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HomeMy WebLinkAbout06-28-21 CVBFFA AgendaChula Vista Bayfront Facilities Financing Authority San Diego Unified Port District Meeting Agenda 3165 Pacific Hwy. San Diego, CA 92101 Virtual Meeting3:00 PMMonday, June 28, 2021 ****Pursuant to Governor Newsom’s Executive Order N-29-20 pertaining to the convening of public meetings in response to the COVID-19 pandemic, the CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY (AUTHORITY) hereby provides notice that it will hold a regular meeting of the BOARD OF DIRECTORS OF THE AUTHORITY (BOARD). The BOARD will attend the meeting and participate remotely to the same extent as if they were present. Due to Governor Newsom's Executive Order, the Board Chambers will remain closed to the public. MEMBERS OF THE PUBLIC MAY VIEW THIS MEETING VIA LIVESTREAM at: https://portofsandiego.legistar.com/Calendar.aspx REMOTE PUBLIC COMMENT IS AVAILABLE FOR THIS MEETING DOING ONE OF THE FOLLOWING NO LATER THAN 2:00 PM on Monday, June 28, 2021: 1. Call 619-736-2155 and leave a brief voicemail message (no longer than 2 minutes) that will be played during the meeting. 2. Email a request to provide live comment to PublicRecords@portofsandiego.org to receive a link to participate in the meeting to provide live comments. * 3. Submit written comments to PublicRecords@portofsandiego.org which will be forwarded to the Board and included in the agenda-related materials record for the meeting. * Neither the San Diego Unified Port District nor the Authority are responsible for the member of the public’s internet connections or technical ability to participate in the meeting. It is highly recommended that you use voicemail rather than provide live comment. In keeping with the Americans with Disabilities Act (ADA), the Authority and San Diego Unified Port District will make every reasonable effort to encourage participation in all its public meetings. If you require assistance or auxiliary aids in order to participate at this public meeting, please contact the Office of the District Clerk at publicrecords@portofsandiego.org or (619) 686-6206 at least 48 hours prior to the meeting. Page 1 San Diego Unified Port District Printed on 6/24/2021 June 28, 2021Chula Vista Bayfront Facilities Financing Authority Meeting Agenda Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm Call to Order Roll Call Non-Agenda Public Comment Each individual speaker is limited to two (2) minutes Consent Items A) Approval of Minutes of January 8, 2020 B) Approval of Minutes of February 26, 2020 C) Approval of Minutes of April 1, 2020 D) Approval of Minutes of April 27, 2020 E) Approval of Minutes of May 20, 2020 F) Approval of Minutes of June 8, 2020 G) Approval of Minutes of December 2, 2020 Action Items Resolution: A) Selecting the Chair and Vice Chair and Confirming the Designation of Other Officers of the Chula Vista Bayfront Facilities Financing Authority (Authority) B) Authorizing the Issuance of One or More Series of Revenue Bonds by the Authority C) Authorizing the Execution and Delivery of the Third Amended and Restated Revenue Sharing Agreement among the City of Chula Vista (City), the San Diego Unified Port District (District), and the Authority D) Authorizing the Execution and Delivery of the Project Implementation Agreement among the City, the District, the Bayfront Project Special Tax Financing District (Special Tax District), and RIDA Chula Vista, LLC (RIDA) for the Construction of Public Infrastructure (Phase 1A Improvements) and a Convention Center, with Conditions Page 2 San Diego Unified Port District Printed on 6/24/2021 June 28, 2021Chula Vista Bayfront Facilities Financing Authority Meeting Agenda E) Authorizing the Execution and Delivery of the Site Lease between the District and the Authority (Site Lease) for the land necessary to construct a Convention Center located in the City of Chula Vista, with Conditions F) Authorizing the Execution and Delivery of the Facility Lease between the Authority and the City, with Conditions G) Authorizing the Execution and Delivery of the Bond Purchase Agreement among J.P. Morgan Securities LLC, the Authority, the District, the Special Tax District, and the City for the Purchase and Sale of One or More Series of Bonds issued by the Authority, with Conditions H) Authorizing the Execution and Delivery of the Indenture of Trust between the Authority and Wilmington Trust, National Association (Trustee), with Conditions I) Authorizing the Execution and Delivery of the Support Agreement between the District and the Authority, with Conditions J) Authorizing the Execution and Delivery of the Loan Agreement between the Authority and the Special Tax District, with Conditions K) Authorizing the Execution and Delivery of Other Documents Related to the Issuance of the Authority Bonds Staff Comments Board Comments Adjournment Page 3 San Diego Unified Port District Printed on 6/24/2021 Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY Minutes Wednesday, January 8, 2020 3:00 PM Port of San Diego Don L. Nay Port Administration Boardroom 3165 Pacific Highway San Diego, CA 92101 A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:10 p.m., on Wednesday, January 8, 2020, in the Port of San Diego’s Don L. Nay Port Administration Boardroom, 3165 Pacific Highway, San Diego, CA 92101. B. Roll Call Board of Directors Present: Mary Casillas Salas, Rafael Castellanos, Dan Malcolm, Ann Moore, and Stephen Padilla Absent: None. Officers Present: Randa Coniglio (Executive Director), and Donna Morales (Secretary) C. Non-Agenda Public Comment None. D. Action Items 1. Approval of Minutes of October 9, 2019 The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Malcolm, seconded by Board Member Castellanos, the Board approved the minutes of October 9, 2019. The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, Moore, and Padilla 2. A. Resolution of the Chula Vista Bayfront Facilities Financing Authority Adopting a Procurement Policy for Developer-Performed Public Works. B. Resolution of the Chula Vista Bayfront Facilities Financing Authority (Authority): (1) Authorizing RIDA Chula Vista, LLC (Developer) to Proceed with the Development and Construction of Developer’s Public Improvements, with Conditions; (2) Finding Developer’s Proposed Sole Source Award of the Prime Contract to Construct Developer’s Public Improvements to be in the Best Interest of the Public; (3) Delegating Authority to the Executive Director, or Designee, to Implement the Subcontractor Procurement Process for Page 2 of 2 the Phase 1A Improvements in Accordance with the Authority’s Procurement Policy; and (4) Finding the Convention Center to be a Special Purpose Project Pursuant to the Authority’s Procurement Policy, Granting a Waiver of the Procurement Policy Requirements for the Subcontractor Award and Bid Process for the Convention Center, and Delegating Authority to the Executive Director, or Designee, to Implement Appropriate Project Implementation Safeguards for the Convention Center. Tiffany Allen, Assistant Director, Development Services, City of Chula Vista provided staff presentation on Action Item D-2 (A copy of the staff report, presentations and any agenda- related materials are on file with the Office of the District Clerk, Port of San Diego). The following member(s) of the public addressed the Board with agenda-related comments: None. Board members Moore, Malcolm, Padilla, and Casillas Salas, provided comments, asked clarifying questions, and directed staff regarding modifications to the resolutions and policy. Tiffany Allen, Glen Googins, City Attorney, City of Chula Vista, and Shaun Sumner, Vice President of Real Estate, Engineering and Facilities, Port of San Diego, responded. Ms. Allen and Mr. Googins acknowledged they will incorporate the changes as directed. Kip Howard, representing RIDA, asked clarifying questions, Board Member Malcolm responded. Board Member Castellanos made a motion to adopt Action Item 2A Resolution 2020-001 Action Item 2B – Resolution 2020-002, as amended per direction to staff, Board member Moore seconded the motion. The motion passed unanimously. E. Staff Comments None. F. Board Comments Commissioner Moore thanked staff for their excellent work regarding the procurement policy. G. Adjournment The meeting adjourned at 3:48 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Minutes Wednesday, February 26, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:10 p.m., on Wednesday, February 26, 2020, in the Port of San Diego’s Don L. Nay Port Administration Boardroom, 3165 Pacific Highway, San Diego, CA 92101. B. Roll Call Board of Directors Present: Mary Casillas Salas, Rafael Castellanos, Dan Malcolm, and Stephen Padilla. Excused: Ann Moore Officers Present: Donna Morales (Secretary) C. Non-Agenda Public Comment None. D. Action Items 1. Resolution to Change the Day and Frequency of the Regular Meetings of the Board of Directors to the First and Third Wednesday of Each Month and the Second and Fourth Monday of Each Month, beginning March 4, 2020, and to Establish the Location of the Regular Meetings The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Castellanos, seconded by Board Member Malcolm, the Board adopted Resolution No. 2020-003 of the Chula Vista Bayfront Facilities Financing Authority Page 2 of 2 (Authority) to Change the Day and Frequency of the Regular Meetings of the Board of Directors to the First and Third Wednesday of Each Month and the Second and Fourth Monday of Each Month, beginning March 4, 2020, and to Establish the Location of the Regular Meetings. The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, and Padilla. Excused: Moore 2. Resolution of the Chula Vista Bayfront Facilities Financing Authority Regarding its Intention to Issue Tax Exempt Obligations to Finance Public Infrastructure on the Chula Vista Bayfront and to Make Related Reimbursements. The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Malcolm, seconded by Board Member Padilla, the Board adopted Resolution No. 2020-004 of the Chula Vista Bayfront Facilities Financing Authority (Authority) Regarding its Intention to Issue Tax Exempt Obligations to Finance Public Infrastructure on the Chula Vista Bayfront and to Make Related Reimbursements. The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, and Padilla. Excused: Moore E. Staff Comments None. F. Board Comments None. G. Adjournment The meeting adjourned at 3:14 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 3 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Minutes Wednesday, April 1, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:01 p.m., on Wednesday, April 1 2020, via Microsoft Teams meeting. B. Roll Call Board of Directors Present: Mary Casillas Salas, Rafael Castellanos, Dan Malcolm, and Ann Moore. Excused: Stephen Padilla Officers Present: Randa Coniglio (Executive Director), and Donna Morales (Secretary), and David Bilby, Treasurer C. Non-Agenda Public Comment None. D. Action Items 1. Adopt a Resolution Ratifying the Final Form of the Chula Vista Bayfront Facilities Financing Authority (Authority) Board of Director’s Modifications to the Authority’s Procurement Policy for Developer-Performed Public Works and Resolution 2020- 002 Implementing the Construction of Public Improvements for the Chula Vista Bayfront Resort Hotel and Convention Center Project The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Malcolm, seconded by Board Member Moore, the Board approved the continuance of the Resolution Ratifying the Final Form of the Chula Page 2 of 3 Vista Bayfront Facilities Financing Authority (Authority) Board of Director’s Modifications to the Authority’s Procurement Policy for Developer-Performed Public Works and Resolution 2020-002 Implementing the Construction of Public Improvements for the Chula Vista Bayfront Resort Hotel and Convention Center Project The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, and Moore Excused: Padilla 2. Adopt a Resolution of the Authority Adopting a Procurement Policy for Professional and Legal Services Moved by Board Member Casillas Salas, seconded by Board Member Moore, the Board adopted Resolution 2020-005 of the Authority Adopting a Procurement Policy for Professional and Legal Services The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, and Moore Excused: Padilla 3. Adopt a Resolution Authorizing the Co-Counsels of the Authority to Execute the Legal Services Agreement with Stradling Yocca Carlson and Rauth for Bond Counsel and Disclosure Counsel Services in the Maximum Amount of $450,000, Including a Waiver of Potential and Actual Conflicts of Interest Regarding Representation of the Authority and Others Moved by Board Member Moore, seconded by Board Member Castellanos, the Board adopted Resolution 2020-006 Authorizing the Co-Counsels of the Authority to Execute the Legal Services Agreement with Stradling Yocca Carlson and Rauth for Bond Counsel and Disclosure Counsel Services in the Maximum Amount of $450,000, Including a Waiver of Potential and Actual Conflicts of Interest Regarding Representation of the Authority and Others The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, and Moore Excused: Padilla E. Staff Comments: Elizabeth Alonso, Deputy General Counsel, Port of San Diego read the following statement into the record: Consistent with the Procurement Policy for Professional and Legal Services set forth in Item D(2) above, the Co-Counsels of the Authority expect to enter into an agreement for legal services by and among Colantuono, Highsmith & Whatley, P.C., the San Diego Unified Port District, and the City of Chula Vista, for a validation action related to the Chula Vista Bayfront Resort Hotel and Convention Center Project Page 3 of 3 F. Board Comments None. G. Adjournment The meeting adjourned at 3:09 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Agenda Monday, April 27, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:01 p.m., on Wednesday, April 27, 2020, via Microsoft Teams meeting. B. Roll Call Board of Directors Present: Mary Casillas Salas, Dan Malcolm, Ann Moore, and Stephen Padilla Excused: Rafael Castellanos Officers Present: Donna Morales (Secretary), and David Bilby (Treasurer & Auditor) C. Non-Agenda Public Comment None. D. Consent Agenda 1. Adopt a Resolution of the Chula Vista Financing Authority (Authority) Approving an Assignment and Assumption of Investment Banking and Bond Underwriting Services Agreement Between the City of Chula Vista (City) and the Authority and Approving a Bayfront Project Underwriter Letter of Intent Between the Authority and J.P. Morgan Securities LLC. Donna Morales, District Clerk for the Port of San Diego, announced that additional agenda-related information was received by the Board of Directors for this item after the publication of the agenda. The following member(s) of the public addressed the Board with agenda-related comments: None. Board members Malcolm, Moore, Casillas Salas, and Padilla provided comments and asked clarifying questions. Glen Googins, City Attorney, City of Chula Vista and Tiffany Allen, Assistant Director of Development Services, City of Chula Vista, responded. Page 2 of 2 Moved by Chair Casillas Salas, seconded by Board Member Moore, the Board approved the continuance of the Resolution of the Chula Vista Financing Authority (Authority) Approving an Assignment and Assumption of Investment Banking and Bond Underwriting Services Agreement Between the City of Chula Vista (City) and the Authority and Approving a Bayfront Project Underwriter Letter of Intent Between the Authority and J.P. Morgan Securities LLC The motion carried by the following vote: Yeas: Casillas Salas, Malcolm, Moore, and Padilla Excused: Castellanos E. Action Items No action items. F. Staff Comments: Elizabeth Alonso, Deputy General Counsel, Port of San Diego read the following statement into the record: In accordance with the Authority Policy for Procurement of Professional and Legal Services, the Co-Counsels of the Authority entered into an agreement for legal services by and among Colantuono, Highsmith & Whatley, P.C. (Outside Counsel), the San Diego Unified Port District (District), and the City, effective April 1, 2020, for a validation action related to the Chula Vista Bayfront Resort Hotel and Convention Center Project (Legal Agreement). The Legal Agreement includes a waiver regarding potential conflicts of interest resulting from the joint representation from Outside Counsel to the City, the Authority, and the District. The Co-Counsels of the Authority have reviewed the waiver regarding potential conflicts of interests, determined that it is in the best interest of the Authority to approve the waiver, and have approved the waiver. G. Board Comments Board members Moore, Casillas Salas, and Malcolm expressed appreciation for Board Member Padilla’s return. H. Adjournment The meeting adjourned at 3:20 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Minutes Wednesday, May 20, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:06 p.m., on Wednesday, May 20, 2020, via Microsoft Teams meeting. B. Roll Call Board of Directors Present: Rafael Castellanos, Dan Malcolm, Ann Moore, and Stephen Padilla. Excused: Mary Casillas Salas Officers Present: Donna Morales (Secretary), and David Bilby (Treasurer & Auditor) C. Non-Agenda Public Comment None. D. Consent Items 1. Resolution Ratifying the Final Form of the Chula Vista Bayfront Facilities Financing Authority (Authority) Procurement Policy for Developer-Performed Public Works and Resolution 2020-002 Implementing the Construction of Developer-Performed Public Works for and in Support of the Chula Vista Bayfront Resort Hotel and Convention Center Project Page 2 of 2 The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Malcolm, seconded by Board Member Castellanos, the Board adopted Resolution No. 2020-007 Ratifying the Final Form of the Chula Vista Bayfront Facilities Financing Authority (Authority) Procurement Policy for Developer-Performed Public Works and Resolution 2020-002 Implementing the Construction of Developer- Performed Public Works for and in Support of the Chula Vista Bayfront Resort Hotel and Convention Center Project The motion carried by the following vote: Yeas: Castellanos, Malcolm, Moore, and Padilla Excused: Casillas Salas E. Action Items None. F. Staff Comments None. G. Board Comments None. H. Adjournment The meeting adjourned at 3:12 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Minutes Monday, June 8, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:02 p.m., on Monday, June 8, 2020, via Microsoft Teams meeting. B. Roll Call Board of Directors Present: Mary Casillas Salas, Rafael Castellanos, Dan Malcolm, and Ann Moore Excused: Stephen Padilla. Officers Present: Randa Coniglio (Executive Director), and Donna Morales (Secretary) C. Non-Agenda Public Comment None. D. Consent Items 1. Resolution of the Chula Vista Bayfront Facilities Financing Authority (Authority) Approving an Assignment and Assumption of Investment Banking and Bond Underwriting Services Agreement Between the City of Chula Vista and the Authority and Approving a Bayfront Project Underwriter Letter of Intent Between the Authority and J.P. Morgan Securities LLC Page 2 of 2 The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Castellanos, seconded by Board Member Moore, the Board adopted Resolution No. 2020-008 of the Chula Vista Bayfront Facilities Financing Authority (Authority) Approving an Assignment and Assumption of Investment Banking and Bond Underwriting Services Agreement Between the City of Chula Vista and the Authority and Approving a Bayfront Project Underwriter Letter of Intent Between the Authority and J.P. Morgan Securities LLC The motion carried by the following vote: Yeas:, Casillas Salas, Castellanos, Malcolm, and Moore Excused: Padilla E. Action Items None. F. Staff Comments None. G. Board Comments None. H. Adjournment The meeting adjourned at 3:04 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary Page 1 of 2 MEETING OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY BOARD OF DIRECTORS Minutes Wednesday, December 2, 2020 3:00 PM Board of Directors Honorable City of Chula Vista Mayor Mary Casillas Salas City of Chula Vista Councilman Stephen Padilla Port Commissioner Ann Moore Port Commissioner Rafael Castellanos Port Commissioner Dan Malcolm A. Call to Order Donna Morales, District Clerk for the Port of San Diego, called the meeting of the Board of Directors of the Chula Vista Bayfront Facilities Financing Authority to order at 3:03 p.m., on Wednesday, December 2, 2020, via Microsoft Teams meeting. B. Roll Call Board of Directors Present: Mary Casillas Salas, Rafael Castellanos, Dan Malcolm, Ann Moore, and Stephen Padilla. Excused: None. Officers Present: Randa Coniglio (Executive Director), Donna Morales (Secretary), and David Bilby (Treasurer & Auditor) C. Non-Agenda Public Comment None. D. Consent Items None. E. Action Items 1. Resolution Adopting a Debt Policy to Establish Guidelines for the Issuance and Application of Proceeds of Debt Issuances by the Chula Vista Bayfront Facilities Financing Authority. Page 2 of 2 The following member(s) of the public addressed the Board with agenda-related comments: None. Moved by Board Member Castellanos, seconded by Board Member Moore, the Board adopted Resolution No. 2020-009 of the Chula Vista Bayfront Facilities Financing Authority (Authority) Adopting a Debt Policy to Establish Guidelines for the Issuance and Application of Proceeds of Debt Issuances by the Chula Vista Bayfront Facilities Financing Authority The motion carried by the following vote: Yeas: Casillas Salas, Castellanos, Malcolm, Moore, and Padilla. F. Staff Comments None. G. Board Comments None. H. Adjournment The meeting adjourned at 3:09 p.m. Mary Casillas Salas, Chair Board of Directors ATTEST: Donna Morales Secretary DATE: June 24, 2021 SUBJECT: RESOLUTION: (A) SELECTING THE CHAIR AND VICE CHAIR AND CONFIRMING THE DESIGNATION OF THE OTHER OFFICERS OF THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY (AUTHORITY) (B) AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF REVENUE BONDS BY THE AUTHORITY (C) AUTHORIZING THE EXECUTION AND DELIVERY OF THE THIRD AMENDED AND RESTATED REVENUE SHARING AGREEMENT AMONG THE CITY OF CHULA VISTA (CITY), THE SAN DIEGO UNIFIED PORT DISTRICT (DISTRICT), AND THE AUTHORITY (D) AUTHORIZING THE EXECUTION AND DELIVERY OF THE PROJECT IMPLEMENTATION AGREEMENT AMONG THE CITY, THE AUTHORITY, THE DISTRICT, THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT (SPECIAL TAX DISTRICT), AND RIDA CHULA VISTA, LLC (RIDA) FOR THE CONSTRUCTION OF PUBLIC INFRASTRUCTURE (PHASE 1A INFRASTRUCTURE IMPROVEMENTS) AND A CONVENTION CENTER, WITH CONDITIONS (E) AUTHORIZING THE EXECUTION AND DELIVERY OF THE SITE LEASE BETWEEN THE DISTRICT AND THE AUTHORITY (SITE LEASE) FOR THE LAND NECESSARY TO CONSTRUCT A CONVENTION CENTER LOCATED IN THE CITY OF CHULA VISTA, WITH CONDITIONS (F) AUTHORIZING THE EXECUTION AND DELIVERY OF THE FACILITY LEASE BETWEEN THE AUTHORITY AND THE CITY, WITH CONDITIONS (G) AUTHORIZING THE EXECUTION AND DELIVERY OF THE BOND PURCHASE AGREEMENT AMONG J.P. MORGAN SECURITIES LLC, THE AUTHORITY, THE DISTRICT, THE SPECIAL TAX DISTRICT, AND THE CITY FOR THE PURCHASE AND SALE OF ONE OR MORE SERIES OF BONDS ISSUED BY THE AUTHORITY, WITH CONDITIONS (H) AUTHORIZING THE EXECUTION AND DELIVERY OF THE INDENTURE OF TRUST BETWEEN THE AUTHORITY AND WILMINGTON TRUST, NATIONAL ASSOCIATION (TRUSTEE), WITH CONDITIONS Page 2 of 30 (I) AUTHORIZING THE EXECUTION AND DELIVERY OF THE SUPPORT AGREEMENT BETWEEN THE DISTRICT AND THE AUTHORITY, WITH CONDITIONS (J) AUTHORIZING THE EXECUTION AND DELIVERY OF THE LOAN AGREEMENT BETWEEN THE AUTHORITY AND THE SPECIAL TAX DISTRICT, WITH CONDITIONS (K) AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS RELATED TO THE ISSUANCE OF THE AUTHORITY BONDS EXECUTIVE SUMMARY: The Chula Vista Bayfront Facilities Financing Authority (Authority) was formed through that certain Joint Exercise of Powers Agreement between the City of Chula Vista (City) and the San Diego Unified Port District (District) dated as of May 1, 2014 and filed in the Office of the District Clerk as Document No. 61905 (Original Authority Agreement), as amended and restated by that certain Amended and Restated Joint Exercise of Powers Agreement between the City and District dated July 25, 2019 and filed in the Office of the District Clerk as Document No. 70245 (Authority Agreement). The District and City have also approved Amendment No. 1 to the Amended and Restated Authority Agreement (Amendment) on June 15, 2021, which will be executed in connection with the issuance of certain taxable and tax exempt bonds by the Authority (Authority Bonds). The District and the City (each, a Member of the Authority) are the sole members of the Authority. The District and the City have been working collaboratively for decades to plan and implement the Chula Vista Bayfront Master Plan (CVBMP). Since 2014, the District and the City have been working to deliver the catalyst project for the CVBMP, an approximately 275,000 net usable square foot convention center (Convention Center) and a 1,570 to 1,600 room resort hotel (Resort Hotel) to be located on Parcel H3 of the CVBMP. The project also requires the construction of extensive public infrastructure to the areas surrounding Parcel H3 (Phase 1A Infrastructure Improvements). The actions before the Board of Directors of the Authority (Authority Board) at the June 28, 2021 Authority Board Meeting are another significant milestone on the critical path toward delivering the Convention Center and Phase 1A Infrastructure Improvements. RIDA Chula Vista, LLC (RIDA) was selected as the developer of the Convention Center and the Resort Hotel through a Request for Qualifications. At the early stages, and in light of an overall project cost in excess of $1.1 billion, it was determined that in order for the Convention Center and Phase 1A Infrastructure Improvements to be financially feasible, the City and the District would need to make a “Public Contribution” for the construction of the Convention Center and Phase 1A Infrastructure Improvements. The Public Contribution consists of approximately $265MM toward the cost of the Convention Center and approximately $85MM toward the Phase 1A Infrastructure Improvements for a total public investment of $350MM. The Authority was formed to issue bonds to finance most of the Public Contribution. In support of the Public Contribution, the Authority will issue Page 3 of 30 Authority Bonds in an amount not to exceed $400MM and the Authority Bonds will be secured by funds provided by the District, the City, and the Bayfront Project Special Tax Financing District (Special Tax District). Additional funding to cover the amounts not financed will be provided through grants, a contribution of $25MM from the County of San Diego through the County Agreement (defined below), a sewer contribution from the City, a contribution through the City’s Bayfront Development Impact Fee (BFDIF) program, and funds from the District that have been collected over time through various projects on the Chula Vista Bayfront, including a contribution from the North C.V. Waterfront L.P. (Pacifica). At the June 28 Authority Board Meeting, as the first order of business, pursuant to the Authority Agreement and Bylaws of the Authority (Authority Bylaws), the Authority Board will select the Chair and Vice Chair and confirm the other officers of the Authority. The Honorable Mayor Mary Casillas Salas is currently the Chair and Port Commissioner Ann Moore is currently the Vice Chair. Mayor Casillas Salas and Commissioner Moore may be selected to serve in these positions again or other members of the Authority Board may be selected to serve in these positions. Each of the Chair and Vice Chair will serve as Chair and Vice Chair respectively from the date of his or her election through the date of the first meeting of the Authority in the next succeeding calendar year; provided that each shall serve as Chair or Vice Chair, as applicable, until a successor has been duly selected. The other officers of the Authority are currently as follows: Executive Director (District CEO/President and designees), Auditor (City Director of Finance and designees), Treasurer (City Director of Finance and designees), and Secretary (District Clerk and designees). At the June 28 Authority Board Meeting, the Authority Board will also be considering the issuance of Authority Bonds in an amount not to exceed $400MM and approval of the execution and delivery of the agreements which the Authority is a party to, which are described in greater detail in the Discussion section below: (1) Third Amended and Restated Revenue Sharing Agreement among the City, District, and Authority (Third A&R Revenue Sharing Agreement, Attachment A) – Describes the funds to be contributed by the City and the District to the Authority during an approximately 38 year period and how funds distributed to the Authority by the Trustee are to be shared between the City and the District; (2) Project Implementation Agreement among the City, the District, the Authority, the Special Tax District, and RIDA (Project Implementation Agreement, Attachment B) – Sets forth the process for construction of the Convention Center and Phase 1A Infrastructure Improvements, among other things; (3) Site Lease between the District and the Authority (Site Lease, Attachment C) – Leases the land (and the existing improvements thereon) on which the Convention Center will be constructed to the Authority; Page 4 of 30 (4) Facility Lease between the City and the Authority (Facility Lease, Attachment D) – Sets forth the terms and conditions for the City to make lease payments to the Authority for the lease of the Convention Center that will be used by the Authority to pay the debt service on the Authority Bonds; (5) Bond Purchase Agreement among J.P. Morgan Securities, LLC (J.P. Morgan), the Authority, the City, the District, and the Special Tax District (Bond Purchase Agreement, Attachment E) – Sets forth the terms for the purchase and sale of the Authority Bonds to fund a portion of the Public Contribution; (6) Indenture of Trust between the Authority and Trustee (Authority Indenture, Attachment F) – Sets forth the terms and provisions of the Authority Bonds, including repayment provisions; (7) Support Agreement between the District and the Authority (Support Agreement, Attachment G) – Sets forth the terms and conditions for the District to make certain payments to the Authority to be used by the Authority to pay the debt service on the Authority Bonds; and (8) Loan Agreement between the Authority and the Special Tax District (Loan Agreement, Attachment H) – Sets forth the terms and conditions of a loan in an amount not to exceed $175,000,000 to be made by the Authority to the Special Tax District from the proceeds of the Authority Bonds that will be repaid by the Special Tax District from the special taxes the Special Tax District levies on three properties within the CVBMP and the City, including the Resort Hotel. Staff recommends that the Authority Board adopt the resolution selecting the chair and vice chair and confirming the other officers, authorizing the issuance of the Authority Bonds, the execution and delivery of the Third A&R Revenue Sharing Agreement, and the execution and delivery of the agreements to be entered into in connection with the issuance of the Authority Bonds. RECOMMENDATION: ..Recommendation (A) ADOPT THE RESOLUTION TO: (1) SELECT THE CHAIR AND VICE CHAIR AND CONFIRM THE DESIGNATION OF THE OTHER OFFICERS OF THE AUTHORITY; (2) AUTHORIZE ISSUANCE OF THE AUTHORITY BONDS; (3) AUTHORIZE THE EXECUTION AND DELIVERY OF THE THIRD A&R REVENUE SHARING AGREEMENT, WITH CONDITIONS; Page 5 of 30 (4) AUTHORIZE THE EXECUTION AND DELIVERY OF THE PROJECT IMPLEMENTATION AGREEMENT, WITH CONDITIONS; (5) AUTHORIZE THE EXECUTION AND DELIVERY OF THE SITE LEASE, WITH CONDITIONS; (6) AUTHORIZE THE EXECUTION AND DELIVERY OF THE FACILITY LEASE, WITH CONDITIONS; (7) AUTHORIZE THE EXECUTION AND DELIVERY OF THE BOND PURCHASE AGREEMENT, WITH CONDITIONS; (8) AUTHORIZE THE EXECUTION AND DELIVERY OF THE AUTHORITY INDENTURE, WITH CONDITIONS; (9) AUTHORIZE THE EXECUTION AND DELIVERY OF THE SUPPORT AGREEMENT, WITH CONDITIONS; (10) AUTHORIZE THE EXECUTION AND DELIVERY OF THE LOAN AGREEMENT, WITH CONDITIONS; AND (11) AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS RELATED TO THE ISSUANCE OF THE AUTHORITY BONDS. ..Body RISKS AND BENEFITS OF THE ISSUANCE OF THE AUTHORITY BONDS: Potential Benefits: (1) Public Amenities/Ecological Buffers: The CVBMP was collaboratively planned through extensive public outreach that included more than 100 community meetings and resulted in a comprehensive Environmental Impact Report and Port Master Plan Amendment, which was approved by the Board of Port Commissioners (District Board) in May 2010 and certified by the California Coastal Commission in August 2012. When implementation of the CVBMP is complete, the public will enjoy more than 200 acres of parks, a shoreline promenade, walking trails, RV camping, shopping, dining and more. The CVBMP also establishes ecological buffers to protect wildlife habitat, species and other coastal resources. (2) Public Access: Completion of the Convention Center, Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements will enhance public Page 6 of 30 access to the waterfront and is expected to attract new visitors and convention business to the region and create thousands of new jobs. (3) Catalyst Project: Construction of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel and Parking Improvements are anticipated to be the centerpiece of and the catalyst project for future development within the Chula Vista Bayfront area to be developed pursuant to the CVBMP. The goal of the CVBMP is to provide a convention center and world-class hotel in the South Bay and to fund and build future public parks, restore sensitive habitat, and construct public infrastructure. (4) Regional Economic Impact: Completion of the Convention Center, Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements are projected to have a tremendous regional economic impact, generating approximately $1.6 billion during construction and an estimated $475 million per year once complete. With respect to jobs, it is projected that completion of the Convention Center, Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements will support 10,000 jobs (direct and indirect) through construction, nearly 1,500 permanent jobs on site, and nearly 3,900 jobs regionally per year in the historically disadvantaged Chula Vista Bayfront area. Potential Risks: (1) Availability of Funds to Pay Debt Service: As described herein, certain payments from the District, the City, and the Special Tax District to the Authority will be applied to pay debt service on the Authority Bonds. Certain of the District and City payments are subject to conditions, including completion and delivery of the Convention Center. (2) Construction Delay Damages: If RIDA is late in completing construction, RIDA will pay delay damages starting on the first month after the Completion Date (as defined below and as such date may be extended by force majeure events or actions of the Authority, Special Tax District, City, or District). (3) Payment of the Authority Bonds in the Event of Termination of the Sublease by RIDA: Under the Sublease between the City and RIDA (Sublease, Attachment K), RIDA may terminate the Sublease due to casualty and condemnation under certain circumstances, mainly involving the cost to repair ($50MM in the case of casualty and $70MM in the case of condemnation). To help mitigate the risk to the Authority, the City and the District in the event of a termination by RIDA before completion of Page 7 of 30 the Convention Center, RIDA has agreed to make up to a $5MM payment if needed to redeem all of the Authority Bonds issued to finance the costs to construct the Convention Center. However, if the insurance or condemnation proceeds and RIDA’s contribution are not sufficient to redeem all of the Authority Bonds, the Authority would still need to find a way to cover any gap or shortfall in revenues needed to redeem all of the Authority Bonds following a casualty or condemnation event prior to completion of the Convention Center. To cover the gap, which is currently approximated to be around $56MM (capitalized interest is currently estimated at approximately $47,465,000 and cost of issuance is currently estimated at approximately $8,825,000), the District and City are working with RIDA to find the most economical manner to procure insurance coverage for these soft costs. Based on recent calculations, the Bond Issuance Working Group (as such term is defined in the Authority Bylaws) believes that if there are sufficient amounts available to redeem all of the Authority Bonds issued for the Convention Center, then there should be adequate revenues from the funds that are being contributed by the District, the City and the Special Tax District under the Facility Lease, the Support Agreement and the Loan Agreement, respectively, to continue to pay debt service on the Authority Bonds issued to finance the Phase 1A Infrastructure Improvements when due. The District and City will continue to analyze this during the course of the validation proceedings. (4) New Market/Lingering Effects of COVID-19: The District engaged CBRE, Inc. in 2015 and the City engaged RSG in 2020 to analyze the feasibility of the revenues to be generated from the Chula Vista Bayfront. Ongoing