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ST1002-CN080424 Ken Griffin - Carter Crowley Development Agreeement From: To: "Pete Smith" <Psmith@njdhs.com> "Mindi Hurley" <mhurley@ci.coppell.tx. us>, <jwitt@ci.coppell.tx. us>, <kgriffin@ci.coppell.tx. us> 4/24/2008 2:12 PM Carter Crowley Development Agreeement 2Coppell Eco Devo CSE Commercial27192.doc Date: Subject: Attachments: Attached is draft of the development agreement for your review and comment. We are working on the Option Contract and Restriction Agreement. Peter G. Smith Nichols, Jackson, Dillard Hager & Smith, LLP 1800 Lincoln Plaza 500 North Akard Street Dallas, Texas 75201 214-965-9900 214-965-001 0 Fax **Information contained in this transmission is attorney privileged and confidential. It is intended for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone. STATE OF TEXAS ~ ~ ~ ~ Economic Development Incentive Agreement COUNTY OF DALLAS This Economic Development Incentive Agreement (this "Agreement") is made by and among the City ofCoppell, Texas (the "City"), and CSE Commercial Real Estate. LP, a Texas limited partnership (the "Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the City owns the real property commonly know as the Carter Crowley Property generally located at Coppell Road, Burns Road and Hammonds Road within the City as further described in Exhibit "A" (the "Land"); and WHEREAS, the Company desires to purchase the Land pursuant to the Option Agreement (hereinafter defined) and to develop the Land for a mixed use development consisting of approximately ten (10) retail office cottages built with craftsman architectural style, forty-four (44) townhomes, eight (8) retail service buildings, one (1) restaurant and future commercial development to be agreed upon by the parties all of which is to be anchored by a town square (the "Project"); and WHEREAS, the Company will purchase and develop the Land in phases; and WHEREAS, the parties have or intend to enter into the Option Agreement pursuant to which the Company shall have the option to purchase the Land or portions thereof as provided therein; and WHEREAS, the Company has advised the City that a contributing factor that would induce the Company to develop the Land and construct the Project would be an agreement by the City to provide economic development grant to the Company; and WHEREAS, the City has adopted programs for promoting economic development; and WHEREAS, the City is authorized by TEX. Lac. GoV'T. CODE S 380.001 to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City has determined that making an economic development grant to the Company in accordance with this Agreement will further the objectives of the City, will benefit the City and the City's inhabitants and will promote local economic development and stimulate business and commercial activity in the City. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: Article I Term The term of this Agreement shall begin on the last date of execution hereof ("Effective Date") and continue until the Expiration Date, unless sooner terminated as provided herein. Article II Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "City" shall mean the City ofCoppell, Texas. "City Facilities" shall collectively mean the Infrastructure and the Town Square. "Commencement of Construction" shall mean that: (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for the respective phase of the Project or the Infrastructure, as the case may be; (ii) all necessary permits for construction of the respective phase of the Project or the Infrastructure, pursuant to the respective plans therefore having been issued by all applicable governmental authorities; and (iii) grading of the Land has commenced for the respective phase of the Project or the Infrastructure, as the case may be. "Company" shall mean CSE Commercial Real Estate. LP, a Texas limited partnership. "Completion of Construction" shall mean that: (i) the Project or the Infrastructure, has been substantially completed, and (ii) a certificate of substantial completion has been issued by the general contractor(s) for the Project or the Infrastructure; and (iii) the City has accepted the respective Infrastructure or the City has issued a Certificate of Occupancy for the respective phase of the Project, as the case may be. "Engineering Costs" shall mean all costs of the Engineering Services authorized by the Company and approved by the City. "Effective Date" shall mean the last date of execution hereof "Engineering Services" shall mean the engineering services to be provided by the Project Engineers for the design and construction of the Project as set forth in the Company's contract(s) with the Project Engineers. "Entrance Features" shall mean entrance features to the Project III locations and III accordance with plans approved by the City. "Entrance Feature Grant" shall mean an economic development grant in the amount of the lesser of: (i) fifty percent (50%) of the actual costs of construction paid and incurred by the Company for the Entrance Features; and (ii) $25,000, to be paid as set forth herein. "Event of Bankruptcy or Insolvency" shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any significant part of such party's