HomeMy WebLinkAbout17 AMEND DDA 04-02, TLCP & PYMT AGMT 03-21-05
Agenda Item 17
Reviewed: ",A ~.
City Manager ~
Finance Director N/A
AGENDA REPORT
MEETING DATE: MARCH 21, 2005
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
CHRISTINE A. SHINGLETON, ASSISTANT CITY MANAGER
AMENDMENT NO.1 TO TUSTIN LEGACY DDA 04-02 AND APPROVAL
OF AN INFRASTRUCTURE CONSTRUCTION AND PAYMENT
AGREEMENT
SUMMARY:
City Council authorization is requested for an Amendment to Tustin Legacy DDA 04-02
and for approval of an Infrastructure Construction and Payment Agreement as required
by DDA 04-02.
RECOMMENDATION:
It is recommended that the City Council:
1.
Adopt Resolution No. 05-03 finding that the Amendment No.1 to DDA 04-02 is
within the scope fo the Final Joint Program EIS/EIR for the Reuse and Disposal
of MCAS Tustin and no additional analysis, action or document is required under
CEQA.
2.
Subject to any non-substantive modifications as may be determined necessary
by the City's Tustin Legacy Special Counsel, approve and authorize the City
Manager, or designee to execute the First Amendment to DDA 04-02 between
the City of Tustin and Vestar/Kimco Tustin, loP. (the "Developer"), and to carry
out all actions necessary to implement the amendment including execution of all
related comments.
3.
Subject to any non-substantive modifications as may be determined necessary
by the City's Tustin Legacy Special Counsel, approve and authorize the City
Manager, or designee to execute an Infrastructure Construction and Payment
Agreement between the City of Tustin and the Developer and to carry out all
actions necessary to implement the Agreement.
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FISCAL IMPACT:
Provisions of the Amendment No 1 to Tustin Legacy DDA 04-02 do not have any direct
financial impact on the City. Amendments are only refinements to the original DDA 04-
02. The Infrastructure Construction and Payment Agreement is an implementing
agreement previously described and required by DDA 04-02. It involves the City
commitments to reimburse the Developer for any costs incurred by the Developer in
excess of their fair share contribution to the Tustin Legacy Backbone Infrastructure.
BACKGROUND:
The City Council previously approved DDA 04-02, which was executed on July 20,
2004. Final Map approval is being recommended at the City Council meeting of March
21, 2005 and escrow closing is expected to follow shortly. In conjunction with these
actions, a number of non-substantive changes to the DDA have been determined
necessary by the City's Tustin Legacy Special Counsel. These amendments largely
reflect the following: (i) changes in lot configurations and legal descriptions of parcels to
be conveyed and leased to the Developer as a result of preparation of the Final Map; (ii)
inclusion of additional Indemnified Parties in the DDA to include the Tustin Public
Financing Authority and the Tustin Community Redevelopment Agency and their
respective official, employees, etc; (Hi) modifications of City Release provisions in the
DDA, and; (iv) modifications to environmental insurance provisions offered by the
Developer with the City accepting a reduced reporting period for the Developer's
additional increase in insurance coverage. A copy of the proposed First Amendment to
DDA 04-02 is attached.
Section 8.13.3 of the DDA deals with the Developer's obligation for Payment of the
Project's Fair Share Contribution to Tustin Legacy Backbone Infrastructure in an
amount, payable in phases, of up to $36,330,000. As a condition precedent to the initial
close of escrow on Phase I of the Project, Developer is required to enter into the
Infrastructure Construction and Payment Agreement governing the construction of
certain Tustin Legacy Backbone Infrastructure and the repayment by the City of excess
contributions of Developer to the Tustin Legacy Backbone Infrastructure. The current
estimate of the Developer's construction of Tustin Legacy Backbone Infrastructure
reviewed by the City's Public Works Director is $55,682,205. Provisions of the
Agreement provide for final reconciliation of these costs by the City and a determination
as to what reimbursement the City will be responsible for providing to Developer. To
the extent the Developer's cost for Tustin Legacy Backbone Infrastructure exceeds
$36,300,000 such difference would be reimbursed to Developer by the City from the
following sources:
1. City's land sale proceeds from the initial Developer closing on this transaction
not to exceed $7,500,000, provided that the City's obligation to reimburse
Developer utilizing these funds shall terminate if reconciliation under
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procedures in the Agreement is not completed and funds paid to Developer
before May 13, 2004.
2. City's land sale proceeds from any subsequent Developer closing on this
transaction, provided that the City's obligation to reimburse Developer utilizing
these funds shall terminate if reconciliation under procedures in the
Agreement is not completed and funds paid to Developer before May 13,
2009.
3. The City's receipt of land sale proceeds from the Master Developer footprint
which are in excess of the cost of Tustin Legacy Backbone Infrastructure
design and construction costs for the Valencia North Loop Road and
Armstrong Infrastructure project (CIP NO. 7139).
4. To the extent that the City determines to issue bonds covering all or any
portion of Tustin Legacy with a plan of work that includes Developer's
Backbone Infrastructure work.
5. The City's receipt of reimbursement funds from IRWD for water and sewer
utilities constructed by Developer as part of Backbone Infrastructure work.
A copy of the Infrastructure Construction and Payment Agreement is attached.
City staff will be available to answer any questions regarding either the First
Amendment to DDA 04-02 or the Infrastructure Construction and Payment Agreement.
\
Attachments
(1) Resolution 05-53
(2) First Amendment to DDA 04-02
(3) Infrastructure Construction and Payment Agreement
RESOLUTION NO. 05-53
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, FINDING THAT PURSUANT TO
PUBLIC RESOURCES CODE SECTION 2116 AND
SECTION 15168(c) OF STATE CEQA GUIDELINES THE
PROJECT IS WITHIN THE SCOPE OF THE FINAL JOINT
PROGRAM MCAS ENVIRONMENTAL IMPACT
STATEMENT/ENVIRONMENTAL IMPACT REPORT (MCAS
TUSTIN FEIS/EIR) AND NO NEW ENVIRONMENTAL
DOCUMENT IS REQUIRED; APPLICABLE MITIGATION
MEASURES HAVE BEEN INCORPORATED INTO THE
PROJECT OR WILL BE CONDITIONS OF APPROVAL ON
PENDING ENTITLEMENT APPLICATIONS
The City Council of the City of Tustin does hereby resolve as follows:
I.
The City Council finds and determines as follows:
A.
II.
That First Amendment No.1 to DDA 04-02 is considered a "Project"
pursuant to the terms of the California Environmental Quality Act;
B.
That the Marine Corps Air Station (MCAS) Tustin Reuse Plan/Specific
Plan Final Environmental Impact Statement/Environmental Impact Report
(FEIS/EIR) was certified by the City Council on January 16, 2001. The
FEIS/EIR considered the potential impacts associated with development
on the former Marine Corps Air Station, Tustin, including development of
commercial uses within Planning Areas 16, 17, and 19.
C.
That an initial study checklist, on file with the Redevelopment Agency, was
prepared to evaluate the potential impacts associated with the Project.
The initial study checklist demonstrates that all potential impacts of the
Project were addressed by the certified FEIS/EIR, no additional impacts
have been identified, and all applicable mitigation measures in the
FEIS/EIR will be implemented through the Mitigation Monitoring Program
for the original DDA 04-02 and the City entitlement conditions of approval
already approved for the development site.
The City Council hereby finds for the First Amendment to DDA 04-02 that this
Project is within the scope of the previously approved MCAS Tustin Final
Program EIS/EIR previously certified on January 16, 2001, that the
environmental effects of the Project are within the scope of the MCAS Tustin
FEIS/EIR and were fully examined in the MCAS Tustin FEIS/EIR; that no
substantial changes are proposed in the Project or have occurred with respect to
circumstances under which the Project is being undertaken since certification of
Resolution No. 05-53
Page 2
the MCAS Tustin FEIS/EIR; no new information has become available since the
certification of the MCAS Tustin FEIS/EIR, and pursuant to Public Resources
Code Section 2116 and the requirements of CEQA regulations promulgated with
respect thereto including Title 14 California Code of Regulations Sections 15162
and 15168(c), no additional environmental analysis, action or document is
required by the CEQA.
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on
the 21st day of March, 2005.
LOU BONE
Mayor
PAMELA STOKER
City Clerk
STATE OF CALIFORNIA)
COUNTY OF ORANGE) SS
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No. 05-53 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 21st day of
March, 2005, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED: .
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
FIRST AMENDMENT TO
TUSTIN LEGACY
DISPOSITION AND DEVELOPMENT AGREEMENT
(RETAIL DEVELOPMENT)
This FIRST AMENDMENT TO TUSTIN LEGACY DISPOSITION AND
DEVELOPMENT AGREEMENT (RETAIL DEVELOPMENT) (this "Amendment") is entered
into as of March _,2005 (the "Effective Date") by and between the CITY OF TUSTIN (as
more fully defined in Section 1.4.1 of the Original DDA (as defined below), "City") and
VESTAR/KIMCO TUSTIN, LP., a California limited partnership (as defined in Section 1.4.2 of
the Original DDA, the "Developer"). The City and the Developer are sometimes referred to
herein individually as a "Party" and collectively as the "Parties."
RECITALS
A. City and the Developer entered into that certain Tustin Legacy Disposition and
Development Agreement (Retail Development) dated as of July 20,2004 (the "Original DDA")
pursuant to which, among other things, the City agreed to sell and/or lease or sublease, and the
Developer agreed to purchase and/or lease or sublease, the Property (as defined in the Original
DDA) and the Parties agreed to a scope of development ofthe Property. Initially capitalized
terms not defined herein shall have the respective meanings assigned to such terms in the
Original DDA.
B. Whereas the Final Tract Map has been recorded in the Official Records of Orange
County, California, concurrently herewith.
C. City and the Developer each desire to amend the Original DDA as set forth below. The
Original DDA as amended by this 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 ofthis 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. Modification of Lel!al Descriptions. In order to reflect the lot configuration and
numbering shown on the Final Tract Map, the Parties agree to the following substitutions oflega!
descriptions:
(a) Attachment No. 1A to the Original DDA is hereby deleted and a new
Attachment No. lA, in form attached hereto as Schedule 1, is substituted in its place.
(b) Attachment No. lB to the Original DDA is hereby deleted and a new
Attachment No. lB, in form attached hereto as Schedule 2, is substituted in its place.
(c) Attachment No. 2A to the Original DDA is hereby deleted and a new
Attachment No. 2A, in form attached hereto as Schedule 3, is substituted in its place.
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-------------'----------------'--------------' -------.. ----.---.--.... .-.-------...---
(d) Attachment No. 2B to the Original DDA is hereby deleted and a new
Attachment No. 2B, in form attached hereto as Schedule 4, is substituted in its place.
2.
Modifications of City Indemnification Provisions.
(a) Section 5.4. The first portion of the first sentence of Section 5.4 of the
Original DDA which reads: "Developer hereby agrees to protect, indemnify, defend and hold
harmless the City and its elected and appointed officials, employees, agents, attorneys,
representatives, contractors, successors and assigns from and against any and all Claims arising
from or related to. . ." is hereby deleted in its entirety and replaced with the following:
"Developer hereby agrees to protect, indemnify, defend and hold harmless the City
Indemnified Parties from and against any and all Claims arising from or related to. . ."
(b) Section 6.1. The fourth sentence of Section 6.1 of the Original DDA is
hereby deleted in its entirety and replaced with the following:
"Developer agrees to indemnify and hold the City Indemnified Parties free and harmless
from any and all Claims which the Developer shall-incur or sustain as a result of
inaccuracy in the legal description for the Developer Parcels, the Right of Way Parcels or
the City Dedication Parcels."
(c) Section 8.11. The third sentence of Section 8.11 of the Original DDA is
hereby deleted in its entirety and replaced with the following:
"The Developer hereby agrees that with respect to the remainder of the Project,
Developer shall be fully responsible for determining whether the foregoing wage
requirements are applicable and agrees to indemnify, defend and hold the City
Indemnified Parties free and harmless from and against any and all Claims arising from
or related to compliance by the Developer or the Developer's officers, directors,
employees, agents, representatives, consultants and/or contractors (at every tier) in
construction of the Project with the prevailing wage requirements imposed by State law
and/or the Davis-Bacon Act requirements imposed by federal law."
(d) Section I 0.1. The portion of the first sentence of Section I 0.1 of the
Original DDA prior to the colon is hereby deleted in its entirety and replaced with the following:
"As a material part of the consideration for this Agreement, and to the maximum extent
permitted by law, the Developer shall indemnify, protect, defend, assume all
responsibility for and hold harmless the City, the Tustin Public Financing Authority and
the Tustin Community Redevelopment Agency and their respective appointed and elected
officials, agents, attorneys, affiliates, employees, contractors, representatives and
governmental successors and assigns (the "City Indemnified Parties") and, with respect
to the LIFOC Parcels only, the Federal Government and its appointed and elected
officials, agents, attorneys, affiliates, employees, contractors and representatives
(collectively, with the City Indemnified Parties, the "Indemnified Parties"), with
counsel reasonably acceptable to the City, from and against any and all Claims including
environmental Claims resulting or arising from or in any way connected with the
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following, provided the Developer shall not be responsible for (and such indemnity shall
not apply to) the gross negligence or willful misconduct of the Indemnified Parties"
(e) Section 10.2.2. The language in quotation marks in Section 10.2.2 of the
Original DDA is hereby deleted in its entirety and replaced with the following:
"[Each Pad Transferee/Tenant] on behalf of itself and each and every Person claiming
by, through or under [Pad Transferee/Tenant], including without limitation, successors
and assigns of such [Pad Transferee/Tenant] owning or leasing all or any portion of
[defined premises] to the maximum extent permitted by law, shall indemnifY, protect,
defend, assume all responsibility for and hold harmless the City, the Tustin Public
Financing Authority and the Tustin Community Redevelopment Agency and their
respective appointed and elected officials, agents, attorneys, affiliates, employees,
contractors, representatives and governmental successors and assigns from and against
any and all Claims resulting or arising from or in any way connected with the existence,
Release, threatened Release, presence, storage, treatment, transportation and/or disposal
of any Hazardous Materials at any time on, in, under, from, about or adjacent to or
occurring on or about any portion or portions of the [defined premises] caused or created
by such [Pad Transferee/Tenant] or its officers, directors, members, partners, agents,
affiliates, employees, contractors, consultants or representatives, or with respect to pre-
existing conditions, exacerbated by negligent act or omission of any of the foregoing (but
with respect to such exacerbation, only to the extent of the exacerbation)."
