "Sewer Improvements" means the sewer improvements within Warner Avenue, Park Avenue and the Parcel described on Exhibit A as IRWD Reimbursable Facilities 13.1.b, B.2.b and B.3.a and as further described by the Sewer Plans. "Sewer Plans" means the plans and specifications for the sewer within Warner Avenue, Park Avenue and the Parcel, entitled "Capital Sewer Improvements, Planning Area 2A- Tustin Legacy, Tract No. 17404, Lots 29, 30, 38 and 39, Project No. 4329, IRWD Code 5910," prepared by Fuscoe Engineering Inc. at the direction of Developer. "Site" has the meaning set forth in Section 2.4.3. "Special Restrictions" means the Declaration of Special Restrictions that will be recorded against the Parcel on the date when Developer's acquisition of the Parcel from the City is closed. "State" means the State of California. "Subcontractor" means the winning bidder to whom the Construction Contract for construction of a Facility is awarded by ICDC in accordance with the procedures set forth in Sections 2.3.2 and 2.3.3. "Sub- subcontractor" means any entity retained to perform a portion of the Work that does not have a direct contractual relationship with ICDC and shall include entities retained by a Subcontractor at any tier to perform a portion of the Work under the Construction Contract. "Tustin Legacy" means the portion of the closed Marine Corps Air Station - Tustin located within the City of Tustin and owned by the City as of the effective date of the DDA or subject to ground lease between the Navy and the City. "Tustin Legacy Backbone Infrastructure Program" means the various backbone infrastructure improvements located outside of the Parcel as more specifically described in Section 8.5.1 of the DDA. "Warner Avenue Street & Median Improvements" means the following infrastructure improvements for the segment of Warner Avenue between Legacy Road and Tustin Ranch Road to be constructed by or on behalf of the City: landscape median, roadway paving, curb and gutter for Tustin ICDC Reimbursement 05- 29- 2013(2).docx 9 City of Tustin/ Irvine Community Development Company LLC landscape median and roadway borders, and traffic signal upgrade at intersection of Warner Avenue and Tustin Ranch Road, which improvements are referenced on the "Plans for Street and Domestic Water Improvements — Warner Avenue from Legacy Road to Tustin Ranch Road," CIP No. 70202, IRWD Code 5724, prepared by RBF Consulting. "Work" means the construction, installation, maintenance and services required by the Plans and the Sewer Plans, and includes without limitation all labor, services, equipment or materials provided or to be provided by ICDC to fulfill ICDC's obligations with respect to each Facility and IRWD Reimbursable Facility constructed under this Agreement. ARTICLE II CONSTRUCTION OF FACILITIES Section 2.1 Preparation of Plans The City shall cause the Plans for each Facility and for each IRWD Reimbursable Facility other than the Sewer Improvements to be prepared by licensed engineers in the State in a competent, professional and satisfactory manner in accordance with (a) all standards prevalent in the industry and (b) all applicable laws, ordinances, resolutions, statutes, rules and regulations of applicable Governmental Authorities in effect at the time the Plans were prepared. The Director shall provide ICDC with two (2) paper copies of the complete set of Plans for each Facility, together with an electronic copy of the Plans in PDF and AutoCad format. ICDC shall obtain the Sewer Plans from Developer. Section 2.2 Duty of ICDC to Construct 2.2.1 General Contractor. ICDC shall act as the General Contractor for the Project and shall construct or cause the construction of each Facility and each IRWD Reimbursable Facility in accordance with the Plans and the Sewer Plans therefor, as applicable, and the Construction Schedule. ICDC shall provide, or cause to be provided, all labor, materials, equipment, supplies, tools, permits, supervision, transportation, services, sales tax and all other things necessary to complete the Facilities and the IRWD Reimbursable Facilities in accordance with the Plans and the Sewer Plans therefor, as applicable, including all Work expressly specified therein and reasonably inferred from the Plans and the Sewer Plans. 2.2.2 Quality and Care. ICDC shall perform all of its obligations hereunder, shall cause all Subcontractors to perform the Work, and shall conduct all operations with respect to the Work in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified Persons utilizing commercially reasonable efforts in the performance of comparable work and in accordance with generally accepted practices in Orange County, California, appropriate to the activities undertaken. Unless otherwise specified in the Plans and the Sewer Plans, all materials shall be new and of good quality and ICDC shall, if requested by the City, furnish satisfactory evidence to the City as to the kind and quality of materials. The Work shall be performed in a manner that complies with the requirements of any manufacturers' warranties applicable to equipment or materials included in any of the Facilities or the IRWD Reimbursable Facilities. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 10 City of Tustin/ Irvine Community Development Company LLC 2.2.3 Construction Schedule. The "Construction Schedule" is set forth on Exhibit F and sets forth (a) the final day for commencement of construction and the final day for Completion of construction of each Facility and each IRWD Reimbursable Facility for which ICDC is responsible, and (b) the start and completion dates for the Warner Avenue Street & Median Improvements to be constructed by the City, which shall be performed in two phases, with the initial phase following the completion by ICDC of the ICDC Pre - Paving Work and the second phase following the completion by ICDC of the raising of manhole covers and valves. The commencement and Completion dates established for each Facility and IRWD Reimbursable Facility for Work to be performed by or on behalf of ICDC in the Construction Schedule shall be subject to extension only for (x) "Authorized Extensions" requested pursuant to a PCOW and approved by the Director in writing in accordance with the procedure set forth in Section 2.4.1 below, (y) with respect to the Warner Avenue Facility only, City's failure to commence and complete each phase of the Warner Avenue Street & Median Improvements within the times specified in the Construction Schedule for performance by the City (in which event the Construction Schedule applicable to the Work to be performed by or on behalf of ICDC shall be extended by the number of days of delay by the City in completing the Warner Avenue Street & Median Improvements not authorized pursuant to this Section), or (z) a Force Majeure Delay or for any other reason permitted by this Agreement. In the event that (i) any extensions for the foregoing reasons are provided for any of the aforementioned improvements to be constructed by ICDC or (ii) additional time is required by reason of default by ICDC with respect to its obligations under this Agreement, and such extension or additional time affects the start of construction of any improvement to be constructed by the City as noted on Exhibit F or delays the City's completion of such improvements, then the start and completion dates for each phase of the Warner Avenue Street & Median Improvements shown on Exhibit F to be constructed by the City shall likewise be extended for an equal period of time (and such extension shall not create a right of extension to ICDC.) 2.2.4 Repairs. In connection with ICDC's or any Subcontractor's construction of the Facilities or the IRWD Reimbursable Facilities, ICDC shall be responsible for any damage caused by ICDC or any Subcontractor to the Warner Avenue Street & Median Improvements or any other property of City, and shall, within ten (10) Business Days of receipt of substantiation from City of any such damage caused by ICDC or any Subcontractor, meet and confer with City to confirm the extent of the damage for which such parties are responsible and to identify the parties responsible for making repairs. Thereafter, ICDC shall either promptly cause the repair of such damage or after City's repair of any such damage, shall reimburse the City for the cost of the repairs paid for by City within thirty (30) days of receipt of City's invoice and backup information substantiating the cost of the repairs or such cost of repair may be retained by the City from any monies due to ICDC under this Agreement. Section 2.3 Contract Requirements ICDC shall comply with and, at such intervals and in such form as the City may reasonably require, provide proof to the City that the following requirements have been satisfied as to each of the Facilities. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 11 City of Tustin/ Irvine Community Development Company LLC 2.3.1 Bidding Requirements. The Construction Contracts for the construction of each Facility shall be awarded to the responsible bidder submitting the lowest responsive bid for such Facility and utilizing the Construction Contract prepared by ICDC. 2.3.2 Bid /RFP Process. After receipt of the Plans for each Facility from the City, ICDC shall solicit bids for such construction of the Facility (or in the case of services, proposals related to the construction of the Facility) in a timely manner to ensure compliance with the commencement date for such Facility set forth in Construction Schedule. The bid and award procedures to be followed by ICDC in connection with the construction of each Facility are described on Exhibit P attached hereto. ICDC may solicit bids either for an individual Facility or for multiple Facilities at one time. If the Work is bid for multiple Facilities at one time, ICDC will require all bidders to specify the cost of each Facility separately, and shall require in any Construction Contract awarded to the successful bidder that all progress payment and final payment applications submitted by the Subcontractor break out separately the cost of constructing each Facility. 2.3.3 Award of Contract or Professional Services Agreement. Promptly after receipt and opening of all bids, ICDC will submit to the City a spreadsheet showing all bids received. The City shall have a period of five (5) Business Days from receipt of the bid results for review and approval of same. After receipt of the City's approval of the responsible bidder submitting the lowest responsive bid for the construction of the Facility (which approval shall be confirmed in a Concurrence Letter in the form of Exhibit C attached hereto), ICDC shall award the Construction Contract for the construction of such Facility or Facilities to that contractor. The construction contract for each Facility awarded to the winning bidder is hereinafter referred to as a "Construction Contract" and the winning bidder for such Facility is referred to as the "Subcontractor." Likewise, as to all professional services agreements required in connection with the Construction of each Facility, ICDC shall provide the City with a spreadsheet showing all proposals received, after which the City shall have a period of five (5) Business Days from receipt of the spreadsheet to review and approve of same. After receipt of City's approval of the professional consultant with the lowest responsive proposal to perform the services (which approval shall be confirmed in a Concurrence Letter in the form of Exhibit C attached hereto), ICDC shall enter into a professional services agreement with the approved consultant. The professional services agreement so awarded is hereinafter referred to as the "Professional Services Agreement" and the winning bidder for such services is referred to as the "Professional." Promptly after the award of each such Construction Contract or Professional Services Agreement, ICDC shall furnish the City with a copy of (a) the fully executed Construction Contract documents and one copy of the bid package received from the Subcontractor to whom the Construction Contract was awarded, and /or (b) with respect to professional services, the fully executed Professional Services Agreement and one copy of the proposal received from the Professional to whom the Professional Services Agreement was awarded. 2.3.4 Public Works Contract Requirements, Prevailing Wages. The specifications and bid and contract documents shall require that ICDC and the Subcontractor shall comply and shall cause its Sub - subcontractors to comply with all applicable provisions of the California Labor Code, the California Government Code and the California Public Contract Code relating to public works projects of cities. In addition, ICDC shall cause each Subcontractor and Tustin ICDC Reimbursement 05- 29- 2013(2).docx 12 City of Tustin/ Irvine Community Development Company LLC require in its Construction Contract that each Subcontractor shall cause its Sub - subcontractors engaged to perform Work on a Facility (a) to pay at least General Prevailing Wage Rates to all workers employed in the performance of the Construction Contract or any subcontract, (b) to post a copy of the General Prevailing Wage Rates at the job -site in a conspicuous place available to all employees and applicants for employment (c) to otherwise comply with applicable laws relating to public works projects of cities, and (d) if requested by ICDC or the City, to provide certified copies of payrolls or affidavits confirming that each Subcontractor and its Sub - subcontractors have paid prevailing wages in connection with the construction of the Facilities and IRWD Reimbursable Facilities. ICDC shall require in its Construction Contract that Subcontractor comply with all applicable laws for public works projects, including California Labor Code Sections 1771, 1775, 1776, 1777.5, 1813 and 1815, and shall attach copies of such Labor Code provisions in an exhibit attached to the Construction Contract used with each Subcontractor. 2.3.5 Compliance With Law. In connection with construction of each Facility and each IRWD Reimbursable Facility, ICDC shall, and shall require each Subcontractor to, comply with all applicable laws, ordinances, regulations and building codes of applicable Governmental Authorities. Neither ICDC nor any Subcontractor or Sub - subcontractor shall discriminate in its employment practices against any employee, or applicant for employment, because of such individual's race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status or medical condition. 2.3.6 Contract Requirements, Cit. Rights. The Construction Contract used by ICDC shall include, among other provisions, the terms and conditions set forth on Exhibit J attached hereto and each Construction Contract shall not include any provisions that diminish the rights of the City or the obligations of Subcontractor or any Sub - subcontractors thereunder. The price for the Work set forth in each Construction Contract ( "Contract Price ") shall be established as a not -to- exceed price as determined in accordance with the procedures set forth in Exhibit P. Notwithstanding any other provision of this Agreement, ICDC shall be responsible for (a) all costs under the Construction Contracts in excess of the established Contract Price as modified only by an Approved PCOW, and (b) any loss incurred by the City as a result of the breach of a Construction Contract by a Subcontractor or a defect in the Work or faulty workmanship (unless covered by Subcontractor's warranty assigned to the City on the Acceptance Date for the applicable Facility). Nothing contained in this Agreement shall create any contractual relationship between the City and any Subcontractor, Sub - subcontractor, vendor, material supplier, laborer or any other Person retained by ICDC or retained by any of the foregoing, at any tier, or their respective officers, employees or agents (collectively, the "ICDC Parties "). 2.3.7 Subcontractor Insurance. ICDC shall require the Subcontractor for each Facility and each of its Sub - subcontractors engaged to perform Work on a Facility, to provide proof of insurance coverage satisfying the requirements of Section 2.8.4 throughout the term of the construction of such Facility. 2.3.8 Compliance with City Requirements. ICDC shall comply, and shall cause each Subcontractor and each of its Sub - subcontractors, vendors, material suppliers, equipment operators and owner operators, to the extent each such Person is engaged to perform Work, to comply with such other requirements relating to the Work as the City may impose by Tustin ICDC Reimbursement 05- 29- 2013(2).docx 13 City of Tustin/ Irvine Community Development Company LLC written notification delivered to ICDC, to the extent legally required as a result of changes in applicable federal, State or City laws. 2.3.9 Approval of Sewer Plans. ICDC shall provide the Sewer Plans to the City upon approval thereof by IRWD. The City shall have ten (10) Business Days to review and comment upon such Sewer Plans with respect to portions of the Site other than the Parcel (the "Non- Parcel Site "). Failure of the City to respond within such time period shall be deemed to mean that the City has no comments on the Sewer Plans. ICDC shall forward to IRWD any comments that the City provides within such ten (10) Business Day period for IRWD's consideration. ICDC shall construct the IRWD Reimbursable Facilities in accordance with the Sewer Plans (or any revisions thereto) as approved by IRWD. . Section 2.4 Changes 2.4.1 Preliminary Change of Work Request. ICDC shall provide the City with a preliminary change of work request in the form of Exhibit B (each, a "PCOW ") within ten (10) Business Days of initiation of changed conditions to the Construction Contract or in connection with any request for an extension of time (i.e., for an Authorized Extension), which PCOW shall be subject to City approval in its sole discretion. The Director shall provide written approval or disapproval of any such PCOW within ten (10) Business Days of the Director's receipt of same from ICDC. Each PCOW approved by the City in writing is referred to herein as an "Approved PCOW." If the Director fails to respond within such ten (10) Business Day period, such failure to respond shall be deemed to constitute disapproval of the PCOW. There shall be no change to the Construction Schedule, the Plans, the scope of the Work, the Actual Cost of a Facility or amount due to ICDC and no extension of time unless such change in time, Plans, Work or cost is set forth on an Approved PCOW. A design revision or construction change order or increase in the quantity of any unit price item over the bid quantity involving the Facilities shall be considered null and void for purposes of reimbursement hereunder unless approved in writing by both the Director and the ICDC Representative. 2.4.2 Changes to Plans. City and ICDC agree that if, during design or construction, the City requests or initiates any revision to the Plans, or if any such revision to the Plans as a result of such City request also requires changes to the Sewer Plans, then the cost of any such revision to the Plans (and, if applicable, the Sewer Plans) shall be borne by the City. In such event, the City will promptly furnish ICDC with copies of any proposed design revisions to the Plans and the Parties shall process a PCOW to address the impacts of any such change in the Plans (and, if applicable, the Sewer Plans) on the cost of Work and the Construction Schedule. ICDC shall not modify the Plans without first obtaining the City's prior approval of such modification. In the event of any changes to the Sewer Plans for the Non - Parcel Site or the Plans prepared by the City for the Facilities -- whether as a result of the change to the Plans requested by the City or a change to the Sewer Plans initiated by ICDC or carried out pursuant to Section 2.3.9 -- ICDC shall provide a copy of the proposed change to the Sewer Plans to City for review and comment in accordance with Section 2.3.9 prior to initiating any Work related to such change. 2.4.3 Constructability Review. ICDC represents and warrants that it has visited and examined the land upon which the Developer Backbone Improvements and the IRWD Tustin ICDC Reimbursement 05- 29- 2013(2).docx 14 City of Tustin/ Irvine Community Development Company LLC Reimbursable Facilities will be performed (the "Site "), that it has examined all physical, legal and other conditions affecting the Work and that it has become sufficiently familiar therewith to perform the Work. In addition, ICDC has reviewed the Plans and Sewer Plans for the constructability thereof from a cost and schedule perspective. The City shall rely on its own design professionals to ensure that the Plans conform to Site conditions and engineering practices consistent with the standard of care followed by licensed engineers in the design of similar improvements in Orange County, California. Section 2.5 Bonding Requirements 2.5.1 Provision of Bonds, Terms. Prior to the commencement of construction of each Facility, ICDC shall secure and provide to the City a Payment Bond for such Facility to ensure payment of all Subcontractors, Sub - subcontractors, laborers and material suppliers with respect to such Facility. In addition, ICDC shall obtain from each Subcontractor to whom a Construction Contract is awarded for each Facility (and, if required by IRWD, for each IRWD Reimbursable Facility), a Performance Bond to ensure completion of the performance of the Work on each such Facility (and, if required, each IRWD Reimbursable Facility). The Payment Bond for each Facility that is delivered to the City by ICDC or any Subcontractor shall meet the requirements above and shall be substantially in the form of Exhibit N to this Agreement unless otherwise agreed by the City in its sole discretion. The Performance Bond for each Facility that is delivered to the City by each Subcontractor shall meet the requirements above and be substantially in the form of Exhibit O to this Agreement unless otherwise agreed by the City in its sole discretion. Any Performance Bonds provided by ICDC or its subcontractors with respect to the IRWD Reimbursable Facilities shall be on the bond forms required by IRWD. 2.5.2 Additional Requirements. Each bond for a Facility shall be (a) in an amount that is at least equal to 100% of the amount of the bid approved by the City pursuant to Section 2.3.3, or (b) if bids have not been received, in an amount equal to the amount of the engineer's estimate for the Facility being bonded, including reasonable contingency. Each bond for a Facility provided shall, unless otherwise agreed by the City in its sole discretion, be issued by a surety company duly authorized to issue such bonds in the State of California and rated "A" or better by A.M. Best and name the City as a covered obligee thereunder. Further, if Performance Bonds are required by IRWD for any IRWD Reimbursable Facility, ICDC shall assure that such Performance Bonds name IRWD and the City as covered obligees thereunder. Without the prior written approval of the City in its sole discretion each Payment Bond and Performance Bond delivered to the City with respect to the Facilities shall not be terminated or modified in any respect prior to the Acceptance Date of the Facility for which it was provided. 2.5.3 Increase in Security. To the extent that the cost of any Facility (or, if applicable, IRWD Reimbursable Facility) is determined at any time by the Director to have increased such that the Payment Bond or any Performance Bond provided pursuant to this Section is less than the then- estimated cost to complete such Facility (or, if applicable, IRWD Reimbursable Facility), the City may, in its sole discretion, require ICDC to (a) post a replacement Payment Bond to secure such estimated additional costs, or (b) obtain from its Subcontractor a replacement Performance Bond to secure such estimated additional costs. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 15 City of Tustin/ Irvine Community Development Company LLC 2.5.4 Bond Costs. Actual Costs for each Facility shall include the cost of the Payment Bond procured by ICDC for such Facility and the cost of Performance Bonds procured by each Subcontractors for each Facility and shall not include the cost of any additional performance or payment bonds that may be required by ICDC, unless otherwise agreed by the City in its sole discretion. 