property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party and such proceeding is not dismissed within ninety (90) days after the filing thereof "Expiration Date" shall mean the tenth (10th) anniversary of the date the City issues the notice to proceed with the construction of the Infrastructure, unless sooner terminated as provided herein. "Finished Lot" shall mean a developed lot or parcel with frontage on a public street with on-site utilities installed. "Force Majeure" means any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, terrorism, riot, civil commotion, insurrection, criminal acts by unrelated third parties, government or de facto governmental action (unless caused by acts or omissions of the party) adverse weather, fires, explosions or floods, strikes, slowdowns or work stoppages. "Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company and/or affecting the Land. "Infrastructure" shall mean public streets, alleys, parking contiguous to the Town Square, parking on the west side of the Coppell entry to the Project, water, storm water and sanitary sewer in public right-of-way, retention pond if necessary, streetscape improvements in the public right-of-way and the Town Square. "Land" shall mean the real property described in Exhibit "A". "Old Coppell Design Guidelines" shall mean the development guidelines for Old Coppell Design as approved by the City, from time to time. "Option Agreement" shall mean that certain option to purchase the Land by and between the Coppell Economic Development foundation and the Company of approximate even date herewith pursuant to which the Company shall provide a non-refundable option price of $2 Million Dollars with the unilateral right to purchase the Land (less approximately 2 acres for the Town Square and area necessary for a retention pond) at $1.00 per acre of net land area for a period of seven (7) years. "Phase One" shall mean the first phase of the Project which shall consists of at least one retail service building on the west side of the Town Square and one cottage on the north side of the Town square and the initial phase of 16 units of townhomes fronting on the Town Square together with the necessary water, sewer and other infrastructure including the respective portion of the Infrastructure. The retail service building fronting the west side of the Town Square shall consist of approximately 20,000 square feet of space and the cottages fronting the north side of the Town Square shall be designed, constructed and leased such that at least forty percent (40%) of the total cumulative square feet available will be used for restaurant and retail uses that produce regular daily foot traffic within the Project. "Planned Development District" shall mean the planned development zoning ordinance governing the development of the Land. "Plans" shall mean the plans and specifications for design and construction of the City Facilities as approved by the City. "Project" shall a mixed use development to be constructed on the Land, or portion thereof, consisting of approximately ten (10) retail office cottages built with craftsman architectural style, forty-four (44) townhomes, eight (8) retail service buildings, one (1) restaurant and future commercial development to be defined and agreed upon by the parties to be anchored by the Town Square, private parking on the west, east and south sides of the perimeter of the City Facilities, together with other required parking and landscaping all as further described in the submittals filed with the City in order to obtain a building permit(s) from time to time. "Project Engineers" shall mean the certified professional engineers selected by the Company and approved by the City to provide the Engineering Services. "Project Sign Grant" shall mean an economic development grant in an amount equal to fifty Percent (50%) of the actual costs incurred and paid by the Company to construct a Project Sign at Bethel Road and Denton Tap Road, Freeport Parkway and Bethel Road and at Sandy lake Road and Coppell Road, to be paid as set forth herein. "Related Agreements" shall mean the Option Agreement and any other appropriate agreement(s) related to the Project. "Town Square" shall mean approximately two (2) acres of the Land on which the City intends to construct a town square open space, generally consisting of landscaping, pavilion, interactive water feature, playground equipment, and one additional public use venue or other mutually agreed upon improvements. Article III Project 3.1 Construction of the Proiect. The Company shall, subject to Events of Force Majeure, cause Commencement of Construction of Phase One of the Project to within four (4) months after City approval of the final plat for Phase One and shall, subject to Events of Force Majeure, cause Completion of Construction thereof to occur within _ CJ months thereafter. The Company shall design and construct the Project in accordance with the applicable City development regulations including the Old Coppell Design Guidelines and the Planned Development District. Notwithstanding anything to the contrary, the Company shall, subject to Events of Force Majeure, cause Completion of Construction of the entire the Project (including the City Facilities) to