analysis has been conducted and continues to be conducted and will be finalized prior to the issuance of the Authority Bonds and used in connection with the public offering of the Authority Bonds. Construction of the Convention Center, Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements will be the first large development in the Chula Vista Bayfront and it is possible that the actual revenues will not reach the projected levels. Lingering effects of COVID-19 may also impact actual revenues. FISCAL IMPACT: Bond Purchase Agreement: The Bond Purchase Agreement sets forth the terms and conditions pursuant to which J.P. Morgan will purchase the Authority Bonds and offer them for resale to the public. J.P. Morgan’s underwriting fee will be paid from the proceeds of the Authority Bonds when the Authority Bonds are issued. Page 8 of 30 Authority Indenture: Under the Authority Indenture, the Authority is required to pay the Trustee its fees and expenses (including indemnification). These fees and expenses will be paid from the Administrative Expense Fund established under the Authority Indenture. To the extent the Authority does not have funds to make these payments, the District and the City may be required to make contributions to make such payments. Project Implementation Agreement: The Authority will fund a portion of the costs incurred by RIDA for construction of the Phase 1A Infrastructure Improvements and the Convention Center from the proceeds of the Authority Bonds. As discussed below, the cost to the Authority for construction of the Convention Center is capped at $265MM. Under certain circumstances, including payment of interest on late payments, arbitration and mediation fees, and if funds to be applied to pay costs of construction are misappropriated, additional costs could be incurred by the Authority. Costs of the Phase 1A Infrastructure Improvements are not capped. The Project Implementation Agreement also includes a payment from the Authority of the lesser of (a) the cost actually incurred by RIDA in procuring the payment and performance bonds for the Convention Center, Phase 1A Infrastructure Improvements and Resort Hotel and Parking Improvements; and (b) $1MM, to be paid from Existing Revenues (as defined in the Third A&R Revenue Sharing Agreement). Loan Agreement: If the Authority Bonds are fully paid, the Loan Agreement will terminate and any unpaid portion of the Loan (defined below) will be forgiven. Facility Lease: Under the Facility Lease, the City’s obligation to pay lease payments is subject to certain conditions, including completion and delivery of the Convention Center, availability of funds in the Lease Revenues Fund (defined below), and the City’s ability to use the Convention Center. Site Lease: The Authority will pay the District $1 for the term of the lease. Support Agreement: Under the Support Agreement, the District's obligation to pay Annual Support Payments (defined below) is subject to certain conditions, including completion and delivery of the Convention Center. DISCUSSION: As more fully discussed below, staff recommends that the Authority Board select a Chair and Vice Chair, confirm appointment of the other officers of the Authority as required by the Authority Agreement and Authority Bylaws, authorize the issuance of the Authority Bonds, and approve and authorize the execution and delivery of (a) the Third A&R Revenue Sharing Agreement that has been previously approved by the District Board and City Council of the City (City Council), (b) the Authority Indenture and (c) the remaining agreements identified herein which the Authority is a party to, all of which are critical to the financing and construction of the Convention Center and Phase 1A Infrastructure Improvements. Page 9 of 30 Overall, the transaction can be broken into the following major categories: Financing, Construction, and Leasing and Operations. An overview of the financing agreements and current approach to the financing can be found in the draft Conceptual Plan of Finance, attached as Attachment I. The financing documents for the Authority Bonds consist of (a) the Authority Indenture, (b) the Loan Agreement, (c) the Facility Lease, (d) the Support Agreement, and (d) the Bond Purchase Agreement. The construction document for the Convention Center and Phase 1A Infrastructure Improvements is the Project Implementation Agreement that discusses the procurement, construction and reimbursement provisions for the Convention Center and Phase 1A Infrastructure Improvements, including the initial phases of Sweetwater Park and Harbor Park. The leasing and operations documents for the Convention Center are (a) the Management Agreement between RIDA and Marriott International, Inc. (Marriott) detailing Marriott’s obligations to RIDA and Marriott’s role in operating the Resort Hotel and Parking Improvements and Convention Center (Management Agreement); (b) the Site Lease; (c) the Facility Lease, and (d) the Sublease. The Site Lease, Facility Lease, and Sublease are collectively referred to as the Convention Center Leases. Subject to early termination events described therein, the Site Lease, Facility Lease, and Sublease will be in effect for the longer of: (a) the date of the final payment on the Authority Bonds and (b) 37 years. I. Selection of Officers Under Section 3.3 of the Authority Bylaws, the Chair and Vice Chair of the Authority are to be selected as the first order of business at the first regular or special meeting of the Authority held in each calendar year. Since this is the first regular meeting of the Authority Board held in this calendar year, the Chair and Vice Chair must be selected and designation of the remaining officers must also be confirmed. Following the presentation, staff recommends that the Authority Board select the Authority Board Chair and Vice Chair, confirm the designation of the other officers, and consider the balance of the agenda action items. II. Parameters to Issue Authority Bonds The Authority intends to issue the Authority Bonds in an amount not to exceed $400MM in one or more series pursuant to the Authority Indenture to finance certain public capital improvements to be constructed in the CVBMP as specified in the Authority Indenture as finally executed; provided, however, the final maturity date of the Authority Bonds shall not be more than forty (40) years from the date of issuance of the Authority Bonds, the Authority Bonds shall bear interest at fixed rates to be determined by J.P. Morgan based upon market conditions on the sale date for the Authority Bonds, no Authority Bond shall Page 10 of 30 have an interest rate in excess of twelve percent (12%) per annum and J.P. Morgan’s discount shall not exceed one percent (1%) of the principal amount of Authority Bonds issued. Subject to the foregoing limitations, each of the Executive Director and Treasurer (each, an Authorized Officer) will be authorized to determine the final principal amount and the maturity dates of the Authority Bonds to be sold in each series, the interest rates for each series and the J.P. Morgan’s discount to be paid, with all of such final terms to be included in the Authority Indenture or Bond Purchase Agreement to be executed by an Authorized Officer. III. Approval of Third A&R Revenue Sharing Agreement The City and the District entered into a Revenue Sharing Agreement on April 24, 2018 (Original Revenue Sharing Agreement) to memorialize the various funds that the District and City will contribute to the payment of debt service for the Authority Bonds and expected to be distributed by the Trustee to the Authority subsequent to completion of the Convention Center, Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements. The Original Revenue Sharing Agreement also establishes a waterfall where the City and the District will share the Residual Revenues (as defined in the Revenue Sharing Agreement). Since the approval of the Original Revenue Sharing Agreement on April 24, 2018, the Original Revenue Sharing Agreement has been amended and restated twice to reflect evolutions in the business model and further negotiations with RIDA resulting in the Second Amended and Restated Revenue Sharing Agreement (Revenue Sharing Agreement). The Third A&R Revenue Sharing Agreement is currently being proposed to the Authority Board for its consideration. The Third A&R Revenue Sharing Agreement was approved by the District Board on February 11, 2021 and by the City Council on February 16, 2021. The Authority is being added as a party to the Third A&R Revenue Sharing Agreement to implement directions with respect to amounts being transferred to the Authority by the Trustee and amounts being deposited by the Members of the Authority for distribution as provided in the Third A&R Revenue Sharing Agreement. IV. Overview of Proposed Bond Issuance The total estimated cost to construct the Convention Center and the Phase 1A Infrastructure Improvements is $425,000,000. Approximately $286,500,000 of this amount will be funded from the proceeds of the Authority Bonds, approximately $21,500,000 of which will be applied to fund the construction of the Phase 1A Infrastructure Improvements and approximately $265MM of which will be applied to fund the construction of the Convention Center. District and City staff functioning as the Bond Issuance Working Group have reviewed RIDA’s calculations for the cost of the Phase 1A Infrastructure Improvements. Based on those calculations, the amount needed to fund the Phase 1A Infrastructure Improvements is available using a combination of proceeds from the Authority Bonds and the anticipated $25MM contribution from the County of San Diego as memorialized in the Chula Vista Page 11 of 30 Bayfront Project Funding Agreement among the County, the District, the Authority, and the City (County Agreement). District and City staff have also reviewed RIDA’s calculations for the cost of the Convention Center and based on those calculations the amount needed to fund the Convention Center is available through the contribution of $265MM and RIDA’s expected financing and equity. V. Debt Policy On December 2, 2020, in order to comply with Section 8855(i) of the California Government Code, the Authority Board adopted the Chula Vista Bayfront Facilities Financing Authority Debt Policy (Authority Debt Policy) to provide guidance for the proposed issuance of debt. The purpose of the Authority Debt Policy is to help ensure that the Authority, the Authority Board, the officers of the Authority, staff of each Member of the Authority which function as staff to the Authority, staff engaged by the Authority, if any, and such advisors, consultants and experts as shall be engaged from time to time in connection with a proposed issuance of debt (i) adhere to sound debt issuance practices and (ii) establish and implement monitoring procedures to ensure that the proceeds of proposed debt issuances are directed to their intended use. Pursuant to the Authority Debt Policy, the Authority may issue debt for any of the purposes specified in the Authority Agreement, which purposes include financing the construction of public capital improvements. Proceeds of debt issued may also be applied to pay costs of issuance, fund capitalized interest and a debt service reserve fund. The proposed issuance of debt shall be submitted to, and subject to approval by, the Authority Board, which shall have reviewed and considered a report prepared by the Bond Issuance Working Group. This Action Agenda Item, which is being provided to each member of the Authority Board, constitutes the report prepared by the Bond Issuance Working Group with respect to the proposed issuance of the Authority Bonds. As set forth in the Authority Debt Policy, the individual designated by the Authority Board as the Treasurer and Auditor of the Authority, in consultation with the Treasurer of the District when requested by the Treasurer of the District, shall be responsible for monitoring the use of proceeds of the Authority Bonds to ensure that such proceeds are directed to their intended use and for monitoring the use of the proceeds of any tax exempt bonds to ensure compliance with all applicable federal tax requirements. The Treasurer and Auditor of the Authority shall be responsible for filing or causing to be filed all reports required by state and federal law and by the agreements pursued to which the Authority Bonds are issued. The proposed Authority Bonds meet the criteria set forth in Section V.B of the Authority Debt Policy as follows: 1. Whether proposed issuance complies with the Authority Debt Policy - The proposed issuance complies with the Debt Policy for the reasons discussed in this report, Page 12 of 30 including without limitation, because the proceeds will be used to finance the construction of public capital improvements, pay costs of issuance, fund capitalized interest and a debt service reserve fund, and meet the remaining criteria of Section V.B of the Authority Debt Policy; 2. Sources of payment and security for the proposed issuance of debt - As discussed further in Discussion, Section VI.A.1 below, the Authority Bonds will be secured by (1) the lease payments made by the City under the Facility Lease, (2) the loan payments made by the Special Tax District under the Loan Agreement, (3) the Annual Support Payments (defined below) and Other Ground Lease Revenues (defined below) made by the District under the Support Agreement (collectively, the Port District Payments), and (4) other amounts on deposit in certain of the funds and accounts maintained by the Trustee under the Authority Indenture (collectively, Revenues). To secure the interests of the owners of the Authority Bonds, the Authority will assign to the Trustee certain rights (as defined in the Authority Indenture, the Assigned Rights), which the Authority has under the Facility Lease, Loan Agreement, and Support Agreement to allow the Trustee to enforce the Authority’s right to payments under such agreements; 3. Projected revenues and other benefits from the facilities or infrastructure proposed to be financed from the proceeds of the proposed issuance of debt - As discussed further in the Risks and Benefits of the Issuance of the Authority Bonds above, the Members of the Authority, the region, surrounding areas, and the general public will benefit from the financing of the Convention Center and Phase 1A Infrastructure Improvements and the Resort Hotel and Parking Improvements. 4. Projected operating and other costs related to the facilities or infrastructure proposed to be financed from the proceeds of the proposed issuance of debt – The Authority will not operate or maintain the facilities or infrastructure. The District and the City will accept the Phase 1A Infrastructure Improvements based on their respective interests and share the costs of the operations and maintenance of the Phase 1A Infrastructure Improvements pursuant to the Third A&R Revenue Sharing Agreement and RIDA will be obligated under the Sublease to pay the costs of operations and maintenance of the Convention Center. 5. Period over which interest on the proposed debt should be capitalized – It is currently anticipated that 100% of interest payments will be funded for three years and that a portion of the interest payments will be funded for an additional four years such that the net debt service is structured as level coverage. 6. Extent to which debt service on the proposed debt should be level or non-level – It is currently anticipated the bond amortization will be structured for proportional debt service relative to aggregate gross revenues. The remaining criteria in Section V.B. of the Authority Debt Policy is not applicable because the proposed issuance of the Authority Bonds will be the first issuance of debt by the Authority. Page 13 of 30 VI. Agreements under Consideration by the Authority Board A. Financing Agreements 1. Authority Indenture The Conceptual Outline of the Plan of Finance outlines the sources of revenues that the District and the City intend to use to pay the debt service for the Authority Bonds. The Authority Bonds are expected to be issued in two series, a taxable series to finance the Convention Center (Taxable Bonds), and a tax-exempt series to finance Phase 1A Infrastructure Improvements (Tax-Exempt Bonds). Debt service on Authority Bonds is anticipated to be paid from the various funding sources contributed by the District, the City and the Special Tax District. The Authority Indenture is attached as Attachment F. Pursuant to the Authority Indenture, the Authority Bonds will be secured by the Revenues. To secure the interests of the owners of the Authority Bonds, the Authority will assign to the Trustee the Assigned Rights, which the Authority has under the Facility Lease, Loan Agreement, and Support Agreement to allow the Trustee to enforce the Authority’s right to payments under such agreements. The Authority Bonds are special, limited obligations of the Authority, payable from and secured as to the payment of the principal of, redemption premium, if any, and interest thereon, in accordance with their terms and the terms of the Authority Indenture, solely from the Revenues. The Authority Bonds are not a charge against the general credit of the Authority or of the Members of the Authority. Under no circumstances shall the Authority be obligated to pay principal of, redemption premium, if any, or interest on the Authority Bonds except from the Revenues. Neither the State of California nor any public agency (other than the Authority) nor either the District or the City as a Member of the Authority is obligated to pay the principal of, redemption premium, if any, or interest on the Authority Bonds. No covenant or agreement contained in any Authority Bond or the Authority Indenture shall be deemed to be a covenant or agreement of either Member of the Authority, any of the directors of the Authority Board, or by any officer, member, agent, contractor or employee of the Authority, District, or City in his or her individual capacity and neither the City or the District as Members of the Authority, nor any of the directors of the Authority Board, nor any officer or employee thereof executing the Authority Bonds shall be liable personally on any Authority Bond or be subject to any personal liability or accountability by reason of the issuance of such Authority Bonds. Pursuant to the Authority Indenture, the Trustee will establish a Construction Fund that will hold proceeds from the Authority Bonds and funds from the County Agreement that will be used to pay or reimburse RIDA for its payment of costs of construction of the Phase 1A Infrastructure Improvements and the Convention Center. No amounts in the Construction Fund may be withdrawn for any other purpose or transferred to any other fund established under the Authority Indenture until all costs of the construction have been paid, at which time the Trustee shall transfer all remaining amounts in the Page 14 of 30 Construction Fund to the Revenue Fund for application in accordance with the provisions of the Authority Indenture, which includes provisions permitting transfers to the Authority Surplus Fund established under the Authority Indenture and transfers to the Authority for deposit pursuant to the Third A&R Revenue Sharing Agreement. To ensure that RIDA gets paid the costs for construction RIDA is entitled to receive under the Project Implementation Agreement, amounts may not be transferred by the Authority to the Third A&R Revenue Sharing Agreement until any true up payments owed to RIDA under the Project Implementation Agreement are paid. The Trustee will also establish an Insurance and Condemnation Fund under the Authority Indenture that will hold any Net Proceeds (as defined in the Authority Indenture) and any payments received from RIDA following a casualty or condemnation event. Net Proceeds deposited in the Insurance and Condemnation Fund will be used to redeem the Taxable Bonds in the event that the Sublease terminates due to a casualty or condemnation event or will be disbursed to RIDA if RIDA is rebuilding. As long as any Authority Bonds remain outstanding, in order to amend the Authority Indenture, consent of the owners of the majority in aggregate principal amount of the Authority Bonds may be required. Such consent may also be required to amend or modify the Convention Center Leases and/or the Project Implementation Agreement. 2. Support Agreement At the February 11, 2021 District Board meeting, the District Board authorized, with conditions, a Support Agreement to provide for the terms and conditions upon which the District will be obligated to contribute Port District Payments to the Authority to pay debt service on the Authority Bonds. Under the Support Agreement, Port District Payments are comprised of annual payments (Annual Support Payments) set forth in a schedule attached to the Support Agreement and payments made from Other Ground Lease Revenues (defined below). The District is not required to make Annual Support Payments until the Convention Center is complete. This means that if the Convention Center construction is not completed until Bond Year 6, the Annual Support Payment for Bond Year 5 would be “abated” and the amount abated would be tacked on to the end of the schedule such that the District would have an Annual Support Payment in Bond Year 38 for $5MM. In addition, if the City’s Lease Payments are abated pursuant to the terms of the Facility Lease as a result of casualty, condemnation, or title defect with respect to the Convention Center, the District’s Annual Support Payments will be abated to the same degree. Other Ground Lease Revenues consist of ground lease revenues actually received by the District from (a) the ground lease with The Marine Group LLC (dba Marine Group Boat Works) (District Clerk No. 54509, as amended from time to time), (b) the ground lease with Chula Vista Marina LP (dba Chula Vista Marina) (District Clerk No. 14244, as amended from time to time), (c) the ground lease with California Yacht Marina - Chula Vista LLC (California Yacht Club) (District Clerk No. 23924, as amended from time to Page 15 of 30 time); and (d) the ground lease with Sun Chula Vista Bayfront RV LLC (District Clerk No. 70407) (as amended from time to time, the RV Park Lease). In addition, if any of these four ground leases are renewed, replaced, or amended in such a way as to change the size or configuration of the original premises to include premises outside of the original premises boundaries of all the other ground leases (Modified Boundary Lease) or the premises for such ground leases are used for other revenue generating agreements some or all of such additional revenues resulting from such Modified Boundary Lease or revenue generating agreements need to be contributed as part of the Other Ground Lease Revenues. The District has current debt comprised of revenue bonds (District Bonds) issued under an existing indenture filed in the Office of the District Clerk as Document Nos. 48385, 48388, and 70956 (collectively, District Indenture) and a promissory note issued to the San Diego Airport Authority filed in the Office of the District Clerk as Document No. 47940 (Airport Note). Pursuant to the District Indenture and the Airport Note, the District is required to pay debt service on the District Bonds and Airport Note prior to payment of the Port District Payments. In the event the District does not pay any Port District Payment, the Authority may exercise any and all remedies available or granted to it pursuant to law, including specific performance or its equivalent remedy, including a writ of mandamus. The Authority will assign to the Trustee the right to collect and enforce payment of the Port District Payments, so the Trustee would enforce any obligation of the District to pay the Port District Payments under the Support Agreement. Under the Support Agreement, the Authority and the District each make customary representations regarding the ability to enter into the Support Agreement. In addition, if the District elects to issue additional bonds under the District Indenture or incur Parity Debt or Subordinate Obligations (each as defined in the District Indenture) in the future, in addition to complying with the requirements of the District Indenture, the District has also agreed to comply with certain additional requirements set forth in the Support Agreement, including providing certain certifications to the Trustee regarding debt service coverage on the District Bonds, Parity Debt, Subordinate Obligations, the Airport Note and the Port District Payments. 3. Convention Center Site Lease Under the Site Lease, the Authority will ground lease the land (including the existing improvements thereon) on which the Convention Center will be constructed from the District for a total rent of $1. As consideration for this Site Lease, the Authority will enter into the Facility Lease, the Authority Indenture, the Loan Agreement, and the Project Implementation Agreement. The Site Lease requires that the Authority cause RIDA to construct the Convention Center. Once complete, the Convention Center will be owned by the Authority. When the Site Lease expires, the Authority will convey the Convention Center to the District and the District will own the Convention Center. The term of the Site Page 16 of 30 Lease is 37 years, unless terminated earlier, or extended, in accordance with the terms of the Site Lease. The term of the Site Lease cannot be longer than 66 years. 4. Convention Center Facility Lease The Authority will sublease the Convention Center to the City through the Facility Lease. The Facility Lease is the City’s main financing vehicle for contributing its funds toward the payment of debt service on the Authority Bonds. The term of the Facility Lease is coterminous with the Site Lease. The City will make payments to the Authority in accordance with the terms of the Facility Lease from the following sources of revenues to the extent such revenues are actually received by the City: (a) An amount equal to the funds received by the City from the District, in fiscal year 2016 pursuant to Municipal Services Agreement No. 88-2012 between the District and the City (MSA Revenues) ($986,225), increasing 3% on July 1 of each year; (b) Transient Occupancy Tax Revenues from the Resort Hotel and the RV Park Lease (collectively, TOT Revenues); (c) Sales and Use Tax revenues from the Resort Hotel, the Convention Center and the RV Park Lease, exclusive of any amount levied and allocated to the City pursuant to voter approval by the electors of the City, which portion is currently one percent (1%) of taxable transactions (Sales and Use Tax Revenues); and (d) Incremental ad valorem property taxes (including property tax in-lieu of motor vehicle license fees) generated by the Resort Hotel and Convention Center, which is that amount in excess of any ad valorem property tax levied in the fiscal year in which the Authority Bonds are issued (Tax Increment Revenues). The City does not have an obligation to make lease payments to the Authority from any source other than those listed above and only to the extent such revenues are available in the Lease Revenues Fund (as defined in the Facility Lease) that is held separate and apart from the City’s other revenues or that have been received by the City and not yet deposited into the Lease Revenues Fund. The obligation of the City to make the Lease Payments (as defined in the Facility Lease) is subject to abatement in order to comply with the constitutional debt limit. The City will agree to make Pre-Completion Lease Payments (as defined in the Facility Lease) from amounts in the Lease Revenues Fund prior to the delivery of the completed Convention Center; however, in order to comply with the constitutional debt limit such amounts will be subject to annual appropriation by the City. The City’s obligation to pay the Lease Payments is contingent on the Convention Center being completed and delivered to the City and thereafter remaining available to the City for its use. If the Convention Center is not completed or the Convention Center cannot be used by the City for its intended purposes due to damage, destruction, condemnation or title defect, the City’s Lease Payments will be abated in an amount which is proportionate Page 17 of 30 to the amount of the City’s loss of use. If as a result of any abatement of Lease Payments the Authority Bonds are not repaid at their final maturity, then the term of the Facility Lease will be extended and the City will continue to make Lease Payments until the Authority Bonds are repaid or the term of the Facility Lease reaches 66 years. During any extension, the City’s obligation to make Lease Payments will remain contingent on funds being available in the Lease Revenues Fund. In the event the City does not pay any Lease Payments when due in accordance with the provisions of the Facility Lease, the Authority may exercise any and all remedies available or granted to it pursuant to law, including specific performance or its equivalent remedy, including a writ of mandamus. The Authority will assign to the Trustee the right to collect and enforce payment of the Lease Payments, so the Trustee would enforce any obligation of the City to pay the Lease Payments under the Facility Lease. Since the Lease Payments are a large component of the Revenues that will be used to pay the debt service on the Authority Bonds, the City intends to procure rental interruption insurance to cover the City’s Lease Payments during a casualty or condemnation event to avoid a default under the Authority Bonds. The District, City, and the Authority are working with RIDA to determine the most economical way of providing such insurance and will secure a commitment for such insurance prior to the issuance of the Authority Bonds. Although some provisions of the Facility Lease and the Project Implementation Agreement will overlap, the Project Implementation Agreement will generally address the construction of the Convention Center and the Facility Lease will generally address the operations period of the Convention Center (i.e., after the completion of the Convention Center). Examples of the division between construction and operations include insurance (RIDA will provide liability and builder’s risk insurance under the Project Implementation Agreement for the Convention Center and Site and will provide the liability and all-risk insurance required by the Facility Lease and the Sublease after the Convention Center is complete), liens, and prevailing wage requirements. 5. Loan Agreement The City formed the Special Tax District in 2020. It is expected that the Special Tax District will receive a loan (Loan) from the Authority which the Special Tax District will repay from the taxes received from an annual special tax levy (Special Taxes). The Loan Agreement is attached as Attachment H. The amount of the Loan, which will have a fixed repayment schedule, is expected to be in an amount not to exceed $175,000,000. Payments on the Loan will be made to the Trustee and will be applied to pay debt service on the Authority Bonds. In the event that the amount of the Special Taxes collected from the special tax levy is less than the scheduled Loan payment, then the unpaid amount will be deferred and paid in a future year or years to the extent that the Special Taxes collected exceeds the amount of the scheduled Loan payment in such year. If the Special Taxes collected are sufficient to pay all scheduled and any deferred Loan payments, then the remaining amount would be available for use on other qualified expenditures of the Page 18 of 30 Special Tax District. If the Authority Bonds are redeemed prior to the maturity date of the Loan, the Loan will be forgiven. 6. Bond Purchase Agreement The Bond Purchase Agreement sets forth the terms and conditions pursuant to which J.P. Morgan will purchase the Authority Bonds and offer them for sale to investors . The primary role of J.P. Morgan, as an underwriter, is to purchase the Authority Bonds, for resale to investors, in an arm’s length commercial transaction between J.P. Morgan, as underwriter and the Authority, the City, the District and the Special Tax District. The interest rates on the Authority Bonds will be set based on market conditions on the day that the Bond Purchase Agreement is signed by the parties. J.P. Morgan’s underwriting fee will be paid from the bond proceeds as a cost of issuance of the Authority Bonds when the Authority Bonds are issued. The terms of the Bond Purchase Agreement include conditions for the purchase and sale of the Authority Bonds and will require that each of the Authority, City, District, Special Tax District and RIDA provide and certify as to the accuracy of certain information for inclusion in the offering documents to be prepared and used in the offering of the Authority Bonds which are the Preliminary Official Statement and the Official Statement. In addition, the terms of the Bond Purchase Agreement require the Authority, the City, District and Special Tax District to undertake an obligation to make “continuing” disclosure to the financial markets through the use of the MSRB EMMA website. B. Construction Agreement (Project Implementation Agreement) 1. Procurement Process for the Convention Center and Phase 1A Infrastructure Improvements The Project Implementation Agreement establishes the terms and conditions for the construction of the Phase 1A Infrastructure Improvements and Convention Center. RIDA will construct the Convention Center as the Authority’s contractor under the Project Implementation Agreement. On May 20, 2020, the Authority Board adopted Resolution 2020-007 ratifying the final form of a procurement policy for developer-performed public improvements for the Authority attached as Exhibit A to such resolution (Authority Procurement Policy) and ratifying the final form of Authority Resolution 2020-002 in the form presented and attached as Exhibit B to Resolution 2020-007 (Authority Resolution 2020-002) applying the Authority Procurement Policy to the construction of developer- performed public works for the Convention Center and Phase 1A Infrastructure Improvements. The Authority Procurement Policy and Authority Resolution 2020-002 are attached as Attachment J hereto. Pursuant to Authority Resolution 2020-002 and in accordance with Procurement Policy Section 2.a. (Authorization to Proceed), the Authority Board authorized RIDA to proceed with the development and construction of specific Phase 1A Infrastructure Improvements and the Convention Center subject to the terms, conditions, and obligations of the Authority Procurement Policy, Authority Resolution 2020-002, all applicable project agreements, including the Project Page 19 of 30 Implementation Agreement, and all applicable federal, state, and local laws and regulations. Section 5 of the Authority Procurement Policy specifically authorizes the Authority Board to require a developer to enter into an agreement to clarify or modify the application of the Authority Procurement Policy and/or to clarify, establish, or modify the procedures to be undertaken in connection with the Authority Procurement Policy. The Project Implementation Agreement is intended to clarify and delineate how the Authority Procurement Policy will specifically apply to RIDA’s construction of the Convention Center and Phase 1A Infrastructure Improvements. Under Authority Resolution 2020-002, the Authority Board determined that the Convention Center was a “special purpose project” under Section 6 of the Authority Procurement Policy and waived certain provisions of Authority Procurement Policy as in the best interest of the public provided that certain safeguards were put in place to protect the public interest. These safeguards include: (1) cap on the Public Contribution to $265MM; (2) future agreements to include appropriate insurance and payment and performance bond requirements, (3) performance of the work to the appropriate standard and in compliance with applicable laws; and (4) indemnification of the Authority, the City and the District by RIDA. The Authority Board also delegated to the Executive Director of the Authority the authority to implement the safeguards in support of the waiver described herein. Under Authority Resolution 2020-002, the Authority Board determined that it was in the best interest of the public for the Phase 1A Infrastructure Improvements to be constructed through a sole source prime contract to the Mortensen/McCarthy Chula Vista Resort Joint Venture (MMJV), provided that RIDA followed the subcontractor bid and award process in the Authority Resolution 2020-002, which is included in Exhibit G-1 of the Project Implementation Agreement. Similar to the Convention Center, the Authority Board also delegated authority to the Executive Director of the Authority to determine RIDA’s compliance with Authority Resolution 2020-002, and in particular, the subcontractor bid and award process. The Project Implementation Agreement incorporates and implements the safeguards that the Authority Board required in the Authority Procurement Policy and Authority Resolution 2020-002. In particular, the Project Implementation Agreement establishes the maximum amount of Public Contribution to the Convention Center costs, sets forth RIDA’s insurance obligations, requires that RIDA’s contractor deliver both performance and payment bonds, obligates RIDA to make late payments if completion of the project is not timely (further discussed below), requires RIDA to deliver a completion guaranty, requires RIDA to ensure the quality of work and to comply with all laws (including prevailing wage laws); and sets forth RIDA’s indemnity obligations to the Authority, the District, the City, and the Special Tax District. 