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HomeMy WebLinkAboutRES 14-36RESOLUTION NO. 14-36 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE murrIoN,PINAL COUNTY, ARIZONA, ADOPTING A NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC WHEREAS,Blount approximately three located at 1353 South "Property") ; and Rental Equipment,LLC ("Landowner")owns (3)acres of unimproved real property Vista Road, Apache Junction, Arizona,(the linioxam,the City of Apache Junction ("City") and Landowner have negotiated a retail development tax incentive agreement to and and develop the Property as a heavy equipment rental construction firm facility consisting of buildings improvements of approximately three thousand five hundred square feet (3,500 ft2) in exchange for reimbursement of not more than $51,200.00 for adjacent public infrastructure (Vista Road); and WHEREAS, development of the Property is beneficial to City and such development will Improve and/or enhance economic welfare of the City's residents and businesses generate anticipated tax revenues for the City; and the the and muumks,development of the Property will generate municipal benefits,tangible and intangible,which benefits outweigh,or are not disproportionate to, the costs associated with the economic incentives provided for in the development agreement; and WHEREAS,the proposed development agreement includes a retail development tax incentive component as defined under A.R.S. § 9-500.11(M);and WHEREAS, A.R.S. § 9-500.11(K) requires a city or town which desires to enter into a retail development tax incentive agreement to adopt a Notice of Intent to Enter into such agreement a minim=o f fourteen (14)calendar days before adoption of the agreement; and WHEREAS,the expected action date by the Mayor and City Council is October 7, 2014. RESOLUTION NO. 14-36 PAGE 1 OF 2 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA AS FOLLOWS: 1) That the Mayor and City Council hereby adopt this Notice of Intent to Enter into a Retail Development Tax Incentive Agreement with Blount Rental Equipment, LLC, which notice is fully set forth in Exhibit A and a copy of the proposed agreement is fully set forth in Exhibit B. 2) That staff is directed to post this Resolution and Notice of Intent inclusive of the proposed agreement, at the city's website in the same manner as all notices are electronically posted. PASSED AND ADOPTED BY THE MAYOR AND, CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS / 6 17i-DAY OF _....,-,c0/6574 2014. SIGNED AND ATTESTED TO THIS /6'4-DAY OF ga 2014. ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: G1.1b* RICHARD J. STERN City Attorney RESOLUTION NO. 14-36 PAGE 2 OF 2 JOHN S. INSALACO Mayor EXHIBIT A Notice of Intent to Enter into a Retail Development Tax Incentive Agreement Notice is hereby given,pursuant to Arizona Revised Statutes § 9-500.11, as amended,that the City of Apache Junction, Arizona, an Arizona municipal corporation ("City"), intends to enter into a Retail Development Tax Incentive Agreement (entitled "Retail Development Tax Incentive Agreement with Blount Rental Equipment, LLC and City of Apache Junction" and in a form substantially similar to the form attached hereto in Exhibit B), on a date which is at least fourteen calendar days after the adoption of this notice by the City. EXHIBIT RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC AND CITY OF APACHE JUNCTION When recorded return to: Richard Joel Stern, Esq. Apache Junction City Attorney 300 East Superstition Blvd. Apache Junction, AZ 85119 RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT WITH BLOUNT RENTAL EQUIPMENT, LLC. AND CITY OF APACHE JUNCTION THIS RETAIL DEVELOPMENT TAX INCENTIVE AGREEMENT (the "Agreement") is made as of the day of 2014, by and between CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation (the "City"); and BLOUNT RENTAL EQUIPMENT, LLC, an Arizona private corporation ("Developer"). City and Developer are sometimes referred to herein collectively as the "Parties," or individually as a "Party." RECITALS A. Developer owns three (3) acres of unimproved real property, located at 1 353 S. Vista Rd, Apache Junction, Arizona, 85119 (the "Property"), the legal description and map of which are attached hereto as Exhibit A. Developer intends to develop the Property as a heavy equipment rental and civil construction firm consisting of buildings and improvements of approximately three thousand five hundred square feet (3,500 fe) on the Property (the "Project"). B. It is anticipated that completion of the Project as planned will improve and/or enhance the economic welfare of City's residents and businesses and generate anticipated tax revenues for City as verified for the City in an independent study compiled by Applied Economics, a copy of which is on file with the City's Principal Economic Development Specialist and incorporated herein by this reference. C.Developer has submitted, or will submit, a development review application package for the Property (which includes,but is not limited to, applications for approval of standard grading and drainage, traffic, elevations, landscaping, signage, etc.) for review and approval (or disapproval) by City in accordance with City's customary and ordinary zoning, plan and development review processes. The proposed (but not approved) Site Plan for the Property is attached hereto as Exhibit B. D.It is anticipated that development of the Project pursuant to this Agreement will generate municipal benefits, tangible and intangible,which benefits outweigh, or are not disproportionate to, the costs associated with the economic incentives provided for in this Agreement. E. The Parties understand and acknowledge that this Agreement is a "Development Agreement"within the meaning of, and entered into pursuant, A.R.S. § 9-500.05,and that the terms of this Agreement shall constitute covenants running with the Property as more fully described in this Agreement. F. The