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HomeMy WebLinkAboutNo Meeting Packet, La Porte TIRZ, Development Agreement (HMH La Porte Land LLC) DEVELOPMENT AGREEMENT among REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS, and LA PORTE REDEVELOPMENT AUTHORITY and HMH LA PORTE LAND LLC 011782.0153271 EMF_US 84032577v3 DEVELOPMENT AGREEMENT Agreementfective as of ____________, 2021, by and among the REINVESTMENT ZONE NUMBER ONE, CITY OF Zonety of La CityZone Board Authority Authority Board HMH LA PORTE LAND LLC Developer RECITALS WHEREAS, by Ordinance No. 99-TIRZ Ordinance City created TIRZ Act and WHEREAS, the Zone Board adopted a final Project Plan and Reinvestment Zone Financing Plan; and WHEREAS, the City Council of the City approved the final Project Plan and Reinvestment Zone Financing Plan by Ordinance No. 99-2352, which has been amended from Project Plan WHEREAS, the City authorized the creation of the Authority to aid, assist and act on behalf of the City in the performanc common good and general welfare of the City and neighboring areas as described in the TIRZ Ordinance; and WHEREAS, the City, the Zone and the Authority have entered into that certain Agreement dated July 9, 2001, and approved by Ordinance No. 2001-Tri-Party Agreement administer the Zone, including, but not limited to, the power to engage in activities relating to the acquisition and development of land, to construct and improve infrastructure in the City, to enter into development agreements with developers and builders in the City, and to issue, sell or deliver its bonds, notes or other obligations in accordance with the terms of the Tri-Party Agreement upon the approval of the City Council of the City; and WHEREAS, the Tri-Party Agreement further provides that the Authority must obtain the prior approval of the City for any project approved in the Project Plan that is constructed or caused to be constructed by the Authority; and WHEREAS, the TIRZ Act provides that the Zone may enter into agreements as the Zone Board considers necessary or convenient to implement the Project Plan and achieve its purposes; and WHEREAS, the Authority Board and the Zone Board have determined that it is in the best interest of the Zone and the Authority to contract with the Developer, in order to provide for the efficient and effective implementation of certain aspects of the Project Plan; and 011782.0153271 EMF_US 84032577v3 WHEREAS, the Developer desires to proceed with a single-family residential and commercial Project the time that the Authority can issue its bonds or otherwise pay the costs of the Public Improvements (as defined herein); NOW THEREFORE, for and in consideration of the mutual promises, covenants, obligations, and benefits of this Agreement, the Zone, the Authority and the Developer contract and agree as follows: AGREEMENT ARTICLE 1 GENERAL TERMS 1.1 - meanings: or more series pursuant to Section 6.1(H) of this Agreement. accordance with the Plans and Specifications so that the Project can be used and maintained for its intended purposes. Completion shall be approved by the City and certified by the engineering firm engaged by Developer to make such certification. hired by Developer to complete the Public Improvements. A contract progress payment must be supported not only by a report of a certified public accountant as required in Section 6.1(B), but also by customary documentation including, but not limited to, the name and address of the contractor, a description of the contract pursuant to which the payment is requested, the amount of such payment, the original contract amount, total payments made to date on such contract, an estimate of remaining work to be completed, the cost of such work, and customary lien and subcontractor releases. Harris County, Texas. Developer pursuant to Section 6.1 of this Agreement and shall include any interest payable thereon as prescribed in this Agreement. Harris County Appraisal District. 2 011782.0153271 EMF_US 84032577v3 ications for the Public Improvements prepared or to be prepared by engineering and landscape architect firms at the direction of Developer in accordance with the Project Plan and as approved by the City in accordance with Section 4.2. to the Project Site. deposit of Pledged Available Tax Increment, the proceeds of Authorized Bonds issued to finance Public Improvements pursuant to this Agreement, and other obligations issued pursuant to Article 6, and earnings from the investment of such amounts. tract of land located along Wharton Weems Blvd. and Hwy 146 in La Porte, Harris County, Texas being approximately 56.7 acres as depicted on Exhibit A, and all improvements located thereon, which such tract shall be the location where the Project will be developed. Article 3 of this Agreement. -Party Agreement. an the special fund established by the Authority and funded with payments made by the City and any other participating Taxing Units, pursuant to the Tri-Party Agreement. School District, and any other taxing units participating in the Zone. 1.2 . Words used herein in the singular, where the context so permits, also include the plural and vice versa. The definitions of words in the singular herein also apply to such words when used in the plural where the context so permits and vice versa. ARTICLE 2 REPRESENTATIONS 2.1 . The Authority hereby represents to the Developer that: (A) The Authority is duly authorized, created and existing in good standing under the laws of the State and is duly qualified and authorized to carry on the governmental functions and operations as contemplated by this Agreement. 3 011782.0153271 EMF_US 84032577v3 (B) The Authority has the power, authority and legal right to enter into and perform this Agreement and the execution, delivery and performance hereof (i) have been duly authorized, (ii) to the best of its knowledge, will not violate any applicable judgment, order, law or regulation, and (iii) do not constitute a default under, or result in the creation of, any lien, charge, encumbrance or security interest upon any assets of the Authority under any agreement or instrument to which the Authority is a party or by which the Authority or its assets may be bound or affected. (C) The Project, the Public Improvements and the Project Costs are components of or are consistent with the Project Plan. (D) This Agreement has been duly authorized, executed and delivered by the Authority and, constitutes a legal, valid and binding obligation of the Authority, enforceable in accordance with its terms except to the extent that (i) the enforceability of such instruments may be limited by sovereign immunity, bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application in effect from time to ti remedies including specific performance may be unavailable. (E) The execution, delivery and performance of this Agreement by the Authority does not require the consent or approval of any person which has not been obtained. (F) The Authority has an exemption from the payment of sales and use taxes pursuant to the statute under which the Authority was created. 