2. Convention Center RIDA is required to complete the Convention Center within 48 months of commencement of construction (Completion Date). “Completion” means that RIDA has obtained from the Page 20 of 30 City and delivered to the Authority a certificate of occupancy or temporary certificate of occupancy for the Convention Center. The Completion Date can be extended for the following reasons: 1) (i) the occurrence of a force majeure event (including actual collateral effects) that delays the completion of (x) the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel or Parking Improvements or (y) Sweetwater Park (if RIDA exercise its option to construct); (ii) a breach of the District, City, Special Tax District, or Authority under the financing, operations, or construction agreements, or the Convention Center Leases or the Ground Lease between the District, as lessor, and RIDA, as lessee, entered into with respect to the Resort Hotel and Parking Improvements, that causes delays to the completion of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, or Parking Improvements; or (2) delays by the District in completing Sweetwater Park (if RIDA does not construct). If RIDA does not meet the Completion Date (as extended by (1) or (2) above), RIDA must pay construction late damages starting on the date that is one year after the Completion Date (as extended by (1) or (2) above). The cost of the construction of the Convention Center is currently estimated at approximately $340MM. The Public Contribution toward the construction of the Convention Center includes $265MM from the Authority Bonds that will be paid to RIDA over time until the amount is fully disbursed. RIDA is responsible for covering any costs over $265MM, except for interest payments as further discussed below. To receive payments, RIDA must submit monthly payment requests based on work performed. Under Authority Resolution 2020-002, the Authority Board authorized the Executive Director of the Authority to delegate the Executive Director's authority under Authority Resolution 2020-002 to two or more members of the staff of the City or the District functioning as staff to the Authority; provided that such delegation is made to a contingent comprised of an equal number of City and District staff members respectively. The staff members delegated this authority will review the payment requests received from RIDA and authorize the Trustee to issue the corresponding payments from the Construction Fund established under the Authority Indenture. As part of the payment request process, both RIDA and its architect will certify that the request is based on work performed to- date and provide supporting documentation. In order to avoid construction delays or interruptions resulting from payment disputes, the parties have agreed to use binding arbitration to resolve payment disputes related to the payment requests in very defined circumstances, including issues related to defective work, amounts under protest, late payments, incomplete payment requests, incorrect payments, and whether the dispute qualifies for arbitration, to avoid delay in the project and increased costs to all parties (collectively, the Arbitration Disputes). If the Arbitration Disputes are brought to arbitration, the arbitrator will have limited jurisdiction to resolve the Arbitration Disputes. For example, in a dispute arising from a demand involving a payment request for the Convention Center, (a) the arbitrator only has jurisdiction to determine whether any amount is owed to RIDA in accordance with the Project Implementation Agreement and to order payment to RIDA of the amount owed, and (b) the arbitrator has no power to order the Authority, the District, or the City to pay Page 21 of 30 any amount to RIDA in excess of $265MM (other than default interest in accordance with the Project Implementation Agreement). In addition, for all Arbitration Disputes, the arbitrator shall have no authority or power to do any of the following: (i) award payment of any amount that is not consistent with the Project Implementation Agreement or expressly authorized within the terms of the Project Implementation Agreement; (ii) award any consequential, incidental or punitive damages or any amounts relating to lost profits, lost business opportunity or similar damages; (iii) commit errors of law; (iv) decide any matter related to the Project Implementation Agreement that is not specifically identified as a “Specified Dispute” arising from a “demand;" (v) order injunctive relief or (vi) order the Authority, City, or District to perform any discretionary act. For arbitration, the parties will use an approved arbitrator list to help avoid delays caused through the arbitrator selection process and proceed in accordance with the JAMS Expedited Construction Arbitration Rules (JAMS Rules), including for disputes greater than $100,000. The arbitration will be completed (whether by settlement or the issuance of an award by the arbitrator) within twenty (20) business days after the arbitrator is selected. The arbitrator’s jurisdiction will be limited to determining whether a demand is subject to arbitration as well as the amount due from one party to other under the Project Implementation Agreement and ordering the payment of such amounts due from one party to the other party by a date certain. If the Authority does not make a payment to RIDA on time, then RIDA will be entitled to default interest (10% per annum) on the amount of the delinquency, which must be paid by the Authority regardless of whether that amount is in excess of the $265MM Public Contribution. To help alleviate the costs to the Authority, RIDA granted the Authority four “grace periods” each year for late payments in which interest will not accrue during the grace period. If the Authority disputes a payment request, the Authority can make the payment under protest in order to avoid potential interest accrual, in which case RIDA would be liable to return any overpayment to the Authority with interest. In the event of any payment dispute that cannot be resolved through negotiations amongst the parties, the dispute will proceed to arbitration on an expedited basis (as discussed above). The Authority’s costs of arbitration cannot be paid through the $265MM Public Contribution and will need to be funded from other Authority funds. Following completion of the Convention Center, there will be a final review and true-up of all payments to ensure that the Authority has not overpaid RIDA. 3. Phase 1A Infrastructure Improvements The Project Implementation Agreement specifies that RIDA will cause the development and completion of certain Phase 1A Infrastructure Improvements within approximately 48 months of commencement of construction. The Project Implementation Agreement also specifies the projected costs of development and costs reporting associated with the Phase 1A Infrastructure Improvements that RIDA will construct. Upon satisfactory Page 22 of 30 completion, the Phase 1A Infrastructure Improvements will be accepted by the City or District, as applicable, based on the nature of the improvement. A general, high level list of the Phase 1A Infrastructure Improvements which RIDA has committed to construct is as follows: • E Street (G Street to H Street) • G Street Connection • H Street (Bay Boulevard to Street A) • H Street (Marina Parkway to E Street) • Parcel H3 Site Preparation • Parcel H3 Utility Corridor The remaining Phase 1A Infrastructure Improvements that RIDA has not committed to construct, but that RIDA may construct pursuant to the terms of the Project Implementation Agreement, are listed below: • Sweetwater Park (initial phase, including Sweetwater Buffer (SP1 for Parcel S2)) • Harbor Park (initial phase) The District will construct Sweetwater Park and the Sweetwater Buffer (SP1 for Parcel S2). The District and City have allocated the amounts for the initial phase of Harbor Park to be used as a contingency funding for payments to RIDA for the Phase 1A Infrastructure Improvements which RIDA has committed to construct. Consistent with this approach, Harbor Park will not be a “priority” Phase 1A Infrastructure Improvement. However, the District and City intend to build Harbor Park and once the Phase 1A Infrastructure Improvements to be constructed by RIDA are 75% complete, the City, District, and RIDA will meet and confer to decide whether there are funds available to build Harbor Park and whether RIDA or the District will construct Harbor Park. The total to construct all Phase Infrastructure 1A Improvements, including work completed to date, is currently estimated at $85MM. This amount for the remaining work on Sweetwater Park is $13.2MM and on Harbor Park is $19.5MM. Staff has reviewed RIDA’s calculations for the cost of the Phase 1A Infrastructure Improvements and based on those calculations the amount needed to fund the Phase 1A Infrastructure Improvements is available using a combination of the BFDIF credits, sewer fees, a portion of the proceeds of the Authority Bonds, funds from the County Agreement, a grant from California Natural Resources, and other work performed by other tenants on the CVBMP. The key difference in funding between the Phase 1A Infrastructure Improvements and the Convention Center is that RIDA will look to the Authority to pay for all of the costs of the Phase 1A Infrastructure Improvements. This means that the District and City may need to contribute additional amounts to reimburse RIDA for the construction of the Phase 1A Infrastructure Improvements if the cost exceeds available funds. Under Authority Resolution 2020-002, the Authority Board authorized the Executive Director of the Authority to delegate the Executive Director's authority under Authority Resolution 2020- Page 23 of 30 002 to two or more members of the staff of the District and the City functioning as staff to the Authority; provided that such delegation is made to a contingent comprised of an equal number of City and District staff members respectively. The staff members delegated this authority will review the payment requests received from RIDA and authorize the Trustee to issue the corresponding payments from the Construction Fund established under the Authority Indenture. 4. Sweetwater Park Sweetwater Park is part of the Phase 1A Infrastructure Improvements. Sweetwater Park is a new, resource based passive recreation park that will serve as a regional, coastal destination. The park improvements include parking for 216 vehicles, a new park restroom, plazas and informal small group gathering areas, a nature-themed play area, an adventure dunes play area, a large multiuse meadow with perimeter walkway and picnic areas, a shade pavilion, multiple trail and path routes for walking, jogging, and bicycling, and elevated scenic overlook areas that will provide sweeping views of San Diego Bay. Since RIDA did not include the Sweetwater Park as part of its bid for the Chula Vista Bayfront project, the District determined that it might be more economical and effective for the District to bid out the work and construct Sweetwater Park. Under the Project Implementation Agreement, the District will be required to construct Sweetwater Park within 22 months of the issuance of the Authority Bonds. This time limit was added to provide additional certainty that Sweetwater Park will be sufficiently complete in time for the opening of the Convention Center, Parking Improvements, and Resort Hotel. To address RIDA’s concerns that Sweetwater Park will be sufficiently complete in a timely manner and not delay the opening of the Convention Center and Resort Hotel, RIDA has two opportunities to step in and perform the work itself: first, before the District bids the contract to construct Sweetwater Park; and second, at month 23 if the District does not complete the construction within the 22 months. If RIDA takes over the construction of Sweetwater Park, RIDA would be reimbursed in the same manner as it is being reimbursed for the other Phase 1A Infrastructure Improvements. If RIDA takes over the construction, RIDA will have a right to accept assignment of the District’s design contract to move forward with construction without competitive bids. 5. Harbor Park As discussed earlier, Harbor Park will not be constructed on the same timeline as the remainder of the Phase 1A Infrastructure Improvements. Instead, the District and City will use the money it would have allocated to Harbor Park as contingency funding in case the costs of the remainder of the Phase 1A Infrastructure Improvements, including Sweetwater Park, increase beyond the amounts currently projected to be needed to construct the Phase 1A Infrastructure Improvements. This decision was made to reduce risk to RIDA that RIDA would not be paid for excess costs related to the Phase 1A Infrastructure Improvements. Once the Phase 1A Infrastructure Improvements, excluding Harbor Park, are 75% complete, the District, the City, and RIDA will reconvene to decide Page 24 of 30 whether to move forward with Harbor Park and whether RIDA or the District will perform the construction. If RIDA constructs Harbor Park, it is anticipated that the same payment request process as used for the other Phase 1A Infrastructure Improvements will be used. 6. Payment and Dispute Resolution Process For the Phase 1A Infrastructure Improvements (including Sweetwater Park and Harbor Park if RIDA proceeds with the construction), the Project Implementation Agreement contains a similar payment request and dispute resolution process as the Convention Center process. RIDA will submit monthly payment requests, certified by a RIDA executive and a third-party architect, which will be limited to work performed to-date, and the Authority will direct the Trustee to issue payments it approves, which it can choose to issue under protest, and the parties will take any unresolved disputes that qualify for arbitration to expedited arbitration. If an arbitrator orders RIDA to return any payments, RIDA will be liable for 10% annual interest. Likewise, the Authority will have to pay interest on any untimely payments, subject to the four free grace periods. There will also be a final review and true-up of all the payments that the Authority made to RIDA for the Phase 1A Infrastructure Improvements. As discussed above, a Construction Fund will be established under the Authority Indenture to pay for the cost of the Phase 1A Infrastructure Improvements and a portion of the cost of construction of the Convention Center and the Trustee will distribute payments from the Construction Fund at the request of the Authority. In addition, if the Authority is late in issuing payments, RIDA will get paid interest and an arbitration provision has been incorporated to fast track solutions regarding payment request. Despite these protections, RIDA has also requested that if an employee of the City or District misappropriates or transfers funds from the Construction Fund or Authority Surplus Fund (either in the capacity as an employee of the City or District or as staff of the Authority), or the District Board or City Council approves an affirmative action transferring these funds, the Authority, City, and the District will use commercially reasonable efforts to pursue recovery of these amounts and seek crime insurance coverage. To the extent the Authority cannot recover the misappropriated funds, through the employee or insurance, the Authority would be responsible for paying the remaining amount. C. Leasing and Operations The leasing and operations documents for the Convention Center are (a) the Management Agreement (between and being executed by RIDA and Marriott); (b) the Site Lease; (c) the Facility Lease, and (d) the Sublease (between and being executed by the City and RIDA but requiring the Authority’s and District’s consent and agreement as to certain sections as specified therein). The Management Agreement was consented to by the District on May 11, 2021. Under the Management Agreement, Marriott will supervise, direct and control the management and operation of the Convention Center and Resort Hotel and Parking Improvements. If Page 25 of 30 there is a conflict between the Management Agreement and the Sublease, the terms of the Sublease control. The City will be subleasing to RIDA the Convention Center and Convention Center land in the form of the Sublease. Due to the Authority’s interest in the Convention Center, as owner of the Convention Center, the Authority has certain third-party rights under the Sublease. Under the Sublease, RIDA may terminate the Sublease due to casualty and condemnation under certain circumstances, mainly involving the cost to repair ($50MM in the case of casualty and $70MM in the case of condemnation). To help mitigate the risk to the Authority, the City and the District in the event of a termination by RIDA before completion of the Convention Center, RIDA has agreed to make up to a $5MM payment if needed to redeem all of the Authority Bonds issued to finance the costs to construct the Convention Center. However, if the insurance or condemnation proceeds and RIDA’s contribution are not sufficient to redeem all of the Authority Bonds, the Authority would still need to find a way to cover any gap or shortfall in revenues needed to redeem all of the Authority Bonds following a casualty or condemnation event prior to completion of the Convention Center. To cover the gap, which is currently approximated to be around $56MM (capitalized interest is currently estimated at approximately $47,465,000 and cost of issuance is currently estimated at approximately $8,825,000), the District and City are working with RIDA to find the most economical manner to procure insurance coverage for these soft costs. Based on recent calculations, the Bond Issuance Working Group (as such term is defined in the Authority Bylaws) believes that if there are sufficient amounts available to redeem all of the Authority Bonds issued for the Convention Center, then there should be adequate revenues from the funds that are being contributed by the District, the City and the Special Tax District under the Facility Lease, the Support Agreement and the Loan Agreement, respectively, to continue to pay debt service on the Authority Bonds issued to finance the Phase 1A Infrastructure Improvements when due. The District and City will continue to analyze this during the course of the validation proceedings. VII. Economic Development Investment The Authority’s issuance of the Authority Bonds for the financing of the Convention Center and the Phase 1A Infrastructure Improvements will result in an “economic development opportunity” as defined in Government Code Section 52200.2 and an “economic development subsidy” to the project as defined in Government Code Section 53083(a) (together, the Economic Development Investment) for the following reasons: The construction of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, and the Parking Improvements will benefit the Members of the Authority and generate substantial benefits to the local and regional community in the form of increased tax and land lease revenues, permanent and temporary jobs, and the provision of significant public amenities and public infrastructure. The construction of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, and the Parking Improvements is also anticipated to be the development catalyst for the CVBMP and is consistent with the policies of the Members of the Authority: (a) the City’s Economic Page 26 of 30 Development Element of the General Plan in order to achieve its economic development goals and objectives and (b) the Port’s Compass Strategic Goals and planning objectives under the CVBMP. The operation of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, and the Parking Improvements will serve the region and the surrounding community by providing commercial and recreational facilities that are not currently available in the community. When implementation of the CVBMP is complete, the public will enjoy more than 200 acres of parks, a shoreline promenade, walking trails, RV camping, shopping, dining and more. The CVBMP also establishes ecological buffers to protect wildlife habitat, species and other coastal resources. The Phase 1A Infrastructure Improvements include the Sweetwater Park, the construction and relocation of streets, development of sewers, and other amenities for the public. Further, no luxury, AAA Four Diamond (or similar) hotel currently operates in the City or the CVBMP. Further, the City and CVBMP currently lacks large, luxury conference facilities similar to the Convention Center that will accommodate community events and gatherings such as high school dances, meetings of local trade organizations, fundraisers, and other community events. The nature of the Resort Hotel as a high-end, luxury resort is expected to bring a demand for additional luxury facilities and services in the community, encouraging related investment and development in the region, the Chula Vista Bayfront, the City, and surrounding areas. The development, opening, and operation of the Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, and the Parking Improvements will be of material benefit to the region, the City, the Chula Vista Bayfront, and to the citizens of, and property owners in, the City and surrounding areas, because construction and operation of Convention Center, Phase 1A Infrastructure Improvements, the Resort Hotel, and the Parking Improvements will encourage and foster the economic revitalization of the Chula Vista Bayfront and the City for the people in the area and the region and the general public as a whole; provide commercial facilities, recreational amenities, and services not currently available in the City and Chula Vista Bayfront; increase tax revenues available to the City and other taxing agencies; increase sales tax revenues available to the City; increase Transient Occupancy Tax revenues available to the City; generate Additional Rent (as defined in the Ground Lease) to the City and the District; generate Parking Rent (as defined in the Ground Lease) to the City and the District; generate leasing revenues to the City and the District; and create jobs within the City, the Chula Vista Bayfront, and the region. VIII. Other Documents Related to the Issuance of the Authority Bonds Staff recommends that the Authority Executive Director and his written designees and the Authority Treasurer and his or her written designees (each, an Authorized Officer), and other officers, employees and agents of each of the Members of the Authority, be authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions authorized by the Authority Board on June 28, 2021 and to otherwise carry out, give effect to and comply Page 27 of 30 with the terms and intent of the draft resolution attached to this Action Item (Resolution), including, but not limited to, the execution and delivery of easement agreements related to the Facility (as such term is defined in the Facility Lease), a Tax Certificate for any of the Authority Bonds and other certificates or agreements required pursuant to the terms of the Bond Purchase Agreement or by the City or the District as a condition to their consummating the transactions described herein related to the Authority Bonds. In addition, following the issuance of the Authority Bonds, each of the Authorized Officers, acting alone, is authorized to take any and all actions required of the Authority under the Authority Agreements (defined below), including, but not limited to, executing required certificates, granting consents, filing reports and sending notices on behalf of the Authority. This delegation of authority shall extend to and include such items, but not be limited to, the execution and delivery by the Authority of the consent and agreement required by the Authority under the Sublease. IX. Conclusion and Recommendation The documents to be approved by the Authority Board in connection with the issuance of the Authority Bonds are: 1. Authority Indenture 2. Loan Agreement 3. Bond Purchase Agreement 4. Project Implementation Agreement 5. Site Lease 6. Facility Lease 7. Support Agreement 8. Sublease 9. Third A&R Revenue Sharing Agreement The aforementioned documents are collectively referred to as, the “Authority Agreements”. The first eight documents are part of the validation action that will be filed by the Authority, the City, and the District. Authority approval of these documents is the last legislative action needed before the validation action can be filed. If the validation action is successful, the parties will then move forward with issuing the Authority Bonds, enter into their respective financing, construction, leasing and operations, and enforcement agreements at the time of issuance of the Authority Bonds, and RIDA would commence construction of certain of the Phase 1A Infrastructure Improvements, the Convention Center and the Resort Hotel and Parking Improvements shortly thereafter. Based on the current schedule, it is estimated that the construction could commence as early as the end of 2021. As more fully discussed above, staff recommends that the Authority Board: Page 28 of 30 (A) Select the Chair and Vice Chair and Confirm the Designation of the Other Officers of the Authority; (B) Authorize the Issuance of the Authority Bonds by the Authority (C) Authorize the Execution and Delivery of the Third A&R Revenue Sharing Agreement; (D) Authorize the Execution and Delivery of the Project Implementation Agreement, with conditions; (E) Authorize the Execution and Delivery of the Site Lease, with conditions; (F) Authorize the Execution and Delivery of the Facility Lease, with conditions; (G) Authorize the Execution and Delivery of the Bond Purchase Agreement, with conditions; (H) Authorize the Execution and Delivery of the Authority Indenture, with conditions; (I) Authorize the Execution and Delivery of the Support Agreement, with conditions; (J) Authorize the Execution and Delivery of the Loan Agreement, with conditions; and (K) Authorize the Execution and Delivery of Other Documents Related to the Issuance of the Authority Bonds. Co-Counsel’s Comments: Each Co-Counsel has reviewed this agenda sheet and Attachments A-H and K as presented to him or her and approve each as to form and legality. Environmental Review: The proposed action by the Authority Board, selecting the Chair and Vice Chair and confirming the designation of the other officers of the Authority, the issuance of the Authority Bonds, and approving the execution and delivery of the Third A&R Revenue Sharing Agreement, the Project Implementation Agreement, the Site Lease, the Facility Lease, the Bond Purchase Agreement, the Authority Indenture, the Support Agreement, the Loan Agreement, and other documents related to the issuance of the Authority Bonds, was previously analyzed in the Final Environmental Impact Report (FEIR) for the Chula Vista Bayfront Master Plan (UPD #83356-EIR-658; SCH #2005081077; Clerk Document No. 56562), certified by the District on May 18, 2010 (Resolution No. 2010-78), the Page 29 of 30 Addendum to the FEIR, which was adopted by the District Board on August 13, 2013 (Resolution No. 2013-138), the Second Addendum to the FEIR, which was adopted by the District Board on April 10, 2018 (Resolution No. 2018-0069), and the Third Addendum to the FEIR, which was adopted by the District Board on December 8, 2020 (Resolution No. 2020-116). The proposed Authority Board actions are not a separate “project” for CEQA purposes but are a subsequent discretionary approval related to a previously approved project. (CEQA Guidelines § 15378(c); Van de Kamps Coalition v. Board of Trustees of Los Angeles Comm. College Dist. (2012) 206 Cal.App.4th 1036.) Additionally, pursuant to CEQA Guidelines Sections 15162 and 15163, and based on the review of the entire record, including without limitation, the FEIR and Addendums, the Authority finds that the proposed Authority Board actions do not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the FEIR and Addendums due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; 2) no new information of substantial importance has come to light that (a) shows the project will have one or more significant effects not discussed in the FEIR and Addendums, (b) identifies significant impacts would not be more severe than those analyzed in the FEIR and Addendums, or (c) shows that mitigation measures or alternatives are now feasible that were identified as infeasible and those mitigation measures or alternatives would reduce significant impacts, and 3) no changes to mitigation measures or alternatives have been identified or are required. Pursuant to CEQA Guidelines §15162(b), the Authority finds that no further analysis or environmental documentation is necessary. Accordingly, the proposed Authority Board actions are merely a step-in furtherance of the original project for which environmental review was performed and no supplemental or subsequent CEQA has been triggered, and no further environmental review is required. In addition, the proposed Authority Board actions would not conflict with the Port Act or Public Trust Doctrine. The proposed Authority Board actions were covered in the Coastal Development Permit (CDP) for the Resort Hotel and Convention Center, Parking, Infrastructure and Phase 1A Improvements (CDP-2019-03; Clerk Document No. 70152) approved by the District Board on June 18, 2019 (Resolution No. 2019-080). The proposed Authority Board actions are consistent with the project in the CDP. No additional action under the California Coastal Act is required at this time. PREPARED BY: Shaun D. Sumner Vice President Real Estate, Engineering, and Facilities, District Adam Meyer Assistant Director, Real Estate, District Tiffany Allen Page 30 of 30 Director, Development Services, City Attachment(s): Attachment A: Third A&R Revenue Sharing Agreement Attachment B: Project Implementation Agreement Attachment C: Site Lease Attachment D: Facility Lease Attachment E: Bond Purchase Agreement Attachment F: Authority Indenture Attachment G: Support Agreement Attachment H: Loan Agreement Attachment I: Conceptual Plan of Finance Attachment J: Authority Resolution 2020-002 and Authority Procurement Policy Attachment K: Sublease Draft Dated 02/04/21 1 4123-6602-0395.6 THIRD AMENDED AND RESTATED REVENUE SHARING AGREEMENT By and Among CITY OF CHULA VISTA, SAN DIEGO UNIFIED PORT DISTRICT, and CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY (Chula Vista Resort Hotel, Convention Center and Public Infrastructure Improvements) This Third Amended and Restated Revenue Sharing Agreement (“Agreement”), dated , 2021, is entered into by and among the City of Chula Vista, a chartered municipal corporation (“City”), the San Diego Unified Port District, a public corporation (“District”), and the Chula Vista Bayfront Facilities Financing Authority, a California joint exercise of powers authority (“Authority”). The City, Authority, and District may be individually referred to herein as, a “Party”, and collectively as, the “Parties”. RECITALS WHEREAS, to develop certain portions of the Chula Vista Bayfront (“CVB”) for the benefit of the residents, tenants, and visitors of the CVB, the City and the District formed the Authority to fund a portion of the costs of a convention center (“Convention Center”) to be located on the CVB and a portion of the costs of certain public infrastructure improvements in the CVB to be constructed during the initial phase of development of the CVB (such public infrastructure improvements being herein referred to as the “Phase 1A Infrastructure Improvements”); and WHEREAS, the Authority will fund such costs through issuance of the Chula Vista Bayfront Facilities Financing Authority Revenue Bonds (Chula Vista Bayfront Convention Center) Series 2021A (Federally Taxable) (the “2021A Bonds”) and Chula Vista Bayfront Facilities Financing Authority Revenue Bonds (Chula Vista Bayfront Convention Center) Series 2021B (Tax-Exempt) (the “2021B Bonds” and, together with the 2021A Bonds, the “Authority 2021 Bonds”); and WHEREAS, the Authority 2021 Bonds will be issued pursuant to the terms of an indenture of trust (“Indenture”) by and between the Authority and the corporate trustee identified therein (the “Trustee”); and WHEREAS, it expected that RIDA Chula Vista, LLC (“RIDA”) will finance the construction of a resort hotel (“Hotel”) to be located on the CVB; and WHEREAS, it is expected that RIDA will make payments to the District with respect to the Hotel; and WHEREAS, it is expected that RIDA will make payments to the City, or its assignee, with respect to the Convention Center; and WHEREAS, the District will contribute funds to the repayment of the Authority 2021 Bonds pursuant to a Support Agreement between the Authority and the District (the “Support Agreement”) and the City will contribute funds to repayment of the Authority 2021 Bonds pursuant to a Facility Lease between the Authority and the City; and Attachment A 2 4123-6602-0395.6 WHEREAS, the Bayfront Project Special Tax Financing District (“Special Tax District”) will contribute funds to the repayment of the Authority 2021 Bonds pursuant to a loan agreement between the Special Tax District and the Authority (the “Loan Agreement”); and WHEREAS, the City and the District entered into that certain Revenue Sharing Agreement dated April 24, 2018 and filed in the Office of the District Clerk as Document No. 68392 (the “Original RSA”); and WHEREAS, the City and District entered into that certain Amended and Restated Revenue Sharing Agreement dated November 19, 2019 and filed in the Office of the District Clerk as Document No. 70911 (the “Amended RSA”) that amended and restated in its entirety the Original RSA; and WHEREAS, the City and District entered into that certain Second Amended and Restated Revenue Sharing Agreement dated September 15, 2020 and filed in the Office of the District Clerk as Document No. 71855 (the “Second Amended RSA”) that amended and restated in its entirety the Amended RSA; and WHEREAS, the City and the District desire to amend and restate in its entirety the Second Amended RSA as set forth herein to add the Authority as a Party to this Agreement and to describe the funds to be contributed and distributed pursuant to this Agreement. NOW THEREFORE, in consideration of One Dollar and the mutual promises set forth herein, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Recitals. The Recitals are incorporated herein by reference. 2. Term. The term of this Agreement commenced on the effective date of the Original RSA, May 7, 2018. Amendment and restatement of the Second Amended RSA as set forth herein shall take effect on the date first set forth above. If the Authority 2021 Bonds are issued, this Agreement shall terminate on the later to occur of the following two dates, which shall be referred to herein as the “Agreement Termination Date”: (i) the first date on which no Authority 2021 Bonds remain Outstanding (as such term is defined in the Indenture); or (ii) thirty-eight (38) years from the date the Authority 2021 Bonds are issued (the “Closing Date”), provided however that in no event shall the term of this Agreement exceed sixty-six (66) years. Prior to the Closing Date, the Parties may, by mutual agreement, terminate this Agreement at any time. If the Authority 2021 Bonds are not issued on or prior to June 30, 2025, then this Agreement shall terminate on July 1, 2025 unless extended or terminated by mutual agreement of the Parties prior thereto. 