CITY OF TUCSON - Amazon S3
MOHAVE COUNTY
NOTICE OF REQUEST FOR PROPOSALS
RFP NO. 06-PS-14
Finance-Design-Construction-Property Maintenance Services
For New Mohave County Detention Facility
The County of Mohave invites those short-listed teams under Request for Qualifications No. 06-PS-14, Finance-Design-Construction-Property Management Services for New Mohave County Correctional Facility, to submit sealed Technical and Financial Proposals relating to this Project. A Selection Committee of five (5) will evaluate the proposals in accordance with a scoring method. The Offeror determined to have the most advantageous proposal will then be invited to enter into a Guaranteed Maximum Price (GMP) contract. Each Offeror must submit separately a preliminary technical proposal, final technical proposal, and a financial proposal. The Offeror’s entire proposal shall be responsive to the requirements in the Request for Proposals.
Preliminary Technical Proposals are due on the date and time indicated on the cover of the RFP. Preliminary Technical Proposals must be submitted in a sealed envelope that is clearly labeled “Preliminary Technical Proposal,” and must include the RFP number, project description, date and time of proposal opening, and Offeror’s name and address.
Final Technical Proposals are due on the date and time indicated on the cover of the RFP. Final Technical Proposals must be submitted in a sealed envelope separate from the Final Financial Proposal that is clearly labeled “Final Technical Proposal,” and must include the RFP number, project description, date and time of proposal opening, and Offeror’s name and address.
Financial Proposals are due on the date and time indicated on the cover of the RFP. Financial Proposals must be submitted in a sealed envelope, separate from the Final Technical Proposal that is clearly labeled “Financial Proposal,” and must include RFP number, service description, date and time of proposal opening, and Offeror’s name and address.
Respondents are invited to review the information and to submit their Proposal in accordance with the criteria established within this RFP. Written questions regarding this RFP must be received by the Department of Procurement no later than DATE, 2007. Questions may then be responded to by written amendment to this document. Oral statements or instructions shall not constitute an amendment to the RFP.
All submittals must be received by the due date and at the submittal location specified herein. The County of Mohave reserves the right to reject any or all submittals, or to withhold the award for any reason it may determine, and to waive or not to waive any informalities in any submittal. All information regarding the content of the specific submittals will remain confidential until a contract is finalized or all proposals are rejected.
All submittals must be received by the due date and at the submittal location specified herein. The County reserves the right to reject any or all submittals, or to withhold the award for any reason it may determine, and to waive or not to waive any informalities in any submittal. All information regarding the content of the specific submittals will remain confidential until a contract is finalized or all proposals are rejected.
PRELIMINARY TECHNICAL SUBMITTAL DUE DATE: DATE, 2007 AT 2:00 P.M. LOCAL AZ TIME
PROPOSALS DUE DATE: DATE, 2007 AT 2:00 P.M. LOCAL AZ TIME
SUBMITTAL LOCATION: Department of Procurement
700 W. Beale Street, 1st Floor East
Kingman, AZ 86401
MANDATORY PRE-PROPOSAL CONFERENCE DATE: DATE, 2007
TIME: XX:XX A.M./P.M. LOCAL AZ TIME
LOCATION: Department of Procurement
700 W. Beale Street, 1st Floor East
Kingman, AZ 86401
QUESTIONS SHALL BE DIRECTED TO: Travis J. Lingenfelter, C.P.M., A.P.P.
Procurement Manager
Department of Procurement
700 W. Beale Street, Kingman, AZ 86401
travis.lingenfelter@co.mohave.az.us
SCOPE OF SERVICES
Introduction
The County of Mohave, Arizona, is considering the unique opportunity for a qualified private sector Development Team to develop and maintain a key component in the modernization of Mohave County facilities. This process will consist of the development, finance, design, construction and property maintenance of a fully functional estimated 266,056 SF modern correctional facility on an 838,720 SF county-owned site located directly south of the current County of Mohave Administration Building. The facility will require appropriately sized and dedicated parking facilities. Development of the facility will require full site improvements that are compatible with the existing County facilities and do not preclude future development on the same site.
On August 10, 2006, the Department of Procurement advertised competitive Request for Qualifications No. 06-PS-14, for the purpose of short-listing three (3) top-ranked Development Teams for the proposed project. Statements of Qualifications were received on September 25, 2006, and subsequently evaluated and ranked by a Selection Committee of five (5) individuals. The top three (3) development teams were then short-listed for participation in a competitive RFP process.
As part of the RFP process, the County is requesting much more specific documentation in three (3) areas of the project development process:
• PROJECT APPROACH
• DEVELOPMENT TEAM
• FINANCIAL PROPOSAL
DESIGN CRITERIA & REQUIREMENTS
The design of this project will be guided by the minimum design requirements provided herein under Appendix C – Performance Specification, and all in accordance with the Jail Master Plan Final Report, attached herein as APPENDIX XX – Jail Master Plan Final Report. Within those guidelines each Development Team shall submit a proposal which produces the best overall Project for the intended purpose. Proposals shall include both drawings and outline specifications. The entire design shall be in accordance with all applicable Federal, State and local Codes and standards and all other attachments included as an Appendix of this RFP Package.
LAND LEASE TRANSACTION
The County will lease the land required for the proposed project to the successful Development Team and that land will in turn be sub-leased back to the County as a part of a Lease-to-Own Agreement with the successful Development Team. Arizona Revised Statutes require the County to lease the subject land at public auction to the highest responsive and responsible bidder, subject to the terms and conditions the Board of Supervisors may prescribe (A.R.S. 11-256.D). To be considered a responsive and responsible bidder, the bidder must be one of the three (3) successful offerors selected by the Evaluation Committee under Request for Qualifications No. 06-PS-14. For the purposes of this lease, the Board of Supervisors has prescribed terms and conditions which include the design, construction, furnishing, financing and property maintenance of a new county jail which will be leased to the County for not more than fifteen (15) years under a Lease-to-Own Agreement. Therefore, the total price submitted by each responsive and responsible bidder will be deemed to the value of the real property and improvements which will ultimately be owned by the County. The “value” to the County will be determined by an Evaluation Committee, appointed pursuant to A.R.S. 34-603.C.2., who will evaluate based upon the published selection criteria listed on Page XX of XX of this Request for Proposals.
The proposed new facility will be located on property presently owned by the County, as indicated on Appendix XX – Title. The exact locations of the buildings and associated parking lots within the property have not yet been determined. The suggested location(s) and facility type(s) will be a portion of the response to this Request for Proposals.
This RFP is issued as the second step of a two-step process. The first step of which resulted in the selection of a short list of three (3) top-rated Development Teams. The second step is the issuance of this RFP to the short-listed teams, which details the required and desired development of the new facility.
UTILITIES COORDINATION/RELOCATION
The Development Team shall be assigned overall responsibility for coordination with affected utilities. The Development Team shall assign an individual as the utilities coordinator. This individual shall have previous experience coordinating with utility companies. The Development Team's utilities coordinator shall hold meetings and communicate with the utility companies, their own staff and others, as often as necessary, in order to ensure that utility conflicts are resolved and do not delay the construction period.
REGISTRATION AND LICENSURE
The Development Team for the design-build services is not required to be registered or licensed to perform design services or construction pursuant to A.R.S., Title 32, Chapter 1 and Chapter 10, if the person or firm actually performing the design services or construction on behalf of the Development Team is appropriately registered or licensed in the State of Arizona.
CONSTRUCTION SERVICES
By submitting a response to this RFP, the Offeror acknowledges and agrees that any resultant contract shall be subject to the Mohave County Construction Services Agreement. A copy of the Construction Services Agreement has been included as Appendix XX -- Mohave County Construction Services Agreement.
VOLUNTARY PARTNERING
The County intends to encourage the foundation of a cohesive partnership with the selected Development Team and its principal subcontractors and suppliers. This partnership will be structured to draw upon the strengths of each organization to identify and achieve reciprocal goals. The objectives are effective and efficient contract performance and completion within budget, on schedule, and in accordance with plans and specifications.
Therefore, a partnering workshop will be conducted immediately after contract award and prior to the pre-construction conference. The location, duration, suggested attendees, and agenda will be developed mutually by both the selected Development Team and the County's Project Management team. Persons expected to be in attendance will be the County's Designated Project Manager and other key County project personnel; the Development Team’s on-site Project Manager, the project Design Engineer, and key project supervision personnel of both the prime and principal subcontractors. Other key project personnel shall be invited to attend as necessary. The establishment of a partnership charter will in no way change the legal relationship of the parties to the contract nor relieve either party from any of the terms and conditions of the contract.
INSTRUCTIONS TO OFFERORS
1. PROPOSAL FORMAT: Original and 8 copies (9 total) of each proposal should be submitted to the Department of Procurement, on any required forms and in the format specified in the solicitation. The original copy of the proposal should be clearly labeled "Original" and shall be unbound and single-sided. The material should be in sequence and related to the solicitation. The sections of the proposal should be paginated, tabbed and clearly identifiable. Failure to include any requested information may have a negative impact on the evaluation and/or may result in the rejection of the proposal.
2. WHERE TO SEND PROPOSALS: In order to be considered, the proposal must be received at the Mohave County Department of Procurement 700 W. Beale Street, 1st Floor East, Kingman, AZ 86401 (mailing address: P.O. Box 7000, Kingman, AZ 86402-7000), by no later than the specified opening date and time. The Technical proposal and Financial Proposal shall be presented in two separate and sealed envelopes. The words "SEALED PROPOSAL" with FIRM NAME, FIRM ADDRESS, SERVICE DESCRIPTION, SOLICITATION NUMBER, DATE, and TIME of PROPOSAL OPENING shall be written on each envelope.
3. INQUIRIES: Any question related to this solicitation shall be directed to the responsible Procurement Officer whose name appears on the front side of this document. Interested parties shall not contact or ask questions of the department for whom the requirement is being procured. Questions should be submitted in writing when time permits. The Procurement Officer may require any and all questions to be submitted in writing at their discretion. Any correspondence related to a solicitation should refer to the appropriate Solicitation number, page and paragraph number. However, do not place the number on the outside of an envelope containing questions since such an envelope may be identified as a sealed submittal and may not be opened until after the official submittal due time and date. Oral interpretations or clarifications will be without legal effect. Only questions answered by formal written solicitation amendment will be binding. (NOTE: It is the responsibility of all interested parties to examine the entire RFP package and seek clarification of any requirement(s) that may not be clear and to check all responses for accuracy before submitting a response. Negligence in preparing a proposal confers no right of withdrawal after due time and date).
4. PROTEST PROCEDURE: Protests shall be in writing and shall be filed with the Procurement Manager. A protest of a Request for Qualification and/or Request for Proposal shall be received at the Department of Procurement before the solicitation opening date. A protest of a proposed award or of an award shall be filed within ten days after the protestor knows or should have known the basis of the protest. A protest shall include:
A. The name, address, and telephone number of the protestor;
B. The signature of the protestor or its representative;
C. Identification of the solicitation number;
D. A detailed statement of the legal and factual grounds of protest including copies of relevant documents; and,
E. The form of relief requested.
5. OFFER AND ACCEPTANCE PERIOD: In order to allow for an adequate evaluation, the County requires an offer in response to this solicitation to be valid and irrevocable for one hundred and eighty (180) days after the opening time and date.
6. RESERVED RIGHTS OF THE COUNTY: Notwithstanding any other provision of the solicitation, the County reserves the right to:
(1) Waive any immaterial defect or informality; or
(2) Reject any or all offers, or portions thereof; or
(3) Reissue the solicitation.
7. WITHDRAWAL OF PROPOSAL: At any time prior to a specified solicitation due time and date an offeror (or designated representative) may withdraw the proposal by submittal of a written request from the firm's principal stating the reason for withdrawal. Facsimile and/or telephone withdrawals shall not be considered.
8. LATE PROPOSALS: Please be advised that Kingman is considered a “rural” area by many carriers and does not guarantee priority delivery. Late submittals shall be rejected and returned to the bidder regardless of reason for being late.
9. AMENDMENT OF SOLICITATION: The Offeror shall acknowledge receipt of a solicitation amendment by signing and returning the document by the specified due time and date.
10. CONFIDENTIAL INFORMATION: If a person believes that any portion of a submittal, offer, specification, protest, or correspondence contains information that should be withheld, then the Procurement Manager should be so advised in writing. The County shall review all requests for confidentiality and provide a written determination. If the confidential request is denied, such information shall be disclosed as public information, unless the person utilizes the "Protest" provision.
11. SUBCONTRACTORS: Submittals must include, in writing, any subcontractor to be utilized in performance of services herein. For each subcontractor, detail on respective qualifications must be included.
12. UPON NOTICE OF INTENT TO AWARD: The apparent successful offeror shall sign and file with the County, within ten (10) days after Notice of Intent to Award, all documents necessary to the successful execution of the contract, including but not limited to, bonds, the construction agreement, and certificates of insurance.
13. VENDOR APPLICATION: Prior to the award of a contract, the successful offeror shall have a completed vendor application on file with the Department of Procurement.
14. EVALUATION PROCESS: All submittals shall be evaluated in accordance with A.R.S., Title 34, Chapter 6 and the evaluation criteria stated herein. The evaluation process and subsequent contract negotiations shall include:
(i) The County shall use the selection committee appointed by the Procurement Agent for the Request for Qualifications process.
(ii) The County shall issue a competitive Request for Proposals to the persons or firms on the short list to include a separate Technical Proposal and a Financial Proposal.
(iii) The selection committee shall conduct discussions with all short-listed development teams. Discussions shall be for the purpose of clarification to assure full understanding of, and responsiveness to, the solicitation requirements. Offerors shall be accorded fair treatment with respect to any opportunity for discussion and for clarification by the owner. In conducting discussions, information derived from proposals submitted by competing Offerors shall not be disclosed to other competing Offerors.
(iv) Before opening any Financial Proposal, the selection committee shall evaluate and score the Technical Proposals.
(v) After completion of the evaluation and scoring of all Technical Proposals, the selection committee shall open the Financial Proposals, evaluate the Financial Proposals, and complete the scoring of the entire proposals using the scoring method in the request for proposals. No other factors or criteria may be used in the evaluation and scoring.
(vi) The County shall negotiate with the responsive and responsible Offeror whose proposal receives the highest score under the method of scoring in the Request for Proposals. No other factors or criteria may be used in the evaluation.
(vii)The contract file shall contain the basis on which the award is made.
15. EXCEPTIONS TO TERMS AND CONDITIONS: Offeror recognizes that the terms and conditions in this Request for Proposals shall become the terms and conditions of the contract. Offeror shall clearly identify any proposed deviations from the terms and conditions in the solicitation. Each exception must be clearly defined and referenced to the proper paragraph. The exception shall include the Offeror's proposed substitute language and opinion as to why the suggested substitution will provide equivalent or better service and performance. Exceptions will be addressed in the negotiation process and will not be accepted unless approved by the County and included into the contract documents.
16. EXAMINATION OF CONTRACT DOCUMENTS AND SITE: It is the responsibility of each Team before submitting a Financial Proposal to; (a) examine the RFP Documents thoroughly; (b) visit the site to become familiar with local site conditions that may affect cost, progress, performance or furnishing of the Work; (c) consider Federal, State, and local laws and regulations that may affect cost, progress, performance or furnishing of the Work; (d) study and carefully correlate Team’s observations with the Bidding Documents, and (e) notify the County in writing of all conflicts, errors or discrepancies noted in the Bidding Documents.
The failure or omission of a Team to receive or examine any form, instrument, amendment, or other document or to visit the site and acquaint themselves with conditions there existing, shall in no way relieve such Team from obligations with respect to their Financial Proposal or to the Contract. The submission of a Financial Proposal shall be taken as prima facie evidence of compliance with these instructions.
Teams wishing to conduct additional examinations, including site investigations and explorations, shall request approval from the County prior to commencing any on-site investigation or exploration. Approval shall be granted at the County’s sole discretion. If approved, Teams shall observe all noise, dust and vegetation control restrictions, fill all holes and excavations and clean up and restore the site to its former condition upon completion.
The submission of a Financial Proposal shall constitute an incontrovertible representation by Team that they have complied with every requirement of these Instructions to Bidders and that without exception, the Financial Proposal is premised upon performing and furnishing the Work required by the RFP Package and that the RFP Package contents are sufficient in scope and detail to indicate and convey understanding of all terms and conditions for performance and furnishing of the Work.
17. CONTRACT BOND SECURITY: Prior to the execution of the Contract, the successful Bidder will be required to furnish two (2) Bonds, one being the full amount (100%) of the contract price, to be designated the Statutory Performance Bond, conditioned that the Development Team shall fully perform the Contract; and one being in the amount of one hundred percent (100%) of the Contract price, to be designated the Statutory Payment Bond, conditioned that the Development Team shall pay for all labor and materials used or contracted for in the performance of the Contract. Such Bonds shall be secured by a surety company authorized to do business in the State of Arizona and acceptable to the County. Surety company agents furnishing Performance or Payment Bonds must file with the Procurement Department a document signed by an authorized officer of the surety company certifying that in the event the agent’s Power of Attorney is revoked, the company will give the Procurement Department direct notice thereof in writing and that such Power of Attorney will remain in full force and effect until such direct notice is given.
If any surety upon any bond furnished in connection with the Contract becomes unacceptable to the County, or if any such surety fails to furnish reports as to its financial condition from time to time as may be requested by the County, the Development Team shall promptly furnish such additional security as may be required from time to time to protect the interests of the County and of any persons supplying labor or materials in the prosecution of the Work contemplated by this contract.
18. BID SECURITY: Financial Proposals shall be accompanied by a Bid bond issued by a Surety Company authorized to do business in the State of Arizona and acceptable to the County, or by a certified check or cashier’s check on a bank doing business in the County of Mohave, payable to the County of Mohave, in an amount equal to at least ten percent (10%) of the total amount of the bid (including any alternates) as stated in the Financial Proposal, as a guarantee that the Successful Team, if awarded a negotiated Contract, will promptly enter into Contract to perform the Work in the manner and form required by the Contract Documents, and will furnish the required Performance and Payment Bonds. Failure of the Successful Team to execute a contract and file the required bonds within the time specified in the Contract Documents shall be just cause for the cancellation of the award and may be cause for the forfeiture of the Bid Bond or other Bid securities, which shall become the property of the County, not as a penalty, but as liquidation of damages sustained by the County. Award may then be made to the next lowest responsible and responsive Team, or the Work may be re-advertised as the County may decide.
Unsuccessful Teams’ Bid securities will be returned to them after execution of the Contract and delivery to the County of the required Performance and Payment Bonds.
19. DISCUSSIONS: The Selection Committee will conduct individual discussions with all short-listed Teams, as per Instructions to Offerors 14.iii. The Development Team shall present an overview of its plan and approach to the project. Details of its Technical Proposal are to be explained, and Proposer should be prepared to answer the Selection Committee's questions. The discussions will be held at:
MOHAVE COUNTY ADMINISTRATION BUILDING
700 W. BEALE ST., 2ND FLOOR EAST
SENITA CONFERENCE ROOM
(**Individual Discussion times TBA)
20. STIPULATED FEE: Each unsuccessful short-listed Offeror shall be awarded a stipend of two-tenths of one percent of the Final Design and Construction budget. In order to receive this stipend unsuccessful Offeror’s are required to invoice the County for the amount stated above within ninety (90) consecutive calendar days of being notified that they were not successful. By invoicing the County for the stipend, the County may use any ideas and/or information obtained in the proposal in connection with any contract awarded for the project or in connection with a subsequent procurement. An unsuccessful short-listed Offeror may elect to waive the stipulated fee and the County will not use ideas and information contained in the Offerors proposal, except that this does not prevent the County from using any idea or information if the idea or information is also included in a proposal of an Offeror that accepts the stipulated fee. If the County does not award a contract all responsive short listed Offerors shall receive the stipulated fee based on the County’s estimate for the project final design and construction budget.
21. CONTRACT NEGOTIATIONS: Based on the selection criteria contained herein, one Team will be selected to enter into contract negotiations. Should the County not be able to successfully negotiate with the highest ranked Team, negotiations with that Team will cease and the County will commence negotiations with the second highest rated Team.
22. ESTIMATED REMAINING PROJECT SCHEDULE:
STEP TWO – RFP
Mandatory Pre-Submittal Conference Month/Year
Preliminary Technical Proposals Submitted Month/Year
Discussions Month/Year
Final Technical and Price Proposals Submitted Month/Year
Successful Team Selected Month/Year
GMP Negotiations Month/Year
Contract Award Month/Year
Commence Work Date of Award + 7 Calendar Days
Schedule of Payment Items Submitted Date of Award + 14 Calendar Days
Substantial Completion Month/Year
Final Completion Month/Year
PROPOSAL EVALUATION CRITERIA
Final Technical Proposals and Financial Proposals shall be submitted in two (2) separate, sealed parcels containing the Final Technical Proposal in one and the Financial Proposal in the other. Both parcels shall be clearly marked to identify the Project and the Proposer, and to identify the contents as the Final Technical or Financial Proposal. Development Teams will answer the following questions clarifying their project approach, financial plan, and experience.
I. FINANCIAL PROPOSAL (40 POINTS POSSIBLE)
A. FINANCIAL PROPOSAL
1. The Financial Proposal shall contain the proposed price for performing the work specified in the solicitation. Numbers shall be stated both in writing and in figures. The Financial Proposal shall be without interlineations, alterations, or erasures. The prices are to include the furnishing of all materials, equipment, tools, supplies, and all other facilities, and the performance of all labor and services necessary or proper for the completion of this Project. In case of a discrepancy between written Words and figures in the Financial Proposal, the amount stated in written words shall govern.
Delineate your projected cost estimate for this project. Describe how you arrived at the project estimate. Total project cost should be presented in the following format: See Appendix XX – Financial Proposal Format and include this format with your proposal. The Development Team may attach narrative text to offer explanation on the cost items if necessary.
Provide an itemized breakdown of your Team’s Financial Proposal that is broken into the following minimum categories:
• Architecture, engineering and professional services
• Building Permits and fees.
• Site preparation\Building shell
• Mechanical system
• Interior build-out (utilize a tenant improvement allowance per SF)
• Parking
• Site improvements
• Furniture, fixtures and equipment
• Contingency
• Financing costs
• Lessor/Development Team fees
• Total Cost of Correctional Facility
• TOTAL PROJECT COST (“Total Project Cost” would be the “option to purchase” cost on day one of the lease).
**Clearly note any pertinent assumptions or unusual conditions related to the preparation of this cost breakdown. **Note any cost breakdown impacts that may be related to on-going operations options that may be presented.
2. Describe the process you will utilize in securing the necessary capital for the development of this project. What will be the source of your funding?
3. Please provide your Financial Proposal information. See APPENDIX XX
4. The Financial Proposal will be submitted as an annual full service lease cost over a 15-year term.
5. The annual full service lease cost will be the total of three (3) components which are:
• Principle & Interest
• Maintenance Costs
• Major Maintenance
(Major maintenance includes activities not ordinarily covered under normal operation and maintenance. This would include, facility re-painting, re-roofing, re-carpeting, etc).
Note: The Lessor/Development Team acknowledges and represents that no method of financing will be used that is issued in the name of or on behalf of the County of Mohave, Arizona that represents or relies upon the credit of the County, or in any way pledges the full faith and credit of the County. The County has the right to review and in its sole discretion approve any method of financing the Lessor/Development Team intends to use.
The Lessor/Development Team further acknowledges and agrees that the method of financing of the successful Lessor/Development Team will be subject to review and approval of the County’s legal counsel. The County may refuse to proceed with this transaction and terminate any contract without liability of any kind if the County’s legal counsel in its sole discretion determines not to approve the transaction.
For each year of the term, provide the annual lease cost broken down into three parts: Provide financial proposal in accordance with the format laid out in APPENDIX XX:
• Base Rent (principle & interest)
• Annual Maintenance Cost
• Major Maintenance
• Total Annual Lease Cost for the Facility
6. During the term of your Financial Proposal, how does the Lessor/Development Team plan to handle major maintenance items and on what type of schedule, i.e., roofing, painting, carpeting replacement, elevators, HVAC, etc.?
7. Describe the proposed method of compensation for the Lessor/Development Team. Is your Financial Proposal based on a fee method of compensation? How are potential project savings or overruns distributed or accommodated?
8. Describe your administrative/office space improvement allowance. What materials for these spaces have you included in the cost of your proposal? What do you specifically consider to be the scope of these improvements? Please be precise in your description.
II. TECHNICAL PROPOSAL EVALUATION CRITERIA (60 POINTS POSSIBLE)
The Technical Proposal shall be developed using narratives, tables, charts, plots, drawings, and sketches as appropriate. The purpose of the Technical Proposal is to document the Lessor/Development Team’s understanding of the project, its selection of appropriate design criteria, and its approach for completing all design and construction activities. The narrative portion and the materials presented in response to this Request for Proposals shall be submitted in the same order as requested and must contain, at a minimum, the following information.
B. PROJECT APPROACH
1. Describe how you will finalize the project scope and meet or exceed the performance specifications. List any proposed performance specification changes and the specific reasoning for such a change.
2. Provide your proposed site plan, to include the new correctional facility and necessary parking and site improvements to support capability of future facility expansion.
3. Provide your facility floor plates with sample floor layout for modular workstations, conference rooms and walled offices.
4. Provide your proposed building and parking elevations and/or perspective. These drawings must be representative of your Financial Proposal.
5. What are the proposed parking requirements for this project and how will they by provided for considering the current sloped topography of the site?
6. Describe how your proposed facility will be architecturally compatible with the existing surrounding land uses and County buildings.