2.5.5 Release of Bonds. Any Payment and Performance Bonds for a Facility or IRWD Reimbursable Facility shall be released (or reduced in amount) only as provided in Section 3.3 below. Section 2.6 Inspection; Completion of Construction 2.6.1 Inspection. The City shall be entitled (a) to inspect, for purposes of observation and comment only, the construction of the IRWD Reimbursable Facilities upon the Non - Parcel Site as it deems necessary to assure compliance with the Plans and the Sewer Plans and (b) to inspect the Facilities as it deems necessary to assure compliance with the Plans, in each case including shop drawing review and material inspection thereof. The City shall have access to all phases of the Work for the Facilities and IRWD Reimbursable Facilities for the purpose of such inspection. The City's personnel shall have access to the Site at all reasonable times for the purpose of accomplishing such inspections. The City will promptly notify ICDC of any portion of the Work that appears not to conform to the Plans or the Sewer Plans. In addition, within five (5) Business Days following receipt of an inspection request from ICDC, the City shall have its inspectors inspect the Work to confirm that such Work is accomplished in accordance with the Plans. The determination of the City as to conformity of the Facilities and the IRWD Reimbursable Facilities on the Non - Parcel Site with the Plans and the Sewer Plans, as applicable, shall be made in the City's sole and absolute discretion. 2.6.2 Notice of Completion. Within fifteen (15) calendar days after the Acceptance Date of each Facility pursuant to the procedures set forth in Section 3.2 below, ICDC shall file with the Orange County Recorder a Notice of Completion, in form acceptable to the Director, pursuant to the provisions of Section 8180 et seq. of the California Civil Code. Section 2.7 Maintenance of Facilities; Transfer of Interest and Warranties Prior to the Acceptance Date of each Facility (and prior to IRWD's acceptance of each IRWD Reimbursable Facility), ICDC shall be responsible for maintaining (or causing the maintenance of) such Facility (or IRWD Reimbursable Facility, as the case may be) in good and proper operating condition, and shall perform (or cause to be performed) such maintenance on the Facility as the Director reasonably determines to be necessary. At such time as ICDC delivers the Request for Acceptance to the Director, ICDC shall also deliver three duplicate originals of an Assignment Agreement substantially in the form of Exhibit D, executed by ICDC and the Subcontractor that constructed the Facility, under which ICDC shall assign to the City all of ICDC's right, title and interest in the completed Facility and all warranties, express or implied, with respect to the Facility (except for an Other IRWD Facility, in which case the title and warranty rights shall be assigned by ICDC to IRWD), including without limitation those provided pursuant to the Construction Contracts(s) and subcontracts for the Facility, effective as of the Acceptance Date, all Tustin ICDC Reimbursement 05- 29- 2013(2).docx 16 City of Tustin/ Irvine Community Development Company LLC in accordance with the procedures set forth in Section 3.2.1. The warranties under each Construction Contract shall be consistent with the terms set forth on Exhibit J unless otherwise agreed by the City in its sole discretion and shall be in effect for a term of not less than one year from the Acceptance Date of each Facility accepted by the City, except that landscaping warranties shall have a term of no less than one hundred and twenty (120) days from the Completion of such Work. ICDC shall have no maintenance responsibilities with respect to such Completed Facility after the Acceptance Date. Section 2.8 Insurance Requirements 2.8.1 Insurance Types and Levels of Coverage. ICDC shall either obtain and maintain for the term of this Agreement or shall cause each Subcontractor who constructs a Facility or any other improvements on the portion of the Site owned by the City to maintain from the effective date of the Construction Contract until the Acceptance Date of the Facility constructed by such Subcontractor, the insurance specified on Exhibit K in accordance with all requirements specified on said Exhibit. Likewise, each Professional shall be required to maintain from the effective date of the Professional Services Agreement until the Acceptance Date of the applicable Facility for which services were performed, the insurance specified on Exhibit K -1 in accordance with all requirements specified in said Exhibit. ICDC shall not reduce or eliminate the insurance coverages required by Exhibit K and Exhibit K -1 of this Agreement, including without limitation, by reducing the amounts of coverage, increasing the permitted self - insured retention or deductibles or reducing any requirements relating to the insurance carriers, ratings or types of insurance required without the prior written approval of the City, in its sole discretion. 2.8.2 Sub - subcontractor Insurance Requirements. ICDC shall include in its Construction Contract with each Subcontractor the requirement that, in addition to the insurance that Subcontractor must maintain, Subcontractor will not permit any Sub - subcontractors or other Persons to work on the Facility or on the portions of the Site owned by the City until each such Sub - subcontractor or other Person has complied with, the general liability, automobile liability, and workers compensation insurance requirements specified in Section 5 of Exhibit K, including without limitation, the requirement that each Sub - subcontractor or other Person name the City and the other parties specified in said Exhibit as additional insureds on its general liability insurance policy. Likewise, ICDC shall require in its Professional Services Agreement with each Professional that provides services in connection with a Facility the requirement that, in addition to the insurance the Professional must maintain, Professional will not permit any subconsultants or other Persons who provide any portion of such services to commence such services until each subconsultant or other Person obtains and maintains the levels of insurance in accordance with the requirements set forth in Exhibit K -1. 2.8.3 City Right to Procure Insurance. If ICDC fails to cause each Subcontractor to maintain any insurance required hereby, the City may, but shall not be obligated to, procure such insurance and recover the amount of the premiums therefor from ICDC or retain such amount from any monies due to ICDC under this Agreement. The failure of the City to procure any such insurance shall in no way relieve ICDC of any of its obligations under this Agreement. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 17 City of Tustin/ Irvine Community Development Company LLC 2.8.4 No Limitation. ICDC's or any Subcontractor's maintenance of insurance as required by this Agreement shall not be construed to limit the liability of ICDC or the Subcontractor to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or equity. Section 2.9 Liens and Stop Notices 2.9.1 No Liens. ICDC shall keep the Site and all other property owned by the City free from any and all liens relating to the Work. ICDC shall obtain conditional and unconditional lien releases in accordance with applicable provisions of the California Civil Code from all Subcontractor, Sub - subcontractor, vendors, material supplier and other Persons performing any portion of the Work in accordance with the procedures specified on Exhibit L attached hereto. ICDC shall promptly notify the City in the event any Subcontractor, Sub - subcontractor, vendor or material supplier or other Person refuses to deliver any such conditional and /or unconditional waiver and lien release. 2.9.2 Removal of Liens. ICDC shall, within thirty (30) calendar days following receipt of notice thereof. (a) cause to be removed or bonded against (with bonds satisfying California statutory requirements), any and all mechanic's liens, stop notices and bonded stop notices that are recorded or served by ICDC, any Subcontractors or other ICDC Parties in connection with the construction of any Facility or IRWD Reimbursable Facility or other work performed by or on behalf of ICDC or the ICDC Parties, and (b) provide to the Director written evidence acceptable to the Director in his or her sole discretion of the withdrawal of any lien or lis pendens and /or notice of action that has been recorded against the Site as well as against any other property owned by the City in connection with such mechanic's lien claim. Notwithstanding the foregoing, ICDC may contest the amount, validity or application, in whole or in part, of any such mechanic's liens, stop notices and bonded stop notices; subject, however, to the further requirement that neither the Facility or IRWD Reimbursable Facility, nor the Site nor any part or interest in either thereof would be in any danger of being sold, forfeited, attached or lost pending the outcome of such proceedings. If any such contest is finally resolved against ICDC, ICDC shall promptly pay the amount required to be paid, together with all interest and penalties accrued thereon. 2.9.3 Stop Notices. If a stop notice is served upon the City, the City may, until the discharge or bonding thereof, withhold from the moneys under its control so much of said moneys due or to become due to ICDC under this Agreement as shall be equal to one hundred twenty -five percent (125 %) of the amount stated in such stop notice. Any bond filed pursuant to this Section 2.9.3 shall comply with the provisions of California Civil Code Section 9364 and the requirements of Section 2.9.4. 2.9.4 Bond Requirements. Any bond filed with the City to satisfy the requirements of this Section 2.9 shall be issued by a corporate surety authorized to issue security bonds in the State of California in an amount equal to one hundred twenty -five percent (125 %) of the claim stated in the mechanics' lien, material supplier's lien, stop notice or notice to withhold. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 18 City of Tustin/ Irvine Community Development Company LLC Section 2.10 Facility Proiect Coordination With respect to communications regarding PCOWs, bonding, payment requests and all other matters relating to construction of each Facility and IRWD Reimbursable Facility, the City and ICDC designate the following individuals as their respective Project Coordinators: (a) City Representative. Ken Nishikawa, telephone: (714) 573- 3389, e -mail: knishikawa @tustinca.org, shall be the City's representative and contact person. (b) ICDC Representative. Bryan Austin, telephone: (949) 720- 2724, e-mail: baustin @irvinecompany.com, shall be ICDC's representative and contact person. The City and ICDC may, at any time, change their respective representative by providing written notice to the other Party. Section 2.11 Access License Prior to commencement of construction of each Facility and IRWD Reimbursable Facility, City shall (a) provide ICDC with a License or Entry Permit on City's standard form for the land required for the construction of the Facility and /or IRWD Reimbursable Facility on the portions of the Site owned by the City as depicted on Exhibit H to this Agreement, which license shall be in the form set forth in Exhibit I to this Agreement, and (b) obtain for ICDC a right of access for construction of such Facility and /or IRWD Reimbursable Facility on any portions of the Site not owned by the City or Developer. Section 2.12 Warranties and Guarantees ICDC shall include in each Construction Contract a written guarantee for each Facility and IRWD Reimbursable Facility against defects in workmanship and materials for the periods specified in Section 2.7 in the form and substance of the guarantee and warranty provisions set forth in Exhibit J or as otherwise approved by the City in its sole discretion. ICDC shall not reduce or modify the guarantee or warranty coverage provided by such provisions or the time period in which such guarantees or warranties remain in effect without the prior written approval of the Director. The warranties shall remain in effect for a period of one (1) year commencing from the date of Final Acceptance of the Work by the City (or, in the case of landscape improvements, one hundred and twenty (120) days from Completion thereof). Upon Completion of each Facility, ICDC shall provide all warranty paperwork, if any, to the City. No Final Acceptance by the City shall operate as a waiver or release with respect to any warranties applicable to the Work or the Facilities or any rights or remedies pertaining thereto. Section 2.13 IRWD Reimbursable Facilities ICDC hereby acknowledges and agrees on behalf of itself and each Subcontractor and Sub - subcontractor that the City shall have no responsibility or obligation to pay for work, equipment, materials, labor or services performed in connection with the IRWD Reimbursable Facilities. Notwithstanding the foregoing, ICDC acknowledges the integral relationship of the IRWD Tustin ICDC Reimbursement 05- 29- 2013(2).docx 19 City of Tustin/ Irvine Community Development Company LLC Reimbursable Facilities to the Facilities and accordingly agrees to the following with respect to the IRWD Reimbursable Facilities: (a) prior to commencement of construction of the first Facility, ICDC will provide the City with a copy of the reimbursement or other agreement between ICDC and IRWD governing construction of the IRWD Reimbursable Facilities. (b) ICDC shall provide the City with monthly progress reports regarding the status of the work and the schedule for completion of the IRWD Reimbursable Facilities. (c) Subject to the cure period specified in Section 6.1.2 of this Agreement, failure of ICDC to commence construction of and to Complete the IRWD Reimbursable Facilities within the time period set forth in the Construction Schedule as extended (i) by an Authorized Extension, (ii) by a Force Maj eure Delay or (iii) for any other reason expressly permitted by this Agreement, shall be a default by ICDC under this Agreement. (d) Each IRWD Reimbursable Facility shall be constructed in accordance with all requirements of IRWD. Section 2.14 Warner Avenue Street & Median Improvements The Parties acknowledge that ICDC will not be able to Complete all of the Warner Rough Grading & Improvements listed on Exhibit A until the City Completes construction of the Warner Avenue Street & Median Improvements. The City agrees to the following with respect to the construction of the Warner Avenue Street & Median Improvements: (a) Provided that ICDC has completed all portions of the ICDC Pre - Paving Work in accordance with the Construction Schedule, the City shall cause the Warner Avenue Street & Median Improvements (base paving and curb & gutter) to be commenced and completed by the dates set forth in the Construction Schedule on Exhibit F. Thereafter, provided ICDC raises the manhole covers and valves in the Warner Avenue right -of -way by the dates set forth on Exhibit F, the City shall cause the remainder of the Warner Avenue Street & Median Improvements (i.e., the final cap paving, repairs and median landscaping) to be completed by the dates set forth in said Exhibit. Any dates set forth in said Exhibit or in this Section 2.14 are subject to change based on an Authorized Extension, Force Majeure Delay or any other reason permitted by this Agreement. (b) In connection with the City's construction of the Warner Avenue Street & Median Improvements, the City shall be responsible for any damage caused by City's contractors to the Work (including but not limited to the ICDC Pre - Paving Work) or any other property of ICDC or Developer, and shall, within ten (10) Business Days of receipt of substantiation from ICDC of any such damage caused by the City's contractors, meet and confer with ICDC to confirm the extent of the damage for which the City's contractors are responsible and to identify the parties responsible for making repairs. Thereafter, City shall either promptly cause the repair of such damage or after ICDC's repair of any such damage, shall reimburse ICDC for the cost of the repairs paid for by ICDC within thirty (30) days of receipt of ICDC's invoice and backup information substantiating the cost of the repairs. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 20 City of Tustin/ Irvine Community Development Company LLC (c) If the City fails to complete the second phase of the Warner Avenue Street & Median Improvements (which determination shall be made by the Director) by the later of. (i) the date shown on the Construction Schedule for the City's completion of such work, as extended by any time period authorized by Section 2.2.3; or (ii) December 30, 2014 (unless a later date is agreed to in writing by ICDC), and such failure prevents Developer from obtaining certificates of occupancy for any units within the apartment development within the Parcel or from any satisfying any other condition or requirement of the City or other Governmental Authority related to the completion of Warner Avenue or the opening thereof for public traffic, then ICDC shall have the right, as its sole remedy with respect to failure of the City to construct the Warner Avenue Street & Median Improvements, upon ten (10) Business Days prior written notice to the City, to advise the City of ICDC's election to Complete the Warner Avenue Street & Median Improvements. In such event, the City shall reimburse ICDC for its costs to Complete such improvements within thirty (30) days of City's receipt of ICDC's invoice and backup information substantiating the costs of Completing such improvements. (d) ICDC acknowledges that after the completion of first phase of the Warner Avenue Street & Median Improvements, ICDC shall be responsible for completing the remainder of the Warner Avenue Rough Grading & Improvements (that is, installing sidewalks, street lights and the traffic signal at the intersection of Warner Avenue and Legacy Road), prior to ICDC's submission of a Request for Acceptance of such Facility by the City, and such Work shall be performed in accordance with the time for such performance set forth in the Construction Schedule. Section 2.15 Disclaimer of Responsibility With respect to the Sewer Plans and all improvement plans in connection with the Work not prepared or caused to be prepared by the City, the City hereby disclaims all responsibility therefor, including, without limitation, any duty to ICDC, IRWD or any other Person to review or inspect any matter in connection with the design, development or construction of such Work whether regarding the quality, adequacy or suitability of improvement plans, any labor, service, equipment or material furnished for development of the Work, any Person furnishing same, or otherwise . The review by the City of any design submittals shall not constitute the assumption of any responsibility by, or impose any liability upon, the City as to the accuracy, efficacy, sufficiency or legality thereof nor decrease or diminish any liability, duties, responsibilities, or obligations of ICDC under this Agreement or otherwise. The provisions of this Section shall survive the termination of this Agreement. ARTICLE III ACQUISITION OF FACILITIES Section 3.1 Transfer of Ownership of Facilities to City Upon Completion of each Facility, ICDC shall transfer such Facility (other than for the Other IRWD Facilities that will be conveyed by ICDC to IRWD) to the City in accordance with the terms and conditions of this Article III. To the extent that any Facilities to be transferred are located Tustin ICDC Reimbursement 05- 29- 2013(2).docx 21 City of Tustin/ Irvine Community Development Company LLC on land owned by Developer, ICDC shall coordinate with Developer so that easements for any such Facilities located on Developer -owned land are conveyed to the City on the Acceptance Date of each Facility. Ownership of each Facility shall be transferred to the City as of the "Acceptance Date" of such Facility, which shall be memorialized in the Assignment Agreement provided by ICDC to the City in accordance with the requirements of Section 2.7 and Section 3.2.1. ICDC shall be responsible for maintenance of each Facility in a good and operable condition until the Acceptance Date and shall deliver the Facilities to the City in good and operable condition. Notwithstanding the fact that some or all of the Facilities may be constructed in dedicated street rights -of -way or on property that is not owned by ICDC, each Facility shall be and remain the property of ICDC until title thereto or ownership thereof is conveyed as provided herein. With respect to the IRWD Facilities, each IRWD Facility shall be conveyed by ICDC directly to IRWD; provided, however, that (a) with respect to each Other IRWD Facility, such Other IRWD Facility shall not be conveyed until the Acceptance Date of the Facility on the Site within which the Other IRWD Facility is located and City has reimbursed ICDC for the cost of such Other IRWD Facility, and (b) with respect to the IRWD Reimbursable Facilities, each such IRWD Reimbursable Facility shall be conveyed by ICDC to IRWD on the Acceptance Date of the Facility on the Site within which the IRWD Reimbursable Facility is located provided that IRWD has reimbursed ICDC for the cost of such IRWD Reimbursable Facility. Further, in the event that an easement is required for any IRWD Facility that has been Completed on land owned by the City, the City shall convey to IRWD an easement for the operation and maintenance of such IRWD Facility in the form mutually acceptable to IRWD and the City. Section 3.2 City Acceptance Process 3.2.1 Request for Acceptance. Pursuant to Section 2.6, at such time as the City's inspectors are satisfied that a Facility has been completed in accordance with the Plans therefor, ICDC shall provide written notice to the Director in the form of a "Request for Acceptance" substantially in the form of Exhibit E, in accordance with the following process: (a) Information Provided with Request. ICDC shall deliver to the Director: (i) a complete fully executed Request for Acceptance of such Facility, together with all attachments referenced therein to be included with such request; (ii) as -built drawings and one (1) copy of the Subcontractor's redlined set of "record" drawings (showing all revisions as required by the City or IRWD, as applicable) and one (1) copy of the compaction reports and certificate for the Facility trench zones, survey notes and cut sheets; (iii) lien releases in accordance with the procedures set forth on Exhibits E and L attached hereto; (iv) a final accounting of the Actual Cost incurred in constructing the Facility, together with supporting receipts and documentation; (v) if an Other IRWD Facility or an IRWD Reimbursable Facility is located within the Site where the Facility is located, a copy of a letter of acceptance or other proof that IRWD has accepted or is prepared to accept such Other IRWD Facility or IRWD Reimbursable Facility, as the case may be; and (vi) three duplicate originals of the Assignment Agreement for the Facility signed by ICDC and the Subcontractor, with the effective date left blank in Section 2 of said Assignment Agreement for completion as provided in clause (c) below. (b) Review of Information by Director, Final Approved Cost. Upon receipt of a complete and fully executed Request for Acceptance (and accompanying Tustin ICDC Reimbursement 05- 29- 2013(2).docx 22 City of Tustin/ Irvine Community Development Company LLC documentation and such other documentation related to the Work as the Director may reasonably request) for a Facility, the Director, acting in a Governmental Capacity, shall conduct a final review of the Request for Acceptance and accompanying documentation specified in subsection (a) above and this subsection (b) in order to: (i) confirm that such Facility was constructed in accordance with the Plans and has been Completed; (ii) examine the final accounting provided by ICDC and verify and approve the Actual Cost and the Final Approved Cost of such Facility; (iii) confirm that all information provided with the Request for Acceptance is accurate; (iv) confirm that any mechanic's and material supplier's liens filed in connection with construction of the Facility have been removed and the statutory time periods for filing of any such liens has expired; (v) confirm that the lien releases as described in Sections 2.9.1 and 3.2.1 a have been delivered by ICDC; and (vi) if applicable, confirm that IRWD has accepted or is prepared to accept the Other IRWD Facility or IRWD Reimbursable Facility located within the Site where such Facility was constructed. ICDC agrees to cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. The City agrees to cause the Director to commence such review within ten (10) Business Days of receipt of such