2.2 . The Zone hereby represents to the Developer that: (A) The Zone is duly authorized, created and existing in good standing under the laws of the State and is duly qualified and authorized to carry on the governmental functions and operations as contemplated by this Agreement. (B) The Zone has the power, authority and legal right to enter into and perform this Agreement and the execution, delivery and performance hereof (i) have been duly authorized, (ii) to the best of its knowledge, will not violate any applicable judgment, order, law or regulation, and (iii) do not constitute a default under, or result in the creation of, any lien, charge, encumbrance or security interest upon any assets of the Zone under any agreement or instrument to which the Zone is a party or by which the Zone or its assets may be bound or affected. (C) The Project, the Public Improvements and the Project Costs are components of or are consistent with the Project Plan. (D) This Agreement has been duly authorized, executed and delivered by the Zone and constitutes a legal, valid and binding obligation of the Zone, enforceable in accordance with its terms except to the extent that (i) the enforceability of such instruments may be limited by sovereign immunity, bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application in effect from time to 4 011782.0153271 EMF_US 84032577v3 remedies including specific performance may be unavailable. (E) The execution, delivery and performance of this Agreement by the Zone does not require the consent or approval of any person which has not been obtained. 2.3 . The Developer hereby represents to the Authority and the Zone that: (A) The Developer is duly authorized, created and existing in good standing under the laws of the State and is qualified to do business in the State. (B) The Developer has the power, authority and legal right to enter into and perform its obligations set forth in this Agreement, and the execution, delivery and performance hereof, (i) have been duly authorized by requisite corporate action, (ii) will not, to the best of its knowledge, violate any judgment, order, law or regulation agreement and/or other governing document(s), and (iii) do not constitute a default under or result in the creation of, any lien, charge, encumbrance or security interest upon any assets of the Developer under any agreement or instrument to which the Developer is a party or by which the Developer or its assets may be bound or affected. (C) The Developer will have sufficient capital to perform its obligations under this Agreement as and when needed. (D) This Agreement has been duly authorized, executed and delivered and constitutes a legal, valid and binding obligation of the Developer, enforceable in accordance with its terms except to the extent that (i) the enforceability of such instruments may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application in effect from time to time relating to or specific performance may be unavailable. (E) The Developer will comply with any and all City development ordinances and other requirements applicable to the Project Site and/or the Project, including, without limitation, the Plans and Specifications for the Project approved by the City and any planned development or zoning ordinance covering the Project Site. - - - - - - - -- 5 011782.0153271 EMF_US 84032577v3 ARTICLE 3 THE PUBLIC IMPROVEMENTS 3.1 . The Public Improvements shall be and include the design, construction and installation of certain public infrastructure relating to the Project, such infrastructure being more particularly described in the Plans and Specifications. 3.2 . The estimated Project Costs of the Public Improvements are described in Exhibit B. The Public Improvements will be developed pursuant to the Plans and Specifications and a schedule that is mutually agreeable to the Parties. The Project Costs shall include all architectural, engineering, design, legal and other consultant fees and expenses (as further set forth in Section 6.1(A) hereof) related to such Public Improvements. The Project Costs may be modified with approval of the Authority Board. 3.3 . The Public Improvements shall be designed, acquired, constructed and implemented in accordance with the Plans and Specifications to be approved by the City pursuant to Article 4. ARTICLE 4 DUTIES AND RESPONSIBILITIES OF THE DEVELOPER 4.1 . Subject to Article 3, the Developer agrees to construct the Public Improvements as described in the Plans and Specifications and to provide and furnish, or cause to be provided and furnished, all materials and services as and when required in connection with the construction of the Public Improvements. The Developer will obtain all necessary permits and approvals from the City and all other governmental officials and agencies having jurisdiction (including the approvals required under the Tri-Party Agreement), provide supervision of all phases of construction of the Public Improvements, provide periodic reports as may be reasonably requested and required by the Authority from time to time of such construction to the Authority Board with copies to the City, and cause the construction to be performed in accordance with the Plans and Specifications. 4.2 . The Developer shall prepare or cause to be prepared the Plans and Specifications for the Public Improvements. Prior to the commencement of construction or implementation of the Public Improvements, the Plans and Specifications must be submitted to and approved by the City and all other regulatory authorities having jurisdiction. Once the City has approved the Plans and Specifications, no changes thereto can be made without the express written approval of the City, the Zone Board, and the Authority. 