3. Agreements. This Agreement amends, restates, and supersedes in its entirety the Second Amended RSA. As their interests may appear, the City, the District and the Authority hereby agree as follows: 3.1 Funds and Existing Funds. “Funds” means, collectively, moneys in an amount equivalent to each of the following sources of funds actually received by the City or the District on a yearly basis commencing July 1, 2018: A. District Attachment A 3 4123-6602-0395.6 (i) all funds derived from the following items (a) – (b) (collectively, “Ground Lease Revenues”): (a) those real estate agreements set forth in Exhibit 1 (collectively, the “Other Ground Leases”); provided, however, if one or more of the Other Ground Leases are renewed, replaced, or amended in such a way as to change the size or configuration of the original premises to include premises outside of the original premises boundaries of all the Other Ground Leases (each a “Modified Boundary Lease”), then, for purposes of this Section, the Ground Lease Revenues derived from each Modified Boundary Lease shall be calculated by multiplying the total amount of Ground Lease Revenues generated by such Modified Boundary Lease by a fraction, the numerator of which shall be an amount equal to the Modified Boundary Lease premises still within the original premises boundary, and the denominator of which shall be the total premises area of the Modified Boundary Lease as modified. The City and the Port District acknowledge and agree that a Modified Boundary Lease shall not include the modification of the RV Park Lease (listed on and as defined in Exhibit 1) to include some or all of parcel S-3 or a replacement of the RV Park TUOP (listed on and as defined in Exhibit 1) where RIDA is the tenant. For example, if the original premises of an Other Ground Lease encompasses 5.0 acres, and the Modified Boundary Lease includes 4.0 acres of the original premises, and adds 6.0 acres of premises outside the original premises, then forty percent (40%) of the lease payments paid to the District under the Modified Boundary Lease shall be included as Other Ground Leases lease payments under this Section (collectively, the “Other Ground Leases Revenues”); to the extent District enters into any revenue generating agreement other than a Ground Lease with respect to operations on all or any portion of the Other Ground Leases premises, such revenue, net any related out-of-pocket operating costs paid by District to third parties, shall also be included as Other Ground Leases Revenues under this Section; (b) less $3,283,970, which is the actual amount of the buyout payment paid solely by the District to Chula Vista Marina, LP, dba Chula Vista Marina ( “RV Park Lessee”) to terminate the lease between the RV Park Lessee and the District (“Net RV Park Buyout Credit”), such amount to be amortized over a period of eight years commencing on July 1, 2018 pursuant to the schedule of credits provided in Exhibit 2, attached hereto and incorporated herein by reference (“Net RV Park Buyout Credit Schedule”), as such Net RV Park Buyout Credit Schedule and its contents may be administratively modified from time to time with the mutual consent of the City Manager Attachment A 4 4123-6602-0395.6 of the City (the “City Manager”) and the Executive Director of the District (the “Executive Director”), without further approval of the Board of Port Commissioners of the District (“District Board”) or City Council of the City (“City Council”); and (ii) the annual payments to be made by the District (the “District Support Payments”) pursuant to the Support Agreement; and (iii) any funds in addition to those specified in (i) and (ii) above committed by the District to the Convention Center or the Phase 1A Infrastructure Improvements (together, the “CVB Public Improvements”) to be applied as Funds in accordance with the terms of this Agreement with the approval of the City Manager and the Executive Director, without further approval of the District Board or the City Council. B. City (i) the transient occupancy taxes levied pursuant to Chula Vista Municipal Code Chapter 3.40, attributable to the Convention Center, the Hotel, the RV Park TUOP (listed on and as defined in Exhibit 1), and the RV Park Lease (listed on and as defined in Exhibit 1) (such transient occupancy taxes, the “TOT”); (ii) that portion of use and sales taxes levied pursuant to the Bradley-Burns Uniform Local Use and Sales Tax Law (California Revenue and Taxation Code Section 7000, et seq.) and allocated to the City pursuant to applicable law attributable to the RV Park Lease, the Convention Center and the Hotel, exclusive of any amount so levied and allocated to the City pursuant to voter approval by the electors of the City, which portion is currently one percent (1%) of taxable transactions (the “Sales Tax”); (iii) incremental ad valorem property tax (including property tax in-lieu of motor vehicle license fees) generated by the Convention Center and Hotel parcels, which is that amount in excess of any ad valorem property tax levied in the fiscal year in which the Authority 2021 Bonds are issued; (iv) an amount equal to $986,625.00, increasing 3% on July 1 of each year, commencing July 1, 2017, which amount is based on the payment made by the District to the City in fiscal year 2016 pursuant to that certain Municipal Services Agreement No. 88-2012 between the District and the City for the provision of Police, Fire and Emergency Medical Services; (v) special tax proceeds (“Special Tax Revenues”) of the Special Tax District, equal to the annual amount used to repay the Authority under Attachment A 5 4123-6602-0395.6 the Loan Agreement or any other indebtedness of the Special Tax District related to the Authority 2021 Bonds; and (vi) any funds in addition to those specified in (i) through (v) above committed by the City to the CVB Public Improvements to be applied as Funds in accordance with the terms of this Agreement, with the approval of the City Manager and the Executive Director, without further approval of the City Council or the District Board. C. As used herein, “Existing Funds” means, collectively, moneys in an amount equivalent to each of the following sources of funds actually received by the District or the City, as applicable, from and after July 1, 2018: (i) the Ground Lease Revenues; (ii) the TOT attributable to the RV Park TUOP and the RV Park Lease; and (iii) amounts described in Section 3.1(B)(iv). The City and the District shall remit any Existing Funds remaining after any expenditure permitted by Section 3.2 to the Authority by no later than the date the Preliminary Official Statement for the Authority 2021 Bonds is posted on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access website (the “Contribution Date”). No interest will accrue with respect to the Existing Funds contributed by the City or the District prior to the Contribution Date. The Existing Funds to be contributed by the City and by the District shall not include interest earned by the City or the District on such funds prior to the Contribution Date. Should either the City or the District elect to retain Existing Funds for the period from and after July 1, 2018 to the Contribution Date, such Existing Funds shall be reported as restricted in the audited financial statements included in such Party's Comprehensive Annual Financial Report (“CAFR”), commencing with such Party's CAFR for the fiscal year ended June 30, 2020. Funds received by the Authority on the Contribution Date shall be transferred by the Authority to the Trustee on or prior to the Closing Date as provided in Section 3.3. 3.2 Use of Existing Funds Prior to the Contribution Date. Existing Funds may be expended by the City and the District prior to the Contribution Date pursuant to the following terms: A. The City may deduct amounts reimbursed to RIDA pursuant to that certain Pre- Close Design Reimbursement Agreement, dated September 15, 2020, entered into between the City and RIDA. B. The City may deduct plan review, permitting, and inspection fees in the amount that would have been incurred by RIDA to process the work for the Phase 1A Infrastructure Improvements based on current schedules of fees adopted by the City for such plan review, permitting, and inspection; Attachment A 6 4123-6602-0395.6 C. The City and the District may deduct design, plan review, permitting, project/construction management, and inspection costs incurred by the City and the District, respectively, for Phase 1A Infrastructure Improvements, memorialized in one or more operating memoranda of the City and the District executed by the City Manager and the Executive Director, without further approval of the City Council or the District Board; D. The District or the City may deduct the cost of any Phase 1A Infrastructure Improvements constructed by or at the direction of RIDA pursuant to that certain Chula Vista Bayfront Project Phase 1A Early Work Implementation and Right of Entry License Agreement, to be entered into among the City, the District, the Authority and RIDA, including without limitation, any cost increases and delay damages, up to the amount of the budget approved by such parties; E. The City and the District may deduct such amounts necessary for the payment of existing or future obligations of the Authority, including without limitation, administrative fees, consultant and attorneys’ fees, and other staff reimbursements and fees (collectively, the “Pre-Close Authority Expenses”), as such Pre-Close Authority Expenses are memorialized in one or more operating memoranda of the City and the District executed by the City Manager and the Executive Director, without further approval of the City Council or the District Board; F. Prior to the deduction of any amounts by the City or by the District pursuant to Section 3.2(A) through Section 3.2(E), the Party desiring to deduct such amount shall submit an accounting of such amounts to the other Parties and the other Parties shall review the accounting in good faith and approve or reject such accounting within thirty (30) days. If the accounting is approved, such amount shall be deducted from the Existing Funds to be delivered by such Party prior to the Contribution Date. Should the Closing Date for the Authority 2021 Bonds not occur as provided in Section 2, and such date is not extended by mutual agreement of the Parties in accordance with Section 2 of this Agreement, the City and the District shall each prepare an accounting of amounts deducted and approved by such Party from the Existing Funds pursuant to Section 3.2(A) through Section 3.2(E) above (the “Pre-Close Expenses”). Should the Pre-Close Expenses of the City exceed the Pre-Close Expenses of the District, or in the alternative, the Pre-Close Expenses of the District exceed the Pre-Close Expenses of the City, then the Party with the lower Pre-Close Expenses shall make a reimbursement sufficient to equalize the Pre-Close Expenses between the City and the District (e.g., if the City has expended $2.0 million and the District has expended $1.0 million, then the combined Pre-Close Expenses total $3.0 million, with a fair-share expense of $1.5 million per Party, and a reimbursement due from the District to the City in the amount of $0.5 million, the “Pre-Close Expense Reimbursement”). The Pre-Close Expense Reimbursement shall be made within thirty (30) days of the District and City’s mutual agreement as to the amount of such payment; and G. This Section 3.2 shall survive the termination of this Agreement. Attachment A 7 4123-6602-0395.6 3.3 Use of Existing Funds Subsequent to the Contribution Date. Any Existing Funds collected by the City and the District subsequent to the transfer of funds on the Contribution Date shall be paid by such Parties to the Authority, for transfer by the Authority to the Trustee on or prior to the Closing Date for application in accordance with the provisions of the Indenture. 3.4 Distribution of Funds Post Closing Date. On and after the Closing Date until the Agreement Termination Date, amounts disbursed by the Trustee to the Authority pursuant to the provisions of the Indenture (the “Residual Revenues”), together with the RIDA Lease Payments (as such term is defined below) received by the Authority, shall be applied in the following order of priority: 1. To reimburse the District for the cumulative amount of District Support Payments actually contributed by the District and not previously reimbursed to the District by the Authority; then 2. To reimburse the City and the District pari passu for any amounts either Party actually paid or contributed to the County of San Diego (“County”) pursuant to the Chula Vista Bayfront Project Funding Agreement (“Funding Agreement”) by and among the County, the City, the District and the Authority; then 3. To reimburse the City for 73.6% of the cumulative actual, direct costs incurred by the City to provide fire service within the CVB, which 73.6% reflects amounts for which the City is entitled to reimbursement in addition to any payments the City receives pursuant to any municipal services agreement between the City and the District in effect at the time such reimbursement is being made and which is the proportionate share of costs attributable to the Convention Center and the Hotel and not previously reimbursed to the City or paid through Special Tax Revenues; then 4. To reimburse the City and the District on a proportionate, pro-rata basis, for each Party’s contribution of the Existing Funds, as of the Closing Date; then 5. To reimburse the City and the District on a proportionate, pro-rata basis, for each Party’s contribution of Existing Funds after the Closing Date, continuing to the Agreement Termination Date; then 6. To fund an additional reserve fund or reserve fund insurance policy in the amount of one year’s debt service for the Authority 2021 Bonds; and finally 7. Any Funds remaining after the payments described in numbered items (1) through (6) above will be equally distributed between the City and the District. No interest will accrue with respect to unreimbursed Funds contributed by the City or the District. 3.5 RIDA Lease Payments. Pursuant to a ground lease between the District and RIDA for the Hotel (the “Hotel Ground Lease”) and a sublease between the City and RIDA for the Convention Center (the “Convention Center Sublease”), each to be executed at the Closing Date, RIDA will be obligated to pay to the District and to the City, Attachment A 8 4123-6602-0395.6 respectively, certain payments, which payments, exclusive of the RIDA Parking Payments (as such term is defined in Section 3.8 of this Agreement) and any Advance Rent (as such term is defined in the Convention Center Sublease) are collectively referred to herein as the “RIDA Lease Payments.” Each of the District and City shall remit to the Authority any RIDA Lease Payments such Party actually receives from RIDA within thirty (30) days following the District’s or City’s receipt of such RIDA Lease Payments. The District’s and City’s obligation to remit the RIDA Lease Payments to the Authority shall cease on the Agreement Termination Date. For purposes of this Agreement, the RIDA Lease Payments shall not be considered Funds. 3.6 Parks. The District and the City have agreed to cooperate in good faith and use their respective best efforts to negotiate an agreement (“Park Agreement”) which grants the City a nonexclusive, joint-use right or other interest in the areas designated for public park use within the CVB (the “Park Areas”). The Park Agreement is anticipated to provide as follows: as and when the City collects Parkland Acquisition and Development fees, or other such park related impact fees as may be adopted in the future, from developments in the CVB (collectively, the “PAD Fees”), the City will pay the acquisition component of such PAD Fees to the District, or an amount equivalent to the acquisition component of the PAD Fees, as rent under the Park Agreement (such amount being referred to as the “Park Rent”). To the extent that the City pays Park Rent to the District, the District shall contribute the Park Rent actually received to the Authority and the Authority shall use the Park Rent to reimburse the City and the District for O&M Costs actually paid by each of the City and the District, subject to terms of any future implementing agreements entered into by the City, the District and/or the Authority. 3.7 Operations & Maintenance Costs and Transit Plan. A. The City and District agree to generally split the operation and maintenance costs (“O&M Costs”) for the CVB not otherwise maintained by a third party. The District will be responsible for the O&M Costs of the parks and all related public infrastructure located within the parks. The City will be responsible for the O&M Costs of the streets and sanitary sewers. B. The City and District will split the O&M Costs payable pursuant to that certain Chula Vista Bayfront Master Plan Natural Resources Management Plan filed June 6, 2016 in the Office of the District Clerk as Document No. 65065 that are not the responsibility of a third party (“NRMP Costs”). The NRMP Costs shall be shared equally by the District and the City. C. The City will be responsible for funding a transit plan for the Chula Vista Bayfront Shuttle as defined in the Chula Vista Bayfront Master Plan Public Access Program, filed in the Office of the District Clerk as Document No. 59408, as such document may be amended from time to time (the “Shuttle Transit Plan”). The City will cooperate with the District in good faith to coordinate implementation of the Shuttle Transit Plan with any other transit plan needed for the CVB. The City will also be responsible for funding the implementation of the Shuttle Transit Plan, including capital costs and operational costs of the Chula Vista Bayfront Shuttle, until such time as such Attachment A 9 4123-6602-0395.6 operational costs are borne by other applicable transportation providers or the City and District mutually agree that the Chula Vista Bayfront Shuttle is no longer required. In no event shall either Party be reimbursed for any O&M Costs that have been previously reimbursed to such Party through Special Tax Revenues or Park Rent. 3.8 Parking Lease Payments. RIDA is expected to pay to the District a percentage of the gross revenues it receives for the use of parking spaces on the Hotel site and in the parking garage (collectively, the “RIDA Parking Payments”). The District shall deliver to the City fifty percent (50%) of all RIDA Parking Payments the District actually receives from RIDA under the Hotel Ground Lease within thirty (30) days following the District’s receipt of such RIDA Parking Payments. The District’s obligation to remit the RIDA Parking Payments to the City shall cease on the Agreement Termination Date. For purposes of this Agreement, the RIDA Parking Payments shall not be considered Revenues as such term is defined in the Indenture and shall not be considered Funds for purposes of this Agreement. 4. Operating Memoranda. To the extent the City and the District enter into any operating memoranda pursuant to the terms of this Agreement that requires any action(s) be taken by the Authority, the City and the District shall (i) specify in the operating memoranda any instructions that the Authority shall follow upon receipt of the operating memoranda; and (ii) promptly deliver the operating memoranda to the Treasurer of the Authority after the execution of the operating memoranda by the City Manager of the City and the Executive Director of the District. If the Authority is unable to comply with the instructions set forth in the operating memoranda for any reason, the Authority shall inform the District and the City promptly and to the extent compliance with the instructions requires the adoption of certain administrative rules or procedures or an amendment to the Amended and Restated Joint Exercise of Powers Agreement filed on August 7, 2019 in the Office of the District Clerk as Document No. 70245 (“Authority Incorporation Agreement’) or the Bylaws of the Authority (“Authority Bylaws”), the City and the District, as the sole members of the Authority, shall use good faith efforts to promptly adopt such administrative rules or procedures administratively or present any modifications to the Authority Bylaws or Authority Incorporation Agreement to the Authority Board of Directors for their consideration, as necessary. 5. Binding Agreement. The Parties agree that this Agreement is a binding agreement among the Parties. Notwithstanding the binding nature of this Agreement, the Parties contemplate that future implementing agreements between the City and the District or the Authority, between the District and the Authority and/or among the City, the District and the Authority may be needed to implement or clarify the terms of this Agreement. To that end, each of the Parties agree to meet and confer in good faith in response to a request by any other Party regarding the implementation or clarification of this Agreement. 6. Event of Default. An “Event of Default” will occur under this Agreement when: (a) there is a material breach of any material condition, covenant or promise set forth herein; (b) written notice thereof has been given to the Party in breach; and (c) such breach has not been cured within ten (10) business days after such notice was given to the Party in breach. In the event the breach cannot reasonably be cured within such ten (10) business day period, the Party in breach must commence cure of the breach within such ten (10) business day period and thereafter diligently proceed to cure such breach. A waiver by any Party of any such breach Attachment A 10 4123-6602-0395.6 shall not be construed as a waiver of any succeeding breach of the same or other condition, covenant or promise. In the event of an Event of Default, the non-defaulting Parties may, in their sole and absolute discretion, elect to either: (a) extend the time beyond the cure period set forth in this Section 6 for the defaulting Party to perform the applicable obligation(s) hereunder for a period of time acceptable to the non-defaulting Parties, or (b) proceed with an action or proceeding for specific performance. 7. Remedies. The occurrence of an Event of Default shall give the non-defaulting Parties the right to proceed with an action or proceeding for specific performance. 8. Notices. The notice addresses shall be the same as those set forth in the Authority Incorporation Agreement and shall be sent by certified U.S. Mail (return receipt requested) and shall be deemed delivered three days after deposit in the U.S. Mail. 9. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the City and the District with respect to the subject matter hereof. 10. Drafting Presumption; Review Standard. The Parties acknowledge that this Agreement has been agreed to by all the Parties, that each Party has consulted with attorneys with respect to the terms of this Agreement and that no presumption shall be created against the drafting Party. Any deletion of language from this Agreement prior to its execution by City, District and Authority shall not be construed to raise any presumption, canon of construction or implication, including, without limitation, any implication that the Parties intended thereby to state the converse of the deleted language. 11. Governing Law. This Agreement and all of the rights and obligations of the Parties hereto and all of the terms and conditions hereof shall be construed, interpreted and applied in accordance with and governed by and enforced under the laws of the State of California. 12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be the original and all of which shall constitute one and the same document. 13. Electronic Signatures. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this Agreement and the transaction contemplated hereby shall be deemed to include electronic signatures, contract formations on electronic platforms approved by the Parties, or the keeping of such electronic signatures and electronic contracts in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the California Uniform Electronic Transaction Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Attachment A 11 4123-6602-0395.6 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and the year first set forth above. CITY: CITY OF CHULA VISTA By:__________________________________ Mary Casillas Salas, Mayor ATTEST: Kerry K. Bigelow, City Clerk APPROVED AS TO FORM: Glen R. Googins, City Attorney DISTRICT: APPROVED AS TO FORM AND LEGALITY: SAN DIEGO UNIFIED PORT DISTRICT, GENERAL COUNSEL a public corporation By: By:_________________________________ Thomas A. Russell Name: Its: Attachment A 12 4123-6602-0395.6 AUTHORITY: APPROVED AS TO FORM AND LEGALITY: CHULA VISTA BAYFRONT FACILITIES CO-COUNSEL FINANCING AUTHORITY, a California joint exercise of powers authority By: By:_________________________________ Glen R. Googins City of Chula Vista City Attorney Name: Its: By: Thomas A. Russell San Diego Unified Port District General General Counsel Attachment A 13 4123-6602-0395.6 Exhibit 1 Listing of Other Ground Leases 1. Amended, Restated and Combined Lease between the San Diego Unified Port District (the "District") and The Marine Group LLC for property at the North Side of G Street at the terminus of both Quay Avenues and Sandpiper Way in Chula Vista, which lease is on file in the Office of the District Clerk as Document No. 54509, as amended and may be amended from time to time. 2. Lease between the District and Chula Vista Marina, LP, dba Chula Vista Marina, for property located at 550 Marina Parkway in Chula Vista which lease is on file in the Office of the District Clerk as Document No. 14244, as amended and may be amended from time to time. 3. Lease between the District and California Yacht Marina-Chula Vista, LLC, for property located at 640 Marina Parkway in Chula Vista which lease is on file in the Office of the District Clerk as Document No. 23924, as amended and may be amended from time to time. 4. Lease between the District and Sun Chula Vista Bayfront RV LLC for property located at 825 E Street in Chula Vista (Costa Vista RV Park) which lease is on file in the Office of the District Clerk as Document No. 70407, as amended and may be amended from time to time (“RV Park Lease”). 5. Tideland Use and Occupancy Permit between the District and Sun Chula Vista Existing Park RV LLC for property located at 460 Sandpiper Way in Chula Vista which tideland use and occupancy permit is on file in the Office of the District Clerk as Document No. 69412, as amended and may be amended from time to time (“RV Park TUOP”). Attachment A 14 4123-6602-0395.6 Exhibit 2 Net RV Park Buyout Credit Schedule Fiscal Year (FY) RV Park Buyout Credit Cumulative Credit FY 19 $410,500 $410,500 FY 20 $410,500 $821,000 FY 21 $410,500 $1,231,500 FY 22 $410,500 $1,642,000 FY 23 $410,500 $2,052,500 FY 24 $410,500 $2,463,000 FY 25 $410,500 $2,873,500 FY 26 $410,470 $3,283,970 Note: The total rent credit was reduced from $4,329,614 to $3,283,970 based on a permitted rent credit applied to the Chula Vista Marina lease as partial payment of the RV Park Buyout. This therefore will reduce the Chula Vista Marina rent actually received by the District from the tenant by $1,045,644 until November 30, 2021. Attachment A 4825-3218-1203v24/024036-0079 PROJECT IMPLEMENTATION AGREEMENT by and among THE CITY OF CHULA VISTA, a California charter city and municipal corporation, THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT, a financing district, THE SAN DIEGO UNIFIED PORT DISTRICT, a public corporation, THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY a joint exercise of powers entity, and RIDA CHULA VISTA, LLC a Delaware limited liability company Dated as of __________ 1, 2021 Relating to $_______________________ CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY REVENUE BONDS (CHULA VISTA BAYFRONT CONVENTION CENTER) SERIES 2021A (FEDERALLY TAXABLE) $_______________________ CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY REVENUE BONDS (CHULA VISTA BAYFRONT PHASE 1A INFRASTRUCTURE IMPROVEMENTS) SERIES 2021B (TAX-EXEMPT) Page 1 of 237 EAttachment B TABLE OF CONTENTS Page i ARTICLE I DEFINITIONS 1.1. Definitions Addendum .............................................................................................................. 4 ARTICLE II SUBJECT OF THE AGREEMENT GENERALLY 2.1. Developer’s Phase 1A Infrastructure Improvements................................................................. 5 2.2. Convention Center ..................................................................................................................... 7 2.3. Sweetwater Park ........................................................................................................................ 7 ARTICLE III DURATION OF AGREEMENT 3.1. Term of Agreement ................................................................................................................. 12 ARTICLE IV PROJECT COSTS 4.1. Phase 1A Infrastructure Improvements ................................................................................... 12 4.2. Convention Center ................................................................................................................... 13 4.3. Cost Reporting ......................................................................................................................... 13 ARTICLE V CONSTRUCTION OF THE PROJECT AND THE REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS 5.1. Construction of the Project ...................................................................................................... 14 5.2. Reserved .................................................................................................................................. 19 5.3. Reserved .................................................................................................................................. 19 5.4. Project Schedule and Schedule Updates .................................................................................. 19 5.5. Unavoidable Delay .................................................................................................................. 21 5.6. Completion Guaranty .............................................................................................................. 24 5.7. Entitlements ............................................................................................................................. 24 5.8. Energy Requirements .............................................................................................................. 25 ARTICLE VI PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY 6.1. Award of Sole-Sole Source Prime Contract ............................................................................ 26 6.2. Subcontractor Bid and Award Process for the Developer’s Phase 1A Infrastructure Improvements .......................................................................................................................... 26 6.3. Bid and Award Process for the Remaining Phase 1A Infrastructure Improvements .............. 27 6.4. The Convention Center as a Special Purpose Project .............................................................. 27 6.5. Procurement of Alterations ...................................................................................................... 27 6.6. Bid Opening and Award .......................................................................................................... 27 6.7. Authority Procurement Policy Acknowledgement .................................................................. 28 Page 2 of 237 EAttachment B TABLE OF CONTENTS (continued) Page ii 4825-3218-1203v24/024036-0079 ARTICLE VII DESIGN AND CONSTRUCTION STANDARDS 7.1. Standard of Care ...................................................................................................................... 28 7.2. Compliance with Laws ............................................................................................................ 28 7.3. Compliance with Design and Construction Standards ............................................................ 31 7.4. Construction Period ................................................................................................................. 31 7.5. Authority Approval Not a Waiver of Obligations ................................................................... 31 ARTICLE VIII CONSTRUCTION 8.1. Site Safety, Security ................................................................................................................ 31 8.2. Public Right-of-Way ............................................................................................................... 32 8.3. Traffic Control ......................................................................................................................... 33 8.4. Maintenance ............................................................................................................................ 33 ARTICLE IX PAYMENT OF PROJECT COSTS 9.1. Developer’s Phase 1A Infrastructure Improvements Costs ..................................................... 33 9.2. Convention Center Costs ......................................................................................................... 40 9.3. Investment of Amounts in the Construction Fund .................................................................. 47 9.4. Calculation of Specified Default Rate ..................................................................................... 47 9.5. Redemption of the Authority Bonds ........................................................................................ 47 9.6. Survival ................................................................................................................................... 47 ARTICLE X ACCEPTANCE OF IMPROVEMENTS 10.1. Developer’s Phase 1A Infrastructure Improvements............................................................... 48 10.2. Convention Center ................................................................................................................... 49 10.3. Sweetwater Park ...................................................................................................................... 49 ARTICLE XI WARRANTIES 11.1. Enforcement of Warranties ...................................................................................................... 50 11.2. Term of Warranties .................................................................................................................. 50 11.3. Additional Warranties ............................................................................................................. 51 ARTICLE XII DEFECTIVE WORK 12.1. Correction, Removal, or Replacement .................................................................................... 51 12.2. Extension of Warranty ............................................................................................................. 51 12.3. Right of Authority to Correct .................................................................................................. 51 12.4. No Limitation on Other Remedies .......................................................................................... 51 12.5. Disputes ................................................................................................................................... 51 12.6. Applicability ............................................................................................................................ 52 Page 3 of 237 EAttachment B TABLE OF CONTENTS (continued) Page iii 4825-3218-1203v24/024036-0079 ARTICLE XIII SECURITY FOR CONSTRUCTION 13.1. Bonds ....................................................................................................................................... 52 13.2. Insolvency or Bankruptcy ........................................................................................................ 52 13.3. Calling a Bond ......................................................................................................................... 53 13.4. Bond Reimbursement .............................................................................................................. 53 ARTICLE XIV INDEMNITY AND DUTY TO DEFEND 14.1. General Indemnity ................................................................................................................... 54 14.2. Damage to Other Properties .................................................................................................... 55 14.3. Hazardous Materials Indemnity .............................................................................................. 55 14.4. Illegal Discharge to Storm Drains ........................................................................................... 57 14.5. Implementation of Authority Resolution 2020-002 ................................................................ 57 14.6. Costs of Defense and Award ................................................................................................... 57 14.7. Insurance Proceeds .................................................................................................................. 58 14.8. Declarations ............................................................................................................................. 58 14.9. Survival ................................................................................................................................... 58 ARTICLE XV INSURANCE REQUIREMENTS 15.1. Insurance Requirements .......................................................................................................... 58 15.2. Forms and Amounts of Coverage ............................................................................................ 58 15.3. General Requirements ............................................................................................................. 61 15.4. Waiver of Subrogation ............................................................................................................ 62 15.5. Authority Obligation to Maintain Insurance ........................................................................... 62 ARTICLE XVI RECORDS AND AUDITS 16.1. Retention of Project Records ................................................................................................... 63 16.2. Audit of Records...................................................................................................................... 63 ARTICLE XVII TITLE TO ALTERATIONS AND IMPROVEMENTS 17.1. Title to Project ......................................................................................................................... 64 17.2. Survival ................................................................................................................................... 64 ARTICLE XVIII LIENS 18.1. No Right to Bind Port District ................................................................................................. 64 18.2. Notice of Non-Responsibility .................................................................................................. 