Request for Acceptance and to thereafter complete such review without unreasonable delay (and in any event, within thirty (30) days of the Director's receipt of a fully complete and executed the Request for Acceptance together with all attachments referenced therein to be included with such request). If the Director determines that the Actual Cost specified in such Request for Acceptance exceeds ICDC's actual costs to construct the Facility as verified by the supporting information provided by ICDC or contains any amounts not included in the definition of Actual Cost contained in Section 1.1 (e.g., the Construction Cost of the Facility exceeds the Contract Price for the Facility as modified by any cost changes as set forth in any Approved PCOW), then ICDC shall either (A) meet with the Director to provide information why ICDC believes the Director's determination is in error and resolve such discrepancy to the Director's satisfaction, in the Director's sole discretion or (B) resubmit such Request for Acceptance with the Actual Cost specified therein modified so as to take into account such determination by the Director. The final Actual Cost approved by the Director for such Facility (the "Final Approved Cost ") shall be the Actual Cost for that Facility used in connection with any payments made by City and for all other purposes set forth in Article IV below. The Director shall notify ICDC of the Final Approved Cost of the Facility in the completed Request for Acceptance returned to ICDC. (c) Final Acceptance by City; Acceptance Date. Upon (i) approval by the Director of the items specified in clause (b) above (including verification of IRWD's letter of acceptance or similar proof that any IRWD Reimbursable Facility or any Other IRWD Facility located within the Site are acceptable to IRWD), and (ii) approval by the City Council of the Request for Acceptance with respect to each Facility, the Director shall execute and issue the final acceptance of each Completed Facility. The "Acceptance Date" of each Facility shall be the date when all of the following have been deemed complete to the satisfaction of the Director acting in a Governmental Capacity: (i) the Director has completed its review of the Request for Acceptance and accompanying documentation; (ii) the Director has confirmed that all information provided with the Request for Acceptance is accurate and that the Facility has been constructed in accordance with the Plans therefor and is Completed; (iii) the Director has verified the final accounting provided by ICDC and provided the Final Approved Cost for the Facility to Tustin ICDC Reimbursement 05- 29- 2013(2).docx 23 City of Tustin/ Irvine Community Development Company LLC ICDC; (iv) any mechanic's and material supplier's liens filed in connection with construction of the Facility have been removed and the statutory time periods for filing of any such liens has expired; (v) the Director has confirmed that the lien releases as described in Section 2.9.1 and 3.2.1(a) have been delivered by ICDC; (vi) if applicable, the Director has confirmed that IRWD has accepted or is prepared to accept the Other IRWD Facility or IRWD Reimbursable Facility located within the Site where such Facility was constructed; (vii) the City Council has approved the Request for Acceptance with respect to each Facility, and (viii) the Director has approved the Assignment Agreement for the completed Facility. Upon the Acceptance Date with respect to each Facility, the Director shall (A) sign the Request for Acceptance and insert the Final Approved Cost and the Acceptance Date of the Facility in the "Approval by City" section of the signed Request, (B) sign the three duplicate originals of the Assignment Agreement and insert the Acceptance Date in Section 2 thereof, and (C) return the fully completed and signed Request for Acceptance and two fully completed and signed duplicate originals of the Assignment Agreement to ICDC; provided, however, that with respect to each of the IRWD Facilities, no such Assignment Agreement shall be signed by the City as such assignment of warranties shall be provided directly by ICDC to IRWD. (d) ICDC Actions Upon Receipt of Approved Request. Upon ICDC's receipt of the documentation described in clause (c) above from the City, ICDC shall, within ten (10) days of receipt of such documents, (i) return one fully signed duplicate original of the Assignment Agreement to the Subcontractor so that the Subcontractor is aware that its warranty obligations under the Construction Contract for the Facility have been transferred to the City as of the Acceptance Date, and (ii) with respect to each of the IRWD Facilities, provide an Assignment Agreement of Subcontractor's warranties directly to IRWD pursuant to ICDC's standard procedure with IRWD. 3.2.2 Facilitv Modifications. ICDC shall not make modifications in the composition of any Facility without the City's prior written approval (and with respect to any IRWD Reimbursable Facility, without the prior written approval of IRWD). Section 3.3 Release of Bonds Notwithstanding any other provision of this Agreement, any Performance Bonds and Payment Bonds provided to the City as security under this Agreement for the construction of any Facility will be released upon the Acceptance Date of each Facility, provided that the City shall retain ten percent (10 %) of the Performance Bond (or accept, in its sole discretion, a separate replacement bond to cover the warranty) to guarantee such Facility will be free from defects due to faulty workmanship or materials for the period of any warranty assigned to the City pursuant to an Assignment Agreement as described in Section 3.2.1. ARTICLE IV PAYMENTS, REIMBURSEMENT PROCEDURES AND RECONCILIATION Section 4.1 Progress Payments for Facilities 4.1.1 Proiect Fair Share Contribution. Under the terms of the DDA as amended, Developer is obligated to pay to the City the Project Fair Share Contribution at close of escrow for acquisition of the Parcel. Upon its receipt of the Project Fair Share Contribution, the Tustin ICDC Reimbursement 05- 29- 2013(2).docx 24 City of Tustin/ Irvine Community Development Company LLC City shall establish a separate account in the City's accounts, books and records in the amount of Five Million Dollars ($5,000,000.00) until the earlier of the Acceptance Date for all of the Facilities or the termination of this Agreement (the "Fair Share Earmark Account "). The money in the Fair Share Earmark Account shall be used for reimbursement payments from the City to ICDC for Actual Costs incurred by ICDC in connection with construction of the Facilities. 4.1.2 Progress Pam. From and after the date of City's receipt of the Project Fair Share Contribution from Developer, on a monthly basis during the construction of each Facility, ICDC shall submit a request for payment (each, a "Payment Request ") to the City in the form of Exhibit G and the "Invoice and Payment Summary" attached as Exhibit G-1, which Payment Request certifies the amount of the Actual Costs incurred in connection with construction of such Facility during the preceding month (which shall be net of a ten percent (10 %) retention of the estimated value of the Work performed under each Construction Contract), which retention shall be held as retention until Final Acceptance as security for the fulfillment of the obligations of each Subcontractor who performs Work on a Facility), together with such supporting information in accordance with the "Payment Request Submittal Procedures" attached as Exhibit M. Within thirty (30) days of City's receipt of each fully completed and certified Payment Request and supporting information, City shall reimburse ICDC for the Actual Cost shown on the Payment Request and approved by the City. Each Payment Request shall include ICDC's certification of the accuracy of the information set forth in the Payment Request. 4.1.3 Final Accounting and Payment for Facilities. Promptly after Completion of each Facility, ICDC shall complete a Request for City Acceptance and submit such request, along with a final Payment Request and a final accounting of the Actual Costs incurred in Completing such Facility and all other supporting documentation, to the City in accordance with the procedures set forth in Section 3.2.1. In the final accounting of the Actual Costs, ICDC shall include the costs incurred (or reasonably anticipated to be incurred) in connection with maintenance of such Facility between the date of Completion of same and the Acceptance Date. Within thirty (30) days of the Acceptance Date of each completed Facility, the City shall pay ICDC the difference between (a) the Final Approved Cost of such Facility, and (b) the total progress payments for such Facility previously paid by the City to ICDC. If the Final Approved Cost for such Facility shall for any reason be less than the total progress payments previously paid to ICDC by the City for such Facility, ICDC shall promptly and in all events, within thirty (30) days of the determination of the Final Approved Cost for such Facility, reimburse the City for any such difference. 4.1.4 No Payment for Work Prior to Developer Contribution. Based on the timing of the Project Fair Share Contribution as required in the amended DDA, such contribution shall be made prior to ICDC's commencement of construction of each Facility. The City's obligation to reimburse ICDC for any progress or final Payment Request shall not, in any event, be applicable for any work on any Facility commenced by ICDC prior to Developer's payment of the Project Fair Share Contribution to the City. ICDC shall not issue any notice to proceed to any Subcontractor in connection with the Work prior to Developer's payment of the Project Fair Share Contribution to the City. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 25 City of Tustin/ Irvine Community Development Company LLC Section 4.2 Payee. All payments by the City to ICDC pursuant to this Agreement shall be made payable to "Irvine Community Development Company LLC" and sent to Irvine Community Development Company, 550 Newport Center Drive, Newport Beach, CA 92660, Attention: Nicholas Reichert. Section 4.3 Survival of Provisions. The provisions of this Article IV shall survive the termination of this Agreement. ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION Section 5.1 Representation and Warranties of ICDC ICDC makes the following representations and warranties for the benefit of the City: (a) Organization. That it is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, is authorized to conduct business and is in good standing under the laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated. (b) Authority. That it has the power and authority to enter into this Agreement, and has taken all actions necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered on behalf of ICDC. (c) Binding Obligation. That this Agreement is a valid and binding obligation of ICDC and is enforceable against ICDC in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights in general and by general equity principles. (d) No Legal Impediment. That it is not aware of any legal impediment that would make infeasible ICDC's proceeding with and completing the construction of the Facilities or the IRWD Reimbursable Facilities. Section 5.2 Covenants of ICDC ICDC makes the following covenants for the benefit of the City: (a) Completion of Facilities. ICDC covenants that it will use its reasonable and diligent efforts to do all things that may be lawfully required of it in order to cause the Facilities and the IRWD Reimbursable Facilities to be completed in accordance with this Agreement. (b) Compliance with Laws. ICDC covenants that in carrying out its obligations under this Agreement and in constructing the Facilities and the IRWD Reimbursable Facilities, it shall, and shall cause its Subcontractors and all Sub - subcontractors to comply with all Tustin ICDC Reimbursement 05- 29- 2013(2).docx 26 City of Tustin/ Irvine Community Development Company LLC applicable Governmental Requirements. During the period while the Facilities and IRWD Reimbursable Facilities are owned by ICDC or required to be maintained by ICDC pursuant to this Agreement, ICDC will not commit, suffer or permit any of its agents, employees or Subcontractors to commit any act to be done in, upon or to the Facilities or any IRWD Reimbursable Facilities in violation of any applicable Governmental Requirement. In addition, with respect to any Work performed on the Parcel, ICDC shall comply with the applicable provisions of the Special Restrictions. (c) Request for Acceptance. ICDC covenants that (i) it will not request payment from the City under this Agreement for the acquisition of any improvements that are not part of a Facility, and (ii) it will diligently follow all procedures set forth in this Agreement with respect to each Request for Acceptance for a Completed Facility. (d) Financial Records. Until the Acceptance Date of each Facility, ICDC covenants to maintain proper books of record and account for the Facilities and all costs related thereto for which ICDC requests reimbursement from the City. ICDC covenants that such records will be available for inspection by the City within a reasonable time after the City submits a written request to ICDC requesting that such records be made available for inspection. (e) Environmental Matters Relating to Facilities. ICDC covenants that neither ICDC, nor the Subcontractor and other Persons retained by ICDC to construct any Facility or IRWD Reimbursable Facility, will use, generate, manufacture, procure, store, release, discharge or dispose of (whether accidentally or intentionally) at any time on or prior to the later of the Acceptance Date of each Facility or the date of acceptance of the IRWD Reimbursable Facility by IRWD any Hazardous Materials on, under or in such Facility or any IRWD Reimbursable Facility or the Site, or transport (whether accidentally or intentionally) any Hazardous Materials to or from such Facility or IRWD Reimbursable Facility or the Site, in violation of any federal, State or local law, ordinance, regulation, rule or decision regulating Hazardous Materials in effect at the time of such use, generation, manufacturing, procurement, storage, release, discharge, disposal or transportation, other than for any Hazardous Materials that may be contained in the materials or components of the Facility or IRWD Reimbursable Facility as required by the Plans or the Sewer Plans. (f) Permits. ICDC covenants that it will obtain all governmental or other permits required to proceed with the construction of the Facilities and the IRWD Reimbursable Facilities and that it will pay all fees relating thereto that are required to be paid, which permit fees for Facilities shall be included in the Actual Cost of each Facility for which the City is responsible to reimburse ICDC. Section 5.3 Representations and Warranties of the City The City represents and warrants for the benefit of ICDC that the City has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered on behalf of the City and that it is a valid and binding obligation of the City and is enforceable against the City in accordance with its terms. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 27 City of Tustin/ Irvine Community Development Company LLC Section 5.4 Indemnification by ICDC 5.4.1 Indemnification and Other Obligations. ICDC shall protect, indemnify, defend (with counsel reasonably acceptable to the City) and hold the City and its elected and appointed officials, employees, consultants, contractors and agents (the "City Indemnitees ") harmless from and against any and all Claims, whether incurred by or made against or recovered or obtained from the City or any of the City Indemnitees or any combination thereof, that arise as a result of or by reason of or as a consequence o£ (a) the construction, installation or maintenance of the Work or any portion thereof by ICDC or any of the ICDC Parties; (b) the terms of any Construction Agreement or subcontract; (c) the untruth or inaccuracy of any representation or warranty made by ICDC in this Agreement, in any Request for Acceptance or in any certifications delivered by ICDC pursuant thereto; (d) the Release, threatened release, storage, treatment, transportation or disposal of any Hazardous Materials on, under, in, from or to the Site or any other property through the act or omission to act of ICDC or the ICDC Parties (provided, however, that (i) any material or component required by the Plans or the Sewer Plans to be installed in connection with the construction of any Facility or IRWD Reimbursable Facility shall not be considered to be Hazardous Materials even if said Plan- or Sewer Plan- specified material or component contains Hazardous Materials, and (ii) ICDC shall not be obligated under this Section 5.4.1 for the disposal of Hazardous Materials that are taken to a disposal site chosen by the City, which disposal site shall be appropriate for the material to be disposed of and shall, to the extent possible, be a reasonable distance from the Site); (e) any act or omission of ICDC or the ICDC Parties in connection with the construction, installation or maintenance of the Work or any portion thereof, including without limitation noncompliance with any covenants made by ICDC in this Agreement (e.g., failure to comply with any prevailing wage or other provision of Sections 2.2 or 2.3); and (f) any breach by ICDC of any of its representations, warranties, covenants or obligations set forth in this Agreement. If ICDC fails to defend any Claim pursuant to its obligations hereunder, the City shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any third party fees or costs paid for by the City (including but not limited to bills from the City's contract City Attorney related to this Agreement), to and recover the same from ICDC. 5.4.2 Limitations on Section 5.4.1 Obligations. Notwithstanding the foregoing, ICDC shall not have any obligations under Section 5.4.1 to the extent that any Claim arises as a result of or by reason of or as a consequence o£ (a) the negligent preparation of the Plans for any Facility or IRWD Reimbursable Facility provided to ICDC by the City; (b) the use or operation of a Facility or IRWD Reimbursable Facility after the Acceptance Date of the Facility or the acceptance of an IRWD Reimbursable Facility by IRWD, unless such Claim results from (i) defective Work or the defective or improper construction or installation of the Work on such Facility or IRWD Reimbursable Facility or (ii) maintenance of the Work or any Facility or IRWD Reimbursable Facility prior to the Acceptance Date; (c) to the extent required by California Civil Code Section 2782, the active negligence or willful misconduct of any of the City Indemnitees; (d) any breach by the City of any of its representations, warranties, covenants or obligations set forth in this Agreement; or (e) any pre- existing condition, pre- existing circumstance or pre- existing Hazardous Material on the Site or any adjoining property provided that ICDC and /or the ICDC Parties do not cause any additional Release of such pre- existing Hazardous Material. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 28 City of Tustin/ Irvine Community Development Company LLC 5.4.3 Survival. The provisions of this Section 5.4 shall survive the termination of this Agreement until the expiration of the applicable statute of limitations for such Claims. Section 5.5 Indemnification by City 5.5.1 Indemnification & Other Obligations. The City shall protect, indemnify, defend (with counsel reasonably acceptable to ICDC) and hold ICDC, and all Persons controlling or controlled by such entity, together with their respective owners, shareholders, partners, members, divisions, officers, directors, employees, representatives and agents (the "ICDC Indemnitees "), harmless from and against any and all Claims, whether incurred by or made against or recovered or obtained from any of the ICDC Indemnitees, that arise as a result of or by reason of as a consequence of either or both (a) the Plans prepared by or on behalf of the City, and (b) any breach by the City of any of its representations, warranties, covenants or obligations set forth in this Agreement, subject to the limitations in Section 6.3 below. Notwithstanding the foregoing, in the event that the defense of a Claim requires that multiple ICDC Indemnitees be defended concurrently, the City shall be permitted to satisfy its defense obligations hereunder through the use of a single counsel reasonably acceptable to ICDC. 5.5.2 Limitations on Section 5.5.1 Obligations. Notwithstanding the foregoing, the City shall not have any obligations under Section 5.5.1 to the extent that any Claim is caused by or as a result of (a) the performance of the Work by ICDC or the ICDC Parties that is not as a result of negligence in the preparation of the Plans provided by the City, (b) the maintenance of the Facilities or IRWD Reimbursable Facilities by ICDC or the ICDC Parties prior to the Acceptance Date, (c) the use, generation, treatment, manufacture, procurement, storage, transportation, Release and /or threatened Release of any Hazardous Materials on, under, in, from or to the Site caused by ICDC or the ICDC Parties in connection with the construction of the Facilities or the IRWD Reimbursable Facilities other than for any Hazardous Materials that may be contained in the materials or components of the Facility or IRWD Reimbursable Facility as required by the Plans or the Sewer Plans (provided, however, that ICDC shall not be deemed a generator of Hazardous Materials or responsible for any Hazardous Materials not brought onto the Site by ICDC or the ICDC Parties so long as ICDC disposes of same at a disposal site chosen by the City, which disposal site shall be appropriate for the material to be disposed of and shall, to the extent possible, be a reasonable distance from the Site), (d) the active negligence or willful misconduct of ICDC or any the ICDC Parties, or (e) any breach by ICDC of any of its representations, warranties, covenants or obligations set forth in this Agreement. 5.5.3 Survival. The provisions of this Section 5.5 shall survive the termination of this Agreement until the expiration of the applicable statute of limitations for such Claims. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 29 City of Tustin/ Irvine Community Development Company LLC ARTICLE VI REMEDIES; TERMINATION; DAMAGES Section 6.1 Termination for Cause by City 6.1.1 Grounds for Termination for Cause by Ci1y. The following events shall be deemed "Cause" for termination and shall constitute grounds for the City, at its option, to terminate this Agreement for Cause: (a) Voluntary Bankruptcy. Fig. ICDC shall voluntarily file for reorganization or other relief under any Federal or State bankruptcy or insolvency law; (b) Involuntary Bankruptcy Filing. ICDC shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of ICDC; (c) Abandonment of Construction. Except to the extent that ICDC's obligation to construct the Facilities is suspended by an Authorized Extension or delayed as a result of failure by the City to complete any backbone infrastructure facilities for which it is responsible, ICDC shall abandon or substantially suspend construction of the Facilities or any IRWD Reimbursable Facilities for a period of one hundred and eighty (180) consecutive calendar days; provided, however, that the foregoing period shall be tolled for each of the following time periods: (i) the time elapsed between ICDC's completion of the ICDC Pre - Paving Work and the completion by the City of the first phase of the Warner Avenue Street & Median Improvements described in Section I of Exhibit F and (ii) the time elapsed between ICDC's completion of the raising of manhole covers and valves with respect to the Warner Avenue Facility and the date the City completes the Warner Avenue Street & Median Improvements (which determination shall be made by the Director). (d) Material Breach of Agreement. ICDC shall breach any material covenant or default in the performance of any material obligation required of it under this Agreement, or any representation or warranty of ICDC set forth herein or in any certifications delivered by ICDC hereunder shall prove to have been false or misleading in any material respect when made or deemed made; (e) Failure to Commence Construction or Diligently Prosecute to Completion. ICDC shall fail to commence construction of each Facility and IRWD Reimbursable Facility in accordance with the Construction Schedule attached as Exhibit F, or, subject to a Force Majeure event or an Authorized Extension or a delay resulting from City's failure to construct the Warner Avenue Street & Median Improvements within the time periods set forth on Exhibit F (as extended pursuant to the provisions of this Agreement), ICDC shall fail to diligently prosecute the construction of each Facility and IRWD Reimbursable Facility to completion in accordance with the Construction Schedule and, as applicable, the Plans and the Sewer Plans. (f) Default or Failure to Pay under Construction Contracts. ICDC shall default in its obligations under the Construction Contracts or shall fail to pay Subcontractors for materials and labor in a timely manner in accordance with the Construction Contracts; Tustin ICDC Reimbursement 05- 29- 2013(2).docx 30 City of Tustin/ Irvine Community Development Company LLC (g) Assignment Without Consent. ICDC shall transfer any of its rights or obligations under this Agreement, without the prior written consent of the City; or (h) Failure to Complete. ICDC shall fail to Complete the Facilities and the IRWD Reimbursable Facilities by the time set forth in the Construction Schedule as the same may be extended for the reasons provided in subsection (e) above. 