7. Describe your proposed correctional facility, specifically mentioning both construction method and materials to be employed. Include at a minimum the following:
• Structural system
• Exterior building system
• Mechanical system
• Electrical system
• Interior finishes
• Green Building elements
• Life cycle costing
8. Describe your quality control procedures that will be utilized throughout this project.
9. Provide an estimated schedule for the project. The schedule shall show the sequence and continuity of operations, as well as the month of delivery. The time scale should not be smaller than 1-month increments.
10. How will the Development Team correct design and construction defects?
11. What warranties will be delivered to the County by the Development Team after construction completion?
12. What property maintenance strategies will be employed to promote maintenance efficiencies and what impacts do these strategies have on design, staffing and security concerns?
13. Describe your proposed property maintenance program for the correctional facility in accordance with Appendix XX.
14. Please delineate all property maintenance responsibilities of the County and also of the Development Team during the entire lease term.
15. Describe if and how the proposed correctional facility will implement sustainable and energy-efficient design principles. Clear documentation on the return on investment (ROI) shall be included.
16. Describe how the proposed design reinforces vehicle and pedestrian circulation systems that are safe, secure and convenient for all user groups of the new facility.
17. Describe how the proposed design will effectively screen service access points and equipment, and keep them away from high-traffic areas.
18. Specifically describe all potential problem areas and what specific approach would be taken to resolve these potential problems in order to maintain the stated project schedule.
19. Describe creative and/or innovative methods the design, construction, choice of structural materials and/or other aspects will benefit the public and/or the project. Identify any aspect of the design or construction elements that the team considers to be innovative. Include a description of alternatives that were considered, whether implemented or not.
20. List the assumptions used in development of the structure type, materials and design life considerations for the proposed structure.
21. Describe ease and cost of maintainability for extended structure life.
22. Describe the strategy used for maintaining safety, function, and serviceability of the structure.
23. Outline conceptual solutions for any complex structural problems that are identified.
28. Comment on how the Development Team’s structural selection contributes to the overall project goals of time, quality, and budget.
29. Due to the location and nature of this project, personal interface with the public and tenants through an effective public relations plan may be critical to the project's success. Potential public relations challenges associated with this project include preventing unnecessary disruptions associated with construction; ensuring the safe movement of construction equipment, personnel, and materials to and from the project site, in a manner least disruptive to others; and minimizing noise and dust pollution at adjacent buildings. Describe your Team’s approach to providing the required public relations plan described above. Describe any major problems anticipated in this area and the proposed solutions.
30. Describe the proposed lighting system and discuss how it will provide the required adequate illumination and safety while avoiding external light pollution and detrimental glare, provide ease of maintenance and durability and maintain power and lighting efficiently. Describe if your team has explored the possibility of utilizing the lighting as a design feature.
31. Provide outline specifications describing materials and systems to be utilized in the project.
32. Describe the Proposer's concept of the Project construction management and inspection organization and how it interrelates with the other elements of the Proposer's organization for the project. Provide a brief narrative description of the Proposer's plan for performing construction and inspection for the Project, to include the following:
32.1. A construction organization chart for the project, showing the relationships between functions shown on the chart and the functional relationships with subcontractors. The chart shall indicate how the Proposer intends to divide the project into work segments to enable optimum construction performance.
32.2. Descriptions of those categories of work that the Proposer anticipates will be performed by the Proposer's own direct labor force, and those categories that will be performed by subcontractors.
32.3. The Proposer's plans and procedures to ensure timely deliveries of materials to achieve the stated project schedule.
32.4. Describe the relationship between the construction and inspection functions.
33. Describe the traffic control concepts that will be used during construction.
34. Describe your understanding of what utilities will be in conflict with design features and will need to be relocated and/or extended.
35. Describe what will be done to coordinate and plan for the relocation of each of the affected utilities.
36. Identify what utility relocation designs will be done and by whom.
37. Describe method to ensure prompt payment to utility companies.
38. Describe coordination procedures with utility crews.
39. Describe the safety considerations of this project.
40. Discuss the Development Team’s overall approach to safety.
41. Describe the incorporation of building and design elements that recognize Mohave County’s cultural history and environmental setting.
42. Describe your team’s understanding of the importance of the facility’s downtown setting, and how the proposed design will integrate the facility with the site, the Mohave County campus, enhances the site to be enjoyable to pass, and enhances the site as a positive downtown design element rather than a neutral background. The County is interested in a higher level of design as we would like to submit this building for various excellence awards upon completion.
C. LESSOR/DEVELOPMENT TEAM
1. The Lessor/Development Team organization, membership, key individuals, licensing status, financial and manpower capacities, client references, and all other representations included in the RFQ, are represented as remaining true and accurate throughout this RFP process, unless specifically modified in this section of the proposal. Please do not repeat information previously submitted; simply describe any revisions to the information that may have become necessary due to unforeseen circumstances or causes out of your control. Provide any additional information that may be helpful in evaluating the abilities and references of the Lessor/Development Team.
2. If any additions or revisions are made which materially affect the Team’s organization charts or roles and responsibilities lists, please include corrected copies of the effected documents in this section.
3. Have members of your Development Team been the recipients of any notable design/build project awards or honors within the past five (5) years?
4. Have members of your Lessor/Development Team had any bankruptcies or foreclosures within the last five (5) years?
5. Have members of your Lessor/Development Team been, or are they currently, involved in any litigation within the State of Arizona? If so, please explain the circumstances, resolution and current status.
6. Have members of your Lessor/Development Team been involved in litigation with any public or governmental organizations, or any construction related litigation in the last (10) years? If so, please explain the circumstances, resolution and current status.
III. OFFEROR FINANCIAL CAPACITY
1. Provide information, such as a financial statement and/or a Dunn and Bradstreet Report, which demonstrates and exhibits the fiscal competency and financial stability of your Team.
IV. SCORING METHOD
1. Technical Proposals shall be evaluated prior to the evaluation of Financial Proposals. Financial Proposals shall be evaluated separately from the Technical Proposals.
SPECIAL TERMS AND CONDITIONS
1. INSURANCE PROVISIONS AND BONDING REQUIREMENTS:
A. REPRESENTATIONS AND REQUIREMENTS
Without limiting any obligations or liabilities of Development Team, Development Team shall purchase and maintain, at its own expense, hereinafter stipulated minimum insurance with insurance companies duly licensed by the State of Arizona with an AM Best, Inc. rating of FSC VIII A- or above with policies and forms satisfactory to Mohave County Risk Management. Failure to maintain insurance as specified herein may result in termination of this Agreement at Mohave County’s option.
By requiring insurance herein, Mohave County does not represent that coverage and limits will be adequate to protect Development Team, his consultants or subconsultants. Mohave County Risk Management reserves the right to review any and all of the insurance policies and/or endorsements cited in this Agreement but Mohave County has no obligation to do so. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Development Team from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement.
All coverage and self insured retention or deductible portions of insurance of Development Team, his consultants, and his subconsultants at any level, except Workers’ Compensation insurance and Professional Liability insurance, if applicable, shall name by written endorsement to the fullest extent permitted by law for claims arising out of the performance of the Work included in this Agreement, Mohave County and its agents, representatives, officers, directors, officials and employees as Additional Insured as specified under the respective coverage sections of this Agreement. In addition, all coverage and self insured retention or deductible portions of insurance of Development Team shall name by written endorsement to the fullest extent permitted by law for claims arising out of the performance of the Work included in this Agreement his consultants and his subconsultants at any level as Additional Insured as specified under the respective coverage sections of this Agreement.
All insurance required herein shall be maintained in full force and effect until all Work or services required to be performed under the terms of this Agreement is satisfactorily performed, completed and Final Payment has been made by Mohave County.
Development Team’s, consultant’s, and subconsultant’s insurance shall be primary insurance with respect to performance of the work included in this Agreement and in the protection of Mohave County as an Additional Insured. The policies required by this Agreement shall have attached an “Additional Insured Endorsement” form that includes Mohave County as well as its agents, officials, and employees as insured parties. The form shall stipulate that the insurance afforded by the policies shall be by primary insurance and that any insurance, self-insured retention, deductibles, or risk retention programs maintained or participated in by Mohave County, or its agents, officials or employees shall be excess and not contributory to insurance required herein.
In the event any insurance policies required by this Agreement are written on a “claims made” basis, coverage shall extend, either by keeping coverage in force or purchasing an extended reporting option, for five years past completion and acceptance of the Work or services. Such continuing coverage shall be evidenced by submission of annual Certificates of Insurance citing applicable coverage is in force and containing the provisions as required herein for the five-year period.
Each policy of Development Team, consultants, and subconsultants, including Workers’ Compensation insurance, shall contain a waiver of rights of recovery (subrogation) against Mohave County, its agents, representatives, officials, officers and employees for any claims arising out of the work or services of Development Team, consultant, or subconsultant. Development Team shall arrange to have such subrogation waivers incorporated into each policy via formal written endorsement thereto.
The policies set forth in these requirements may provide coverage that contains deductibles or self-insured retention amounts. Such deductibles or self-insured retention shall not be applicable with respect to the policy limits provided to Mohave County. Development Team shall be solely responsible for any such deductible or self-insured retention amount. Mohave County, at its option, may require Development Team to secure payment of such deductible or self-insured retention by a surety bond or irrevocable and unconditional letter of credit.
For any work under this Agreement subcontracted in any way, Development Team shall execute written agreement with each consultant or Subcontractor containing the indemnification provisions set forth herein and insurance requirements set forth herein protecting Mohave County and Development Team. Development Team shall be responsible for executing the agreement with consultant or subcontractor and providing Mohave County with certificates of insurance verifying the insurance requirements. Subject to Owner’s prior written approval, which approval shall not be unreasonably withheld, Development Team may, at Development Team’s option and at Development Team’s sole risk, allow minor subcontractors to deviate from these insurance requirements, for insurance other than professional liability, due to insurance market availability or affordability issues. Issuance of any such prior Owner written approval is at the sole discretion of Owner and shall in no way relieve Development Team of any of its responsibilities under this Agreement, nor shall it constitute a waiver of any claims or damages otherwise available by law or contract to Owner.
Prior to commencing any work or services under this Agreement, Development Team shall furnish Mohave County Risk Management Division with certificate(s) of insurance, or formal endorsements as required by this Agreement, issued by the insurers of the Development Team, consultants, and subcontractors as evidence that policies are placed with acceptable insurers as specified herein and provide the required coverage, conditions and limits of coverage specified in this Agreement and that such coverage and provisions are in full force and effect. If a certificate of insurance is submitted as verification of coverage, Mohave County will reasonably rely upon the certificate of insurance as evidence of coverage but such acceptance and reliance shall not waive or alter in any way the insurance requirements or obligations of this Agreement. If any of the policies required herein expire during the life of this Agreement, it shall be Development Team’s responsibility to forward renewal certificates containing all insurance provisions required herein within thirty days prior to the renewal date. Additionally, certificates of insurance submitted without referencing the Project, the project number, and the contract number will be subject to rejection and returned or discarded. Certificates of insurance shall specifically include the following provisions:
a. “Mohave County, a body politic and corporate of the State of Arizona, its Board members, officers, employees, agents, and other officials” are Additional Insured as follows:
(i) Commercial General Liability - Under Insurance Services Office, Inc., (“ISO”) current Form CG 20 10 or equivalent.
(ii) Auto Liability - Under current ISO Form CA 20 48 or equivalent.
(iii) Excess Liability - Follow Form to underlying insurance.
b. Development Team’s, consultant’s, and subcontractor’s insurance shall be primary insurance as respects performance of the Work included in this Agreement.
c. All policies, including Workers’ Compensation, waive rights of recovery (subrogation) against Mohave County, its agents, representatives, officers, officials and employees for any claims arising out of work or services performed by Development Team under this Agreement.
d. A 60-day advance notice cancellation provision. If ACORD certificate of insurance form is used, the phrases in the cancellation provision “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives” shall be deleted. Certificate forms other than ACORD form shall have similar restrictive language deleted.
e. Certificates of Insurance and any notice of cancellation or material change shall be addressed as follows:
Mohave County
P.O. Box 7000
Kingman, AZ 86402
Development Team, his consultants, and subcontractors shall not fail to comply with the claim reporting provisions of the insurance policies required herein or cause a breach of any insurance policy warranty, which would affect the coverage, and protection of Mohave County provided by the policy.
B. REQUIRED INSURANCE COVERAGES
The successful Development Team shall maintain “occurrence” form Commercial General Liability insurance with an unimpaired limit of not less than two million dollars ($2,000,000.00) for each occurrence, five million dollars ($5,000,000.00) Products and Completed Operations Aggregate and a five million dollars ($5,000,000.00) General Aggregate Limit. The policy shall cover liability arising from premises, operations, independent Development Teams, products-completed operations, property damage, bodily injury, personal injury and advertising injury. Coverage under the policy will be at least as broad as ISO current policy Form CG 00 010 or equivalent thereof, including but not limited to, separation of insured’s clause; and shall not contain a sunset provision or commutation clause, nor any provision which would serve to limit third party action over claims. Further, the policy shall include coverage for the hazards commonly referred to as X (explosion), C (collapse), U (underground). The products and completed operations coverage shall extend for five years past acceptance, cancellation or termination of the Work. Said policy shall contain a severability of interest provision. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, Mohave County, a body politic and corporate of the State of Arizona, its Board members, officers, employees, agents, and other officials shall be cited as an Additional Insured under ISO current Commercial General Liability Additional Insured Endorsement Form CG 20 10, or equivalent, which shall read “Who is an Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of “your work” for that insured by or for you.” If any Excess insurance is utilized to fulfill the requirements of this paragraph, such Excess insurance shall be “follow form” equal or broader in coverage scope than underlying insurance.
The successful Development Team shall maintain his own occurrence based Professional Liability insurance covering negligent errors and omissions arising out of the work or services performed by Development Team, or anyone employed by Development Team, or anyone for whose negligent acts, mistakes, errors and omissions Development Team is legally liable, with an unimpaired liability insurance limit of one million dollars ($1,000,000.00) each claim and two million dollars ($2,000,000.00) all claims. In the event the Professional Liability insurance policy is written on a “claims made” basis, coverage shall extend for five (5) years past completion and acceptance of the work or services, and Development Team shall be required to submit certificates of insurance evidencing proper coverage is in effect as required above.
The successful Development Team shall ensure and evidence that Architect/Engineer maintains Professional Liability insurance covering errors and omissions arising out of the work or services performed by Architect, or anyone employed by Architect, or anyone for whose acts, mistakes, errors and omissions Architect is legally liable, with a liability insurance limit of one million dollars ($1,000,000.00) each claim and two million dollars ($2,000,000.00) unimpaired liability limit for all claims. Professional Liability coverage specifically for Architects, Engineers and Surveyors shall contain contractual liability insurance covering the contractual obligations of this Contract. In the event the Professional Liability insurance policy is written on a “claims made” basis, coverage shall extend for five years past completion and acceptance of the work or services, and Architect shall be required to submit Certificates of Insurance evidencing proper coverage is in effect as required above. Architect shall require all his subconsultants or subcontractors to maintain the same Professional Liability insurance.
The successful Development Team, his consultants, and Subcontractors shall maintain Business Automobile Liability insurance with a limit of one million dollars ($1,000,000.00) each occurrence on Development Team’s owned, hired and non-owned vehicles assigned to or used in the performance of the Development Team’s work or services under this Agreement. Coverage will be at least as broad as ISO coverage code “1” "any auto” current policy form CA 00 01 or equivalent thereof. To the fullest extent allowed by law, for claims arising out of the performance of this Agreement, Mohave County, a body politic and corporate of the State of Arizona, its Board members, officers, employees, agents, and other officials shall be cited as Additional Insured under ISO Business Auto policy Designated Insured Endorsement form CA 20 48 or equivalent. If any Excess insurance is utilized to fulfill the requirements of this paragraph, such Excess insurance shall be “follow form” equal or broader in coverage scope then underlying insurance.
The successful Development Team, his consultants, and Subcontractors shall maintain Workers’ Compensation insurance to cover obligations imposed by federal and state statutes having jurisdiction of Development Team’s employees engaged in the performance of work or services under this Agreement and shall also maintain Employers Liability Insurance of not less than one million dollars ($1,000,000.00) for each accident, one million dollars ($1,000,000.00) disease for each employee and one million dollars ($1,000,000.00) disease policy limit.
The successful Development Team shall be responsible for purchasing and maintaining Builder’s Risk and Course of Construction insurance to protect the Project from perils of physical loss. The insurance shall provide for all costs of replacement for the entire Project at the time of any loss. The insurance shall include as named insureds Mohave County, a body politic and corporate of the State of Arizona, its Board members, officers, employees, agents, and other officials, the Development Team, the Development Team’s consultants and subcontractors and sub subcontractors and shall insure against loss from the perils of fire and all-risk coverage for physical loss or damage due to theft, lightning, vandalism, collapse, malicious mischief, riot, civil commotion, landslide, smoke, sprinkler leak, water damage, windstorm, hail, transit, flood, earthquake, testing, resulting loss arising from defective design, negligent workmanship or defective material during the Work until Final Payment. Development Team shall increase the coverage limits as necessary to reflect changes in the estimated replacement cost. Policy shall be endorsed such that the insurance shall not be canceled or lapse because of any partial use or occupancy by the County.
The successful Development Team shall maintain either a Commercial Umbrella or Excess Liability at a limit of liability not less than five million dollars ($5,000,000.00) Aggregate. The Development Team agrees to endorse Mohave County as an Additional Insured on the Commercial Umbrella/Excess Liability, unless the Commercial Umbrella/Excess Liability provides coverage on a pure/true follow-form basis, or Mohave County is automatically defined as an Additional Protected Person. The Development Team agrees any Self-Insured-Retention or deductible shall not exceed twenty-five thousand ($25,000.00).
C. CERTIFICATES OF INSURANCE & ENDORSEMENTS
Prior to commencing the Work under this Agreement, the successful Development Team shall furnish Mohave County Contracts Division with certificates of insurance, or formal endorsements as required by this Agreement, issued by Development Team’s, consultant’s, and Subcontractor’s insurer(s), as evidence that policies providing the required coverage, conditions and limits required by this Agreement are in full force and effect. Development Team may submit a written request to Owner to delay the purchase of certain of the policies required herein until a GMP amendment has been executed. Unless otherwise specified in this Agreement, in the event any insurance policy(ies) required by this Agreement is(are) written on a “claims made” basis, coverage shall extend for five years past completion and acceptance of Development Team’s work or services and as evidenced by annual certificates of insurance. If a policy does expire during the life of the Agreement, a renewal certificate must be sent to Owner thirty Days prior to the expiration date. All certificates of insurance required by this Agreement shall be identified by Project name, project number, and contract number. Owner reserves the right to request and receive, within ten working days, certified copies of any or all of the above insurance policies and/or endorsements. Failure to demand such evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Development Team from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement.
D. CANCELLATION AND EXPIRATION NOTICE
Insurance required herein shall not expire, be canceled, or materially changed without sixty (60) days’ prior written notice to Owner.
E. FAILURE OF COMPLIANCE
Should the Development Team fail to provide and maintain in force any and all insurance, or insurance coverage required by this Agreement or by law, or should a dispute arise between the Mohave County and any insurance company of Development Team over policy coverage or limits of liability as required herein, Mohave County will be entitled to recover from Development Team all amounts payable, as a matter of law, to the Mohave County or any other parties, had the required insurance or insurance coverage been in force. Said recovery will include, but is not limited to, interest for the loss of use of such amounts of money, plus all attorney’s fees, costs, and expenses incurred in securing such determination and any other consequential damages arising out of the failure of Development Team or insurance company to comply with the provisions of this Agreement, or any policy required hereby, or any other requirements regarding insurance imposed by law. Nothing herein shall limit any damages for which Development Team is responsible as a matter of law.
F. PROPOSAL GUARANTEE OR BID BOND
Each Financial Proposal shall be accompanied by a Surety Bond, Cashiers’ or certified check or postal money order equal to ten percent (10%) of the Offeror’s total project amount, made payable to the Mohave County Treasurer as a guarantee that, if the Work is awarded to the Development Team, the Development Team intends to enter into proper Contract and provide the proper Performance and Payment Bonds, and Certificates of Insurance and endorsements, and any other documents or information required of the Offeror which is deemed necessary by the Owner for the Owner to enter into proper Contract with the Offeror as Contractor, for the faithful performance of the Work..
Surety bonds shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in the State of Arizona issued by the Director of the Department of Insurance. The surety bond shall not be executed by an individual surety or sureties. In addition, said company or companies shall be rated FSC VIII A- or better as required by the Owner, as currently listed in the most recent Best Key Guide, published by the A.M. Best Company.
Failure on the part of the Offeror to enter into a Contract and provide satisfactory Performance and Payment Bonds, Certificates of Insurance, and other required documents in a timely manner after the date of the Notice of Award letter shall be just cause for the cancellation of the award and the forfeiture of the Proposal Guarantee which shall become the property of the Owner, not as a penalty, but in liquidated damages, except to the extent that the applicable Laws permit a penalty. Bid Bonds submitted by unsuccessful Offerors will be returned after the successful Award of Contract, including the Owner and successful Offeror entering into a binding Contract with the Contractor; or upon rejection of all proposals by the Owner.
G. PERFORMANCE AND PAYMENT BONDS
After Owner and Contractor have executed a written GMP amendment but prior to commencing any construction activities, Contractor shall furnish Owner with an irrevocable security binding Contractor to provide faithful performance of the Agreement in the amount of one hundred percent (100%) of the percentage of the GMP attributable to construction, payable to the Mohave County. Performance security shall be in the form of a performance bond, as required by Arizona law. If Contractor fails to execute the security document as required, Contractor may be found in material default of the Agreement, permitting Owner to terminate this Agreement. In case of default Owner reserves all rights. All performance bonds shall be executed on State of Arizona approved forms, duly executed by Contractor as Principal and having as Surety thereon a Surety company approved by Owner and holding a Certificate of Authority issued by the Arizona Department of Insurance to transact surety business in the State of Arizona. A copy of the Certificate of Authority shall accompany the bonds. The Certificate shall have been issued or updated within two years prior to the execution of this Agreement. The conditions and provisions of the bonds regarding the surety’s obligation shall follow the form required under A.R.S. § 34-222; Subsection G. The cost of the bonds shall be included in the GMP. Individual sureties are unacceptable. All Insurers and Sureties shall have at the time of submission of bonds a rating FSC VIII A- or better as currently listed in the most recent Best Key Guide, published by the A.M. Best Company.
After Owner and Contractor have executed a written GMP amendment but prior to commencing any construction activities, Contractor shall furnish Owner with an irrevocable security for the protection of all persons supplying labor and material to Contractor or any subcontractor for the performance of any work related to the Agreement. Payment security shall be in the amount of one hundred percent (100%) of the portion of the GMP attributable to construction and be payable to Mohave County. Payment security shall be in the form of a payment bond, as required by Arizona law. All payment bonds shall be executed on State of Arizona approved forms, duly executed by Contractor as Principal and having as Surety thereon a Surety company approved by Owner and holding a Certificate of Authority issued by the Arizona Department of Insurance to transact surety business in the State of Arizona. A copy of the Certificate of Authority shall accompany the bonds. The Certificate shall have been issued or updated within two years prior to the execution of this Agreement. The conditions and provisions of the bonds regarding the surety’s obligation shall follow the form required under A.R.S. § 34-222; Subsection F. The cost of the bonds shall be included in the GMP. Individual sureties are unacceptable. All Insurers and Sureties shall have at the time of submission of bonds a rating FSC VIII A- or better as currently listed in the most recent Best Key Guide, published by the A.M. Best Company.
The bonds shall be written or countersigned by an authorized representative of the surety who is either a resident of the state of Arizona or whose principal office is maintained in this state, as by law required, and Contractor shall require the attorney-in-fact who executes the required bond on behalf of the surety to affix thereto a certified and current copy of the Power of Attorney.
Upon the request of any person or entity appearing to be a potential beneficiary of bonds covering payment of obligations arising under the Agreement, Contractor shall promptly furnish a copy of the bonds or shall permit a copy to be made.
2. CONFLICT OF INTEREST: Consultants and/or Development Teams and their sub-consultants who design and/or develop specifications for materials for this project will be precluded from contract award for that item if a solicitation is issued for the item.
3. KEY PERSONNEL: It is essential that the Development Team provide adequate experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this contract. The Development Team must agree to assign specific individuals to the key positions.
A. The successful Development Team agrees that, once assigned to work under this contract, key personnel shall not be removed or replaced without written notice to the County.
B. If key personnel are not available for work under this contract for a continuous period exceeding thirty (30) calendar days, or are expected to devote substantially less effort to the work than initially anticipated, the Development Team shall immediately notify the County, and shall, subject to the concurrence of the County, replace such personnel with personnel of substantially equal ability and qualifications.
STANDARD TERMS AND CONDITIONS
1. COMPENSATION AND METHOD OF PAYMENT: In consideration of the performance of the services described in the Scope of Services, the Development Team shall be compensated in accordance with the negotiated terms of the financial proposal and final contract, and the Development Team shall charge only in accordance with those same rates.
The Development Team will be paid following the submission of itemized invoice(s). Each itemized invoice must bear a written certification by an authorized Owner’s representative confirming the services for which payment is requested. No payment shall be issued prior to receipt of material or service and correct invoice.
2. WARRANTY: The two-year (2) warranty for the project shall be from the date of final acceptance of the project.
3. PRINCIPAL DESIGNER’S RESPONSIBILITY: The Development Team shall be responsible for the professional quality, technical accuracy, and the coordination of all designs, drawings, specifications, and other services furnished by the Development Team, subconsultants or subcontractors under this Contract. The Development Team shall without additional compensation, be responsible for correcting or revising any errors or deficiencies in designs, drawings, specifications, and other services performed by subconsultants or subcontractors.