64 18.3. Mechanics’ Liens..................................................................................................................... 65 18.4. Contest of Lien ........................................................................................................................ 65 18.5. Port District’s Right to Pay ...................................................................................................... 65 18.6. Notice of Liens ........................................................................................................................ 65 Page 4 of 237 EAttachment B TABLE OF CONTENTS (continued) Page iv 4825-3218-1203v24/024036-0079 18.7. Right of Entry .......................................................................................................................... 66 ARTICLE XIX TAXES 19.1. Reporting ................................................................................................................................. 66 19.2. Tax Claims .............................................................................................................................. 67 19.3. Property Expenses ................................................................................................................... 68 19.4. Property Tax Contest Cooperation .......................................................................................... 69 ARTICLE XX EQUAL EMPLOYMENT OPPORTUNITY/NONDISCRIMINATION AND OFAC 20.1. Nondiscrimination ................................................................................................................... 69 20.2. Compliance with Employment and Labor Requirements........................................................ 70 20.3. OFAC Compliance .................................................................................................................. 70 ARTICLE XXI EVENTS OF DEFAULT AND REMEDIES 21.1. Events of Default ..................................................................................................................... 71 21.2. Remedies for Events of Default .............................................................................................. 72 21.3. Sweetwater Park ...................................................................................................................... 74 21.4. Reserved .................................................................................................................................. 74 21.5. Authority Events of Default .................................................................................................... 74 21.6. Remedies for Authority Events of Default (Rent Offset) ........................................................ 74 21.7. Payment Sources ..................................................................................................................... 75 ARTICLE XXII ASSIGNMENT PARTICIPATION FEE 22.1. Assignment Participation Fee .................................................................................................. 76 22.2. Assignment and Collateral Assignment .................................................................................. 77 22.3. Non-Disturbance Agreement ................................................................................................... 78 ARTICLE XXIII NONDISTURBANCE 23.1. Port District Nondisturbance of Lessee and Sublessee Rights under the Convention Center Leases .......................................................................................................................... 78 23.2. Authority Nondisturbance of Lessee and Sublessee Rights under the Convention Center Leases ...................................................................................................................................... 79 ARTICLE XXIV Operation of the Site and the Convention Center 24.1. Approved Agreements ............................................................................................................. 79 24.2. Reservations ............................................................................................................................ 79 24.3. Cooperation in connection with Condemnation ...................................................................... 81 Page 5 of 237 EAttachment B TABLE OF CONTENTS (continued) Page v 4825-3218-1203v24/024036-0079 ARTICLE XXV “AS-IS” LEASE AND WAIVERS 25.1. Developer’s Acknowledgment ................................................................................................ 81 25.2. Only Port District’s Express Written Agreements Binding ..................................................... 82 25.3. As-Is ........................................................................................................................................ 82 25.4. Waivers, Disclaimers and Indemnity ...................................................................................... 82 25.5. Survival ................................................................................................................................... 84 ARTICLE XXVI MISCELLANEOUS PROVISIONS 26.1. Notices ..................................................................................................................................... 84 26.2. Captions ................................................................................................................................... 86 26.3. No Merger ............................................................................................................................... 86 26.4. Recording ................................................................................................................................ 86 26.5. Port District Transfer ............................................................................................................... 86 26.6. Time of Essence ...................................................................................................................... 87 26.7. Partial Invalidity ...................................................................................................................... 87 26.8. Entire Agreement ..................................................................................................................... 87 26.9. Joint and Several...................................................................................................................... 87 26.10. Developer’s Authority ............................................................................................................. 87 26.11. Interaction with Sewer Agreement .......................................................................................... 87 26.12. Resolution of Specified Disputes ............................................................................................ 88 26.13. Attorneys’ Fees ........................................................................................................................ 91 26.14. Transaction Costs .................................................................................................................... 91 26.15. Provisions Regarding Authority Operations ........................................................................... 92 26.16. Replacement Trustees .............................................................................................................. 92 26.17. Effect of Section 365(h)(1) Election ....................................................................................... 92 26.18. Financial Information Regarding Continuous Operations....................................................... 92 26.19. Governing Law ........................................................................................................................ 93 26.20. Modification ............................................................................................................................ 93 26.21. Counterparts ............................................................................................................................ 93 26.22. Drafting Presumption; Review Standard ................................................................................. 93 26.23. Administrative Claims ............................................................................................................. 93 26.24. Non-liability of Public Agency Officials and Employees ....................................................... 94 26.25. Authority Executive Director; Authority Approvals and Actions ........................................... 94 26.26. Further Assurances .................................................................................................................. 94 LIST OF EXHIBITS EXHIBIT A-1 LEGAL DESCRIPTION OF THE SITE ........................................................ A-1-1 EXHIBIT A-2 LEGAL DESCRIPTION OF THE GROUND LEASE PROPERTY ............ A-2-1 EXHIBIT A-3 LEGAL DESCRIPTION OF THE DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS SITE ........................................... A-3-1 EXHIBIT B-1 DEPICTION OF THE SITE ............................................................................ B-1-1 Page 6 of 237 EAttachment B TABLE OF CONTENTS (continued) Page vi 4825-3218-1203v24/024036-0079 EXHIBIT B-2 DEPICTION OF THE GROUND LEASE PROPERTY ................................ B-2-1 EXHIBIT B-3 DEPICTION OF THE DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS SITE ............................................ B-3-1 EXHIBIT C-1-A PUBLIC AGENCY’S ESTIMATED DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS COST ..................................... C-1-A-1 EXHIBIT C-1-B SOURCES FOR DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS COST ........................................................................... C-1-B-1 EXHIBIT C-2 DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS BUDGET ............................................................................................................ C-2 EXHIBIT D REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS (SWEETWATER PARK) .................................................................................. D-1 EXHIBIT E CONSTRUCTION REQUIREMENTS .............................................................. E-1 EXHIBIT F CONVENTION CENTER PLANS .................................................................... F-1 EXHIBIT G-1 APPROVED SUBCONTRACTOR BID AND AWARD PROCESS ........... G-1-1 EXHIBIT G-2 SUBCONTRACTOR BIDS AWARDED PRIOR TO EFFECTIVE DATE .............................................................................................................. G-2-1 EXHIBIT G-3 APPROVED CONSTRUCTION CONTRACTS ............................................... G-3 EXHIBIT H FORM OF COMPLETION GUARANTY ......................................................... H-1 EXHIBIT I OTHER GROUND LEASES .............................................................................. I-1 EXHIBIT J PUBLIC DEBT SERVICE OBLIGATION (PDSO) ........................................... J-1 EXHIBIT K-1 DEVELOPER’S PHASE 1A PAYMENT REQUEST ................................... K-1-1 EXHIBIT K-2 FORM OF CONVENTION CENTER PAYMENT REQUEST .................... K-2-1 EXHIBIT L SOLE SOURCE SUBCONTRACT AWARD APPROVAL (DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS) ...... L-1 EXHIBIT M BEST QUALIFIED CONTRACTOR SUBCONTRACT AWARD APPROVAL (DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS) .......................................................................................... M-1 EXHIBIT N-1 LIST OF APPROVED ARBITRATORS ....................................................... N-1-1 EXHIBIT N-2 LIST OF APPROVED MEDIATORS ........................................................... N-2-1 Page 7 of 237 EAttachment B TABLE OF CONTENTS (continued) Page vii 4825-3218-1203v24/024036-0079 EXHIBIT O ENERGY REQUIREMENTS ............................................................................ O-1 EXHIBIT P FORM OF DEVELOPER’S CONVENTION CENTER BUDGET .................. P-1 EXHIBIT Q PORT DISTRICT TRANSFER DOCUMENTS ................................................ Q-1 EXHIBIT R FORM OF MEMORANDUM OF AGREEMENT ............................................ R-1 EXHIBIT S APPROVED AGREEMENTS ........................................................................... S-1 EXHIBIT T DISTRICT DOCUMENTS ................................................................................ T-1 EXHIBIT U PRIOR AGREEMENTS ..................................................................................... U-1 EXHIBIT V-1 APPROVED DRAWINGS AND SPECIFICATIONS FOR DEVELOPER’S PHASE 1A INFRASTRUCTURE IMPROVEMENTS ..... V-1-1 EXHIBIT V-2 APPROVED DRAWINGS AND SPECIFICATIONS FOR REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS ................................. V-2-1 EXHIBIT W FORM OF EQUAL EMPLOYMENT OPPORTUNITY CERTIFICATION ............................................................................................. W-1 EXHIBIT X-1 FORM OF EARLY WORK AGREEMENT ................................................. X-1-1 EXHIBIT X-2 REIMBURSEMENT AGREEMENT ........................................................... X-2-1 EXHIBIT X-3 SEWER AGREEMENT ................................................................................ X-3-1 EXHIBIT Y HOTEL OPERATOR NON-DISTURBANCE AGREEMENT ......................... Y-1 Page 8 of 237 EAttachment B 4825-3218-1203v24/024036-0079 PROJECT IMPLEMENTATION AGREEMENT BY AND AMONG THE CITY OF CHULA VISTA, THE BAYFRONT PROJECT SPECIAL TAX FINANCING DISTRICT, THE SAN DIEGO UNIFIED PORT DISTRICT, THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY, AND RIDA CHULA VISTA, LLC This PROJECT IMPLEMENTATION AGREEMENT (“Agreement”) is entered into as of ____________ 1, 20__ by and among the City of Chula Vista, a chartered municipal corporation (“City”), acting on its behalf and for and on behalf of the Bayfront Project Special Tax Financing District, a financing district established and existing pursuant to Chula Vista Municipal Code Chapter 3.61 Bayfront Project Special Tax Financing District Procedural Ordinance (the “Financing District”), the San Diego Unified Port District, a public corporation (the “Port District”), the Chula Vista Bayfront Facilities Financing Authority (the “Authority” and also sometimes referred to herein as the “JEPA”; and, collectively with the City, the Financing District, and the Port District, the “Public Agencies” or each separately, a “Public Agency”), a joint exercise of powers entity created by the City and the Port District pursuant to the Joint Exercise of Powers Act (defined herein below), and RIDA Chula Vista, LLC, a Delaware limited liability company (“Developer” or “RIDA”) (collectively, the “Parties” and, individually, a “Party”), with reference to the following Recitals: RECITALS A. The City and the Port District are parties to that certain Amended and Restated Joint Exercise of Powers Agreement, dated and effective July 25, 2019 (the “JEPA Agreement”), which amended and restated that certain Joint Exercise of Powers Agreement, dated as of May 1, 2014, by and between the City and the Port District. The JEPA Agreement forms the Authority for the purpose of assisting in the financing and refinancing of capital improvement projects of the City and the Port District as permitted under the Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code relating to the Chula Vista Bayfront. B. Pursuant to a “Site Lease” dated as of ____________ 1, 20__ (the “Site Lease”), the Port District has leased to the JEPA and the JEPA has leased from Port District certain real property described in Exhibit A-1 and depicted in Exhibit B-1 attached hereto (the “Site”), upon which an approximately 275,000 net usable square foot convention center (the “Convention Center” and, together with the Site, the “Facility”) will be constructed by RIDA pursuant to this Agreement and operated by RIDA pursuant to the Sublease, as described in more detail below. C. Pursuant to a “Facility Lease” dated as of ____________ 1, 20__ (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Facility Lease”), the JEPA has in turn subleased the Site and leased the Convention Center to the City. D. Pursuant to a “Sublease Agreement” dated as of ____________ 1, 20__ (as amended, amended and restated, supplemented or otherwise modified from time to time, together with any New Sublease (as defined in the Sublease, the “Sublease”), the City has in turn subleased the Facility to RIDA. The Site Lease, Facility Lease, and Sublease are referred to collectively herein as the “Convention Center Leases.” E. Port District and Developer have entered into a ground lease dated as of ____________ 1, 20__ (as amended, amended and restated, supplemented or otherwise modified Page 9 of 237 EAttachment B 2 4825-3218-1203v24/024036-0079 from time to time, the “Ground Lease”), pursuant to which the Port District has leased to Developer approximately 37 acres of land located in the City of Chula Vista, California, described in Exhibit A- 2 and depicted in Exhibit B-2 attached hereto (the “Ground Lease Property”), together with all improvements currently located on the Ground Lease Property. Pursuant to the Ground Lease, the Developer is obligated to construct, operate and maintain (or cause to be constructed, operated and maintained) the Resort Hotel (defined herein) on the Ground Lease Property. F. The City, the Port District, the Authority and the County of San Diego (the “County”) entered into that certain Chula Vista Bayfront Project Funding Agreement dated as of December 13, 2019, (the “County Funding Agreement”) pursuant to which the County will assist the City, the Port District and the Authority in financing the construction of the Phase 1A Infrastructure Improvements by contributing the County Funds (defined in the Definitions Addendum) as provided for in the County Funding Agreement. G. To create a vehicle to generate special tax revenues initially equal to 5.5% of the transient occupancy revenues collected within the CVBMP (defined below), to pay or reimburse the cost of the Phase 1A Infrastructure Improvements (defined below) and/or to support payments with respect to the Revenue Bonds (defined below), the City Council of the City (the “City Council”), took certain actions under and pursuant to the powers reserved to the City under Sections 3, 5, and 7 of the Constitution and the Charter of the City, and enacted Chapter 3.61 of the Chula Vista Municipal Code (“Chapter 3.61”) for the purpose of establishing a procedure for financing certain public and private improvements and maintenance and services to serve development within the boundaries of the Financing District through the establishment of the Financing District, the levy and collection of special taxes (the “Special Tax Revenues”) therein by the Financing District and the issuance of bonds or other indebtedness of such Financing District secured by such special taxes for the purpose of financing the Convention Center and certain other public improvements, including the Phase 1A Infrastructure Improvements, as described below. H. On September 10, 2019, the City Council initiated proceedings pursuant to Chapter 3.61 to establish the Financing District, to authorize the Financing District to finance the purchase, construction, expansion, improvement, and rehabilitation of the Convention Center and certain other public improvements and certain maintenance and services, to authorize the levy of a special tax pursuant to the amended and restated rate and method of apportionment thereof to pay for such improvements and services and to declare the necessity of the Financing District to incur an indebtedness to contribute to the financing of such improvements. I. On February 16, 2021, the City Council adopted a resolution declaring its intention and initiating proceedings to make changes to the rate and method of apportionment of the Financing District to increase the special tax rates to be levied initially on taxable property in the Financing District, to extend the term of the special tax to June 30, 2086 and to give the City Council the ability to lower the special tax rates in future fiscal years. J. The City and the Port District entered into an Amended and Restated Joint Community Facilities Agreement (Chula Vista Bayfront Project Special Tax Financing District) effective as of February 24, 2020 (as amended, the “JCFA”) to set forth some of the essential terms for the development, operation, maintenance, and servicing of various improvements within the Chula Vista Bayfront Master Plan Area (the “CVBMP”) or outside the CVBMP as further described in the JCFA. Such essential terms included the priorities for the allocation of the Special Tax Revenues, as such term is defined in the JCFA, and to provide that the Special Tax Revenues Page 10 of 237 EAttachment B 3 4825-3218-1203v24/024036-0079 dedicated to the Convention Center and the Developer’s Phase 1A Infrastructure Improvements shall be disbursed pursuant to an agreement between the Port District, the City and/or the Authority, on the one hand, and the Developer, the Project lenders and/or the Developer’s contractors, on the other hand. K. On May 20, 2020, the Authority Board adopted its Resolution 2020-007 ratifying the final form of a procurement policy for developer-performed public improvements for the Authority attached as Exhibit A to such resolution (the “Authority Procurement Policy”) and ratifying the final form of Authority Resolution 2020-002 in the form presented and attached as Exhibit B to Resolution 2020-007 (the “Authority Resolution 2020-002”) applying the Authority Procurement Policy to the construction of developer-performed public works for the Project. L. Pursuant to Authority Resolution 2020-002 and in accordance with Procurement Policy Section 2.a., the Authority Board authorized the Developer to proceed with the development and construction of the Developer’s Phase 1A Infrastructure Improvements and the Convention Center subject to the terms, conditions, and obligations of the Authority Procurement Policy, Authority Resolution 2020-002, all applicable Project agreements, including this Agreement, and all applicable federal, state, and local laws and regulations. M. The Authority, the Port District and the City have determined it to be beneficial to have the Financing District finance certain of the Phase 1A Infrastructure Improvements in connection with the construction of the Resort Hotel and the Convention Center. To assist in the financing of the Convention Center and the Phase 1A Infrastructure Improvements, the Authority has determined to issue its “Authority Taxable Bonds” and its “Authority Tax-Exempt Bonds,” each as defined herein and together, the “Authority Bonds” pursuant to the terms of the “Authority Indenture,” as defined herein. The Authority Bonds will be secured in part and be repaid from loan payments made by the Financing District on the “Loan,” as defined herein, and any loan payable on a parity with the Loan, made under the “Loan Agreement,” as defined herein, “Lease Payments,” as defined herein, payable by the City pursuant to the Facility Lease and payments to be made by the Port District pursuant to the Port Support Agreement. N. Pursuant to the Sublease and this Agreement, the Developer is required to cause the development and construction of the “Project” which consists of the Developer’s Phase 1A Infrastructure Improvements and the Convention Center (as such terms are defined herein). O. Certain Laws may require that certain of the Phase 1A Infrastructure Improvements (as defined herein) be constructed in connection with the construction of the Convention Center and the Resort Hotel (as defined herein). P. Developer and the Public Agencies desire that Developer construct the Convention Center, and in connection with the construction of the Convention Center and the Resort Hotel, construct the Developer’s Phase 1A Infrastructure Improvements on certain real property described in Exhibit A-3 and depicted in Exhibit B-3 attached hereto (the “Developer’s Phase 1A Infrastructure Improvements Site”, together with the Site, the “Project Site”), as set forth in this Agreement. Q. City, Authority and Developer have entered into that certain Phase 1A Early Work Implementation and Right of Entry License Agreement, dated as of [  ], 2021 (the “Early Work Agreement”), a copy of which is attached hereto as Exhibit X-1. The Early Work Agreement Page 11 of 237 EAttachment B 4 4825-3218-1203v24/024036-0079 provides for the reimbursement of certain costs described therein by the Authority to the Developer. However, City, Authority and Developer intend that such costs be reimbursed as part of the Developer’s Phase 1A Infrastructure Improvements Costs payable hereunder to the extent such amounts are not reimbursed under the Early Work Agreement. R. City and Developer have entered into (i) that certain City of Chula Vista Reimbursement Agreement to Design Specified Bayfront Infrastructure Improvements, dated as of September 15, 2020 (the “Reimbursement Agreement”), a copy of which is attached hereto as Exhibit X-2, and (ii) that certain City of Chula Vista Reimbursement Agreement to Construct Specified Bayfront Sewer Improvements, dated as of September 15, 2020 (the “Sewer Agreement”), a copy of which is attached hereto as Exhibit X-3. Each of the Reimbursement Agreement and the Sewer Agreement provide for the reimbursement of certain costs described therein by City to Developer, and therefore such costs are excluded from the Developer’s Phase 1A Infrastructure Improvements Costs payable hereunder to avoid double counting. S. The Parties desire to enter into, and Authority has required that Developer enter into, this Agreement to establish the terms and conditions in compliance with the applicable provisions of the Authority Procurement Policy and Authority Resolution 2020-002 pursuant to which the Developer may develop and construct the Project and obtain payment for all of the eligible costs of developing and constructing the Developer’s Phase 1A Infrastructure Improvements from proceeds of the Authority Tax-Exempt Bonds and the County Funds, reimbursements pursuant to the Sewer Agreement, and will provide credit to the Developer pursuant to the BFDIF Program, which is on file in the office of the City Clerk, and a portion of the overall costs of developing and constructing the Convention Center from the proceeds of the Authority Taxable Bonds. T. The Parties desire to provide for the development and construction of the “Remaining Phase 1A Infrastructure Improvements” (as defined herein) by the Port District, pursuant to the procurement rules of the Port District; provided that payment or reimbursement to the Port District of the costs of constructing the Remaining Phase 1A Infrastructure Improvements shall be handled by separate agreement between the City and/or the Authority, on one hand, and the Port District, on the other hand. U. The Parties further desire to set forth certain provisions relating to nondisturbance, indemnification, and other continuing covenants of the Parties relating to the Resort Hotel and Convention Center Project and the Phase IA Infrastructure Improvements which shall remain in effect for the Term hereof. AGREEMENT NOW THEREFORE, in consideration of the above Recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, the Authority, the Port District, the City, the Financing District and the Developer agree as follows: ARTICLE I DEFINITIONS 1.1. Definitions Addendum. Defined terms used in this Agreement and not specifically defined herein shall have the meanings set forth in the Definitions Addendum attached hereto, which Page 12 of 237 EAttachment B 5 4825-3218-1203v24/024036-0079 is incorporated herein by this reference. Any reference in this Agreement to this Agreement or any other agreement is a reference to such agreement as the same may be amended or amended and restated from time to time. ARTICLE II SUBJECT OF THE AGREEMENT GENERALLY All Exhibits attached to this Agreement are incorporated into this Agreement by this reference. 2.1. Developer’s Phase 1A Infrastructure Improvements. 2.1.1. Access to the Developer’s Phase 1A Infrastructure Improvements Site. The Developer Parties shall have the non-exclusive right to enter upon the Developer’s Phase 1A Infrastructure Improvements Site in connection with the construction and development of the Developer’s Phase 1A Infrastructure Improvements commencing on the Commencement Date and ending on the earlier of the following dates: (x) as to each portion of the Developer’s Phase 1A Infrastructure Improvements Site, the date on which the Developer’s Phase 1A Infrastructure Improvements corresponding to such portion of the Developer’s Phase 1A Infrastructure Improvements Site is Accepted, (y) the date on which this Agreement is terminated, and (z) the date on which this Agreement expires. 2.1.2. Construction of Developer’s Phase 1A Infrastructure Improvements. Except as expressly provided in this Agreement, Developer shall cause the development of the Developer’s Phase 1A Infrastructure Improvements on the Developer’s Phase 1A Infrastructure Improvements Site substantially in accordance in all material respects with the Approved Drawings and Specifications for the development of the Developer’s Phase 1A Infrastructure Improvements within the timeframe described in Section 5.1, in each case, in accordance with all the terms and conditions of this Agreement. 2.1.3. Complete and Functional Improvements. Developer shall provide complete and functional Developer’s Phase 1A Infrastructure Improvements substantially in accordance in all material respects with the Approved Drawings and Specifications. Neither recommendation of any progress payment, nor any payment by the Authority to Developer under this Agreement, nor any use or occupancy of the Project or any part thereof by the Authority, the City, or the Port District, nor any failure to act, nor any review of a shop drawing or sample submittal, will constitute an approval by any of the Public Agencies of work which is not completed by Developer substantially in accordance with the Approved Drawings and Specifications. The foregoing shall not limit claims pursuant to Articles XI or XII. 2.1.4. Payment of Developer’s Phase 1A Contract Sum, Reimbursements under Sewer Agreement, Credits under BFDIF Program, and Developer’s Phase 1A Project Administration Fee. In consideration for the Developer’s development and delivery of the Developer’s Phase 1A Infrastructure Improvements as required by this Agreement, (a) the Authority shall pay the Developer’s Phase 1A Contract Sum to Developer, (b) the City shall provide to Developer a credit towards the amount payable by Developer pursuant to the BFDIF Program, as a condition of developing the Resort Hotel and Convention Center (as applicable), (c) the City shall pay to Developer amounts required to be reimbursed to Developer pursuant to the Sewer Agreement, and (d) the City shall provide payment to or credit for Developer, as applicable, the amount of the Page 13 of 237 EAttachment B 6 4825-3218-1203v24/024036-0079 Developer’s Phase 1A Project Administration Fee. The Authority acknowledges and agrees that, without limitation, all of the Public Agency’s Estimated Developer’s Phase 1A Infrastructure Improvements Costs identified in Exhibit C-1-A are Developer’s Phase 1A Infrastructure Improvements Costs. The Parties acknowledge that concurrent with requesting payment of Developer’s Phase 1A Contract Sum, Developer will identify amounts to be paid pursuant to the Sewer Agreement and City will issue payment for same consistent with the terms of the Sewer Reimbursement Agreement. Further, Developer will identify BFDIF credit amounts requested with each payment request. City shall incrementally accrue BFDIF credits toward Developer’s ultimate BFDIF obligation, subject to true-up and final calculation of credits earned and BFDIF amounts to be paid to City. City shall pay or credit, as applicable, to Developer portions of the Developer’s Phase 1A Project Administration Fee as and when Developer’s Phase 1A Project Administration Fee Eligible Costs are incurred by Developer. 2.1.5. Sources of Funding for Developer’s Phase 1A Contract Sum. The Parties anticipate that the sources of funding for the payment of the Developer’s Phase 1A Contract Sum are as set forth on Exhibit C-1-B. 2.1.6. Changes to Developer’s Phase 1A Infrastructure Improvements. 2.1.6.1. In accordance with the Authority Procurement Policy, any change to the Contract Documents or the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements shall be subject to Authority’s prior written approval, except for changes or change orders that result in none of the following (as determined in Authority’s reasonable discretion): (i) any additional payment by Authority in excess of the contingency set forth in the Developer’s Phase 1A Infrastructure Improvements Budget; (ii) any additional maintenance or overhead costs to the Authority; (iii) any material delay to the date on which Completion of the Developer’s Phase 1A Infrastructure Improvements occurs; (iv) any material modifications to the design or construction of the Developer’s Phase 1A Infrastructure Improvements nor (v) any adverse effect with respect to the Developer’s Phase 1A Infrastructure Improvements’ compliance with Law. Authority shall provide written approval or a reasonable basis for denial of such changes within ten (10) Business Days after Authority receives written notice thereof from Developer. Without limitation of the foregoing, Authority shall consider reasonably and in good faith any change to the Contract Documents or the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements that is proposed by Developer to address conditions affecting the Project Site that are unknown to Developer as of the Effective Date. 2.1.6.2. Developer shall meet and confer in good faith with Authority regarding, and will reasonably consider in good faith, any changes that Authority desires to make to the Approved Drawings and Specifications with respect to the Developer’s Phase 1A Infrastructure Improvements, and Developer shall use commercially reasonable efforts to implement any such changes, to the extent Developer reasonably determines that such changes result in none of the following: (i) any delay to the date on which Completion of the Developer’s Phase 1A Infrastructure Improvements occurs; (ii) any adverse effect with respect to the Developer’s Phase 1A Infrastructure Improvements’ compliance with Law nor (iii) any adverse effect on the development, maintenance or operation of (including any adverse effect on the compliance with Law by) the Convention Center or the Private Improvements (as defined in the Ground Lease). Notwithstanding the foregoing, if any such change would decrease the funds that could be allocated for the construction of Harbor Park by more than Two Million Five Hundred Thousand Dollars ($2,500,000) individually or in the Page 14 of 237 EAttachment B 7 4825-3218-1203v24/024036-0079 aggregate with other changes proposed by the Authority, then such change will be subject to Developer’s approval in its sole discretion. The re-allocation of amounts from the contingency to a non-contingency line item within the Developer’s Phase 1A Infrastructure Improvements Budget shall not be considered when determining whether the funds that could be allocated for the construction of Harbor Park have decreased. 2.1.6.3. Nothing in this Agreement amends or waives the regulatory process for amending permits or plans approved by the City or the Port District, which shall be governed by the City’s and Port District’s established entitlement and permitting processes and applicable Laws. 2.2. Convention Center. Developer shall cause the development of the Convention Center substantially in accordance in all material respects with the Convention Center Plans, within the timeframe described in Section 5.1 and in accordance with all the terms and conditions of this Agreement. 2.2.1. Complete and Functional Improvements. Developer shall provide a complete and functional Convention Center substantially in accordance in all material respects with the Convention Center Plans and the Convention Center Costs incurred shall not be less than the Project Public Investment Amount. 2.2.2. Payment of Convention Center Costs. In consideration for the work performed or caused to be performed by Developer pursuant to this Section 2.2, the Authority shall pay the Convention Center Contract Sum to Developer pursuant to the procedures set forth in Section 9.2. 2.3. Sweetwater Park. Port District shall Sufficiently Complete development of Sweetwater Park. “Sufficient Completion” or “Sufficiently Complete” means that the Port District, in its sole and good faith discretion, determines that Sweetwater Park, as developed, satisfies the following criteria: (1) the Sweetwater Park on parcel S2 shall be open to the public and include improvements such as landscaping, public parking lots and restrooms, which may be temporary in nature and (2) the development within the Transition Buffer Areas and Limited Use zones of parcel SP-1 and the fencing of the No Touch Buffer Area of parcel SP-1 shall be completed. The Transition Buffer Areas and Limited Use zones of parcel SP-1 and the No Touch Buffer Area of parcel SP-1 are described in the certified PMP. Port District may, in its sole and absolute discretion, further develop Sweetwater Park following achievement of Sufficient Completion, including but not limited to the development of additional features, elements and/or landscaping, without any obligation to the Developer and without requiring Developer’s approval or consent. 