6.1.2 Termination for Cause, Cure Rights. If the City intends to terminate this Agreement as a result of the occurrence of any event listed in Section 6.1.1 (i.e., for "Cause "), the City shall first notify ICDC in writing of such intention and of the grounds for such termination. With respect to any notice of termination for Cause delivered by the City pursuant to Section 6.1.1 (c) through (h), ICDC shall have twenty (20) Business Days after the date such notice is received or deemed to be received to eliminate or mitigate to the satisfaction of the City the grounds for such termination or if such cure cannot be reasonably accomplished within such twenty (20) Business Day period, shall have a total of ninety (90) calendar days after the date the notice of default is received or deemed to have been received by ICDC to complete such cure, but only if ICDC has commenced such cure within such twenty (20) Business Day period and diligently pursues such cure to completion, or shall have such longer period of time as may be expressly agreed by the City in its sole discretion. If, at the end of the applicable cure period (or any extension thereof), ICDC has not eliminated or completely mitigated such grounds for termination to the satisfaction of the City, the City may then terminate this Agreement for Cause by delivering a written notice of such termination to ICDC. The City shall have the right to terminate this Agreement for Cause upon provision of written notice to ICDC upon the occurrence of either of the events described in Section 6.1.1 a or b) and without cure period provided to ICDC. 6.1.3 City Termination Rights. Upon termination for Cause, the City may, but shall not be obligated to, do any or all of the following: (a) take possession of the Site and all of the materials, equipment, tools and construction thereon; (b) acquire any Facility that has not been Completed prior to the termination date; (c) Complete the Work or any portion thereof by whatever reasonable method the City may deem expedient or complete the acquisition, construction and installation of any Facilities not theretofore acquired from ICDC pursuant to Section 3.2.1 and the City may use all or any portion of the proceeds from the Fair Share Earmark Account or the Performance Bonds to pay for such construction and installation; and /or (d) accept assignment(s) of the Construction Contracts. 6.1.4 City Remedies in Event of ICDC Default. If this Agreement is terminated for Cause by the City pursuant to this Section 6. 1, ICDC shall have no claim or right to any payments for any portion of the Work performed after the termination date, and the City may, at its election, Complete all or any portion of the Facilities, in which event it may use whatever services, materials and equipment it deems appropriate to Complete the Facilities. In addition, if the expense to the City of Completing any Facility together with the amount previously paid to ICDC for performance of Work on such Facility pursuant to this Agreement exceeds the Contract Price for such Facility, then ICDC shall be liable for (a) the cost to Complete such Work in excess of the Contract Price as amended by PCOW and all other amounts due to the Subcontractor with respect to such Work and not then paid and (b) all additional damages, including attorneys', experts' and consultants fees and cost, but excluding anticipatory or unearned profits, suffered by the City as Tustin ICDC Reimbursement 05- 29- 2013(2).docx 31 City of Tustin/ Irvine Community Development Company LLC a result of the termination for Cause by the City. The performance of the Work shall be secured by the Performance Bonds and Payment Bonds. The City shall have all rights and remedies available at law or equity and nothing in this Agreement is intended to limit any legal or equitable rights or remedies of the City in the event of any failure by ICDC to perform the Work as required under this Agreement. 6.1.5 In the event that ICDC shall fail to Complete any IRWD Reimbursable Facilities within the Non - Parcel Site in accordance with the Construction Schedule and in compliance with the terms of the reimbursement agreement between ICDC and IRWD for the IRWD Reimbursable Facilities, ICDC shall cooperate with the City and shall execute all instruments reasonably requested by the City or IRWD to: (a) allow the City to construct the IRWD Reimbursable Facilities on the Non - Parcel Site that have not been Completed within the Non - Parcel Site with whatever services, materials and equipment the City deems appropriate to cause construction of such IRWD Reimbursable Facilities and (b) terminate the reimbursement agreement between IRWD and ICDC with respect to the IRWD Reimbursable Facilities on the Non - Parcel Site that have not been Completed. Section 6.2 Termination of Construction Contracts ICDC acknowledges that time is of the essence with respect to this Agreement and the commencement and completion of construction of the Work. Accordingly, in addition to any other rights of the City under this Agreement, if ICDC is in default of its obligations hereunder, the City shall have the right to require ICDC to terminate any Construction Contract or, at the election of the City, to assign to the City the rights and obligations of ICDC under the applicable Construction Contract, in which event the City may enforce the obligations of the Subcontractor under such assigned Construction Contract. Section 6.3 Remedies in General; Damages Limited ICDC acknowledges that the City would not have entered into this Agreement if it were to be liable for significant damages under or with respect to this Agreement. Consequently, except for (a) monetary damages that may arise from the City's indemnity obligations referenced in Section 5_5; (b) a breach of the City's representations and warranties contained in Section 5.3, provided, however, that the amount of any damages payable pursuant to this clause (b) shall be the lesser of (i) actual damages, or (ii) One Million Dollars ($1,000,000) less the amount of any Claim awarded to Developer for a breach of a representation or warranty by the City under the DDA (or ultimately determined by the trier of fact or in the course of settlement to be paid to Developer for a breach of a representation or warranty by the City under the DDA); and (c) the payment of attorney's fees in accordance with Section 7.5 below (which Section references Section 17.2 of the DDA), the City shall not be liable in damages under this Agreement except as set forth in this Section. The limitations on damages set forth in this Section shall not preclude ICDC from seeking payment for amounts that the City is obligated to pay to ICDC pursuant to Sections 4.1 of this Agreement; provided, however, that ICDC shall not be entitled to any damages in addition to the actual amounts owed by the City to ICDC pursuant to this Agreement. The City shall in no event be liable for any expectation, anticipation, indirect, consequential, exemplary or punitive damages. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 32 City of Tustin/ Irvine Community Development Company LLC Section 6.4 Survival. The provisions of this Article VI shall survive the termination of this Agreement. ARTICLE VII NUSCELLANEOUS Section 7.1 Independent Contractor In performing under this Agreement, it is mutually understood that ICDC is acting as an independent contractor, and not as an agent of the City. The City shall not have any responsibility for payment to any Subcontractor, Sub - subcontractor, material supplier, material manufacturer or vendor, or other Persons engaged by ICDC or any Subcontractor or Sub - subcontractor at any tier. Section 7.2 Binding on Successors and Assigns. Neither this Agreement nor the duties and obligations of ICDC hereunder may be assigned to any Person except in connection with an assignment of all of Developer's right, title and interest under the DDA and in such event only to the assignee of Developer with respect to such interest; provided, however, that the foregoing is not intended to prohibit ICDC entering into construction or consulting contracts in connection with the construction of the Facilities or the IRWD Reimbursable Facilities that are in compliance with all requirements of this Agreement. Such assignment shall be subject to consent of the City in accordance with the requirements and standards set forth in the DDA. This Agreement may be assigned by the City to any agency or instrumentality of the City, including the Tustin Public Financing Authority or to the community facilities district issuing public finance bonds for the Facilities, if any, without the prior consent of Developer. The agreements and covenants included herein shall be binding on and inure to the benefit of the permitted assigns and successors -in- interest of the Parties hereto. Section 7.3 Amendments This Agreement may be amended only by an instrument in writing executed and delivered by the City and ICDC. Section 7.4 Counterparts This Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. Section 7.5 Incorporation of DDA Provisions by Reference The provisions of the DDA contained in Sections 17.1 (except that the reference to Section 17.6 in the next to last sentence of Section 17.1 shall be deemed to refer to Section 7.6 below), 17.2, 17.5.1 (except that the reference to Section 17.5.2 contained in the second sentence of said section shall be deemed to refer to Section 6.3 of this Agreement) 17.7 (except as the definition of Force Majeure Delay has been modified as described in Section 1.1 of this Agreement), 17.8, 17.9, 17.13, Tustin ICDC Reimbursement 05- 29- 2013(2).docx 33 City of Tustin/ Irvine Community Development Company LLC 17.16, 17.17, 17.19, 17.20, 17.21 and 17.23.3 are hereby incorporated into this Agreement as though fully set forth in this Article VII and shall be in full force and effect with respect to interpretation of this Agreement, except that any references in said Sections to (a) the term "Agreement" used therein in reference to the DDA shall mean this Agreement, (b) the term "Developer" shall mean ICDC, (c) the term "Schedule of Performance" shall mean the specific time periods for performance of an act as set forth herein, (d) the term "City Manager or designee" shall mean City Manager, the Director, or either of their respective designees, (e) the term "Effective Date" shall mean the date first set forth on page 1 of this Agreement, and (f) the term "Attachments" shall mean the Attachments attached to this Agreement. Section 7.6 Notices Any written notice, demand, consent, request or other communication to be given hereunder to be effective shall be given to the Party entitled thereto under any method specified in Section 17.6 of the DDA except for facsimile transmission to the address set forth below. Any Party hereto may change its address by notifying the other Party of the change of address in writing in the manner specified in said Section. If to City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: Director of Public Works e -mail: dstack @tustinca.org With a copy to: David Kendig Woodruff Spradlin & Smart, APC 555 Anton Boulevard, Suite 1200 Costa Mesa, CA 92626 e -mail: dkendig @wss- law.com If to ICDC: Irvine Community Development Company LLC 550 Newport Center Drive Newport Beach, CA 92660 Attention: Bryan Austin e -mail: baustin @irvinecompany.com With a copy to: THE IRVINE COMPANY LLC 550 Newport Center Drive Newport Beach, CA 92660 Attention: Legal Affairs e -mail: gcnotices @irvinecompany.com Section 7.7 Duplicate Originals This Agreement is executed in two (2) duplicate originals, each of which is deemed to be an original. Tustin ICDC Reimbursement 05- 29- 2013(2).docx 34 City of Tustin/ Irvine Community Development Company LLC Section 7.8 Entire Agreement This Agreement, including the Exhibits attached hereto and the specific sections of the DDA referenced herein, constitutes the entire agreement between the City and ICDC with respect to the subject matter hereof. [Signature Page Follows] Tustin ICDC Reimbursement 05- 29- 2013(2).docx 35 City of Tustin/ Irvine Community Development Company LLC [Signature Page to Reimbursement Agreement] IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. Dated: APPROVED AS TO FORM: : David Kendig, City Attorney Armbruster Goldsmith & Delvac LLP Special Real Estate Counsel to the City LE Amy E. Freilich "CITY" CITY OF TUSTIN, a California municipal corporation an Jeffrey C. Parker, City Manager "ICDC" IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, a Delaware limited liability company R-A L-02 J. David Conley Senior Vice President Jamie Yoshida Assistant Secretary Tustin ICDC Reimbursement 05- 29- 2013(2).docx 36 City of Tustin/ Irvine Community Development Company LLC EXHIBIT A Description of Developer Backbone Improvements and IRWD Reimbursable Facilities (All as further shown in Exhibit A -1 attached to and made part of this Exhibit A) A. Developer Backbone Improvements: No. Facili Reimbursement Source 1. Warner Avenue Rough Grading & Improvements a. Rough Grading (Plans by RBF for City of Tustin R- 1913A) City of Tustin b. Storm Drain (Plans by RBF for City of Tustin D- 1913A) City of Tustin c. Dry Utilities (Plans by Moran Utilities for City of Tustin) City of Tustin d. Domestic Water (Plans by RBF for City of Tustin: IRWD 5724) ** City of Tustin 2. Park Avenue Rough Grading and Improvements a. Rough Grading (Plans by RBF for City of Tustin R -1914) City of Tustin b. Storm Drain (Plans by RBF for City of Tustin D -1914) City of Tustin c. Dry Utilities (Plans by Moran Utilities for City of Tustin) City of Tustin d. Street Improvements (Plans by RBF for City of Tustin R -1914) City of Tustin e. Domestic Water (Plans by RBF for City of Tustin: IRWD 5724) ** City of Tustin f. Traffic Signal Upgrade (Plans by RBF for City of Tustin: TE 534) City of Tustin ** Denotes an "Other IRWD Facility" B. IRWD Reimbursable Facilities: 1. IRWD Reimbursable Facilities In Warner Avenue a. Domestic and Reclaimed Water (Plans by RBF for City of Tustin: IRWD 5725) Irvine Ranch Water District b. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) Irvine Ranch Water District 2. IRWD Reimbursable Facilities In Park Avenue a. Reclaimed Water (Plans by RBF for City of Tustin: IRWD 5725) b. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) 3. IRWD Reimbursable Facilities (Within the Apartment Site Parcel) a. Sewer (Plans by Fuscoe for Legacy Villas LLC: Portion of IRWD 5910) A -1 Irvine Ranch Water District Irvine Ranch Water District Irvine Ranch Water District Ir 0 LLI Ir 1 D Cl) r V < v J `^ W z J wv z mw av /m in W co ry- w m x 0- w 0 W w w n Z � Q Oz n J z Cl) U H w s W o o ° z Z w z «� 0� J 7 , m 0 a K R O N W Fe Fe �^ Fe Fe Fh � r ryry 6 6 o o oaC �NWO Z C Z Z z, O + oz 00 00 0 z 0� � Z +www "s6 "s6 "sue O"3 J N �O $ z I I jo j W V = 0 _U z DO O V Q Q ' N Z V wU V �z T w_ Fn Fn i i 0 001 az2o :z5 �a 33 33�= 3_- w= w s L�GVOH AOV037 0; No .0 No smalm i Q \a� 0 'uZ 2 zw Afift Q � e q A'n � 34Y nw o-a1 0 Np O E° N O � n z 0 31 - 2 3 O ° Sz PP�S�PO�G FJ II � W o o ° z Z w z «� 0� J 7 , 7QU a K R O N W Fe Fe �^ OS s% r ryry 6 6 On GaG 6 On 'Q �NWO Z C Z Z Z y u + N No go go �N oN Z +www o° � J N �O Q ° N - x >N II O j W V = o _U z V Q Q = V wU V OO z Fn Fn i i 0 001 D :z5 �a 33 3 3 u a V az L�GVOH AOV037 0; No .0 No smalm i Q \a� 0 'uZ 2 zw Afift Q � e q A'n � 34Y nw o-a1 0 Np O E° N O � n z 0 31 - 2 3 O ° Sz PP�S�PO�G FJ II � W o o ° z Z � m O z �0 0� J 7 , 7QU a K R J H Z Q cm N W 66 9m OS s% r Z U Z!2 E O % N a � �NWO Z 3 s�1 u �w z N W N Q s o° L�GVOH AOV037 0; No .0 No smalm i Q \a� 0 'uZ 2 zw Afift Q � e q A'n � 34Y nw o-a1 0 Np O E° N O � n z 0 31 - 2 3 O ° Sz PP�S�PO�G FJ II � 0 V1 w = ° fo w o o ° z Z o 3F N tz H 0� 0003 7 0 0 V1 w = ° fo w o o ° z Z o 3F N tz H o O _ Z 7 0 u z O o a K R ° j w N w a Z = r E O % N a � 3 Z 3 = u �w z N J N �O Q - x >N W V = Zw$s z V Q Q = V wU _ ?� ZO ww ° 001 D °° �a = 3 3 u a V w= w 3 V C >G r IV 010 U V J Q Z C0 F- Z ..O � U =0 i0 Q W U N 3 a Q m C a = ° fo w o o ° z o 3F d o z F O u LL u z O o 3n N3AV 771H 03d ZW gz 0$ U w� N O M_ O N W Z D Eff son MOMF 9 EXHIBIT B POTENTIAL CHANGE OF WORK FORM [See attached] CITY OF TUSTIN DATE INITIATED IN FIELD: POTENTIAL CHANGE OF WORK ( "PCOW') ACKNOWLEDGEMENT & VALUE The purpose of this form is to acknowledge a change in work that may impact the Actual Costs and/or Construction Schedule for a Facility constructed per the Infrastructure Construction & Reimbursement Agreement between the City of Tustin and Irvine Community Development Company LLC ( "ICDC "). Upon acceptance, a Change Order will be issued. City of Tustin Reference No.: Subcontractor /Consultant Name: Project: Facility: Contractor: ICDC ICDC's Constr. Mgr: Design Finn: PCOW NO: (ICDC Original PO No. — CO No.) (CO PO No.) If PCOW is for Consultant services during construction, fill in the following information otherwise leave blank: Consultant's Contract No: Consultant's Name: POTENTIAL CHANGE OF WORK: • Work Description: • What Caused the Change: • Why is this Change Outside the Original Contract Scope and Previous Change Orders: • Plan Revision Required? ❑ Y ❑ N If yes, Delta Revision No. Date Approved: • Change in Contract Time? ❑ Y ❑ N If yes: +/- Working Days • Change in Contract Price? ❑ Y ❑ N If yes: +/- $ I. City Inspector: ICDC's Construction Manager has discussed this potential change of work with me. (Signature) (Print Name) 2. ICDC: Reviewed by: Owner Representative / Date 3. City of Tustin: In the City of Tustin's opinion the aforementioned work a. = Does Qualify = Does NOT Qualify as a potential change of work. b. City of Tustin's comments (required if representative does not concur with the potential change): C. CHANGE OF WORK VALUE (with detailed backup attached) d. Recommended by: City of Tustin Representative / Date Date EXHIBIT C FORM OF CONCURRENCE LETTER JRC\30110.0086\443238.7 5/23/2013 C -1 [ICDC Letterhead] [Date] City of Tustin 300 Centennial Way Tustin, CA 92780 Please find enclosed the following Bid /Proposal documents for the [Facility] of the Tustin Legacy Backbone Infrastructure to be constructed by Irvine Community Development Company LLC ( "ICDC ") pursuant to the Infrastructure Construction and Reimbursement Agreement between the City of Tustin and ICDC dated June 4, 2013 ( "Reimbursement Agreement "). 1. Bid Summary for Construction 2. One (1) copy of Subcontractor Bid Submittal 3. One (1) copy of Professional Proposal ICDC recommends award of contracts as follows: CITY PORTION WORK /SERVICE VENDOR NAME PURCHASE ORDER AMOUNT Construction [cmbVendor] [txtPONo] [txtAmount] N/A [cmbVendorl] [txtPONo1] [txtAmountl] Award Total: Please indicate your concurrence of the City's acceptance of the above bid and cost of work/services and that the above - described work is eligible for reimbursement under the Reimbursement Agreement by signing below and returning to me. If you have any questions, please contact me directly at (949) 720 -2560. Sincerely, Michael J. Morse Vice President Copy: Bid File (Task/PC ID: [cmbTaskID].) Finance, Nick Reichert (once signed by Agency) JRC\30110.0086\443238.7 5/23/2013 CITY OF TUSTIN CONCURRENCE By: Name: Title: Date: EXHIBIT D FORM OF ASSIGNMENT AGREEMENT [See attached] Assignment Agreement This ASSIGNMENT AGREEMENT is made as of , 20, by and between IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, a Delaware limited liability company ( "Assignor "), to the CITY OF TUSTIN, a California municipal corporation ( "Assignee ") based upon the following recitals: A. Assignor has previously entered into that certain construction contract relating to construction of (the "Facility ") by and between Assignor and ( "Subcontractor "), a copy of which contract is attached hereto as Attachment 1 (the "Construction Contract "). B. Assignee desires to acquire (i) Assignor's right, title and interest in and to the Facility constructed under the Construction Contract, and (ii) the warranty rights of Assignor as to the Facility under the Construction Contract, and Assignor desires to assign such rights to Assignee. NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements contained herein and other valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. ASSIGNMENT. Effective upon the date specified in Section 2 hereof (the "Effective Date "), Assignor assigns and transfers to Assignee all of Assignor's right, title, claim and interest in and to (a) the Facility constructed pursuant to the Construction Contract, and (b) the warranties and guarantees of Subcontractor as to the Facility constructed pursuant to the Construction Contract. This Assignment is made by Assignor pursuant to the provisions of Section 2.7 of the Infrastructure Construction and Reimbursement Agreement between Irvine Community Development Company LLC and the City of Tustin dated as of June 4, 2013 (the "Reimbursement Agreement "). 2. EFFECTIVE DATE. The Effective Date of this Assignment Agreement shall be , 20__, which is the date that the City has entered as the "Acceptance Date" on the Request for Acceptance referenced in Section 3.2 of the Reimbursement Agreement b or if the assignment is made by reason of default of Assignor under the terms of the Reimbursement Agreement, 20]. IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment Agreement as of the day and year first hereinabove written. ASSIGNOR: IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, a Delaware limited liability company By: _ Name: Title: By: _ Name: Title: (signatures continued on following page) ACCEPTED BY ASSIGNEE: CITY OF TUSTIN, a California municipal corporation By: _ Name: Title: Subcontractor Acknowledgment: By its signature below, Subcontractor acknowledges receipt of notice of this Assignment Agreement, and agrees that all Warranties provided by Subcontractor and its Sub - subcontractors, vendors and material manufacturers and suppliers under the Construction Contract with respect to the Facilities shall be deemed transferred to, and enforceable by, the City of Tustin, effective on the Effective Date of this Assignment. "Subcontractor" By: Name: Title: Date: 20 Subcontractor Address and Contact Information: Telephone: Contractor's License No. JRC\30110.0086\443238.7 5/23/2013 2 Attachment 1 to Assignment Agreement [Attach Copy of Construction Contract Being Assigned] JRC\30110.0086\443238.7 5/23/2013 EXHIBIT E FORM OF REOUEST FOR ACCEPTANCE [See attached) JRC\30110.0086\443238.7 5/23/2013 E -1 REQUEST FOR ACCEPTANCE Irvine Community Development Company LLC ( "ICDC "), hereby requests that the City of Tustin ( "City ") accept the Facility or Facilities described in Attachment A attached hereto in accordance with the procedures contained in Section 3.2 of the Infrastructure Construction and Reimbursement Agreement between the City and ICDC ( "Developer ") dated as of June 4, 2013 (the "Agreement "). Capitalized undefined terms contained in this Request shall have the meanings ascribed thereto in the Agreement. In connection with this Request for Acceptance, the undersigned hereby represents and warrants to the City as follows: 1. ICDC Representative. The undersigned is an ICDC Representative, qualified to execute this request for payment on behalf of ICDC and knowledgeable as to the matters set forth herein. 2. As -Built Plans. ICDC has submitted or submits herewith to the Director as -built drawings or similar plans for the Facilities for which City Acceptance is requested, including as described in Section 3.2.1(al of the Agreement and such drawings or plans and specifications, as applicable, are true, correct and complete. 