(f) Section 11.1. The first sentence of Section 11.1 of the Original DDA is
hereby deleted in its entirety and replaced with the following:
"Without limiting the rights of the City Indemnified Parties or any of them, the
- Developer shall procure and maintain, at its own cost and expense, and furnish or cause
to be furnished to the City, evidence of the following policies of insurance naming the
Developer as insured and, except for automobile insurance and Workers' Compensation
insurance, the City, the Tustin Public Financing Authority and the Tustin Community
Redevelopment Agency as additional insureds."
(g) Section 11.1.1. The second paragraph of Section 11.1.1 of the Original
DDA is hereby deleted in its entirety and replaced with the following:
"A City or Accord certificate evidencing the foregoing and designating the City, the
Tustin Community Redevelopment Agency, the Tustin Public Financing Authority and,
as to the LIFOC Parcels only, the Navy, as additional named insureds shall be delivered
to and approved by the City as a condition to Initial Close of Escrow. The procuring of
such insurance and the delivery of policies or certificates evidencing the same shall not
be construed as a limitation of Developer's obligation to indemnify the City Indemnified
Parties. The insurance certificate shall name the City Indemnified Parties as additional
insureds under the policy. The certificate shall contain a statement of obligation on the
part of the carrier to notify the City of any cancellation or termination of the coverage at
least thirty (30) calendar days in advance of the effective date of any such cancellation or
termination. Coverage provided hereunder by the Developer shall be primary to, and not
18405:6428888.4
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contribute with any insurance or self-insurance maintained by the City Indemnified
Parties or any of them, and the policy shall contain such an endorsement. The insurance
policy, by endorsement, shall contain a waiver of subrogation for the benefit of the City,
the Tustin Public Financing Authority and the Tustin Community Redevelopment
Agency and this fact shall be set forth also on the certificate."
(h) Section 14.1.4. The third and fourth sentences of Section 14.1.4 of the
Original DDA is hereby deleted in its entirety and replaced with the following:
"In the event of a termination as provided in this Section 14.1.4, the Developer shall
comply with Section 13.7 before any amount ofthe DDA Deposit is returned to the
Developer, and shall indemnifY the City Indemnified Parties as provided in Section 5.4.
The termination ofthis Agreement pursuant to this Section 14.1.4 shall constitute a
waiver of any rights, claims, causes of action, or demands either Party may have against
the other or the Property, or any portion thereof, but shall not terminate or release any
liability or obligations of the Developer to comply with Section 13.8 and to indemnifY the
City Indemnified Parties as provided in Section 5.4."
(i) Section 14.3.3(b). The first sentence of Section l4.3.3(b) of the Original
DDA is hereby deleted in its entirety and replaced with the following:
"The termination of this Agreement pursuant to this Section 14.3.3 shall not terminate or
release any liability or obligations of the Developer: to comply with Sections 13.7 and
ill and to indemnify the City Indemnified Parties as provided in Section 5.4."
U) Section 16.13.1. The second sentence of Section 16.13.1 of the Original
DDA is hereby deleted in its entirety and replaced with the following:
"The Developer hereby agrees to indemnify and hold the City Indemnified Parties
harmless from any losses and liabilities arising from or in any way related to any claim
by any broker, agent, or finder retained by the Developer regarding this Agreement or
development of the Project or the transactions identified in this Agreement or the
purchase or sale of other property at or adjacent to the Developer Parcels."
3.
Modifications of Citv Release Provisions.
(a)
Section 4.4.3.
(i) Section 4.4.3 of the Original DDA is hereby deleted in its entirety
and replaced with the following:
"4.4.3 Release. Save and except for the explicit covenants, representations
and warranties of the City set forth in Section 3.3 and, as to the Lease Parcels only, the
explicit covenants, representations and warranties of the City set forth in the Ground
Lease, the Developer on behalf of itself and each Successor Owner and every Person
claiming by, through or under the Developer or any Successor Owner (each a "Releasing
Party", and collectively, the "Releasing Parties"), hereby waives, as of the Effective
Date, and agrees to waive, as of the Initial Close of Escrow and as of each Subsequent
18405,6428888.4
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Closing Date, the right of each Releasing Party to recover from, and fully and irrevocably
releases, the City, the Tustin Public Financing Authority and the Tustin Community
Redevelopment Agency and their respective elected and appointed officials, employees,
agents, attorneys, affiliates, representatives, contractors, successors and assigns
(individually, a "Released Party", and collectively, the "Released Parties") from any
and all Claims that the Developer or any Releasing Party may now have or hereafter
suffer or acquire arising from or related to: (a) any information or documentation
supplied by any of the Released Parties ("Due Diligence Information"); (b) any
condition of the Property, the Project Site, or any current or future improvement thereon,
known or unknown by any Releasing Party or any Released Party; (c) any construction
defects, errors, omissions or other conditions, latent or otherwise, including
environmental matters, as well as economic and legal conditions on or affecting the
Property, or any portion thereof; (d) the existence, Release, threatened Release, presence,
storage, treatment, transportation or disposal of any Hazardous Materials at any time on,
in, under, ftom, about or adjacent to the Property, the Project Site, or any current or
future improvement thereon or any portion thereof; ( e) Claims of or acts or omission to
act of any Governmental Authority or any other third party arising from or related to any
actual, threatened, or suspected Release of a Hazardous Material on, in, under, from,
about, or adjacent to the Property or any current or future improvement thereon,
including any Investigation or Remediation at or about the Property, the Project Site, or
any current or future improvement thereon; (f) the cost or extent of the Tustin Legacy
Backbone Inftastructure Program or the Developer's Backbone Inftastructure Work; (g)
the amount of the Project Fair Share Contribution set forth in this Agreement; (h) the
formation of any community facilities district in connection with the recoupment or
payment of the Project Fair Share Contribution (except with respect to Claims against the
City which might arise with respect to agreements between the City and Developer
entered into subsequent to the Initial Close of Escrow relating to community facility
districts); (i) school related development fees and/or (j) any restriction on access to the
Developer Sublease Property for pre-acquisition inspection; provided, however, that the
foregoing release by the Releasing Parties shall not apply to the extent that any Claim is
the result of the gross negligence, willful misconduct or ftaud of the City or its elected
and appointed officials, employees, representatives, agents or consultants arising after the
Initial Close of Escrow. This release includes Claims of which the Developer is presently
unaware or which the Developer does not presently suspect to exist which, if known by
the Developer, would materially affect the Developer's release to the Released Parties.
The Developer specifically waives the provision 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 HIS SETTLEMENT WITH THE
DEBTOR."
In this connection and to the extent permitted by law, the Developer on behalf of
itself, and the other Releasing Parties hereby agrees, represents and warrants, which
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representation and warranty shall survive the Initial Close of Escrow, each Subsequent
Closing and the termination of this Agreement and shall not be merged with any
Quitclaim Deed or the Ground Lease, that (x) it realizes and acknowledges 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, (y) the
waivers and releases in this Agreement have been negotiated and agreed upon in light of
that realization and (z) the Developer, on behalf of itself and the other Releasing Parties,
nevertheless hereby intends to release, discharge and acquit the Released Parties from
any such unknown Claims and controversies which might in any way be included as a
material portion of the consideration given to the City by the Developer in exchange for
the City's performance hereunder.
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (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.
CITY'S INITIALS
DEVELOPER'S INITIALS
This release is for the benefit of the City, the Tustin Public Financing Authority
and the Tustin Community Redevelopment Agency and all successors and assigns of the
foregoing and shall run with the land for the benefit of the City Benefited Property and all
governmental successors and governmental assigns of the City owning all or any portion
of the City Benefited Property and burdening the Developer and the Developer Parcels
and the Successor Owners thereof and all Persons claiming by, through or under the
Developer or any Successor Owner and, to further evidence its effectiveness with respect
to Successor Owners of the Developer Parcels, shall be included in its entirety in each
Quitclaim Deed, in the Special Restrictions, in the Memorandum of Ground Lease and in
the Ground Lease."
4.
Modifications of "As-Is" Provisions.
(a) Section 4.4.2(a). The first paragraph of Section 4.4.2(a) of the Original
DDA is hereby deleted in its entirety and replaced with the following:
"The Developer recognizes that neither the City nor the Tustin Public Financing
Authority would sell and/or lease or subsequently sell the Developer Fee Property or
sublease and subsequently sell the Developer Sublease Property except on an "AS, IS,
WHERE IS, WITH ALL F AUL TS" basis, and the Developer acknowledges that neither
the City, the Tustin Public Financing Authority nor the Tustin Community
Redevelopment Agency has made any representations or warranties of any kind
whatsoever (excepting only representations of the City expressly set forth in this
Agreement), either express or implied in connection with any matters with respect to the
Property or any portion thereof. Developer's determination to enter into this Agreement
and, subsequent to the Effective Date not to terminate this Agreement prior to the close of
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the Due Diligence Period and to proceed to Initial Close of Escrow constitutes
Developer's agreement that Developer, in consummating the transactions described in
this Agreement, is buying and/or leasing the Developer Fee Property, subleasing the
Developer Sublease Property, and later will be buying the Lease Property, in each case in
an "AS IS, WHERE IS, WITH ALL F AUL TS" condition, in its present state and
condition and with all faults, ifany. The Developer further acknowledges and agrees
that, except as otherwise specifically provided in Section 3.3, the City, the Tustin Public
Financing Authority and/or the Tustin Community Redevelopment Agency have not
made and do not make and specifically negate and disclaim any representations,
warranties, promises, agreements or guaranties of any kind or character, whether express
or implied, oral or written, past, present or future, whether by the City, the Tustin Public
Financing Authority, the Tustin Community Redevelopment Agency or any of their
respective agents, elected or appointed officials, representatives or employees, of
concerning or with respect to:"
5.
Modification to Environmental Insurance.
(a) Section 11.1.4(b)(ii) of the Original DDA is hereby deleted in its entirety
and replaced with the following:
"the policy shall provide no less than Ten Million Dollars ($10,000,000.00) in
coverage, subject to a maximum Two Hundred Thousand and No/IOO Dollars
($200,000.00) deductible per claim, to protect against claims and loss from liability
relating to known and unknown conditions on the Developer Parcels for no less than a
10-year term from the Initial Closing Date with an extended 3-year reporting period,
including this Agreement and the Special Restrictions as covered contracts and
containing coverage substantially equivalent to that provided by the City's Environmental
Insurance Policy, in form and content acceptable to the City;"
(b)
Section 7.2.8 ofthe Original DDA is hereby deleted and replaced with the
following:
"7.2.8 Environmental Insurance. The Developer has complied with the
requirements of Section 11.1.4(b )."
(c) The Parties hereto acknowledge and agree that Developer has elected the
option described in Section 11.1.4(b) of the Original DDA.
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6.
Modification to Potential and Material Defaults.
(a) Section 13.I(a) of the Original DDA is hereby deleted in its entirety and
replaced with the following:
"(a) fails to pay timely any sum required to be paid by the Defaulting Party pursuant to
this Agreement, the Special Restrictions, the Infrastructure Construction and Payment
Agreement and/or the Ground Lease."
(b) Section 13.I(c) of the Original DDA is hereby deleted in its entirety and
replaced with the following:
"(c) fails to perform, or delays in the performance of, in whole or in part, any
obligation required to be performed by the Defaulting Party as provided in the
Infrastructure Construction and Payment Agreement and/or this Agreement (including
failure to perform within the time periods for performance set forth in this Agreement),
other than as set forth in clauses (a) or (b) above."
7. Modification ofSil!:nature Block; Ratification of Develouer's Oblil!:ations.
The Parties acknowledge and agree that due to an inadvertent ministerial error, an incorrect
signature block for Developer was attached to the Original DDA and the signature block of the
Developer set forth below is the correct signature block for the Developer. Notwithstanding the
foregoing, the individual executing the Original DDA and all related documents was and is the
duly authorized signatory of Developer, such signatures to the Original DDA and related
documents were and remain valid and, by its execution of this Amendment, the Developer
consents to, acknowledges, ratifies and reaffirms its obligations under the Original DDA as
amended hereby. Each and every signature block for the Developer in the Original DDA is
hereby deleted in its entirety and replaced with the following:
"Vestar/Kimco Tustin, LP.
a California limited partnership
By:
Vestar California XXX, LLC.,
an Arizona limited liability company
General Partner
Its:
By:
Name:
Title: Manager"
8.
Miscellaneous.
(a) Agreement Ratified. Except as specifically amended or modified herein,
each and every term, covenant and condition of the Original DDA as amended is hereby ratified
18405:6428888.4
-8-
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 Amendment.
(b) Binding Agreement. This Amendment shall be binding upon and inure to
the benefit of the parties hereto, their legal representatives, successors and permitted assigns.
(c) Governing Law. This instrument shall be interpreted and construed in
accordance with the laws of the State of California.
18405:6428888.4
-9-
IN WITNESS WHEREOF, City and the Developer have executed this Amendment as of
the date first set forth above.
City of Tustin, California
By:
William Huston, City Manager
ATTEST:
By:
Pamela Stoker
City Clerk
Dated:
APPROVED AS TO FORM
Special Counsel for the City
Steere!, Levitt & Weiss
A Professional Corporation
By:
Vestar/Kimco Tustin, LP.
a California limited partnership
By:
Vestar California XXX, LLC.,
an Arizona limited liability company
General Partner
Its:
By:
Name:
Title:
Manager
18405:6428888.4
-10-
SCHEDULE 1
ATTACHMENT NO. lA
LEGAL DESCRIPTION OF DEVELOPER FEE PARCEL A, DEVELOPER FEE
PARCEL B, DEVELOPER FEE PARCEL C AND DEVELOPER FEE PARCEL D
Developer Fee Parcel A
Lots 1,2,4,5,6,7,8,9,10, 11, 12 and 15 of Tract Map 16695, located in the City of
Tustin, County of Orange, State of California, recorded on ,2005, as
Instrument No. , Book -' Page -' Official Records of Orange County,
California.