2.3.1. Sweetwater Park Updates. Port District shall provide, not less frequently than monthly, written updates to the Developer of the progress of the development of Sweetwater Park and shall provide written notice to Developer when Port District determines that Sweetwater Park is Sufficiently Complete. 2.3.2. First Sweetwater Park Option. Port District shall provide written notice to Developer at least thirty (30) days before Port District advertises for bids for the construction of Sweetwater Park and shall provide Developer with all Sweetwater Park Materials to the extent available at such time. On or before 5:00 p.m. (Pacific Time) on the last day of such thirty (30) day period (such date, the “First Sweetwater Park End Date”), Developer may, but shall not be Page 15 of 237 EAttachment B 8 4825-3218-1203v24/024036-0079 obligated to, exercise the option to Sufficiently Complete Sweetwater Park (the “First Sweetwater Park Option”). If Developer exercises the First Sweetwater Park Option, then: (a) Sweetwater Park shall thereafter be considered part of Developer’s Phase 1A Infrastructure Improvements for purposes of this Agreement (except as otherwise set forth herein), and Developer shall expeditiously Sufficiently Complete Sweetwater Park, and (b) subject to section 2.3.2.1, Developer’s costs to Sufficiently Complete Sweetwater Park shall be considered Developer’s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same manner as other Developer’s Phase 1A Infrastructure Improvements Costs. 2.3.2.1. Developer may exercise the First Sweetwater Park Option only by giving written notice to the Port District and the Authority (“First Developer Completion Notice”) prior to the First Sweetwater Park End Date. If Developer does not deliver the First Developer Completion Notice prior to the First Sweetwater Park End Date, then (a) the First Sweetwater Park Option shall terminate, and (b) the Port District shall expeditiously continue development of the Sweetwater Park until Sufficiently Complete. Notwithstanding delivery of the First Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastructure Improvements Site until the Developer has the right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in accordance with Section 2.3.2.4 below. Notwithstanding the foregoing, Developer may commence any other work for the performance of the Sweetwater Park that does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day after Developer exercises the First Sweetwater Park Option. The Authority will not issue payment to Developer for work performed on Sweetwater Park if Developer does not exercise any of the First Sweetwater Park Option or the Second Sweetwater Park Option (as defined below). If Developer exercises the First Sweetwater Park Option, then with respect to Sweetwater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer from and after the date the First Developer Completion Notice is delivered to Port District. 2.3.2.2. If Developer timely delivers the First Developer Completion Notice, then (a) Developer shall Sufficiently Complete Sweetwater Park in accordance with Sweetwater Park Materials on or before the Outside Construction Completion Date, and (b) within five (5) Business Days after Port District’s timely receipt of the First Developer Completion Notice, Port District shall deliver to Developer the Sweetwater Park Materials that have not previously been delivered to Developer. After Developer has delivered the First Developer Completion Notice, the Port District shall reasonably cooperate with Developer, at no cost or expense to Developer, in seeking any consent to Developer’s use of such Sweetwater Park Materials reasonably requested by Developer from the preparer or issuer of any Sweetwater Park Materials. 2.3.2.3. [Reserved]. 2.3.2.4. If Developer exercises the First Sweetwater Park Option, the Developer Parties shall have the non-exclusive right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the First Sweetwater Park End Date and ending on the earlier of the following dates: (x) the date on which Sweetwater Park is Accepted; and (y) the date on which this Agreement is terminated. 2.3.2.5. If Developer exercises the First Sweetwater Park Option, Developer’s failure to Sufficiently Complete Sweetwater Park by the Original Outside Construction Page 16 of 237 EAttachment B 9 4825-3218-1203v24/024036-0079 Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges. 2.3.3. Second Sweetwater Park Option. If Developer does not exercise the First Sweetwater Park Option and the development of Sweetwater Park is not Sufficiently Complete on or before the Second Sweetwater Park End Date, then Developer may, but shall not be obligated to, exercise the option to Sufficiently Complete Sweetwater Park (the “Second Sweetwater Park Option”; and, together with the First Sweetwater Park Option, the “Sweetwater Park Option”). If Developer exercises the Second Sweetwater Park Option, then: (a) Sweetwater Park shall thereafter be considered part of Developer’s Phase 1A Infrastructure Improvements for purposes of this Agreement (except as otherwise set forth herein), and Developer shall expeditiously Sufficiently Complete Sweetwater Park and (b) subject to Section 2.3.3.1, Developer’s costs to Sufficiently Complete Sweetwater Park shall be considered Developer’s Phase 1A Infrastructure Improvements Costs and shall thereafter be payable in the same manner as other Developer’s Phase 1A Infrastructure Improvements Costs. The Second Sweetwater Park Option shall terminate upon Port District irrevocably notifying Developer that Sweetwater Park is Sufficiently Complete. 2.3.3.1. Developer may exercise the Second Sweetwater Park Option only by giving written notice to the Port District and the Authority (“Second Developer Completion Notice”) within ten (10) Business Days after the Second Sweetwater Park End Date, but not sooner than ten (10) days prior to the Second Sweetwater Park End Date. If Developer does not deliver the Second Developer Completion Notice within the time stated in this Section 2.3.2.1, then (a) the Second Sweetwater Park Option shall terminate at 5:00 p.m. (Pacific Time) on the date that is ten (10) Business Days after the Second Sweetwater Park End Date and Developer shall have no further remedy against Port District with respect to the development of Sweetwater Park, and (b) the Port District shall expeditiously continue development of Sweetwater Park until Sufficiently Complete. Notwithstanding delivery of the Second Developer Completion Notice, Developer shall not commence any development work for Sweetwater Park at the Remaining Phase 1A Infrastructure Improvements Site until the Developer has the right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in accordance with Section 2.3.2.4 below. Notwithstanding the foregoing, Developer may commence any work for the performance of the Sweetwater Park that does not require access to the Remaining Phase 1A Infrastructure Improvements commencing on the first calendar day after the Second Sweetwater Park End Date. The Authority will not issue payment to Developer for work performed on Sweetwater Park if the Port District Sufficiently Completes Sweetwater Park by the Second Sweetwater Park End Date or if Developer does not exercise any of the Second Sweetwater Park Option or the First Sweetwater Park Option. If Developer exercises the Second Sweetwater Park Option, then with respect to Sweetwater Park, Developer shall be entitled to reimbursement only of costs incurred by Developer from and after Developer’s exercise of the Second Sweetwater Park Option. Developer shall not request reimbursement for such costs until after the Second Sweetwater Park End Date. 2.3.3.2. If Developer timely delivers the Second Developer Completion Notice, then (a) Developer shall Sufficiently Complete Sweetwater Park in accordance with the Sweetwater Park Materials on or before the Outside Construction Completion Date, and (b) within five (5) Business Days after Port District’s timely receipt of the Second Developer Completion Notice, Port District shall (i) issue a notice of termination under any outstanding Sweetwater Park Construction Contracts and (ii) deliver to Developer the Sweetwater Park Materials that have not previously been delivered to Developer. After the Developer has delivered the Second Developer Completion Notice, the Port District shall reasonably cooperate with Developer, at no cost or Page 17 of 237 EAttachment B 10 4825-3218-1203v24/024036-0079 expense to the Developer, in seeking any consent from the preparer or issuer of any Sweetwater Park Materials. If Port District fails to issue a notice of termination under any outstanding Sweetwater Park Construction Contract within five (5) Business Days after Port District’s timely receipt of the Second Developer Completion Notice as set forth above, then Developer shall have the right to issue such notice of termination on behalf of Port District and on Developer’s own behalf pursuant to Section 2.3.4.2. 2.3.3.3. Prior to delivery of the Second Developer Completion Notice, but not sooner than six (6) months prior to the Second Sweetwater Park End Date, Developer may request, and Port District shall from time-to-time provide, within ten (10) Business Days after Developer’s request therefor, (i) copies of the Sweetwater Park Materials, all outstanding construction, development and design documents related to Sweetwater Park (including, without limitation, construction contracts, pay applications and architect certifications), at Developer’s sole cost and expense, and (ii) a written description of the work that remains uncompleted in order to cause Sweetwater Park to be Sufficiently Complete. 2.3.3.4. If Developer exercises the Second Sweetwater Park Option, the Developer Parties shall have the non-exclusive right to enter upon the Remaining Phase 1A Infrastructure Improvements Site in connection with the construction and development of Sweetwater Park commencing on the date that is the later of (a) ten (10) days after Developer exercises the Second Sweetwater Park Option or (b) the day after the Second Sweetwater Park End Date and ending on the earlier of the following dates: (x) the date on which Sweetwater Park is Accepted; and (y) the date on which this Agreement is terminated. 2.3.3.5. If Developer exercises the Sweetwater Park Option, Developer’s failure to Sufficiently Complete Sweetwater Park by the Original Outside Construction Completion Date shall in no event relieve Developer of the obligation to pay Construction Late Charges. 2.3.3.6. Each Sweetwater Park Design Contract is hereby assigned by Port District to Developer; provided, that such assignment shall be effective only upon Developer’s exercise of the Second Sweetwater Park Option and only for those Sweetwater Park Contracts that Developer accepts by notifying Port District and the counterparty to such Sweetwater Park Contract in writing. When the Developer accepts the assignment of a Sweetwater Park Design Contract, Developer assumes Port District’s rights and obligations under such Sweetwater Park Design Contract, but in the case of obligations, only to the extent such obligations are to be performed after the date Developer accepts the assignment. Port District shall not assign any Sweetwater Park Design Contract to, or grant a security interest in any Sweetwater Park Design Contract in favor of, any person or entity other than Developer. Port District hereby grants to Developer a security interest in the Sweetwater Park Design Contracts to secure Port District’s obligations under the preceding sentence of this Section 2.3.3.6, and Port District shall take such steps as may be reasonably requested by Developer to evidence and perfect such security interest (including, without limitation, by authorizing Developer to file a UCC-1 financing statement with respect to the Sweetwater Park Design Contracts). Developer shall not assign its security interest in any Sweetwater Park Design Contract, except that it may assign or collaterally assign such security interest to a permitted assignee, or permitted collateral assignee, of this Agreement. Page 18 of 237 EAttachment B 11 4825-3218-1203v24/024036-0079 2.3.4. Sweetwater Park Contracts. 2.3.4.1. Port District shall include in each Sweetwater Park Design Contract (or, to the extent that any Sweetwater Park Design Contract exists as of the Effective Date, amend such Sweetwater Park Design Contract to include): (a) a provision that permits Port District (or its successors or assignees) or Developer to terminate such Sweetwater Park Design Contract for convenience upon not more than ten (10) days’ prior written notice, (b) to the extent applicable, a provision that Developer is entitled to use any drawings, plans or specifications prepared under such Sweetwater Park Design Contract in connection the construction or development of Sweetwater Park, and (c) the following provision with appropriate conforming modifications: “[Contractor] consents to the assignment of [Port District’s] rights and obligations in this [Sweetwater Park Design Contract] by [Port District] to RIDA Chula Vista, LLC, its assigns and/or its lenders and their respective assigns (“RIDA Parties”), and agrees that the warranties and obligations hereunder shall inure to the benefit of RIDA Parties, all as if RIDA Parties were a party of this [Sweetwater Park Design Contract]. Such assignment will be effective when a RIDA Party delivers to [Contractor] and [Port District] a notice accepting such assignment and assuming Port District’s obligations under this [Sweetwater Park Design Contract] from and after the date of such notice. From and after Contractor’s receipt of such notice, [Contractor] will treat such RIDA Party as the [Port District] under this [Sweetwater Park Design Contract].” To the extent that Developer assumes Port District’s obligations under any Sweetwater Park Design Contract, Developer may pay any amounts that are owing to the counterparty under such Sweetwater Park Design Contract which result from a breach by Port District under such Sweetwater Park Design Contract, and such payments shall constitute Developer’s Phase 1A Infrastructure Improvements Costs. Unless Developer does not exercise the First Sweetwater Park Option prior to the First Sweetwater Park End Date and does not exercise the Second Sweetwater Park Option prior to the Second Sweetwater Park End Date, Port District shall neither assign nor terminate any Sweetwater Park Design Contract without Developer’s prior written consent, which shall not be unreasonably withheld or delayed. 2.3.4.2. Port District shall include in each Sweetwater Park Construction Contract (or, to the extent that any Sweetwater Park Construction Contract exists as of the Effective Date, amend such Sweetwater Park Construction Contract to include): (a) a provision that permits Port District (or its successors or assignees) or Developer to terminate such Sweetwater Park Construction Contract for convenience upon not more than ten (10) days’ prior written notice, and (b) the following provision with appropriate conforming modifications: “[Contractor] agrees that RIDA Chula Vista, LLC, its assigns and/or its lenders and their respective assigns (“RIDA Parties”) shall have the right to terminate this [Sweetwater Park Construction Contract] pursuant to [cross- reference termination for convenience provision] of this Sweetwater Park Construction Contract as if RIDA Parties were a party of this [Sweetwater Park Construction Contract]. Such termination will be effective when a RIDA Party delivers to [Contractor] and [Port District] a notice of termination pursuant to such Section. Notwithstanding anything to the contrary in this [Sweetwater Park Construction Contract], no RIDA Party shall have any obligations under this [Sweetwater Park Construction Contract].” 2.3.4.3. Developer shall have no right to accept assignment of a Sweetwater Park Design Contract or to terminate for convenience a Sweetwater Park Design Contract or Sweetwater Park Construction Contract, unless and until Developer exercises the First Sweetwater Park Option or the Second Sweetwater Park Option, as applicable. Developer shall provide any notice of its acceptance of assignment or notice of termination for convenience (excluding any notice of termination for convenience after Developer’s acceptance of assignment of Page 19 of 237 EAttachment B 12 4825-3218-1203v24/024036-0079 the applicable contract) to the Port District and the counterparty of the respective contract within thirty (30) days following delivery of the First Developer Completion Notice or the Second Developer Completion Notice, as applicable. 2.3.5. Sweetwater Park Materials. Port District shall use commercially reasonable efforts to deliver the Sweetwater Park Materials to Developer pursuant to Section 2.3.3.3 or as soon as practicable after Developer exercises the First Sweetwater Park Option or the Second Sweetwater Park Option. After Developer exercise the First Sweetwater Park Option or the Second Sweetwater Park Option, Developer shall have the right to use any and all plans, drawings and specifications that constitute Sweetwater Park Materials for construction and development of Sweetwater Park. The Sweetwater Park Materials (other than the Sweetwater Park Design Contracts that are assumed by Developer) shall remain the property of the Port District, and Developer shall return or deliver all such Sweetwater Park Materials to the Port District upon Acceptance of Sweetwater Park. ARTICLE III DURATION OF AGREEMENT 3.1. Term of Agreement. This Agreement shall become effective on the Effective Date, and the term of this Agreement (the “Term”) shall extend until the earlier of (a) the termination of this Agreement by the Public Agencies according to the termination provisions herein, (b) the termination of the Sublease according to Sections 5.1 or 5.2 of the Sublease (unless Authority provides written notice to Developer within ten (10) Business Days after the termination of this Agreement directing Developer to complete the Developer’s Phase 1A Infrastructure Improvements, in which case (i) except with respect to obligations that expressly survive the termination of this Agreement, Developer shall have no further obligations hereunder with respect to the Convention Center and (ii) the Term shall end upon Acceptance of all Developer’s Phase 1A Infrastructure Improvements (including Harbor Park only if Developer has agreed to construct Harbor Park pursuant to Section 5.4.4) and (if Developer has exercised a Sweetwater Park Option) the Sufficient Completion of Sweetwater Park, or (c) the later of (i) the termination or expiration of the Sublease and (ii) the occurrence of the Expansion Date under and as defined in the Ground Lease. Notwithstanding the foregoing, but subject to the next sentence of this Section 3.1, if the Sublease terminates according to Sections 5.1 or 5.2 of the Sublease, but the Ground Lease remains in effect, then (x) Developer shall have no further obligations hereunder with respect to the Convention Center, but this Agreement shall otherwise remain in effect (including with respect to Developer’s Phase 1A Infrastructure Improvements, Harbor Park (only if Developer has agreed to construct Harbor Park pursuant to Section 5.4.4), and Sweetwater Park (including with respect to the payment for each of the foregoing)) and (y) the Term shall end upon Acceptance of all Developer’s Phase 1A Infrastructure Improvements (including Harbor Park only if Developer has agreed to construct Harbor Park pursuant to Section 5.4.4) and the Sufficient Completion of Sweetwater Park. Notwithstanding anything to the contrary herein, the Term shall not extend beyond sixty-six (66) years from the Effective Date. ARTICLE IV PROJECT COSTS 4.1. Phase 1A Infrastructure Improvements. The provisions of Section 4.1.1 and each subsection thereof shall apply only to the Developer’s Phase 1A Infrastructure Improvements. Page 20 of 237 EAttachment B 13 4825-3218-1203v24/024036-0079 4.1.1. Public Agency’s Estimated Developer’s Phase 1A Infrastructure Improvements Cost. 4.1.1.1. The aggregate Public Agency’s Estimated Developer’s Phase 1A Infrastructure Improvements Cost is ____________________ dollars ($__________), as shown in Exhibit C-1-A attached hereto. Developer’s Phase 1A Infrastructure Improvements Budget as of the Effective Date is attached as Exhibit C-2 hereto. Developer may modify from time to time the Developer’s Phase 1A Infrastructure Improvements Budget reasonably and in good faith and shall provide written notice of any such modification to the Public Agencies. The Developer’s Phase 1A Infrastructure Improvements Budget shall indicate the Guaranteed Maximum Price for the General Contractor’s services, which shall not be increased unless (a) the General Contractor is entitled to an increase under the General Contract or (b) as otherwise expressly agreed by the Authority in writing, in the Authority’s sole and absolute discretion. 4.1.1.2. If, at any time, Developer definitively establishes that the amount expended on the Developer’s Phase 1A Infrastructure Improvements will exceed the amount set forth in the Developer’s Phase 1A Infrastructure Improvements Budget (including contingency amounts), Developer shall promptly, and in any case not more than ten (10) Business Days after the Developer definitively establishes the amount of the increase, notify the Executive Director thereof in writing. This written notification shall include an itemized cost estimate and a list of recommended revisions (e.g., deductive changes) which Developer believes will bring the cost to within the amount set forth in the Developer’s Phase 1A Infrastructure Improvements Budget. The Authority may either: (i) approve an increase in the Developer’s Phase 1A Infrastructure Improvements Budget (which approval shall not be unreasonably withheld, conditioned, or delayed) or (ii) reasonably value engineer, delete or replace subcomponents of a component of the Developer’s Phase 1A Infrastructure Improvements so that the Developer’s Phase 1A Infrastructure Improvements can be constructed for the amount set forth in the Developer’s Phase 1A Infrastructure Improvements Budget, but only if such modification neither has a material and adverse effect on the design, development, or construction of the Resort Hotel or the Project nor delays the Completion of the Resort Hotel, the Parking Improvements or the Project. 4.1.2. Approved Drawings and Specifications for the Developer’s Phase 1A Infrastructure Improvements. As of the Effective Date, each of the Port District and the City has reviewed and approved the Approved Drawings and Specifications for the Developer’s Phase 1A Infrastructure Improvements. 4.2. Convention Center. The provisions of Section 4.2 and each subsection thereof shall apply only to the Convention Center. 4.2.1. Estimated Convention Center Cost. The aggregate Estimated Convention Center Cost is ____________________________ ($____________). The Convention Center Budget as of the Effective Date is attached as Exhibit P hereto. Developer may modify from time to time the Convention Center Budget reasonably and in good faith and shall provide written notice of any such modification to the Public Agencies. 4.3. Cost Reporting. Developer shall, during the Term and, with respect to each record, for a period of seven (7) years after the date such record is created (or such longer period as Developer may decide in its sole discretion), use commercially reasonable efforts to maintain customary records of construction costs incurred by Developer in connection with the Project. Such Page 21 of 237 EAttachment B 14 4825-3218-1203v24/024036-0079 records shall include, but are not limited to, a general ledger, vendor invoices, cancelled checks, agreements with third-party contractors and contractor progress payment billings. Such records may be in electronic format. Developer shall furnish to Authority an itemized statement of the construction costs incurred and paid by Developer in connection with the Improvements, as applicable, within thirty (30) days after Developer receives Authority’s request therefor (which request shall not be provided to Developer until the respective Improvements have been Completed). The statement shall be sworn to and signed, under penalty of perjury, by Developer as fairly representing, to the best of Developer’s knowledge, the construction costs incurred and paid by Developer. Should Developer perform any construction with its own personnel, Developer shall during the Term and, with respect to each record, for a period of seven (7) years after the date of such record (or such longer period as Developer may decide in its sole discretion), maintain the following records with respect to the actual work performed by its own personnel: a payroll journal, copies of cancelled payroll checks, and timecards or other payroll documents which show dates worked, hours worked, and pay rates. Books and records herein required shall be maintained and made available either at the Project Site, the Convention Center, or at such other location in San Diego County, California as is reasonably acceptable to Authority. Authority shall have the right with 48 hours’ advanced notice and at reasonable times to examine and audit said books and records without restriction for the purpose of determining the accuracy thereof, and the accuracy of the aforesaid statement. In the event Developer does not make available the original books and records at the Project Site, the Convention Center, or at such other location in San Diego County, California, then Developer agrees to pay all expenses incurred by the Authority Parties, as applicable, in conducting an audit at the location where said books and records are maintained. After the seven (7) year period has expired for any record subject to this Section 4.3, Developer shall deliver the original or an electronic copy of such record to Authority at the address set forth in Section 26.1 or such other location designated by Authority in writing, which may include the main offices of the City; provided, however, that Developer may elect to deliver all of the records subject to this Section 4.3 that expire in a given year at one time, in one delivery, within twelve (12) months after the end of the applicable year. ARTICLE V CONSTRUCTION OF THE PROJECT AND THE REMAINING PHASE 1A INFRASTRUCTURE IMPROVEMENTS 5.1. Construction of the Project. 5.1.1. Commencement and Completion of the Project. 5.1.1.1. Following the Commencement Date, but not later than the Outside Construction Commencement Date, Developer shall commence the construction of the Project. Developer shall be deemed to have commenced the construction of the Project when Developer delivers a notice to proceed with respect to the construction of the Project to Developer’s contractor. Thereafter, Developer shall, subject to the terms of Section 5.5, diligently proceed with the construction of the Project to Completion, and Complete the Project by the Outside Construction Completion Date. Without limiting the generality of the foregoing, Developer acknowledges and agrees that the cessation of construction of the Project for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event, be deemed a failure by Developer to diligently proceed with the construction of the Project to Completion and shall constitute an Event of Default under this Agreement without further notice or cure right by Developer if Developer does not resume construction of the Project within ten (10) days after Developer receives notice thereof from Page 22 of 237 EAttachment B 15 4825-3218-1203v24/024036-0079 Authority which notice shall include the following language: “FAILURE BY DEVELOPER TO RESUME CONSTRUCTION OF THE PROJECT (AS SUCH TERM IS DEFINED IN THE PROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN (10) DAYS AFTER THE DATE DEVELOPER RECEIVES, OR IS DEEMED TO HAVE RECEIVED, THIS NOTICE SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJECT IMPLEMENTATION AGREEMENT”. 5.1.1.2. The Convention Center Plans have been previously approved in writing by Port District, Authority and City. Changes to the Convention Center Plans must be approved by the Authority in writing, in Authority’s sole and absolute discretion, and, once approved, shall be considered a part of the “Convention Center Plans”; provided, however, Authority’s approval of any change in the Convention Center Plans shall not be required if: (a) such change does not result in a use that is not a Permitted Use, (b) such change does not require modifications to the Convention Center Plans for the structural portions of the Convention Center, (c) such change does not change the design principles of the exterior appearance of the Convention Center (if any), as set forth in the CDP, (d) such change is in compliance with the Chula Vista Building Code, (e) such change is in compliance with, and does not violate the provisions of, the PMP, CDP, the EIR, CVBMP Documents and any other Laws, (f) such change does not trigger any storm water construction BMP permit or permanent structural BMP permit or alterations to existing permanent structural BMPs, and (g) such change does not pave any area greater than twenty-five (25) square feet unless Developer has previously secured the approval to perform such work from all applicable Governmental Authorities, including the Authority. Within thirty (30) days of the Authority’s notice to Developer, Developer shall provide to Authority a reasonably detailed explanation of all changes that Developer has made to the Convention Center Plans without the Authority’s approval pursuant to this Section 5.1.1, including, without limitation, an explanation of why such change did not require approval from the Authority, and copies of the revised Convention Center Plans showing the changes, and Authority shall have thirty (30) days from the receipt of such information to object to the changes to the Convention Center Plans as requiring the Authority’s approval as provided in this Section 5.1.1.2. The Convention Center Plans are by this reference made a part hereof. In the event of any inconsistency between the Convention Center Plans and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail. 5.1.1.3. In constructing the Project, Developer shall comply with all Construction Requirements set forth in Exhibit E attached hereto and all Laws, including, without limitation, the PMP requirements, mitigation measures or conditions of approval under the terms of any of the approvals by any Governmental Authority for the Project, including any CDPs applicable to the Project Site or the use or development thereof and any conditions of approval or mitigation measures or Project changes pursuant to any environmental review under CEQA. 5.1.2. Initial Public Financing Payments; Construction Late Charge. Developer hereby acknowledges that if the Resort Hotel, Parking Improvements, and Convention Center are not Complete by the Original Outside Construction Completion Date (as extended in accordance herewith), JEPA Parties, Port District Parties, Financing District Parties, and City Parties will incur costs not contemplated by this Agreement, the Ground Lease and the Convention Center Leases. Accordingly, in the event Developer or the Foreclosure Purchaser (if applicable) does not Complete the Resort Hotel and Convention Center by the Original Outside Construction Completion Date (as extended in accordance herewith), then, beginning with the first month following the Original Outside Construction Completion Date, and monthly thereafter until the Resort Hotel, Parking Improvements, and Convention Center are Complete, the Developer shall, on or before the first day Page 23 of 237 EAttachment B 16 4825-3218-1203v24/024036-0079 of each such month, pay to the Trustee, as assignee of JEPA under the Authority Indenture, the Developer Public Financing Payment (the “RPFP”) based on the formula set forth below (collectively, “Construction Late Charges”). The Parties further agree that the Construction Late Charges apply whether or not Developer receives notice of its failure to Complete the Convention Center, Resort Hotel, and Parking Improvements, and that said Construction Late Charges are appropriate to compensate the City, Port District, Financing District, and JEPA, and are the sole compensation and remedy of the Public Agencies, for the Developer’s failure to construct the Resort Hotel, Convention Center, Developer’s Phase 1A Infrastructure Improvements, or the Parking Improvements by the Original Outside Construction Completion Date or if the Foreclosure Purchaser has assumed the Sublease, Ground Lease, and the Project Implementation Agreement, the Foreclosure Purchaser’s failure to construct the Resort Hotel, Convention Center, or the Parking Improvements, by the Outside Construction Completion Date, including any loss resulting from the loss of revenues that the JEPA Parties, the Port District Parties, the Financing District Parties and the City Parties would have received if the Resort Hotel, Convention Center, Parking Improvements, and Developer’s Phase 1A Infrastructure Improvements had been Completed by the Original Outside Construction Completion Date or the Outside Construction Completion Date (each as extended in accordance herewith); provided, however, Developer acknowledges and agrees that, as and to the extent provided in the next sentence, there will be an Event of Default if (a) Developer fails to Complete the Convention Center by the date that is three hundred sixty-five (365) days after the Outside Construction Completion Date (the “Extended Construction Period Deadline”) (as extended as a result of a Force Majeure Event) (“Late Completion”) and (b) either (i) Developer does not pay the Construction Late Charges until Completion of the Convention Center (a “Construction Late Charge Failure”) or (ii) if Developer can reasonably Complete the Convention Center within thirty (30) days of the Extended Construction Period Deadline, Developer does not Complete the Convention Center within such thirty (30) days, and if the nature of the Completion of the Convention Center is such that Developer cannot reasonably Complete the Convention Center within such thirty (30) days, Developer does not diligently commence such cure within such thirty (30) days or thereafter fails to diligently proceed to rectify and cure such failure (a “Completion Cure Failure”, and any Completion Cure Failure or any Construction Late Charge Failure, a “Post- Late Completion Failure”). Developer acknowledges and agrees that if Late Completion Occurs and any Post-Late Completion Failure occurs, then the Public Agencies may declare an Event of Default, and such Event of Default shall constitute a cross-default under the Ground Lease and the Sublease, if Developer does not cure its Post-Late Completion Failure within thirty (30) days of receipt of notice from the Authority, and Developer shall not be entitled to any additional cure periods under Article XXI herein. Developer acknowledges and agrees that the payment of Construction Late Charges does not constitute a remedy for any Event of Default under this Agreement, Event of Default under the Sublease for failure to Complete the Convention Center, or Event of Default under the Ground Lease for failure to Complete the Resort Hotel and Parking Improvements. Without limiting the generality of the foregoing, Developer acknowledges and agrees that the cessation of construction of the Convention Center for more than thirty (30) consecutive days shall, unless caused by a Force Majeure Event, be deemed a failure by Developer to diligently proceed with the construction of the Convention Center to Completion and shall constitute an Event of Default under this Agreement without further notice or cure right by Developer if Developer does not resume construction of the Convention Center within ten (10) days after Developer receives notice thereof from the Public Agencies which notice shall include the following language: “FAILURE BY DEVELOPER TO RESUME CONSTRUCTION OF THE CONVENTION CENTER (AS SUCH TERM IS DEFINED IN THE PROJECT IMPLEMENTATION AGREEMENT) WITHIN TEN (10) DAYS AFTER THE DATE DEVELOPER RECEIVES, OR IS DEEMED TO HAVE RECEIVED, THIS NOTICE SHALL Page 24 of 237 EAttachment B 17 4825-3218-1203v24/024036-0079 CONSTITUTE AN EVENT OF DEFAULT UNDER THE PROJECT IMPLEMENTATION AGREEMENT”. Calculation of RPFP Formula: RPFP = PDSO – (EF + DSP) 12 Example of Calculation of RPFP: Assuming the following annual amounts: • Annual PDSO: $18,000,000 • Annual EF: $4,000,000 • Annual DSP: $4,000,000 RPFP = $18,000,000 – ($4,000,000+ $4,000,000) 12 RPFP = $10,000,000 12 RPFP = $833,333.33 For purposes of this Section 5.1.2: “District Support Payment” or “DSP” means, with respect to any Fiscal Year, the Annual Support Payments under and as defined in the Port Support Agreement as of the Effective Date that are due and payable during such Fiscal Year. “Existing Funds” or “EF” means, collectively, with respect to any Fiscal Year, moneys in an amount equivalent to each of the following sources of funds described in (i), (ii), and (iii), actually received by the Port District or the City, during such Fiscal Year: (i) the Ground Lease Revenues (defined below) received by the Port District during the preceding Fiscal Year, which Ground Lease Revenues shall be subject to adjustment pursuant to Section 5.1.3 below; (ii) the TOT attributable to the RV Park Lease; and (iii) an amount equal to $986,625.00, increasing 3% on July 1 of each year, commencing July 1, 2017, which amount is based on the payment made by the Port District to the City in Fiscal Year 2016 pursuant to that certain Municipal Services Agreement No. 88-2012 between the Port District and the City for the provision of Police, Fire and Emergency Medical Services. “Ground Lease Revenues” means all funds derived from the following clause (a) less the amounts listed in the following clause (b): Page 25 of 237 EAttachment B 18 4825-3218-1203v24/024036-0079 (a) those real estate agreements set forth in Exhibit I (collectively, the “Other Ground Leases”); provided, however, if one or more of the Other Ground Leases are renewed, replaced, or amended in such a way as to change the size or configuration of the original premises to include premises outside of the original premises boundaries of all the Other Ground Leases (each a “Modified Boundary Lease”), then, for purposes of this Section, the Ground Lease Revenues derived from each Modified Boundary Lease shall be calculated by multiplying the total amount of Ground Lease Revenues generated by such Modified Boundary Lease by a fraction, the numerator of which shall be an amount equal to the Modified Boundary Lease premises still within the original premises boundary, and the denominator of which shall be the total premises area of the Modified Boundary Lease as modified. The City and the Port District acknowledge and agree that a Modified Boundary Lease shall not include the modification of the RV Park Lease to include some or all of parcel S-3. For example, if the original premises of an Other Ground Lease encompasses 5.0 acres, and the Modified Boundary Lease includes 4.0 acres of the original premises, and adds 6.0 acres of premises outside the original premises, then forty percent (40%) of the lease payments paid to the District under the Modified Boundary Lease shall be included as Other Ground Leases lease payments under this Section (collectively, the “Other Ground Leases Revenues”); to the extent Port District enters into any revenue generating agreement other than a Ground Lease with respect to operations on all or any portion of the Other Ground Leases premises, such revenue, net any related out-of-pocket operating costs paid by Port District to third parties, shall also be included as Other Ground Leases Revenues under this Section; (b) less $3,283,970, which is the actual amount of the buyout payment paid solely by the Port District to Chula Vista Marina, LP, dba Chula Vista Marina (“RV Park Lessee”) to terminate the lease between the RV Park Lessee and the Port District (“Net RV Park Buyout Credit”), such amount to be amortized over a period of eight years commencing on July 1, 2018 pursuant to the Net RV Park Buyout Credit Schedule (defined below), as such Net RV Park Buyout Credit Schedule and its contents may be administratively modified from time to time with the mutual consent of the City Manager and the Executive Director, without further approval of the BPC or City Council. “Net RV Park Buyout Credit Schedule” means the following schedule: Fiscal Year (FY) RV Park Buyout Credit Cumulative Credit FY 19 $410,500 $410,500 FY 20 $410,500 $821,000 FY 21 $410,500 $1,231,500 FY 22 $410,500 $1,642,000 FY 23 $410,500 $2,052,500 FY 24 $410,500 $2,463,000 FY 25 $410,500 $2,873,500 FY 26 $410,470 $3,283,970 “Public Debt Service Obligation” or “PDSO” means, for any year, the amount of debt service set forth on Exhibit J attached hereto and incorporated herein by reference. Page 26 of 237 EAttachment B 19 4825-3218-1203v24/024036-0079 “RV Park Lease” means that certain lease described in Exhibit I between the Port District and Sun Chula Vista Bayfront RV LLC for property located at 825 E Street in Chula Vista which lease is on file in the Office of the Port District Clerk as Document No. 70407, as amended and may be amended from time to time. “TOT” means the transient occupancy taxes levied pursuant to Chula Vista Municipal Code Chapter 3.40, attributable to the RV Park Lease. The amount of the RPFP will be reduced to the extent the RPFP would otherwise be increased solely because Port District or the City fails to use commercially reasonable efforts to ensure the receipt of amounts that, if received by the City or the Port District, would be Existing Revenues and are due and payable to the City or the Port District. 