occur within ten (10) years after the Effective Date. 3.2 Construction of Infrastructure. (a) For the consideration and upon and subject to the terms, provisions and conditions hereinafter set forth in this Section, Company agrees to sell and convey unto City, and City agrees to purchase from Company the Infrastructure, or portion thereof, specifications and warranties related to the Infrastructure or potion thereof, it being agreed that Company shall own such Infrastructure or portion thereof, until payment therefore is made by City in accordance with the terms of this Section. The parties acknowledge that the Infrastructure is to be constructed as the Land is developed and that the City will purchase the Infrastructure as such portions are completed during the development in accordance with this section. (b) Purchase Price. A purchase price equal to the actual costs paid and incurred by the Company for the construction of the Infrastructure, or portion thereof as mutually agreed to by the parties shall be due and payable as set forth in this Section. For the purpose of securing the performance of the City under the terms of this Section, the purchase price for the Infrastructure, or portion thereof shall be paid by City in installments as construction of the Infrastructure, or portion thereof progresses, in the amounts and in accordance with an installment schedule approved by the City Engineer. The obligation of the City to make each installment is subject to the prior occurrence of each of the following conditions: (i) City shall have received from Company evidence reasonably satisfactory to the City that the construction of the Infrastructure, or portion thereof complies with all applicable laws. (ii) City shall have received from Company a cost breakdown reasonably satisfactory to City showing the total costs of constructing the Infrastructure, or portion thereof free and clear of liens or claims for material supplied and for labor services performed. (iii) City shall have received from Company a copy of each contract and agreement entered into between Company and any contractor pertaining to the design, construction and completion of the Infrastructure, or portion thereof, unless previously provided. (iv) City shall have received from Company a waiver of lien or a lien subordination agreement executed by each contractor, laborer and supplier that has furnished labor and/or materials in connection with the completed aspects of the Infrastructure, or portion thereof, in a form reasonably acceptable to the City. (v) City shall have received a title report dated within five (5) days of the installment payment date from the Title Company showing no state of facts objectionable to the City including, but not limited to, a showing that no claim for mechanic's or materialmen's liens has been filed against the Infrastructure, or portion thereof (vi) The representations and warranties made by Company, as contained III this Agreement, shall be true and correct as of the date of each installment. (vii) The covenants made by Company to City as contained in this Agreement shall have been fully complied with, except to the extent such compliance may be limited by the passage of time or the Completion of Construction of the Infrastructure, or portion thereof (viii) A report of any changes, replacements, substitutions, additions or other modifications in the list of contractors and subcontractors. (ix) City shall have received from Company a request for payment of an installment of the Purchase Price in such form and containing such information as the City may reasonably require, executed by Company stating, among other things, that all work required at the stage of construction when the installment is requested has been done. (x) There shall be no breach of this Agreement by Company under this Agreement. (xi) The Infrastructure, or portion thereof shall not have been materially damaged or destroyed by Casualty. (xii) Company shall execute and deliver to City a special warranty deed and bill of sale, reasonably acceptable to City conveying to City the Infrastructure, or portion thereof then constructed (it being agreed, however that ownership of the Infrastructure, or portion thereof then constructed shall automatically vest in the City upon payment therefore, without the necessity of any instrument). An amount equal to ten percent (10%) of the Purchase Price shall be retained by City and shall be paid over by City to Company as the final installment of the Purchase Price, provided that no lien claims are then filed against the Infrastructure, or portion thereof, when all of the following has occurred to the reasonable satisfaction of City: (i) Company shall have completed all Punch list items, if any. (ii) City shall have received a completion certificate executed by Company for the Infrastructure, or portion thereof, and the City's inspector stating that the Infrastructure, or portion thereof has been completed in accordance with the approved Plans, together with such other evidence that no mechanics or materialmen's liens or other encumbrances have been filed against the Infrastructure, or portion thereof (iii) City shall have accepted such Infrastructure. (iv) Company shall have delivered