4.3 . On the later of completion of the construction of the Public Improvements or thirty days after this Agreement is executed, Developer shall provide the Authority and the City with a final cost summary of all costs associated with such Public Improvements (which shall be certified to as true and correct by an officer of Developer under penalty of perjury), a Certificate of Completion and evidence that all amounts owing to 6 011782.0153271 EMF_US 84032577v3 contractors and subcontractors have been paid in full evidenced by customary affidavits executed by such contractors. 4.4 . If applicable, the Developer shall grant the City and the Authority all required temporary construction and access easements necessary to maintain the Public Improvements. The easements granted must be satisfactory for the intended purpose as determined by the City. On property owned by the Authority, the Authority shall grant the Developer at no cost all required temporary construction and access easements necessary to install the Public Improvements. 4.5 . If applicable, Developer agrees to pay any monthly rates and charges for water and sewer services and shall pay all applicable City building permit fees for the Public Improvements. 4.6 . Developer agrees that it will cooperate with the Zone and the Authority and Developer will provide all necessary information to the Authority and its consultants in order to assist the Authority in complying with the Tri-Party Agreement, including, without limitation, the completion of the audit and construction audit required therein. 4.7 . The Developer agrees that all real property within the Project Site will be valued for taxation in accordance with Section 23.01, Texas Tax Code, as hereinafter may be amended, and that it will not request such property to be valued for taxation on the basis of inventory as permitted by Section 23.12, Texas Tax Code and as hereinafter may be amended. 4.8 . The Developer shall not make any change in the Project as to the uses of the property or change the boundaries within the Project Site without the express written consent of the City, the Authority Board and the Zone Board. 4.9 . The Developer expressly understands and agrees that neither as defined in Section 245.001 of the Texas Local Government Code, or an application therefor; and, as such, expiration date or other requirement in effect at the time of execution of this Agreement or at the time any approval pursuant to the terms hereof is obtained. To this end, Developer, for itself, its officers, agents, employees, successors and assigns, hereby releases and holds harmless the City, the Authority and the Zone from any claim or cause of action involving vested rights, including, but not limited to, such a right claimed pursuant to Chapter 245 of the Texas Local Government Code, arising out of this Agreement or the approvals required to be obtained herein. ARTICLE 5 DUTIES AND RESPONSIBILITIES OF THE AUTHORITY 5.1 . The Authority shall pay or reimburse to Developer the Project Costs in the amount of the actual costs of the Public Improvements, less any sums paid to Developer by any public improvement district within which the Project is located now or in the future for Project Costs, subject to the conditions of and provided by Articles 3 and 4. The total, actual Project Costs of the Public Improvements is estimated to be $8,580,296.95. Attached hereto as Exhibit B is a detailed description of the engineering estimates of the Public 7 011782.0153271 EMF_US 84032577v3 Improvements. The Project Costs shall be financed and funded in accordance with Article 6 hereof. In the event a portion of the Public Improvements is determined by the Authority to be ineligible under the Act, the Project Costs shall be reduced by the amount of such ineligible Public Improvements. If the Authority has already repaid Developer for such ineligible Public Improvements in accordance with this Agreement, the Parties agree that Developer shall reimburse the Authority for such repayment within thirty (30) days of receipt of an invoice from the Authority and all such sums shall bear interest at the rate established in Section 6.1(F) from the date past due until the date of such reimbursement. Should the Developer fail to timely pay such amount, the Authority may, in its sole discretion, withhold the amount due, including accrued interest, from future Contract Progress Payments. 5.2 . The Authority shall pay or reimburse the Project Costs in accordance with this Agreement. In the event the Authority does not have funds available at the time all or part of the Project Costs are payable by the Authority in accordance with this Agreement, the Project Costs shall be funded in accordance with Article 6 hereof, and such funding shall not be deemed a default by the Authority under this Agreement. 5.3 . In accordance with the Tri-Party Agreement and the eement to participate in the Zone, the Parties understand and agree that, reimburse the Developer for its Project Costs. ARTICLE 6 PUBLIC IMPROVEMENTS FINANCING AND FUNDING 6.1 Developer Advances. (A) Developer shall advance sufficient funds as such become due for all costs comprising the Project Costs including, without limitation, all costs of design, engineering, materials, labor, construction, and inspection arising in connection with the Public Improvements, including all payments arising under any contracts entered into by Developer pursuant to this Agreement, all costs incurred in connection with obtaining governmental approvals, certificates or permits (including any building permit fees) required as a part of any contracts entered into in accordance with this Agreement and all related legal fees incurred in connection therewith. (B) The Developer must submit, within sixty (60) days after the latest of recording a final plat of property within the Project Site, signing this Agreement, or completing an identifiable segment of Public Improvements not subject to the platting requirements of the City, a request for a Contract Progress Payment when an identifiable segment of Public Improvements has been completed. Documentation of cost and completion shall be forwarded to the Authority. The Authority, at its expense, shall hire a certified public accountant to calculate the amount due Developer and shall prepare and submit, within a reasonable time, a report to the Authority Board and send a copy to the City Manager of the City. Requests for Contract Progress Payments shall be submitted only when an identifiable segment of Public Improvements has been completed and shall be submitted no more often than once every sixty (60) days. If the Authority does not 8 011782.0153271 EMF_US 84032577v3 have sufficient funds to pay