5.1.3. True-Up Payments. Because the actual amounts of the RPFP may not be known when Developer is required to pay Construction Late Charges (since some of the amounts used in the calculation of RPFP will not be known), the Authority shall promptly, after any request by Developer, notify Developer of the reasonably expected amount of the applicable RPFP and Developer shall initially pay Construction Late Charges based on such estimated amounts. Within sixty (60) days after the end of each Fiscal Year with respect to which Developer was required to pay Construction Late Charges pursuant to this Section 5.1, the Port District shall reasonably determine the actual Ground Lease Revenues it received during such Fiscal Year and present such amount, together with reasonable supporting documentation, to Developer for Developer’s review and approval. If the amount of such actual Ground Lease Revenues received by the Port District exceeds the Ground Lease Revenues as calculated based on the preceding Fiscal Year, then the Authority shall make a true-up payment to Developer for the difference within twenty (20) Business Days from the Revenue Fund maintained under the Authority Indenture. If the amount of such Ground Lease Revenues calculated by the Port District based on the preceding Fiscal Year exceeds the amount of such actual Ground Lease Revenues received by the Port District, then Developer shall make a true- up payment to the Authority for the difference within twenty (20) Business Days of a notice of deficiency and upon receipt of such amount from Developer, the Authority shall deposit it into the Revenue Fund maintained under the Authority Indenture. 5.2. Reserved. 5.3. Reserved. 5.4. Project Schedule and Schedule Updates. 5.4.1. Planned Completion Date. For the Developer’s Phase 1A Infrastructure Improvements, the Project schedule shall indicate a planned completion date following the Commencement Date that is not later than the Outside Construction Completion Date (the “Planned Completion Date”). The Planned Completion Date may be extended in the event of a delay, provided that Developer duly requests a time extension in accordance with this Section 5.4 and such extension is authorized under this Article V. Any such schedule is for information purposes only. 5.4.2. Critical Path Method Schedules. Developer shall require that MMJV maintain a detailed, computer-generated, logic-driven, precedence style critical path method (“CPM”) schedule that is prepared with Primavera or other software used by MMJV and that includes all of MMJV’s work related to the Project. Developer shall submit to the Authority a Page 27 of 237 EAttachment B 20 4825-3218-1203v24/024036-0079 courtesy copy of all schedules and schedule updates that Developer receives from MMJV. If requested by the Authority, Developer shall deliver digital copies of any schedules in native computer file format. 5.4.3. Schedule Updates. Developer shall provide to Authority regular schedule updates not less than monthly, which shall include: actual start dates; actual completion dates; and remaining duration of activities in progress. Developer shall promptly notify the Authority of any changes to the schedule. 5.4.4. Schedule for Commencement and Completion of Harbor Park. Notwithstanding any provision of this Agreement to the contrary, Harbor Park shall be deemed to be excluded from Developer’s Phase 1A Infrastructure Improvements and not part of the Developer’s Phase 1A Infrastructure Improvements Site unless and until Harbor Park is included in the Developer’s Phase 1A Infrastructure Improvements in accordance with this Section 5.4.4. Developer shall provide notice to the Public Agencies promptly after Developer determines that 75% Completion has occurred. Developer and the Public Agencies shall meet and confer in good faith within ten (10) Business Days after Developer provides such notice in order to (i) establish the plans and specifications for Harbor Park (the “Harbor Park Plans”) and budget for Harbor Park (the “Harbor Park Budget”), (ii) discuss whether the Port District or Developer will construct Harbor Park, (iii) discuss the status of the development of Sweetwater Park, and (iv) discuss the use of moneys in the County Funded Bayfront Improvements Subaccount. Within sixty (60) days following such meet and confer, Port District will notify Developer in writing as to whether the Port District will construct Harbor Park (which decision will be made by the Port District in its sole and absolute discretion). If Port District elects to develop Harbor Park, then Port District shall not commence development, and shall not commence construction, of Harbor Park unless and until the Developer and the Public Agencies agree in writing that the proceeds available in the County Funded Developer’s Phase 1A Subaccount, the 2021B Bond Proceeds Subaccount; and the County Funded Bayfront Improvements Subaccount of the 2021B Construction Account (including any amounts deposited by the Public Agencies in such account after the Effective Date), are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Developer’s Phase 1A Infrastructure Improvements Costs and that the remaining County Sweetwater Park Funds held by the Port District and the amounts on deposit in the Sweetwater Park Subaccount, if needed, are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Remaining Phase 1A Infrastructure Improvements Costs that may be incurred to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements. If the Port District does not elect to construct Harbor Park within such ten (10) Business Day period and the Developer and the Public Agencies agree in writing upon the Harbor Park Plans and the Harbor Park Budget and that the proceeds available in the County Funded Developer’s Phase 1A Subaccount, the 2021B Bond Proceeds Subaccount; and the County Funded Bayfront Improvements Subaccount of the 2021B Construction Account (including any amounts deposited by the Public Agencies in such account after the Effective Date), are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Developer’s Phase 1A Infrastructure Improvements Costs (assuming for this purpose only that Harbor Park is included in Developer’s Phase 1A Infrastructure Improvements) and that the remaining County Sweetwater Park Funds held by the Port and the amounts on deposit in the Sweetwater Park Subaccount, if needed, are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Remaining Phase 1A Infrastructure Improvements Costs that may be incurred to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements, then Developer’s Phase 1A Infrastructure Improvements shall be deemed to include Harbor Park, Developer’s Phase 1A Infrastructure Improvements Costs shall be modified accordingly and Page 28 of 237 EAttachment B 21 4825-3218-1203v24/024036-0079 Developer shall commence development and construction of Harbor Park. Developer shall not commence development or construction of Harbor Park prior to such time. Notwithstanding anything in this Agreement to the contrary, Harbor Park will in no event be included in Developer’s Phase 1A Infrastructure Improvements for the purpose of determining whether Developer’s Phase 1A Infrastructure Improvements are Complete, Harbor Park will be Accepted separately from the remainder of Developer’s Phase 1A Infrastructure Improvements and any warranty period will be calculated separately for Harbor Park, on the one hand, and the remainder of Developer’s Phase 1A Infrastructure Improvements, on the other hand. Developer’s Phase 1A Infrastructure Improvements shall be deemed not to include Harbor Park, and Developer shall have no obligation to develop nor construct Harbor Park, unless (a) Developer and the Public Agencies agree (i) upon the Harbor Park Plans and the Harbor Park Budget, (ii) that the proceeds available in the County Funded Developer’s Phase 1A Subaccount, the 2021B Bond Proceeds Subaccount; and the County Funded Bayfront Improvements Subaccount of the 2021B Construction Account (including any amounts deposited by the Public Agencies in such account after the Effective Date), are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Developer’s Phase 1A Infrastructure Improvements Costs (assuming for this purpose only that Harbor Park is included in Developer’s Phase 1A Infrastructure Improvements) and (iii) that the remaining County Sweetwater Park Funds held by the Port and the amounts on deposit in the Sweetwater Park Subaccount, if needed, are sufficient (with a contingency that is acceptable to the Authority and Developer) to pay all Remaining Phase 1A Infrastructure Improvements Costs that may be incurred to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements, and (b) the Port District does not elect to construct Harbor Park as provided above. If the Port District elects to develop Harbor Park, the Port District, on the one hand, and the City and Authority, on the other hand, shall enter into a separate agreement regarding the development of Harbor Park. Notwithstanding anything herein to the contrary, the Parties shall determine appropriate insurance requirements at the time the Harbor Park Plans and Harbor Park Budget are prepared. 5.5. Unavoidable Delay. Each of the Developer and the Port District shall be entitled to an extension of the date of the performance of any obligation required of such Party under this Agreement upon the occurrence of a Force Majeure Event as and to the extent set forth in this Section 5.5. (a) Definition. The term “Force Majeure Event” means the occurrence of any of the following events (and the actual collateral effects of such event), individually or in any combination, to the extent that (x) such event is beyond the reasonable control of the Developer or the Port District, as applicable, that is asserting that a Force Majeure Event has occurred (the “Force Majeure Party”) and (y) such event and/or such actual collateral effect prevents such Force Majeure Party from the performance of its obligations under this Agreement and is approved by the Authority pursuant to Section 5.5(e) below: (i) A strike, or similar labor disturbances causing a work stoppage, excluding any such strike or work stoppage that could have been avoided had the Force Majeure Party (or Hotel Operator or a Developer Party, in the case of the Project), complied with Laws or labor agreements with respect to the Project, if any. (ii) Hurricanes, typhoons, tornadoes, cyclones, other severe storms, lightning or floods. Page 29 of 237 EAttachment B 22 4825-3218-1203v24/024036-0079 (iii) Days of precipitation or high winds in any month in excess of ten (10) year average for the area within City’s jurisdiction. (iv) An earthquake, volcanic eruptions, explosions, disease, epidemics or other natural disaster. (v) Fires (including wildfires). (vi) Inability to procure labor, utilities, equipment, materials, or supplies in the open market due to lack of availability (but, in each case, not attributable to a mere increase in price or the Force Majeure Party’s (or Hotel Operator or a Developer Party, in the case of the Project) acts or failure to act). (vii) Acts of war or armed conflict, insurrections, riots, and acts of terrorism (including hijacking, chemical or biological events, nuclear events, disease related events, arson or bombing) or, with respect to any of the foregoing, any threat thereof. (viii) Extraordinary delays in the issuance of any approvals or authorizations from any Governmental Authority (excluding any non-regulatory approvals provided under the terms of this Agreement by the Port District, the JEPA or the City) that is necessary to proceed with development or operation of the Convention Center, Developer’s Phase 1A Infrastructure Improvements or the Remaining Phase 1A Infrastructure Improvements, as applicable (provided that Developer has timely and properly filed all applications, submitted all required documents and fees and taken all other reasonable actions that are necessary to obtain such approvals or authorizations and that the Force Majeure Party (or Hotel Operator or a Developer Party) is not responsible for the delay in the issuance of such approvals or authorizations by such party’s own actions or inactions). For purposes of this paragraph, (A) “extraordinary delays” with respect to City regulatory approvals or authorizations that are subject to the Staffing and Processing Agreement shall mean delays in City processing actions or approvals that exceed 150% of the time periods for City actions under the terms of the Staffing and Processing Agreement, excluding any such delays caused by RIDA’s own actions or inactions thereunder, and (B) “extraordinary delays” with respect to any other approval or authorization from any Governmental Authority shall mean delays beyond the reasonably expected time period for such approval or authorization which reasonably expected time period shall include customary or reasonably foreseeable delays in obtaining such approvals. (ix) An act of God. (x) Embargoes or blockades. (xi) Pre-Existing Hazardous Material (that is not the result of Material Exacerbation). (xii) Closures or work stoppages ordered by any Governmental Authority that do not arise from a breach of this Agreement or the Sublease or misconduct by Force Majeure Party (or Hotel Operator or a Developer Party, in the case of the Project). (b) Calculation of Delay. Actual delays resulting from the occurrence of one or more Force Majeure Events occurring concurrently shall be calculated concurrently and not consecutively. Page 30 of 237 EAttachment B 23 4825-3218-1203v24/024036-0079 (c) Exclusions. For purposes of this Section 5.5, a Force Majeure Event shall not include adverse general economic or market conditions not caused by any of the events described in 5.5(a)(i) through (xii) above. (d) Payment Obligations. In no event will a Force Majeure Event excuse the payment of Project Costs due under this Agreement. (e) Notice and Acceptance Requirement. After the Force Majeure Party learns of any Force Majeure Event, such Force Majeure Party shall endeavor to provide prompt (under the circumstances) informal written notice to the Executive Director and Authority staff working in the field that a Force Majeure Event has commenced, with a formal written notice to follow as described below. The Force Majeure Party shall notify the Authority and the other Parties in writing within ten (10) Business Days after the Force Majeure Party learns of, and in no event later than thirty (30) days after commencement of a Force Majeure Event. Such notice (the “Initial Force Majeure Notice”) must be made in good faith and describe the Force Majeure Event creating delay, why such delay is occurring, the estimated expected duration of such delay, and the commercially reasonable efforts that the Force Majeure Party is taking to minimize the period of delay. Commencing on the date that is thirty (30) days after the date of the Initial Force Majeure Notice and for so long as the Force Majeure Event or the actual collateral effects of such Force Majeure Event exist (whichever is later), the Force Majeure Party shall provide to the Authority and the other Parties monthly written updates on the estimated expected duration of such delay and the commercially reasonable efforts that the Force Majeure Party is taking to minimize the period of delay. Within thirty (30) days after the Force Majeure Event or the actual collateral effects of such Force Majeure Event cease to exist (whichever is later), the Force Majeure Party shall notify the Authority and the other Parties in writing that the Force Majeure Event and the actual collateral effects of such Force Majeure Event, as applicable, have ceased to exist and of the number of days by which Force Majeure Event (including the actual collateral effects of such Force Majeure Event) has delayed the Force Majeure Party’s construction of the Project (or, with respect to the Port District, the Remaining Phase 1A Infrastructure Improvements) or Completion (the “Force Majeure Notice”). Within thirty (30) days after Authority’s receipt of the Force Majeure Notice, the Authority shall provide notice to the Force Majeure Party and the other Parties (“Force Majeure Response”) that either the Authority (a) requires additional information to make a determination regarding the Force Majeure Party’s assertion of the existence of a Force Majeure Event or the duration of the delay caused by the Force Majeure Event or the actual collateral effects of such Force Majeure Event, (b) approves the Force Majeure Notice, or (c) denies some or all of the Force Majeure Notice. The Authority’s approval or denial of the Force Majeure Notice shall be in the Authority’s reasonable discretion. If the Authority denies some or all of the Force Majeure Notice, the Authority and the Force Majeure Party will meet and confer in good faith within ten (10) days after the Authority’s delivery of the Force Majeure Response to attempt to reach a mutually acceptable modification to the Force Majeure Notice that will result in the Authority approving the Force Majeure Notice as modified (“Meet & Confer Period”). If the Authority and the Force Majeure Party do not agree on a modification to the Force Majeure Notice during the Meet & Confer Period, the Force Majeure Party may elect to withdraw the Force Majeure Notice and if the Force Majeure Party does not withdraw the Force Majeure Notice, the Authority shall present the Force Majeure Notice to the Authority Board for its consideration to either approve or deny the Force Majeure Notice at a regularly scheduled meeting that shall take place within sixty (60) days after the expiration of the Meet & Confer Period. If the Authority Board denies the Force Majeure Notice, then the dispute shall be resolved by a court of competent jurisdiction. If a court of competent jurisdiction determines in a final and non-appealable decision that the putative Force Majeure Event that was described in such Force Majeure Notice did not Page 31 of 237 EAttachment B 24 4825-3218-1203v24/024036-0079 constitute a Force Majeure Event, the duration of such delay in the construction of the Project (or, with respect to the Port District, the Remaining Phase 1A Infrastructure Improvements) or Completion specified therein was not reasonable, or the efforts that the Force Majeure Party took to minimize the period of delay were not commercially reasonable, then, at the Authority’s sole and exclusive remedy for the Force Majeure Party’s failure to perform any obligation under this Agreement from which the Force Majeure Party claimed to be excused as a result of such Force Majeure Event, but was not excused, the Force Majeure Party shall make the Authority whole for any loss that the Authority suffered as a result of such failure. 5.6. Completion Guaranty. On or before the Effective Date, Developer shall cause each Completion Guarantor (as defined in each Completion Guaranty) to execute and deliver to Authority, and maintain in effect in accordance with its terms, a Completion Guaranty substantially in the form attached hereto as Exhibit H and incorporated herein by reference (“Completion Guaranty”), with any deviations from such form being reasonably acceptable to Authority, City, Port District, and Developer. 5.7. Entitlements. 5.7.1. Entitlement Costs. If any discretionary approval, permit or entitlement, including, without limitation, environmental analysis under CEQA or the National Environmental Policy Act, the PMP, a Port Master Plan Amendment (“PMPA”), stormwater permits, a CDP and/or a Coastal Act exclusion (collectively, “Discretionary Entitlement”), are necessary, in Port District’s sole and absolute determination, in connection with any Improvements or Alterations, demolition work, remediation work or other projects undertaken by Developer on or at the Project Site or the Improvements (each of the foregoing for which a Discretionary Entitlement is required, the “Discretionary Project”), then Developer shall enter into agreements, consistent with the Port District’s applicable standard practices at that time (if any), with third-party experts, professionals and consultants to prepare reports and other materials (“Consultant Services”) that are required to process the Discretionary Project and for the Port District or any other relevant Governmental Authority to consider the Discretionary Entitlement or Discretionary Project. Developer shall be directly responsible for the costs of the Consultant Services. Developer shall reimburse Port District pursuant to the Reimbursement Procedure for all reasonable costs and expenses incurred by Port District in connection with preparing, processing, considering and approving any Discretionary Project, any Discretionary Entitlement or any appeal of any CDP or Coastal Act exclusion to the CCC. If Developer fails to reimburse Port District for such costs or expenses pursuant to the Reimbursement Procedure, then, in addition to any other remedies that Port District may have, following three (3) Business Days’ prior written notice to Developer, Port District may, at its reasonable discretion, discontinue the preparing, processing, considering or approving of such Discretionary Project, Discretionary Entitlement or such appeal of a CDP or Coastal Act exclusion to the CCC, as applicable, until Developer reimburses Port District, and Developer shall be responsible for any costs and expenses incurred by Port District related to such discontinuance and if such failure continues for seven (7) additional Business Days after written notice from Port District to Developer, then such failure shall be an Event of Default. Nothing herein shall obligate Port District to seek, process or obtain any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project for the benefit of Developer, and Port District makes no warranty or representation to Developer that Developer will obtain any Discretionary Entitlement or ministerial approval. Port District shall not be required to pay any Governmental Authority fees or costs and expenses for any Consultant Services associated with any Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project. If Developer requests Page 32 of 237 EAttachment B 25 4825-3218-1203v24/024036-0079 Port District’s assistance in obtaining from any third-party Governmental Authority any licenses, approvals, notifications, registrations or permits in connection with development, use and operation of the Project Site and the Improvements, including the construction of the Initial Project Improvements, Port District will consider Developer’s request and inform Developer within thirty (30) days whether it will agree to reasonably assist Developer. 5.7.2. Entitlements Indemnity. Without limitation of Developer’s other obligations under this Agreement, Developer agrees, at its sole cost and expense, and with counsel selected by the Public Agencies and reasonably acceptable to Developer, to indemnify, defend and hold harmless the Port District Parties, Authority Parties, Financing District Parties, and the City Parties from any third-party claims, demands, actions, causes of action, suits and Related Costs, arising out of Port District’s approval of any Discretionary Project, Discretionary Entitlement or appeal of a CDP or Coastal Act exclusion to the CCC. Port District may, in its sole and absolute discretion, participate in the defense of any claims, demands, actions and causes of action and suits, and Developer shall reimburse Port District for all reasonable costs that are incurred by Port District in connection therewith, including, without limitation, reimbursement for attorneys’ fees, experts’ fees and other costs. Port District’s participation in such defense shall not relieve Developer of any of its obligations under this Section 5.7.2. The foregoing indemnity obligations of Developer are in addition to, and not in limitation of, any other indemnity obligations of Developer contained in this Agreement, the Ground Lease, and the Sublease, and this Section 5.7.2 shall survive the expiration or earlier termination of this Agreement and the Sublease. 5.7.3. Reservation of Discretion. Developer acknowledges and agrees that, notwithstanding the terms and conditions of this Agreement, and the Sublease, Port District reserves its discretion to condition, approve or disapprove any Discretionary Entitlements or Discretionary Project, including, without limitation, adoption of any and all feasible mitigation measures, alternatives to a Discretionary Project, including a no project alternative, and a statement of overriding consideration, if applicable, and that nothing in this Agreement or the Sublease will be construed as circumventing or limiting Port District’s discretion with respect to any Discretionary Entitlement, or any Discretionary Project, including, without limitation, the exercise of eminent domain, code enforcement and the making of findings and determinations required by Laws. Developer acknowledges and agrees that any and all Discretionary Entitlements may be conditioned, approved or denied by Port District, in its sole and absolute determination, and Developer accepts the risk that Port District may deny any and all Discretionary Entitlements, and hereby waives any claims, demands, actions, causes of action, suits against Port District for such conditions or denial. 5.7.4. Ministerial Action by Authority. At Developer’s request, the Authority will take any reasonable and lawful ministerial action that is reasonably necessary in connection with Discretionary Entitlement or any other third-party Governmental Authority approval for a Discretionary Project (including, without limitation, signing any application for a Discretionary Entitlement in its capacity as the owner of the Convention Center, tenant under the Site Lease or sublandlord under the Facility Lease). 5.8. Energy Requirements. Notwithstanding any other provision of this Agreement to the contrary, the only obligations of Developer with respect to Section 15 and Exhibit 3 of the Settlement Agreement and any indemnification obligations with respect thereto are set forth in Exhibit O attached hereto and incorporated herein by reference and in the Ground Lease. Page 33 of 237 EAttachment B 26 4825-3218-1203v24/024036-0079 ARTICLE VI PROCUREMENT REQUIREMENTS AND EQUAL OPPORTUNITY 6.1. Award of Sole-Sole Source Prime Contract. Pursuant to the findings of the Authority Board found in Authority Resolution 2020-002, the Developer may award one or more single sole source prime contracts to MMJV for the partial design and construction of the Project subject to the terms and conditions of Authority Resolution 2020-002 and this Article VI of this Agreement. The Authority has approved the final, executable construction contracts for the Convention Center and the Developer’s Phase 1A Infrastructure Improvements listed on Exhibit G-3.1 6.2. Subcontractor Bid and Award Process for the Developer’s Phase 1A Infrastructure Improvements. The provisions of this Section 6.2 shall apply only to the Phase 1A Infrastructure Improvements that Developer performs. Developer shall award subcontracts in compliance with the Authority Procurement Policy and Authority Resolution 2020-002 and as implemented (with modifications) and further delineated in the bid and award process that is attached as Exhibit G-1 hereto and as further set out in this Section 6.2. Developer represents and warrants that the subcontracts listed in Exhibit G-2 hereto were awarded in accordance with the bid and award process set forth in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Authority Procurement Policy and Authority Resolution 2020-002. Developer may utilize subcontracts awarded prior to the Effective Date of this Agreement, provided such subcontracts were procured in accordance with this Section 6.2. Nothing herein is intended to limit the Executive Director’s authority to implement the Authority Procurement Policy and Authority Resolution 2020- 002 and approve waivers as set forth therein. 6.2.1. Sole Source Subcontract Award. If so intended by Developer, Developer shall provide notice of its intention to award a sole-source contract to Authority and Authority shall evidence its approval of the Developer’s proposed sole source subcontract award (which approval shall not be unreasonably withheld) by delivering a signed Sole Source Subcontract Award Approval in the form set forth in Exhibit L (with respect to Developer’s Phase 1A Infrastructure Improvements) and Authority shall evidence its approval of such sole source subcontract award by counter-signing such Sole Source Subcontract Award Approval. Authority shall counter-sign a Sole Source Subcontract Award Approval or provide written notice of Authority’s reasons for withholding approval within five (5) Business Days after receiving written notice from the Developer. If Authority fails to respond to a written request for Sole Source Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respond in writing within two (2) Business Days after receiving written notice from the Developer. If Authority fails to respond within such additional two (2) Business Day period, then Authority shall be deemed to have approved such Sole Source Subcontract Award Approval. 6.2.2. Best Qualified Contractor Subcontract Award. If so intended by Developer, Developer shall provide notice of its intention to award a subcontract on the best qualified contractor (who is not the lowest bidder) to Authority and Authority shall evidence its approval of the Developer’s proposed best qualified subcontract award (which approval shall not be unreasonably withheld) by delivering a signed Best Qualified Contractor Subcontract Award Approval in the form set forth in Exhibit M (with respect to Developer’s Phase 1A Infrastructure Improvements) and Authority shall evidence its approval of such best qualified contractor award by counter-signing such Best Qualified Contractor Subcontract Award Approval. Authority shall counter-sign a Best 1 NTD: Such approval to occur before Closing. Page 34 of 237 EAttachment B 27 4825-3218-1203v24/024036-0079 Qualified Contractor Subcontract Award Approval or provide written notice of Authority’s reasons for withholding approval within five (5) Business Days after receiving written notice from the Developer. If Authority fails to respond to a written request for Best Qualified Contractor Subcontract Award Approval within five (5) Business Days, Developer shall notify Authority that such deadline has passed and Authority shall respond in writing within two (2) Business Days after receiving written notice from the Developer. If Authority fails to respond within such additional two (2) Business Day period, then Authority shall be deemed to have approved such Best Qualified Contractor Subcontract Award Approval. 6.2.3. Applicability of Authority Procurement Policy. Notwithstanding anything to the contrary set forth in the Authority Procurement Policy or Authority Resolution 2020-002, to the extent that Developer procures work to construct all or a portion of the Remaining Phase 1A Infrastructure Improvements pursuant to Section 2.3 and to the extent Developer procures work with respect to Remaining Phase 1A Infrastructure Improvements (or, with the reasonable approval of the Executive Director, Developer’s Phase 1A Infrastructure Improvements) as a result of a casualty or condemnation event, Developer may procure such work without regard to the bidding requirements set forth in Sections 1 and 2 of the Authority Procurement Policy. Except with respect to Sections 1 and 2 of the Authority Procurement Policy, the requirements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by this Agreement, shall remain in effect and apply to the Remaining Phase 1A Infrastructure Improvements constructed by Developer and any work with respect to Remaining Phase 1A Infrastructure Improvements (or, with the reasonable approval of the Executive Director, Developer’s Phase 1A Infrastructure Improvements) procured by Developer as a result of a casualty or condemnation event. The modifications described above are intended to be modifications by agreement approved by the Authority Board, as expressly authorized in the Authority Procurement Policy. 6.3. Bid and Award Process for the Remaining Phase 1A Infrastructure Improvements. If the Port District constructs or causes the construction of the Remaining Phase 1A Infrastructure Improvements or Harbor Park, the Port District shall use its procurement policies, then in effect. 6.4. The Convention Center as a Special Purpose Project. Pursuant to Authority Resolution 2020-002, the Convention Center constitutes a “special purpose project” as defined in Section 6 of the Authority Procurement Policy, and the requirements of Sections 1.b.ii, 1.b.iii, 2 and 3(b) of the Authority Procurement Policy shall not apply to the provisions of this Agreement pertaining to development and construction of the Convention Center or work for the Convention Center procured by Developer as a result of a casualty or condemnation event pursuant to Article V of the Sublease. 