Neither the County’s review, approval or acceptance of, nor payment for, the services required under this Contract shall be construed to operate as a waiver of any rights under this Contract or of any cause of action arising out of the performance of this Contract, and the Development Team shall be and remain liable to the County in accordance with applicable law for all damages to the County caused by the Development Team’s negligent performance of any of the services furnished under this Contract.
If the Development Team is comprised of more than one legal entity, each such entity shall be jointly and severally liable hereunder.
The Development Team agrees that the design work to be performed pursuant to this agreement shall be under the full authority and responsible charge of a principal of the firm or officer of the corporation, who must be the holder of a current Arizona Certificate of Registration issued by the Board of Technical Registration for the practice of professional design services in the State of Arizona.
Any drawings, plans, specifications, and estimates to be prepared pursuant to this agreement shall be prepared by or under the personal direction of the undersigned qualified holder of an Arizona Certificate of Registration issued by the Arizona Board of Technical Registration.
The Development Team shall be responsible for the completeness and accuracy of all services rendered and correction of all errors of omission or commission on the drawings, specifications, and other documents notwithstanding prior approval by the County.
By signature on the Offer Page, the Development Team affirms that it or one of its subconsultants or subcontractors has the ordinary skill, knowledge, and judgment possessed by members of the design profession, and that it will use reasonable and ordinary care and diligence in performing the work.
4. EXCLUSIVE POSSESSION: All work of authorship, including but not limited to calculations, designs, drawings, specifications, graphics, text, and all copy-writable works resulting from this Contract shall become property of the County. Additionally, all services, information, computer program elements, reports, plans, specifications, and other deliverables which may be created under this Contract are the sole property of the County. Property of the County shall not be used or released by the Development Team or any other person except with prior written permission by the County.
5. DRAWING, STANDARD DETAILS, ETC.: MAGG drafting standards, standard details, specifications, and office procedures are to be used in the preparation of items required under this Contract unless directed otherwise by the County. The County will furnish the Development Team with copies of the necessary standard County documents. All final documents shall be prepared by such methods and of such quality of workmanship as will permit the making of satisfactory reproductions.
6. ADVICE AND CONSULTATION: The Development Team shall be available to the County for advice and consultation on the interpretation of the plans and specifications on questions that may arise during the course of this Contract.
7. PUBLIC HEARINGS: The Development Team shall upon request, attend any public hearing on matters related to the scope of professional services set forth in this Contract.
8. PROJECT LICENSES AND PERMITS: Development Team shall ensure that all licenses and permits, applicable to the work as specified herein, are maintained and current. Some examples of permits that may apply are:
A. Army Corp of Engineers 404 Permit
B. ADOT Permits
C. Union Pacific Railroad permits
D. Arizona Department of Water Resources dewatering permit
E. Mohave County permits
F. Federal, State and City authorizations
G. ADEQ Permits
H. Agricultural and Horticultural permits
I. FAA permits
9. PROJECT COMPLIANCE: At a minimum, the project shall be designed to comply with all applicable Federal, State and Local regulations and any amendments thereto which are adopted during the life of this Contract. Therefore, the Development Team should be aware that any of the following might apply to this project. Compliance with these is required and it shall be the responsibility of the Development Team to alert the County of any deviation from this requirement. (Note: It is the Development Team’s sole responsibility to ensure that they comply with all applicable Federal, State, and Local regulations. The inclusion of this list is for informational purposes only and is not intended to be all-inclusive).
FEDERAL:
1. The Hazard Communication Act, CFR 1910-1200- handling hazardous materials
2. Resource Conservation and Recovery Act, 42 USC 6901 et. Seq.- Hazardous waste disposal
D. 3. 36 CFR 800 – Protection of Historical and Cultural Properties
4. National Historic Preservation Act of 1966
5. 23 CFR 771 – Environmental Impact and Related Procedures
E. 6. Americans with Disabilities Act (ADA), PL 101-336
7. Section 4(f) of the Department of Transportation Act
8. Executive Order 11988 (Floodplain Management)
9. FHPM 7-7-3 - Procedures for Abatement of Highway Traffic Noise and Construction Noise
10. FHPM 7-7-9 – Air Quality Guidelines
11. National Environmental Policy Act of 1969, 1973 and supplements
12. Executive Order 11990 (Protection of Wetlands)
13. Wild and Scenic Rivers Act of 1968
14. Section 404 of the Clean Water Act of 1977
15. Federal Farmlands Act of 1981
16. FHWA Technical Advisory T6640.8m, “Guidance Material for the Preparation of Environmental Documents”
17. Section 1424 (e) of the Safe Drinking Water Act (Sole Source Aquifer Review).
18. 36 CFR 60 – Determinations of Eligibility for Inclusion in the National Register of Historic Places
19. Public Law – 91-646 – Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970
20. Wilderness Act of 1964, Public Law 88-577
21. Arizona Desert Wilderness Act of 1990, Public Law 101-628
22. Resource Conservation and Recovery Act (RCRA)
23. Comprehensive Environmental Response, Compensation and Recovery Act of 1980 (CERCLA)
24. Superfund Amendments and Reauthorization Act (SARA)
25. United States Forest Service, Integrated Resource Management (3rd Edition), August 1990
26. Endangered Species Act
27. Other Authorities: OSHA, Occupational Safety & Health Administration
28. Other governmental authorities having jurisdiction over the design or implementation of the Project.
STATE:
1. Arizona Revised Statutes (ARS) Title 34 Section 34-104 - Use of proprietary specifications
2. ARS Title 41 Section 41-844 - Findings of subsurface archaeological remains
3. ARS Title 34 Section 34-401 - Designing for the physically disabled
4. Arizona Native Plant Law
5. Arizona Historic Preservation Law
6. State Water Quality Law
7. ADOT Action Plan
8. ADOT Highways Division Policy and Implementation Memorandum 89-05, “Preservation of Arizona’s Wetlands,” August 1, 1989
9. Noise Abatement Policy for State Funded Projects
10. Arizona Environmental Quality Act (EQA)
11. Hazardous Waste Management Act (HWMA)
12. Underground Storage Tank Act of 1986
LOCAL:
1. The Building Code of Mohave County
2. Drainage Report and/or Grading Permit
3. Local codes and ordinances relating to air quality, noise, dust abatement, light, etc.
OFFER PAGE
TO THE COUNTY OF MOHAVE:
The Undersigned hereby offers and agrees to enter into negotiations with the County to provide the material or service in compliance with all terms, scope of work, conditions, specifications, and amendments in the solicitation package.
For clarification of this offer, contact:
Name:
Company Name
Phone:
Address
Fax:
City State Zip
Signature of Person Authorized to Sign
Printed Name
Title
APPENDIX A
SUGGESTED FORMAT – CORRECTIONAL FACILITY COST ESTIMATE
Lessor/Development Team: ________________________________________________________________________
Date: ___________________________________________________________________________________
COUNTY OF MOHAVE CORRECTIONAL FACILITY
COST ITEMS
Architecture, engineering and professional services: $____________________________________________________
Building Permits and Fees: $________________________________________________________________________
Site Preparation: $_______________________________________________________________________________
Building Shell: $_______________________________________________________________________________
Interior Build-Out: $_______________________________________________________________________________
HVAC: $_____________________________________________________________________________________
Parking: $_____________________________________________________________________________________
Site Improvements: $______________________________________________________________________________
Furniture, Fixtures and Equipment: $_________________________________________________________________
Contingency: $_____________________________________________________________________________________
Financing Costs: $______________________________________________________________________________
Lessor/Development Team Fees: $_________________________________________________________________
Total Cost of Correctional Facility: $_________________________________________________________________
Total Cost of Project: $______________________________________________________________________________
NOTE: Total Cost of Project would be the “option to purchase” cost on day one of the lease.
APPENDIX B
SUGGESTED FORMAT – FINANCIAL PROPOSAL
|MOHAVE COUNTY CORRECTIONAL FACILITY | | | | | | | |
|Yearly Costs | | | |Year 1 |2 |3 |4 |
| | | | | | | | | | | | |Day One Purchase Option | | | | | | | | | | | | | | | | | | | | | | | |Year | |Major Maintenance Amount | | | | | | | | |1 | | | | | | | | | | | | |2 | | | | | | | | | | | | |3 | | | | | | | | | | | | |4 | | | | | | | | | | | | |5 | | | | | | | | | | | | |6 | | | | | | | | | | | | |7 | | | | | | | | | | | | |8 | | | | | | | | | | | | |9 | | | | | | | | | | | | |10 | | | | | | | | | | | | |11 | | | | | | | | | | | | |12 | | | | | | | | | | | | |13 | | | | | | | | | | | | |14 | | | | | | | | | | | | |15 | | | | | | | | | | | | | | | | | | | | | | | | | |
EXHIBIT C
PROJECT PERFORMANCE SPECIFICATIONS PACKAGE
APPENDIX D
SAMPLE GROUND LEASE
Affidavit and Fee Exemption Claimed:
A.R.S. Section 11-1134.A.2
Property Tax Exemption:
A.R.S. Section 42-11102.A.2
GROUND LEASE
by and between
MOHAVE COUNTY, ARIZONA
as lessor
and
MOHAVE CORRECTIONAL FACILITY FINANCE CORPORATION
as lessee
Dated as of APPLICABLE DATE
GROUND LEASE
THIS GROUND LEASE (the “Ground Lease”), dated as of July 1, 2004, by and between the MOHAVE COUNTY, ARIZONA (the “County”), and MOHAVE CORRECTIONAL FACILITY FINANCE CORPORATION (the “Corporation”), an Arizona nonprofit corporation, as lessee;
W I T N E S S E T H:
WHEREAS, the County owns the parcel of real property situated in Mohave County, Arizona and described in Exhibit A and all improvements thereon existing at the time of execution of this Ground Lease (the “Leased Land”); and
WHEREAS, the Corporation was determined by the County to be the highest responsible bidder after public auction conducted pursuant to A.R.S. Section 11-256 and as part of such bid, the County and Corporation intend to enter into a lease-to-own transaction for the construction, occupancy and ownership by the County of an office building and appurtenant facilities (the “Project Facilities”), including the lease to the Corporation of the Leased Land; and
WHEREAS, as a means of financing the acquisition and construction of certain buildings, structures and facilities (the “Improvements”) to be located on the Leased Land, the Corporation has concurrently herewith entered into that certain Indenture of Trust, dated as of June 1, 2004 (the “Indenture”), with Wells Fargo Bank, N.A., Arizona, as trustee (the “Trustee”), securing $19,320,000 aggregate principal amount of Beneficial Interest Certificates in a Lease-to-Own Agreement with Mohave County, Arizona (Mohave Administration Building Project), Series 2004 (the “Certificates”); and
WHEREAS, in order to affect such financing it is necessary to set forth the terms and provisions to be in effect hereafter;
NOW, THEREFORE, in consideration of the, above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows:
1. Term. The County hereby leases the Leased Land to the Corporation and the Corporation hereby leases the Leased Land from the County for the period commencing as of the date hereof and terminating on DATE, or such later date as the term of the Lease Agreement identified in Section 2 below shall terminate. This Ground Lease shall be subject to earlier termination in accordance with Section 5 hereof.
2. Simultaneous Lease-Back; No Merger. The County and the Corporation agree that simultaneously with and upon the execution of this Ground Lease, the parties shall enter into a Lease-to-Own Agreement, dated as of DATE (the “Lease Agreement”), under which the Corporation, as lessor, has agreed to lease the Leased Land along with the Improvements to the County, as lessee. The County acknowledges that, as provided in the Lease Agreement, if an event of default or termination occurs under the Lease Agreement without a concurrent prepayment there under, the Corporation shall have the right to enter upon and have the right to occupy the Leased Land and to relet or otherwise dispose of its interest in the Leased Land without affecting or terminating this Ground Lease, provided, however, that the Corporation and any transferee of its interest in the Leased Land shall comply with the provisions of Section 6 below.
It is intended by the parties hereto that no merger of the leasehold estates of the County shall occur by operation of law by reason of this Ground Lease and the Lease Agreement, and more particularly that (i) the leasehold interest granted by the County to the Corporation under this Ground Lease is and shall be independent of the Lease Agreement, (ii) the Lease Agreement shall not be an assignment or surrender of the leasehold interest granted to the Corporation under this Ground Lease, and (iii) the Lease Agreement shall not operate as a merger or extinguishment of the leasehold interest granted to the Corporation under this Ground Lease.
3. Title to Realty and Improvements. Title to the Leased Land shall at all times remain with the County. Title to the Improvements made on the Leased Land shall remain with the Corporation, subject to the prepayment option provisions in Section 20 of the Lease Agreement. All such Improvements made on the Leased Land will remain personal property and will not be deemed to be affixed to or a part of the Leased Land, notwithstanding that such personal property or any part thereof may be or hereafter may become in any manner physically affixed or attached to the Leased Land. The County agrees to grant reasonable utility and similar development grants in fee, without payment of consideration, as necessary to develop and operate the Improvements.
4. Rent. The County and the Corporation acknowledge that the County has received from the Corporation a one-time lease payment, in an amount of $10.00, plus the Corporation’s undertaking in the Lease Agreement and Construction Contract (as such terms are defined in the Indenture), to cause the Improvements to be acquired and constructed on the Leased Land, which consideration is agreed to represent fair market rental value for the Leased Land, and is being paid to the County.
5. Early Rights of Termination by County. The County shall have the right to terminate this Ground Lease upon written notice to the Corporation after defeasance of the Lease Agreement in accordance with Section 24 thereof, or the exercise by the County of its purchase option to purchase the improvements in accordance with Section 20 thereof, and, in either case, defeasance of the Indenture in accordance with Section 10.02 thereof.
Obligations of the Corporation.
a) Capitalized terms used in this Section shall have the same definitions as given in the Lease Agreement.
b) The Corporation agrees to comply with applicable laws, ordinances, regulations and building codes, now or hereafter in force in connection with its use of the Leased Land. Except for use by the County pursuant to the Lease Agreement, the Corporation will use the Project Facilities only for purposes of providing rental office space and will not allow any third party tenant to use the Leased Land for any other purpose.
c) The Corporation will not place or allow to be placed any advertising sign or billboard on or about the Leased Land without the express written consent of the County which consent shall be exercised in its sole and unfettered discretion.
d) The County shall have the right to inspect all of the Leased Land including without limitation the Project Facilities upon reasonable notice and during normal business hours.
e) The Corporation will not suffer the commission of any waste of the Leased Land or the Project Facilities, overload any floor of the Project Facilities beyond the applicable design load limit or knowingly permit any explosives or Contaminants on the Leased Land.
f) The Corporation may not make any assignment of this Ground Lease, other than the absolute and irrevocable sale and assignment made pursuant to the Assignment Agreement, without the express written consent of the County. Any such assignment without the permission of the County shall be void.
g) For so long as the Lease Agreement is in effect and has not been terminated pursuant to Section 5 or Section 23 thereof, the Corporation will not lease or sublease any part of the Leased Land or the Project Facilities to any third party without the express written consent of the County.
Section 7. Surrender. The Corporation agrees that upon the expiration or termination of this Ground Lease it will surrender to the County the Leased Land together with all Improvements. At the time of such surrender, the Leased Land shall be free and clear of all liens and encumbrances other than (i) those existing on the date hereof, and (ii) those placed upon the Leased Land by the County.
Section 8. Notices. All notices to be given under this Ground Lease shall be made in writing and mailed by first class mail, postage prepaid, to the party at its address stated below or at such other address as the party may provide in writing from time to time.
If to the County: County Manager
Mohave County, Arizona
809 East Beale Street
Kingman, Arizona 86402
With a copy to: Office of the County Attorney
Mohave County, Arizona
P.O. Box 7000
Kingman, Arizona 86402
If to Corporation: Mohave Correctional Facility Finance Corporation
809 East Beale Street
Kingman, Arizona 86402
Attn: Financial Services Director
Section 9. Headings. All section headings contained in this Ground Lease are for the convenience of reference only and are not intended to define or limit the scope of any provision of this Ground Lease.
Section 10. Cancellation of County Contracts; Conflicts of Interest. The County and the Corporation acknowledge that this Ground Lease is subject to cancellation by the County pursuant to Arizona Revised Statutes Section 38-511, the provisions of which are incorporated herein. The County and the Corporation represent that, to the best of their knowledge, no basis exists for the County to cancel this Ground Lease pursuant to Arizona Revised Statutes Section 38-511 as of the date hereof. The Corporation covenants not to employ as an employee, an agent or, with respect to the subject matter of this Ground Lease, a consultant, any person significantly involved in initiating, negotiating, securing, drafting or creating this Ground Lease on behalf of the County within three (3) years from execution of this Ground Lease, unless a waiver of Arizona Revised Statutes. Section 38-511 is provided by the County.
Section 11. Governing Law; Arbitration. This Ground Lease shall be construed in accordance with and governed by the laws of the State. The venue for any proceedings on any and all controversies arising under this Ground Lease shall be Mohave County, Arizona. In the event of a dispute, the parties agree to use arbitration to the extent required by Arizona Revised Statutes § 12-1518, and the prevailing party shall be entitled to attorneys’ fees and costs.
Section 12. Entire Agreement; Amendment; Severability.
(a) This Ground Lease, together with attachments, exhibits and other documents or instruments executed by the County and the Corporation in connection with this Ground Lease, constitutes the entire agreement between the parties with respect to the lease of the Leased Land.
(b) This Ground Lease may not be modified, amended, altered or changed except with the prior written consent of the County, the Corporation, the Bond Insurer and the Trustee.
(c) If any provision of, or any covenants, obligation or agreement contained in, this Ground Lease is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained in this Ground Lease. That invalidity or unenforceability shall not affect any valid or enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.
Section 13. Inspection, Audit and Production of Records. The Corporation agrees that all books, accounts, reports, files and other records relating to this Ground Lease shall be subject at all reasonable times to inspection and audits by the County for five (5) years after completion of this Ground Lease, and that upon request by the County such records shall be produced at any of the County offices designated herein as the place at which notices to the County are to be given.
Section 14. Limited Obligation of Corporation.
(a) The County acknowledges that the Corporation’s rights and benefits in this Ground Lease have been assigned to the Trustee pursuant to the Assignment Agreement. The County further acknowledges that the sole duty, responsibility and obligation of the Corporation hereunder is to execute on a ministerial basis those documents presented to it by the Trustee for execution (which execution shall be directed by the County or Insurer as the case may be).
(b) The County acknowledges that any and all obligations of the Corporation hereunder are nonrecourse and are limited to moneys received by the Corporation under the Lease Agreement or through funds made available pursuant to the Indenture or the Construction Contract.
Section 15. Execution in Counterparts. This Ground Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 16. Recording. The parties agree that this Ground Lease or a memorandum thereof is to be recorded in the records of Mohave County, and that this Ground Lease or a memorandum thereof may be re-recorded as necessary to correct the legal description of the Leased Land due to replatting or otherwise.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the County has caused this Ground Lease to be executed in its name by its duly authorized officer, and the Corporation has caused this Ground Lease to be executed in its corporate name by its duly authorized officer, as of the date first above written.
MOHAVE COUNTY, ARIZONA, as lessor
By:
Name: Pete Byers
Title: Chairman, Mohave County Board of Supervisors
[County signature page to Ground Lease]
MOHAVE ADMINISTRATION BUILDING FINANCE CORPORATION, an Arizona nonprofit corporation, as Lessee
By:
Name: John F. Timko
Title: President
[Corporation signature page to Ground Lease]
STATE OF ARIZONA )
) ss.
COUNTY OF MOHAVE )
On this, the ___ day of MONTH, YEAR, before me, the undersigned Notary Public, personally appeared Pete Byers, who acknowledged himself to be the Chairman of the Mohave County, Board of Supervisors and that he, as such officer, being authorized so to do, executed the foregoing Ground Lease for the purposes therein contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
My Commission expires:
STATE OF ARIZONA )
) ss.
COUNTY OF MOHAVE )
On this, the ____ day of MONTH, YEAR, before me, the undersigned Notary Public, personally appeared John F. Timko, who acknowledged himself to be the President of Mohave Administration Building Finance Corporation and that he, as such officer, being authorized so to do, executed the foregoing Ground Lease for the purposes therein contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
My Commission expires:
EXHIBIT A
LEGAL DESCRIPTION
APPENDIX E
SAMPLE FACILITY LEASE-TO-OWN AGREEMENT
Affidavit and Fee Exemption Claimed:
A.R.S. Section 11-1134.A.2
Property Tax Exemption:
A.R.S. Section 42-11102.A.2
LEASE-TO-OWN AGREEMENT
Between
MOHAVE CORRECTIONAL FACILITY FINANCE CORPORATION,
as lessor
and
MOHAVE COUNTY, ARIZONA,
as lessee
Dated as of APPLICABLE DATE
TABLE OF CONTENTS
Page
Section 1. Certain Defined Terms and References 6
Section 2. Lease of Project 12
Section 3. Construction of Project Facilities and Tenant Improvements 13
Section 4. Lease Payments 17
Section 5. Non-appropriation of Funds 21
Section 6. Authority and Authorization 22
Section 7. Title 23
Section 8. Personal Property 23
Section 9. Maintenance, Operation and Use of Project 23
Section 10. Additions, Modifications and Improvements 27
Section 11. Substitutions and Removals 27
Section 12. Indemnification 28
Section 13. Inspection 28
Section 14. Liens and Encumbrances 28
Section 15. Risk of Loss; Damage; Destruction 29
Section 16. Eminent Domain 30
Section 17. Compliance with Legal and Insurance Requirements 30
Section 18. Payment of Taxes and Other Governmental Charges 32
Section 19. Insurance 33
Section 20. Purchase Option 33
Section 21. Assignments 34
Section 22. Events of Default 35
Section 23. Remedies 35
Section 24. Defeasance 37
Section 25. Notices 38
Section 26. Notice of Litigation 38
Section 27. Headings 39
Section 28. Conflicts of Interest 39
Section 29. Governing Law 39
Section 30. Arbitration 39
Section 31. Delivery of Related Documents 39
Section 32. Entire Agreement; Amendment; Severability 39
Section 33. Tax Covenants 39
Section 34. Assignment and Subcontracting: Limited Obligation of Corporation 40
Section 35. Financial Information 40
Section 36. Notices and Limitations Under Other Agreements 40
Section 37. Solicitation 40
Section 38. Lessening the Burdens of Government 40
Section 39. Recording 41
EXHIBIT A – PROJECT DESCRIPTION
EXHIBIT A-1 – DESIGN DOCUMENTS
EXHIBIT B – BASE RENT PAYMENT SCHEDULE
EXHIBIT C – ESTIMATED OPERATING COSTS FOR FISCAL PERIOD ENDING JUNE 30, 2007
EXHIBIT D – MAJOR MAINTENANCE FUND PAYMENT SCHEDULE
LEASE-TO-OWN AGREEMENT
THIS LEASE-TO-OWN AGREEMENT, made and entered into as of DATE by and between MOHAVE ADMINISTRATION BUILDING FINANCE CORPORATION (the “Corporation”), an Arizona nonprofit corporation, as lessor, and MOHAVE COUNTY, ARIZONA (the “County”), as lessee.
W I T N E S S E T H:
WHEREAS, the County desires to enter into a lease-to-own transaction for the construction, occupancy and ownership of an office building and related parking facilities located in Kingman, Arizona (the “Project”) as provided herein; and
WHEREAS, the County is authorized to enter into this Lease-To-Own Agreement pursuant to A.R.S. Section 11-256 (the “Enabling Legislation”), and has taken all action required thereby for such purpose pursuant to action taken by the Board of Supervisors on DATE and DATE;
WHEREAS, concurrently herewith, the Corporation and the County have entered into a Ground Lease with respect to the Project Site described on Exhibit A, Project Description, hereto after the County determined that Corporation was the highest responsible bidder after public auction conducted pursuant to A.R.S. Section 11-256 and in response to Request for Proposals No. 06-P-XX (the “RFP”);
WHEREAS, pursuant to the Assignment Agreement, the Corporation shall absolutely and irrevocably sell and assign its rights and benefits hereunder to the Trustee (defined herein) as security for the payment of the Certificates (defined herein);
WHEREAS, pursuant to the Construction Contract (defined herein), the Corporation will satisfy its obligations hereunder to provide for the development, design and construction of the Project, subject to the approval of the County; and
WHEREAS, pursuant to the Management Agreement (defined herein), the Corporation has contracted with the Manager to perform all duties and obligations of the Corporation hereunder related to the maintenance, repair, and operation of the Project.
NOW THEREFORE, in consideration of the Lease Payments to be paid under and the covenants and agreements contained in this Lease, the parties agree as follows:
Certain Defined Terms and References.
(a) In addition to the terms defined elsewhere in this Lease, the following terms have the meanings given below unless the context clearly requires otherwise:
“Actual Operating Costs” means all Operating Costs for the Project for a Fiscal Period as set forth in a written statement prepared by, signed and certified to as true and complete by the Manager or other representative of the Corporation.
“Additional Rent” means any payments required to be made pursuant to Section 4(b) hereof in addition to the Base Rent.
“Appropriation” or “Appropriations” means an appropriation of Lease Payments by the County set forth in a budget for a Fiscal Period approved by the Board of Supervisors.
“Assignment Agreement” means the Assignment Agreement dated as of DATE between the Corporation and the Trustee pursuant to which the Corporation will assign certain of its rights and interests hereunder to the Trustee.