any Contract Progress Payment within thirty (30) days of the Developer shall be deemed to have advanced such amount to the Authority as of the date actually expended by the Developer. Interest (as calculated pursuant to Subsection 6.1(F)) on each Developer Advance made pursuant to this subsection shall accrue from the date the Developer expended the funds and shall accrue for a maximum period of five (5) years from such date. At such time as funds are available to pay all or any portion of the Developer Advances made hereunder, the Authority, at its expense, shall hire a certified public accountant to calculate the amount due to the Developer and shall prepare and submit a report to the Authority Board and send a copy to the City Manager of the City certifying (1) the amount due to the Developer for the Developer Advances being repaid, with interest calculated thereon as specified herein and (2) that funds are available to make such payment. Upon receipt of such report, the Authority Board shall promptly authorize and make payment to the Developer. (C) If, upon completion of the Public Improvements and conveyance of the Public Improvements to the Authority or the City, as applicable, the Authority does not have sufficient funds to reimburse to Developer the unpaid balance of the Project Costs, Developer shall be deemed to have advanced to the Authority an amount equal to the difference between (i) the amount of the Project Costs which has been previously paid by the Authority to Developer and (ii) the final cost of the Public Improvements as evidenced by documentation approved by the Authority Board in accordance with Section 4.3. (D) Each Developer Advance shall be evidenced by a certificate in the form attached hereto as Exhibit C. (E) The Authority shall begin repaying the Developer Advances, and shall continue such repayment until repaid in full, on the earliest date that funds are available from any of the following sources. (1) proceeds of any applicable bank loan; (2) proceeds from the sale of applicable Authority Bonds; or (3) Pledged Available Tax Increment. (F) Subject to the limitations described in Section 6.1(B) hereof, interest on each Developer Advance shall accrue at the lesser of the: (a) prime rate of JPMorgan make the Developer Advance; provided, however, that if the Developer has not obtained a development loan to make the Developer Advance, interest shall accrue at the prime rate of JPMorgan Chase Bank. Interest shall be calculated on the basis of a year of 360 days and the actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable, unless such calculation would result in a usurious rate, in which case interest shall be calculated on the per annum basis of a year of 365 or 366 days, as applicable, and the actual days elapsed (including the 9 011782.0153271 EMF_US 84032577v3 first day but excluding the last day). In no case shall the interest rate exceed one percent per month. (G) nces or reimburse the Developer for Project Costs is limited to any Pledged Available Tax Increment. The rights of Developer in and to the Pledged Available Tax Increment granted herein are subject only to (i) the rights of any holders of bonds, notes or other obligations that have been heretofore or are hereafter issued by the City or any other participating Taxing Unit that are payable from and secured by a general levy of ad valorem taxes throughout the taxing jurisdiction of the City or any other participating Taxing Unit, (ii) the rights of any of the holders of bonds and notes that are hereafter issued or incurred by the Authority and which are secured by a pledge of the Tax Increment Revenue Fund, and (iii) the rights of any of the holders of notes that are hereafter issued or incurred by the Authority, which are secured by a pledge, all or a part, of the Tax Increment Revenue Fund, the proceeds of which are used solely to fund the annual operating and administration budget of the Authority approved by the Authority Board and the City Council of the City. Except in the event that sufficient tax increment increase does not occur within the term of the Zone or within the Project Site to generate sufficient revenue to repay the Developer Advance(s), it shall be the obligation of the Authority to repay the Developer Advances and accrued interest thereon as set forth in this Agreement from the Pledged Available Tax Increment until such time as the Developer Advances and accrued interest thereof incurred pursuant to this Agreement have been fully repaid or provision for payment thereon to Developer shall have been made in accordance with this Agreement. The Developer Advances constitute a special obligation of the Authority payable solely from the Pledged Available Tax Increment as and to the extent provided in this Agreement. The Developer Advances do not give rise to a charge against the general credit or taxing powers of the Authority, the Zone, the City, the County or any other Taxing Unit and is not payable except as provided in this Agreement. Developer, its successors and assigns, shall not have the right to demand payment thereof out of any funds of the Authority other than the Pledged Available Tax Increment or sources described in Section 6.1(E). (H) The Authority will evaluate and consider bond issues to reimburse the Developer upon the following circumstances: (1) Projected incremental revenue generates 1.25 times coverage for the bonds over projected annual debt service as determined by the Authority Boa discretion, be issued with lesser coverage if recommended by the (2) Projected incremental revenue will be calculated by multiplying estimated or certified incremental value from HCAD by the participant(s) tax rate(s) divided by 100 times one minus a reasonable historical tax collection factor times one minus the City set-aside percentage; 10 011782.0153271 EMF_US 84032577v3 (3) A reserve fund equal to maximum annual debt service must be funded from the bond proceeds; (4) Adequate cash or capitalized interest must be set aside to assure payment of the bonds through the date of the next increment payment; and (5) The minimum bond size will be that size that after funding the reserve fund, any capitalized interest and any costs of issuance will allow for a reimbursement to the developer of at least $1,500,000 plus any developer interest. Reimbursements to multiple developers may be aggregated in a single bond issue to achieve the minimum bond size. (I) The Authority shall not issue obligations in accordance with this Article unless