and assigned all warranties to the City for the Infrastructure, or portion thereof No payment of an installment of the purchase price shall be deemed an acceptance by the City of the work theretofore done. City shall have no obligation to pay any installment of the purchase price during the occurrence of a breach of this Agreement on the part of Company, but the City may do so, provided however if the City elects to pay any such installment, no such payment shall be deemed a waiver of any remedies City may have in respect to such default. ( c) Plans and Specifications. The Company shall be responsible for preparing the Plans for the Infrastructure, or portion thereof The Company shall submit the Plans for the Infrastructure, or portion thereof for review and obtain approval thereof by the City Engineer prior to the submission of any Construction Plans for the Infrastructure, or portion thereof It shall be the responsibility of the Company to obtain approval of building, grading and other permits required for the construction of the Infrastructure, or portion thereof from all applicable governmental authorities. The Plans for the Infrastructure, or portion thereof as approved by the City Engineer shall be deemed a part of this Agreement without the necessity of further amendment. (d) Commencement of Construction. The Company shall, subject to events of Force Majeure, cause Commencement of Construction of the Infrastructure to occur within - , and shall, subject to events of Force Majeure, cause Completion of Construction thereof to occur within _ CJ months thereafter. ( e) Substantial Completion. The Company will use good faith efforts to notify City of the date that the Company reasonably expects the Infrastructure, or portion thereof to be Substantially Complete, not more than forty-five (45) or less than thirty (30) business days prior to the date that is set forth in such notice for the Infrastructure, or portion thereof to be Substantially Complete. The failure to provide such notice shall not be considered an event of default. Upon receipt of written notification from the Company that the Infrastructure, or portion thereof is Substantially Complete, City shall notify the Company of the date a City inspector intends to make a walk-through inspection of the Infrastructure, or portion thereof to determine Punch-list items, such date to be within ten (10) business days after City's receipt of such notice. The Company will accompany the City inspector on the walk-through inspection so as to mutually determine the Punch-list of items to be completed or repaired by the Company. The Company will complete all Punch-list items within twenty (20) business days after the date of the walk- through inspection, subject to events of Force Majeure. (f) Construction Meetin2s. The Company agrees to meet with City representatives at least once per month to jointly review the progress of construction and to discuss any other matters pertaining to the construction of the Infrastructure, or portion thereof The Company will cause minutes of these meetings to be prepared and provided to City. The Company will otherwise keep City reasonably informed as to the progress of the Infrastructure, or portion thereof and agrees to meet with City upon request to discuss the same. Furthermore, the Company will allow City's inspector to inspect the Infrastructure, or portion thereof at any time during business hours. (g) Warranties. The Company agrees, as a part of the costs of construction, to obtain and assign to City warranties from the Company's contractors, subcontractors and suppliers providing labor and/or materials in connection with the Infrastructure, or portion thereof; provided that such assignment shall not prevent the Company from enforcing the same. Such warranties shall: (a) be at least standard industry warranties from generally recognized contractors, subcontractors and suppliers with respect to the Infrastructure, or portion thereof; and (b) obligate the Company's contractors, subcontractors and suppliers to repair all defects in the applicable portion of the Infrastructure, or portion thereof for a period of one (1) year following Completion of Construction. (h) No Delav of Dama2es. In the event of delay not the fault of the City, then the Company shall be entitled to an extension of time for the Completion of Construction of the Infrastructure, or portion thereof only and shall not be entitled to any additional payment from the City on account of such delay. (i) Casualtv. Risk of loss due to casualty shall be borne by the Company until Completion of Construction of the Infrastructure, or portion thereof at such time said risk of loss due to Casualty shall be borne by the City. The Company shall carry or cause to be carried insurance in amounts sufficient to restore any of the Infrastructure, or portion thereof damaged by Casualty to substantially the same condition they were in immediately prior to such Casualty. The Company will in any event restore any of the Infrastructure, or portion thereof damaged or destroyed by Casualty as part of its obligation to construct the Improvements. 