Developer Fee Parcel B
Lots 16, 18 and 19 of Tract Map 16695, located in the City of Tustin, County of Orange, State of
California, recorded on ,2005, as Instrument No. , Book_,
Page -' Official Records of Orange County, California.
Developer Fee Parcel C
Lot 20 of Tract Map 16695, located in the City of Tustin, County of Orange, State of California,
recorded on ,2005, as Instrument No. , Book -' Page -'
Official Records of Orange County, California.
Developer Fee Parcel D
Lots 17 and 27 of Tract Map 16695, located in the City of Tustin, County of Orange, State of
California, recorded on ,2005, as Instrument No. , Book_,
Page -' Official Records of Orange County, California.
18405:6428888.4
-1-
SCHEDULE 2
ATTACHMENT NO. IB
DEPICTION OF DEVELOPER FEE PARCEL A, DEVELOPER FEE PARCEL B,
DEVELOPER FEE PARCEL C AND DEVELOPER FEE PARCEL D
18405:6428888.4
-1-
TRACT 16695 LOT EXHIBIT
LEGEND
FEE PARCEL A I I
FEE PARCEL B Y"' ~ ~------1
FEE PARCEL C
FEE PARCEL D ~
SCALE: 1" = 500'
=Z~
ATTACHMENT IB
DEPICTION OF DEVELOPER FEE
PARCELS A-D
DRC
Development Resource Consultants, Inc,
Ci,n E..,;..",;..,. L",d SO".,;"' . L",dPlOM;",
6175 EAST KAISER BOULEVARD
ANAHEIM HILLS, CA 92808 (714) 685-6660
SCHEDULE 3
ATTACHMENT NO. 2A
LEGAL DESCRIPTION OF DEVELOPER SUBLEASE PARCEL A, DEVELOPER
SUBLEASE PARCEL B, DEVELOPER SUBLEASE PARCEL C, DEVELOPER
SUBLEASE PARCEL D AND DEVELOPER SUBLEASE PARCEL E
Developer Sublease Parcel A and Developer Sublease Parcel B
Lot 14 of Tract Map 16695, located in the City of Tustin, County of Orange, State of California,
recorded on ,2005, as Instrument No. , Book -' Page -'
Official Records of Orange County, California.
Developer Sublease Parcel C
Lots 3, 13,21,22 and 23 of Tract Map 16695, located in the City of Tustin, County of Orange,
State of California, recorded on ,2005, as Instrument No. , Book
-' Page -' Official Records of Orange County, California.
Developer Sublease Parcel D
Lots 24, 28 and 29 of Tract Map 16695, located in the City of Tustin, County of Orange, State of
California, recorded on , 2005, as Instrument No. , Book_,
Page -' Official Records of Orange County, California.
Developer Sublease Parcel E
Lots 25 and 26 of Tract Map 16695, located in the City of Tustin, County of Orange, State of
California, recorded on ,2005. as Instrument No. , Book_,
Page -' Official Records of Orange County, California.
18405:6428888.4
-1-
------------------------ -..-----..-.--- .-----------.
SCHEDULE 4
ATTACHMENT NO. 2B
DEPICTION OF DEVELOPER SUBLEASE PARCEL A, DEVELOPER SUBLEASE
PARCEL B, DEVELOPER SUBLEASE PARCEL C, DEVELOPER SUBLEASE
PARCEL D AND DEVELOPER SUBLEASE PARCEL E
1840H428888.4
-1-
TRACT 16695 LOT EXHIBIT
SCALE: ," = 500'
=Z~
lE..G.Et:!D
~~~ Þ~~E~r ~ ~ ~ ~~
FEE PARCEL C
II
~
FEE PARCEL D
FEE PARCEL E
ATTACHMENT 2B
DEPICTION OF DEVELOPER SUBLEASE
PARCELS A-E
~R C De~~I~~~~~~, ~~!~~!.£o.n~~~~~~~,¡,~ne.
817S EAST KAJSER BOULEVARD
ANAHEIM Hills, CA 92808 (714) 685-6880
INFRASTRUCTURE CONSTRUCTION AND PAYMENT AGREEMENT
by and between
THE CITY OF TUSTIN
and
VESTAR / KIMCO TUSTIN, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Dated as of March_, 2005
18405:641O871.15
EXHIBIT A - FACILITIES; SEGMENTS.. ...................................................A-!
EXHIBIT B - FORM OF RELEASE REQUEST................................................................... B-1
EXHIBIT C - FORM OF LETTER OF CREDIT .................................................................. C-!
1840%410871.15
----- ----..- ---- ------------------ -- - ----------..---- ...-----
INFRASTRUCTURE CONSTRUCTION AND PAYMENT AGREEMENT
THIS INFRASTRUCTURE CONSTRUCTION AND PAYMENT AGREEMENT
(Agreement") is made and entered into as of March -' 2005, by and between the CITY OF
TUSTIN (the "City") and VESTAR / KIMCO TUSTIN, LP., a California limited partnership
(the "Developer").
RECITALS:
A. City and Developer have previously entered into that certain Tustin Legacy
Disposition and Development Agreement (Retail Development) dated July 20, 2004 (the
"DDA"), pursuant to which Developer has agreed to purchase certain "Property" (as defined in
the DDA). including the Developer Fee Parcels and the Developer Sublease Parcels, from the
City and to develop the Project (as defined in the DDA). As part of the Project, Developer has
agreed to design and construct certain infrastructure improvements, including a portion of the
Tustin Legacy Backbone Infrastructure Program (as defined in the DDA) in accordance with the
terms and conditions set forth in the DDA.
B. In connection with Developer's execution of the DDA and acquisition of the
Property, Developer has agreed (i) to pay the Project Fair Share Contribution (as defined in the
DDA) with respect to the Tustin Legacy Backbone Infrastructure Program and (ii) (x) to design
and construct those portions of the Tustin Legacy Backbone Infrastructure Program denominated
in the DDA as "Developer's Backbone Infrastructure Work" and (y) to maintain the same until
the City's acceptance of such completed Tustin Legacy Backbone Infrastructure Program
improvements. The physical infrastructure improvements which are required as part of
Developer's Backbone Infrastructure Work are referred to herein as the "Facilities" and are set
forth in Exhibit A to this Agreement. The Facilities are further broken down into "Segments" as
further described in Exhibit A. Under the terms of the DDA, Developer shall be entitled to
reimbursement from the City upon Final Completion of Developer's Backbone Infrastructure
Work in the event that Developer's Infrastructure Payment exceeds the Project Fair Share
Contribution, subject to compliance with all applicable provisions of this Agreement and as
further described herein.
C. Developer may receive reimbursement pursuant to this Agreement with funds
derived from a Community Facilities District established at the sale discretion of the City on
property other than the Developer Parcels (as defined in the DDA) pursuant to the provisions of
the Mello-Roos Community Facilities Act of 1982 (the "Act"). Pursuant to the Act, in the event
that a Community Facilities District is established, the Community Facilities District would be
authorized to issue special tax bonds (the "Bonds") secured by special taxes levied within the
Community Facilities District to finance certain public facilities. Section 53313.5 of the Act
provides that a community facilities district may only finance the purchase of facilities whose
construction has been completed, as determined by the legislative body, before the resolution of
formation to establish the community facilities district is adopted pursuant to Section 53325.1 of
the Act, except that a community facilities district may finance the purchase of facilities
completed after the adoption of the resolution of formation if the facility was constructed as if it
had been constructed under the direction and supervision, or under the authority of, the local
agency.
18405,6410871.15
-1-
D. Section 53314.9 of the Act provides that, notwithstanding Section 53313.5, at any
time either before or after the formation of the community facilities district, the legislative body
may accept advances of funds or work in-kind from any source, including, but not limited to,
private persons or private entities and may provide, by resolution, for the use of those funds or
that work in-kind for any authorized purpose.
E. Section 53314.9 of the Act further provides that the legislative body may enter
into an agreement, by resolution, with the person or entity advancing the funds or work in-kind,
to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value,
or cost, whichever is less, of the work in-kind, as determined by the legislative body, with or
without interest, under all of the following conditions: (i) the proposal to repay the funds or the
value or cost of the work in-kind, whichever is less, is included both in the resolution of intention
to establish a community facilities district adopted pursuant to Section 53521 of the Act and in
the resolution of formation to establish the community facilities district pursuant to
Section 53325.1 of the Act, (ii) any proposed special tax is approved by the qualified electors of
the community facilities district pursuant to the Act, and (iii) any work in-kind accepted pursuant
to Section 53314.9 of the Act shall have bcen performed or constructed as if the work had been
performed or constructed under the direction and supervision, or under the authority, of the local
agency.
F. This Agreement is entered into by City and Developer in order to (i) establish
certain obligations upon Developer with respect to construction of Developer's Backbone
Infrastmcture Work in order to assure that Developer's Backbone Infrastructure Work is carried
out in a manner consistent with the requirements of the Act such that funds raised by issuance of
the Bonds may be used to reimburse Developer for amounts due it pursuant to this Agreement, if
any and (ii) to establish further rights and obligations of the parties with respect to Developer's
Backbone Infrastructure Work and the Project Fair Share Contribution.
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. Terms used in this Agreement and not otherwise defined
shall have the meanings set forth therefor in the DDA- Unless the context otherwise requires, the
terms utilized in this Agreement shall have the meanings herein specified:
"Acceptable Title" means title to land, or an easement therein, and to the Facilities
located thereon, delivered to the City or other applicable public agency free and clear of all liens,
taxes, assessments, leases, easements and encumbrances, whether any such item is recorded or
unrecorded, provided that items which are rcasonably determined by the City not to interfere
with the intended use of such land or easement are not required to be cleared ftom title. Except
with respect to mechanic's and materialmen's liens which are bonded and removed in
accordance with Section 2.8, all monetary liens, taxes, assessments and all other monetary
encumbrances shall be paid in full and removed from title as a condition of "Acceptable Title".
-2-
18405,6410871.15
,--, ,--------------- - -------..--. ----------- --------.. --------..-
"Acceptance Date" means (a) with respect to a Segment, the date upon which the City
has approved in writing the Release Request of Developer for such Segment and has approved
the Segment Release, and (b) with respect to the Facilities as a whole, the date upon which the
City has approved in writing the Release Request by Developer for the last of the Segments and
has approved the Segment Release therefor.
"Act" shall have the meaning set forth in Recital C of this Agreement.
"Actual Cost" means the following costs of Developer with respect to a Segment:
(a) the Construction Costs of such Segment; (b) Developer's actual, reasonable cost of
professional services directly related to the construction of such Segment, including engineering,
legal, accounting, and similar professional services related to design and preparation of the Plans
for such Segment and costs of environmental evaluations required specifically for such Segment
which costs in total shall not exceed ten percent 10% of the Construction Costs of such Segment;
(c) Developer's actual, reasonable cost of construction management services, which costs in total
shall not exceed (i) three percent (3%) of the Construction Costs of such Segment if construction
management services are provided by Deveioper utilizing its own employees or individuals
acting as consultants to Developer or (ii) five percent (5%) of the Construction Costs of such
Segment if construction management services are provided by Developer through arms length
retention of a construction management firm; (d) Developer's actual, reasonable cost of contract
services, including (i) construction services fees in an amount equal to the sum of costs of the
amount of any fees actually paid by Developer to governmental agencies in order to obtain
permits, licenses or other necessary governmental approvals and reviews for such Segment,
(ii) inspection, construction staking and materials testing and (iii) Payment Bonds, Performance
Bonds or maintenance bonds and insurance for such Segment (but excluding Leiter of Credit
fees), which costs in total shall not exceed five percent (5%) of the costs of Construction Costs of
such Segment, and (e) Developer's actuai, reasonablc cost to acquire any real property or interest
therein from a party other than Developer or the City which real property or interest therein is
either necessary for the construction of such Segment (e.g-, temporary construction easements,
haul roads, etc.) or is required to be conveyed with such Segment in order to convey Acceptable
Title thereto to the City or its designee, all as specified in a Release Request that has been
reviewed and approved by the Director; provided, however, that (x) no item of cost relating to a
Segment shall be included in more than one category of cost specified in clauses fa) through Ie)
of this definition, and (y) each item of cost shall include only amounts actually paid by
Developer to third parties and shall not include overhead or other internal expenses of
Developer.
"Approved Soft Costs" means, as to each Segment, those soft costs described in clauses
(b) and (c) of the definition of "Actual Cost" and approved by the City in connection with design
and construction of a particular Segment.
"Bonds" shall have the meaning set forth in Recital C of this Agreement.
"City" means the City of Tustin, a general law city organized and existing under the laws
of the State, and its successors.
-3-
18405,6410871.15
"Community Facilities District" means one or more community facilities districts
and/or assessment districts formed pursuant to the Act by or under the authorization of the City
of Tustin.
"Completion" means that for each Segment: (a) construction of that Segment is
complete in conformity with this Agreement, the DDA and the Construction Contracts, with all
systems (including mechanical, electrical, structural, communication and other systems, as
applicable) in operating condition and ready for use such that the City may utilize such Segment
for its intended purpose; (b) all work required by this Agreement, the DDA and the Construction
Contracts with respect to such Segment, including minor corrective work and minor deficient or
incomplete work is complete, as evidenced by a certification by the project engineer(s) for the
Segment that such Segment has been completed in a good and workmanlike manner and
substantially in accordance with the approved Plans; (c) a Notice of Completion has been
recorded by Developer for such Segment; and (d) any and all mechanic's liens that have been
recorded or stop notices that have been delivered with respect to such Segment have been paid,
settled or otherwise extinguished, dischargcd, released, waived or bonded in accordance with
Section 2.8.
"Construction Bonds" means the Pcrformance Bonds and the Payment Bonds,
collectively.
"Construction Contracts" has the meaning ascribed thereto in the DDA.