the resulting debt service requirements on all Zone obligations may be paid in full when due from all money then on deposit in or thereafter required to be deposited to the Property Account during the term of such Zone obligations, assuming that (a) the rates at which property taxes are levied by all Taxing Units required to make deposits to the Tax Increment Fund do not change from the rates at which they most recently levied property taxes, (b) the assessed value of taxable property (net of exemptions) within the Project Site does not change from the amount then most recently estimated or certified by HCAD, (c) all amounts deposited (or required to be deposited) to the Property Account are deposited to and set aside in the Property Account as capitalized interest in the amount requested by the Developer and approved by the City Manager of the City, and (e) the Property Account is expended in each year to pay administrative expenses of the Zone in an amount equal to the product of (i) the total amount of such expenses budgeted cent operating budget and (ii) a fraction, the numerator of which is the current Tax Increment attributable to the Project Site and the denominator of which is the current Tax Increment for the Zone. (J) The Authority shall provide to Developer, upon the written request of Developer, and on the earliest date such information is available after the date of such request, certified copies of all statements of revenue attributable to the Project Site and the source of such revenue of the Zone and of the Authority the intended use of which is to verify the availability of funds for payment of the Project Costs or Developer Advances, if applicable, pursuant to this Section. ARTICLE 7 INSURANCE; RELEASE 7.1 on for indemnification, the Developer shall require that each contractor providing work or service on the Public Improvements provide and maintain certain insurance in full force and effect at all times during the construction of the Public Improvements and shall require that the City, the policies. 11 011782.0153271 EMF_US 84032577v3 liability: Coverage Limit of Liability Statutory Bodily Injury by Accident $100,000 (each accident) Bodily injury by Disease $500,000 (policy limit) Bodily injury by Disease $100,000 (each employee) Comprehensive General Liability: Bodily Injury and Property Damage, Combined Including Broad Form Coverage, Limits of $500,000 each Occurrence and Contractual Liability, Bodily and Personal $1,000,000 Aggregate Injury, and Completed Operations (for a period of one year after completion of work) Automobile Liability Insurance (for $500,000 Combined Single Limit per Occurrence automobiles used in performing under this Ownership and Hired Auto Coverage) Professional Liability Coverage (for $500,000 per occurrence $1,000,000 aggregate professional service contract only) Defense costs are excluded from the face amount of the policy. Aggregate Limits are per 12 month policy period unless otherwise indicated. If the amount of any contract awarded by Developer to construct the Public Improvements shall exceed $1,000,000, Developer shall contract with the contractor to maintain Commercial General Liability coverage and the Auto Liability coverage for at least twice the combined minimum limits specified above. th The amounts of the insurance required herein shall be reviewed on the fifth (5) anniversary date th of this Agreement and each fifth (5) year thereafter until the construction of the Project is completed and shall be increased, if necessary, so that the amount of such coverage is at all times generally equal to the limits described herein measured in year 2021 dollars. (A) Form of Policies. The Authority Board may approve the form of the insurance policies, but nothing the Authority Board does or fails to do relieves Developer of its obligation to provide the required coverage under this Agreement. The Authority Agreement. 12 011782.0153271 EMF_US 84032577v3 (B) Issuers of Policies. The issuer of each policy shall have a certificate of edition . (C) Insured Parties agents and employees as additional insured parties on the original policy and all renewals or replacements. (D) Deductibles. Developer shall be responsible for and bear (or shall contract with each applicable contractor to bear and assume) any claims or losses to the extent of any deductible amounts and waives (and shall contract with each contractor to waive) any claim it may have for the same against the Authority or Zone, its officers, agents, or employees. (E) Cancellation. Each policy must state that it may not be canceled, materially modified, or non-renewed unless the insurance company gives the Authority to) give written notice to the Authority within five days of the date on which total claims by any party against such person reduce the aggregate amount of coverage below the amounts required by this Agreement. In the alternative, the policy may contain an endorsement establishing a policy aggregate for the particular Public Improvements or location subject to this Agreement. (F) Subrogation. Each policy must contain an endorsement to the effect that the issuer waives any claim or right of subrogation to recover against the Authority, the Zone, its officers, agents, or employees. (G) Primary Insurance Endorsement Compensation and Professional Liability (if any), must contain an endorsement that the policy is primary to any other insurance available to the additional insured with respect to claims arising under this Agreement. (H) Liability for Premium. Developer shall pay (or shall contract with contractors to pay) all insurance premiums for coverage required by this Section, and the Authority or Zone shall not be obligated to pay any premiums. (I) Subcontractors. Notwithstanding the other provisions of this Section, the amount of coverage contracted to be provided by subcontractors shall be commensurate with the amount of the subcontract, but in no case less than $500,000 per occurrence. Developer shall provide (or shall contract with contractors to provide) copies of insurance certificates to the Authority. (J) Proof of Insurance. Promptly after the execution of this Agreement and from time to time during the term of this Agreement at the request of the Authority, Developer shall furnish the Authority with certificates of insurance maintained by Developer in accordance with this Section. If requested in writing by the Authority, 13 011782.0153271 EMF_US 84032577v3 policies. If Developer does not comply with the requirements of this Section, the Authority, at its sole discretion, may (1) suspend performance by the Authority hereunder and begin procedures to terminate this Agreement for default or (2) purchase the required insurance with Authority or Zone funds and deduct the cost of the premiums from amounts due to Developer under this Agreement. The Authority shall never waive or be estopped to assert its right to terminate this Agreement because of its acts or omissions regarding its review of insurance documents. 