3.3 General Construction ReQuirements. (a) The Company shall cause all necessary permits and approvals required by the City and any applicable governmental authorities to be issued for the construction of the Project and the Infrastructure. The Company shall, at its costs, be responsible for the design, inspection and supervision of the construction of the Project and the Infrastructure. (b) The Company shall comply with all local and state laws and regulations regarding the design and construction of the Project and the Infrastructure applicable to similar facilities constructed by the City, including but not limited to any applicable requirement relating to payment, performance and maintenance bonds. Upon Completion of Construction of the Infrastructure, the Company shall provide the City with a final cost summary of all costs associated with the construction of the Infrastructure, and provide proof that all amounts owing to contractors and subcontractors have been paid in full evidenced by the customary affidavits executed by the Company and/or its contractors. (c) The Company shall in connection with the construction of the Infrastructure, or portion thereof provide performance and payment bond(s) for the construction of the Infrastructure, or portion thereof and the Vision Project Improvements to ensure completion of such projects in accordance with Chapter 2253, Texas Government Code, as amended and cause its contractors to provide such performance bonds, and payment bonds in forms reasonably satisfactory to the City for the construction of the Infrastructure, or portion thereof 3.4 Construction of Entrance Features. The Company shall, subject to events of Force Majeure, cause Commencement of Construction of the Entrance Features to occur concurrent with the Commencement of Construction of the Infrastructure, and shall, subject to events of Force Majeure, cause Completion of Construction thereof to occur concurrent with the Completion of Construction of the Infrastructure. The costs of construction of the Entrance Features shall not exceed $50,000 unless otherwise agreed by the parties. The City shall provide an economic development grant in the amount of the lesser of: (i) fifty percent (50%) of the actual costs of construction paid and incurred by the Company for the Entrance Features; and (ii) $25,000, (the "Entrance Feature Grant") to be paid to the Company within thirty (30) days after receipt of a Payment Request following Completion of Construction of the Entrance Features. 3.5 Proiect Si2:n. The Company shall at its costs construct a Project sign (the "Project Sign") at Bethel Road and Denton Tap Road, Freeport Parkway and Bethel Road and at Sandy lake Road and Coppell Road; provided however the City shall pay fifty percent (50%) of the actual costs incurred and paid by the Company for the Project Signs in the event the City does not complete the Way-Finding Project (the "Project Sign Grant"). The Project Sign Grant shall be paid by the City to the Company within thirty (30) days after receipt of a Payment Request following Completion of Construction of the Project Sign unless the City has completed the Way- Finding Project. 3.6 Private Parkin2:. The Company shall, at its sole cost, construct private surface parking on the east, west and south sides of the perimeter of the City Facilities as depicted in Exhibit "B". The Company subject to events of Force Majeure, cause Commencement of Construction of the Private Parking to occur concurrent with the Commencement of Construction of the Infrastructure, and shall, subject to events of Force Majeure, cause Completion of Construction thereof to occur concurrent with the Completion of Construction of the Infrastructure; provide however the streetscape improvements shall not be constructed until improvements are constructed on the Finished Lots. 3.7 En2:ineerin2: Services. (a) Prior to the solicitation of bids for the construction of the Project, the Company shall at its cost, contract with the Project Engineers. The City shall have the right to approve or reject the Company's selection of the Project Engineers and the cost of such services, which approvals shall not be unreasonably withheld, conditioned or delayed. The Company shall cause the Project Engineers to provide the City with the Plans on or before _ for review and approval. The City shall have the right to approve the Plans or to terminate this Agreement upon written notice to the Company. The City shall have the right to approve the Plans or to terminate this Agreement upon written notice to the Company within _ (~ business days following receipt of the Plans by the City (the "Plan Approval Period"). The City shall be deemed to have approved the Plans for the City Facilities unless it has provided written notice to the Company prior to the expiration of the Plan Approval Period of the City's objections to the Plans. The Company shall cause the Project Engineers to promptly cured or correct any City objections to the Plans. (b) The City shall be responsible for all costs for the Engineering services for the City Facilities and for any change orders or increases in the costs of the Engineering Services for the City Facilities approved by the City. The Company shall be responsible for all other costs for the Engineering services for the Project and for any change orders or increases in the costs of the Engineering Services for the Project. 