“Authorized Officer,” when used:
i) With respect to the County, means the County Manager, Finance Director, or any other or additional officer of County who is designated in writing by a certificate containing the specimen signature of each such person, as its Authorized Officer for the purposes of this Lease; delivered to the Corporation.
ii) With respect to the Corporation, means any person authorized to act on behalf of the sole member of the Corporation under or with respect to the Lease as evidenced by a resolution confirming such authorization and delivered to the County.
“Base Rent” means the payments, including the principal and interest components of those payments, specified in Exhibit B.
“Board of Supervisors” means the Mohave County Board of Supervisors.
“Bond Insurer” or “Ambac Assurance” means Ambac Assurance Corporation, a Wisconsin domiciled stock insurance company.
“Business Day” shall mean any day of the year other than a Saturday or Sunday or a day on which (i) banks located in the city in which the Designated Office of the Trustee is located are required or authorized to remain closed and (ii) the New York Stock Exchange is closed.
“Certificate Holder” or “Certificate Holders” or “Owners” means any registered owner or holder of the Certificates.
“Certificates” means the $$$$ Beneficial Interest Certificates in a Lease-To-Own Agreement with Mohave County, Arizona (Mohave Correctional Facility Project) Series 2004.
“Closing Date” shall mean the date of initial authentication and delivery of the Certificates.
“Code” shall mean the Internal Revenue Code of 1986, and applicable regulations thereunder.
“Construction Contract” has the meaning set forth in Section 3 of this Lease Agreement.
“Construction Documents” shall mean the construction documents for the Project Facilities.
“Contractor” has the meaning set forth in Section 3 of this Lease Agreement.
“Contract Sum” shall have the meaning set forth in the Construction Contract.
“Corporation” means Mohave Administration Building Finance Corporation, an Arizona nonprofit corporation, its successors and assigns.
“Contract Time” shall have the meaning set forth in the Construction Contract.
“County” means the County of Mohave, Arizona.
“Defeasance Obligations” means one or more of the following:
i) Cash;
iii) United States Treasury Obligations, State and Local Government Series (“SLGS”);
iv) United States Treasury bills, notes and bonds traded on the open market; and
v) Zero coupon United States Treasury bonds.
“Design Development Documents” shall mean drawings and other documents that fix and describe the size and character of the Project Facilities.
“Engineer” means an individual or firm acceptable to the County, the Corporation and the Trustee who is qualified to practice the profession of engineering or architecture under the laws of the State and not a salaried employee of the County or the Corporation.
“Estimated Operating Costs” means the operating costs estimated for any Fiscal Period, as set forth on Exhibit C hereto, and as determined in accordance with Section 4(b) hereof and subject to change and periodic review by the County.
“Event of Default” means an Event of Default described in Section 22 hereof.
“Event of Non-appropriation of Funds” means termination of the Lease for non-appropriation of funds without reinstatement as described in Section 5 hereof.
“Federal Securities” means direct obligations of, or obligations the full and timely payment of the principal and interest on which is unconditionally guaranteed by, the United States of America.
“Fiscal Period” means a period of 12 consecutive months commencing on the first day of July and ending on the last day of June, or any other consecutive 12-month period which may be established hereafter as the fiscal year of the County for budgeting and appropriation purposes; provided, however, that if the Board of Supervisors makes an Appropriation for Lease Payments due hereunder for a period less than 12 consecutive months, Fiscal Period shall mean the period for which the Board of Supervisors makes such Appropriation.
“Ground Lease” means that certain Ground Lease dated as of DATE between the Corporation and the County.
“Indenture” means that certain Indenture of Trust dated as of DATE between the Issuer and the Trustee.
“Independent Counsel” means an attorney or firm of attorneys, engaged by the Trustee, admitted to practice law before the highest court of any state, and not a salaried employee of the County or the Corporation.
“Interest Portion” means the portion of each Base Rent payment denominated as such as set forth on Exhibit B hereto.
“Interest Rate for Advances” means that rate per annum as set by the Trustee as its reasonable cost of funds on the date such interest rate is to be charged, which is lawfully chargeable, in whole or in part.
“Lease” or “Lease Agreement” means this Lease-To-Own Agreement, as the same may be amended or supplemented from time to time in accordance with its terms.
“Lease Payment Date” means the first business day of each calendar month during the Lease Term, commencing on the Closing Date. If the Closing Date occurs on other than the first day of a calendar month, Lease Payments for the remainder of the month shall be paid by the County on a pro-rata basis.
“Lease Payments” means the sum of the Base Rent and Additional Rent due on a stated date or during a stated time.
“Lease Term” means the period beginning on DATE and ending on the date on which all Lease Payments and other amounts due hereunder shall have been paid, or the date upon which this Lease is sooner terminated in accordance with its terms.
“Legal Requirements” means those legal requirements described in Section 17 hereof.
“Manager” means, initially, Opus West Management Corporation, or any successor Manager of the Project.
“Management Agreement” means, initially, the Property Management Agreement dated as of DATE, between the Corporation and the Manager of the Project and any successor agreement for property management services for the Project.
“Management Fees” means the management fees payable to the Manager of the Project pursuant to the Management Agreement.
“Net Proceeds,” when used with respect to any insurance proceeds or eminent domain award, means the gross proceeds thereof less the payment of all expenses, including expert witness fees, attorneys’ fees and costs, incurred in connection with the collection of those gross proceeds.
“Operating Costs” means all expenses the Corporation incurs in connection with maintaining, repairing, managing and operating the Project, including, but not limited to, the following: the services provided by the Corporation (or the Manager on behalf of the Corporation) pursuant to Section 9 of this Lease; maintenance and repair costs, Directors and Officers liability insurance covering the Corporation, insurance the Corporation or the Manager is required to procure under this Lease Agreement or the Management Agreement (including any deductibles to be paid thereafter); electricity, water, sewer, gas and other utility charges; fuel; lighting; window washing; janitorial services; trash and rubbish removal; all payments under any Permitted Encumbrance affecting the Project, if any; wages payable to persons at the level of manager and below whose duties are connected with maintaining and operating the Project (but only for the portion of such persons’ time allocable to the Project), together with all payroll taxes, unemployment insurance, vacation allowances and disability, pension, profit sharing, hospitalization, retirement and other so-called “fringe benefits” paid in connection with such persons (allocated in a manner consistent with such persons’ wages), including expenses imposed upon the Corporation (or the Manager on behalf of the Corporation), its contractors or subcontractors pursuant to law or pursuant to any collective bargaining agreement covering such employees); amounts paid to contractors or subcontractors for work or services performed in connection with maintaining, repairing and operating the Project; all costs of uniforms, supplies and materials used in connection with maintaining, repairing and operating the Project; all services, supplies, repairs, replacements or other expenses for maintaining and operating the Project; costs of complying with laws, rules, ordinances, orders or regulations; management fees and the costs (including rental) of maintaining a building or management office in the Project; expenses in connection with public sidewalks and landscaping adjacent to the Project, any pedestrian walkway system (either above or below ground) and any other public facility to which the Corporation or the Project is from time to time subject in connection, with operating the Project; capital improvement to the Project; repairs, restoration or other work occasioned by fire, windstorm or other insured casualty (except to the extent covered by any insurance proceeds actually received); costs relating to any condemnation or similar action affecting the Project (except to the extent covered by any condemnation proceeds actually received by the Corporation); legal, accounting and other professional services costs and expenses incurred by the Corporation (or the Manager on behalf of the Corporation in connection with the Project or this Lease); and such other expenses as may ordinarily be incurred in connection with maintaining and operating an office complex similar to the Project. Operating Costs also includes regular fees and expenses of the Issuer and the Trustee payable as Additional Rent pursuant to Section 4(b)(iv) hereof. Operating Costs shall not include amounts paid by the Corporation to indemnify, defend or hold harmless the Manager from, for or against claims, costs, expenses, demands, attorneys fees, suits, liabilities, judgments or damages arising from or relating to the ownership, condition, maintenance, management or operation of the Project which are caused by the Manager’s negligence or misconduct.
“Permitted Encumbrances” shall be defined, as of any particular time, as (i) liens for ad valorem taxes and special assessments not then delinquent (the parties acknowledge that the Project is exempt from taxation during construction of the Project Facilities and subsequent occupancy by the County for a governmental activity); (ii) the Lease; (iii) the Indenture; (iv) the Ground Lease; (v) utility access and other easements and rights-of-way, mineral rights, restrictions, exceptions and encumbrances that will not (x) materially interfere with or impair the use or operation of the Project and (y) materially adversely affect the security or easements granted to the Corporation; (vi) such minor defects, irregularities, encumbrances, easements, mechanics’ liens, rights-of-way and clouds on title as, in the opinion of independent counsel, normally exist with respect to properties similar in character to the Project for the purposes for which it was acquired or is held by the Corporation and do not (x) materially interfere with or impair the operations being conducted on the Project or (y) materially adversely affect the security or easements granted to the Corporation; and (vii) those certain liens and encumbrances described in the title reports delivered in connection with the execution and delivery of the Lease together with any other liens and encumbrances approved from time to time by the County, the Trustee and the Bond Insurer.
“Person” or “Persons,” or words importing persons, means corporations, companies, unincorporated associations, partnerships (including, without limitation, general and limited partnerships), joint ventures, societies, estates; trusts, public or governmental bodies, other legal entities and natural persons.
“Principal Portion” means the portion of each Base Rent payment denominated as such as set forth on Exhibit B hereto.
“Project” means, collectively, the Project Site and the Project Facilities.
“Project Facilities” means the improvements to the Project Site, as more fully described on Exhibit A hereto.
“Project Site” means the real property on which the Project Facilities are located, as more fully described on Exhibit A hereto.
“Punchlist” has the meaning set forth in Section 3 of this Lease Agreement.
“Punchlist Items” has the meaning set forth in Section 3 of this Lease Agreement.
“Purchase Date” means any date on which the County may exercise its option to prepay all or a portion of the remaining Lease Payments.
“Purchase Price” means, as of any Purchase Date, on or after [optional call date], the amount which the County may pay to, or assume from, the Corporation, for redemption of Certificates by the Trustee, in addition to any Lease Payments then due or past due, to purchase the Project, which shall be the sum of the Principal Portions of all Lease Payments scheduled to be paid subsequent to the Purchase Date, as shown on Exhibit B hereto, together with a pro rata portion of the Interest Portion of the Base Rent payment coming due on the next succeeding Lease Payment Date, which shall be calculated on the basis of a 360-day year composed of twelve 30-day months. As to any Purchase Date prior to [optional call date], Purchase Price shall mean the amount deposited with the Trustee that as invested is sufficient, as certified by an independent certified public accounting firm to be of such maturity, redemption and interest payment dates as will be sufficient to pay the principal, all accrued interest and premium, if any, due with respect to the Certificates on the first date on which the Certificates may be prepaid under the Indenture.
“Register” means the books kept and maintained by the Trustee, as trustee under the Indenture.
“Required Property Insurance Coverage” means insurance insuring the Project Facilities against loss or damage by fire, lightning, vandalism and malicious mischief and all other perils covered by standard “extended coverage” or “all risks” policies, including amounts as to which the County is a self-insurer as set forth in the County’s certificate of insurance to be filed with the Trustee in accordance with Section 19 hereof.
“Schematic Design Documents” shall mean the drawings and other preliminary documents illustrating the scale and relationship of the components of the Project Facilities, prepared pursuant to the Construction Contract, as approved by the County.
“Subject to Appropriations” means subject to Appropriations being made by the Board of Supervisors.
“Substantial Completion” has the meaning set forth in Section 3 of this Lease Agreement.
“Trustee” means Wells Fargo Bank, N.A., its successors and assigns.
“Unforeseen Costs” has the meaning set forth in Section 3 of this Lease Agreement.
(a) References to sections or exhibits, unless otherwise indicated, are to sections of, or exhibits to, this Lease.
(b) Any reference to a section or provision of the United States Code or the Constitution of the State, or to the Arizona Revised Statutes or Enabling Legislation, shall include such section, provision or chapter as amended, modified, revised, supplemented or superseded from time to time. No amendment, modification or revision, or supplemental or superseding section, provision or chapter, shall be applicable solely by reason of this provision if it constitutes in any way an impairment of the rights or obligations of the Trustee, the Corporation or the County under this Lease.
Lease of Project.
a) The Corporation hereby demises, leases and lets to the County, and the County rents, leases and hires from the Corporation, the Project subject to and in accordance with the provisions of this Lease, to have and to hold for the Lease Term. The obligation of the County to make Lease Payments shall begin on the DATE; provided, however, that Lease Payments shall be reduced to the extent of liquidated damages paid to the Corporation pursuant to the Construction Contract. Subject to earlier termination upon an Event of Default or an Event of Non-appropriation of Funds the Lease Term shall terminate no earlier than final payment or prepayment of all amounts set forth on Exhibit B hereto. The County shall have the right to cancel and terminate the Lease only at the end of its Fiscal Period as a result of an Event of Non-appropriation of Funds.
b) The Corporation covenants with the County that, upon the County’s payment of Base Rent and Additional Rent as required hereunder, and the performance and observance of the other covenants and agreements on its part to be performed and observed under this Lease, the County shall and may peaceably and quietly have, hold and enjoy the Project according to the terms of this Lease without hindrance from the Corporation, its assigns and successors or any person within the control of the Corporation.
c) The County acknowledges that the Project has been selected by the County and acquired by the Corporation specifically and solely for the purpose of leasing the Project to the County; the Project has been acquired on the basis of specifications and requirements furnished by the County; and the Corporation has not held itself out as having knowledge or skill particular to the Project or made any affirmations of fact regarding the Project. THEREFORE, THE CORPORATION MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE COUNTY OF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO, THE PROJECT OR ANY PORTION OF THE PROJECT. IN NO EVENT SHALL THE CORPORATION BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, IN CONNECTION WITH THIS LEASE OR THE EXISTENCE, FURNISHING, OR FUNCTIONING OF THE PROJECT OR COUNTY’S USE OF THE PROJECT.
Construction of Project Facilities.
The design, and construction of the Project Facilities, shall occur as follows:
(a) Construction Documents. The Corporation shall enter into the Guaranteed Price Design/Build Contract, dated as of DATE (the “Construction Contract”), with Opus West Construction Corporation, a Minnesota corporation (the “Contractor”) for the design, and construction of the Project.
The County has reviewed the Construction Contract and the Management Agreement and approves the form and substance thereof. The County further approves the Contractor as the contractor for the Project.
(b) Design of Project Facilities. Attached to this Lease as Exhibit A-1 is a description of the Schematic Design Documents for the Project Facilities. The County hereby approves the Schematic Design Documents. The Corporation shall submit or cause to be submitted to the County for its approval each of the Design Development Documents and the Construction Documents (collectively, the “Design Documents”) prepared pursuant to the Construction Contract. The County shall not disapprove any aspect of the Design Documents except for just and reasonable cause and will not act in an arbitrary or capricious manner. In addition, the County shall not disapprove the Construction Documents if they are generally consistent with the approved Design Development Documents. The County shall review each phase of the Design Documents and notify the Corporation and the Contractor of any comments or objections thereto, or its approval thereof, within seven (7) days of receiving them. If the County has any comments or objections, the Corporation will address, or cause to be addressed, the comments or issues and resubmit or cause to be resubmitted the applicable Design Documents for approval by the County in accordance with the Design Documents. The County will review the resubmitted Design-Documents and notify the Corporation and the Contractor of any comments or objections thereto, or its approval thereof, within five (5) days of receiving them. When the County has approved each phase of the Design Documents, the County will indicate that approval by signing or initialing them.
(c) Construction of Project Facilities. Following the approval of the Construction Documents, the Project Facilities will be constructed in accordance with the terms of the Construction Contract. The County agrees to provide grants of reasonable utility and similar development easements in fee, without consideration, as necessary to develop and operate the Project Facilities, to permit the removal of existing utilities and the easement(s) therefor on the Project Site and to energize the system(s) servicing the Project.
(d) Modifications by the County. If following the approval of the Construction Documents, the County desires to make modifications thereto, such changes shall be made in accordance with the Construction Contract. If such modifications result in an increase in the overall cost of construction of the Project Facilities, the County, at its option, may elect (a) not to make such modifications, (b) subject to the provisions of Section 5 hereof, to pay the increased cost of the modifications upon receipt of an invoice or other evidence of such increased cost or (c) with the reasonable approval of the Corporation, request that the Corporation cause to be executed and delivered additional Certificates to finance such increased costs but only in accordance with the Indenture and other documents pursuant to which the Certificates were executed and delivered and following the execution of an amendment to this Lease increasing the Base Rent to an amount at least sufficient to pay the principal and interest with respect to the Certificates, including the additional Certificates. In addition, the execution and delivery of additional Certificates shall be subject to the following conditions: (i) the written consent of the Bond Insurer and, (ii) the County providing all necessary approvals required under this Lease and the Indenture to provide for the delivery of such additional Certificates, cooperating with the arrangement of such financing and agreeing to all modifications to this Lease required to effectuate such financing, and (iii) the fixed fee portion of the annual management fee payable under the Management Agreement being increased by an amount equal to three percent (3%) of the increase in the annual Base Rent payable in connection with such additional Certificates.
Notwithstanding anything herein to the contrary, if the County requests a modification or change to the Construction Documents which reasonably has the effect of delaying the completion or occupancy of the Project, the County agrees to provide prior written notice to the Bond Insurer. The Bond Insurer shall have no right to approve any modification or change to the Construction Documents unless such modification or change reasonably has the effect of delaying the completion or occupancy of the Project and the requirements of the foregoing clause are not satisfied. Further, the County acknowledges that changes or modifications to the Construction Documents which require additional funds are limited to funds held under the Indenture and available for such purpose or other funds appropriated by the County for such purpose.
(e) Completion. The construction of the Project Facilities will be completed in accordance with the Construction Contract. Any liquidated damages required to be paid by the Contractor to the Corporation in connection with a failure to complete the Project Facilities in a timely manner and any funds remaining in the Construction Fund after completion of the Project Facilities and payment of all authorized amounts will be deposited to the Interest Account of the Certificate Fund and applied in accordance with the Indenture to reduce Lease Payments as provided in Section 2(a) of this Lease. If for any reason the Construction Contract is terminated prior to completion of the Project Facilities, the County shall direct the Corporation to take such actions under the Construction Contract or enter into alternate arrangements consistent with the provisions of this Lease, as are necessary to cause the completion of the Project Facilities.
(f) Authorized Representative. The representatives of the County, who are authorized to execute change orders, give notices, approvals and consents and give directions to the Corporation, the Contractor or the Manager shall be either of the County Manager or the Finance Director of the County.
(g) No Delays by County. The County covenants and agrees to take all actions necessary to approve the Design Documents and provide such other consents, direction and approvals as may be required under the Construction Contract in a timely manner to insure that the construction of the Project Facilities can be completed as contemplated by this Lease. In the event that the County’s approval process results in delays to the construction schedule, the County agrees, subject to Section 5 hereof and to the extent permitted by law and the Constitution of the State, to: (i) pay all direct and indirect costs incurred by the Corporation as a result of such delay (including, without limitation, any amounts payable by the Corporation under the Construction Contract as a result of such delay) upon receipt of an invoice or other evidence of such costs, or (ii) with the reasonable approval of the Corporation, request that the Corporation cause to be executed and delivered additional Certificates to finance such direct and indirect costs but only in accordance with the Indenture and other documents pursuant to which the Certificates were executed and delivered and following the execution of an amendment to this Lease increasing the Base Rent to an amount at least sufficient to pay the principal and interest with respect to the Certificates, including the additional Certificates. In addition, the execution and delivery of additional Certificates shall be subject to the following (i) the written consent of the Bond Insurer, (ii) the County providing all necessary approvals required under this Lease to provide for the delivery of such additional certificates, cooperating with the arrangement of such financing and agreeing to all modifications to this Lease required to effectuate such financing, and (iii) the fixed fee portion of the annual management fee payable under the Management Agreement being increased by an amount equal to three percent (3%) of the increase in the annual Base Rent payable in connection with such additional Certificates.
(h) Unforeseen Costs. In the event the cost of the acquisition, construction, installation and equipping of the Project is in excess of the amount available to the Corporation therefor from the funds held for such purposes under the Indenture as a result of (i) changes in governmental regulations or requirements occurring after the date of execution of this Lease, (ii) Excused Delay as defined in the Construction Contract, (iii) uninsured or underinsured casualty, (iv) the estimated costs of any delay in the construction process (including carrying costs) resulting from or in connection with (i) through (iii) above, or (v) deductibles required to be paid in connection with any property insurance or any other insurance policies insuring the Work or the Project, but excluding the remediation or correction of the condition of the project site (other than any hazardous substances that may be present at the Project Site) or other cost associated with soil conditions (including, without limitation, dewatering, rock excavation and rains). The County hereby agrees, subject to Section 5 hereof and to the extent permitted by law and the Constitution of the State, to pay such Unforeseen Costs hereunder immediately following the submission of an invoice by the Corporation for such Unforeseen Costs. Alternatively, the County, with the reasonable approval of the Corporation, may request that the Corporation cause to be executed and delivered additional Certificates to finance the Unforeseen Costs (subject to the limitation provided in the preceding sentence) but only in accordance with the Indenture and other documents pursuant to which the Certificates were executed and delivered and following the execution of an amendment to this Lease increasing the Base Rent to an amount at least sufficient to pay the principal and interest with respect to the Certificates, including the additional Certificates. In addition, the execution and delivery of additional Certificates shall be subject to the following (i) the written consent of the Bond Insurer, (ii) the County providing all necessary approvals required under this Lease to provided for the delivery of such additional Certificates, cooperating with the arrangement of such financing and agreeing to all modifications to this Lease required to effectuate such financing, and (iii) the fixed fee portion of the annual management fee payable under the Management Agreement being increased by an amount equal to three percent (3%) of the increase in the annual Base Rent payable in connection with such additional Certificates. The Corporation shall immediately notify or cause to immediately notify the County of any event that results in or may result in an Unforeseen Cost. Following such notification, the County and the Contractor shall meet to discuss the nature and extent of such Unforeseen Cost. Thereafter, the County and the Corporation, or the Contractor on its behalf, shall cooperate, at no out-of-pocket expense to the Contractor, to minimize such Unforeseen Cost.
(i) Possession of Project. The County may from time to time take occupancy of all or any portions, of the Project Facilities on the date the applicable structure (or portion thereof) is complete (as evidenced by the issuance of a certificate of occupancy or similar permit for such building) (“Substantial Completion”). Not less than thirty (30) days prior to the date of Substantial Completion for the building constituting a portion of the Project Facilities, the County shall, subject to compliance with reasonable requests by the Corporation designed to minimize interference with Substantial Completion, be allowed to install its machinery, equipment, fixtures and other personal property in such building during the final stages of completion of construction provided that the County does not thereby materially interfere with the completion of construction or occasion any labor dispute as a result of such installations and provided further that the County does hereby agree to assume all risk of loss or damage to such machinery, equipment, fixtures and other personal property, other than that caused by the negligence of the Corporation, and its contractors, subcontractors and materialmen and their respective agents and employees for, from and against any and all loss or damage to such machinery, equipment, fixtures and personal property, and all liability, loss or damage arising from any injury to the property, employees or agents of the Corporation or its contractors, subcontractors or materialmen, and any death or personal injury to any person or persons to the extent arising out of such installations.
(j) Construction Warranty. The Corporation shall use commercially reasonable efforts to enforce or to cause to be enforced by the Trustee pursuant to the Assignment Agreement for the benefit of the County all warranties received by the Corporation pursuant to the Construction Contract. The County acknowledges the terms of the warranties contained in the Construction Contract and that such warranties provide the sole and exclusive remedy with respect to workmanship or materials in the Project Facilities. The Corporation hereby disclaims any other warranties, express or implied.
(k) County’s Acceptance of Project. Within a period of thirty (30) days after Substantial Completion, the County shall notify the Corporation and the Contractor, in writing, of those items in such building which are incomplete (the “Punchlist” and the “Punchlist Item,” respectively). Such Punchlist Items shall be completed within sixty (60) days following written receipt of the Punchlist unless any such Punchlist Items cannot reasonably be completed within such sixty (60) day period, in which event the completion of such Punchlist items shall commence during said sixty (60) day period and shall thereafter be diligently and continuously pursued to completion. The acceptance of possession by the County shall be deemed conclusively to establish that the Project Facilities have been substantially completed.
(l) Repair and Maintenance. Save and except as provided in the foregoing paragraphs (k) and (l) above, the County, from and after the earlier of Substantial Completion or the County’s occupancy of the Project Facilities, shall have and hold the Project as the same shall then be without any liability or obligation on the part of the Corporation for making any alterations, improvements or repairs of any kind in or about the Project for the term of this Lease, or any extension or renewal thereof, except as provided in Section 9 of this Lease.
Lease Payments.
(a) Subject to the provisions of Section 5, the County agrees to pay to the Trustee, for the benefit of the Corporation, when due during the Lease Term the Lease Payments, including the principal and interest components of the Base Rent equal to the amounts specified in Exhibit B hereto on or prior to the dates specified in Exhibit B hereto. Each Lease Payment shall be applied first to payment of the Interest Portion, second to the Principal Portion, of the respective Base Rent payment then due, and then to the Additional Rent payment then due. Except as specifically provided in Section 5 hereof, the obligation to make Lease Payments during the Lease Term will be absolute and unconditional in all events and will not be subject to any set-off, abatement; defense, counterclaim or recoupment for any reason whatsoever; except as expressly provided in Section 4(b) with respect to Additional Rent. Any Lease Payment payable on other than a Business Day may be paid on the next succeeding Business Day with like effect. All payments of Base Rent shall be made directly to the Trustee.