3. Facility Construction Per Plans. Each of the Facilities described in Attachment A to this Request is "Complete," has been constructed in accordance with the Plans therefor, and in compliance with all applicable City standards, and all applicable federal, State and local laws and the requirements of the Agreement, and the as -built drawings or other plans and specifications referenced in paragraph 2 above. 4. ICDC Actual Cost. The true and correct Actual Cost of each Facility for which City acceptance is requested is set forth in Attachment A. 5. Actual Cost Backup Documentation. In connection with prior Payment Requests, ICDC has previously submitted to the Director invoices, receipts, worksheets and other evidence of costs that are in sufficient detail to allow the Director to verify the cost of each Facility for which City Acceptance is requested. In addition to the maintenance costs reflected in such information, ICDC estimates (based on prior maintenance costs or the quoted monthly maintenance cost charge contained in its maintenance contract for such Facility) that the ongoing maintenance costs for the Facility described herein will cost $ per month until the date of City's acceptance of the Facility. Within thirty (30) days of City's acceptance of the Facility, ICDC and the City will meet and review the actual costs of maintenance incurred that were not paid by the City as part of the Final Approved Cost pursuant to Section 4.1.3 of the Agreement, after which the City shall promptly reimburse ICDC for any shortfall in the cost of maintenance paid to ICDC (or if the City has overpaid for any such maintenance costs when the payment pursuant to Section 4.1.3 was paid, ICDC shall promptly reimburse the City for the amount of any such overpayment). 6. No Liens. There has not been filed with or served upon ICDC notice of any lien, right to lien or attachment upon, or claim affecting the Facility or the acceptance thereof by the City that has not been released or will not be released simultaneously with the payment of such obligation, and all lien releases required pursuant to Exhibit L of the Agreement have been provided to the City. JRC\30110.0086\443238.7 5/23/2013 7. No Event of Termination. No event listed in the Agreement that would trigger a default by ICDC or a right to termination for Cause by the City has occurred and is continuing or will occur upon the making of this Request by ICDC to City. 8. Accuracy of Representations and Warranties. The representations and warranties of ICDC set forth in Section 5.1 of the Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of the date hereof. 9. Hazardous Materials. ICDC represents and warrants that, prior to the date of this Request for Acceptance: (a) neither ICDC, nor any of the ICDC Parties in connection with the Work on any Facility or IRWD Reimbursable Facility or any portion thereof, has (i) used, generated, treated, manufactured, procured, stored, transported or Released any Hazardous Materials (in each case, whether accidentally or intentionally) on, under or in such Facility or IRWD Reimbursable Facility or the Site upon which such Facility or IRWD Reimbursable Facility is located or any other property, other than for any Hazardous Materials that may be contained in the materials or components of the Facility or IRWD Reimbursable Facility as required by Plans or the Sewer Plans, or (ii) transported (whether accidentally or intentionally) any Hazardous Materials to or from such Facility, IRWD Reimbursable Facility, the Site or any other property, in violation of federal, State or local laws governing Hazardous Materials; (b) there is not present on, under or in such Facility or IRWD Reimbursable Facility or the Site upon which such Facility or IRWD Reimbursable Facility is located, or any portion thereof, or any other property, any Hazardous Materials Released by ICDC or any of the ICDC Parties in connection with construction, installation or maintenance of the Facility or IRWD Reimbursable Facility or any portion thereof, except for (x) any types or amounts that do not require remediation or mitigation under federal, State or local laws, ordinances, regulations, rules or decisions, (y) those that have been remediated or mitigated in full compliance with applicable federal, State or local laws, ordinances, regulations, rules or decisions, or (z) those contained in materials or components of the completed Facility or IRWD Reimbursable Facility per the requirements specified in the Plans or the Sewer Plans, and (c) ICDC has not received notice of, and to the best of ICDC's knowledge there is not, any proceeding or formal inquiry by any Governmental Authority with respect to the presence of Hazardous Materials on, under or in the Site, or any structure, fixtures, equipment, or other objects thereon, or the migration thereof from or to other property, arising out of the Work, except as follows: The foregoing is declared under penalty of perjury to be true and correct. IRVINE COMMUNITY DEVELOPMENT COMPANY LLC, a Delaware limited liability company By: _ Name: Title: Date: JRC\30110.0086\443238.7 5/23/2013 2 APPROVAL BY THE CITY (Information to be completed by the City upon approval by the Director) The Final Approved Cost of each Facility listed on Attachment A. as well as the Acceptance Date of same, is as follows: Final Approved Cost of Facility: Acceptance Date of Facility: Date: JRC\30110.0086\443238.7 5/23/2013 3 DIRECTOR OF THE CITY OF TUSTIN Name: Title: Attachment A to Form of Request for Acceptance (Ira formation to be completed by ICDC prior to submittal to the Director) Description of Completed Facility: 2. Actual Cost Incurred by ICDC: $ JRC\30110.0086\443238.7 5/23/2013 4 EXHIBIT F Construction Schedule Facili Responsible Start Completion No. Facility Work to Be Performed Party Date Date 1. Warner Avenue Warner Avenue Rough Grading & Improvements (A. la.- Id. and B. la & lb) ICDC 08/01/13 04/30/14 Warner Avenue Street and Median Improvements City of (Base paving and curb & gutter) Tustin 05/01/14 09/01/14 Warner Avenue (Raise manholes and valves) ICDC 09/15/14 10/15/14 Warner Avenue Street and Median Improvements (Final City of cap paving, repairs, median landscaping) Tustin 10/15/14 12/30/14 Warner Avenue (Install sidewalks, street lights and traffic signal) ICDC 09/15/14 03/01/15 2. Park Avenue Park Avenue Rough Grading & Improvements (A.2(a) -(f) and 13.2(a) & (b)) ICDC 08/01/13 12/30/14 Notes: Each "Start Date" is the latest start date; earlier starts are allowed. Each "Completion Date" is latest completion date; earlier completions are allowed. JRC\30110.0086\443238.7 5/23/2013 F -1 EXHIBIT G FORM OF PAYMENT REOUEST {See attached) JRC\30110.0086\443238.7 5/23/2013 G -1 Payment Request Form Payment Request No. To: City of Tustin From: Irvine Community Development Company LLC ( "ICDC ") Project: Tustin Legacy Backbone Infrastructure Facility Name: This Payment Request is made on , 201 pursuant to Section 4.1.2 of that certain Infrastructure Construction and Reimbursement Agreement between the City of Tustin and ICDC dated June 4, 2013 (the "Reimbursement Agreement ") for the portion of the following Work that was performed in connection with the construction of the above Facility: As to this Payment Request Contractor represents and certifies the following: I. The amount(s) specified in this Payment Request accurately represent the hours of labor performed, the materials supplied and the costs incurred for the portion of the Work described above and have been performed upon or furnished to for the Facility described above. Copies of applicable invoices and other documents evidencing the total amount expended, incurred or due are attached to this Payment Request. 2. To the best of our knowledge, the quantities of units installed in the Facility for the various items of Work described in this Payment Request are accurate. 3. There are no known mechanics' or materialmen's liens outstanding, and all due and payable bills with respect to the Work have been paid or are included in the amount requested in this Payment Request, and all lien releases required pursuant to Exhibit L to the Reimbursement Agreement have been provided. 4. That Work for which payment is requested has passed all inspections and approvals required by any applicable Governmental Authority. 5. Out of the funds received by ICDC under this Payment Request, ICDC agrees to pay all due and payable bills with respect to the Work and to make all contributions or payments required under any labor agreement applicable to ICDC's Subcontractor and Sub - subcontractors. JRC\30110.0086\443238.7 5/23/2013 G -1 6. All Work to date has been performed in accordance with the Plans except as expressly approved by the City of Tustin under an Approved PCOW. 7. There have been no changes in the Work or the Construction Schedule, and no extra Work, labor or materials has been ordered or contracted for, except as expressly approved by the City of Tustin in accordance with the Reimbursement Agreement. 8. All conditions to the payment of this Payment Request as required by the Reimbursement Agreement, including, without limitation, the delivery of all supporting documentation required by the Reimbursement Agreement, have been fulfilled. Dated: Exceptions to the above representations by ICDC: Irvine Community Development Company LLC Name: Title: [Attach Exhibit G -1 (Invoice & Payment Summary)] JRC\30110.0086\443238.7 5/23/2013 G -2 " a z g LL z Y } `o a 03 W W Y U ++ Z_ m c O Y m u c 3 F o z z E a a z o E5 o Z' u_0 u p' u a upi s+ m' U � ©' �I a O o 0 z V � }p}i Z: Z 0 c W lu a a a a a a a a a N z a z a z a z a z a z a z z a z z z w a c.. z z o a o 0 0 0 0 0 o G 0 a 4 5 1 � O > Q Q Q H Q O O o 0 0 0 0 0 0 0 0 z 0 m u m m m m m m 0 m u m Q z O Z 0 0 0 0 0 0 0 0 o 0 0 0 0 7.. m 0 a?' H' Z 0: a 0i p? a .. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 _... 0 0 0 0 0 0 0 0 0 0 0 0 Q z u? u o o C5 C5 C5 C5 C5 C5 o W Q a Q U G m m:? o EXHIBIT H MAP OF ACCESS AND STAGING AREAS [See attached] JRC\30110.0086\443238.7 5/23/2013 H -1 I V z Qo N V Q U 0 N_ a O Q ° 0 °z o 3 Z �? u w o ¢ } Q = V in O m j Z N p ¢ O Z Z ° O '3 W 0 u p w N O J Z m wZ o o a = wQ V w w Zax w 3 0 H cn > N > Z O U co Zo w QO 3 w W Z LL m = 3 ~ Q o a Z_W H Z N i F LL LL F0 8 S U- a 5� �v r»r_� I� Q 3 Y Ct Q i d s m N e • 2 ❑ 7> d �I I V z Qo N V Q U 0 N_ a O Q ° 0 °z o 3 Z �? u w o ¢ } Q = V in O m j Z N p ¢ O Z Z ° O '3 W 0 u p w N O J Z m wZ o o a = wQ V w w Zax w 3 0 H cn > N > Z O U co Zo w QO 3 w W Z LL m = 3 ~ Q o a Z_W H Z N i F LL LL F0 8 S U- a 5� �v r»r_� I� Q 3 Y Ct Q i d s m N e • 2 ❑ EXHIBIT I FORM OF ACCESS AGREEMENT /STAGING AREA LICENSE [See attached] JRC\30110.0086\443238.7 5/23/2013 License No. XX -XXX LICENSE AGREEMENT between THE CITY OF TUSTIN and [Insert Licensee] for the USE OF CERTAIN PREMISES AT TUSTIN LEGACY (FORMER MCAS TUSTIN) (Insert Brief Use Description) From [Insert Start Date] — [Insert Finish Date]* * Unless otherwise specified in Agreement JRC\30110.0086 \443238.7 5/23/2013 I -1 11. GENERAL PROVISIONS 11.1 Licensor hereby grants to the Licensee, [Insert Licensee], a temporary non - exclusive License to use the Premises or facilities described in Section 11.3 of this License XX -XXX, and depicted on Exhibit A hereto. 11.2 This License shall be commence upon the effective date of the License as noted on the cover sheet and shall be cancellable with thirty (30) days written notice from Licensor to Licensee unless Licensee is in Default under the terms of this License in which case the Licensor may immediately terminate this License with written notice to Licensee, without liability to the Licensor. 11.3 The use shall be limited to the purposes specified herein: [Insert Description of Licensed Activities] 11.4 Licensee agrees that it is licensing said Premises in an "as is, where is ", in its present condition and subject to and without liability to Licensor, without any representation, promise, agreement or warrant on the part of the Licensor regarding such condition and state of repair needed for occupancy. The Licensee further acknowledges that the Licensor shall not be liable for any latent or patent defects in the Premises. 11.5 This License shall be neither assignable nor transferable by the Licensee. Licensee shall not, without Licensor's prior written consent, (i) assign, convey, mortgage, pledge, encumber or otherwise transfer (whether voluntarily or otherwise) the Premises, this License or any interest under it; (ii) allow any transfer of or any lien upon Licensee's interest by operation of law; (iii) sublet the Premises or facilities or any part thereof; or (iv) permit the use or occupancy of the Premises or facilities or any part thereof by anyone other than Licensee, employees of Licensee, and its members only. 11.6 No additions to, alterations or improvements of the Premises shall be made by the Licensee without the prior written consent of the Licensor in each and every instance including any required permit approvals from the City of Tustin Community Development and /or Public Works Department. In the event that Licensee desires to perform any work, Licensee shall first submit to Licensor a written description of the proposed work, and if Licensor requires, plans and specifications relating thereto, and obtain Licensor's written approval prior to commencing such work. Any digging or subsurface activities of any kind on the Premises shall also require prior written approval from the Licensor and Department of the Navy, and if applicable, a Grading Permit from the City's Building Division. 11.7 Insurance and Indemnification: 11.7.1 Licensee shall provide, or cause its member(s) or contractor(s) to provide, and maintain at its own expense during the term of this License the following insurance covering all construction proposed and any operations under this License. Such insurance shall be provided with insurers authorized to do insurance business in the State of California, with a rating of at least A- VIII or better according to the latest Best's Key Rating Guide, except that the City will accept Workers Compensation Insurance rated B -VIII or better or from the State Compensation Fund. Evidence of such insurance in the form of Certificates and Insurer endorsements shall be delivered to Licensor as a precondition to JRC\30110.0086 \443238.7 5/23/2013 I -2 Licensor's execution of the License. The Insurer endorsements (or a copy of the policy binder, if applicable) shall specifically identify this License and shall provide: (1) either (i) evidence that Licensee has paid for its premium in full for any policy that is currently in place, or (ii) that said insurance shall not be cancelled except if Licensor is given at least thirty (30) days advance written notice of any cancellation or termination of insurance; (2) commercial general liability insurance shall be primary to and not contributing with any other insurance maintained by Licensor, and shall name Licensor (the City of Tustin), Department of the Navy, and the Successor Agency to the Tustin Community Redevelopment Agency (collectively "City insured parties "), and their respective officers and employees as additional insureds, and shall provide that all losses shall be payable notwithstanding any act or failure to act or negligence of Licensor, or any other person; (3) shall contain a provision that the insurer waives any right of subrogation against the City insured parties which may arise by reason of any payments made under a policy; and (4) if Licensee is self- insured for Workers Compensation, Licensee shall submit to Licensor a copy of its certification of self- insurance. All insurance shall be maintained on an occurrence basis and shall include the following: a. Commercial General Liability Insurance. Commercial general liability and property damage insurance covering the Premises, including automobile liability insurance, contractual, broad form property damage, and bodily injury or death, with a combined single limit of not less than $1,000,000 per occurrence with respect to personal injury or death, and $1,000,000 per occurrence with respect to property damage. If Licensee provides claims made professional liability insurance, Licensee shall also agree in writing (in a separate letter to be attached to this License) to purchase tail insurance in the amount required by this License or to cover claims made within five (5) years of the completion of Licensee's work under this License. Licensee shall provide evidence to Licensor of the purchase of the tail insurance under this License. b. Workers' Compensation Insurance. To the extent that Licensee has employees, workers' compensation insurance in an amount and form meeting all applicable requirements of the California Labor Code, covering all employees of Licensee and all risks to such persons. Deductibles. Any deductibles applicable to any insurance required hereunder shall be in amounts reasonably acceptable to Licensor. Verification of Coverage. The insurer endorsements required herein are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by Licensor before Licensor execution of the License. e. Failure to Obtain Insurance. Failure by Licensee to procure or maintain all required insurance shall constitute an Event of Default, upon which Licensor may immediately terminate this License. Licensee's operations shall be subject to suspension by Licensor during any period Licensee fails to maintain required insurance in full force and effect. 11.7.2 Licensee shall defend, with counsel acceptable to Licensor, indemnify, and save harmless Licensor and its agents and employees from, and shall pay all costs, expenses and reasonable attorney's fees for all trial and appellate levels and post judgment proceedings in connection with, any and all claims and demands, actions, proceedings, losses, liens, costs and judgments of any kind and nature whatsoever, JRC\30110.0086 \443238.7 5/23/2013 I -3 including expenses incurred in defending against legal actions, for death or injury to persons or damage to property and for civil fines and penalties to the extent arising out of the occupation or use of the Premises by Licensee, its employees, agents, servants, guests, invitees, contractors, or sublessees, including the following: a. Any operation conducted upon or any use or occupation of the Premises by Licensee, its officers, agents, or employees under or pursuant to the provisions of this License or otherwise; b. Any act, omission, or negligence of Licensee its officers, agents, or employees; c. The loss of, or damage to any property of Licensee by theft or otherwise; d. Any failure of Licensee, its officers, agents, or employees to comply with the terms or conditions of this License, or any applicable federal, state, regional or municipal law, ordinance, rule or regulation related to the use or occupancy of the Premises. 11.7.3 Notification of Hazardous Substances. License acknowledges and understands that the Licensed Premises may have been used in the past for industrial purposes and that hazardous substances may have been released on and beneath said property. In the Department of the Navy's conveyance of the Premises to the City of Tustin, the Navy provided notice in the Quitclaim Deed G and Environmental Restriction Pursuant to Civil Code Section 1471, that certain hazardous substances may have been stored for one year or more, released or disposed of on the Premises. The type and quantity of such hazardous substances, the time at which such storage, release or disposal took place, to the extent such information is available, and a description of the remediation action taken, if any is contained in Exhibit B of the Quitclaim for Deed Group G. The Licensee acknowledges and agrees that Licensee has reviewed the subject Quitclaim Deed G and all environmental restrictions, covenants and restrictions which shall be binding on any Licensee activities on the Premises. Pursuant to the Quitclaim Deed G, Licensee acknowledges that the Federal Government has the right to access the Premises in any case in which a response or corrective action is found necessary on the Premises or such access is necessary to carry out a response action or corrective action on adjoining property. This Federal Government action may require the Licensor to require that the Licensee vacate the License Premises for such period of time, and to such extent, as the Federal Government may determine in good faith is necessary to abate the danger. Neither the City of Tustin nor the Federal Government shall be liable for the exercise of this authority. The right to enter shall include the right to conduct tests, investigations and surveys, including where necessary drilling, test - pitting, boring and other similar activities. Such right shall also include the right to construct, operate, maintain or undertake any other response or corrective action as required or necessary, including, but not limited to monitoring wells, pumping wells, treatment facilities and the installation of associated utilities. [Delete 11. 7.4 if license area is not within a Navy LIFOC Area] 11.7.4 For the portion of the License Area within the LIFOC Area, Licensee acknowledges that Licensor's rights to the property arise solely under the Lease in Furtherance of Conveyance ( LIFOC) between Licensor and the United States of America executed May 13, 2002. Notwithstanding any provisions of this License, Licensee hereby agree as follows: (1) Licensee shall be bound by and perform all of the terms and conditions to be performed by Licensor under the LIFOC to the extent applicable to the Premises JRC\30110.0086 \443238.7 5/23/2013 I -4 and /or Licensee's occupancy under this License; (2) Licensee shall comply with all covenants and conditions of the LIFOC respecting Licensor's use and occupancy of the Premises; (3) Licensee shall not do or permit anything to be done in or on the Premises which will cause the occurrence of a default by Licensor under the LIFOC; (4) Licensee shall defend, indemnify and hold Licensor harmless from and against any cost, claim, liability, loss or damage occurring by reason of Licensee's breach or default of this License, including, without limitation, the cost of cure, loss of the LIFOC, and any attorneys' fees and disbursements incurred in connection with the foregoing; (5) if the LIFOC expires or is terminated for any reason, including without limitation, any default by the Licensor or United States of America thereunder, or the United States of America's election to exercise any right to terminate, then this License shall thereupon terminate, without any liability to Licensor (unless such expiration or termination is caused by a material default of Licensor under the LIFOC), as if such date were the scheduled expiration date of the term. Licensor shall take all reasonable actions to keep the LIFOC in full force and effect during the term of this License. Notwithstanding the preceding sentence, Licensor shall not be required to initiate any legal action. In the event of any conflict in the Rights of Licensee under this License and the Rights of Licensor under the LIFOC, the terms and covenants of the LIFOC shall control. A copy of the LIFOC is attached as Exhibit C. 11.8 Damage and Destruction; Release: 11.8.1 In the event of damage or loss to any improvements situated on the Premises, Licensee shall take all appropriate steps to erect necessary structures to preclude unauthorized access to the Premises and otherwise mitigate hazardous and unsafe conditions within the Premises caused by the damage and destruction. In the event that damage and destruction to the Premises render the Premises unusable for their intended purposes, this License shall terminate in accordance with applicable provisions herein by written notice to Licensor. In such event, Licensee shall be responsible for removing its property from the Premises including all hazardous materials it brought to the Premises, and for reporting, containing, removing and cleaning up any land, air and water pollution resulting from the damage and destruction which is attributable to Licensee's use of the Premises. Such responsibilities will be carried out by Licensee in a timely manner with due consideration for human health and safety and the protection of the environment. 