3.8 Construction Services. (a) Solicitation of Bids. The Company shall, within _ days after the City approval of the Plans, solicit at least three (3) competitive bids and/or competitive sealed proposals for the construction of the Project for the review and approval by the City Engineer. The Company shall in such solicitation require the companies providing the competitive bids or proposals for the construction of the Project to bid the total cost of construction of the Project, and to separately bid the cost of City Facilities and the cost of the Company portion of the Project. Each solicited bid or proposal for the construction of the Project shall provide the costs of construction of the City Facilites separate and apart from the costs for the Company's portion of the Project. (b) Bid Review. The City Engineer shall have the right to review and approve the solicited bids for the construction of the Project and City Facilites. In the event the City does not approve any of the bids or proposals (and/or the companies providing such bids or proposals) this Agreement shall terminate without further notice to either party. (c) Bid Award. The Company shall award the construction contract(s) to the responsible bidder(s) approved by the City Engineer (the "Contract Award"). 3.9 NCTCOG Standards. Except as otherwise provided in this Agreement, the design and construction of the Project shall be in accordance with the Standard Specifications for Public Works Constructions published by the North Central Texas Council of Governments, as amended, and as modified by the City, and to the extent applicable are hereby incorporated by reference. 3.10 Bonds. The Company agrees to provide a payment bond and a performance bond for the construction of the Project to ensure completion of the City facilities in accordance with Chapter 2253, Texas Government Code, and to cause its contractors and subcontractors to provide such performance bonds, and payment bonds in forms reasonably satisfactory to the City for the construction of the Project to ensure completion of the City Facilities. 3.11 Current Revenue. The Grant made hereunder shall be provided solely from lawfully available funds that have been appropriated by the City. Under no circumstances shall the City's obligations hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Further, the City shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by the Company and lor Company. None of the City's obligations under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. 3.12 Concept Plan. The Company shall at its cost prepare and submit a preliminary concept site plan to the City for review and approval prior to closing on the purchase of phase one of the Land for the first phase of the Project. The company shall submit and obtain approval of a final plat for the cottage cluster, first retail services building on the Town Square and the initial phase oftownhomes within 120 days after the company closes the purchase of phase one of the Land pursuant to the Option Agreement. 3.13 Project Marketin2:. The Company at its sole cost shall actively promote and market the Project. 3.14 Propertv Owners Association. The Company shall be responsible for establishing a property owners association to provide for the maintenance of the common areas within the Project. The property owner association documents shall be submitted to the City Attorney for review and approval prior to the approval of the first plat for the development of the land for the Project. 3.15 Residential Lot Development. The Company shall cause all residential lot and structures to be designed and constructed with noise mitigation features as approved by the City. The Company shall grant an avigation easement to the Dallas Forth Worth regional Airport relating to the development of the Land for the Project as the Company closes it purchase of the Land, or portion thereof The Company shall cause all purchasers, tenants and occupants of the Land and buildings/improvements thereon to be notified in writing of the noise conditions existing on the Land and of the existence of the any avigation easements and noise conditions prior to occupancy. Article IV City Projects 4.1 Fee Waivers. The City agrees to waive building permit fees, inspection fees, platting fees, roadway impact fees and other fees for the development of the Project, excluding water and waste water impact fees assessed against the Land, for the period beginning on the Effective Date and continuing thereafter for a period often (10) years. 4.2 Bethel Road Extension. The City agrees to provide the land for and construct the extension of Bethel Road to the Town Square to serve as the Project entrance if the City acquires the necessary right-of-way including the _ gas station site. 4.3 Retention/Detention Pond. The City agrees to cause the construction of a retention/detention pond for the Project if necessary, to be owned and maintained by the City. The City shall provide all required storm water collection capacity on Bethel Road and South Coppell Road contemporaneously with the construction of the Infrastructure by the Company. In the event the City elects not to construct the retention/detention pond the Company shall have an option to purchase such portion of the Land pursuant to the Option Agreement. 