"Construction Cost" means Developer's actual, reasonable cost of constructing each
Segment, including labor, material and equipmcnt costs-
"DDA" means the Tustin Legacy Disposition and Development Agreement (Retail
Development), dated July 20, 2004, by and between the City and Developer, as originally
executed or as the same may be amended from time to time in accordance with its terms.
"Default Rate" has the meaning ascribed thereto in the DDA.
"Developer" means Vestar/Kimco, LP., a limited partnership organized and existing
under the laws of the State of California, and its successors and assigns as permitted in
accordance with the terms and provisions of the DDA.
"Developer Fee Parcel B" has the meaning ascribed thereto in the DDA.
"Developer Representative" means the person or persons authorized to execute a
Release Request on behalf of Developer and dcsignated as such in a Release Request signed by
Developer and delivered to the City. Each Release Request shall contain an original or specimen
signature of each person so designated.
"Developer's Backbone Infrastructure Work" has the meaning ascribed thereto in the
DDA.
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18405:6410871.15
------.---------- -_.._----------------------.------------------ - -- ------------
"Developer's Certificate" means the certificate in the form of Exhibit B attached to this
Agreement, to be completed, executed by a Dcveloper Representative and submitted by
Developer to the City as part of each Release Request
"Developer's Infrastructure Payment" has the meaning set forth in Section 4.2.
"Director" means the City Director of Public Works and any designee of said City
Director of Public Works.
"Estimated Release Price" means the Estimated Release Price set forth on Exhibit A as
the same may be modified by one or more supplements thereto entered into in accordance with
Section 3.3.2. The Estimated Release Price, as the same may be modified from time to time by
agreement of the parties, constitutes the "valuc" of such segment for purposes of Section 53314.9
of the Act.
"Facilities" means the public infrastructure and facilities required to be constructed as
Developer's Backbone Infrastructure Work as described in Exhibit A.
"Final Acceptance" is defined in Section 3.3.4 of this Agreement.
"Final Certificate of Compliance" has the meaning ascribed thereto in the DDA.
"Final Completion" means that: (a) construction of all of the Facilities is complete in
conformity with this Agreement, the DDA and the Construction Contracts, with all systems
(including mechanical, electrical, structural, communication and other systems, as applicable) in
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, the DDA and the Construction
Contracts with respect to the Facilities, including minor corrective work and minor deficient or
incomplete work is complete, as evidenced by a certification by the project engineer(s) for the
Facilities that such Facilities have been completed in a good and workmanlike manner and
substantially in accordance with the approved Plans; (c) a Notice of Completion has been
recorded by Developer for the Facilities; and (d) any and all mechanic's liens that have been
recorded or stop notices that have been delivered with respect to the Facilities 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 2.8), provided, however, that if
Developer or any contractor intends to provide a bond in lieu of extinguishment, discharge,
release or waiver of any stop notice or mechanic's lien, the City shall be entitled to withhold its
acceptance of the Release Request for a period of 60 days following filing of the relevant Notice
of Completion or for such longer period as may be required by Section 3.3.1(e).
"Final Release Date" means the date of the final and last Acceptance Date for the final
and last Segment of the Facilities.
"Final Release Price" means the sum of the Release Prices for all Segments comprising
the Facilities.
"Force Majeure" shall have the meaning ascribed thereto in the DDA.
-5-
18405:6410871.15
-------------.-..-------------- ------------- --.---------------
"General Prevailing Wage Rates" means those rates detennined by the Director of the
Department ofIndustrial 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 Cap~city" has the meaning ascribed thereto in the DDA.
"Hazardous Materials" has the meaning ascribed thereto in the DDA.
"Institutional Lender" has the meaning ascribed thereto in the DDA.
"Letter of Credit" means an irrevocable and unconditional direct draw, sight draft letter
of credit in favor of City and in fonn and substance, and issued by an Institutional Lender, in all
cases satisfactory to City in its sale discretion. Each letter of credit delivered by Developer to
the City shall be in the fonn attached as Exhibit C to this Agreement unless otherwise agreed by
the City in its sole discretion.
"LIFOC" has the meaning ascribed thereto in the DDA.
"Minimum Project" has the meaning ascribed thereto in the DDA.
"North of Loop Road Contribution" has the meaning ascribed thereto in the DDA.
"Notice of Completion" means a valid notice of completion as defined in California
Civil Code §3093.
"Payment Bond" or "Payment Bonds" means one or more bonds guaranteeing that all
contractors, subcontractors, materialmen and other persons performing all or any portion of
Developer's Backbone Infrastructure Work are paid in full and meeting the requirements of
Section 2.4.
"Performance Bond" or "Performance Bonds" means one or more performance bonds
(a) guaranteeing (i) due and punctual performance and completion (within the respective times
provided in this Agreement) of Developer's Backbone Infrastructure Work, in accordance with
drawings or plans, as appropriate, that specifically describe the work to be performed in
sufficient detail for the issuance of such Performance Bonds, and including all obligations of
contractors, subcontra,tors and materialmen with respect to the foregoing work and (ii) the
Project Fair Share Contribution and (b) meeting the requirements of Section 2.4.
"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 the Facilities prepared or to be prepared at
the direction of Developer pursuant to Section 2.1 and approved by the Director.
"Project Fair Share Contribution" has the meaning ascribed thereto in the DDA.
-6-
1840S,641087LlS
"Related Property" means, with respect to a Segment, the property on, in or over which
such Segment is located, which property, or an easement thereon or other interest therein, is
dedicated or otherwise conveyed to the City as provided in Section 3.1.
"Release Price" means, with respect to a Segment, the lesser of (a) the Actual Cost of
Developer with respect to such Segment or (b) thc amount specified as the Estimated Release
Price for such Segment in Exhibit A, as the same may be modified by one or more supplements
thereto entered into in accordance with Section 3.2.
"Release Request" means the following to be submitted by Developer to the Director in
connection with each Segment for which Segment Release is requested: (a) the Developer's
Certificate executed by Developer's Representative to substantiate the Actual Cost of one or
more Segments and to certify the Completion of such Segment(s) or the Facilities as a whole,
(b) the documents conveying, or which previously conveyed, to the City or applicable public
agency Acceptable Title to the Related Property of such Segment, as described in Section 3.3.1,
and (c) a copy of the Notice of Completion of such Segment filed in accordance with
Section 3093 of the California Civil Code.
"Remainder Parcels" has the meaning aseribcd thereto in the DDA.
"Reuse Plan" has the meaning ascribed thereto in the DDA.
"SCE Relocation Costs" mean the sum of$6,840,000 more or less, to be paid by
Developer to Southern California Edison in connection with relocation of the Barranca 220kV
transmission poles.
"Segments" means the discrete portions of the Faciiities identified as such and described
in Exhibit A, as the same may be modified by one or more supplements thereto entered into in
accordance with Section 3.3.2.
"Segment Release" means the occurrence of the Acceptance Date with respect to a
particular Segment.
"South of Loop Road Contribution" has the meaning ascribed thereto in the DDA.
"State" means the State of California.
"Subsequent Closing" has the meaning ascribed thereto in the DDA.
"Successor Owner" has the meaning ascribed thereto in the DDA.
"Surety Bond" or "Surety Bonds" means one or more surety bonds guaranteeing (i) due
and punctual performance and completion (within the respective time provided in this
Agreement) of Developer's Backbone Infrastructure Work, in accordance with drawings or
plans, as appropriate, that specifically describe the work to be performed in sufficient detail for
the issuance of such surety bonds, and including all obligations of contractors, subcontractors
and materialmen with respect to the foregoing work and (ii) the Project Fair Share Contribution
and (b) meeting the requirements of Section 2.4.
-7-
1840H41087Ll5
"Tustin Legacy Backbone Infrastructure Program" has the meaning ascribed thereto
in the DDA.
"Final Tract Map" has the meaning ascribed thereto in the DDA.
ARTICLE II
CONSTRUCTION OF FACILITIES
Section 2.1 Preparation and Approval of Plans and Specifications. Pursuant to the
DDA, Developer has certain obligations to construct Developer's Backbone Inftastructure Work.
In furtherance of such Work, Developer shail cause Plans to be prepared for the Facilities in
accordance with requirements of the DDA, including, without limitation, the Schedule of
Performance attached thereto. The Developer shall obtain the written approval of the Plans from
all appropriate departments of the City or from any other public agency or public utility from
which such approval must be obtained. Copies of all such Plans shall be provided by Developer
to the Director.
Section 2.2 Duty of Developer to Construct. The Developer shall construct or cause
to be constructed the Facilities (and each Segment thereof) in accordance with the Plans
approved by the Director and in accordance with requirements of the DDA, including without
limitation the Schedule of Performance attachcd thereto. The Developer shall perform all of its
obligations hereunder and shall conduct all operations with respect to the construction of the
Facilities 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 appropriate to the activities undertaken. The Developer shall not be relieved
of its obligation to construct a Segment, and convey such Segment to the City in accordance with
the terms hereof, even if (a) the Estimated Release Price for such Segment is less than the Actual
Cost or any greater cost to Developer for design and construction of such Segment, or (b) the
total cost of Developer's Backbone Infrastructure Work exceeds the Project Fair Share
Contribution. Notwithstanding the foregoing, nothing set forth in this Agreement shall be
construed to require Developer to perform any work requiring a contractor's license, nor shall
Developer be deemed to be performing construction services pursuant to this Agreement.
Section 2.3 Public Works Requirements. In order to insure that the Facilities are
constructed as if they had been constructed under the direction and supervision, or under the
authority of, the City, so that they may be acquired by the City pursuant to California
Government Code Section 53313.5, or that the value or cost thereof, whichever is less, may be
reimbursed to the Developer pursuant to Section 53314.9 of the Act, Developer shall comply
with all of the requirements of this Section. The Developer shall provide proof to the City, at
such intervals and in such form as the City may reasonably require, that the following
requirements have been satisfied as to all of the Segments.
2.3.1 The Construction Contracts for the construction of each Segment or
Segments shall be awarded to the responsible bidder submitting the lowest responsive bid for the
construction of such Facilities after notice inviting sealed bids is given as required for public
-8-
18405:6410871.15
works projects pursuant to any applicable provisions of the California Public Contracts Code and
the rules, regulations and policies of the City, including the Uniform Public Constmction Cost
Accounting Act, to which the City, pursuant to Resolution No. 03-37, adopted by the City
Council of the City on March 17,2003, has eiected to subject itself and utilizing the standard bid
package forms developed by the City for projects of like kind.
2.3.2 The Developer shall require, and the specifications and bid and contract
documents shall require, all contractors, subcontractors, vendors, equipment operators and owner
operators, in each such case to the extent such Persons are engaged to perform work on a
Segment, to pay at least General Prevailing Wage Rates to all workers employed in the execution
of the contract, 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, and to otherwise
comply with applicable provisions of the California Labor Code, the California Government
Code and the California Public Contracts Code relating to public works projects of cities. The
City has provided Developer with copies of tables setting forth the General Prevailing Wage
Rates, and Developer hereby acknowledges receipt thereof.
2.3.3 The Developer shall require, and the specifications and bid and contract
documents shall require, for all contracts involving in excess of Thirty Thousand Dollars
($30,000) or 20 working days, all contractors, subcontractors, vendors, equipment operators and
owner operators, in each such case to the extcnt such Persons are engaged to perform work on a
Segment, to comply with the provisions of Scction 1777.5 of the California Labor Code with
respect to all apprenticeable occupations upon the project.
2.3.4 In performing its obligations under this Agreement, Developer shall
comply with the applicable nondiscrimination and affirmative action provisions of the laws of
the United States of America, the State and the City- In performing its obligations under this
Agreement, Developer shall not discriminate in its employment practices against any employee,
or applicant for employment, because of such person's race, religion, national origin, ancestry,
sex, sexual orientation, age, physical handicap, marital status or medical condition. The
Developer shall require, in any contract it entcrs into for the construction of any Segment, that
the contractor be subject to the provisions of this paragraph.
2.3.5 The Developer shall require each contractor, subcontractor, vendor,
equipment operator and owner operator, in each such case to the extent such Person is engaged
to perform work on a Segment, to provide proof of insurance coverage satisfying the
requirements of Section 2.7 throughout the term of the construction of such Segment; provided,
however, that, rather than requiring such contractors, subcontractors, vendors, equipment
operators and owner operators to provide such insurance, Developer may elect to provide the
same for the benefit of such contractors, subcontractors, vendors, equipment operators and owner
operators.
2.3.6 The Developer shall comply, and shall cause each contractor,
subcontractor, vendor, equipment operator and owner operator, in each such case to the extent
such Person is engaged to perform work on a Segment, to comply, with such other requirements
relating to the constmction of the Segments as the City may impose by written notification
delivered to Developer, to the extent legally required as a result of changes in applicable federal,
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State or City laws, except to the extent that such laws are not required to be applied to contracts
executed prior to the enaction thereof.
2.3.7 The Developer shall require, and the specifications and bid and contract
documents shall require, all contractors, subcontractors, vendors, equipment operators and owner
operators, in each such case to the extent such Persons are engaged to perform work on a
Segment, to submit certified payroll records every two weeks to Developer for inspection by the
City, and to furnish certified payroll records to the City promptly upon request.
Section 2.4 Bondiol! Requirements. Developer shall provide security for
Developer's Backbone Infrastructure Work in accordance with the requirements of Section 4.1.
Performance Bonds, Payment Bonds and/or Surety Bonds posted as security in accordance with
this Agreement for any Segment shall: (a) be issued by a surety company admitted in the State of
California and regulated by the State of California Department ofInsurance, Best's Rated "A" or
better and duly authorized to issue such bonds in the State; (b) with respect to each Segment, be
in an amount that is at least equal to 100% of the contract price for such Segment as established
by the Construction Contract, including reasonable contingency; (c) satisfY the requirements for
performance bonds, payment bonds and surety bonds, as applicable, under the DDA and this
Agreement; (d) name the City as a covered obligee thereunder; (e) comply with the provisions of
California Government Code Sections 66499.1 and 66499.2, as applicable and (f) be otherwise
acceptable to the City Attorney in its sole discretion. Each Performance Bond, Payment Bond
and Surety Bond delivered by Developer to thc City shall be in the standard form then required
by the City for public works projects and shall not be terminated or modified in any respect
without the prior written approval of the City in its sole discretion.