(b) Subject to the provisions of Section 5 and the provisions of the last paragraph of this subsection (b), the County agrees to pay the Corporation the following amounts, if and whenever applicable, as Additional Rent: $$$$
(c) If during the Lease Term, the ownership, leasing, rental, sale, purchase, possession or use of the Project or any portion of the Project shall result in the imposition on the Corporation of any charges, assessments or taxes (local, State or Federal), exclusive of income taxes on or measured by the Corporation’s income, the County shall promptly pay to the Corporation, upon receipt from the Corporation of a statement therefor, as Additional Rent, an amount equal to those charges and taxes imposed on the Corporation.
i) The County will pay to the Corporation as Additional Rent all amounts coming due under Section 12 hereof.
ii) Estimated Operating Costs, which shall be paid as follows:
(ii.a) The County will pay to the Corporation on a monthly basis all Estimated Operating Costs as set forth on Exhibit C hereto as Additional Rent, provided however, that for the first month that Estimated Operating Costs are payable and no later than DATE, the County will pay the Corporation for deposit in the Operating Costs Fund the sum of $$$$ for start-up costs and the first monthly payment of Estimated Operating Costs. The Corporation and the County agree that the Estimated Operating Costs for the first Fiscal Period as projected on Exhibit C are fair and reasonable as operating costs for the Kingman area. The Estimated Operating Costs shall be payable by the County in monthly installments, in advance on the first day of each and every month during the Lease Term commencing on occupancy by the County, provided however, that for the first month that Estimated Operating Costs are payable and no later than DATE, the County will pay the Corporation for deposit in the Operating Costs Fund the sum of $$$$ for start-up costs and the first monthly payment of Estimated Operating Costs. Notwithstanding, if the first Lease Payment Date occurs on a date other than the first day of a month, the County agrees to pay the Corporation for deposit in the Operating Costs Fund two times the full amount of such monthly Estimated Operating Costs. During the Lease Term, if funds available for Operating Costs are insufficient for such purposes, the Corporation or the Manager shall request the amount of funds necessary to pay Operating Costs from the County.
(ii.b) No later than sixty (60) days after the end of each Fiscal Period, the Corporation shall furnish or cause to be furnished to the County a statement of the Actual Operating Costs for the Project for such Fiscal Period. The statement shall be prepared, signed and certified to be correct by the Manager on behalf of the Corporation. If Actual Operating Costs are less than Estimated Operating Costs for such Fiscal Period, the excess funds will be held under the Indenture in the Operating Costs Fund. If Actual Operating Costs are in excess of Estimated Operating Costs, the Corporation or the Manager shall request such funds from County and the County shall pay such excess to the Corporation for deposit into the Operating Costs Fund.
(ii.c) No later than three months prior to the end of the first Fiscal Period, and each subsequent Fiscal Period thereafter (or such other period that is established by the County for budgeting and appropriation purposes), the Corporation shall furnish, or cause to be furnished to the County, a statement of Estimated Operating Costs for the Project for the next succeeding Fiscal Period. The County shall approve such statement of Estimated Operating Costs within sixty (60) days of receipt thereof from the Corporation or other representative of the Corporation, or if the County objects to any statement of Estimated Operating Costs submitted to the County by the Corporation or other representative of the Corporation, the County shall within thirty (30) days of the receipt of such statement, provide a written response to the Corporation, the Manager and the Trustee specifically identifying the County’s objections to the statement.
(ii.d) Failure to provide notification to the Corporation within sixty (60) days of receipt of a statement of Estimated Operating Costs from the Corporation (or other representative of the Corporation) shall be deemed to constitute acceptance thereof by the County. Both parties shall attempt to resolve any objections by negotiation. If the Corporation and the County are not able to negotiate a resolution to the County objections within 30 days after the County has given the Corporation written objection to the statement, the County shall have the option of providing or purchasing such services, in whole or in part, including, without limitation, property management services, in which event Corporation or the Manger shall be relieved from providing or purchasing such services and the cost of such services shall not be included as Operating Costs.
iii) All expenses of the Corporation under the Indenture with respect to payment of fees and expenses of and, subject to the provisions of Section 12 of this Lease Agreement, indemnity obligations with respect to, the Corporation and the Trustee and all costs of calculations and payment of arbitrage rebate.
iv) The County will pay to the Corporation on an annual basis, all amounts to be deposited into the Major Maintenance Fund as set forth on Exhibit D hereto, as Additional Rent.
v) The County shall pay as Additional Rent an amount equal to one-twelfth (1/12th) of the amount which, when added to the balance in the Reserve Fund, will be equal to the Reserve Requirement as well as any amounts owed by the Corporation to Ambac under the Guaranty Agreement.
vi) All other payments of whatever nature which the County has agreed to pay or assume under the provisions of this Lease Agreement.
In the event the Corporation fails to maintain the Project in a clean, orderly and safe condition, as required in Section 9, or fails to provide repairs, maintenance or other services as required in Section 9, then the County may make written demand upon the Corporation and the Manager to provide such services. If the services are not provided within 10 days after written demand has been mailed to the Corporation and the Manager by the County, then the County may obtain such services and deduct its cost (in an amount not to exceed its cost in the Estimated Operating Budget) from any Additional Rent payment which becomes due after such service has been obtained; provided, that if any vendor contract for such service cannot be terminated prior to the end of such ten day period, the County shall continue to be responsible for all amounts payable under such vendor contract until such contract is terminated. Vendor contracts or such services must be subject to termination for failure to provide satisfactory services and shall not have a term longer than twelve months.
(d) The County’s obligation to pay Additional Rent in each Fiscal Period is Subject to Appropriations. If Appropriations are not made for payment of all or any part of that Additional Rent or the County does not allocate funds for such purpose, the Corporation shall have the right, but shall not be obligated, to pay or advance the amount of such Additional Rent. If the Corporation so pays or advances any portion of that Additional Rent, the County shall, Subject to Appropriations, pay the Corporation no later than the first Lease Payment Date in the next succeeding Fiscal Period during which the Lease Term is in effect an amount equal to the sum of such Additional Rent and the costs incurred by the Corporation in making such payment or advance, including the amount the Corporation would have earned from investment of the amount paid or advanced before repayment thereof at the Interest Rate for Advances during the same period. The Corporation shall notify the County in writing of the costs incurred in any case of its payment or advancement of such Additional Rent. If the Corporation pays or advances such Additional Rent, and is repaid as provided in this subsection, the Lease shall not be deemed terminated pursuant to Section 5 hereof as a result of such nonpayment of Additional Rent. For all Fiscal Periods subsequent to any payment or advance by the Corporation of Additional Rent, the County shall budget for and will seek appropriation of funds for payment of the Additional Rent, in accordance with subsection (f) below.
(e) The Lease Payments shall be absolutely and irrevocably sold and assigned by the Corporation to the Trustee pursuant to the Assignment Agreement and shall be payable at the designated corporate trust office of the Trustee, or at such other place, as the Trustee may from time to time designate in writing and the Interest Portion thereof shall be deemed to be based on a 360-day year composed of twelve 30-day months.
(f) The County intends and reasonably believes that funds will be available to make all Lease Payments during each Fiscal Period during the Lease Term.
The Corporation acknowledges that, in accordance with A.R.S. § 11-251.54, the County’s obligation to make Lease Payments is a current expense of the County, payable exclusively from Appropriations, and is not a general obligation or indebtedness of the County.
The Corporation acknowledges that A.R.S. § 11-651.2 provides that, if the County Board of Supervisors fails to appropriate monies for any periodic payment or renewal term of a lease purchase agreement relating to land acquisition or capital projects under A.R.S. § 11.251.54 and § 11-651.2, such agreement shall terminate at the end of the then-current Fiscal Period and the County is relieved of any subsequent obligation under such agreement.
The County hereby covenants that it will use its best efforts to budget, obtain, allocate and maintain sufficient appropriated monies to make Lease Payments when due, and other amounts payable pursuant to this Lease. The Corporation acknowledges that, pursuant to A.R.S. § 11-651.1, appropriation of County monies is a legislative act subject to approval of the County Board of Supervisors.
(g) The County represents that the Project and the County’s use of the Project are essential to the governmental operations of the County and that the Project will lessen the burdens imposed upon the County.
Non-appropriation of Funds.
(a) The obligation of the County to make any payment or expenditure under the Lease is a current expense, payable exclusively from Appropriations, and is not a general obligation or indebtedness of the County. If the Board of Supervisors fails to appropriate monies for any subsequent Fiscal Period with respect to the Project, this Lease shall terminate at the end of the then current Fiscal Period and the County shall be relieved of any subsequent obligation under this Lease, other than to return to the Corporation possession of the Project as provided in this Lease and to pay any accrued and unpaid obligations for the payment of which monies are lawfully available including any amounts arising under Section 12 hereof.
(b) If, prior to the last date occurring in any year on which the County is required or permitted to adopt its budget for a Fiscal Period, an Appropriation has not been made for that Fiscal Period in an amount sufficient for the payment of Lease Payments to become due during that Fiscal Period with respect to the Project, the County will immediately notify the Corporation and the Trustee, and the Corporation will immediately notify the Bond Insurer, in writing of that fact. If, on or before the last date occurring in any year on which the County is required or permitted to adopt its budget for a Fiscal Period, no Appropriation has been made for Lease Payments, the Lease shall terminate as of the last day of the prior Fiscal Period for which an Appropriation was made (subject to reinstatement as provided in subsection (c)) without penalty or expense to the County of any kind whatsoever. In the event of such termination without reinstatement, the Corporation will have all legal and equitable rights and remedies to take possession of the Project, and the County agrees to peaceably surrender possession of the Project to the Corporation on the day following the 90-day reinstatement period (as defined in paragraph (c) below) following such termination.
(c) If this Lease terminates pursuant to subsections (a) and (b) and if within 90 days after such date of termination an Appropriation is made which would have caused this Lease to have continued in effect if the Appropriation or allocation, as the case may be, had been made prior to the termination of the prior Fiscal Period, then this Lease shall be reinstated and deemed renewed as of the day of such termination.
Authority and Authorization.
(a) The County represents, covenants and warrants that: (i) the Lease complies with the Constitution and laws of the State; (ii) the execution, delivery and performance by the County of this Lease have been duly authorized by all necessary action on the part of the County; (iii) all necessary approvals of any County official for the County’s acquisition of the Project have been obtained; and (iv) this Lease constitutes a legal, valid and binding obligation of the County enforceable in accordance with its terms, except as such enforceability may be affected by matters of bankruptcy or equity.
(b) The County agrees and warrants that: (i) subject to the provisions of Section 5, it will do or cause to be done all things necessary to preserve and keep the Lease in full force and effect during the Lease Term; (ii) it has complied with all requirements applicable to it, and has taken all steps for approval and adoption of this Lease as a valid obligation on its part; and (iii) to the extent required, it has obtained or will obtain all easements, rights-of-way and use agreements and governmental agency approvals, necessary for its use and operation of, and access to, the Project.
(c) The County represents and warrants that (i) the County is not in any material manner or to any material extent in breach of or in default under any applicable constitutional provision, any applicable law or administrative regulation of the State of Arizona or the United States or any applicable judgment or decree or any agreement or other instrument to which the County is a party or is otherwise subject which breach or default would have a material adverse effect upon the County fulfilling its obligations pursuant to the Ground Lease or this Lease Agreement; and (ii) the execution and delivery by the County of the Ground Lease and this Lease Agreement, and its compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable constitutional provision, law, administrative regulation, judgment, decree, bond, note, resolution, agreement or other instrument to which the County is a party or is otherwise subject in any material manner or to any material extent which would have a material adverse effect upon the County fulfilling its obligations pursuant to the Ground Lease or this Lease Agreement.
Title.
(a) During the Lease Term, the Corporation will retain legal title to the Project Facilities and will retain its interests in the Project Site and will not encumber or dispose of all or any part of the Project except in accordance with Section 21(b) hereof. Title to the Project Site shall remain with the County pursuant to Section 3 of the Ground Lease. The Corporation and the County agree that this Lease or any other appropriate documents (including a memorandum evidencing this Lease) may be filed or recorded to evidence the parties’ respective interests in the Project and the Lease.
(b) The Project shall become the property of the County and title thereto shall pass to the County without further cost upon the County’s exercise of the purchase option contained in Section 20 hereof; provided that the County shall be deemed to have exercised such option without any further act or notice on its part upon the payment in full of all Lease Payments, as they shall have come due, as set forth on Exhibit B hereto, so long as there shall be no Event of Default in existence at such time. In such case, the Corporation agrees to execute such instruments and do such things as the County reasonably requests in order to effectuate transfer of any and all of the Corporation’s right, title and interest in the Project, as is, to the County, without warranty, express or implied, by the Corporation except that the Corporation will warrant to the County that the Project is free and clear of any liens created by the Corporation, other than Permitted Encumbrances.
Personal Property.
(a) Any personal property included in the Project is and will remain personal property and will not be deemed to be affixed to or a part of the Project Site or Project Facilities, notwithstanding that such personal property or any part thereof may be or hereafter may become in any manner physically affixed or attached to the Project Site or Project Facilities. If requested by the County, the Corporation will furnish a landlord’s waiver with respect to such personal property.
(b) The County may from time to time, in its discretion and at its expense, install the County’s own personal property, in addition to the Project Facilities, in or upon the Project. All such items so installed (other than personal property financed with proceeds of the Certificates) shall be and remain the sole property of the County and shall not be deemed part of the Project for purposes of this Lease. The County may, at any time, remove from the Project any property installed pursuant to this subsection (other than personal property financed with proceeds of the Certificates, as set forth in Section 11 hereof). If any such removal causes damage to any portion of the Project, the County shall restore the same or repair such damage at its expense.
Maintenance, Operation and Use of Project.
(a) The County’s Obligations. Except to the extent any of the following are the express obligation of the Corporation pursuant to this Section 9, during the Lease Term, the County will, at its expense:
vii) Keep the interior of the Project Facilities in a neat and sanitary condition and not commit any nuisance or waste in, on or about the Project.
viii) Comply with all laws, insurance policies and regulations relating to, and obtain and maintain any governmental licenses and permits required for, the use, and occupancy of the Project.
ix) Pay all costs, claims, damages, fees and charges arising out of its use, and occupancy of the Project.
x) Comply promptly with all rights-of-way or use, privileges, franchises, servitudes, licenses, easements, tenements, hereditaments and appurtenances forming a part of the Project and all instruments creating or evidencing the same, in each case, to the extent compliance therewith is required of the County under the terms of this Lease.
xi) Not do, or permit to be done, any act or thing which might materially impair the value of the Project, not commit or permit any material waste of the Project, and not permit any unlawful or unauthorized occupation, business or trade to be conducted on the Project.
(b) The Corporation’s Obligations. In addition to those set forth in Exhibit E attached hereto and incorporated herein, the Corporation will use commercially reasonable efforts to provide, or cause to be provided, the following services, the costs of which shall be deemed Operating Costs:
(i) Janitorial Service. Janitorial service within the Project Facilities, five days per week, Monday through Friday, including, without limitation, cleaning, trash removal, vacuuming, maintaining towels, tissue and other restroom supplies and such other work as is customarily performed in connection with nightly janitorial services in projects similar in construction, location, use and occupancy to the Project. The Corporation will also provide or cause to be provided, periodic interior and exterior window washing and cleaning and waxing of uncarpeted floors in accordance with the Manager’s schedule for the Project. Janitorial work shall be done at such time as not to interfere with the County’s normal business operations.
(ii) Electrical Energy. Electrical energy to the Project for normal office building uses. The County will not use any equipment requiring electrical energy for lighting in excess of 3.5 watts per square foot installed or for electrical convenience outlets in excess of 4 watts per square foot installed without receiving the Corporation’s prior written consent, which consent the Corporation will not unreasonably withhold but may condition upon the Corporation installing the equipment and facilities necessary to furnish such excess energy. The Corporation will replace, or cause to be replaced, all lighting bulbs, tubes, ballasts and starters within the Project.
(iii) Heating, Ventilation and Air Conditioning. The Corporation will maintain, or cause to be maintained, adequate heating, ventilation, cooling and lighting equipment in operation to maintain the following environmental conditions within the Project (exclusive of parking areas) during normal business hours Monday through Friday.
Temperature in winter 70F – 75F
Temperature in summer 72F – 78F
Ventilation year round 5 air changes per hour
Lighting in all work stations 50 Foot candles
For the purpose of this clause “summer” is defined as the months April through October, inclusive, and “winter” is defined as the months November through March, inclusive. During other times, the Corporation will provide, or cause to be provided, heat and air conditioning upon the County’s reasonable advance notice (not less than one hour).
(iv) Water. Hot and cold water from standard building outlets for lavatory, restroom and drinking purposes.
(v) Other Utilities. Such other utilities as the County may reasonably require for its use of the Project, provided such utilities are available to the Project.
(vi) Passenger Elevator Service. The Corporation or the Manager may restrict the County’s use of elevators for freight purposes to the freight elevator and to hours the Corporation or the Manager reasonably determines. The Corporation or the Manager may limit the number of elevators in operation from time to time.
(vii) Repair and Maintenance of the Project. The Corporation shall promptly make, or cause to be made, all repairs and replacements to the Project, including all common areas, parking areas, the structural systems, roofs, lighting fixture ballasts, exterior and interior walls, heating, plumbing, air conditioning, doors, windows, corridors and surrounding grounds. The Corporation shall not be responsible for repairs caused by the sole negligence of the County, its employees, contractors or clients. The Corporation shall repaint the premises, interiors and exteriors, at five (5) year intervals. Such repair and maintenance shall include, without limitation, maintaining and repairing the following: (a) the structural and non-structural portions of the Project, including, without limitation, the foundations, exterior and interior walls, floors, roofs, windows and doors; (b) the electrical, mechanical, plumbing, heating and air conditioning systems, facilities and components; (c) the moldings, partitions and ceilings; and (d) the electrical, lighting and plumbing fixtures. Such repair and maintenance shall also include any maintenance, replacement and repair required by any applicable law, rules or ordinances.
(viii) Property Management Services. Each Management Agreement, and all amendments and modifications, shall be in a form which is, and shall be between the Corporation and a Manager which is, acceptable to the County. Each Manager shall be a competent provider of property management services and shall be a financially responsible entity which shall agree pursuant to the provisions of the Management Agreement that for so long as it continues to be the Manager it shall perform, on the Corporation’s behalf and at the Corporation’s expense, the Corporation’s obligations under Sections 4, 9, 10, 11, 16, 18, 19, 23, 24 and 25 of this Lease Agreement. Any successor Manager, except the County, shall be subject to the written approval of the Bond Insurer. The County hereby approves the initial Management Agreement with Opus West Management Corporation as the initial Manager, and the Corporation shall concurrently with the execution of this Lease Agreement enter into such initial Management Agreement. The Corporation shall provide to the County any proposed Management Agreement and any proposed amendment or modification to a Management Agreement, including any notice of termination thereof, at least thirty (30) days prior to its proposed effective date.
(ix) Additional Services. The Corporation shall provide, or cause to be provided, such other services as the County may reasonably request, to the extent such services are reasonably available and are normally provided in connection with this type of Project.
(x) Parking. The Corporation agrees that the surface parking areas and spaces included in the Project shall be for the exclusive use of the County, provided that the Corporation, the Manager, their contractors and subcontractors shall have the right to the reasonable use of parking spaces as necessary for performing duties of the Corporation under this Lease Agreement.
(c) Other Provisions Relating to Services. The Corporation and its agents shall have access to the Project to perform the services described in this Section 9. No temporary interruption in, or temporary stoppage of, any of the services this Section 9 describes is to be deemed an eviction or disturbance of the County’s use and possession of the Project, nor does any temporary interruption or stoppage relieve the County from any obligation this Lease describes, render the Corporation or its agents liable for damages or entitle the County to any abatement of Base Rent or Additional Rent. Neither Base Rent nor Additional Rent will be reduced, nor will the Corporation be liable, for loss or injury to or interference with the County’s property or business arising from or in connection with the Corporation’s performance of its obligations under this Section.
(d) The County Payment of Costs. In no event shall the Corporation have any obligation to provide any of the services described in this Section 9 unless an Appropriation has been made for such services, and funds for the payment of such services are available to the Corporation.
(e) Use of County Contracts. The Corporation consents to allowing the Project to benefit from existing supply contracts of the County for goods and services which are to be provided by the Corporation pursuant to this Lease Agreement, provided that the cost shall be included in Operating Costs.
Additions, Modifications and Improvements.
The County, in its discretion and at its expense, may make or may direct the Corporation to make, or cause to be made, from time to time, any additions, modifications or improvements to the Project from funds made available by the County which it may deem desirable for the purposes of the Project, provided that if such additions, modifications or improvements with respect to the Project shall cost one million dollars ($1,000,000) or more in a single Fiscal Year, an Engineer shall render a professional opinion to the Corporation that (a) no such additions, modifications or improvements shall adversely affect the structural integrity or strength of any improvements constituting a part of the Project or materially interfere with the use and operation of the Project, and (b) the undertaking and completion of such addition, modification and improvement will not cause the aggregate value of the Project to be reduced below the value of the Project immediately prior to the undertaking and completion of any such addition, modification and improvement. All additions, modifications and improvements so made to the Project by the County shall become and be deemed to constitute a part of the Project.
Substitutions and Removals.
(a) If the County, in its reasonable discretion, determines that any item of personal property constituting a part of the Project has become inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or should be replaced, the County, at its expense, may remove or cause the Corporation to remove such item provided that such removal (taking into account any substitutions) shall not impair the operational unity of the Project or damage the Project, and provided that the County shall:
xii) Substitute and install other items of property having equal or greater utility and value (but not necessarily the same property function in the operation of the Project) as the removed property, which substituted property shall be free from all liens and encumbrances and shall become part of the Project; or
xiii) In the case of removal of property without substitution, promptly pay to the Corporation for credit against the next ensuing Lease Payment an amount equal to: (i) if the removed property is sold or scrapped, the proceeds of such sale or the scrap value; (ii) if the removed property is used as a trade-in for property not to be installed as part of the Project, the trade-in credit received by the County; or (iii) in the case of the retention of such removed property by the County for other purposes, the fair market value of such property, as determined by an Engineer.
(b) The County shall promptly report to the Corporation and Trustee each such removal, substitution, sale or other disposition. In addition, the County shall pay to the Corporation such amounts as are required by the provisions of the preceding subsection (a)(2) to be paid to the Corporation promptly after the sale, trade-in or other disposition requiring such payment. However, no such report or payment need be made until the amount to be paid to the Corporation on account of all such sales, trade-ins or other dispositions not previously paid aggregates at least one million dollars ($1,000,000) in such Fiscal Period.
(c) Notwithstanding any other provisions of this Lease, individual items of personal property (other than those funded with proceeds of the Certificates) incorporated into and made part of the Project Facilities in the Project which have value in excess of $500,000 will not be removed from the Project in any one Fiscal Period without prior written notice thereof to the Corporation and Trustee and the prior written consent of the Bond Insurer. Individual items of personal property (other than those funded with proceeds of the Certificates) valued at less than five hundred thousand ($500,000) may be removed from the Project without such notice.
(d) No removal under this Section shall adversely affect the County’s obligation to make Lease Payments.
Indemnification.
To the extent permitted by the laws and Constitution of the State, the County shall protect, hold harmless, reimburse and indemnify, the Corporation and Trustee and their respective, officers, directors, agents and employees for, from and against any and all liability, obligations, losses, claims and damages paid or incurred in connection with the Project or this Lease (including all environmental liabilities regarding the Project) (except that the County shall not protect, hold harmless or indemnify the Corporation for or from its willful acts or gross negligence or Trustee for or from its willful acts or gross negligence, to the extent that such acts or gross negligence, as applicable, are finally determined to have caused the liability, obligation, loss, claim or damage or for any duty of the Corporation to indemnify, the Contractor or the Manager pursuant to the Construction Contract or the Management Agreement) and expenses in connection therewith including reasonable attorneys’ fees and expenses. Any amounts payable hereunder shall be paid as Additional Rent pursuant to Section 4(b) hereof. Obligations of the County to protect, hold harmless, reimburse and indemnify the Issuer, the Corporation and the Trustee as set forth herein which have accrued as of the date of termination shall survive any termination of this Lease, shall be Subject to Appropriations.
Inspection.
Subject to reasonable security and safety regulations and upon reasonable notice, the Corporation, Trustee and their agents will be entitled to enter upon the Project during business hours to inspect, or observe the use and operation of, the Project to the extent such inspection does not compromise the County’s ability to maintain confidentiality of records.
Liens and Encumbrances.
(a) The County shall keep the Project free and clear of all liens and encumbrances except Permitted Encumbrances. The Corporation will not create any liens or encumbrances on the Project or any portion thereof except for Permitted Encumbrances and as permitted by this Lease Agreement. The Corporation shall provide timely notice to the County of any liens or encumbrances with regard to the Project or any portion thereof of which the Corporation has notice. The Corporation shall cooperate with the County with regard to removal of any lien or encumbrance with regard to the Project or any portion thereof.
(b) Supplementing and not limiting subsection (a) above, the County shall not permit any mechanics or other liens to be filed or exist against the Project by reason of work, labor, services or materials supplied or claimed to have been supplied to, for or in connection with the Project or to the County. If any such lien shall at any time be filed, the County shall, within thirty (30) days after notice of its filing but subject to the right to contest set forth below, cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. Notwithstanding the foregoing, the County shall have the right, at its own expense, and after prior notice to the Corporation, by appropriate proceedings duly instituted and diligently prosecuted, to contest in good faith the validity or the amount of any such lien. In the event of such contest, the County shall deliver to the Corporation an opinion of counsel (which may include the County Attorney) to the effect that, by nonpayment of any such items, the interest created by the Lease will not be materially affected and the Project or any part thereof will not be subject to imminent loss or forfeiture. In the event no such opinion is delivered to the Corporation within thirty (30) days following the commencement of any such contest of lien, the County shall promptly cause such lien to be discharged of record.