4.4 South Coppell Road. The City shall at its costs, subject to events of Force Majeure, to cause the Commencement of Construction of South Coppell Road southward from Bethel Road to its intersection with Southwestern Boulevard to occur on or before January 1, 2010. 4.5 Historic Overlav District. The City agrees to provide written notice to and consult with the Company prior to the adoption of any amendments to the Historic Overlay District. 4.6 Additional Citv Facilities. The City agrees at its costs, subject to events of Force Majeure, to construct one (1) pavilion for the Coppell Framers Market and one (1) outdoor theater on the Land within two (2) years after the Company pays the third installment of the Option Price pursuant to the option Agreement. 4.7 En2:ineerin2: Costs. The agrees to reimburse the Company for the Engineering costs incurred and paid by the Company for the Project in the event the City elects not to proceed with the Project and City Facilities. Article V Joint Responsibilities 5.1 Storm Water Street Improvement Plan. The parties shall jointly develop a plan for the necessary storm water and street improvements for South Coppell Road where townhomes abut such street as shown on Exhibit "B". 5.2 Water Feature Studv. The parties shall jointly conduct a feasibility study for an interactive water feature element to be constructed on the Town Square. Article VI Termination 6.1 Termination. This Agreement shall terminate upon the occurrence of anyone or more of the following: (a) the execution by all parties of a written agreement terminating this Agreement; (b) the Expiration Date; (c) by either party, in the event other party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof; or (d) by the City, if the Company suffers an Event of Bankruptcy or Insolvency; (e) by the City, if any Impositions owed to the City or the State of Texas by the Company and/or Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions) and such delinquent Impositions are not paid within thirty (30) days after written notice thereof; or (f) by the City, if any subsequent Federal or State legislation or any decision by a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable; 6.2 In the event the Agreement is terminated by the City pursuant to Section 5.1 ( c), (d), or (e), the City shall be relieved of any further obligation under this Agreement to purchase the Infrastructure from the Company. In the event the Agreement is terminated by the City pursuant to Section 5.1 ( c), the City may seek specific performance, and/or actual damages incurred as a result of such uncured default by the Company. 6.3 In the event the Agreement is terminated by the Company pursuant to Section 5.1 ( c) the Company may seek specific performance, and/or actual damages incurred as a result of such uncured default by the City. 6.4 Ri2ht of Offset. The City may at its option, offset any amounts due and payable under this Agreement against any debt (including Impositions) lawfully due to the City from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City has been reduced to judgment by a court. Article VII Miscellaneous 7.1 Bindin2 A2reement: Assi2nment. The terms and conditions of this Agreement are binding upon the successors and permitted assigns of the parties hereto. This Agreement may not be assigned without the prior written consent of the City Manager. 7.2 Limitation on Liabilitv. It is understood and agreed among the parties that the Company and the City, in satisfying the conditions of this Agreement, have acted independently, and assume no responsibilities or liabilities to third parties in connection with these actions. 7.3 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. 7.4 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. 7.5 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received (i) three (3) days after deposit into the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or (ii) on the day actually received if sent by courier or otherwise hand delivered. Ifintended for City, to: Attn: City Manager City ofCoppell, Texas P.O. Box 478 Coppell, Texas 75019 With a copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 North Akard Dallas, Texas 75201 Ifintended for Company, to: CSE Commercial Real Estate, LP With a copy to: Any party shall have the right to change its address for notice by sending notice of change of address to each other party, in the manner described above. 7.6 Entire A2:reement. This Agreement is the entire agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written Agreement among the parties that in any manner relates to the subject matter of this Agreement, except as provided or referred to in this Agreement or as provided in any Exhibits attached hereto. 7.7 Governin2: Law. This Agreement shall be governed by the laws of the State of Texas; and venue for any action concerning this Agreement shall be in the State District Court of Dallas County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 7.8 Amendment. This Agreement may only be amended by a written agreement executed by all parties. 