11.8.2 Notwithstanding anything to the contrary in this Section 11, Licensee acknowledges that Licensor has agreed not to require that Licensee provide and maintain property insurance for the Premises. In consideration therefor, Licensee, on behalf of itself, its members, principals, officers, elected officials beneficiaries, trustees, shareholders, partners, heirs, personal representatives, successors and assigns (collectively, the "Releasing Parties "), as the case may be, hereby waives the right to recover from and fully and irrevocably releases Licensor, its officers, elected officials, employees, consultants, agents, representatives and contractors (collectively, the "Released Parties "), from and against any and all liabilities, claims, demands, damages, losses, claimed or anticipated profits, expenses, disbursements, professionals' or consultants' fees and expenses, obligations, fines, penalties, actions, causes of action, suits and costs, known or unknown, matured or unmatured, including, without limitation, attorneys' fees and costs and expenses of litigation, of every kind and nature (collectively, "Claims ") that each of the Releasing Parties may now have or hereafter acquire arising from or related to the damage or destruction of any improvements located on the Premises, excepting, to the extent required by California Civil Code Section 2782, those Claims which arise from the willful misconduct or the active negligence of a Released Party. This release includes Claims of which the Releasing Parties are presently unaware or which the Releasing Parties do not presently JRC\30110.0086 \443238.7 5/23/2013 I -5 suspect to exist which, if known by the Releasing Parties, would materially affect the Releasing Parties' decision to release the Released Parties. The Releasing Parties specifically waive the protection of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE DEBTOR." In this connection and to the extent permitted by law, the Releasing Parties realize and acknowledge that factual matters now unknown to it may have given or may hereafter give rise to Claims or controversies which are presently unknown, unanticipated and unsuspected, and the Releasing Parties further agree that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that the Releasing Parties nevertheless hereby intend to release, discharge and acquit the Released Parties from any such unknown Claims. LICENSEE HAS AGREED TO ENTER INTO THIS LICENSE AND HAS GIVEN THE RELEASED PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR THE RELEASED PARTIES AGREEING TO THE PROVISIONS OF THIS SECTION 11.8.2 BY INITIALING BELOW, LICENSEE ACKNOWLEDGES THAT (A) IT HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS SECTION 11.8.2, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 11.8.2. LICENSOR LICENSEE 11.9 Licensee will at all times during the use of this License promptly observe and comply, at its sole cost and expense, with the provisions of all applicable Federal, State, and local laws, regulations, and standards concerning environmental quality and pollution control and abatement, with respect to its use of the Premises. Licensee covenants that it will not improperly generate, use, or store hazardous substances or hazardous waste on the Premises, except for hazardous materials that are contained in materials or components of the Developer Backbone Improvements or IRWD Reimbursable Improvements as required by the Plans for same delivered by Licensor to Licensee or as required by the Sewer Plans for the Sewer Improvements included in the IRWD Reimbursable Facilities; provided, however, that ICDC shall not be deemed a generator of Hazardous Materials or responsible for any Hazardous Materials not brought onto the Site by ICDC or the ICDC Parties so long as ICDC disposes of same at a disposal site chosen by the City, which disposal site shall be appropriate for the material to be disposed of and shall, to the extent possible, be a reasonable distance from the Site. Licensee shall promptly notify the City of Tustin and supply copies of any notices, reports, correspondence, and submissions made by Licensee to any Federal, State, or local authority, or received by Licensee from said authority, concerning environmental matters or hazardous substances or hazardous waste on, about, or pertaining to the Premises. Licensee shall defend, indemnify and hold harmless the City of Tustin from and against all claims, liabilities, losses, damages and costs, foreseen or unforeseen, which the City of Tustin may incur by JRC\30110.0086 \443238.7 5/23/2013 I -6 reason of Licensee's action or non - action with regard to obligations under this paragraph, and this provision shall survive the expiration or termination of the License. a. Licensee shall at a minimum maintain, keep and restore the Premises to the same condition as originally provided by the Licensor. b. Licensee shall not make or permit to be made any use of the Premises or any part thereof (i) which would violate any of the covenants, agreements, terms, provisions, and conditions of this License; or (ii) which would directly or indirectly violate any federal, state or local law, ordinance, rule or governmental regulation; or (iii) which will suffer or permit the Premises or any part thereof to be used in any manner or permit anything to be brought onto or kept thereon which, in the reasonable judgment of Licensor, shall in any way impair or tend to impair the character, reputation or appearance of the Premises or which will impair or interfere with or tend to impair or interfere with any of the services performed by Licensor. c. Licensee shall not display, inscribe, print, maintain or affix on any place in or about the Premises any sign, notice, legend, direction, figure or advertisement, except as may be approved by Licensor in writing. d. Licensee shall comply with all laws, enactments, rules, ordinances and regulations of all governmental authorities relating or applicable to Licensee's occupancy of the Premises governing use of the Premises. Licensee shall obtain all permits and licenses required by the City of Tustin and shall pay all required fees. 11.10 Discrimination and Equal Opportunity. 11.10.1 The Licensee covenants and agrees for itself and for every person claiming by, through or under Licensee, that (a) it shall not discriminate against any employee or applicant for employment on any basis prohibited by law and (b) it has received, read, understands and agrees to be bound with respect to the entirety of the License and Premises and by the non - discrimination covenant contained in the Federal Deed which states as follows: "Non- Discrimination. GRANTEE ( "City of Tustin') covenants for itself, its successors and assigns, that it will comply with all applicable provisions of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1975 in the use, occupancy, sale or lease of the Property. The foregoing shall not be construed to prohibit the operation of federal or state approved programs focusing on the special needs of the homeless, veterans, victims of domestic violence and other classes of persons at risk, nor shall it be construed to prohibit employment practices not otherwise prohibited by law. The GRANTOR ( "Government') shall be deemed a beneficiary of this covenant without regard to whether it remains the owner of any land or interest therein in the locality of the Property hereby conveyed and shall have the sole right to enforce this covenant in any court of competent jurisdiction" JRC\30110.0086 \443238.7 5/23/2013 I -7 The Licensee shall provide equal opportunity in all employment practices. 11.10.2 Obligation to Refrain from Discrimination. The Licensee covenants and agrees for itself and each and every person claiming by, through or under Licensee in interest to the Licensed Premises or any part thereof or any of its activities under the Licensed Premises or in construction or work that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the License use, occupancy, tenure or enjoyment of the Licensed Premises or in construction or work on the Licensed Premises, nor shall the Licensee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Licensee Premises or in construction work on the Premises. 11.10.3 Redevelopment Law; Form of Nondiscrimination and Nonsegregation Clauses. The Licensee shall include in each of its contract documents for any activities undertaken in conjunction with the License or on the Premises the following non- discrimination or non - segregation clauses in substantially the form provided: In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 11.11 In addition to access required under other provisions of this License, the Licensor, and the Department of Navy and their representatives shall be allowed access to the Licensed Premises at all times throughout the term of this License and as further shown on Exhibit A, for any purpose without prior written notice to the Licensee. The Licensee shall ensure that the Licensor has a current roster of on -call personnel and their phone numbers. Licensee shall have no claim against the Licensor for exercise of their rights of access hereunder. 11.12 Violation of any requirement listed in Section 11 or any of the Special Provisions identified in Section 12 may be grounds for immediate termination of the License, at no cost or liability to the Licensor at Licensor's sole discretion. 11.13 Termination and or Vacation. Licensor, its assignees or successor(s) may terminate this License XX -XXX or require temporary vacation of the Premises with 30 days written notice to Licensee unless said Licensee is in default under the terms of this License in which case the Licensor may immediately terminate the License upon written notice to Licensee. 11.14 Upon revocation or surrender of this License (except in the event of damage or destruction under Section 11.8.1), to the extent directed by the Licensor, the Licensee shall remove all temporary drainage facilities made or installed on the License Premises, and restore the Premises to the same or as good condition as existed on the date of entry under this License. JRC\30110.0086 \443238.7 5/23/2013 I -8 [Section 12 includes Special Provisions that are specific to each license. The following is a list of SAMPLE SPECIAL PROVISIONS only] 12. SPECIAL PROVISIONS GENERAL 12.1 The location of the proposed use shall substantially conform to Exhibit A and Section 1 of License (Proposed Activity). Any modifications will need to be provided and approved in writing by the signatory on the Licensing Authority, or their designee and will then be incorporated into the License Agreement by written amendment. In addition, City may modify License with 30 -days prior written notice or immediately in the event of default under License by Licensee. 12.2 This License shall become null and void unless the approved interim use begins within one month of the date of final executed approval of the License including City written approval of the required insurance. 12.3 The Licensee shall comply with all requirements of the Occupational Safety and Health Administration. 12.4 Trash disposal shall comply with CR &R Incorporated and City of Tustin standards. 12.5 The Licensee shall be required to have and maintain a valid City of Tustin Business License. 12.6 All requirements of the City's Noise Ordinance (Chapter 6 of the Tustin City Code) shall be met at all times. 12.7 The Licensee may not access any other areas on the adjacent Tustin Legacy properties and may not enter any of the buildings on the Tustin Legacy site for any purpose. 12.8 The applicant shall ensure controlled access to the site is maintained via Gate [Insert Gate #] per Exhibit A. [Insert Gate #] is the Licensee's sole authorized access to the site and will be response for ensure that no unauthorized persons or vehicles access the overall Tustin Legacy property. The Licensee shall ensure the gate remain closed all times while not in use. Licensee understands and agrees that this access may be disturbed in the future. The City makes no guarantees that there will be continuing access that can be provided at the current location. 12.9 Except for ingress and egress, the Licensee must keep the vehicle gates and adjacent roadway free and clear at all times. The applicant shall install a temporary (mobile) chain -link fence around the site as shown on Exhibit A at its sole cost and expense subject to inspection and approval of the installation by the Licensor. The Applicant shall remove said installation upon termination of this License Agreement. The vehicle gate shall be installed to open into the parking lot so as not open outward and obstruct the internal circulation access route between the site and Tustin Ranch Road. 12.10 Security and access to Tustin Legacy is currently performed by the City of Tustin Police Department. The City of Tustin is not responsible for providing security services for the Licensee, the Licensee's equipment or property, or the site during the license period. Access to the license site shall be permitted only during daylight hours only from 7:00 JRC\30110.0086 \443238.7 5/23/2013 I -9 a.m. until 6:00 p.m., Monday through Friday, 9:00 a.m. until 5:00 p.m. on Saturdays. The Licensee is responsible for securing the site, including keeping the vehicle gate closed and locked during hours when use of the site is not permitted. 12.11 WAIVER OF CLAIMS. As a material part of the consideration to be rendered to CITY for this LICENSE, LICENSEE hereby waives any and all claims or causes of action against CITY, its officers, agents, or employees which it may now or hereafter have for damages to, loss of, or theft of LICENSEE's vehicles or other property anywhere in, about, or on the BASE, including, but not limited to, the PREMISES, from any cause whatsoever, unless such damage, loss, or theft results from the sole negligence, active negligence or willful misconduct of CITY, its officers, agents, or employees (except to the extent that any negligence or willful misconduct of City may be limited by California Civil Code Section 2782). 12.12 BAILEE DISCLAIMER. LICENSEE acknowledges and agrees that CITY has granted its permission for use of the PREMISES only for the purposes and in accordance with the provisions of this LICENSE. By entering into this LICENSE, CITY is not agreeing in any manner to accept obligations or responsibility for the safekeeping of the vehicles or other property of LICENSEE or of LICENSEE's agents, contractors, officers, employees or invitees. This LICENSE is not a contract for bailment or deposit of goods for safekeeping and CITY in no manner whatsoever purports to be a bailee. 12.13 The interim use shall be discontinued and the site cleared of all debris, and stored items upon termination of the original and any written approved extension of the term of License XX -XXX as may be granted by the Licensing Agreement authority, which in any event shall not be later than ten (10) days following termination of this Agreement. The site shall be returned to the same condition as existed prior to commencement of this License as depicted in the photographs in Attachment 2 of Exhibit A, except for changes to the Premises made in connection with construction of the Developer Backbone Improvements and the IRWD Reimbursable Facilities in accordance with the Plans and the Sewer Plans. BUILDING AND SAFETY 12.14 Hours of operation shall be according to Tustin City Code Section 4616 which limits construction activities to between 7:00 a.m. and 6:00 p.m. Monday through Friday, and between 9:00 a.m. and 5:00 p.m. on Saturdays, and at no time on Sundays unless otherwise approved by the City. Construction activities are prohibited on New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, and Christmas Day. PUBLIC WORKS 12.15 The Licensee shall not alter the existing drainage patterns or drainage facilities serving the Premises without the permission of the Licensor and City Engineer. 12.16 This development shall comply with all provisions of the City of Tustin Water Quality Ordinance and all Federal, State, and Regional Water Quality Control Board rules and regulations, including keeping the licensed site, and public roadways, including but not limited to Tustin Ranch Road and Warner Avenue, clear of any dirt or mud tracked out of the parking area. JRC\30110.0086 \443238.7 5/23/2013 I -10 .■ Description of Premises Licensed activities will occur on [Insert Description of Premises, including size of area and legal description if available]. Attachment 1: License Area Exhibit JRC\30110.0086 \443238.7 5/23/2013 I -11 100 i i Certificate of Insurance and Insurer Endorsements JRC\30110.0086 \443238.7 5/23/2013 I -12 EXHIBIT C "Lease in Furtherance of Conveyance (LIFOC) between Licensor and the United States of America, dated May 13, 2002" [Due to the large size of the document, please contact the Licensor to obtain a copy for review.] JRC\30110.0086 \443238.7 5/23/2013 I -13 EXHIBIT J CONSTRUCTION CONTRACT TERMS ICDC shall include the following provisions into any Construction Contract it enters with a Subcontractor for performance of Work in connection with the construction of any Facility: Notwithstanding anything in this Contract to the contrary, the parties to this Contract agree as follows: (a) Construction Guidelines. Subcontractor and all of its employees, representative, contractors, suppliers and other invitees (collectively, the "Subcontractor Parties ") shall comply with the construction guidelines and any other rules and regulations of ICDC and the City of Tustin ( "City ") applicable to the site where the Work is to be performed (copies of which guidelines, rules and regulations will be provided by Contractor to Subcontractor). (b) Insurance. Prior to any entry onto the Site, Subcontractor shall obtain, and maintain in full force and effect during the term of this Subcontract, insurance coverage as set forth in the Insurance Requirements Exhibit attached to the Contract, and shall require all the Subcontractor Parties (i.e., Sub - subcontractors) to obtain and maintain the coverages specified in Section 5 of said Insurance Requirements Exhibit. (c) Bonds. Subcontractor shall provide payment and performance bonds in the full amount of the Contract Price that guarantee the payment of all Sub - subcontractors, laborers, suppliers and materialmen and that guarantee the performance and completion of the Work on the Facility, which bonds shall be issued by a licensed surety in the State of California acceptable to ICDC. The bonds shall be in the form provided by ICDC, which shall be the same bond forms as ICDC uses in connection with its Reimbursement Agreement with the City. ICDC, Legacy Villas LLC and the City of Tustin shall each be named as co- obligees under each bond provided by Subcontractor. (d) Indemnification. Subcontractor agrees to indemnify, defend, protect and hold harmless ICDC, Legacy Villas LLC and the City ( "Indemnified Parties ") (with counsel reasonably acceptable to the affected Indemnified Party or Parties) and the City's elected and appointed officials, employees, consultants, contractors and agents and all the other indemnified parties identified in the Contract harmless from and against any all claims, actions, causes of action, demands, orders, or other means of seeking or recovering losses, damages, liabilities, costs, expenses (including attorneys' fees, fees of expert witnesses and consultants and court and litigation costs), costs and expenses attributable to compliance with judicial and regulatory orders and requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, whether incurred by or made against or recovered or obtained from any of such parties ( "Claim ") , that arise as a result of or by reason of or as a consequence of (i) the construction, installation or maintenance of the Work on the Facility or any portion thereof by Subcontractor and the other Subcontractor Parties; (ii) all other activities on and use of the Site by Subcontractor and the other Subcontractor Parties; (iii) any breach by Subcontractor of any of its representations, warranties, covenants or obligations set forth in the Contract; (iv) the releasing, or threat of releasing, spilling, leaking, pumping, pouring, JRC\30110.0086\443238.7 5/23/2013 J -1 emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping into the environment, storage, treatment, transportation or disposal of any Hazardous Materials on, under, in, from or to the Site or any other property through the act or omission to act of Subcontractor or the Subcontractor Parties; and (v) any act or omission of the Subcontractor or the Subcontractor Parties in connection with the construction, installation or maintenance of the Work or any portion thereof. If Subcontractor fails to defend any Claim pursuant to its obligations hereunder, the City shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any third party fees or costs paid for by the City (including but not limited to bills from the City's contract City Attorney related to this Agreement), to and recover the same from Subcontractor. (e) Repair of Damage. Subcontractor shall repair any damage to the property of the Indemnified Parties or any other Person caused by Subcontractor or the Subcontractor Parties during the course of Subcontractor's performance of the Work and any other activities and operations on the work site. (f) Assignment. Subcontractor agrees that if the Reimbursement Agreement between ICDC and the City is terminated and ICDC assigns its rights under the Contract to the City and such assignment is accepted by the City, Subcontractor shall continue to perform its obligations under the Contract if the City is substituted in place of ICDC; provided, however, that the City shall not be responsible for any breaches or defaults of ICDC under the Contract that occurred prior to the date of such assignment to the City. Upon such assignment and acceptance by the City, ICDC will be relieved of all of its obligations under the Contract arising after the date of such assignment. (g) Third Party Beneficiaries. Subcontractor acknowledges and agrees that (i) the City, ICDC and the other indemnitees identified in the indemnification provision of the Contract shall be third party beneficiaries of this Subcontract as to all obligations owed by Subcontractor as described in this Addendum, as well as any express or implied warranties of Subcontractor under this Contract, (ii) neither ICDC nor the City shall be deemed to be a guarantor of Subcontractor's obligations under this Contract, and (iii) except for obligations arising after the assignment to the City of the Contract pursuant to subsection (f) above, the City shall not be bound by any obligations owed by ICDC to Subcontractor under this Contract. (h) Compliance with Law. Subcontractor shall be required to comply with all applicable laws, ordinances and regulations in its performance of Work on any Facility, including but not limited to applicable provisions of the California Labor Code regarding public works contracts and payment of prevailing wages. (i) Independent Contractor. Subcontractor shall be deemed to be an independent contractor retained by ICDC to perform the Work, and nothing contained in this Contract shall create any contractual relationship between the City and Subcontractor, Sub - subcontractor, vendor, material supplier or laborer or any other Person retained by Subcontractor or by any of the foregoing, at any tier, or their respective officers, employees or agents. JRC\30110.0086\443238.7 5/23/2013 J -2 0) Warranties. Subcontractor represents and warrants to ICDC that any materials, supplies, products and equipment furnished under this Contract will be new unless otherwise specified, and that any of the Work will be of good workmanship and quality, free from faults and defects and in strict conformance with the Contract Documents, the standards in the industry, all applicable laws, ordinances and regulation, including without limitation the Uniform Building Code, and any manufacturer's recommendations. Any of the Work not conforming to same may be considered defective. If required by ICDC, in ICDC's sole discretion, Subcontractor shall furnish satisfactory evidence as to the kind and quality of such materials, supplies, products and equipment. If any manufacturer or supplier of any such materials, supplies, products or equipment furnishes a guarantee or warranty for a period in excess of one year from final completion, then Subcontractor's warranty pursuant to this Article shall be deemed to extend to it for a like period. Prior to final completion of the Work, Subcontractor shall deliver to ICDC copies of any guarantees and warranties relating to the Project, together with duly executed instruments properly assigning same to ICDC. Subcontractor shall bind copies of the guarantees and warranties together in a single volume, grouped by trade and properly indexed. Subcontractor shall assign to ICDC or any purchaser from or assignee of ICDC the guarantees and warranties of Subcontractor's