Risk of Loss; Damage; Destruction.
(a) The County shall either self-insure pursuant to A.R.S. Section 11-251.15 all risk of physical loss or provide insurance from a commercial insurer and provide evidence of Required Property Insurance Coverage in accordance with the provisions of Section 19. No loss of or damage to, or appropriation by governmental authorities of, or defect in or unfitness or obsolescence of, the Project will relieve the County of the obligation to make Lease Payments during the Lease Term or to perform any other obligation under this Lease.
(b) In case of any damage to or destruction of the Project which might exceed $250,000, the County will promptly give or cause to be given written notice thereof to the Trustee, and the Corporation, who shall promptly give notice thereof to the Bond Insurer, generally describing the nature and extent of such damage or destruction. There shall be no abatement or diminution of Lease Payments and the County shall, whether or not the Net Proceeds of insurance, if any, received on account of any damage or destruction shall be sufficient for such purpose, promptly commence and complete, or cause to be commenced and completed, the repair or restoration of the Project as nearly as practicable to the value, condition and character thereof existing immediately prior to such damage or destruction, with such changes or alterations, however, as the County may deem necessary for proper operation of the Project.
(c) In the event of total destruction of the Project, unless the County shall exercise its purchase option under Section 20 hereof or defease this Lease pursuant to Section 24 hereof from lawfully available funds, the County shall apply Net Proceeds of insurance and self-insurance and any other moneys lawfully available and appropriated for the purpose to the extent required to acquire, construct and/or install replacement facilities to constitute the Project.
(d) Unless the County has exercised its purchase option or defeased this Lease, as contemplated by subsection (c) hereof, any Net Proceeds in excess of amounts applied pursuant to subsections (b) or (c) above shall be paid to and held by the Corporation as a pro rata prepayment of future Lease Payments set forth on Exhibit B hereto and the Principal Portion of the future Lease Payments set forth thereon shall be reduced accordingly.
Eminent Domain.
If title to or the temporary use of the Project shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under any governmental authority, each party will promptly give written notice thereof to the other describing the nature and extent of such taking. Any Net Proceeds received from any eminent domain award during the Lease Term and not used to acquire replacement property constituting part of the Project shall be paid to and held by the Trustee as a pro rata prepayment of future Lease Payments set forth on Exhibit B hereto and the Principal Portion of the future Lease Payments set forth thereon shall be reduced accordingly.
Compliance with Legal and Insurance Requirements.
(a) The County, at its expense, shall promptly comply or cause compliance with all Legal Requirements and Insurance Requirements applicable to its occupancy and use of the Project, and shall procure, maintain and comply with all permits, licenses and other authorizations required for its occupancy and use of the Project and will comply with any instruments of record at the time in force burdening the Project.
(b) As used in this Section:
xiv) “Legal Requirements” means all laws, codes, acts, ordinances, resolutions, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of all governmental entities, departments, commissions, boards, courts, authorities, agencies, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which now or at any time hereafter may be applicable to the County’s occupancy and use of the Project.
xv) “Insurance Requirements” means all provisions of any insurance policy covering or applicable to the Project and all contractual requirements of the issuer of any such policy.
(c) The County may, at its expense and after prior notice to the Corporation, by any appropriate proceedings diligently prosecuted, contest in good faith any Legal Requirement and postpone compliance therewith pending the resolution or settlement of such contest, provided that such postponement does not, in the opinion of Independent Counsel satisfactory to the Corporation, materially affect the interest created by the Lease or subject the Project to imminent loss or forfeiture.
(d)
(i) Neither this Lease nor the County’s actions pursuant thereto shall create any warranties regarding environmental conditions at the Project. Nothing in this paragraph (d)(i) shall be deemed to negate the terms of paragraphs (ii) through (v) below.
i) Except as disclosed in writing to the Corporation and the Trustee prior to the date hereof the County has not been informed of, nor does the County have any knowledge of (a) the presence of any “Contaminants” (as defined below) on, in or under the Project, or (b) any spills, releases, threatened releases, discharges or disposal of Contaminants that have occurred or are presently occurring on or onto the Project or any properties adjacent to the Project, or (c) any spills or disposal of Contaminants that have occurred or are presently occurring on any other properties as a result of any construction on or operation and use of the Project.
xvi) In connection with the operation and use of the Project, the County represents that it has no knowledge of any failure to comply with any applicable local, state or federal environmental laws, regulations, ordinances and administrative and judicial orders relating to the generation, treatment, recycling, reuse, sale, storage, handling, transport and disposal of any Contaminants.
xvii) The County represents and warrants that it has not given and will not give any release or waiver of liability that would impair any claim based upon Contaminants to a previous owner of the Project or to any party who may be potentially responsible for the presence of Contaminants thereon nor has it made promises of indemnification regarding Contaminants on or associated with the Project to any person other than the Corporation as set forth herein.
xviii) In the event that the County becomes aware of the release of any Contaminants on, or other environmental condition, problem or liability with respect to, the Project that is required by Federal or State law to be reported, the County agrees to notify the Corporation and the Trustee in writing of such condition at the time such required report is filed. The County further agrees to take all actions, which are required of property owners by law, to investigate or clean up any Contaminants released on-site during the term of this Agreement affecting the Project. The County does not, by this Lease, release any person from liability for the costs of any such clean up or response action.
xix) As used in this Section, “Contaminants” shall mean: any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, a hazardous or toxic chemical, a hazardous, toxic or radioactive substance, petroleum or other similar term, by any federal, state or local environmental statute, regulation, or ordinance presently in effect or that may be promulgated in the future, as such statutes, regulations and ordinances may be amended from time to time, including, but not limited to, the statutes listed below:
Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq.
Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et seq.
Federal Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001, et seq.
Federal Clean Air Act, 42 U.S.C. Sections 7401-7642.
Federal Water Pollution Control Act, Federal Clean Water Act of 1977, 33 U.S.C. Sections 1251, et seq.
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Sections 136, et seq.
Federal Toxic Substances Control Act, U.S.C. 2601, et seq.
Federal Safe Drinking Water Act, 42 U.S.C. Sections 300(f), et seq.
Arizona Environmental Quality Act, A.R.S. Sections 49-101, seq.
Arizona Community Planning and Emergency Right-to-Know Act, A.R.S. Sections 26-341, et seq.
Payment of Taxes and Other Governmental Charges.
(a) The County shall pay, promptly when due and before penalty or interest accrues thereon, all taxes and assessments, either general or special, and other governmental charges of any kind whatsoever, foreseen or unforeseen, ordinary or extraordinary, that now or hereafter at any time during the Lease Term may be lawfully taxed, charged, levied, assessed or imposed upon or against or be payable for or in respect of the Project or any part thereof or interest therein (including the leasehold estate of the County therein) or any buildings, improvements, machinery and equipment at any time installed thereon by the County, or the income therefrom or Lease Payments and other amounts payable, under the Lease, including any new taxes and assessments not of the kind enumerated above to the extent that the same are lawfully made, levied or assessed in lieu of or in addition to taxes or assessments now customarily levied against real or personal property, and further including all utility charges, (including gas, water, steam, electricity, heat, power, telephone and the charges incurred in the operation, maintenance, use, occupancy and upkeep thereof) not paid by the Corporation or the Corporation’s agents pursuant to Section 9 hereof, assessments and other general governmental charges and impositions whatsoever, foreseen or unforeseen, which if not paid when due would impair or encumber the Corporation’s title to or leasehold interest in the Project; provided that, with respect to any special assessments or other governmental charges that are lawfully levied and assessed but which may be paid in installments, the County shall be obligated to pay only such installments thereof as become due and payable during the Lease Term. Nothing in this subsection shall be construed to be an agreement on the part of the County to pay any tax, assessment, or other governmental charge the Corporation is not otherwise required by law to pay. The County shall cause all such tax and assessment bills for the Project to be mailed to the Manager for the Project, and the Manager shall collect such taxes and assessments from the Corporation as part of the Operating Costs.
(b) Notwithstanding subsection (a) above, the County may, at its expense and after prior written notice to the Corporation and the Trustee, by appropriate proceedings diligently prosecuted; contest in good faith the validity or amount of any such taxes, assessments and other charges, and during the period of contest need not pay the items so contested. As a condition to and prior to pursuit of such a contest, the County shall deliver to the Corporation an opinion of counsel (which may include the County Attorney) to the effect that by nonpayment of any such items, the interest created by the Lease as to the Project will not be materially affected or the Project will not be subjected to imminent loss or forfeiture. Otherwise, the County shall promptly pay such taxes, assessments or charges. During the period when any taxes, assessments or other charges so contested remain unpaid, the County shall set aside on its books adequate reserves with respect to the unpaid amounts.
Insurance.
Prior to occupancy by the County of any of the various Project Facilities, the Corporation’s obligation to provide Required Property Insurance Coverage shall be deemed satisfied by operation of Section 8.1.2 of the Construction Contract. Upon occupancy by the County of any of the Project Facilities, the County shall self-insure and insure such Project Facilities (including appurtenant common or public areas) and personal property constituting a part of the Project as occupant during the Lease Term pursuant to A.R.S. Section 11-251.15, in amounts equal to the greater of (a) replacement cost of the Project Facilities and the actual cash value of personal property; or (b) the outstanding aggregate principal amount of the Certificates. The County shall retain any/all deductibles and/or amounts not covered by commercial reinsurance, and self-insure those amounts in accordance with the provisions of A.R.S. Section 11.251.15. Evidence of insurance in the form of certificates, shall be issued at time of the County’s occupancy of each structure comprising the Project, and shall name the Corporation and the Trustee as loss payee as their interests may appear. Coverage shall be as broad as standard commercial “All Risk of Physical Loss” insurance policies including business interruption, extra expense, rental value/income, leasehold interests, demolition and increased cost of construction. The payment of loss proceeds under self-insurance and commercial reinsurance shall be determined at the time of loss adjustment in satisfaction of the terms of this Lease Agreement and the liabilities of the County.
The County may self-insure its general liability in accordance with the provisions of A.R.S. Section 11-261.C and provide a certificate of self-insurance in the amount of $$$$ to the Corporation and the Trustee at time of the County’s occupancy of each structure comprising the Project.
Purchase Option.
(a) If there is not then existing an Event of Default, or a default which with notice or lapse of time or both could become an Event of Default, which would not be cured or remedied by the payments provided for in this Section, the County shall have the right, during the Lease Term and upon ninety (90) days prior written notice to the Corporation and the Trustee, to purchase the Corporation’s right, title and interest in the Project on a Purchase Date specified in the County’s notice by paying to the Corporation all Lease Payments then due or past due and payable, together with the Purchase Price, on the designated Purchase Date; provided, however, that if the County elects to cause the defeasance of this Lease, the amount to be paid in order to exercise this purchase option shall be the amount which will cause the defeasance of this Lease in accordance with Section 24 hereof.
(b) After providing such notice, the County shall pay to the Corporation the amount specified in (a) above at least thirty (30) days prior to the Purchase Date specified in such notice.
Assignments.
(a) The County shall not, without the prior written consent of the Corporation, the Trustee and the Bond Insurer, which consent shall not be unreasonably withheld,: (i) assign, transfer, pledge, hypothecate or grant any security interest in or otherwise dispose, of this Lease, without replacement or substitution in accordance with the terms of this Lease, or any interest in this Lease; (ii) sublease the Project to any person other than an agency or political subdivision of the State or the United States Government or any agency thereof; or (iii) permit the Project to be operated by any person other than the County, an agency or political subdivision of the State or the United States Government or any agency thereof, or such governmental units’ employees or persons authorized by the County or such governmental units in connection with such governmental units’ operation and maintenance of the Project. Any such consents or any sublease to or operation of any part of the Project by the United States Government or any agency thereof shall be conditioned upon the Corporation’s and the Trustee’s receipt of an opinion of nationally-recognized special (bond) counsel satisfactory to the Corporation and the Trustee substantially to the effect that any such proposed action shall not adversely affect the exclusion of the Interest Portion of Base Rent from gross income of the Certificate Holders for federal income tax purposes. Any sublease or assignment shall (1) not extend for longer than the Lease Term, (2) be cancellable by the Corporation, upon an Event of Default or an Event of Nonappropriation of Funds and (3) not allow the assignee or sublessee in any way to encumber or dispose of the Project. The limitations of this paragraph shall not apply to subleases of minor portions of the Project such that not more than five percent (5%) of the proceeds of the Certificates, the interest on which is intended to be excluded from gross income for federal income tax purposes would be used, directly or indirectly, in a trade or business that constitutes an unrelated trade or business or that constitutes a private business use within the meaning of Sections 145(a)(2) and 141(b) of the Internal Revenue Code and to which the Corporation gives its prior written consent, which consent shall not be unreasonably withheld.
(b) The Corporation may not assign its rights, title and interest in and to this Lease, the Project or any documents executed with respect to this Lease, or grant or assign any security interest in this Lease or its rights to the Project, in whole or in part, except pursuant to the Assignment Agreement or upon an Event of Non-appropriation of Funds or an Event of Default hereunder.
(c) Subject to the preceding subsections, this Lease inures to the benefit of and is binding upon the successors or assigns of the parties to this Lease.
Events of Default.
(a) The occurrence of any one or more of the following events constitutes an “Event of Default” under this Lease:
xx) The County’s failure to make any Lease Payment as it becomes due in accordance with the terms of this Lease; or
xxi) The County’s failure to perform or observe any other covenant, condition or agreement to be performed or observed by it under this Lease, which failure is not cured or steps satisfactory to the Corporation taken to cure the failure within 30 days after written notice of the failure to the County by the Corporation.
(b) Notwithstanding the foregoing, if, by reason of Force Majeure, the County is unable to perform or observe any agreement, term or condition of this Lease, other than any obligation to make payments required under this Lease, the County shall not be deemed in default during the continuance of such inability. However, the County shall promptly give notice to the Corporation of the existence of any event of Force Majeure and shall use its best efforts to eliminate or mitigate the effects thereof; provided that the settlement of strikes or other labor disturbances shall be entirely within the County’s discretion.
For the purpose of this subsection, the term “Force Majeure” means, without limitation: Acts of God; strikes, lockouts or other labor disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States or any of its departments, agencies, political subdivisions, courts or officials, or any civil or military authority; insurrections; civil disturbances; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; droughts; floods; arrests; explosions; breakage, malfunction or accident to facilities, machinery, transmission pipes or canals; partial or entire failure of utilities; shortages of labor, materials, supplies or transportation, or any other similar or dissimilar cause that is beyond the control of the County and occurs without the County’s fault or negligence and which the County is unable to prevent by exercising reasonable diligence.
Remedies.
(a) Upon the occurrence of an Event of Default, and as long as the Event of Default is continuing for a continuous period of ninety (90) days, subject to the provisions of subsection (i) hereof, the Corporation may, at its option, exercise any one or more of the following remedies:
xxii) By written notice to the County, terminate this Lease and direct the County to (and the County agrees that it will), at the County’s expense, promptly return possession of the Project to the Corporation, or, as to the County’s personal property included in the Project Facilities, and at the Corporation’s option, enter upon the Project and take immediate possession of and remove any or all of such personal property;
xxiii) Sell or lease the Corporation’s interest in the Project or sublease the Project for the account of the County pursuant to the terms of this Lease, holding the County liable for all applicable Lease Payments and other payments due during the then-current Fiscal Period to the effective date of such sale, lease or sublease and for the difference between the purchase price, rental and other amounts paid by the purchaser, the County or sub-lessee pursuant to such sale, lease or sublease and the amounts payable during the then-current Fiscal Period by the County under this Lease; and
xxiv) Exercise any other right, remedy or privilege which may be available to it under the applicable laws of the State or any other applicable law or proceed by appropriate court action to enforce the terms of this Lease or to recover damages for the breach of this Lease or to rescind this Lease as to the Project.
(b) The County will remain liable for all covenants and obligations under this Lease, and for all legal fees and other costs and expenses, including court costs awarded by a court of competent jurisdiction, incurred by the Corporation with respect to the enforcement of any of the remedies under this Lease, when an Event of Default has occurred.
(c) No remedy conferred on or reserved to the Corporation by this Lease is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair or be construed to be a waiver of any such right or power, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Corporation to exercise any remedy reserved to it in this Lease, it shall not be necessary to give any notice, other than any notice required by law or for which express provision is made in this Lease.
(d) If an Event of Default occurs and the Corporation incurs expenses, including, without limitation, attorneys’ fees, in connection with the enforcement of or the collection of amounts due under this Lease, the County shall reimburse the Corporation for the expenses so incurred upon demand. If any such expenses are not so reimbursed, the amount thereof, together with interest thereon from the date of demand for payment at the Interest Rate for Advances, to the extent permitted by law, shall be reimbursed and in any action brought to collect such amounts, the Corporation shall be entitled to seek recovery of those expenses in such action except as limited by law or by judicial order or decision.
(e) No failure by the Corporation or Trustee to insist upon strict performance by the County of any provision of this Lease shall constitute a waiver of the Corporation’s or Trustee’s right to strict performance and no express waiver shall be deemed to apply to any other existing or subsequent right to exercise any remedy upon the failure by the County to observe or comply with any provision of this Lease.
(f) The County shall notify the Corporation and the Trustee immediately if it becomes aware of the occurrence of any Event of Default or of any fact, condition or event which, with the giving of notice or passage of time or both, would become an Event of Default.
(g) The County’s obligations under this Section are Subject to Appropriations.
(h) To the extent that the Project is sold pursuant to the exercise by the Corporation or Trustee of its remedies hereunder or otherwise and there remain proceeds of sale with respect thereto after payment of all expenses of such sale, payment to the Corporation of an amount equal to the remaining Principal Portions of all Lease Payments through the entire Lease Term plus all interest components of Lease Payments accruing to the date of distribution of the proceeds of such sale (all of the foregoing being determined without taking into account any early termination of the Lease Term) and, regardless of the adequacy of Appropriation, payment of any other amounts required to be paid to the Corporation herein, such remaining proceeds shall be paid to the County.
(i) Notwithstanding the foregoing, so long as the Bond Insurer is not in default in its obligations under the Municipal Bond Insurance Policy, and such Municipal Bond Insurance Policy is in full force and effect, the Corporation shall provide immediate notice to the Bond Insurer of any default or Event of Default hereunder and shall not waive any default or Event of Default hereunder without the prior written consent of the Bond Insurer, and the Bond Insurer, acting alone, shall have the right, to direct the Corporation to pursue any remedy provided for herein and the Corporation shall not pursue any remedy except with the prior written consent of the Bond Insurer.
Defeasance.
(a) All Lease Payments will be deemed to be paid when money sufficient, or noncallable Defeasance Obligations which are certified by an independent public accounting firm acceptable to the County, the Corporation and the Trustee to be of such maturity or redemption dates and interest payment dates, and to bear such interest, as will be sufficient together with any moneys on deposit, without further investment or reinvestment of either principal amounts thereof or the interest earnings thereon, to pay the Purchase Price for the Project on a designated Purchase Date or to pay all Lease Payments when due.
(b) When all Lease Payments are deemed paid, as provided above, and the Corporation and the Trustee have received the unqualified written legal opinion of nationally recognized bond counsel to the effect that the deposit of money or Defeasance Obligations in trust will not cause the interest on the Certificates to be includable in gross income of the Certificate Holder for Federal income tax purposes under the Code, the Corporation and Trustee shall be entitled to payment of those Lease Payments solely from that money or the proceeds of those Defeasance Obligations and the right, title and interest of the Corporation and the County under this Lease as to the Project shall, except for the provisions relating to the County’s indemnification of the Corporation and the Trustee pursuant to Section 12 hereof and the exercise by the County of its option to purchase and the conveyance of title to the County, cease, terminate and become void.
Notices.
All notices to be given under this Lease shall be made in writing and mailed by first class mail, postage prepaid, to the party at its address stated below or at such other address as the party may provide in writing from time to time.
If to the Corporation: Mohave Administration Building Finance Corporation
700 W. Beale Street, 3rd Floor East
Kingman, Arizona 86401
Attention: John Timko
With a copy to: Opus West Management Corporation
2555 East Camelback Road, Suite 840
Phoenix, Arizona 85016-9267
Attention: Director of Property Management
If to the County: County Manager
Mohave County, Arizona
700 W. Beale Street, 3rd Floor West
Kingman, Arizona 86401
and to: Finance Director
Mohave County, Arizona
700 W. Beale Street, 3rd Floor East
Kingman, Arizona 86401
If to the Trustee: Wells Fargo Bank, N.A.
100 West Washington, 8th Floor
Phoenix, Arizona 85003
Attn: Corporate Trust Office
If to the Bond Insurer: Ambac Assurance Corporation
One State Street Plaza
New York, NY 10004
Attn: General Counsel
Notice of Litigation.
The County shall give the Corporation, the Issuer and the Trustee prompt notice of any action, suit or proceeding by it or against it at law or in equity, or before any governmental instrumentality or agency, or of any of the same which may be substantially threatened, which, if adversely determined, would materially impair the right or ability of the County to carry out its obligations under this Lease or to renew this Lease, or which would materially and adversely affect the County’s operations, properties, assets or condition.
Headings.
All section headings contained in this Lease are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease.
Conflicts of Interest.
All parties acknowledge that this Lease is subject to cancellation by the County Board of Supervisors pursuant to A.R.S. § 38-511, the provisions of which are incorporated by reference herein.
Governing Law.
This Lease shall be construed in accordance with and governed by the laws of the State. The venue for any proceedings on any and all controversies arising under this Lease shall be Mohave County, Arizona.
Arbitration.
In the event of a dispute, the parties agree to use arbitration to the extent required by A.R.S. § 12-1518, and the prevailing party shall be entitled to attorney’s fees and costs with respect thereto.
Delivery of Related Documents.
The County will execute or provide, as requested by the Corporation, the following, and such other documents and information of a similar character, as are reasonably necessary with respect to the transaction contemplated by this Lease: certificates relating to the due authorization, execution and delivery hereof, the absence of any litigation relating hereto or of any conflicts with law or other agreements to which the County is a party or by which the County is bound, UCC-1 financing statements and any amendments to Exhibit A or Exhibit B hereto made pursuant to the terms hereof.
Entire Agreement; Amendment; Severability.
(a) This Lease, together with attachments, exhibits and other documents or instruments executed by the County and the Corporation in connection with this Lease, constitutes the entire agreement between the parties with respect to the lease of the Project.
(b) This Lease may not be modified, amended, altered or changed except with the written consents of the County, the Corporation, the Trustee and the Bond Insurer.
(c) If any provision of, or any covenant, obligation or agreement contained in, this Lease is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained in this Lease. Any such invalidity or unenforceability shall not affect any valid or enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.
Tax Covenants.
The County covenants (a) that it will take or cause to be taken all actions, which pursuant to the provisions of this Lease Agreement are within its reasonable control, that may be required of it for the interest on the Certificates to be and remain excluded from gross income for federal income tax purposes, and (b) that it will not take or authorize to be taken any actions, which pursuant to the provisions of this Lease Agreement are within its reasonable control, which would adversely affect such exclusion. An officer of the County shall take any and all such actions, which pursuant to the provisions of this Lease Agreement are within its reasonable control, and make or give such reports and certifications as may be appropriate to support such exclusion of the interest on the Certificates.
Assignment and Subcontracting: Limited Obligation of Corporation.
(a) The County acknowledges that the Corporation’s rights and benefits under this Lease have been assigned to the Trustee pursuant to the Assignment Agreement. The County further acknowledges that certain duties, obligations and responsibilities of the Corporation hereunder will be performed by the Manager or the Contractor in accordance with the Management Agreement and the Construction Contract and the sole duty, responsibility and obligation of the Corporation hereunder is to execute on a ministerial basis those documents presented to it by the Trustee, the Manager or the Contractor for execution (which execution shall be directed by the County or the Bond Insurer, as the case may be).
(b) The County acknowledges that any payment obligations of Corporation hereunder are nonrecourse and are limited solely to moneys received by Corporation hereunder, or through funds made available pursuant to the Indenture, or the Construction Contract or any insurance policies.
Financial Information.
So long as this Lease is in effect, the County covenants and agrees to deliver to the Corporation and Trustee a copy of each final annual budget of the County and a copy of each annual financial statement for the County as soon as possible following the availability thereof.
Notices and Limitations Under Other Agreements.
The Corporation shall provide promptly to the County all written communications given or received by the Corporation pursuant to the provisions of the Construction Contract, the Design Documents, the Management Agreement, the Indenture or other documents related to the design, development, construction, financing or management of the Project. The Corporation shall not approve, consent to, execute or deliver any amendment, modification or termination of any of the Construction Contract, the Design Documents, Management Agreement, or the Indenture, without, in each instance, the prior written consent of the County.
Solicitation.
The parties acknowledge and agree that this agreement is entered into to in connection with the award to the Opus West team resulting from the RFP. The parties agree that to the best of their knowledge there has been no occurrence, action, omission or incident with respect to the solicitation, response to the solicitation, or the negotiation, documentation or award of this transaction that violates Chapter 6, Title 34, Arizona Revised Statutes, as amended.
Lessening the Burdens of Government.
The County acknowledges that the Corporation by entering into this Lease Agreement, construction of the Project Facilities and leasing the Project to the County pursuant to this Lease Agreement will lessen the burdens imposed on the County and will create a public work and building.