Section 2.5 Inspection; Completion of Construction. The City shall have primary
responsibility for providing inspection of the work of construction of the Segments to insure that
the work of construction is accomplished in accordancc with the Plans. The City's personnel
shall have access to the site of the work of construction at ail reasonable times for the purpose of
accomplishing such inspection. Upon the Completion of the construction of a Segment to the
satisfaction of the City's inspectors, Developer shall notify the City and the Director in writing
that the construction of such Segment has been completed in accordance with the Plans. No later
than ten days after receiving notification from the City that a Segment was constructed in
accordance with the Plans therefor, Developer shail forthwith file with the Orange County
Recorder a Notice of Completion, in form acceptable to the Director, pursuant to the provisions
of Section 3093 of the California Civil Codc, if applicable. The Developer shall furnish to the
City a duplicate copy of each such Notice of Completion showing thereon the date of filing with
said County Recorder.
Section 2.6 Maintenance of Facilities; Warranties. The Developer shall maintain
each Segment in good and safe condition until the Acceptance Date of such Segment. Prior to
the Acceptance Date of such Segment, Developer shail be responsible for maintaining such
Segment in proper operating condition, and shail perform such maintenance on such Segment as
the Director reasonably determines to be necessary. As of the Acceptance Date of each
Segment, the Letter of Credit, Perfonnance Bond, Surety Bond or alternate security provided
pursuant to Section 4.1.3 by Developer (or by a contractor on behalf of Developer) for such
Segment shall be reduced to an amount equal to 10% of the original amount thereof applicable to
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such Segment and the remaining 10% (or substitute security in such 10% amount per
Section 4.1.6) shall serve as a warranty bond to guarantee that such Segment will be tree trom
defects due to faulty workmanship or materials for a period of 12 months from the Acceptance
Date of such Segment, or Developer may elect to provide a new warranty bond in such an
amount. As of the Acceptance Date for each Segment, Developer shall assign to the City all of
Developer's rights in any warranties, guarantees, maintenance obligations or other evidence of
contingent obligations of third Persons with respect to such Segment.
Section 2.7
Insurance ReQuirements.
2.7.1 The Developer shall or shall cause each contractor, subcontractor, vendor,
equipment operator and owner operator, in each such case to the extent such Person is engaged
to perform work on a Segment, to, at all times prior to the Final Acceptance of all Segments,
maintain, deliver to the City and keep in full force and effect, the following insurance policies:
(a) general liability insurance which includes, but is not limited to,
coverage for personal injury, premiscs and operations liability, losses related to
independent contractors, products and completed operations, contractual liability,
explosion, collapse, and underground hazards having not less than a combined single
limit of Five Million Dollars ($5,000,000) for one or more persons injured and property
damage in each occurrence;
(b) automobile liability insurance which includes, but is not limited to,
owned, non-owned and hired automobiles, in the amount of not less than a combined
single limit of Five Million Dollars ($5,000,000) for one or more persons injured and
property damage in each accident;
(c) course of construction insurance to the extent that it may apply to
materials to be used in the construction of a Segment, during the course of construction of
such Segment; and
(d) worker's compensation insurance as required by the California
Labor Code for all persons employed directly or indirectly by Developer or any
contractor or subcontractor in connection with the construction of any Segment,
accompanied by employer's liability insurance in the amount of not less than One Million
Dollar ($1,000,000) policy limit per employee, which policy shall contain a waiver of
subrogation in favor of the City.
2.7.2 In addition to the foregoing insurance requirements, each contractor
constructing all or any portion of the Facilities (or Developer on behalf of all such contractors)
shall obtain, maintain, deliver to the City and keep in full force and effect tram the inception of
any construction contract until the Acceptance Date and with an extended reporting period of not
less than five years, pollution legal liability insurance which provides financial protection and
assurance for the benefit of the insureds listed in Section 2.7.4(a) for all claims, losses, expenses
and costs related to or arising from or related to pollution conditions including those related to
asbestos containing materials, lead based paint, PCB's and petroleum products and their
derivatives that are created, released or conveyed through the activities and/or performance
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under the contract of such contractors or their respective subcontractors or agents, including
through negligence or failure to perform the construction.
2.7.3 Each policy of insurance shall be issued by an insurer licensed to do
business in the State by the California Department ofInsurance, which insurer shall have a
Bests' rating of Grade A and Class Vll (seven) (if an Admitted Insurer) and Grade A- and Class
X (ten) or better (if offered by a Surplus Line Broker); provided, however, that policies of
worker's compensation insurance may be issucd by insurers with a Bests' rating of no less than
B- and Class VII (seven) or better or such insurance may be provided through the State
Compensation Fund, and provided further that ratings and providers with respect to the pollution
legal liability policy or policies described in Section 2.7.2 may be lower if approved by the City
in its sole discretion.
2.7.4 Except as otherwise noted, each policy of insurance shall provide, or shall
bear an endorsement that provides (a) that the City, the Tustin Public Financing Authority, the
Community Redevelopment Agency, the Irvine Ranch Water District, and the Department of the
Navy and their respective elective and appointive boards, officers, agents and employees are
additional insureds under the policy as to the work being performed under the contract, (b) that
the coverage provided under the policy is primary and no other insurance carried by the City will
be called upon to contribute to a loss under the policy, (c) that the policy limits or liability are
provided on an occurrence basis, (d) that the coverage provided by policy shall not be cancelled
or terminated unless 30 days' written notice is first given to the City, (e) for each of the general
liability insurance policy and the course of construction policy, that such policy covers blanket
contractual liability, explosion, collapse and underground hazards, products and completed
operations, (f) for each of the general liability insurance policy, the course of construction policy
and the automobile liability policy that such policy covers broad form property damage liability
and that such policy covers personal injury as well as bodily injury liability, and (g) for the
automobile liability policy, that such policy covers use of non-owned automobiles. Each such
policy shall provide that the carrier waives any right of subrogation against the above listed
additional insureds.
2.7.5 If Developer fails to maintain or cause to be maintained 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 Dcveloper or retain such amount from any monies due
to Developer under this Agreement. The failure of the City to procure any such insurance shall
in no way relieve Developer of any of its obiigations under this Agreement.
Section 2.8
Liens and Stop Notices.
2.8.1 Developer shall keep the Property and the Related Property free from any
and all liens relating to the provision of labor and services. Developer shall not pay nor permit
the payment of any contractor, subcontractor and/or materialman without first obtaining or
causing to be obtained conditional (as to payment only) lien waivers for current invoices and
unconditional lien waivers for all previous work for which no unconditional lien waiver was
previously obtained by Developer. Developer shall promptly notify the City in the event any
contractor, subcontractor or material supplier refuses to deliver any such conditional and/or
unconditional waiver and lien release.
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2.8.2 In the event any lien is recorded against all or any portion of the Property
or the Related Property, Developer shall promptly discharge all liens or indemnify the City by
(a) recording a statutory lien release bond which removes such lien from title to the Property
and/or Related Property in accordance with California Civil Code Section 3143 and the
requirements of Section 2.8.4; and (b) providing to the Director written evidence acceptable to it
in its sole discretion of the withdrawal of any lis pendens and/or notice of action that has been
recorded against the Property and/or the Related Property in connection with such mechanic's
lien claim.
2.8.3 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 Developer 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
2.8.3 shall comply with the provisions of California Civil Code Section 31966 and the
requirements of Section 2.8.4.
2.8.4 Any bond filed with the City to satisfy the requirements of this Section 2.8
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 perccnt (125%) of the claim stated in the
mechanics' liens, materialmens' liens, stop notice or notice to withhold.
ARTICLE III
ACQUISITION OF FACILITIES
Section 3.1 AcQuisition and Ownership of Facilities. The Developer hereby agrees
to transfer to the City, or to the applicable public agency, upon the Acceptance Date, each
Segment of the Facilities, subject to the terms and conditions hereof. Acceptable Title to each
Segment shall be transferred to the City or to the applicable public agency as of the Acceptance
Date of such Segment; provided, however, that notwithstanding such transfer, as provided in
Section 2.6, Developer shall be responsible for the maintenance of such Segment until the
Acceptance Date of such Segment. Notwithstanding the fact that some or all of the Facilities
may be constructed in dedicated street rights-of-way or on property which has been or will be
dedicated to the City or its designee, the Facilities shall be and remain the property of Developer
until title thereto is conveyed to the City as provided herein. Such ownership by Developer shall
likewise not be affected by any agreement which Developer may have entered into or may enter
into with the City pursuant to the provisions of the Subdivision Map Act, Section 66410 et seq.
of the California Government Code, and thc provisions of this Section shall control.
Section 3.2 Dedication of Propertv and Easements to Citv. Acceptable Title to all
property on, in or over which each Segment will be located and which is not then owned by the
City shall be deeded over to the City or to the applicable public agency designated by the City,
by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such
easement is approved by the City as being a sufficient interest therein to permit the City to
properly own, operate and maintain such Segment located therein, thereon or thereover, and to
permit Developer to perform its obligations as set forth in this Agreement. Upon the request of
the City, Developer shall furnish to the City a title report for such property not previously
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dedicated or otherwise owned by the City or its designee, for review and approval at least 20
calendar days prior to the transfer of Acceptable Title to a Segment to the City or its designee. In
the event the City does not approve the condition of title as Acceptable Title, the City shall not
be obligated to accept title to such Segment and the Release Request shall not be approved unless
and until Developer has cured such objections to title to the reasonable satisfaction of the City
and Acceptable Title is conveyed to the City or other applicable public agency.
Section 3.3
Release.
3.3.1 Segment Release. Upon Completion of each Segment, Developer shall
obtain a Segment Release ITom the City for such completed Segment, as follows:
(a) Developer shail deliver to the City and the Director a fully
executed Release Request for such Scgment, together with all attachments, instruments
and exhibits to be included therewith. By presentation of a Release Request for a
Segment to the City, Developer warrants to the City that: (i) the work, materials and
equipment covered by such Release Request are free and clear ofliens and stop notices
not satisfied or bonded in accordance with Section 2.8, and (ii) no work, materials or
equipment covered by such Release Request has been acquired by Developer (or any
other person performing work on such Segment or furnishing materials or equipment for
such Segment) subject to an agreement under which an interest therein or an
encumbrance thereon is retained by the vendor thereof or is otherwise imposed on
Developer (or such other person).
(b) Upon receipt of a completed Release Request (and accompanying
documentation) for a Segment, the Director shall conduct a review in order to confirm
that such Segment was constructed in accordance with the Plans therefor and to verify
and approve the Actual Cost of such Segment specified in such Release Request.
Developer agrees to cooperate with the Director in conducting each such review and to
provide the Director with such additional infonnation and documentation as is reasonably
necessary for the Director to conclude each such review. The City agrees to cause the
Director to conduct such review without unreasonable delay. If the Director determines
that the Actual Cost specified in such Release Request as initially submitted exceeds
Developer's actual, reasonable cost of constructing such Segment, Developer shall
resubmit such Release Request, with the Actual Cost specified therein modified so as to
take into account such determination by the Director. Notwithstanding any greater
amount expended by Developer in connection with a Segment, the Release Price for each
Segment shall be the lesser of (a) the Actual Cost for such Segment as approved by the
Director or (b) the Estimated Release Price.
(c) Approval by the Director of a Release Request and Acceptance of
a Segment shall be determined by the Director acting in a Governmental Capacity and
shall occur only upon: (i) delivery to the Director of a complete Release Request fully
executed by Developer and including verification of the Actual Cost of such Segment and
(ii) confirmation by the Director that: (aa) the Release Request and the proposed Release
Price is accurate, (bb) the Segment has been constructed in accordance with the Plans
therefor, (cc) the Actual Cost of such Segment has been verified, and (dd) unconditional
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waivers and lien releases as described in Section 2.8 and 3.3.l(e) or other security as
described in such Sections have been delivered to Developer. Upon satisfaction of all of
the foregoing conditions the Director shall approve the Segment Release. The Release
Price established by the Director for such Segment shall constitute the final Release Price
for such Segment. The date upon which the Director signs the Release Request shall be
the deemed the "Acceptance Date" for such Segment.
(d) Upon approval by thc Director of the Segment Release and the Release
Price for such Segment, the Director shall sign the Release Request and forward the same
to Developer and shall take such actions as may be reasonably requested by Developer to
cause a reduction in the security provided by Developer to the extent provided by
Section 4.1.6.
(e) Developer shall have furnished to the Director copies of written
unconditional waivers and lien releases for any and all claims for stop-notices,
mechanics' liens or rights to payment for labor and materials, pursuant to and in the form
set forth in California Civil Code sections 3262(d)(2) and 3262(d)(4) from all contractors,
subcontractors and material suppliers covering all work for such Segment provided,
however, with respect to any contractor, subcontractor or material supplier refusing to
deliver such unconditional waiver and lien release:
(i) Developer shall deliver to the City statutory lien release bonds in
form and substance satisfactory to the City in it sale discretion and otherwise
complying with the terms and conditions set forth in Section 2.8.
(ii) Developer shall cause each and every party holding labor and
material bonds associated with such Segment to maintain such labor and material
bonds for said Segment and the work associated therewith for not less than eight
(8) months after recordation of a Notice of Completion with respect to such
Segment.
3.3.2 Modification to Release Price. The City and Developer may make
modifications in the composition and description of a Segment, or in the amount of the Estimated
Release Price for a Segment, whenever the City and Developer deem such modifications to be
appropriate. Any such modification shall bc approved and implemented by the City and
Developer executing a supplement to Exhibit A containing a description of the modified
Segment and, if applicable, Release Price. Upon the execution of any such supplement to
Exhibit A, the description of the Segment and, if applicable, the Estimated Release Price in
Exhibit A shall be deemed to have been modified in accordance therewith.
3.3.3 Final Release Request. Upon Final Completion by Developer of
Developer's Backbone Infrastructure Work, including all Segments constituting the Facilities to
the satisfaction of the City, Developer shall submit to the City a final Release Request ("Final
Release Request") including a certification setting forth the Final Release Price of Developer in
completing the Facilities constituting Developer's Backbone Infrastructure Work and setting
forth the actual cash payments made by Developer to third parties on account of Developer's
Backbone Infrastructure Work.