7.2 . DEVELOPER SHALL DEFEND, INDEMNIFY, AND HOLD THE AUTHORITY, THE CITY AND THE ZONE, THEIR AGENTS, EMPLOYEES, OFFICERS, AND LEGAL REPRESENTATIVES (COLLECTIVELY, THE LIABILITIES, FINES, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COSTS AND INTEREST) FOR INJURY, DEATH, DAMAGE, OR LOSS TO PERSONS OR PROPERTY SUSTAINED IN CONNECTION WITH OR INCIDENTAL TO PERFORMANCE UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE CAUSED BY: (A) ACTUAL OR ALLEGED SOLE AND/OR CONCURRENT NEGLIGENCE OR INTENTIONAL ACTS; (B) ALLEGED CONCURRENT NEGLIGENCE AND/OR GROSS NEGLIGENCE, WHETHER DEVELOPER IS IMMUNE FROM LIABILITY OR NOT; AND/OR (C) THE INDEMNIFIED PER ALLEGED STRICT PRODUCTS LIABILITY OR STRICT STATUTORY LIABILITY, WHETHER DEVELOPER IS IMMUNE FROM LIABILITY OR NOT. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO THAT THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION IS AN INDEMNITY BY THE DEVELOPER TO INDEMNIFY AND PROTECT THE INDEMNIFIED PERSONS FROM INCLUDING GROSS NEGLIGENCE, WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE RESULTING INJURY, DEATH OR DAMAGE. FURTHERMORE, THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT AND LIABILITY WHERE THE INJURY, DEATH OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF THE INDEMNIFIED PERSONS UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. THE INDEMNITY PROVIDED FOR IN THIS SECTION 7.2 SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT. 14 011782.0153271 EMF_US 84032577v3 If an Indemnified Person or Developer receives notice of any claim or circumstance which could give rise to an indemnified loss, the receiving party shall give written notice to the other party within 30 days. The notice must include a description of the indemnification event in reasonable detail, the basis on which indemnification may be due, and the anticipated amount of the indemnified loss. This notice shall not estop or prevent an Indemnified Person from later asserting a different basis for indemnification or a different amount of indemnified loss than that indicated in the initial notice. If an Indemnified Person does not provide this notice within the 30-day period, it does not waive any right to indemnification except to the extent that Developer is prejudiced, suffers loss, or incurs expense because of the delay. For those matters for which the Developer has the obligation to defend an Indemnified Person pursuant to this Section 7.2, Developer shall assume the defense of the claim at its own expense with counsel chosen by it that is on the approved list established by the Texas Municipal League or that is otherwise approved by the City. Within ten (10) days after receiving written notice of the indemnification request, Developer shall advise the Indemnified Person as to the chosen counsel. If Developer does not properly notify the Indemnified Persons as required above, the Indemnified Person shall assume and control the defense, and all defense expenses actually incurred by it shall constitute an indemnified loss, which must be paid by the Developer within thirty (30) days of receipt of an invoice from an Indemnified Person. Such indemnified loss shall bear interest at the rate, but not the time, established in Section 6.1 (F) from the due date noted in the invoice until the date of payment. Should the Developer fail to timely pay such amount, the Authority may, in its sole discretion, withhold the amount due, including accrued interest, from future Contract Progress Payments. If Developer defends a claim against any Indemnified Person, the Indemnified Person may retain separate counsel at the sole cost and expense of such Indemnified Person to participate in (but not control) the defense and to participate in (but not control) any settlement negotiations. Developer may not settle the claim without the consent or agreement of the Indemnified Person, unless such settlement is at no cost to the Indemnified Person and no judgment is entered against any Indemnified Person. DEVELOPER RELEASES EACH INDEMNIFIED PERSON FROM ALL LIABILITY FOR INJURY, DEATH, DAMAGE, OR LOSS TO PERSONS OR PROPERTY SUSTAINED IN CONNECTION WITH OR INCIDENTAL TO PERFORMANCE UNDER THIS AGREEMENT, EVEN IF THE INJURY, DEATH, PRODUCTS LIABILITY OR STRICT STATUTORY LIABILITY; PROVIDED, HOWEVER, THIS RELEASE SHALL HAVE NO APPLICATION TO AN AGREEMENT. FROM AND AFTER THE DATE OF THIS AGREEMENT, DEVELOPER SHALL REQUIRE ALL CONTRACTORS ENGAGED BY IT TO CONSTRUCT PUBLIC IMPROVEMENTS (AND THEIR SUBCONTRACTORS) TO RELEASE AND INDEMNIFY THE INDEMNIFIED PERSONS TO THE SAME EXTENT AND IN THE 15 011782.0153271 EMF_US 84032577v3 SAME FORM AS ITS RELEASE OF AND INDEMNITY TO THE INDEMNIFIED PERSONS HEREUNDER. THE DEVELOPER SHALL REQUIRE ALL GENERAL CONTRACTORS TO POST PAYMENT AND PERFORMANCE BONDS IN THE AMOUNT OF THE PROJECT COST AND ONE YEAR MAINTENANCE BONDS AS DEEMED APPROPRIATE BY THE AUTHORITY. ARTICLE 8 DEFAULT 8.1 Default. (A) If the Authority or the Zone does not perform its obligations hereunder in compliance with this Agreement in all material respects, in addition to the other rights given the Developer under this Agreement, the Developer may enforce specific performance of this Agreement for any such default if such default is not cured or is not commenced and diligently pursued within thirty (30) days after receipt by the Authority and the Zone of a written notice detailing the event of default. Failure of a project to generate sufficient tax increment increase to repay Developer Advances is not a default on the part of the Authority or the Zone. (B) In the event the Developer completes the Public Improvements and the Project but does not otherwise perform its obligations hereunder as provided in Article 4 in compliance with this Agreement, in addition to the other rights and remedies the Authority and the Zone may have under this Agreement or in law or equity, the Authority and/or the Zone may enforce specific performance or seek actual damages incurred for any such default if such default is not cured within thirty (30) days after receipt by Developer of a written notice of default or such cure is not commenced within ten (10) days after receipt by Developer of a written notice of default and thereafter diligently prosecuted to completion as determined in the discretion of the Authority. ARTICLE 9 GENERAL 9.1 . The Developer agrees to keep such operating records relating to the Public Improvements as may be required by the Authority, or by state and federal law or regulation for a period not to exceed four (4) years after completion unless otherwise required by law. The Developer shall allow the Authority and the Zone access to documents and records in reement. 