Recording.
The parties agree that this Lease Agreement or a memorandum thereof is to be recorded in the records of Mohave County, and that this Lease Agreement or a memorandum thereof may be re-recorded as necessary to correct the legal description of the Project Site due to replatting or otherwise.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this Lease-To-Own Agreement by their authorized officers as of the date first set forth above.
LESSOR:
MOHAVE ADMINISTRATION BUILDING FINANCE CORPORATION, an Arizona nonprofit corporation
By:
Name: John F. Timko
Title: President
LESSEE:
MOHAVE COUNTY, ARIZONA
By:
Name: Pete Byers
Title: Chairman, Mohave County Board of Supervisor
ATTEST:
Clerk, Board of Supervisors
[SIGNATURE PAGE TO LEASE-TO-OWN AGREEMENT]
STATE OF ARIZONA )
)
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this _____ day of DATED, by John Timko, President of Mohave Administration Building Finance Corporation, an Arizona nonprofit corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
My Commission Expires:
STATE OF ARIZONA )
)
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this _____ day of DATE, by Pete Byers, the Chairman of the Mohave County Board of Supervisors.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
My Commission Expires:
EXHIBIT A
PROJECT DESCRIPTION
PROJECT SITE:
That certain real property located in Mohave County, Arizona, and more fully described as follows:
PROJECT FACILITIES:
One office building, consisting of an Administration component and a Health and Human Services component containing approximately 100,000 square feet and 30,000 square feet, respectively, of gross building space, as more fully described in the Schematic Design Documents identified on Exhibit A-1 attached hereto.
LEGAL DESCRIPTION:
EXHIBIT A-1
SCHEMATIC DESIGN DOCUMENTS
EXHIBIT B
BASE RENT PAYMENT SCHEDULE
EXHIBIT C
ESTIMATED OPERATING COSTS
FOR FISCAL PERIOD
ENDING JUNE 30, 2006
EXHIBIT D
MAJOR MAINTENANCE
FUND PAYMENT SCHEDULE
EXHIBIT E
BUILDING MANAGEMENT STANDARDS
The offeror shall prepare a detailed Property Management Proposal for operating and maintaining the proposed facility.
The offeror shall provide an example of General Terms and Conditions suggested for implementing the Property Management Proposal or Plan.
The offeror shall identify a single point contact responsible for management and administration of each of the following four categories:
1. Operations Plan - Clearly identify staffing requirements, assignments, a proposed organization chart, shifts, hours of work, and definitions of responsibilities and duties addressing at a minimum the following issues:
a. Operating Engineer / BMW (building maintenance worker)
b. Custodial staff
c. Standards/assumptions for cleaning:
i. Daily
ii. Weekly
iii. Monthly
iv. Quarterly
v. Annually
d. Criteria:
i. Square feet per shift
ii. Hours of operations
iii. Density of staff
e. Materials, equipment, tools, and disposables - identify costs, control, and methods for measuring performance and responsibility
f. Space requirements for office and storage
g. Landscape & Grounds - identify options for levels of service and responsibility for the landscaping, parking areas, and overall grounds maintenance and care.
h. Incentives & corrections plan - clearly identify the process for corrective measures and levels of response. Identify incentives and or penalties and compensation for performance corrections.
i. A plan for after hours support and public use of certain areas of the
facility by other community and agency groups or organizations.
2. Maintenance & Preventative Maintenance - Clearly identify where specific overlaps of responsibility and staffing occur for operating and custodial staff. Identify a specific plan for both standard and routine maintenance as well as preventative maintenance procedures and activities.
a. Demonstrate compliances with manufacture's suggestions for operations as well as compliance with warranty requirements.
b. Tracking - provide a tracking and monitory plan for all routine maintenance and preventative maintenance tasks required. Provide monthly reports of tasks completed, planned, and / or outstanding. Provide information on any additional maintenance and / or repair activities required. This system of tracking may stand alone or be integrated with the Energy Management Systems and or Work Order system.
c. Work Order plan - Define a work order process for maintenance tracking, monitoring, and process control.
i. Standard turn around - identify the corrective repair process for standard care items such as routine hardware repairs or adjustments.
ii. Critical turn around - identify process and procedures for critical items such as mechanical system failures.
iii. Tenant requests - identify the process and cost control measures for tenant requested and tenant related work orders that the tenant may want to take advantage of.
d. Spares & warehousing - identify the space requirements for maintaining an adequate inventory of standard additional materials, tools, and disposables. Identify a plan for measuring the adequacy of the inventory as well as disposal of hazardous or controlled chemicals used in the process.
e. Incentives & corrections plan - identify the process and procedures for reporting and evaluating success of the maintenance plan as well as the process for improving, and correcting identified deficiencies.
3. Building Renewal Plan - Develop a long term building life-cycle renewal plan for all mechanical systems, electrical systems, components of the building exterior, and finishes.
a. Major Maintenance Reserve Fund - prepare a proposed budget, funded by the tenant for major maintenance reserve. This fund shall not be used for any operating expenses and shall not be used without express written permission from the tenant. The proposal is to include the structure of the proposed agreement, recommended amounts to be funded, and the specifics of the methods for approval, use, and expenditure.
b. Plan & anticipated cost segregation for building type - identify those costs specific to the unique design of the proposed particular building (i.e. a plan for renewal of a 20 year roof with projected maintenance costs and replacement costs set aside).
c. Landlord / tenant accounts - identify the responsibilities the tenant shall assume as well as the landlord in preparing for building renewal.
4. Energy Management – Identify the anticipated plan for energy and overall utility management and use. Provide a detailed plan for energy management, monitoring, responsibility, and reporting. This plan may stand independent or be integrated with the Preventative Maintenance and Work Order process, but must provide a level of reporting consistent with the anticipated terms of the lease agreement and / or Green building certifications.
a. Assumptions:
i. Cost /sq. ft.
ii. Hours of operations
iii. Occupancy
b. Modifiers or other annual review options
c. EMS system - off hours use – It is anticipated that the tenant will make certain spaces available to other government, civic, and public agencies for use at other than the normal hours of operations. Identify the proposed configuration of the EMS system for managing and tracking this additional use and costs associated with the use.
d. Incentives / corrections plan - identify the process and procedures for reporting and evaluating success of the maintenance plan as well as the process for improving, and correcting identified deficiencies.
EXHIBIT xx
SAMPLE GUARANTEED PRICE DESIGN/BUILD CONTRACT
GUARANTEED PRICE DESIGN/BUILD CONTRACT
THIS GUARANTEED PRICE DESIGN/BUILD CONTRACT (this “Contract”) is made as of June 1, 2004, by and between OPUS WEST CONSTRUCTION CORPORATION, a Minnesota corporation (“Contractor”), and MOHAVE ADMINISTRATION BUILDING FINANCE CORPORATION, an Arizona nonprofit corporation (“Owner”).
WITNESSETH:
Contractor and Owner, in consideration of the mutual covenants and agreements contained herein, hereby agree as follows:
1. Scope of Work.
Contractor will cause certain design and engineering services (sometimes herein “Design Services”) to be performed as described in this Contract by duly licensed personnel or entities (the “Design Professionals”) and shall perform certain construction work (sometimes herein “Contracting Services”) (the Design Services and the Contracting Services are, collectively, the “Work”) necessary for the complete design and construction of an office building consisting of an Administration component and a Health and Human Services component containing approximately 100,000 square feet and 30,000 square feet, respectively, of gross building space, as more fully described in the Schematic Design Documents defined below (the “Improvements”), upon that real property ground leased by Owner and legally described in Exhibit “ A “ attached hereto and made a part hereof (the “Land”), which Improvements and Land the Owner intends to lease to Mohave County, Arizona (the “County”), pursuant to that certain Lease-To-Own Agreement, dated as of June 1, 2004 (the “Lease”), as follows:
1.1. Design Service.
Contractor shall utilize the services of competent design professionals, who are either salaried employees of Contractor or independent consultants to whom all or parts of the design work is subcontracted, to perform the following Design Services:
1.1.1. Schematic Design Phase.
Contractor prepared or caused to be prepared the schematic design documents (the “Schematic Design Documents”) consisting of drawings and outline specifications. The Schematic Design Documents are described on Exhibit “B” attached hereto and are hereby approved by the Owner and have been approved by the County pursuant to the Lease.
1.1.2. Design Development Phase.
Based on the approved Schematic Design Documents, and any adjustments authorized by the Owner (with the County’s consent as required by the Lease) in the project requirements, Contractor shall cause to be prepared, for approval by the Owner and the County, design development documents (the “Design Development Documents”) consisting of drawings and other documents to fix and describe the size and character of the entire project as to architectural, structural, civil, landscape, mechanical and electrical systems, materials and such other elements as may be appropriate. A land survey, a title report, topographical information, environmental reports and archaeological studies shall be supplied by Owner. Owner and the County shall approve the Design Development Documents in accordance with Section 1.1.4 below. Owner shall verify that all necessary zoning, entitlements, licenses and permits are obtained for the construction of the project and assist Contractor in obtaining all other necessary licenses and approvals required for the Owner to own and commence operation of the project and for the County to commence occupancy of the project pursuant to the Lease.
1.1.3. Construction Documents Phase.
Based upon the approved Design Development Documents, and any adjustments authorized by the Owner (with the County’s consent as required by the Lease) in the requirements for the Improvements the Contractor will cause duly licensed design and engineering professionals working at the direction of Contractor to prepare all construction documents (the “Construction Documents”) for the Work, setting forth the requirements for construction of the Work in detail sufficient to enable trade contractors and suppliers to bid their respective portions of the Work, to enable workers of ordinary skill to construct the Work, and to enable the issuance of all necessary construction permits. When so prepared, Contractor will submit the Construction Documents for approval by the Owner and the County. The Construction Documents may (as appropriate) be submitted in phases. The Owner and the County shall approve the Construction Documents in accordance with Section 1.1.4 below.
1.1.4. Approval.
Contractor shall submit each of the Design Development Documents and Construction Documents (collectively, the “Design Documents”) to the Owner and the County for their approval. The County shall review and approve the Design Documents in accordance with the Lease. The Owner shall not disapprove any aspect of the Design Documents except for just and reasonable cause and will not act in an arbitrary or capricious manner. In addition, Owner shall not disapprove the Design Development Documents if they are generally consistent with the approved Schematic Design Documents and Owner shall not disapprove the Construction Documents if they are generally consistent with the approved Design Development Documents. Owner will review each phase of the Design Documents and notify Contractor of any comments or objections thereto, or its approval thereof, within seven (7) days of receiving them from Contractor. If Owner has any comments or objections, Contractor will cause them to be promptly addressed and will then resubmit the applicable Design Documents for approval by the Owner. Owner will review the resubmitted Design Documents and notify Contractor of any comments or objections thereto, or its approval thereof, within five (5) days of respectively receiving them from Contractor. When Owner, Contractor and County have each approved each phase of the Design Documents, each party will indicate that approval by signing or initialing them. The final Construction Documents so approved are referred to herein as the “Plans and Specifications”.
1.1.5. Design Charges.
All charges for the preparation of the Design Documents (including the Schematic Design Documents and any other Design Services related to the Improvements preceding such documents) and for all other Design Services performed in accordance with the terms of this Contract, whether performed before or after the execution of this Contract, will be included in the Contract Sum (as defined below) but shall be accounted for and billed separately as provided in Section 1.1.5.1 below. The Design Services to be performed by duly licensed design and engineering professionals acting at Contractor's direction will also include the documentation of all changes in the Plans and Specifications made during the course of the Work and provision of a complete set of record drawings at the conclusion of the Work.
1.1.5.1. Design Charges Separate Billings. The charges for Design Services comprised of design, engineering, pre-construction services and procurement services as provided herein shall be separately billed as provided below. The Design Services provided for in this Contract are material and substantial in nature. Accordingly, Contractor shall account for and bill Design Services charges separately from the Contracting Services provided herein. Design Services shall be billed separately from Construction Services although the Contractor may submit one payment application for both Design Services and Construction Services with such services separately billed therein by separate line items and supporting schedules.
1.1.6. Ownership of Design and Construction Documents. Notwithstanding anything contained in this Contract to the contrary, all Design Documents (including the Schematic Design Documents) produced pursuant to this Section 1.1 will remain the sole property of Contractor until the Improvements are constructed and Owner has made the final payment due hereunder. Owner's rights to such documents will accrue only upon such final payment, it being understood by the parties hereto that the design work performed under this Contract is being done for the express purpose of defining the scope of the construction portion of the Work. Upon completion of the Work, Contractor shall deliver a set of Plans and Specifications to each the Owner and the County. Notwithstanding anything contained in this Contract to the contrary, Contractor shall have an irrevocable right and license to use all or any part of the Plans and Specifications in connection with any other project.
1.2. Construction Work.
Contractor will furnish all of the materials and perform all of the work necessary for the construction of all the Improvements in accordance with the approved Plans and Specifications and any correspondence or documents amending the same (which documents, together with this Contract, are collectively hereinafter called the “Contract Documents”) and in accordance with applicable building regulations as presently interpreted and enforced. The parties hereby acknowledge that they will each approve any correspondence or documents amending the Plans and Specifications by signing and/or initialing said documents and retaining a copy thereof.
2. Time of Completion.
2.1. Contractor will diligently perform the Work.
2.2. Contractor shall cause the activities constituting the Work to be performed in accordance with the project schedule set forth in Exhibit C attached hereto and made a part hereof. The Date of Substantial Completion (as defined below) is scheduled to occur on or before September 1, 2005. If the Date of Substantial Completion does not occur on or before November 1, 2005 (sometimes referred to herein as the “Contract Time”), the Contractor shall be required to pay liquidated damages in accordance with this Section 2. For purposes of this Contract, the “Date of Substantial Completion” shall mean the date the Improvements are delivered to Owner ready for beneficial occupancy (which will be deemed to have occurred upon the issuance of a certificate of occupancy or its equivalent) or when the County occupies the Improvements, whichever first occurs. If Contractor is delayed at any time in the progress of the Work by any act or neglect of Owner or the County, or by any employee of Owner or County (including, without limitation, the failure of Owner to provide comments or approvals in accordance with the requirements and within the time periods set forth in Article I hereof or to obtain any approvals or consents of the County required pursuant to the Lease and in accordance with the requirements and within the time periods set forth in Section 3 of the Lease (which requirements and time periods shall not be revised without the prior written consent of the Contractor)), or by any separate contractor employed by Owner or the County, or by changes ordered in the Work (whether by Change Order or otherwise), or by Force Majeure, strikes, lockouts, unusual or unexpected site conditions, labor disputes, fire or other casualty, delays in transportation not within the reasonable control of Contractor, fuel shortages, material shortages, or inclement weather, labor shortages or unavailability of labor not within the reasonable control of Contractor, governmental laws or regulations, orders or directives of any legislative, administrative or judicial body or any governmental department, inability to obtain or delays in obtaining any governmental licenses, permits, approvals, permissions or authorizations (including, without limitation, any building permits, variances, use permits, special use permits or zoning changes), failure to obtain all building permits for the Improvements, on or before September 30, 2004, or by any other similar or dissimilar causes beyond Contractor's reasonable control or any other events stated elsewhere in this Contract to be an Excused Delay, then the applicable delivery dates and the Contract Time will be extended by a period equal to such delay. Such delay is referred to in this Contract as “Excused Delay”, provided, however, that Excused Delay shall not include the following occurrences:
2.2.1. Late delivery of equipment or materials caused by congestion at a manufacturer's plant or elsewhere, or an oversold condition of the market, provided that Contractor may select alternative equipment or materials with the County’s consent, such consent not to be unreasonably withheld or delayed, and if the County unreasonably withholds or delays its consent, any delay caused thereby shall be deemed an Excused Delay;
2.2.2. Late performance by a subcontractor unless the delay arises out of an Excused Delay occurrence in accordance with this Section 2;
2.2.3. Inability of either the Contractor or any subcontractor to acquire or maintain any required insurance, bonds, or contractor licenses; or
2.2.4. Strikes, lockouts and labor disputes directed primarily against Contractor which Contractor could resolve by using commercially reasonable efforts but fails to do so within a reasonable period of time.
2.3. If the Date of Substantial Completion does not occur within the Contract Time, including any authorized extensions, it is mutually understood and agreed by and between the Owner and the Contractor that the use by the County of the Improvements will be correspondingly delayed, and that by reason thereof, the public will necessarily suffer great damages; that such damages from the nature of the case will be extremely difficult and impractical to fix; that the Owner, the County and the Contractor have endeavored to fix the amount of said damages in advance at the sum of $_________ [daily debt service (interest component only on the Certificates)] a day for each day of delay beyond the Contract Time (including any authorized extensions); provided, that in no event shall Contractor pay such liquidated damages for more than twelve (12) months. Contractor will pay such sum to the Trustee (as defined in the Lease) within thirty (30) days from Contractor's receipt of written demand therefore and such amount shall be paid to Trustee and applied towards debt service on the Certificates for which the County will receive credit.
3. Contract Sum.
Owner will pay Contractor for the performance of the Work, subject to the additions and deductions provided herein, in current funds, the sum of $$$$ (hereinafter called the “Contract Sum”). The Contract Sum includes an allowance of $$$$ for a contingency that Owner may utilize at the written direction of the County. To the extent such contingency fund is not spent by Owner, on behalf of the County, in connection with the construction of the Improvements, the Contract Sum will be reduced dollar for dollar for each dollar of the contingency not spent in the construction of the Work. If Owner desires to utilize any portion of such contingency, Owner and Contractor shall execute a written document (“Contingency Use Authorization”) describing the work to be performed and the payment to be made therefore from such contingency amount, and describing any impact to the project schedule, Contractor will not perform any such contingency work until Owner has provided the written consent of the County thereto.
4. Payment of Contract Sum.
4.1. Monthly Payments. Contractor will provide a schedule of values to Owner and the County prior to the commencement of construction of the Work (as may be adjusted from time to time by Change Orders, the “Schedule of Values”). The Schedule of Values will allocate the Contract Sum between Design Services and Contracting Services and among the various portions of the Work and will be used as the basis for reviewing Contractor's payment applications. Owner will make monthly (30-day billing cycle) payments under this Contract, within 10 days after receiving an application for payment therefore. Applications for payment will be made using AIA G702 and G703 forms, or substantially equivalent forms, which Contractor will provide monthly to Owner and the County for review. Each payment application will be based upon the Schedule of Values and will indicate the percentage of completion of each portion of the Work as of the end of the month covered by the payment application. Owner (or its authorized representative under Section 9.23 of this Contract) will review the payment applications on behalf of Owner and the County within five business days of receipt. Not later than the last day of such five business day period, Owner will deliver a properly prepared and executed requisition for payment (“Payment Requisition”) to the Trustee in the manner provided for obtaining payment of project construction costs under the Indenture (as defined in the Lease) directing that payment be made to Contractor in the full amount of the payment application, less only (i) any retention required pursuant to Section 4.1.1; and (ii) any amounts specifically objected to as provided in the next sentence. If Owner or the County reasonably believes that any item or amount (or portion thereof) for which Contractor has requested payment in a payment application should not be paid as and when requested, Owner will provide written notice to Contractor specifically identifying, on a “line-item” and “proportionate-amount” basis, those items or amounts not approved and stating the specific reasons for their disapproval (it being agreed that all items and amounts, or portions thereof, to which Owner does not so specifically deliver an objection will be approved and paid by Owner as and when requested in the payment application). Contractor and Owner will cooperated in good faith to resolve any items or amounts to which Owner may deliver notice of objection, and as each such objection is resolved, payment for the item or amount so resolved will be included by Owner in the next Payment Requisition submitted by Owner following such resolution. Owner's monthly payments under this Contract to Contractor will be made as follows:
4.1.1. Owner will make payments to Contractor equal to ninety percent (90%) of the value of the Work completed, based upon the value of labor, services and materials incorporated in the Work (on a percentage complete basis) and of materials stored at the site up to the last day of the preceding month, less the aggregate amount of payments previously made by Owner to Contractor. Notwithstanding the foregoing, no retention will be applicable to design items [or general conditions items (such as insurance, permits, fees, utilities, temporary facilities, dumpsters and cost of items not incorporated into the Improvements], Retention shall be released at Substantial Completion.
4.1.2. Along with each application for payment to Owner or contemporaneously with payment, Contractor will deliver to Owner its general lien waiver waiving liens for work for which payment was requested by Contractor and paid for by Owner on the preceding application for payment.
4.2. Final Payment.
Full payment of the Contract Sum will be due and payable upon the occurrence of the Date of Substantial Completion for the project, or when the County occupies the project, whichever first occurs. If minor items remain to be completed, Contractor and Owner will list such items and Contractor will complete such items within a reasonable time thereafter. Owner may retain one hundred fifty percent (150%) of the estimated cost of completing any unfinished item, provided that such unfinished items are listed separately and the estimated cost of completing each item is likewise listed separately. Thereafter, Owner will pay to Contractor the amount retained for each incomplete item in the monthly payment due after that item is completed.
4.3. Late Payment.
If any payment to Contractor is due and is not paid by Owner on the due date because Owner fails to properly deliver an appropriate Payment Requisition therefore, Owner will pay interest on the unpaid amount (upon receipt of invoice) from and after its due date, to and including the date of payment, at the lesser of (i) eighteen percent (18%) per annum, or (ii) the highest rate then allowed by law. The parties agree that such amounts represent a fair and reasonable estimate of the damages Contractor will incur by reason of such late payment.
4.4. Request for Final Payment.
Contractor's request for full payment of the Contract Sum (less sums withheld for incomplete items) will be accompanied by Contractor's affidavit that all payrolls, bills for materials and equipment and other indebtedness connected with the Work for which Owner has paid Contractor prior to the time of application have been paid or otherwise satisfied. Contractor will provide a copy of the request for full payment and all accompanying documents to the County.
4.5. Unforeseen Costs.
In the event the cost of the construction, installation or equipping of the project is affected by (i) changes in governmental regulations or requirements occurring after the date of execution of this Contract, (ii) Excused Delay as set forth in Section 2 herein, (iii) uninsured or underinsured casualty, and (iv) the estimated costs of any delay in the construction process (including carrying costs) resulting from or in connection with (i) through (iii) above, or (v) deductibles required to be paid in connection with any property insurance or any other insurance policies insuring the Work or the Project, but excluding the remediation or correction of the condition of the project site (other than any hazardous substances that may be present at the project site) or other cost associated with soil conditions (including, without limitation, dewatering, rock excavation and rains) (the “Unforeseen Costs”), the Contract Sum shall be increased by any amount equal to such Unforeseen Costs and the Owner shall pay such Unforeseen Costs immediately following the submission of an invoice by the Contractor for such Unforeseen Costs. The Contractor shall also be entitled to a reasonable extension of the time for the completion of the Work. The Contractor shall immediately notify the Owner and the County of any event that results in or may result in an Unforeseen Cost. Following such notification, the Owner, the County, and the Contractor shall meet to discuss the nature and extent of such Unforeseen Cost. Thereafter, the Contractor and the Owner shall cooperate to minimize such Unforeseen Cost.
5. Guaranty Bond.
Contractor shall furnish a bond or bonds covering Contractor's faithful performance of this Contract and the payment of all obligations arising hereunder in such form as may be approved by the County and the Owner and with such insurance company or other surety as Owner and the County may approve, which approval will not be unreasonably withheld. Cost of this Bond shall be included in the Contract Sum and considered as part of the cost of the Work.
6. Changes in Work.
6.1. Procedure.
Owner (with the consent of the County if required by the Lease) may order changes in the Work within the general scope of this Contract, consisting of additions, deletions or other revisions, with the Contract Sum and Contract Time being adjusted accordingly. All such changes in the Work will be authorized by a Change Order (as defined in Section 6.2) and will be executed under the applicable conditions of the Contract Documents.
6.2. Change Orders.
A “Change Order” is a written order to Contractor issued after the execution of this Contract authorizing a change in the Work or an adjustment in the Contract Sum or Contract Time. A Change Order must be signed by Contractor and Owner (and approved by the County if required by the Lease) if there is an adjustment in the Contract Sum or Contract Time. Contractor shall deliver a copy of any Change Order to the Owner within five (5) days of Contractor's execution thereof. The Contract Sum and Contract Time may be changed only by a Change Order.
6.3. Cost of Changes.
The cost or credit to Owner resulting from a change in the Work will be determined in one or more of the following ways:
6.3.1. By mutual acceptance of a lump sum properly itemized;
6.3.2. By unit prices stated in the Contract Documents or subsequently agreed upon by Owner, County and Contractor; or
6.3.3. By cost and a mutually acceptable fixed or percentage fee. If none of the methods set forth above is agreed upon, Contractor, provided it receives a Change Order, will promptly proceed with the Work involved. The cost of such Work will then be determined on the basis of Contractor's reasonable expenditures and savings, including, in the case of an increase in the Contract Sum, an amount equal to ten percent (10%) of such increase in costs for Contractor's overhead and profit. In such case, Contractor will keep and present to Owner and the County an itemized accounting, together with appropriate supporting data. The amount of credit to be allowed by Contractor to Owner for any deletion or change which results in a net decrease in cost will be the amount of the actual net decrease in the Cost of the Work. When both additions and credits are involved in any one change, the charge for overhead and profit will be computed on the basis of the net increase, if any.
6.4. Unit Prices.
If unit prices are stated in the Contract Documents or subsequently agreed upon, and if the quantities originally contemplated are so changed in a proposed Change Order that application of the agreed unit prices to the quantities of Work proposed will create a hardship on Contractor or Owner, the applicable unit prices will be equitably adjusted to prevent such hardship.