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3.3.4 Final Acceotance. Approval by the Director of the Final Segment Release
and the Final Acceptance Date ("Final Acceptance") shall be made by the Director acting in a
Governmental Capacity and shall occur only upon (a) Developer's compliance with all the terms
and conditions set forth in Section 3.3.1 for all Segments, including provision by Developer of a
Final Release Request meeting the requirements of Section 3.3.l(a) and Acceptance thereof by
the Director in accordance with the provisions of Section 3.3. L (b) payment in full by
Developer to the City of the Initial Closing Contribution and, if then or previously due, the
remainder of the North of Loop Road Contribution; (c) transfer by Developer to the City or
applicable public agency of all of the Facilities and the Related Property in accordance with this
Agreement, (d) removal or bonding of all mechanic's liens, materialmen's liens and stop notices
in accordance with Section 2.8, and (e) passage of the statutory time period for filing ofliens and
stop notices without additional liens or stop notices being filed (or if filed, being removed or
bonded as aforesaid). Following Final Acceptance, Developer shall be entitled to obtain
reimbursement due to it, if any, on account of the Tustin Legacy Backbone Infrastructure
Program in accordance with the provisions of Article 4.
Section 3.4 Release of Construction Bonds and Surety Bonds. Notwithstanding
any other provision of this Agreement, all Construction Bonds and Surety Bonds provided to the
City as security under this Agreement or any related contract will be released only in accordance
with standard City rules and procedures and in accordance with the time frames and other
requirements established in this Agreement.
Section 3.5 Certain Items Treated as Seoarate Se!!ments. The following shall be
treated as separate Segments:
(a) each acquisition by Developer ofright-ot:way in connection with Developer's
Backbone Infrastructure Work;
(b)
(c)
payment to Southern California Edison of SCE Relocation Costs; and
payment of Approved Soft Costs.
The City agrees that the Acceptance Date for the foregoing items shall be as follows, with
the intent that the City shall, upon the Acceptance Date for each of the foregoing Segments,
permit a reduction in the amount of the Letter of Credit (or Performance Bond or Surety Bond if
the Performance Bond or Surety Bond covers such items) equal to one hundred percent (100%)
of the following documented cash payments: .
(x) The Acceptance Date for the SCE Relocation Costs shall be the date the City
confirms in writing, based on written evidence submitted to it by Developer confirming Southern
California Edison's receipt and acknowledgment of such sums, that payment of SCE Relocation
Costs have been made to Southern California Edison.
(y) The Acceptance Date for acquisition by Developer of right-of-way shall be the
date the City confirms in writing, based on written evidence submitted by Developer to the City,
that Developer has paid for and acquired Acceptable Title to applicable right-of-way in
connection with Developer's Backbone Infrastructure Work.
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(z) The Acceptance Date for the Approved Soft Costs shall be the date that the City
approves in writing, based uppn written evidence submitted by Developer to the City, Approved
Soft Costs paid in full by Developer as to any Segment. As a condition precedent to approval by
the City of Approved Soft Costs, Developer shall certify to the City that (I) all Approved Soft
Costs have been paid to the consultants and construction manager to whom they are due (as
evidenced by written acknowledgement of amounts received by such consultants and
construction manager), (2) the total Approved Soft Costs for the Segment for which
reimbursement is sought is less than or equal to the budgeted amount of such Approved Soft
Costs for such Segment, and (3) there shall be no further request for Approved Soft Costs with
respect to such Segment.
ARTICLE IV
PAYMENTS AND RECONCILIATION
Section 4.1
Developer Pavments and Security.
4.1.1 Pursuant to the terms and conditions of the DDA, Developer has agreed,
among other matters, to pay the Project Fair Share Contribution. The total Project Fair Share
Contribution of Developer for the Project is Thirty Six Million Three Hundred Thirty Thousand
and Noll 00 Dollars ($36,330,000.00). Of this amount, Twenty-Two Million Eight Hundred
Thousand and Noll 00 Dollars ($22,800,000.00) of the Project Fair Share Contribution is
allocated to Developer Fee Parcel A, Developer Sublease Parcel A and Developer Sublease
Parcel B ("South of Loop Road Contribution") and shall be paid at the Initial Closing. The
remainder of the Project Fair Share Contribution, totaling Thirteen Million Five Hundred Thirty
Thousand and Noll 00 Dollars ($13,530,000.00), is allocated to the remaining Developer Parcels
("North of Loop Road Contribution"). Of the North of Loop Road Contribution, that portion
attributable to Developer Fee Parcel B, equal to Six Million Thirty Thousand Nine Hundred
Sixty Two and 061100 ($6,030,962.06) (the "Developer Fee Parcel B Contribution), shall be
paid at the Initial Closing. The Developer Fee Parcel B Contribution and the South of Loop
Road Contribution total Twenty Eight Million Eight Hundred Thirty Thousand Nine Hundred
Sixty Two and 061100 ($28,830,962.06) and are referred to herein collectively as the "Initial
Closing Contribution". In accordance with the requirements of the DDA, at the Initial Closing
Developer has secured with a Letter of Credit and/or Surety Bond ("Initial Security") an amount
equal to Fifty Five Million Six Hundred Eighty Two Thousand Two Hundred and Five and
No/IOO Dollars ($55,682,205.00).
4.1.2 Under the terms of thc DDA, upon the execution by Developer of
construction contracts for Developer's Backbone Infrastructure Work, Developer may reduce,
and the City shall cooperate in effectuating such reduction, the face amount of the Initial Security
(or any subsequent Letter of Credit and/or Surety Bond meeting the requirements of this
Agreement and posted in accordance with thc DDA) (a) on a dollar for dollar basis up to a total
reduction equal to the "Estimated Backbone Infrastructure Cost", by providing, or causing its
contractor(s) employed to construct Developer's Backbone Infrastructure under the Construction
Contracts to provide, Construction Bonds to secure the total amount of the Construction
Contracts or by providing alternative security as described in Section 4.1.3; and (b) for the
remainder of the Initial Security, if any, by paying to the City in cash an amount equal to the
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positive difference remaining, if any, after deducting from the total Initial Closing Contribution
the amount of the Estimated Backbone Infrastructure Cost secured pursuant to clause (a) above.
4.1.3 Pursuant to the DDA, in lieu of the cash payment of the Initial Closing
Contribution and/or provision of Construction Bonds sccuring the Estimated Backbone
Infrastructure Cost, the Developer may provide the following forms of security securing the
entirety of amounts described in Sections 4.l.1 and:Ll2:
(a) a Letter of Credit in the form attached hereto as Exhibit C issued
by an Institutional Lender and naming the City as the sale beneficiary;
a Surety Bond, or
(b)
(c)
a cash deposit.
4.1.4 To the extent that thc City determines, at any time following determination
of the Estimated Backbone Infrastructure Cost that the actual cost of Developer's Backbone
Infrastructure Work has decreased such that it is less than the amount of the Project Fair Share
Contribution then or previously due and payable (the "Negative Difference") (and after taking
into account the release of Performance Bonds or other security, if any, following any previously
occurring Segment Release) and Developer has not previously paid cash for such Negative
Difference, Developer, within ten (10) Business Days following the date of the City's written
notice thereof, shall provide to the City a cash payment in the amount of the Negative Difference
or if requested by Developer and approved by the City in its sole discretion, security meeting the
requirements of Section 4. 1.3 in the amount of the Negative Difference as necessary to fully
secure, in accordance with the City Code, Developer's Backbone Infrastructure Work and the
portion of the Project Fair Share Contribution then or previously due and payable.
4.1.5 To the extent that thc cost of Developer's Backbone Infrastructure Work is
determined at any time by the Director to have increased such that the security provided by
Developer pursuant to this Section is less than the then-estimated cost to complete Developer's
Backbone Infrastructure Work (and after taking into account the release of Performance Bonds
or other security, if any, following any previously occurring Segment Release), the City may, in
its sole discretion, require Developer to post additional security meeting the requirements of
Section 4.1.2 and 4.1.3 to secure such estimated additional costs.
4.1.6 Promptly following the Acceptance Date for each Segment and provided
that (a) the Developer is not then in default of its obligations under this Agreement, (b) there
remains no Negative Difference and (c) thc City is fully secured for the Project Fair Share
Contribution and all re-maining Backbone lnti-astructure Work and warranty obligations of
Developer (as further described in Section 2.6) as required by this Agreement, then the
Performance Bond, Letter of Credit, Surety Bond or other security posted by Developer (or by a
contractor on behalf of Developer) for such Segment shall be reduced by an amount equal to
ninety percent (90%) of the Release Price approved by the City for such Segment (such that there
shall be a retention equal to ten percent (10%) of the approved Release Price) or Developer shall
provide a new Letter of Credit, Performance Bond or Surety Bond in the amount of ten percent
(10%) of the approved Release Price and the existing Letter of Credit, Performance Bond or
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Surety Bond shall be released in the amount of 100% of the approved Release Price; provided,
however, that to the extent the Release Price for such Segment includes Approved Soft Costs, the
then-provided security shall be reduced by the full amount of such Approved Soft Costs without
retention (such that there shall be a ten percent (10%) retention with respect to the full amount of
the Release Price less Approved Soft Costs) and provided further, that following the Acceptance
Date for each Segment consisting ofright-ot:way acquisition and/or SCE Relocation Costs, the
then-provided security shall be reduced by the full amount approved therefor by the City
pursuant to the Release Request, without retention. Upon the first anniversary of the Acceptance
Date of such Segment provided that (x) there are then no warranty claims outstanding with
respect to such Segment and (y) the conditions set forth in clauses (at (b) and (c) above are
satisfied, then the security posted by Deve]oper (or by a contractor on behalf of Developer) for
such Segment shall be further reduced by the ten percent (10%) of the Release Price of such
Segment withheld as described above.
Section 4.2 Final Reconciliation of Developer Payments. Promptly following the
submittal by Developer of the Final Release Request, the City shall determine (a) the Final
Release Price and (b) the tota] cash payments to the City by Developer on account of Project Fair
Share Contribution or Developer's Backbone Infrastructure Work then retained by the City and
not applied to the design or construction of Developer's Backbone Infrastructure Work or to pay
other obligations of Developer under this Agreement ("City Cash Proceeds"). The portion of
the Final Release Price actually funded by cash payments made by the Developer to third parties
on account of Developer's Backbone Infrastructure Work and the City Cash Proceeds are
referred to herein collectively as "Developer's Infrastructure Payment." Reconciliation shall
be made as follows:
4.2.1 To the extent that Developer's Infrastructure Payment exceeds Thirty Six
Million Three Hundred Thirty Thousand and Noll 00 Dollars ($36,330,000.00), such difference
(as the same may be increased pursuant to Section 4.2.3, the "Reimbursement Amount") shall
be reimbursed to Developer by the City in accordance with the following:
(a) The City shall have no obligation to reimburse Developer until the
Final Acceptance Date has occurred and all of Developer's Backbone Infrastructure
Work has been fully completed to the satisfaction of the City.
(b) Reimbursement to Developer shall be from all of the following
sources, but only to the extent of funds from such sources, until paid in full (and the City
shall have no obligation to reimburse Developer from other funds available to it):
(i) the City's receipt and booking in its enterprise fund ofland
sale proceeds from the Initial Closing; provided that (x) reimbursement to Developer
from such funds shall be capped at Seven Million Five Hundred Thousand and No/IOO
Dollars ($7,500,000.00), (y) the City's enterprise fund will be responsible for release of
such funds to Developer as and when due and (z) that the City's obligation to reimburse
Developer utilizing such funds shall terminate if the reconciliation described in Section
4.2 has not been comp]eted and funds paid to Developer before May 13, 2009;
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18405,6410871.15
(ii) the City's receipt and booking in its enterprise fund of land
sale proceeds from the Subsequent Ciosings; provided that (x) reimbursement to
Developer from such funds shall be capped at Three Million Five Hundred Thousand and
No/lOO Dollars ($3,500,000.00), (y) the City's enterprise fund will be responsible for
release of such funds to Developer as and when due and (z) that the City's obligation to
reimburse Developer utilizing such funds shall terminate if the reconciliation described in
Section 4.2 has not been completed and funds paid to Developer before May 13, 2009;
(iii) the City's receipt and booking in its enterprise fund ofland
sale proceeds from those parcels denominated on the Reuse Plan as within Planning
Areas 7, 8, 9,10, II, 12, 13, 14 or 15 which are in excess of the cost of Tustin Legacy
Backbone Infrastructure Program dcsign and construction costs for the Valencia North
Loop Road and Armstrong Avenue Infrastructure Improvements Project No. 7139;
(i",) to thc extent the City determines to issue Bonds covering
the portion of Tustin Legacy described in clause (b)(iii) above with a plan of work that
includes Developer's Backbone Infrastructure Work, receipt by the City of such Bond
funds (provided, however, that no rcimbursement shall be made from Bond funds for
Facilities to be owned and operated by a public agency other than the City and provided
further that in the event that the City does determine to issue Bonds covering the
aforesaid portion of Tustin Legacy, the City will reasonably endeavor to include in such
Bonds a plan of work that includes Developer's Backbone Infrastructure Work); and/or
(v) the City's receipt of reimbursement funds from IRWD for
water and sewer utilities constructed by Developer as part of Developer's Backbone
Infrastructure Work.
(c) Notwithstanding any other provision of this Agreement or the
DDA to the contrary, and regardless of whether or not the North of Loop Road
Contribution or any portion thereof is then due and payable, the City shall have no
obligation to reimburse Developer for Developer's Infrastructure Payment in excess of
the Reimbursement Amount. It is agreed by the parties that pursuant to the foregoing
provision the City shall be entitled to withhold from the reimbursement to Developer and
contribute to any future payment of the North of Loop Road Contribution due from
Developer, that portion of Developer's Infrastructure Payment attributable to the North of
Loop Road Contribution.