Sub - subcontractors, suppliers and representatives and any other rights of any kind against any Persons. Such assignment will not relieve Subcontractor of any of its other obligations contained in the Contract Documents. No Final Acceptance by ICDC or the City shall operate as a waiver or release with respect to any warranties applicable to the Work or the Facilities or any rights or remedies pertaining thereto. Subcontractor warrants that any and all portions of the Work will be free from any defects in material and workmanship for a period of one year from the Date of Acceptance of the Facility by the City (or in the case of landscape improvements, one hundred and twenty days after completion of the Work), which warranty shall survive the expiration or earlier termination of this Contract. As part of the warranty, Subcontractor agrees to commence the repair or replacement of any defective material or equipment and the performance of related labor necessary to correct any such defect in the Work within three days after receipt of notice of the defect and thereafter to diligently prosecute any corrective work to completion, all at Subcontractor's sole cost and expense. Upon failure of Subcontractor to do so, ICDC may, in ICDC's reasonable discretion, furnish or secure any materials and labor necessary to correct any defect. Any loss caused by said failure of Subcontractor, including without limitation compensation for additional professional services, shall be at Subcontractor's sole cost and expense. Nothing in the Contract Documents shall in any way limit the right of ICDC to assert claims for patent or latent defects in the Work or loss caused by them for the longest applicable period of limitations prescribed by California law. Nothing in the Contract Documents shall be construed to establish a period of limitation with respect to any other obligation of Subcontractor or claim of ICDC under the Contract Documents. Subcontractor acknowledges and agrees that prior to Final Acceptance of any Facility by ICDC, that ICDC shall assign to the City any and all warranties or guarantees which Subcontractor is required to provide or obtain pursuant to the Construction Contract, including, but not limited to, Sub - subcontractors and manufacturers, and Contractor agrees to perform the Work in such a manner so as to preserve any and all such warranties. The JRC\30110.0086\443238.7 5/23/2013 J -3 above warranties and guarantees shall remain in effect for a period of one (1) year commencing from the date of Final Acceptance of the Work by the City (or, in the case of landscape improvements, one hundred and twenty (120) days after Completion thereof). JRC\30110.0086\443238.7 5/23/2013 J -4 EXHIBIT K SUBCONTRACTOR INSURANCE REQUIREMENTS Prior to commencement of any Work under this Contract, Subcontractor shall, at Subcontractor's sole cost, comply with the following insurance requirements: 1. General Requirements. a. Carrier Requirements. All insurance to be carried by Subcontractor will be maintained by Subcontractor at its cost with insurance carriers approved to do business in California, having a general policyholders rating of not less than an "A -" and financial rating of not less than "VIII" as currently rated by A.M. Best Company, or such other ratings as agreed upon in writing by ICDC in ICDC's Discretion. b. Insurance Limits, No Limitation of Liability. Subcontractor may provide the required insurance in whole or in part through a policy or policies covering other liabilities and projects of Subcontractor; provided, however, that any such policy or policies shall satisfy all of the requirements set forth in this Exhibit, including the endorsements described below. The required insurance limits stated in this Insurance Exhibit are minimum limits. Nothing contained in this Exhibit is to be construed as limiting the type, quality or quantity of insurance Subcontractor should maintain for its own protection. The carrying of insurance as specified herein shall not be construed to limit Subcontractor's liability under the Construction Contract or as a matter of Law. Nothing in this Insurance Exhibit shall be deemed to place any responsibility on ICDC for ensuring that the required coverages are sufficient for the conduct of Subcontractor's business. C. Evidence of Insurance. As evidence of the insurance required by this Insurance Exhibit, and except as otherwise provided below, ICDC will accept certificates of insurance from Subcontractor's insurance broker (and, where required below, endorsements from Subcontractor's insurance carrier) and other evidence of insurance acceptable to ICDC, in ICDC's sole discretion, showing the required coverages for the applicable insurance required of Subcontractor and Subcontractor's officers, employees, agents, representatives, as well as any Sub - subcontractor performing any portion of the Work for or on behalf of Subcontractor (collectively, "Subcontractor's Representatives ") in force for the specified periods. ICDC has the right to obtain certified policies from Subcontractor and Subcontractor's Representatives and their insurance carriers as ICDC in its sole discretion deems necessary. Such evidence shall be delivered to ICDC promptly upon execution of this Contract, or prior to commencement of Work, whichever earliest occurs, and show specifically the amount of the deductible or SIR under each policy. Each policy, certificate and endorsement shall be subject to approval by ICDC in its sole discretion. d. Changes in Coverage. In no event will any insurance required hereunder be amended or reformed or rescinded or terminated or otherwise changed or allowed to lapse prior to the earlier of the completion of the Work pursuant to the provisions of this Contract or termination of the Contract or such longer period as may be specified in this Exhibit. Insurer endorsements (or a copy of the policy binder, if applicable) shall specifically identify this Contract and shall provide: that said insurance shall not be cancelled except if Subcontractor is given at least thirty (30) days advance written notice of any cancellation or termination of insurance. The foregoing requirement may also be satisfied upon provision of evidence by the insurer that Subcontractor has paid for its JRC\30110.0086\443238.7 5/23/2013 K -1 premium in full for any policy that is currently in place. In the event (i) any policy expires or is canceled before the expiration of this Contract, or (ii) any policy is amended so that the required coverages are reduced or otherwise changed to the detriment of ICDC or any named insured, Subcontractor shall immediately bring such insurance into compliance with the requirements of this Contract and deliver new certificates and endorsements (and policies, if requested by ICDC) to ICDC upon the renewal, replacement or modification of such policy(ies). If Subcontractor fails to comply with the foregoing requirements, then ICDC reserves the right, but shall have no obligation, to procure such policy(ies) and to deduct the cost thereof from any sum due Subcontractor under this Contract, and Subcontractor shall fully cooperate in the purchase of such insurance. e. SIRS and Deductibles. ICDC shall be given the opportunity to approve and, in ICDC's Discretion, disapprove, the amount of any proposed self - insured retention ( "SIR") or deductible. If Subcontractor, with ICDC's approval, elects to maintain an SIR or deductible with respect to the insurance required by this Insurance Exhibit, it shall not apply to the additional insureds listed below and no such additional insured shall be obligated to reimburse such SIR or deductible or to pay Subcontractor as a reimbursable cost, any actual or imputed cost of maintaining such SIR or deductible. Notwithstanding the foregoing, any additional insured may satisfy the SIR or deductible on behalf of the Subcontractor or Subcontractor's Representative if the additional insured elects to do so. 2. Required Coverages: Subcontractor shall maintain the following insurance for the times provided herein: a. Workers' Compensation Insurance. Workers' Compensation Insurance, including Employer's Liability, with a minimum limit of $1,000,000 or the current limit carried by Subcontractor or the amount required to be carried by California law, whichever is greater, for all individuals whom Subcontractor employs in carrying out the Work. This insurance shall be in strict accordance with the requirements of the most current and applicable Workers' Compensation Insurance Laws in effect from time to time in California. Prior to the commencement of the Work, Subcontractor shall cause a waiver of subrogation endorsement from Subcontractor's insurance carrier to be delivered to ICDC in form satisfactory to ICDC in its sole discretion. b. Commercial General Liability Insurance. Commercial General Liability Insurance on an "occurrence" basis, with a minimum combined single limit for bodily injury, property damage and personal and advertising injury of Five Million Dollars ($5,000,000) or the current limited carried by Subcontractor, whichever is greater, unless other limits are agreed to in writing in ICDC's sole discretion, covering operations, independent contractors, products and completed operations, blanket contractual liability, broad form property damage, severability of interest and cross liability clauses, personal injury and explosion, collapse and underground hazards (X,C,U). The limits of liability specified in this Exhibit may be provided by any combination of primary and umbrella/excess liability insurance policies. Such policies shall be renewed annually for at least ten (10) years after final acceptance and completion of the Work or shall provide tail coverage through the expiration of the statute of limitations. An endorsement to such policy satisfactory to ICDC in its sole discretion and meeting the requirements set forth in the "Additional Insured Endorsement" section below shall be delivered to ICDC as required in the Contract. In addition, this Commercial General Liability Insurance shall comply with the following: JRC\30110.0086\443238.7 5/23/2013 K -2 (i) There shall be no limitation of coverage to vicarious liability and coverage shall extend to any independent liability of the additional insureds; (ii) There shall be no exclusionary language or limitations of coverage relating to soils subsidence or earth movement of any kind regardless of cause; (iii) There shall be no exclusionary language or limitations of coverage relating to residential construction, condominiums, multi - family or multi -unit dwellings, if applicable to the Work; (iv) There shall be no exclusionary language or limitations that are applicable to the additional insured that are not also applicable to the named insured; (v) There shall be no exclusionary language or limitations of coverage relating to property damage relating to mold or fungus; and (vi) There shall be a provision that defense costs are paid in addition to and do not deplete any policy limits. C. Automobile Liability Insurance. Automobile liability insurance (including but not limited to owned and non -owned automobiles, as applicable) on an occurrence basis, covering all automobiles, trucks and other vehicles and trailers used by Subcontractor in connection with the Work, with a minimum combined single limit for bodily injury and property damage of not less than Two Million Dollars ($2,000,000) and uninsured motorists coverage of $2,000,000, or, in each case, the current limited carried by Subcontractor, whichever is greater. d. Pollution Liability Insurance. Subcontractor shall maintain pollution liability insurance covering liabilities and losses arising out of such Work. Such insurance shall: (i) provide coverage for, at a minimum, judgments, damages, settlements, legal fees and costs, bodily injury, property damage, remediation and emergency response costs arising out of or relating to the Work and all liability assumed under this Contract; (ii) apply with respect to Work performed at any location and to loading, unloading, transportation and disposal of any related materials or substances; (iii) be issued on a "claims made" basis, and provide coverage for liabilities or losses arising from any claim during the period from when the Work commences until at least five (5) years after the Work is completed; (iv) provide coverage limits of at least $1,000,000 or the limit already carried by Subcontractor for similar insurance, whichever is greater; (v) have a deductible of no more than $25,000; and (vi) include ICDC, the City, and the Irvine Ranch Water District as additional insureds in the manner set forth in the "Additional Insured Endorsement" section of this Exhibit. Subcontractor shall comply with all policy warranties and shall do nothing to invalidate coverage. e. Transit Insurance. Subcontractor shall maintain "all risk" insurance, on a replacement cost basis covering loss or damage to property (for which it has title or risk of loss) which will become a final part of the Project, during its off - Project site transit and while stored or worked upon away from the Project. ICDC shall be included as a loss payee under such policy as its interests may appear. Said insurance shall have a self - insured retention or deductible. f Rental Equipment. In the event that rental of equipment is undertaken to complete or perform the Work, Subcontractor shall be solely responsible for such rental equipment. Such JRC\30110.0086\443238.7 5/23/2013 K -3 responsibility shall include, but not be limited to, theft, fire, vandalism and use by unauthorized Persons. In addition to the other insurance coverage that Subcontractor is required to maintain under this Contract, Subcontractor may elect to obtain a "rental cost reimbursement endorsement" to provide coverage for any equipment it rents in connection with the Work. 3. Additional Insured Endorsement. ICDC and the parties described in this section shall be included as additional insureds under the Commercial General Liability Insurance and, if Pollution Liability Insurance is required to be maintained by Subcontractor under this Exhibit, the Pollution Liability Insurance described above, pursuant to an endorsement to such policy(ies) in form satisfactory to ICDC in its sole discretion. The endorsement shall list the following parties as additional insureds: "Irvine Community Development Company LLC, The Irvine Company LLC, Irvine Apartment Communities, L.P., Legacy Villas LLC, and all persons and entities controlling, controlled by or under common control with such entities, together with their respective owners, shareholders, partners, members, divisions, officers, directors, employees, representatives and agents, and all of their respective successors and assigns; and the City of Tustin, and the Irvine Ranch Water District, and all of their respective elected and appointed boards, officers, agents and employees." The policy coverage shall not contain any exclusionary language or limitations that are applicable to any additional insured that are not applicable to the named insured. In addition to the listing of additional insureds, the endorsement shall also provide: "This insurance is primary and any other insurance maintained by such additional insureds is excess and shall not be required to contribute with this insurance as respects claims or liability caused by, arising out of or resulting from the acts or omissions or work of the named insured, or of others who performed work on behalf of the named insured. Any of such additional insureds may, at his /her /its election, pay any self - insured retention or deductible amount in connection with any claim or liability for which coverage is or may be provided by such insurance notwithstanding any other provision of the policy." 4. Waiver of Subrogation. Subcontractor's release and waiver as set forth in the Contract is intended to be binding upon the insurers of Subcontractor and shall preclude any such insurer from subrogating to any rights or Claims of Subcontractor against ICDC and the City. 5. Subcontractor's Representatives' Insurance. Subcontractor will not permit any of Subcontractor's Representatives to commence Work on the Project until each such Subcontractor's Representative, as applicable, has complied with all applicable insurance requirements stated in this Exhibit. In each of its Subcontracts, Subcontractor shall make ICDC and the other additional insureds listed above express third party beneficiaries to such Subcontract. Each such Subcontract shall also require Subcontractor's Representative to comply with each and every requirement of this Exhibit applicable to Subcontractor, except with respect to the limits of such insurance which, instead, shall be as follows, unless such Subcontractor's Representative currently maintains higher limits, in which case such Subcontractor's Representative shall be required to maintain such higher limits: a. Workers' Compensation: Statutory Workers' Compensation and Employer's Liability with the following limits: (i) bodily injury by accident: $1,000,000 each accident; (ii) bodily injury by disease: $1,000,000 each employee; and (iii) bodily injury by disease: $1,000,000 policy limit. JRC\30110.0086\443238.7 5/23/2013 K -4 b. Commercial General Liability: $2,000,000 General Aggregate, $1,000,000 Products and Completed Operations Aggregate; $1,000,000 Personal and Advertising Injury Liability; $1,000,000. Any Sub - subcontractor responsible for Work involving mass grading or trenching or other Work over five feet in depth shall carry $5,000,000 per occurrence and aggregate liability coverages; C. Automobile Liability: $1,000,000 each occurrence. JRC\30110.0086\443238.7 5/23/2013 K -5 EXHIBIT K-1 PROFESSIONAL INSURANCE REQUIREMENTS Professional shall not enter on any Site or begin any portion of the Services under any Professional Services Agreement until it obtains all required insurance. Professional shall not permit any of its subconsultants to begin any portion of the Services until such subconsultants have complied with all applicable insurance requirements stated in this Exhibit. General Requirements. a. Carrier Requirements. All insurance to be carried by Professional shall be maintained by Professional at its expense with insurance carriers authorized to do business in California, having a general policyholders rating of not less than an "A -" and financial rating of not less than "VIII" in the most current Best's Key Rating Guide or other such ratings. b. Insurance Limits: No Limitation of Liability. Professional may provide the insurance described herein in whole or in part through a policy or policies covering other liabilities and projects of Professional; provided, however, that any such policy or policies shall satisfy all of the requirements set forth in this Exhibit, including without limitation the endorsements described below (the "Insurance Requirements "). The required coverage limits amounts stated in these Insurance Requirements are minimum coverage limit amounts. Nothing contained in these Insurance Requirements is to be construed as limiting the type, quality or quantity of insurance Professional should maintain for its protection or the extent of Professional's responsibility for payment of damages resulting from its operations under this Professional Services Agreement, nor shall anything contained herein be deemed to place any responsibility on ICDC for ensuring that the insurance required hereunder is sufficient for the conduct of Professional's business. C. Evidence of Insurance. As evidence of specified insurance coverage, and except as otherwise provided below, ICDC will accept certificates of insurance from Professional's insurance broker (and, where required below, endorsements issued by Professional's insurance carrier) showing such policies in force for the specified periods. ICDC has the right to obtain certified policies as reasonably necessary. Such evidence shall be delivered to ICDC within five (5) Business Days of execution of the Professional Services Agreement or prior to commencement of any Services, whichever earliest occurs, and show specifically the amount of the deductible or SIR under each policy. Each policy, endorsement and certificate shall be subject to approval by ICDC in ICDC's sole discretion. Professional shall also allow ICDC to inspect and obtain such evidence of insurance that Professional obtains from any of its subconsultants. d. Changes in Coverage. In no event shall any insurance required under these Insurance Requirements be amended, reformed, rescinded or otherwise changed or allowed to lapse prior to termination of this Professional Services Agreement or any Project Agreement with Professional or such longer period as may be specified herein. Insurer endorsements (or a copy of the policy binder, if applicable) shall specifically identify this Professional Services Contract and shall provide that said insurance shall not be cancelled except if Professional is given at least thirty (30) days advance written notice of any cancellation or termination of insurance. The foregoing requirement may also be satisfied upon provision of evidence by the insurer that Professional has paid for its premium in full for any policy that is currently in place. In the event (i) any policy expires or is canceled before the expiration of this Professional Services Agreement or any Project Agreement, or (ii) any policy of insurance is altered so that the coverage required by this Professional Services Agreement is reduced or otherwise changed to the detriment of ICDC or any named insured, Professional shall immediately bring such insurance into compliance with the requirements of this Professional Services Agreement and deliver new certificates and endorsements (and policies if requested by ICDC) to ICDC upon the renewal, replacement or modification of such policy(ies). If Professional fails to JRC\30110.0086\443238.7 5/23/2013 K -1 -1 comply with the foregoing requirements, then ICDC reserves the right, but shall have no obligation, to procure such insurance and to deduct the cost thereof from any sum due Professional under this Professional Services Agreement or any Project Agreement. C. Levels of Coverage, Deductibles. Where a coverage limit amount specified in these Requirements is less than the current coverage limit generally carried by Professional for such insurance, Professional shall provide coverage at the higher coverage limit. ICDC, in ICDC's sole discretion, may approve commercially reasonable deductibles for the coverage limit amounts specified in these Insurance Requirements. If Professional, with ICDC's approval, elects to maintain a deductible with respect to insurance required hereunder, ICDC shall not be obligated to reimburse such deductible or pay Professional as a reimbursable cost any actual or imputed cost of maintaining the deductible. 