6.5. Procurement of Alterations. Procurement of work for Alterations is governed by the Sublease and not this Agreement, and the requirements of the Authority Procurement Policy shall not apply to Alterations. The modifications described above are intended to be modifications by agreement approved by the Authority Board, as expressly authorized in the Authority Procurement Policy. 6.6. Bid Opening and Award. In the case of any Competitive Bid or Solicitation Process for the Developer’s Phase 1A Infrastructure Improvements, Developer shall provide the Authority with a copy of the tabulation of competitive bid results with respect to each contract and subcontract, as applicable. Developer shall provide the Authority with copies of all executed contracts awarded in accordance with this Section 6.6 and Developer shall certify in writing to the Authority that such Page 35 of 237 EAttachment B 28 4825-3218-1203v24/024036-0079 contracts were awarded in accordance with the process described in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority in accordance with the Authority Procurement Policy and Authority Resolution 2020-002. A list of the subcontracts awarded for the Developer’s Phase 1A Infrastructure Improvements prior to the Effective Date is set forth in Exhibit G-2. Developer hereby certifies to the Public Agencies that the subcontracts listed in Exhibit G-2 were bid and awarded in accordance with the process described in Exhibit G-1 hereto, subject to such waivers as have been approved by the Authority under the Authority Procurement Policy and Authority Resolution 2020-002. 6.7. Authority Procurement Policy Acknowledgement. In the event Developer exercises the Second Sweetwater Park Option and only for purposes of Developer’s procurement of General Contracts for Sweetwater Park, Authority waives the bidding requirement of the Authority Procurement Policy (including, without limitation, set forth in Sections 1 and 2 of the Authority Procurement Policy). All other requirements of the Authority Procurement Policy and Authority Resolution 2020-002, as modified by this Agreement, shall apply to Developer’s procurement of contracts for Sweetwater Park. Authority acknowledges that in compliance with the applicable provisions of the Authority Procurement Policy and Authority Resolution 2020-002, Authority has required Developer to enter into this Agreement to establish the terms and conditions pursuant to which the Developer may develop and construct the Project and obtain payment for a portion of the eligible costs of developing and constructing the Developer’s Phase 1A Infrastructure Improvements and the Convention Center from the proceeds of the Authority Bonds and the County Funds, and that to the extent requirements set forth in this Agreement differ from the requirements set forth in Authority Procurement Policy and Authority Resolution 2020-002, the requirements set forth in this Agreement will govern the procurement, development and funding of the Project, including the Remaining Phase 1A Infrastructure Improvements if Developer has exercised the Second Sweetwater Park Option (to the extent permitted by Authority Procurement Policy and Authority Resolution 2020-002). Notwithstanding anything to the contrary in this Agreement, Sections 6.2 through 6.2.2 shall not apply to the Remaining Phase 1A Infrastructure Improvements. ARTICLE VII DESIGN AND CONSTRUCTION STANDARDS 7.1. Standard of Care. Developer will use commercially reasonable efforts to furnish efficient business administration and supervision and manage the performance of the work with respect to the Project in an expeditious and economical manner consistent with Authority’s interests. Developer shall endeavor to cause the General Contractor and all Subcontractors to construct the Project in a workmanlike manner. Developer’s professional consultants shall be skilled in the profession necessary to perform their respective services and Developer shall cause them to perform their services related to the Project in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals qualified to perform the services in the same discipline in the State of California. 7.2. Compliance with Laws. 7.2.1. Port District Compliance with Laws. Port District shall in its construction of the Remaining Phase 1A Infrastructure Improvements abide by and comply with, and cause any of its General Contractor, Subcontractors, employees, and agents, to abide by and comply with all Laws. Page 36 of 237 EAttachment B 29 4825-3218-1203v24/024036-0079 7.2.2. Developer’s Compliance with Laws. Developer shall in all activities on or in connection with the Project Site and the Project, and in all uses thereof, including without limitation the Permitted Use and any construction of the Project, abide by and comply with, and cause the Developer Parties (other than Developer) and Hotel Operator to abide by and comply with, all Laws at Developer’s sole cost and expense, and Authority shall not have any obligations or responsibilities to comply with any Laws as to the Project Site and the Improvements or any use thereby by Developer Parties or Hotel Operator. In particular and without limitation, Developer shall have the sole and exclusive obligation and responsibility, at Developer’s sole cost and expense, to comply with the requirements of the following, to the extent applicable: (i) the San Diego Unified Port District Code, including without limitation, Article 10 (Stormwater Management and Discharge Control), (ii) the ADA, including but not limited to regulations promulgated thereunder, (iii) applicable federal, state and local laws and regulations regarding employment and labor practices, including, without limitation, the provisions of Section 7.2.3 and Article XX of this Agreement, (iv) any Coastal Development Permit (“CDP”) (including any conditions of approval or mitigation measures or project changes pursuant to the environmental review under the California Environmental Quality Act (“CEQA”)) or any other California Coastal Commission (“CCC”) regulations or local, state or federal requirements now or hereafter affecting the Project Site or the Improvements, including the use or development thereof, (v) the Port Master Plan (“PMP”), (vi) the Chula Vista Municipal Code, (vii) any other development permits or approvals accepted by Developer, and (viii) the policies adopted by the BPC. Until the earlier of such time as all components of the Developer’s Phase 1A Infrastructure Improvements are Accepted or the Term of this Agreement terminates or expires, neither the BPC nor the City Council shall adopt any Law that only applies to the Developer’s Phase 1A Infrastructure Improvements, unless the Law is determined by the BPC, in its sole and absolute discretion, or the City Council, in its sole and absolute discretion (as applicable), but in either case, in a manner that is neither arbitrary nor capricious, to be necessary for health and safety reasons, to protect the welfare of the people, or to exercise the Port District’s police powers under the Port Act or the City Council’s police powers under applicable Laws, including the CVMC. The foregoing limitation shall not apply to the adoption of any ordinance or resolution that authorizes an amendment to this Agreement or any Contemporaneous Agreement, or is adopted to authorize the enforcement of Port District’s or City’s rights or the performance of Port District’s or City’s obligations under this Agreement or any Contemporaneous Agreement, including without limitation, any ordinances or resolutions adopted by the BPC or City Council as part of any discretionary approval. In the event of any conflict between the terms of a policy adopted by the BPC or City Council and this Agreement, Developer shall deliver notice to Port District or City, as applicable, of such a conflict and the Parties shall meet and confer within ten (10) days of Port District’s or City’s, as applicable, receipt of the notice to discuss the conflict and attempt to resolve the conflict in good faith prior to commencing mediation pursuant to Section 26.12.10. If the conflict is not resolved pursuant to Section 26.12.10, then the terms of this Agreement shall control and Developer shall be excused from complying with the terms of such policy adopted by the BPC or City Council, to the extent of such conflict only. 7.2.3. Prevailing Wage. 7.2.3.1. This Section 7.2.3.1 applies only to the Project and does not apply to the Remaining Phase 1A Infrastructure Improvements unless and until Developer exercises a Sweetwater Park Option or to Harbor Park unless Harbor Park will be constructed by Developer. Developer acknowledges and agrees that: Page 37 of 237 EAttachment B 30 4825-3218-1203v24/024036-0079 a. Any construction, alteration, demolition, installation, or repair work, in each case for the Project, required or performed under this Agreement constitutes “public work” under California Prevailing Wage Law, including Labor Code §§ 1720 through 1861, et seq. (“PWL”), and obligates Developer to cause such work to be performed as “public work,” including, but not limited to, the payment of applicable prevailing wages to all Persons subject to the PWL. b. Developer shall cause all Persons performing “public work” for the Project under this Agreement to comply with all applicable provisions of the PWL and other applicable wage Laws. c. Developer’s violations of the PWL shall constitute a breach (subject to cure pursuant to Section 21.1.2) under this Agreement. d. Authority hereby notifies Developer, and Developer hereby acknowledges, that the PWL includes, without limitation, Labor Code § 1771.1(b) that provides that the following requirements described in Labor Code § 1771.1(a) shall be included in all bid invitations and “public work” contracts: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of § 4104 of the Public Contract Code, or engage in the performance of any contract for “public work,” as defined in this chapter, unless it is currently registered and qualified to perform “public work” pursuant to Section 1725.5. It is not a violation of this Section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Sections 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform “public work” pursuant to Section 1725.5 at the time the contract is awarded.” e. Developer acknowledges that its obligations under the PWL with respect to the Project include, without limitation, ensuring that: i. pursuant to Labor Code § 1771.1(b), a bid shall not be accepted nor any contract or subcontract entered into without proof of the contractor or subcontractor’s current registration to perform “public work” pursuant to § 1725.5; ii. pursuant to Labor Code § 1771.4(a)(1), the call for bids and contract documents shall specify that the project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations (“DIR”); iii. pursuant to Labor Code § 1771.4(a)(2), it posts or requires the prime contractor to post job site notices, as prescribed by regulation; and iv. pursuant to Labor Code § 1773.3(a)(1), it provides notice to the DIR of any “public works” contract subject to the requirements of the PWL, within thirty (30) days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. Pursuant to Labor Code § 1773.3(a)(2), the notice shall be transmitted electronically in a format specified by the DIR and shall include the name and registration number issued by the DIR pursuant to §1725.5 of the contractor, the name and registration number issued by the DIR pursuant to §1725.5 of any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, job site location, and any additional information that the DIR specifies that aids in Page 38 of 237 EAttachment B 31 4825-3218-1203v24/024036-0079 the administration and enforcement of the PWL. PWC-100 is the name of the form currently used by the DIR for providing the notice, but Developer shall determine and use whatever form the DIR requires. f. None of the Authority, Port District, City, or Financing District shall be responsible for Developer’s failure to comply with any applicable provisions of the PWL. g. Notwithstanding anything in this Agreement to the contrary, Developer shall not be responsible for any Person’s failure to comply with any applicable provisions of the PWL with respect to any work performed by, or on behalf of, any Public Agency Party (other than by a Developer Party or Hotel Operator, or on behalf of a Developer Party or Hotel Operator, or by any Person acting directly or indirectly under a contract with a Developer Party or Hotel Operator). 7.3. Compliance with Design and Construction Standards. Developer shall comply, and require compliance by any of its General Contractor, Subcontractors, employees, and agents, or other Developer Parties, with the applicable Design and Construction Standards in connection with the design and construction of Developer’s Phase 1A Infrastructure Improvements. 7.3.1. Standard Specifications. In connection with any modification of the Approved Drawings and Specifications for the Developer’s Phase 1A Infrastructure Improvements, Developer shall comply, and require compliance by any of its General Contractor, Subcontractors, employees, and agents, with the editions of the following reference specifications that were in effect on the Plan Submission Date: the Standard Specifications and the Chula Vista Standard Special Provisions. 7.4. Construction Period. With respect to Convention Center and any portion of the Developer’s Phase 1A Infrastructure Improvements, the provisions of Sections 7.1, 7.2 and 7.3 shall apply until Acceptance of the Convention Center or such portion of Developer’s Phase 1A Infrastructure Improvement, as applicable. 7.5. Authority Approval Not a Waiver of Obligations. Where approval by the Authority, the Executive Director, or other representatives of the Authority is required, it is understood to be general approval only and does not relieve Developer of responsibility for complying with all applicable Laws or other requirements of this Agreement, except in the case of the Authority’s express waiver of the requirement to comply with (a) any Authority requirement, to the extent such requirement is waivable, or (b) any other requirement of this Agreement waivable by the Authority. For purposes of this Agreement, in the event of Authority’s express waiver provided pursuant to clauses (a) or (b) above, Developer shall be deemed in compliance with such Authority requirements or other requirement of this Agreement as a result of such waiver, in each case, only to the extent of such waiver. No such waiver shall constitute an assumption of liability by the Authority, nor shall the Authority, through approval, become an insurer or surety of work associated with the approvals. ARTICLE VIII CONSTRUCTION 8.1. Site Safety, Security. Developer shall be responsible for Project Site safety and security, with respect to Developer’s construction of the Project. Page 39 of 237 EAttachment B 32 4825-3218-1203v24/024036-0079 8.1.1. Persons. As between the Developer, on one hand, and the City, Port District, and the Authority, on the other hand, and without expanding the Developer’s contractual obligations or duties to any Person other than the City, Port District, and Authority, the Developer shall be solely responsible for the safety and security of its officers, agents, and employees authorized by Developer to access the Project Site. 8.1.2. Other. Developer is responsible for each portion of the Developer’s Phase 1A Infrastructure Improvements Site and all other materials, equipment, and other incidentals on such portion of the Developer’s Phase 1A Infrastructure Improvements Site until such portion of the completed Developer’s Phase 1A Infrastructure Improvements have been Accepted by the City or Port District, as applicable. Developer is responsible for the Site, materials, equipment, and all other incidentals on the Site until the completed Convention Center has been Accepted by the Authority. From and after Acceptance, any responsibility of the Developer for the Convention Center shall be pursuant to the Sublease. 8.1.3. Environment. In the construction and development of the Project, Developer shall comply with all environmental laws and regulations, including the Clean Air Act of 1970, the Clean Water Act, Executive Order number 11738, and the Stormwater Management and Discharge Control Ordinance No. 0-17988 and any and all Best Management Practice (“BMP”) guidelines and pollution elimination requirements as may be established by an enforcement official. Furthermore, Developer shall prepare and incorporate into the drawings and specifications a Stormwater Pollution Prevention Plan (“SWPPP”) to be implemented by Developer during Project construction and, until Acceptance of the Convention Center or the applicable Developer’s Phase 1A Infrastructure Improvements. Where applicable, the SWPPP shall comply with both the California Regional Water Quality Control Board Statewide General Construction Storm Water permit and National Pollution Discharge Elimination System permit requirements and shall be in conformance with the City of Chula Vista BMP Design Manual and CVMC Chapter 14.20 (Storm Water Management and Discharge Control). 8.1.4. Access to Project Site. During the Construction Period, the Public Agency Parties shall have the right, but not the obligation, to enter upon and inspect the portions of the Project Site where the construction of the Project is ongoing, during normal business hours and upon a two (2) Business Days’ prior notice to Developer (except for or in connection with inspections undertaken by any Public Agency in its regulatory capacity and except in the case of an emergency in which case no prior notice shall be required but each of such Public Agency Parties that enter the Project Site shall notify Developer and Developer’s Risk Construction Manager thereof by phone prior to entering the Project Site), and each Public Agency that enters the Project Site shall, and shall cause each of its respective Public Agency Parties that enter the Project Site, as applicable, to: (a) comply with all applicable security and safety procedures of Developer of which Developer informs such Public Agency in writing and with which such Public Agency Party can reasonably comply, and (b) not interfere with Developer’s construction of the Project. Notwithstanding the foregoing, nothing herein shall limit the Port District’s or City’s right to enter the Project Site at any time to exercise their respective police powers. 8.2. Public Right-of-Way. All work, including materials testing, special testing, and surveying to be conducted in the public right-of-way shall be coordinated with the Authority. Developer agrees to follow all Laws and regulations, and all written and publicly available standards and regulations of the Authority, as applicable, while working in the public right-of-way, including, but not limited to, utilizing proper traffic control and obtaining necessary permits. Page 40 of 237 EAttachment B 33 4825-3218-1203v24/024036-0079 8.3. Traffic Control. In connection with the Project, Developer shall be responsible for traffic management, including traffic control implementation, maintenance, and preparing detailed traffic control plans to be submitted to the jurisdiction for approval. 8.4. Maintenance. Developer shall maintain and be responsible for each portion of the Developer’s Phase 1A Infrastructure Improvements until Acceptance of such portion, including ongoing erosion prevention measures. Upon Acceptance, the City, the Port District and/or the Authority, as applicable, shall be responsible for maintenance of such portion of the Developer’s Phase 1A Infrastructure Improvements, as determined through one or more separate agreements among two or more of the City, the Port District, and the Authority. All costs incurred by Developer in maintaining the Developer’s Phase 1A Infrastructure Improvements shall be Developer’s Phase 1A Infrastructure Improvements Costs. To the extent such costs are incurred after Completion but before Acceptance of the Developer’s Phase 1A Infrastructure Improvements and are not paid to Developer pursuant to Section 9.1 (including pursuant to the Final Accounting under Section 9.1.6), Authority shall reimburse Developer for such costs within thirty (30) days after Developer provides Authority with a request for reimbursement, together with supporting documentation evidencing such costs. For the avoidance of doubt, Developer shall have no further obligations pursuant to this Section 8.4 with respect to any portion of the Developer’s Phase 1A Infrastructure Improvements after Acceptance of such portion of the Developer’s Phase 1A Infrastructure Improvements. ARTICLE IX PAYMENT OF PROJECT COSTS 9.1. Developer’s Phase 1A Infrastructure Improvements Costs. The provisions of this Section 9.1 and each subsection of this Section 9.1 shall apply solely to the Developer’s Phase 1A Infrastructure Improvements. 9.1.1. Payment of Costs Associated with the Developer’s Phase 1A Infrastructure Improvements. Based upon Developer’s Phase 1A Payment Requests submitted to the Authority by the Developer, the Authority shall make progress payments on account of the Developer’s Phase 1A Contract Sum to the Developer in accordance with the provisions of this Section 9.1. The amount of each progress payment shall be computed as follows: 9.1.1.1. The amount of each progress payment shall first include: a. The Developer’s Phase 1A Infrastructure Improvements Costs incurred or to be incurred by Developer and for which Developer has made or intends to make actual payment prior to the next Developer’s Phase 1A Payment Request; and b. The Stipulated Developer’s Phase 1A Infrastructure Improvements Overhead Amount that has accrued as of the date of such Developer’s Phase 1A Payment Request. 9.1.1.2. The amount of each progress payment shall then be reduced by, without duplication: a. The aggregate of any amounts previously paid by the Authority in respect of the Developer’s Phase 1A Contract Sum; Page 41 of 237 EAttachment B 34 4825-3218-1203v24/024036-0079 b. The amount by which the Architect, pursuant to the Architect’s Certificate that is attached to such Developer’s Phase 1A Payment Request, reduces the amount to be paid with respect to such Developer’s Phase 1A Payment Request. The Architect may reduce such amount to the extent the work performed by Developer for which payment is requested has not been performed substantially in accordance in all material respects with the Approved Drawings and Specifications for the Developer’s Phase 1A Infrastructure Improvements, in which case the amount to be disbursed under the applicable Developer’s Phase 1A Payment Request shall be reduced to reflect the cost of causing such construction to be performed substantially in accordance in all material respects with such Approved Drawings and Specifications (without duplication of any similar reduction that is made by Developer). In the event of any such reduction, Developer may seek payment for the amounts so reduced in any subsequent Developer’s Phase 1A Payment Request; and c. Any amount for which the Developer does not intend to pay General Contractor or any Subcontractor, unless the work has been performed by others the Developer intends to pay. 9.1.1.3. Funds for Payment of Costs/Expenses. a. On the Effective Date, Authority shall cause the Trustee to deposit an amount equal to $[  ] [NTD: such amount shall be the net proceeds of the Authority Tax-Exempt Bonds] into the 2021B Bond Proceeds Subaccount. The Parties acknowledge that the County Funding Agreement provides for the County to pay County Funds to the Authority in multiple payments, from time to time as described in the County Funding Agreement, and that such payments are expected to occur after the Effective Date. Within five (5) Business Days of the Authority’s receipt of any County Funds, the Authority shall transfer such County Funds as follows: (i) the Authority shall transfer the first $10,500,000 in County Funds that the Authority receives (the “County Sweetwater Park Funds”) to the Port District; (ii) the Authority shall transfer the next $2,500,000 in County Funds that the Authority receives to the Trustee for deposit into the Sweetwater Park Subaccount; (iii) the Authority shall transfer the next $6,000,000 in County Funds that the Authority receives to the Trustee for deposit into the County Funded Developer’s Phase 1A Subaccount; and (iv) the Authority shall transfer all County Funds that the Authority receives thereafter to the Trustee for deposit into the County Funded Bayfront Improvements Subaccount. The Authority shall cause the Trustee to make the deposits described in clauses (ii), (iii) and (iv), above. b. The Authority shall take all actions necessary to cause the Trustee to disburse moneys from the 2021B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount for payments required to be made to the Developer, as and when required under this Agreement. The Authority shall take all actions necessary to cause the Trustee to disburse moneys from the Sweetwater Park Subaccount for payments required to be made to the Port District, as and when required under this Agreement. The Authority shall take all actions necessary to cause the Trustee to disburse moneys from the County Funded Bayfront Improvements Subaccount for payments required to be made to the Developer, the Port District, or the City, as applicable, as and when required under this Agreement. Each Public Agency shall not interfere with any lawfully made disbursement request delivered to the Trustee. Until the County Funds Release Date, (A) Authority shall not permit any funds in the 2021B Bond Proceeds Subaccount or the County Funded Developer’s Phase 1A Subaccount to be used for any purpose other than making payments to Developer in accordance with this Section 9.1 without the prior written consent of the Page 42 of 237 EAttachment B 35 4825-3218-1203v24/024036-0079 Developer, which consent shall be granted or withheld in Developer’s sole discretion, and (B) Authority shall direct or authorize the Trustee to transfer funds out of the 2021B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount only to the account or accounts designated by Developer in writing (or as otherwise consented to in Developer’s sole discretion). c. Until the County Funds Release Date, the Port District shall use the County Sweetwater Park Funds only for Remaining Phase 1A Infrastructure Improvements Costs. Notwithstanding the foregoing, not later than five (5) Business Days after the Developer exercises a Sweetwater Park Option, the Port District shall promptly transfer all remaining County Sweetwater Park Funds to the Trustee for deposit into the County Funded Developer’s Phase 1A Subaccount. d. After all County Sweetwater Park Funds have been expended for Remaining Phase 1A Infrastructure Improvements Costs, at the written request of the Port District from time to time, the Authority shall direct the Trustee to transfer amounts on deposit in the Sweetwater Park Subaccount to the Port District. Until the County Funds Release Date, the Port District shall request and use amounts from the Sweetwater Park Subaccount only for Remaining Phase 1A Infrastructure Improvements Costs incurred or to be incurred to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements. Notwithstanding the foregoing, not later than five (5) Business Days after the Developer exercises a Sweetwater Park Option, the Authority shall direct the Trustee to transfer all amounts remaining in the Sweetwater Park Subaccount into the County Funded Developer’s Phase 1A Subaccount. e. Not later than five (5) Business Days after the later to occur of (i) Sufficient Completion of the Remaining Phase 1A Infrastructure Improvements and (ii) payment of all Remaining Phase 1A Infrastructure Improvements Costs incurred to Sufficiently Complete the Remaining Phase 1A Infrastructure Improvements (or on such earlier date designated by the Port District if the Port District reasonably determines that sufficient moneys have been set aside by the Port District to Sufficiently Complete Sweetwater Park), and provided that the Developer has not previously exercised a Sweetwater Park Option, (A) the Port District shall transfer any remaining County Sweetwater Park Funds held by the Port District directly to the Trustee for deposit in the County Funded Bayfront Improvements Subaccount and (B) the Authority shall direct the Trustee to transfer all amounts remaining in the Sweetwater Park Subaccount into the County Funded Bayfront Improvements Subaccount. f. Until 75% Completion, amounts in the County Funded Bayfront Improvements Subaccount shall not be used for any purpose other than payment of Developer’s Phase 1A Infrastructure Improvements Costs without the prior written consent of the Developer, which consent shall be granted or withheld in Developer’s sole discretion. Pursuant to Section 5.4.4, following 75% Completion and until the County Funds Release Date, the Developer, the Port District, and the City shall mutually agree with respect to the use of amounts on deposit in the County Funded Bayfront Improvements Subaccount. The Parties anticipate that, until the County Funds Release Date, the Parties will apply amounts on deposit in the County Funded Bayfront Improvements Subaccount for the following purposes, in the following order of priority: (i) first, the payment of Developer Phase 1A Infrastructure Improvements Costs in excess of the amounts deposited into the 2021B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount, (ii) second, the payment of Remaining Phase 1A Infrastructure Improvements Costs in excess of the County Sweetwater Park Funds and amounts deposited into the Sweetwater Park Page 43 of 237 EAttachment B 36 4825-3218-1203v24/024036-0079 Subaccount, (iii) third, the payment of costs incurred to construct Harbor Park as set forth in the approved Harbor Park Budget, and (iv) fourth, other uses permitted by the County Funding Agreement or as otherwise consented to by the County. On and after the County Funds Release Date, all amounts in the County Funded Bayfront Improvements Subaccount shall be available for withdrawal and use by the Authority for any purpose as may be agreed to by the City and the Port District from time to time without any obligation to confer with or obtain consent from the Developer. g. Until such time that the Parties have agreed on the Harbor Park Budget, any costs allocated to Harbor Park in Developer’s Phase 1A Infrastructure Improvement Budget shall be held by the Trustee in the 2021B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount and made available to pay Developer’s Phase 1A Infrastructure Improvements Costs to the extent other moneys in the 2021B Bond Proceeds Subaccount and the County Funded Developer’s Phase 1A Subaccount are insufficient to pay all Developer’s Phase 1A Infrastructure Improvements Costs. Such costs allocated to Harbor Park shall be deemed part of the contingency reserve in Developer’s Phase 1A Infrastructure Improvement Budget. 9.1.2. Prerequisites to Payment. 9.1.2.1. Developer’s Phase 1A Payment Request. Prior to the disbursement of any amounts to pay the Developer’s Phase 1A Contract Sum, Developer shall provide the Executive Director with a Developer’s Phase 1A Payment Request, together with all of the items described therein. Each Developer’s Phase 1A Payment Request shall show (i) the Developer’s Phase 1A Infrastructure Improvements Costs incurred or to be incurred by Developer and for which Developer has made or intends to make actual payment prior to the next Developer’s Phase 1A Payment Request and (ii) the Stipulated Developer’s Phase 1A Infrastructure Improvements Overhead Amount with respect to such Developer’s Phase 1A Infrastructure Improvements. The form of Developer’s Phase 1A Payment Request attached hereto as Exhibit K-1 may be modified or replaced by Developer, subject to the consent of Authority provided or withheld in Authority’s sole discretion. Each Developer’s Phase 1A Payment Request shall be delivered in the following manner (or by such other means as is reasonably agreed to by the Developer and the Authority): Developer shall send by electronic mail to the Authority Email Addresses a notice that the Developer’s Phase 1A Payment Request and supporting documentation have been uploaded to an internet website, the link to which shall be included in such email notice. Authority shall send confirmation to the Developer by electronic mail once Authority has successfully accessed the Developer’s Phase 1A Payment Request. The Authority shall not have an obligation to make payment to Developer unless and until Developer provides the Executive Director with a Developer’s Phase 1A Payment Request, together with all of the items described therein (including the Architect’s Certificate), and such Developer’s Phase 1A Payment Request is approved by the Executive Director as provided below. 9.1.2.2. Inspection. The Developer’s Phase 1A Infrastructure Improvements shall be subject to City inspection, as applicable, as provided in section 2-11 of the Greenbook. Developer shall ensure that all persons and entities providing work or services for the Page 44 of 237 EAttachment B 37 4825-3218-1203v24/024036-0079 Developer’s Phase 1A Infrastructure Improvements comply with the inspection requirements provided in section 2-11 of the Greenbook. 9.1.2.3. Prevailing Wage Compliance. Developer shall ensure that all persons and entities providing work or services for the Developer’s Phase 1A Infrastructure Improvements comply with prevailing wage requirements, as and to the extent described in Section 7.2.3.1. 9.1.2.4. Public Agency Approval. The Executive Director shall review each Developer’s Phase 1A Payment Request and the supporting documentation. If the Executive Director finds in his/her reasonable discretion that any such Developer’s Phase 1A Payment Request is incomplete (except to a de minimis extent) or contains material errors or misstatements on its face, then the Executive Director shall so inform Developer in writing within ten (10) Business Days after Developer provides such Developer’s Phase 1A Payment Request to Authority of the reasons for his/her finding. Developer shall have the right to respond to such finding by submitting further documentation requested in such finding after receipt of said finding. The Executive Director shall review any further documentation received from Developer in support of the Developer’s Phase 1A Payment Request and inform Developer of his/her approval or denial of the Developer’s Phase 1A Payment Request within five (5) Business Days after Developer provides such further documentation to Authority. If the Executive Director does not find that any such Developer’s Phase 1A Payment Request is incomplete (except to a de minimis extent) or contains material errors or misstatements on its face, then the Executive Director shall so inform Developer in writing within ten (10) Business Days after Developer provides such Developer’s Phase 1A Payment Request to Authority and within that time period approve the Developer’s Phase 1A Payment Request. If the Executive Director determines that the Developer’s Phase 1A Payment Request is incomplete (except to a de minimis extent) or contains material errors or misstatements on its face, but that sufficient and complete information exists with respect to a portion of the Phase 1A Payment Request, then the Executive Director shall approve the Developer’s Phase 1A Payment Request with respect to such portion of the Developer’s Phase 1A Payment Request and so notify Developer within ten (10) Business Days after Developer provides such Developer’s Phase 1A Payment Request to Authority. The Authority shall cause the Executive Director to carry out his or her duties under this Section 9.1.2.4 in a reasonable and good faith manner. Notwithstanding anything to the contrary set forth in this Agreement, (a) the Authority may make payment to Developer under protest and commence dispute resolution proceedings pursuant to Section 26.12 and (b) if Authority has made a payment to Developer and later determines that the payment was made in error, whether due to an incomplete or inaccurate payment request or due to missing documentation or otherwise, Authority may commence dispute resolution proceedings pursuant to Section 26.12 to challenge such previous payment. A certificate or request that Developer delivers under this Agreement will be deemed to contain material errors or misstatements on its face if such material error or omission is apparent from the four corners of such certificate or request without the use of extrinsic evidence. 9.1.3. Time of Payment. If the Executive Director provides approval pursuant to Section 9.1.2 with respect to all or any portion of any Developer’s Phase 1A Payment Request, then the Authority shall cause payment to be made to Developer for the approved costs/expenses associated with such Developer’s Phase 1A Payment Request by the Payment Date (excluding any Developer’s Phase 1A Contested Charges). If the Payment Date falls on a weekend or holiday, the Payment Date shall be extended to the next Business Day. Except for Developer Phase 1A Contested Charges, all costs/expenses associated with each Developer Phase 1A Payment Request shall accrue interest at the Specified Default Rate from the Payment Date until paid. At the request of the Page 45 of 237 EAttachment B