9.2 . No personnel supplied or used by the Developer in the performance of this Agreement shall be deemed employees, agents or contractors of the Authority, the Zone or the City for any purpose whatsoever. The Developer shall be solely responsible for the compensation of all such personnel, for withholding of 16 011782.0153271 EMF_US 84032577v3 benefits. Under no circumstance shall the Authority, the Zone, or the City be deemed responsible for compensation of the above. 9.3 . To the extent not limited by State law, no director, officer, employee or agent of the Zone or the Authority, and no officer, employee or agent of the City, shall be personally responsible for any liability arising under or growing out of the Agreement. 9.4 . Any notice sent under this Agreement (except as otherwise expressly required) shall be written and mailed via certified mail, return receipt requested, or sent by electronic or facsimile transmission confirmed by mailing written confirmation via certified mail, return receipt requested at substantially the same time as such electronic or facsimile transmission, or personally delivered to an officer of the receiving party at the following addresses: ZONE Reinvestment Zone Number One, City of La Porte, c/o City of La Porte 604 West Fairmont Parkway La Porte, Texas 77571 Attention: Corby Alexander Fax Number: 281-842-1259 AUTHORITY La Porte Redevelopment Authority c/o City of La Porte 604 West Fairmont Parkway La Porte, Texas 77571 Attention: Corby Alexander Fax Number: 281-842-1259 DEVELOPER HMH La Porte Land LLC 1038 Texas Trail Grapevine, Texas 76051 Attention: B. Nelson Mitchell, Jr. Fax: 817-849-5105 CITY City Manager City of La Porte 604 West Fairmont Parkway La Porte, Texas 77571 Fax Number: 281-842-1259 17 011782.0153271 EMF_US 84032577v3 with a copy to: City Attorney City of La Porte 604 West Fairmont Parkway La Porte, Texas 77571 Phone Number: 281-471-1886 Each party may change its address by written notice in accordance with this Section. Any communication addressed and mailed in accordance with this Section shall be deemed to be given when so mailed, any notice so sent by electronic or facsimile transmission shall be deemed to be given when receipt of such transmission is acknowledged, and any communication so delivered in person shall be deemed to be given when receipted for by, or actually received by the Zone, the Authority or the Developer, as the case may be. 9.5 . Any provision of this Agreement may be amended or waived if such amendment or waiver is in writing and is signed by the Zone, the Authority and the Developer. No course of dealing on the part of the Developer, nor any failure or delay by the Developer with respect to exercising any right, power or privilege of the Developer under this Agreement shall operate as a waiver thereof, except as otherwise provided in this Section. 9.6 . All covenants and agreements contained by or on behalf of the Authority and the Zone in this Agreement shall bind their successors and permitted assigns and shall inure to the benefit of the Developer and its successors and permitted assigns. The Authority and the Zone may assign their rights and obligations under this Agreement or any interest herein with the prior written consent of the Developer. The Developer may sell or otherwise transfer the Project but only with the prior written consent of the Authority and the Zone; provided, however, that Developer shall have the right to assign or pledge all or a portion of assist the Developer in the financing of its acquisition of the Project Site performance of its obligations hereunder, but only if the Developer provides written notice of such assignment to all Parties hereunder and executes and provides to the Authority a release of its right to receive such amounts in a form acceptable to the Authority and any other documentation necessary, in the opinion of the Authority, to accomplish such assignment. 9.7 . The exhibits attached to this Agreement are incorporated herein and shall be considered a part of this Agreement for the purposes stated herein, except that in the event of any conflict between any of the provisions of such exhibits and the provisions of this Agreement, the provisions of this Agreement shall prevail. All titles or headings are only for the convenience of the parties and shall not be construed to have any effect or meaning as to the agreement between the parties hereto. Any reference herein to a Section or Subsection shall be considered a reference to such Section or Subsection of this Agreement unless otherwise stated. Any reference herein to an exhibit shall be considered a reference to the applicable exhibit attached hereto unless otherwise stated. 9.8 . This Agreement is a contract made under and shall be construed in accordance with and governed by the laws of the United States of America and the State of Texas. 18 011782.0153271 EMF_US 84032577v3 9.9 . All parties hereby irrevocably agree that any legal proceeding arising out of or in connection with this Agreement shall only be brought in the District Courts of Harris County, Texas or in the United States District Court for the Southern District of Texas, in Houston, Texas. 9.10 . All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect. 9.11 . This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit the Parties hereto only. 9.12 . Each party has the full power and authority to enter into and perform this Agreement, and the person signing this Agreement on behalf of each party has been properly authorized and empowered to enter into this Agreement. The persons executing this Agreement hereby represent that they have authorization to sign on behalf of their respective corporations, or limited partnerships. 9.13 . Nothing herein contained shall be construed or held to make the Parties hereto partners in the conduct of any business. 