6.5. Added Costs.
If Owner's request for a change in the Work, or any other Excused Delay, results in increased costs (including without limitation increased materials, labor or insurance costs), such costs (plus overhead and profit thereon as set forth in Section 6.3) will be appropriately added to the Contract Sum by Change Order.
7. Correction of Work.
7.1. Defective Work During Construction.
If during the period of construction any portion of the Work is reasonably determined by Contractor, Owner, or the County to be materially defective or otherwise not in substantial accordance with the Contract Documents (“Defective Work”), the Contractor will commence to correct such Defective Work promptly after Contractor receives notice. If Owner or the County through inspection or otherwise becomes aware of any Defective Work, Owner, or the County will immediately give Contractor notice of such Defective Work. Contractor will diligently pursue the correction and completion of the Defective Work. All Defective Work so identified during the course of construction will be corrected to comply with the Contract Documents without cost to Owner.
7.2. Contractor's Warranty.
7.2.1. Construction Warranty.
Contractor warrants the Work for the applicable Improvements against Defective Work (the “Construction Warranty”) for a period of twelve (12) months after the Date of Substantial Completion (the “Warranty Period”). Contractor will promptly following receipt of written notice from Owner during the applicable Warranty Period, repair or replace any such Defective Work at Contractor's expense. Owner will allow Contractor a reasonable period of time to complete such repair or replacement prior to pursuing any remedy that may be available to the Owner with respect to any failure by Contractor to repair or replace such Defective Work. If Contractor repairs or replaces any Defective Work to the reasonable satisfaction of the Owner, the Owner shall have no further remedies with respect to such Defective Work, whether express or implied. The Construction Warranty excludes any damage or defect caused by abuse, modification, improper or insufficient maintenance, unusual or extraordinary site conditions, improper operation, improper installation of additional improvements by Owner, or other causes not directly attributable to Contractor, and Owner is required to perform routine and appropriate regular maintenance during the applicable Warranty Period.
7.2.2. Time Period for Claims.
Contractor shall have no obligation to repair or replace any Defective Work unless specific written notice of such claim is delivered to Contractor within the applicable Warranty Period. Owner expressly waives any contrary applicable statute of limitations under applicable law. Establishment of the time period of twelve (12) months as described in this Section 7.2 relates only to the specific obligation of the Contractor to perform warranty work pursuant to the Construction Warranty, and has no relation to the time within which proceedings may be commenced to establish the Contractor's liability with respect to the Contractor's other obligations under this Contract.
7.2.3. Owner's Acknowledgments.
Owner acknowledges and agrees that: (i) Owner has had the opportunity to negotiate the limitations of liability and claims contained in this Section 7.2; and (ii) the limitations contained in this Section 7.2 are reasonable and reflect the negotiated bargain of the parties. Owner acknowledges and agrees that Contractor has agreed to enter into this Contract, to perform the Work, and to provide the Construction Warranty in consideration for and in reliance upon the foregoing limitations, and that the Contract Sum payable under this Contract is based in part on such limitations.
7.3. Assignment of Subcontractor Warranties.
Following the expiration of the applicable Warranty Period, Contractor will assign to Owner, on a non- exclusive basis, any third party warranties or guarantees given by subcontractors or materialmen that relate to the Work and Contractor will upon request reasonably cooperate with Owner in the enforcement by Owner, at Owner's sole cost and expense and without cost to Contractor, of any such warranties or guarantees given by subcontractors or materialmen that extend for a period of time in excess of the applicable Warranty Period. To the extent the Plans and Specifications require a warranty on any component of the Improvements supplied by a third party to extend for a period of time longer than the Warranty Period, Contractor shall obtain such longer warranty period for the warranty provided by such third party.
8. Insurance.
8.1. Policies Required.
The following insurance will be obtained and maintained:
8.1.1. Contractor's Liability Insurance.
Contractor will purchase and maintain the following policies of liability insurance:
8.1.1.1 Commercial general liability (CGL) insurance.
8.1.1.2 Business auto liability (BAL) insurance. These liability policies must provide coverage at least as broad as the current ISO forms and must be written on an occurrence basis. The CGL policy may not contain any endorsements or modifications limiting the scope of coverage for liability arising from explosion, collapse or underground property damage unless separate policies are obtained to restore such coverage. Policy limits for the CGL policy, which may include coverage from an umbrella liability policy or policies, must be at least $2,000,000 for each occurrence and $5,000,000 aggregate. Policy limits for the BAL policy, which may include coverage from an umbrella liability policy or policies, must be at least $500,000 for each occurrence and $1,000,000 aggregate. Owner and the County, and their respective officers, directors, agents and employees will, be named as additional insureds on the CGL liability policy for matters caused by Contractor's negligence or willful misconduct, and such insurance for such matters shall be primary to liability insurance carried (or insurance self-maintained) by Owner or the County which insurance shall be excess and not contributory to that provided by Contractor.
8.1.1.3 Workers compensation and employers liability insurance, written on the appropriate form for the state in which the Land is located and meeting all statutory coverage requirements. Policy limits for employer’s liability (including any umbrella coverage available) must be at least $1,000,000 aggregate.
8.1.2. Builder's Risk Insurance.
Contractor will purchase and maintain a standard coverage “Special Perils” type builder's risk insurance policy covering the Work for the greater of (i) the full insurable value thereof (including any Change Orders) on a replacement cost basis and (ii) the aggregate unpaid Principal Portions of the Base Rent (as defined in the Lease) less any portion of the Bond proceeds held from time-to-time by the Trustee (as defined in the Lease); provided, however, that to the extent the amount of insurance described in clause (ii) exceeds the amount described in clause (i), Contractor will, to the extent possible, obtain such additional insurance and the increased costs of such additional insurance will be charged to Owner by appropriate Change Order to the Contract Sum. This insurance will include the interests of Owner, the County, the Trustee, Contractor, subcontractors, sub-subcontractors and suppliers in the Work, will insure against the perils normally insured against in such a policy, and will be deemed the primary insurance as to covered risks. If Owner or the County requests in writing that insurance for special hazards or coverages be included in such insurance policy, Contractor will, to the extent possible, obtain such insurance and the cost will be charged to Owner by appropriate Change Order to the Contract Sum. Owner acknowledges that certain risks (including specifically, but without limitation, any loss caused by earthquake or flood) are not covered by the standard coverage “Special Perils” builder's risk insurance required to be maintained by Contractor under this Contract. Contractor may, if Contractor so elects, obtain earthquake, flood, and/or other additional coverages which Contractor determines are reasonable and prudent and the cost of any such additional coverages will be added to the Contract Sum by a Change Order. If Contractor does not elect to purchase such additional coverages, such uninsured perils are Owner's risk and all loss, cost, liability and expense incurred by Contractor arising from such uninsured perils will be added to the Contract Sum by an appropriate Change Order. The builder's risk insurance will be maintained until the Date of Substantial Completion (or such later date as Contractor determines it is reasonable and prudent) and Contractor will obtain any endorsements necessary to continue coverage in the event of early or partial occupancy of the project or any portion thereof (including without limitation, the Parking Structure), until such date.
8.2. Insurance Certificates.
Certificates of insurance reasonably acceptable to Owner will be filed with Owner (if so requested by Owner), and the County. These certificates will contain a provision that coverage afforded under the policies will not be canceled until at least thirty (30) days prior written notice has been given to Owner and the County.
8.3. Adjustment of Loss.
Any insured loss is to be adjusted by Contractor and made payable to Contractor, as trustee for the insureds as their interests may appear. Contractor will deposit in a separate account any money so received and will distribute it in accordance with such agreement as the parties in interest may reach. If, after such loss, no other special agreement is made, replacement of damaged Work will be covered by an appropriate Change Order to the Contract Sum. Contractor, as trustee, will have the power to adjust and settle any loss with the insurers. Priority in distribution will be given so as to reimburse Contractor for Work for which payment had not been made by Owner as of the date of loss. Any loss which is not fully reimbursed by the insurance required under this Contract (including any loss from deductibles) will result in an increase in the Contract Sum by Change Order.
8.4. Waivers of Subrogation.
Notwithstanding any contrary language contained in this Contract, the Owner and the Contractor and their respective officers, directors, shareholders, partners, affiliates, members or employees, will not be liable to the other parties or to any insurance company (by way of subrogation or otherwise) insuring the other party or parties for any loss or damage caused by any matter which such waiving party is insured against under the policies of insurance required to be carried under this Article 8, regardless of the cause of the loss or damage or the negligence or fault of any person. Owner's waiver will be effective as regards any subcontractor, sub-subcontractor, supplier or agent of Contractor (including any architects) to the extent that Contractor has agreed to waive subrogation in Contractor's agreement with such person and such person has likewise waived subrogation against Contractor and Owner. Each party will use commercially reasonable efforts to cause their policies of insurance to permit the foregoing waiver; provided that the waiver will not in any event be construed or enforced to invalidate any such policies or the coverage hereunder.
8.5. Owner's Optional Insurance.
Owner, at its option, may purchase and maintain such insurance as will insure Owner, to any extent not covered by the insurance required to be maintained by Contractor under Section 8.1, against loss of use of its property due to fire or other hazards, however caused, and will look only to such insurance (whether or not purchased) in respect to such loss. Owner hereby releases Contractor from claims for such loss or damage to its business or property to any extent not covered by the insurance required to be maintained by Contractor under Section 8.1.
8.6. Claims to Proceeds.
The waivers in this Article 8 do not preclude a party from asserting a claim for insurance proceeds to which such party is entitled.
8.7. Professional Liability Insurance.
Contractor shall carry or cause to be carried by the Design Professionals commercially-reasonable amounts of professional liability insurance for the Design Services provided for in this Contract. The type and amount of insurance shall be based on coverage for similar projects in the State of Arizona.
9. Miscellaneous Provisions.
9.1. Supervision and Direction.
Contractor will supervise and direct the Work and is solely responsible for all construction means, methods, techniques, sequences and procedures, and for coordinating all portions of the Work under this Contract.
9.2. Labor and Materials.
Unless otherwise specifically provided in this Contract, Contractor will provide and pay for all labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation and other facilities and services necessary for the proper execution and completion of the Work. All materials must be new unless otherwise specified.
9.3. Discipline of Employees.
Contractor will, at all times, enforce strict discipline and good order among its employees, and will not employ on the Work any unfit person or anyone not skilled in the task assigned.
9.4. Surveys and Easements.
Contractor will furnish all boundary, environmental, geotechnical and topographical surveys, unless otherwise specified. Owner will furnish all easements necessary for access to the Land and performance of the Work, including easements (in fee title, if required) for installation and maintenance of utilities.
9.5. Taxes.
Contractor will pay all sales, consumer, use and other similar taxes required by law; provided, however, that Contractor shall be entitled to an increase in the Contract Sum to the extent that an increase in the aggregate amount of such taxes payable by Contractor hereunder results from any change in laws creating such taxes enacted after the date hereof.
9.6. Permits and Fees.
Unless otherwise provided in the Contract Documents, Contractor will secure and pay for all building permits and all governmental building fees and licenses necessary for the proper execution and completion of the Work which are applicable at the date of this Contract. Such costs and expenses incurred by Contractor shall be included as part of the Contract Sum.
9.7. Notices.
Contractor will give all required notices and comply with all applicable building laws and regulations (as interpreted and enforced as of the date of this Contract). If Contractor observes that any of the Contract Documents do not comply with such laws and regulations in any respect, Contractor will promptly notify Owner in writing, and any necessary changes will be adjusted by appropriate modification and, if needed, appropriate Change Order(s) will be executed. If Contractor performs any Work knowing it to be contrary to such laws, ordinances, rules and regulations, and without such notice to Owner, Contractor will assume full responsibility therefor and must bear all costs attributable thereto.
9.8. Cash Allowance.
Contractor will include in the Contract Sum all allowances stated in the Contract Documents. These allowances, unless otherwise stated, will cover the cost of the materials and equipment delivered and unloaded at the site and all applicable taxes, Contractor's handling costs on the site, labor and installation costs. Overhead, profit and other expenses contemplated for the original allowance will be included in the Contract Sum and not in the allowance. If the cost, when determined, is more than the allowance, the Contract Sum will be adjusted accordingly by Change Order which will include additional handling costs on the sites, labor, installation costs, overhead, profit and other expenses.
9.9. Superintendent.
Contractor will employ a competent superintendent who will be in attendance at the project site at all reasonable times during the progress of the Work.
9.10. Responsibility of Contractor.
As between Owner and Contractor, Contractor will be responsible to Owner for the acts and omissions of all of Contractor's employees and all subcontractors and employees, and all other persons performing any of the Work under a contract with Contractor; provided that this provision does not, and may not be construed to, create any obligation or responsibility for such persons under any laws or regulations, or to any person or in any other manner, other than to Owner.
9.11. Progress Schedule.
Contractor will prepare and submit to Owner and County separate estimated progress schedules for the Improvements. The progress schedules will indicate the dates for starting and completion of various stages of construction and will be revised as required by the conditions of the Work. At a minimum the schedule shall be updated and presented to the Owner and the County for review with the monthly application for payment. Contractor shall make available to the Owner and the County for review all relevant logs, daily reports, communications, and material and equipment delivery information as may be requested by either the Owner or the County in order to verify and understand progress of the Work and the project. Access to such items by the Owner, the County, and their identified agents shall not be limited or encumbered by the Contractor.
9.12. Drawings and Specifications. Contractor will maintain one copy of all drawings, specifications, addenda, approved shop drawings, Change Orders and other modifications in good order and marked to record all changes made during construction, which will be available to Owner and the County during normal working hours.
9.13. Use of Project Site. Contractor will confine operations at the project site to areas permitted by law, ordinances, permits and the Contract Documents and will not unreasonably encumber the project site with any materials or equipment.
9.14. Cutting and Patching. Contractor will, as needed, do all cutting, fitting or patching that may be required to make the several parts of the Work fit together properly.
9.15. Cleaning Up. Contractor will keep the project site free from accumulation of waste materials or rubbish caused by its operations. At the completion of the Work, Contractor will remove all its waste materials and rubbish from and about the project site as well as all of its tools, construction equipment, machinery and surplus materials, and will clean all glass surfaces and leave the Work “broom clean”, or its equivalent, except as otherwise specified.
9.16. Indemnification. Subject to the provisions of Article 8, Contractor will indemnify, protect, defend and hold harmless Owner and the County, and their respective officers, directors, employees and agents for, from and against all claims, actions, damages, liabilities, losses and expenses, including attorneys' fees and costs of defense (“Claims”), arising out of third-party claims asserted against the Owner, the County, or their agents resulting from the performance of the Work, but only to the extent that any such Claim is (i) attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) occurring while the Work is being performed at the project site, including the loss of use resulting therefrom; and (ii) caused in whole or in part by any negligent act, omission or intentional misconduct of Contractor, any subcontractor or anyone employed by Contractor or any subcontractor, anyone directly or indirectly employed by them, or anyone for whose acts they may be liable. Contractor's liability under this Section 9.16 will not exceed the insurance limits specified in Section 8.1.1 of this Contract. Each of Owner and the County will notify Contractor of any Claim by it under this indemnity in such time as to avoid prejudice to Contractor and Contractor will have the right to defend all Claims with counsel reasonably acceptable to Owner or the County, as applicable.
9.17. Written Notice. Written notice will be deemed to have been duly served upon receipt if delivered in person, sent by overnight courier service, registered or certified mail, or confirmed facsimile, to the notice addresses set forth below:
If to Contractor: Opus West Construction Corporation
2555 East Camelback Road, Suite 800
Phoenix, AZ 85016-9267
Attention: Senior Vice-President
With a copy to: Opus West Corporation
2555 East Camelback Road, Suite 800
Phoenix, AZ 85016-9267
Attention: Legal Department
If to Owner: Mohave Administration Building
Finance Corporation
700 W. Beale Street, 3rd Floor East
Kingman, Arizona 86401
Attention: John Timko
With a copy to: Pinnacle One
1620 West Fountainhead Parkway, Suite 200
Tempe, AZ 85282
Attention: Chris Gillespie
Or at such other address as the parties may hereafter designate by written notice to the other.
Copies of all notices given hereunder by the Owner or the Contractor shall be delivered to the County at the following address:
If to County: Mohave County, Arizona
700 W. Beale Street, 3dr Floor East
Kingman, Arizona 86401
Attention: John Timko
9.18. Claims for Injury or Damage.
Should either party to this Contract suffer injury or damage to persons or property because of any act or omission of the other party or of any of its employees, agents or others for whose acts it is legally liable, claim will be made, in writing, to such other party within a reasonable time after the first observance of such injury or damage.
9.19. Royalties and Patents.
Contractor shall pay all royalties and license fees related to the Work. Contractor will defend all suits or claims for infringement of any patent rights relating to equipment or materials incorporated in the Work, except that Owner will be responsible for all such loss when a particular design process or the product of a particular manufacturer or manufacturers is specified, but if Contractor has reason to believe that the design, process or product specified is an infringement of a patent, it will be responsible for such loss unless it promptly gives such information to Owner.
9.20. Termination of Contract by Owner.
If Contractor is adjudged a bankrupt, or if it makes a general assignment for the benefit of its creditors, or if a receiver is appointed on account of its insolvency, or if it persistently or repeatedly refuses or fails, except in cases for which extension of time is provided hereunder, to supply enough properly skilled workmen or proper materials, or if it fails without reasonable justification to make payment to subcontractors or for materials or labor, or persistently disregards laws, ordinances, rules, regulations or orders of any public authority having jurisdiction, or otherwise is guilty of a material violation of a provision of this Contract, then Owner may, without prejudice to any right or remedy and after giving Contractor and its surety, if any, thirty (30) days' written notice (and failure of Contractor to cure or commence to cure with all due diligence such matter within such 30-day period), may terminate the employment of Contractor and finish the Work in accordance with the Contract Documents by whatever reasonable method Owner may deem expedient. Notwithstanding anything to the contrary in this Contract, Owner shall not terminate or suspend this Contract without first obtaining the written consent of the County and the Bond Insurer (as defined in the Lease). Contractor will make the Contract Documents available to Owner for the purpose of completing the Work and will not interfere with Owner's right to complete the Work by others or any of the subcontractors.
9.20.1. If Contractor is so terminated, Owner is obligated to pay Contractor (a) the sum of (i) the cost of the Work incurred by Contractor through the date of termination, and (ii) Contractor's reasonable overhead and profit applicable to such amount; less (b) the aggregate amount of the payments previously made to Contractor by Owner under this Contract. Owner will pay such amount to Contractor within thirty (30) days after receiving Contractor's payment application and conditional lien waiver therefore. Owner shall also have the right and option to assume and become liable for, as of the date of termination, all agreements, commitments, subcontracts, supply agreements and other obligations entered into, undertaken or incurred by Contractor in good faith in connection with the Work, excepting only such amounts as have been previously paid to Contractor or are timely paid to Contractor under clause (a)(i) above.
9.21. Termination of Contract by Contractor.
In the event Owner fails to pay Contractor any payment when due, or in the event Owner breaches any of its other obligations under this Contract, or in the event a voluntary or involuntary petition is filed by Owner under any law having for its purpose the adjudication of Owner a bankrupt, or a receiver is appointed for the property of Owner by reason of the insolvency of Owner, or in the event any department of the state or federal government, or any officer thereof, duly authorized, takes possession of the business or property of Owner by reason of the insolvency of Owner, or in the event Owner makes an assignment for the benefit of its creditors, then Contractor, if the same remains uncured after fifteen (15) days' notice to Owner, may cease all or any portion of the Work and Owner will be responsible for all increased costs arising out of such delay, which delay will be an Excused Delay. Further, in any such event, and irrespective of whether or not Contractor ceases all or any portion of the Work, Contractor, after fifteen (15) days' additional notice to Owner and failure of Owner to remove the default or cure such breach within such additional fifteen (15) day period, may terminate this Contract, remove any materials, equipment and tools from the sites, and recover from Owner payment for all Work executed and any loss sustained and Contractor's reasonable profit and such other damages as Contractor may sustain by reason thereof. In the event that any default by Owner (other than relating to the payment of money) is not susceptible of being cured within said fifteen (15) day period, the time within which Owner may cure the same will be extended for such time as may be reasonably necessary to complete the same with all due diligence, but only if Owner provides Contractor evidence satisfactory to Contractor that the default can be cured within such extended time and in such manner so as to not cause prejudice to Contractor.
9.22. Inspection.
The Owner, the County and their representatives or agents will at all reasonable times have access to the Work whenever it is in preparation or progress, and Contractor will permit and facilitate reasonable inspection of the Work by Owner, its agents, and public authorities concerned with such Work.
9.23. Authorized Representatives.
Owner designates Chris Gillespie of Pinnacle One as the representative of Owner, who is authorized to execute Change Orders and to give notices and direction to Contractor. Contractor designates Alan Torvie, as the representative of Contractor, who is authorized to execute Change Orders and to give notices and direction to Owner. In addition, Contractor or Owner may designate in writing additional representatives authorized on behalf of Contractor or Owner to execute Change Orders and to give notices and directions to Contractor or Owner.
9.24. Consequential Damages.
Notwithstanding anything in this Contract to the contrary, neither Owner nor Contractor will be liable for any special, incidental, indirect or consequential damages as a result of a breach, dispute or default under this Contract.
10. Third Party Beneficiary.
The parties hereto acknowledge and agree that the County is a third party beneficiary to this Contract. Nothing in this Contract shall confer any right upon any person other than the parties hereto and those specifically referenced herein and those specifically designated herein as third party beneficiaries of this Contract.
11. Captions/Headings.
Titles of articles are used in this Contract solely for the convenience of those examining it and are not to be used in its construction or interpretation.
12. Successors.
This Contract is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns.
13. Law Governing.
This Contract will be interpreted and construed in accordance with the laws of the state in which the Land is located.
14. Financing.
Owner will provide to Contractor upon request reasonably satisfactory evidence indicating that firm financing or another source of funding is available to pay the Contract Sum, which financing will provide payment to Contractor under and according to the terms of this Contract. Further, Owner will not take any action which might directly or indirectly void or constitute a default under any indenture made in connection with the project and agrees that all agreements made in connection with such financing are also made for the benefit of Contractor. Owner will be responsible for all costs arising out of delays in securing financing. Any financing delays which delay the Work will be Excused Delays.
15. Hazardous Substances.
Owner represents and warrants to Contractor that, except as may have been disclosed in writing to Contractor, Owner has no knowledge of the existence on the Project site of any so-called “hazardous substances” as defined by federal, state or local laws (including “Superfund” laws). Owner will be responsible for any testing, removal or remediation of any hazardous substances at the Project site not brought thereon by Contractor or any party for whom Contractor would be responsible under Section 9.10, as may be necessary for Contractor to perform the Work. Any delays resulting from such hazardous substances will be Excused Delays.
16. Attorneys' Fees.
In the event either party commences litigation for the judicial interpretation, enforcement, termination, cancellation or rescission hereof, or for damages for the breach hereof, then, in addition to any or all other relief awarded in such proceeding, the prevailing party therein shall be entitled to an award against the other party for an amount equal to reasonable attorneys' fees and other costs incurred in connection with such proceeding.
17. Assignment; Limited Obligations of Owner.
17.1. Contractor may not assign its rights or obligations under this Contract without the prior written consent of Owner, the County and the Bond Insurer, such consent not to be unreasonably withheld; provided, however, Contractor may subcontract with others for the fulfillment of its duties under this Contract and Contractor may assign this Contract to an affiliate of Contractor. Owner may not assign its rights or obligations under this Contract without the prior written consent of Contractor, such consent not to be unreasonably withheld; provided, however, Contractor consents to and acknowledges that Owner's right to receive liquidated damages pursuant to Section 2 of this Contract has been assigned to Trustee and the Owner's remaining rights and benefits in this Contract have been collaterally assigned to Trustee. Upon receipt of written notice from Trustee that an Event of Default has occurred under the Indenture (as defined in the Lease), Contractor shall recognize Trustee as the “Owner” under this Contract. Prior to Contractor's receipt of such notice, Trustee shall have no rights under this Contract and Contractor shall owe no duties or obligations to Trustee, except the right to receive liquidated damages pursuant to Section 2 and except as explicitly set forth in this Section 17.1.
17.2. Contractor acknowledges that any payment obligation of Owner hereunder is limited solely to moneys available to the Owner under the Indenture or received by Owner pursuant to (i) the Lease or (ii) any insurance policies.
18. Approvals.
Owner shall not unreasonably withhold or delay any approval or consent required hereunder.
19. Inspection, Audit and Production.
The Contractor agrees that all books, accounts, reports, files and other records relating to this Contract shall be subject at all reasonable times to inspection and audits by the County for five years after completion of the Contract, and that upon request by the County such records shall be produced at any of the County offices designated herein as the place at which notices to the County are to be given.
20. Arbitration.
In the event of a dispute between Contractor and Owner involving the County which, pursuant to the Lease, Owner is required to resolve through arbitration, Contractor agrees to participate in such arbitration proceedings to the extent the Lease requires Owner to do so.
[SIGNATURES CONTAINED ON FOLLOWING PAGES]
IN WITNESS WHEREOF, Owner and Contractor hereto have caused their duly authorized representatives to execute this Guaranteed Price Design/Build Contract as of the day and year first above written.
CONTRACTOR:
OPUS WEST CONSTRUCTION CORPORATION, a Minnesota corporation
By:
Name:
Title:
[CONTRACTOR'S SIGNATURE PAGE]
OWNER:
MOHAVE CORRECTIONAL FACILITY FINANCE CORPORATION, as Owner
By:
Name: John Timko
Title: President
[OWNER'S SIGNATURE PAGE]
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
SCHEMATIC DESIGN DOCUMENTS
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