2. Required Coverage: Professional shall maintain the following insurance for the periods provided herein: a. Workers' Compensation Insurance. Workers' Compensation Insurance, including without limitation Employer's Liability, at a minimum limit of $1,000,000 or the amount required to be carried by California law, whichever is greater, for all persons whom it employs in performing Services under this Professional Services Agreement or any Project Agreement. The foregoing insurance shall be in strict accordance with the requirements of the most current and applicable Worker's Compensation Insurance Laws in effect from time to time in California. Prior to the commencement of any portion of the Services, Professional shall deliver to ICDC a waiver of subrogation endorsement from the insurer in form and substance satisfactory to ICDC in ICDC's sole discretion and precluding any such insurer from subrogating to any rights or claims of Professional against ICDC and the City of Tustin ( "City "). b. Commercial General Liability Insurance. Commercial General Liability Insurance on an "occurrence" basis, with deductibles reasonably acceptable to ICDC, with a combined single limit for bodily injury and property damage of $1,000,000, or current limit carried, whichever is greater, covering Ongoing Operations, Independent Contractors, Blanket Contractual Liability, Broad Form Property Damage, Severability of Interest and Cross Liability clauses, and Personal Injury. An endorsement to such policy satisfactory to ICDC in ICDC's sole discretion and meeting the requirements set forth in the "Additional Insured Endorsement" section below shall be delivered to ICDC within five (5) Business Days of entering into this Professional Services Agreement. C. Automobile Liability Insurance. Automobile Liability Insurance (including but not limited to owned and non -owned automobiles, as applicable) on an occurrence basis, covering all automobiles, trucks and other motor vehicles used by Professional in connection with the performance of the Services under this Professional Services Agreement and any Project Agreement, with a combined single limit for bodily injury and property damage of not less than $1,000,000, or current limit carried, whichever is greater, and uninsured motorists coverage of $1,000,000 or limit carried, whichever is greater. d. Professional Errors and Omissions Liability Insurance. Professional shall maintain Professional Errors and Omissions Liability Insurance on a "claims made" basis, including but not limited to contractual and prior acts coverage, sufficient to cover the Services under each Project Agreement, with a coverage limit of not less than $1,000,000 per claim or current limit carried, whichever is greater, and with a deductible amount not greater than Fifty Thousand Dollars ($50,000.00). Such insurance shall be maintained during the term of this Professional Services Agreement and renewed annually for at least ten years thereafter, so long as such renewable coverage is available at commercially reasonable rates. Such insurance shall not contain any limitation or exclusion based upon the type or use of the structure or building, or for bodily injury or property damage based on subsidence, soil or earth movement, or mold. JRC\30110.0086\443238.7 5/23/2013 K -1 -2 C. Pollution Liability Insurance. In the event that all or any portion of the Services involves inspection, testing, abatement or remediation involving or pertaining to pollution, environmental hazards or Hazardous Materials, including asbestos, mold, fungi or dry cleaner or service station materials or operations, then Professional shall maintain pollution liability insurance covering liabilities and losses arising out of such Services. Such insurance shall: (i) provide coverage for, at a minimum, judgments, damages, settlements, legal fees and costs, bodily injury, property damage, remediation and emergency response costs arising out of or relating to the Services and all liability assumed under this Professional Services Agreement; (ii) apply with respect to Services performed at any location and to loading, unloading, transportation and disposal of any related materials or substances; (iii) be issued on a "claims made" basis, and provide coverage for liabilities or losses arising from any claim during the period from when the Services commences until at least five (5) years after the Services is completed; (iv) provide coverage limits of at least $1,000,000 or the limit already carried by Professional for similar insurance, whichever is greater; (v) have a deductible of no more than $25,000; and (vi) include ICDC, the Irvine Ranch Water District and the City as additional insureds in the manner set forth in the "Additional Insured Endorsement" provision of this Exhibit. Professional shall comply with all policy warranties and shall do nothing to invalidate coverage. For purposes of this Professional Services Agreement, the term "Hazardous Material" shall have the meaning set forth at the end of this Exhibit. 3. Other Requirements: The following requirements shall also apply to the Services performed under this Professional Services Agreement and any Project Agreement: a. Additional Insured Endorsement. ICDC and the parties described in this section shall be included as additional insureds under the Commercial General Liability Insurance and, if such insurance is required to be maintained by Professional under this Exhibit, the Pollution Liability Insurance described above, pursuant to (and Consultant shall provide) an endorsement to such policy(ies) in form approved by ICDC in ICDC's sole discretion. The endorsement shall list the following parties as additional insureds: "Irvine Community Development Company LLC, The Irvine Company LLC, Irvine Apartment Communities, L.P., Legacy Villas LLC and all persons and entities controlling, controlled by or under common control with any of such entities, together with their respective owners, shareholders, partners, members, divisions, officers, directors, employees, representatives and agents, and all of their respective successors and assigns; and the City, and the Irvine Ranch Water District, and all of their respective elected and appointed boards, officers, agents and employees." The policy coverage and endorsement shall not contain any exclusionary language or limitations that are applicable to any additional insured that are not applicable to the named insured. In addition to the listing of additional insureds, the endorsement shall also provide: "This insurance is primary and any other insurance maintained by such additional insureds is excess and shall not be required to contribute with this insurance as respects claims or liability caused by, arising out of or resulting from the acts or omissions or work of the named insured, or of others who performed work on behalf of the named insured. Any of such additional insureds may, at his/her /its election, pay any self - insured retention or deductible amount in connection with any claim or liability for which coverage is or may be provided by such insurance notwithstanding any other provision of the policy." b. Waiver of Subrogation. Any release and waiver of Professional contained in the Professional Services Agreement is intended to be binding upon the insurers of Professional and shall preclude any such insurer from subrogating to any Losses of Professional against ICDC or the City. C. Professional's Subconsultants' Insurance. Professional shall require by contract that each and every subconsultant shall obtain and maintain insurance equal to that required to be carried by Professional. Such agreement to provide insurance between Professional and Professional's subconsultants JRC\30110.0086\443238.7 5/23/2013 K -1 -3 shall make ICDC an express third parry beneficiary to Professional's agreement with Professional's subconsultants. ++++++++++++++++++++++++++++ +++ + + + + +++ + + +++ + +++ + + + + +++ + ++++ For purposes of this Exhibit, the term "Hazardous Materials" shall mean and include without limitation the following: (a) "Hazardous Substance ", "Hazardous Material ", "Hazardous Waste ", or "Toxic Substance" under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. subsection 5101, et seq., or the Resource Conservation and Recovery Act, 42 U.S.C. subsection 6901, et seq.; (b) An "Extremely Hazardous Waste ", a "Hazardous Waste ", or a "Restricted Hazardous Waste ", under subsections 25115, 25117, or 25122.7 of the California Health and Safety Code, or is listed or identified pursuant to subsection 25140 or 44321 of the California Health and Safety Code; (c) "Hazardous Material ", "Hazardous Substance ", "Hazardous Waste ", "Toxic Air Contaminant ", or "Medical Waste" under subsections 25281, 25316, 25501, 25501.1, 117690 or 39655 of the California Health and Safety Code; (d) "Oil" or a "Hazardous Substance" listed or identified pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as well as any other hydro carbonic substance or by- product; (e) A material listed or defined as a "Hazardous Waste ", "Extremely Hazardous Waste ", or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title 22 of the California Code of Regulations; (f) A material listed by the State of California as a chemical known by the State to cause cancer or reproductive toxicity pursuant to Section 25249.9(a) of the California Health and Safety Code; (g) A material which due to its characteristics or interaction with one or more other substances, chemical compounds, or mixtures, damages or threatens to damage, health, safety, or the environment, or is required by any law or public agency to be remediated, including remediation which such law or public agency requires in order for the property to be put to any lawful purpose; (h) Any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether or not the presence of such material resulted from a leaking underground fuel tank; (i) Pesticides regulated under the Feral Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. subsection 136 et seq.; (j) Asbestos, PCBs and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. subsection 2601 et seq.; JRC\30110.0086\443238.7 5/23/2013 K -1 -4 (k) Any radioactive material including any "source material', "special nuclear material', "by- product material', "low -level wastes ", "high -level radioactive waste ", "spent nuclear fuel' or "transuranic waste ", and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C. subsection 2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. subsection 10101 et seq., or pursuant to the California Radiation Control Law, California Health and Safety Code Section 114960 et seq.; (1) A material regulated under the Occupational Safety and Health Act, 29 U.S.C. subsection 651 et seq., or the California Occupational Safety and Health Act, California Labor Code subsection 6300 et seq.; and /or (m) A material regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or pursuant to Division 26 of the California Health and Safety Code. JRC\30110.0086\443238.7 5/23/2013 K -1 -5 EXHIBIT L LIEN RELEASE REQUIREMENTS A. Progress Payment Applications to City With each Progress Payment Application, ICDC (the general contractor) will submit to the City: 1. Conditional and Unconditional Lien Releases from ICDC as to the work performed during the prior period; 2. Conditional and/or Unconditional Lien Releases from all subcontractors and suppliers in accordance with the "Progress Billing" requirements on page 2 of this Exhibit. B. Final Payment Applications to City With each Final Payment Application, ICDC (the general contractor) will submit to the City: Conditional Lien Release from ICDC as to the completed work. (Unconditional lien release from ICDC to be given to City within 15 Business Days of ICDC's receipt of final payment from City.) Conditional and Unconditional Lien Releases from all Subcontractors (other than from subcontractors for which an unconditional lien release has previously been given to City) in accordance with the "Final Retention Billings" requirements on page 2 of this Exhibit. ICDC acknowledges that the City will not provide a final payment to ICDC until unconditional lien releases from all Subcontractors and Sub - subcontractors have been provided by ICDC. Note: Original (wet signature) or fax copies of releases are acceptable for Progress Payment and Final Payment Applications. JRC\30110.0086\443238.7 5/23/2013 L -1 IRVINE COMMUNITY DEVELOPMENT COMPANY LLC — Lien Release Requirements for Bonded Construction Contracts A. Progress Billings: 1. ICDC shall obtain conditional and unconditional releases from Subcontractor, plus conditional and unconditional lien releases for all Sub - subcontractors as requested by ICDC. 2. Sub - subcontractor releases will generally be required as follows: a. Conditional lien releases from all Sub - subcontractors performing 5% or more of the work as designated on the Exhibits to the Construction Contract; and b. Conditional lien releases from any Sub - subcontractors performing less than 5% of the work as requested by ICDC. 3. Conditional Lien Releases are required from any Sub - subcontractors listed on the Subcontractor's current (PC- 4) billing form that have unpaid invoices at the time the progress billing is submitted by Subcontractor. If one or more of the listed Sub - subcontractors have no unpaid invoices, Subcontractor shall submit with its progress billing package either: a. A $0 release from such Sub - subcontractor(s); or b. A letter from Subcontractor attesting that such Sub - subcontractor(s) have no unpaid invoices for the current billing period. B. Final Retention Payment Billings: 1. In addition to its own conditional and unconditional releases, Subcontractor must provide conditional releases for any Sub - subcontractors noted on the PC -4 billing form and others who have filed a California Preliminary Notice. A list of Sub - subcontractors who have filed a Preliminary Notice can be obtained from the ICDC Finance Department. 2. In order for the Final Payment request to be considered complete, all requested lien releases must be provided. 3. Joint checks will be cut for any Sub - subcontractors whose lien releases show a balance due, unless Subcontractor notifies ICDC in writing that there is a dispute between Subcontractor and a Sub - subcontractor, in which event no check will be issued with respect to such Sub - subcontractor. If Subcontractor is able to resolve the dispute within 10 Business Days, ICDC will issue the joint check to Subcontractor and the applicable Sub - subcontractor; otherwise, Subcontractor must submit the payment request again in the next billing cycle. JRC\30110.0086\443238.7 5/23/2013 L -2 EXHIBIT M PAYMENT REOUEST SUBMITTAL PROCEDURES In connection with Payment Requests submitted by ICDC to the City for progress payments under the Reimbursement Agreement, ICDC shall provide the following: • A billing report that identifies subcontractor and supplier invoices paid by ICDC for each Facility and not previously reimbursed by the City • Copies of subcontractor and supplier invoices from scanned images (invoice package includes Subcontractor's /Supplier's invoice, ICDC billing form (PC -4), and Lien Releases in accordance with ICDC's policy) • Copies of all fully- executed consultant contracts, construction contracts and related change orders • A check register showing proof of payment for all cleared checks • Copies of fully- executed Concurrence Letter and /or Potential Change of Work (PLOW) forms as attached to respective contracts and change orders • Billing backup by contract (contract with Concurrence Letter, change orders with PCOW, invoice packages) • Once a contract or change order has been submitted in a Payment Request the first time, it does not have to be provided on subsequent Payment Requests (only invoice backup is provided) • Invoice & Payment Summary per Exhibit G -1 • Completed Payment Request form (note: the Payment may be submitted electronically by PDF copy to the City (ICDC shall retain a hard copy for ICDC files) JRC\30110.0086\443238.7 5/23/2013 M -1 EXHIBIT N FORM OF PAYMENT BOND [See attached] JRC\30110.0086\443238.7 5/23/2013 N -1 Bond No. Amount Premium CITY OF TUSTIN PUBLIC CONTRACT LABOR AND MATERIALS PAYMENT BOND KNOW ALL MEN BY THESE PRESENTS: That Irvine Community Development Company LLC, a Delaware limited liability company and its successors and assigns, as and hereinafter referred to collectively as "Principal ", and a corporation organized and existing under the laws of the State of , and duly authorized to transact surety business in the State of California, as and hereinafter referred to as, "Surety ", are held and firmly bound unto the City of Tustin hereinafter referred to as the "City ", in the sum of $ for payment of which Principal and Surety bind themselves, their heirs, administrators, successors and assigns, jointly and severally as follows: THE CONDITION OF THE ABOVE OBLIGATION IS THAT: WHEREAS, Principal has entered into that certain Infrastructure Construction and Reimbursement Agreement by and between City and ICDC dated June 4, 2013, with the City to do and perform the following, generally described work, which is more particularly described in said contract for the construction of: WHEREAS, Principal shall commence and complete the construction and installation of such improvements provided in said contract; and NOW THEREFORE, if Principal shall pay the Contractor, his subcontractor, and all persons renting equipment or furnishing labor or materials to them for such improvements, for the full cost of such improvements and submit amounts due under the State Unemployment Insurance Act with respect to such labor, then this obligation shall be null and void. PROVIDED, HOWEVER, if Principal shall not pay the subcontractor and all persons renting equipment or furnishing labor or materials to them for such improvements for the full cost of such improvements, or if Principal fails to submit amounts due under the State Unemployment Insurance Act with respect to such labor, then Surety will pay for the same in an amount not exceeding the sum set forth above, which amount shall inure to the benefit of all persons named in Civil Code Section 9100. PROVIDED FURTHER, HOWEVER, that Surety stipulates and agrees that no change, extension of time, alteration or modification of the contract documents or of the work to be performed there under shall in any way affect its obligation on this bond and it does hereby waive notice of any such change, extension of time, alteration or modification of the contract documents or of the work to be performed there under; and PROVIDED FURTHER, that in case suit is brought upon this bond by the City or any other person named in Civil Code Section 9100 who may bring an action on this bond, a reasonable attorney's fee, to be fixed by the Court, shall be paid by Principal and Surety. JRC\30110.0086\443238.7 5/23/2013 IN WITNESS WHEREOF, Principal and Surety have caused these presents to be duly signed and sealed day of , 20. SURETY: I:• (SEAL) APPROVED AS TO FORM: City Attorney I: PRINCIPAL: IM (SEAL) TITLE: APPROVED AS TO CONTENT: Date City Engineer (Name) Attorney -in -Fact Address of Surety: (Name) Address of Principal: Note: Attach proper acknowledgments for both Surety & Principal. JRC\30110.0086\443238.7 5/23/2013 2 EXHIBIT O FORM OF PERFORMANCE BOND [See attached] o -1 Bond No. Amount Premium CITY OF TUSTIN PUBLIC CONTRACT FAITHFUL PERFORMANCE BOND KNOW ALL MEN BY THESE PRESENTS: That , as and hereinafter referred to collectively as "Principal" and a corporation organized and existing under the laws of the State of , and duly authorized to transact surety business in the State of California, as, and hereinafter referred to as, "Surety ", are held and firmly bound unto the City of Tustin, a California municipal corporation ( "City ") and Irvine Community Development Company LLC, a Delaware limited liability company" ( "ICDC "), as and hereinafter referred to collectively as "Obligees ", in the sum of $ for payment of which Principal and Surety bind themselves, their heirs, administrators, successors and assigns, jointly and severally as follows: THE CONDITION OF THE ABOVE OBLIGATION IS THAT: WHEREAS, Principal has entered into a contract dated , 20 , with ICDC to do and perform the following, generally described work, which is more particularly described in said contract for the construction of: which work is performed pursuant to that certain Infrastructure Construction and Reimbursement Agreement by and between City and ICDC dated June 4, 2013, WHEREAS, all of such improvements are to be constructed and installed in accordance with the plans and specifications described, referred to and incorporated in said contract; and WHEREAS, Principal shall commence and complete the construction and installation of such improvements as provided in said contract; and NOW, THEREFORE, if Principal shall faithfully perform all agreements contained in the aforesaid contract, then this obligation shall be null and void. PROVIDED, HOWEVER, if Principal shall not faithfully perform all agreements contained in the hereinabove described contract and all obligations, then this obligation shall remain in full force and effect. PROVIDED FURTHER HOWEVER, that Surety hereby stipulates and agrees that no change, extension of time, alteration or modification of the contract documents or of the work to be performed there under shall in any way affect its obligation on this bond and it does hereby waive notice of any such change, extension of time, alteration or modification of the contract documents or of the work to be performed there under; and PROVIDED FURTHER, that in case suit is brought upon this bond by the Obligees or any other person who may bring an action on this bond, a reasonable attorney's fee, to be fixed by the Court, shall be paid by Principal and Surety. JRC\30110.0086\443238.7 5/23/2013 IN WITNESS WHEREOF, Principal and Surety have caused these presents to be duly signed and sealed this day of , 20_. (SEAL) APPROVED AS TO FORM: City Attorney (SEAL) APPROVED AS TO CONTENT: Date City Engineer SURETY: ICA 11-114 PRINCIPAL: Im TITLE: (Name) Attorney -in -Fact Address of Surety: (Name) Address of Principal: Note: Attach proper acknowledgment for both Surety & Principal. JRC\30110.0086\443238.7 5/23/2013 2 EXHIBIT P ICDC BID AND AWARD PROCEDURES ICDC shall use the following procedures in connection with the award of contracts for each Facility: 1. Prequalified Contractor List. ICDC maintains a list of ICDC prequalified contractors and consultants from which it regularly bids construction work. The list of prequalified contractors and consultants have gone through prequalification process with ICDC and been approved by ICDC to bid and construct Work. ICDC shall bid work for each Facility off its list of prequalified contractors. 2. Bid Coordination Meeting. ICDC shall hold a bid coordination meeting to scope and strategize on contract set -up, bid schedule and contractor and consultant selection. 3. Bid Package. ICDC shall prepare a formal bid package. 4. Pre -Bid Meeting Invitees. ICDC shall invite the City, IRWD, Engineers of Record and the contractors (minimum 3, typically 5 -8) and consultants (identified in step 2) to a pre -bid meeting. Pre -Bid Meeting. ICDC shall convene a formal pre -bid meeting with the parties identified in step 4 in attendance, each of whom shall receive a path to the bid package. ICDC shall chair the pre -bid meeting, and shall have a printed agenda and have all attendees sign -in. ICDC shall provide the consultants in attendance with a Request for Proposal (RFP) for their construction support services (e.g., Survey Staking). The engineer of record shall present a high level overview of the project. ICDC provides an overview of the administration of the bid process including the bid schedule (e.g., the date for bidders' questions, date for bid addendum, and date and time for bid opening) insurance and bonding requirements and prevailing wage requirements. 6. Bidders Questions. Contractors and Consultants submit bidders' questions to ICDC formally via email in Word format. ICDC shall forward questions to Engineer of Record, who shall type a bid addendum and email to ICDC for issuance to the Contractors and Consultants. Public Bid Opening. ICDC shall conduct a public bid opening at 550 Newport Center Drive in a specified conference room. Contractors and Consultants submit their bids / proposals to ICDC (either via electronic bid submittal of pricing, or by hard copy pricing. If a bidder submits both electronic and hard copy pricing, then in event of conflict between the information submitted, the electronic copy shall prevail). The City and IRWD shall be invited to the public bid opening, at which time the bids are opened, read out loud and recorded by hand onto a summary sheet. 8. Bid Summarv. ICDC's Contract Administrator shall review the bids and prepare a bid summary. 9. Review of Bid Summary. ICDC's Contract Manager shall review the bid summary and present the completed summary to ICDC's Vice President of Construction Administration with lowest responsible contractor and consultant bids. 10. Bid Approval. ICDC's Vice President of Construction Administration shall review the bids with the ICDC Project Manager and Senior Vice President of Operations and obtain sign-off. 11. Notification of Low Bidder. ICDC's Contract Administrator shall call the low bidder (whether contractors or consultants) to let them know that they are the low bidder.* JRC\30110.0086\443238.7 5/23/2013 P -1 12. Notification of Contractors /Consultants. ICDC's Contract Administrator shall send an email to all contractors and consultants with low bid /proposal results.* 13. Notification of City and IRWD. ICDC's Contract Administrator shall email the City and IRWD the bid summary for initial concurrence. 14. Concurrence Letter. ICDC's Contract Administrator shall prepare the Concurrence Letter for delivery to the City and shall assemble copies of bids and bid summary and submit to the City and IRWD for formal approval/concurrence. 15. Notice to Proceed. After receipt of City /IRWD approval or concurrence, ICDC's Contract Administrator shall prepare Authorizations to Proceed, Notice to Proceed and Contracts for contractor and all consultants. *If requested by the City or IRWD, this notification shall be delayed until after steps 13 and 14 have been completed. JRC\30110.0086\443238.7 5/23/2013 P -2