4.2.2 To the extent that Developer's Infi"astructure Payment is less than the
Project Fair Share Contribution, Developer shall pay to the City in cash, within ten (10) Business
Days after written demand therefor by the City and as a condition precedent to issuance of a
Final Certificate of Compliance for the Project as a whole and Final Acceptance, the full amount
of the difference between Developer's Infrastructure Payment and the Project Fair Share
Contribution then due, such that the Project Fair Share Contribution is paid in full.
4.2.3 If one or more of the LlFOC Parcels for which the North of Loop Road
Contribution will be required has not been delivered by the Federal Government to the City on or
before the Interest Date (defined below), and provided that Developer is not, on such Interest
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Date or any anniversary thereof, in default under this Agreement or in "Material Default" under
the DDA, the Ground Lease and/or the Special Restrictions, then from and after the Interest
Date, the portion of the Reimbursement Amount then unpaid shall be increased annually on each
anniversary of the Interest Date by simple interest at the rate of five percent (5%) per annum.
The "Interest Date" shal1 mean the later of the date that is (a) the fifth anniversary of the Initial
Close of Escrow or (b) two years fol1owing Completion by Developer of the Minimum Project.
Section 4.3 Develooer Default. If Developer is at any time in default of its
obligations under this Agreement with respect to performance of Developer's Backbone
Infrastructure Work, the posting of security with respect thereto, or the payment of sums due
hereunder, and shall have failed to cure such default within the time period set forth in
Section 6.2.3 for cure of such default, then the City, without waiving any other remedy it may
have, may elect to require Developer to pay the amount of any deficit in the Project Fair Share
Contribution to the City in full, within ten (i 0) Business Days after written demand therefor by
the City. Such amounts shal1 bear interest from the date due at the Default Rate.
Section 4.4 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 Reoresentations and Warranties of Develooer. The Developer makes
the following representations and warranties for the benefit of the City:
(a) Organization. The Developer represents and warrants that
Developer is a limited liability partnership duly organized, validly existing and in good
standing under the laws of the State of California, 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. The Developer represents and warrants that Developer
has the power and authority to entcr 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 bchalf of Developer.
(c) Binding Obligation. The Developer represents and warrants that
this Agreement is a valid and binding obligation of Developer and is enforceable against
Developer in accordance with its terms, subject to bankruptcy, insolvency, reorganization
or other similar laws affecting thc cnforcement of creditors' rights in general and by
general equity principles.
(d) Environmental Mailers Relating to Segments. The Developer
represents and warrants that neither Developer, nor any subcontractor, agent or employee
thereof, has used, generated, manufactured, procured, stored, released, discharged or
disposed of (whether accidentally or intentional1y) any Hazardous Materials in violation
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of any federal, state or local law, ordinance, regulation, rule or decision regulating
Hazardous Materials on, under or in any Segment or the Related Property of such
Segment, or transported (whether accidentally or intentionally) any Hazardous Materials
to or tram such Segment or such Rclated Property, in violation of such laws.
The Developer represents and warrants that, as of the Acceptance Date of each Segment,
there will not be present on, under or in such Segment or the Related Property of such Segment,
or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not
require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules
or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable
federal, state or local laws, ordinances, reguiations, rules or decisions, or (iii) those with respect
to which ongoing remediation or mitigation is being performed in full compliance with
applicable federal, state or local laws, ordinances, regulations, rules or decisions.
(e) Environmental Matters Relating to Property. The Developer
represents and warrants that neither Developer, nor any subcontractor, agent or employee
thereof has used, generated, manufactured, procured, stored, released, discharged or
disposed of (whether accidentally or intentionally) at any time on or prior to the date
hereof any Hazardous Materiais in violation of any federal, state or local law, ordinance,
regulation, rule or decision regulating Hazardous Materials on, under or in the Property,
or any structure, fixtures, equipmcnt, or other objects thereon, or transported (whether
accidentally or intentionally) any Hazardous Materials to or from the Property, or any
structure, fixtures, equipment, or othcr objects thereon, in violation of such laws.
The Developer represents and warrants that there is not present on, under or in the
Property or any structure, fixtures, equipmcnt, or other objects thereon, or any portion thereof,
any Hazardous Materials, except for (i) any types or amounts that do not require remediation or
mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those
that have been remediated or mitigated in fuil compliance with applicable federal, state or local
laws, ordinances, regulations, rules or decisions, and (iii) those with respect to which ongoing
remediation or mitigation is being pcrformcd in full compiiance with applicable federal, state or
local laws, ordinances, regulations, rules or decisions.
The Developer represents and warrants that Developer has not received notice of, and to
the best of Developer's knowledge there is not, any proceeding or formal inquiry by any
governmental authority, body or agency with respect to the presence of Hazardous Materials on,
under or in the Property, or any structure, fixtures, equipment, or other objects thereon, or the
migration thereof from or to other property.
The Developer represents and warrants that there is no legal impediment that would make
infeasible (i) Developer's proceeding with and completing the construction of the Facilities, or
(ii) the development of the Property as contemplated by Developer.
Section 5.2 Covenants of Developer. Developer makes the following covenants for
the benefit of the City:
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(a) Completion o{Segments. The Developer covenants that it will use
its reasonable and diligent etTorts to do all things that may be lawfully required of it in
order to cause the Segments to be completed in accordance with this Agreement.
(b) Compliance with Laws. The Developer covenants that, while the
Facilities are owned by Developer or required pursuant to this Agreement to be
maintained by Developer, it will not commit, suffer or permit any of its agents,
employees or contractors to commit any act to be done in, upon or to the Facilities in
violation in any material respect of any law, ordinance, rule, regulation or order of any
governmental authority or any covcnant, condition or restriction now or hereafter
affecting the Property or the Facilitics.
(c) Release Req1fesls. The Developer covenants that (i) it will not
request payment from the City undcr this Agreement for the acquisition of any
improvements that are not part of a Segment, and (ii) it will diligently follow all
procedures set forth in this Agreemcnt with respect to Release Requests.
(d) Financial Records. Until the Final Acceptance, Developer
covenants to maintain proper books of record and account for the Facilities and all costs
related thereto. The Developer covcnants that such accounting books will be maintained
in accordance with generally acccptcd accounting principles, and will be available for
inspection by the City within a reasonable time after the City submits a written request to
Developer requesting that such books be made available for inspection.
(e) Environmental Matters Relating to Segments. The Developer
covenants that neither Developer nor any of its subcontractors, agents, and employees
will use, generate, manufacture, procure, store, release, discharge or dispose of (whether
accidentally or intentionally) at any time on or prior to the Acceptance Date of each
Segment any Hazardous Materials in violation of any federal, state or local law,
ordinance, regulation, rule or decision regulating Hazardous Materials in etTect at the
time of such use, generation, manuf'lcturing, procurement, storage, release, discharge,
disposal or transportation on, undcr or in such Segment or the Related Property of such
Segment, or transport (whether accidentally or intcntionally) any Hazardous Materials to
or from such Segment or such Related Property, in violation of any such laws.
(I) Permits. The Developer covenants that it will obtain all
governmental or other permits required to proceed with the construction of the Facilities
and will pay all fees relating thereto that are required to be paid, unless excused by the
terms of the DDA.
Section 5.3 Representations and Warranties of the City. The City represents and
warrants 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 delivcrcd on behalf 0 f 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.
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1840S,641087US
Section 5.4 Covenants of the Citv. The City makes the following covenants for the
benefit of Developer:
(a) Segments. The City covenants that it will use its reasonable and
diligent efforts to take all actions that may be lawfully required of it in issuing permits,
processing and approving Plans and inspecting the Segments in accordance with this
Agreement.
(b) Release Requests. The City covenants that it will reasonably and
diligently follow all procedures sct forth in this Agreement with respect to each Release
Request and transfer and acceptance of Segments.
Section 5.5
Indemnification.
5.5.1 The Developer agrees to protect, indemnify, defend and hold the City, and
its respective officers, employees and agents, and each of them, harmless from and against any
and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorney's fees, and
court costs which the City, or its respective officers, employees and agents, or any combination
thereof, may suffer or which may be sought against or recovered or obtained from the City, or
their respective officers, employees or agents, or any combination thereof, as a result of or by
reason of or arising out of or in consequence of (a) the acquisition, construction, installation or
financing of the Facilities, (b) the untruth or inaccuracy of any representation or warranty made
by Developer in this Agreement, in any Release Request or in any certifications delivered by
Developer pursuant hereto, (c) the release, threatened release, storage, treatment, transportation
or disposal of any Hazardous Materials on, under, in, from or to the Property, and (d) any act or
omission of Developer or any of its subcontractors, or their respective officers, employees or
agents, in connection with the Facilities, inciuding noncompliance with any covenants made by
Developer in this Agreement. If Developcr fails to do so, 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 fees or costs, to and recover the same from Developer.
5.5.2 No indemnification is required to be paid by Developer for any claim, loss
or expense (a) arising from the willful misconduct or gross negligence of the City, or its
respective officers, employees or agents, or (b) arising from the use or operation of a Segment
after the Acceptance Date of such Segment, unless such claim, loss or expense results from the
defective or improper design, acquisition, construction or installation of such Segment.
Section 5.6 Survival. The provisions of this Article V shall survive the termination of
this Agreement. Neither this Article nor any provision hereof is intended to limit or supersede
Developer's indemnities set forth in the DDA.
ARTICLE VI
TERMINATION; DAMAGES
Section 6.1 Termination of A!!reement. This Agreement may be terminated by
written agreement of the City and Developer. Upon termination of this Agreement, the City
may, but shall notbe obligated to, complete the acquisition, construction and installation of any
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t840S:641087LtS
Segments not theretofore acquired from Developer pursuant hereto, and the City may use all or
any portion of the proceeds of the Project Fair Share Contribution, the Letter of Credit, the
Performance Bonds, the Surety Bonds and/or other security to pay for such acquisition,
construction and installation. In the event of such termination, Developer shall have no claim or
right to any further payments for the Release Price of any Segment except as otherwise may be
provided in such written agreement. The City shall not bc required to complete all or any portion
of the Facilities and if it chooses to compiete any portion of the Facilities, shall not be required to
do so with the existing contracts of Developer but may use whatever services, materials and
equipment it deems appropriate. In compicting the discontinued work, the City shall not be
required to obtain the lowest price for thc work perfoffi1ed. Nothing herein shall preclude
Developer from obtaining reimbursement as and to the extent set forth in this Agreement.
Section 6.2
Termination hv the Citv.
6.2.1 The following events shall constitute grounds for the City, at its option, to
terminate this Agreement, without the consent of Developer:
(a) except to the extent that Developer's obligation to construct the
Facilities is excused by Force Majeure, Developer shall abandon construction of the
Facilities (failure for a period of one hundred eighty (180) days or failure for two periods
of three consecutive months to undertake substantial work related to the construction of
the Facilities shall constitute a non-cxclusive example of such abandonment);
(b) prior to the Final Acceptance Date, Developer shall breach any
material covenant or default in the performance of any material obligation under this
Agreement, or any representation or warranty of Developer set forth herein or in any
certifications delivered by Developer hereunder shall prove to have been false or
misleading in any material respect when made or deemed made; or
( c) Developer shail transfer any of its rights or obligations under this
Agreement, without the prior written consent of the City.
If the City determines to terminate this Agreement pursuant to this Section, the City shall first
notify Developer in writing of such intention and of the grounds for such termination and allow
Developer sixty (60) calendar days to eliminate or mitigate to the satisfaction of the City the
grounds for such termination. If, in the solc discretion of the City, such grounds for termination
can be eliminated or mitigated, but not within such period, and provided that Developer has
instituted corrective action within such 60 day period and Developer is thereafter proceeding
with diligence to eliminate or mitigate such grounds for termination, then such period shall be
extended by the City for a period of time sufficient, in its sole discretion, to allow Developer to
eliminate or mitigate such grounds for termination. If at the end of such period (and any
extension thereof), Developer has not eliminated or completely mitigated such grounds for
termination to the satisfaction of the City, the City may then terminate this Agreement by .
delivering a written notice of such termination to Developer. If any of the grounds listed above
for termination of this Agreement by the City has occurred and has not been eliminated or
mitigated to the satisfaction of the City or waived by the City, the City, from and after the
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1840%41087Ll5
occurrence thereof, shall have no obligation to acquire any Segment pursuant hereto. The
provisions of Section 6.1 and this Section 6.2 shall apply to any such termination.
6.2.2 If either of the following events shall occur, this Agreement shall
automatically terminate:
(a) Developer shall voluntarily file for reorganization or other relief
under any Federal or state bankruptcy or insolvency law;
(b) Developer 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 Developer, or shall suffer an attachment or levy of
execution to be made against the property it owns within Tustin Legacy unless, in any of
such cases, such action, possession, attachment or levy shall have been terminated or
released within 60 days after the commencement thereof.
The provisions of Section 6.1 and this Section 6.2 shall apply to any such termination.
6.2.3 If this Agreement or any portion of the work is terminated for cause by the
City pursuant to this Section 6.2 and the expense to the City of Completing the Facilities exceeds
the amount of the Project Fair Share Contribution then paid by Developer to the City in cash,
then notwithstanding any other provision of this Agreement, Developer shall pay to the City, in
addition to the Project Fair Share Contribution, the following sums constituting "Developer's
Default Payment": (a) the difference betwcen (i) the cost to the City to Complete the Facilities
and (ii) the sum of the total cash payments to the City as of the Completion Date by Developer or
any third party on account of the Project Fair Share Contribution or Developer's Backbone
Infrastructure Work and (b) all additional damages, including attorneys', experts' and
consultants fees and cost, but excluding anticipatory or unearned profits, suffered by the City as
a result of the termination for cause by the City. The obligation to pay Developer's Default
Payment shall be secured by the Letter of Credit, the Surety Bonds, the Construction Bonds
and/or other security utiiized by Developer to secure the completion of such work (and the
obligation to maintain such Letter of Credit, Construction Bonds or other security shall not
terminate upon termination of this Agreement). Nothing in this Section is intended to limit
City's right to pursue any remedies at law or in equity otherwise available to it.