9.14 . This written agreement represents the final agreement between the parties, unless later amended in writing and signed by the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. 9.15 . In the event of any ambiguity in any of the terms of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same. 9.16 -. Failure of either party hereto to insist on the strict performance of any of the agreements contained herein or to exercise any rights or remedies accruing hereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder or to exercise any right or remedy occurring as a result of any future default or failure of performance. 9.17 . It is understood and agreed that this Agreement may be executed in a number of identical counterparts each of which shall be deemed an original for all purposes. 9.18 . This Agreement shall be in force and effect from the date of execution hereof for a term expiring on the earlier of the date: (i) the Developer Advances have been repaid in full, and (ii) the Zone terminates. It is expressly understood and agreed that Section 7.2 shall not expire but shall remain in full force and effect regardless of the termination of this Agreement. If the Authority is dissolved prior to the date currently (as of the date of this Agreement) set for the termination of the Zone, the Tri-Party Agreement requires that the City shall make satisfactory arrangements to provide for the payment of the obligations to the 19 011782.0153271 EMF_US 84032577v3 Developer of the Authority hereunder. Should the Developer fail to receive all amounts due hereunder prior to the date currently (as of the date of this Agreement) set for the termination of the Zone, none of the City, the Authority and the Zone shall have any obligation to make satisfactory arrangements to provide for the payment of the obligations to the Developer of the Authority hereunder. 9.19 . Whenever this Agreement requires or permits approval or consent to be hereafter given by any of the parties, the parties agree that such approval or consent shall not be unreasonably withheld or delayed. 9.20 . The Parties agree to take such actions, including the execution and delivery of such documents, instruments, petitions and certifications as may be necessary or appropriate, from time to time, to carry out the terms, provisions and intent of this Agreement and to aid and assist each other in carrying out said terms, provisions and intent. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the ____ day of __________, 2021. \[The remainder of this page is intentionally left blank.\] 20 011782.0153271 EMF_US 84032577v3 LA PORTE REDEVELOPMENT AUTHORITY By: Name: Title: _____________________________________ ATTEST: By: Name: Title: Secretary, Board of Directors THE STATE OF TEXAS § § COUNTY OF HARRIS § BEFORE ME, the undersigned authority, on this day personally appeared ____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____day of __________________, 2021. Notary Public in and for The State of Texas (SEAL) APPROVED BY: _________________________________ City Manager, City of La Porte, Texas S-1 011782.0153271 EMF_US 84032577v3 REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS By: Name: Title: ATTEST: By: Name: Title: Secretary, Board of Directors THE STATE OF TEXAS § § COUNTY OF HARRIS § BEFORE ME, the undersigned authority, on this day personally appeared ____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____day of __________________, 2021. Notary Public in and for The State of Texas (SEAL) S-2 011782.0153271 EMF_US 84032577v3 HMH LA PORTE LAND LLC By Name: Title: THE STATE OF _________ § § COUNTY OF ___________ § BEFORE ME, the undersigned authority, on this day personally appeared ____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____day of __________________, 2021. Notary Public in and for The State of (SEAL) S-3 011782.0153271 EMF_US 84032577v3 1 - A EXHIBIT A PROJECT SITE 011782.0153271 EMF_US 84032577v3 EXHIBIT B PROJECT COSTS \[See attached\] B-1 011782.0153271 EMF_US 84032577v3 2 - B 011782.0153271 EMF_US 84032577v3 3 - B 011782.0153271 EMF_US 84032577v3 4 - B 011782.0153271 EMF_US 84032577v3 EXHIBIT C CERTIFICATE OF ADVANCE This Certificate is issued under Development AgreementAuthority Reinvestment Zone Number One, City of La Porte, Texas, and HMH La Porte Land LLC (the Developer____________, 2021. Capitalized terms used in this Certificate shall have the meaning provided for in the Development Agreement. This Certificate evidences a Developer Advance under the Development Agreement in the amount of $____________ for the \[describe the project category and nature of work completed\]. Interest on the Developer Advance evidenced by this Certificate shall accrue at the rate and for the period described in 6.1(B) of the Development Agreement and shall be payable in accordance with the Development Agreement. expenditures and completed the work described in this Certificate. Copies of the relevant invoices and other appropriate documentation are attached to this Certificate. the expenditures and work described in this Certificate and its approval of the matters set forth in this Certificate and recognizes its obligation to repay such Developer Advance together with interest pursuant to the Development Agreement. C-1 011782.0153271 EMF_US 84032577v3 AGREED TO this ____________ day of ____________, 20__. LA PORTE REDEVELOPMENT AUTHORITY By: Name: Title: Chair, Board of Directors ATTEST: By: Name: Title: Secretary, Board of Directors THE STATE OF TEXAS § § COUNTY OF HARRIS § BEFORE ME, the undersigned authority, on this day personally appeared _____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of ____________, 20__. Notary Public in and for The State of Texas (SEAL) C-2 011782.0153271 EMF_US 84032577v3 REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE By: Name: Title: Chair, Board of Directors ATTEST: By: Name: Title: Secretary, Board of Directors THE STATE OF TEXAS § § COUNTY OF HARRIS § BEFORE ME, the undersigned authority, on this day personally appeared _____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of ____________, 20__. Notary Public in and for The State of Texas (SEAL) C-3 011782.0153271 EMF_US 84032577v3 HMH LA PORTE LAND LLC By: Name: Title: THE STATE OF TEXAS § § COUNTY OF HARRIS § BEFORE ME, the undersigned authority, on this day personally appeared _____________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of ____________, 20__. Notary Public in and for The State of Texas (SEAL) C-4 011782.0153271 EMF_US 84032577v3