7.9 Le2al Construction. In the event anyone or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision shall be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 7.10 Recitals. The recitals to this Agreement are incorporated herein. 7.11 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 7.12 Exhibits. The exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 7.13 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 7.14 Indemnification bv Companv. CITY SHALL NOT BE LIABLE OR RESPONSIBLE FOR, AND SHALL BE INDEMNIFIED, DEFENDED, HELD HARMLESS AND RELEASED BY COMP ANY FROM AND AGAINST ANY AND ALL SUITS, ACTIONS, LOSSES, DAMAGES, CLAIMS, OR LIABILITY OF ANY CHARACTER, TYPE, OR DESCRIPTION, INCLUDING ALL REASONABLE EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEY'S FEES FOR INJURY OR DEATH TO ANY PERSON, OR INJURY OR LOSS TO ANY PROPERTY, RECEIVED OR SUSTAINED BY ANY PERSON OR PERSONS, INCLUDING THE COMPANY, OR PROPERTY, ARISING OUT OF, OR OCCASIONED BY THE PERFORMANCE OF COMP ANY UNDER THIS AGREEMENT. THE PROVISIONS OF THIS INDEMNIFICATION ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. IT IS THE EXPRESSED INTENT OF THE PARTIES TO THIS AGREEMENT THAT THE INDEMNITY PROVIDED FOR IN THIS AGREEMENT IS AN INDEMNITY EXTENDED BY COMP ANY TO INDEMNIFY AND PROTECT CITY FROM THE CONSEQUENCES OF THE COMP ANY'S NEGLIGENCE, WHETHER SUCH NEGLIGENCE IS THE SOLE OR PARTIAL CAUSE OF ANY SUCH INJURY, DEATH, OR DAMAGE. 4.8 Insurance. Throughout the term of this Agreement, Company shall, at its expense, maintain in full force and effect, the following insurance: ( a) a policy of insurance for bodily injury, death and property damage insuring against all claims, demands or actions relating to the Company's performance of its obligations pursuant to this Agreement with (1) a policy of comprehensive general liability (public) insurance with a minimum combined single limit of not less than $1 Million Dollars per occurrence for bodily injury and property damage with an aggregate of not less than $2 Million Dollars; (2) policy of automobile liability insurance covering any vehicles owned and/or operated by the Company, its officers, agents, and employees, and used in the performance of its obligations hereunder with a minimum of $1 Million Dollars; and (3) statutory Worker's Compensation Insurance covering all employees involved in the performance of its obligations hereunder. Insurance covering the Project and the Infrastructure against loss or damage from perils covered by an all risk or special form policy. The must be in amounts not less than eighty (80%) percent of the full insurable value of the buildings and other improvements included in the Project and Infrastructure. Construction liability insurance at all times when demolition, excavation, or construction work is in progress on the Land with limits of not less than $100,000 for property damage and $300,000 for one person and $1,000,000 for one accident for personal injury and must protect City and Company, against all liability for injury or damage to any person or property in any way arising out of demolition, excavation, or construction work on the Land. (b) All insurance and certificate(s) of insurance shall contain the following provisions: (1) name the City, its officers, agents and employees as additional insureds as to all applicable coverage with the exception of Workers Compensation Insurance; (2) provide for at least thirty (30) days prior written notice to the City for cancellation, non-renewal, or material change of the insurance; (3) provide for a waiver of subrogation against the City for injuries, including death, property damage, or any other loss to the extent the same is covered by the proceeds of insurance. ( c ) All insurance companies providing the required insurance shall be authorized to transact business in Texas and rated at least "A" by AM Best or other equivalent rating service. (d) A certificate of insurance evidencing the required insurance shall be submitted to the City prior to Commencement of Construction. (e) Without limiting any of the other obligations or liabilities of Company, the Company shall require its general contractors, at the general contractor's own expense, to maintain during the term of this Agreement, the required insurance including the required certificate and policy conditions as stated herein. 7.15 Conditions Precedent. This Agreement shall not be effective is subject to and conditioned upon the following conditions having occurred: (i) the parties having entered into the Option Agreement on or before _ , 2008 or other date agreed to by the parties; (ii) the Company having submitted an application for zoning change for the Planned Development District; and (iii) the City having adopted an ordinance granting the Planned Development District. [Signatures Appear on the Following Page] EXECUTED in duplicate originals this the ~ day of, Agreed as to Form: By: City Attorney EXECUTED in duplicate originals this the City of Coppell, Texas By: 2008. Douglas N. Stover, Mayor Attest: By: Libby Ball, City Secretary day of, CSE Commercial real Estate, LP 2008. By: Debco partners, LLC, its general parnter By: Name Charles Cotton Title: Exhibit "A" Description of Land Exhibit "B" Project Depiction