Section 6.3 Developer's Remedies Limited. The Developer acknowledges that the
City would not have entered into this Agreement if it were to be liable in damages under or with
respect to this Agreement. The City shall not have any pecuniary liability under this Agreement
for any act or omission of the City, except as set forth in this Section. In general, each of the
parties hereto may pursue any remedy at law or equity available for the breach of any provision
of this Agreement; provided, however, that the City shall not be liable in damages to Developer
except to the extent of any overpayment by Developer of Project Fair Share Contribution which
is not reimbursed by the City to Developcr in accordancc with the terms of this Agreement.
Section 6.4
of this Agreement.
Survival. The provisions of this Article VI shall survive the termination
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-- ----.-.-----.-.----.------------.----.-
ARTICLE VII
MISCELLANEOUS
Section 7.1 Developer as Independent Contractor. In performing under this
Agreement, it is mutually understood that Developer is acting as an independent contractor,and
not an agent of the City. The City shall not have any responsibility for payment to any
contractor, subcontractor or supplier of Developer.
Section 7.2 Other A!!reements. Nothing contained herein shall be construed as
affecting the City's or Developer's respective duties to perform their respective obligations under
any other agreements (including, without limitation, the DDA), land use regulations or
subdivision requirements relating to the development of the Property, which obligations are and
shall remain independent of either thc City's or Developer's rights and obligations under this
Agreement. Without limiting the foregoing, nothing herein shall limit, waive or abrogate the
City's rights and remedies under the DDA or any other agreement relating to the development of
the Property or related infrastructure.
Section 7.3 Bindin!! on Successors and Assi!!ns. Neither this Agreement nor the
duties and obligations of Developer hereunder may be assigned to any Person except in
connection with an assignment of all of Dcveloper's right, title and interest under the DDA and
in such event only to the assignee of Deveioper with respect to such interest; provided, however,
that the foregoing is not intended to prohibit Developer entering into construction or consulting
contracts in connection with the construction of the Faciiities 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
Community Redevelopment Agency or the Tustin Public Financing Authority or to the
community facilities district issuing the Bonds, 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 succcssors-in-intercst of the parties hereto.
Section 7.4 Amendments. This Agreement may be amended only by an instrument in
writing executed and delivered by the City and Developer.
Section 7.5 Incorporation of DDA Provisions bv Reference. The provisions of
Article 16 of the DDA (Sections 16.1 through 16.30 inclusive) are hereby incorporated into this
Agreement as though fully set forth in this Section and shall be in full force and effect with
respect to interpretation of this Agreement as though the term "Agreement" used therein in
reference to the DDA referred to this Agreement.
Section 7.6 Notices. Any written notice, statcmcnt, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder to be
effective shall be given to the party entitled thereto at its address set forth in the DDA and upon
the terms and provisions for such notice set forth therein, as the same may be amended or
modified tram time to time.
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1840%410871.15
Section 7.7 Collateral Assi!!nmcnt to Permitted Mort!!a!!ee. Developer shall be
permitted to collaterally assign this Agrecment to a Permitted Mortgagee in connection with a
Permitted Mortgage on the same terms and conditions set forth in the DDA applicable to the
Permitted Mortgages.
(SIGNATURES ON FOLLOWING PAGE)
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1840%410871.15
.-.-----,--------." '--' --_._-----~--_._.'
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first hereinabove written.
City of Tustin, California
Dated:
By:
William Huston, City Manager
ATTEST:
By:
Pamela Stoker
City Clerk
Dated:
APPROVED AS TO FORM
Special Counsel for the City
STEEFEL, LEVITT & WEISS
A PROFESSIONAL CORPORATION
By:
CITY OF TUSTIN
By:
VESTAR/KIMCO TUSTIN, L.P.
a California limited partnership
By:
Vestar California XXX, LLC.,
an Arizona limited liability company
General Partner
Its:
By:
Name:
Title: Manager
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18405,6410871.15
EXHIBIT A
FACILITIES
The following irnprovements will be constructed as part of the Infrastructure
Construction and Payrnent Agreement. Improvement costs also include water quality
related work and work within and/or related to contaminated areas, engineering design,
environmental evaluations, professional services, construction management, bonding
and insurance fees, and property acquisition.
Total Cost = $ 55,682,205
ROADWAY SEGMENTS
1. Barranca Parkway between Jamboree Road and west of future Tustin Ranch
Road with continued taper excluding the transition westerly to Armstrong Avenue:
Roadway improvements including curbs, gutters, pavement, median modification,
sidewalk and Class I trail on north side of Barranca Parkway, landscaping, signing and
striping, storm drain, dry utiiities (electric, gas, telephone, cable, etc.), and street
lights. Includes improvements at the intersection of Jamboree Road/Barranca
Parkway, and improvements along the frontage of the U.S. Army Reserve property
(Parcel 9).
Improvernent Costs = $ 5,696,170
2. Tustin Ranch Road from south of Barranca Parkway to Warner Avenue:
Roadway improvements including new and relocated curbs, gutters, pavement, rnedian,
sidewalks, landscaping, signing and striping, interirn signing and striping, storm drain,
dry utilities (electric, gas, telephone, cable, etc.), and street lights. Includes interim
intersection improvements on Von Karrnan Avenue, south of Barranca Parkway and
along the frontage of the U.S. Army Reserve property (Parcel 9).
Improvement Costs = $ 6,859,629
3. South Loop Road from Tustin Ranch Road through a new extension of Warner
Avenue to a new intersection at the on and off rarnps for southbound Jamboree Road to
Warner Avenue: Roadway improvernents including curbs, gutters, pavement, sidewalks,
landscaping, signing and striping, storm drain, dry utilities (electric, gas, telephone,
cable, etc.), and street iights. Includes construction of a new driveway to serve the
existing Single Room Occupancy (SRO) development in Irvine.
Improvement Costs = $ 8,411,045
4. Warner Avenue from Tustin Ranch Road to east of Jamboree Road: Roadway
improvements including new and relocated curbs, gutters, pavement, sidewalks,
18405:6410871.15
A-I
landscaping, signing and striping, interim signing and striping, storm drain, dry utilities
(electric, gas, telephone, cable, etc.), and street lights.
Irnprovement Costs = $ 2,798,847
5. Jamboree Road adjacent to the project site: Roadway improvements including
curbs and gutters, pavernent repair and replacement, signing and striping, and
landscape improvements in the area behind the curb within the public right-of-way.
Improvement Costs = $ 589,221
STORM DRAIN FACiliTIES SEGMENTS
1. Design and construction of the Barranca Parkway Storm Drain from the south
side of Barranca Parkway to just west of Tustin Ranch Road: Irnprovements include the
lowering and covering of the Barranca Channel and a short transition area in Barranca
Parkway, lowering of the MWD 72" water line, and lowering of the IRWD 54" water line.
Improvement Costs = $ 6,242,338
2. Design and construction of the storm drain in Barranca Parkway along the north
side of Barranca Parkway from the west of Jamboree Road to the Peter's Canyon
Channel as required in the City's Runoff Management Plan: Improvements include
replacement in-kind of any improvements within the storm drain easement along the
Barranca Parkway frontage as rnay be needed for connection to this facility.
Improvement Costs = $ 4,714,347
3. Design and construction of the Warner Avenue storm drain from Tustin Ranch
Road to Peters Canyon Channel as required in the City's Runoff Management Plan.
Improvernent Costs = $ 6,369,921
SOUTHERN CALIFORNIA EDISON (SCE) FACiliTIES
1. Design and construction of the relocation of the 220 KV Southern California
Edison power poles in Barranca Parkway. (Deposit)'
Improvement Costs = $ 7,070,652
. SCE will design and construct once fee deposit received.
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18405,6410871.15
IRVINE RANCH WATER DISTRICT (IRWD) FACILITY SEGMENTS
1. Barranca Parkway between Jamboree Road and west of future Tustin Ranch
Road with continued taper excluding the transition westerly to Armstrong Avenue:
IRWD improvements inciuding water, reciaimed water, and sewer installation.
Improvements Costs for IRWD Faciiities = $ 812,497
2. Tustin Ranch Road from south of Barranca Parkway to Warner Avenue: IRWD
improvements inciuding water, reciaimed water, and sewer installation.
Improvernents Costs for IRWD Facilities = $ 1,475,674
3. South Loop Road from Tustin Ranch Road through a new extension of Warner
Avenue to a new intersection at the on and off ramps for southbound Jamboree Road to
Warner Avenue: IRWD improvements including water, reclaimed water, and sewer
installation. IRWD costs include costs for water, reciaimed water, and sewer installation
in Warner Avenue per IRWD's request.
Improvernent Costs for IRWD Facilities = $ 2,071,250
4. Warner Avenue from Tustin Ranch Road to east of Jamboree Road: IRWD
improvements inciuding water, reciaimed water, and sewer installation.
Improvements Costs for IRWD Facilities = $ o (inciuded in Segment 3 above)
5. Design and construction of an 18" interim sanitary sewer across Parcel 8 from
Tustin Ranch Road near South Loop Road to Armstrong Avenue. Inciudes preparation
of an easernent for the sewer.
Improvement Costs for IRWD Faciiities = $ 478,872
TRAFFIC SIGNAL SEGMENTS
1. Design and construction of traffic signal modification at Barranca ParkwaylTustin
Ranch Road.
Improvement Costs = $82,491
2.
Design and construction of traffic signal at Tustin Ranch Road/South Loop Road.
3.
Improvement Costs = $ 265,150
Design and construction of traffic signal at Tustin Ranch Road/Warner Avenue.
Improvement Costs = $ 212,120
-3-
18405,6410871.15
4.
Design and construction of traffic signal at South Loop RoadlWarner Avenue.
Improvement Costs = $ 235,689
5.
Design and construction of traffic signal at Barranca Parkway/Millikan Avenue.
Improvement Costs = $ 235,689
6. Design and construction of traffic signal at South Loop RoadlWarner Avenue
ramps at Jamboree Road.
Improvernent Costs = $ 235,689
7. Design and construction
Parkway/Jamboree Road.
of traffic
signal
modification
at
Barranca
Improvement Costs = $ 235,689
RIGHT-OF-WAY SEGMENTS
1. Each acquisition by Developer of right-of-way in connection with the Developer's
backbone infrastructure Work shall be treated as a separate Segment.
Acquisition Costs = $ 589,221
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1840S,641087LlS
EXHIBIT B
FORM OF DEVELOPER'S CERTIFICATE
Vestar/Kimco Tustin, LP. (the "Developer"), hereby requests the release of a portion of
the Performance Bond (or Letter of Credit, Surety Bond or other security) in an amount equal to
the Release Price for the Segment or Segments described in Attachment A attached hereto, with
the understanding that the amount by which such security is released shall be governed by the
terms of the Infrastructure Construction and Payment Agreement, dated as of March -' 2005
(the "Agreement"), by and between the City of Tustin (the "City"), and Developer. Capitalized
undefined terms shall have the meanings ascribed thereto in the Agreement.
In connection with this Release Request, the undersigned hereby certifies, represents and
warrants to the City as follows:
1. The undersigned is a Developer Representative, qualified to execute this request
for payment on behalf of Developer and knowledgeable as to the matters set forth herein.
2. The Developer has submitted or submits herewith to the Director as-built
drawings or similar Plans for the Segments for which Segment Release is requested, and such
drawings or plans and specifications, as applicable, are true, correct and complete.
3. Each of the Segments described in Attachment A is Complete and has been
constructed in accordance with the Plans therefor, and in accordance with all applicable City
standards and the requirements of the Agreement, and the as-built drawings or other plans and
specifications referenced in paragraph 2 above.
4. The true and corrcct Actual Cost of each Segment for which Segment Release by
the City is requested is set forth in Attachment A.
6. The Developer has submitted or submits herewith to the Director invoices,
receipts, worksheets and other evidence of costs which are in sufficient detail to allow the
Director to verify the Actual Cost of each Segment for which Segment Release by the City is
requested.
7. There has not been filed with or served upon Developer notice of any lien, right to
lien or attachment upon, or claim affecting the right to receive the Release Requested herein
which has not been released or will not be released simultaneously with the payment of such
obligation or which has not been bonded in accordance with the requirements of the Agreement.
Copies oflien releases for all work for which Segment Release by the City is requested
hereunder are attached hereto.
8. No event listed in Section 6.2. ](a)-(e) of the Agreement has occurred and is
continuing or will occur upon the making of any release requested hereunder.
12. Except as disclosed by the Developer in writing to the City the representations
and warranties of Developer 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
18405:6410871.15
B-1
(except that no certification is made with respect to the representations and warranties contained
in subsection (e) of said Section 5.1).
13. Developer represents and warrants that, as of the date hereof, there is not present
on, under or in any Segment described in Attachment A or the Related Property of such
Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts
that do not require remediation or mitigation under federal, state or local laws, ordinances,
regulations, rules or decisions, (ii) those that have been remediated or mitigated in full
compliance with applicable federal, state or local laws, ordinances, regulations, rules or
decisions, (iii) those with respect to which ongoing remediation or mitigation is being performed
in full compliance with appiicable federai, state or local laws, ordinances, regulations, rules or
decisions or (iv) any types or amounts that do not present a human health risk or hazard to the
public.
I hereby declare under pcnalty of perjury that the above representations and warranties
are true and correct.
Date:
VESTAR/KIMCO TUSTIN, L.P.
a California limited partnership
By:
Vestar California XXX, LLC.,
an Arizona limited liability company
General Partner
Its:
By:
Name:
Title: Manager
1840%410871.15
B-2
APPROVAL BY THE DIRECTOR
The Director has confinlled that each Segment described in Attachment A was
constructed in accordance with the Plans therefor and the Release Request and Release Price of
each Segment described in Attachment A has been reviewed, verified and approved by the
Director. Release of a portion of the Performance Bond, Letter of Credit, Surety Bond or other
permissible security in an amount equal to
($
) is hereby approved.
Date:
DIRECTOR OF THE CITY OF TUSTIN
By:
18405:6410871.15
B-3
Segment
Total Release Price:
ATTACHMENT A
Estimated Release Price
Actual Cost
Release Price*
*Lesser of Estimated Release Price or Actual Cost
18405:64tO87Ll5
B-4
EXHIBIT C
FORM OF LETTER OF CREDIT
18405,6410871.15
D-l
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