Parties also understand and acknowledge that this Agreement is authorized by and entered into accordance with the terms of A.R.S. § 9- 500.11. The actions taken by City pursuant to this Agreement are for "economic development" purposes as that term is used in A.R.S. § 9-500.11; they will assist in the creation and retention of jobs; and in other ways will improve and enhancethe economic welfare of the residents of City.On September 16th, 2014, City adopted a 14 -day notice of intent to enter into this Agreement as required by A.R.S. § 9-500.11(K) and made the findings required by A.R.S. § 9-500.11(0), such findings having been verified by an independent third party (Applied Economics) before City entered into this Agreement.The findings are, by this reference, incorporated into this Agreement as though set forth in their entirety herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual promises contained in this Agreement, the Parties agree as follows: 1. DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the context: (a)"Agreement"means this Agreement, as amended and restated or supplemented in writing from time to time, and includes all exhibits hereto. References to sections or exhibits are to this Agreement unless otherwise qualified. The Recitals set forth in Paragraphs "A" through "F" inclusive are incorporated herein by reference and form a part of this Agreement. (b) "Applicable Laws" means all federal, state, county and local laws (statutory and common law) and the ordinances, rules, regulations, permit requirements, and other requirements and official policies and practices of City which apply to the development of the Property as such may be modified from time to time. (c) "AZDOR" means Arizona Department of Revenue,the tax collector on all sales taxes. 2 (d)"Commencement of Construction"means both:(i) the obtaining of a building, excavation, grading or similar permit by Developer for the construction of the Minimum Improvement's and the Public Infrastructure Improvements;and (ii)the actual commencement of physical construction operations on the Property (or in right-of-way adjacent thereto) and the diligent pursuit of such construction in a manner necessary to achieve Completion of Construction within the time provided in this Agreement. (e) "Completion of Construction" means the date on which: (i) as to the Minimum Improvements, one or more temporary or final certificates of occupancy (or comparable instruments) have been issued by the City for the Minimum Improvements,and that such Minimum Improvements are open for business to the public;and (ii)for the Public Infrastructure Improvements, acceptance by the City Council or appropriate administrative staff member of the City of the completed Public Infrastructure Improvements for maintenance in accordance with the policies,standards and specifications contained in applicable City ordinances,which acceptance shall not be unreasonably withheld, conditioned or delayed.Unless otherwise expressly stated, "Completion of Construction" of the Minimum Improvements means Completion of Construction of both the Minimum Improvements and the Public Infrastructure Improvements. (f) 8.3(b)(iii). "Economic Incentive Period" means as defined in Section (g) "Minimum Improvements" means not less than three thousand five hundred square feet (3,500 fe) of gross building area constructed on the Property as a heavy equipment rental and civil construction firm. (h) "Public Infrastructure Improvements" means those facilities required by the City to be constructed in conjunction with the construction of the Minimum Improvements and are further described in Section 5 of this Agreement. (i) "Public Improvement Costs" means costs, expenses, fees and charges actually incurred and paid by or on behalf of City or Developer to contractors, architects, engineers, surveyors, governmental agencies and other Third Parties for materials,labor, design, engineering, surveying, site excavation and preparation, governmental permits, payment and performance bonds, and other costs reasonably necessary for the construction, installation, or provision of the Public Infrastructure Improvements."Public Improvement Costs" expressly excludes any "contingencies" and any fees, costs, salaries, or other amounts described as or allocable to Developer's or City's "overhead" or "administrative" costs or "profit," and shall not include interest on any sum or any financing charge or cost of any kind. 3 (j)"Sales Taxes"and "Sales Tax Revenues" mean, for the purposes of this Agreement, that portion of City's transaction privilege taxes which are imposed on all taxable activities as determined by the Apache Junction Tax and Licensing Supervisor and construction activities only (as further described in and contemplated by Section 8.1 of this Agreement) under the Tax Code of City of Apache Junction, as the same may change from time -to- time, applicable to general sales and construction revenues and similar activities occurring at the Property ("Taxable Activities"); provided that, for the purposes of this Agreement, the rates of such Sales Taxes used for calculating any Sales Tax Rebate shall never be more than the Sales Tax rates imposed and in effect as of the date of recordation of this Agreement, notwithstanding any increases in City's transaction privilege tax rate, changes in the unallocated portion of City's transaction privilege taxes, or for any other reason whatsoever; and provided, further, that in no event does the term "Sales Taxes" include present or future dedicated or special taxes allocated to a specific purpose only (e.g.,mountain preserve acquisition,transportation, recreation debt, sewer debt, or special public safety expenditures). (k)"Third Parties" means individuals or entities other than the Parties or any person or entity related to, affiliated, or associated in any way with a Party, other than as an independent contractor. 2. PARTIES AND PURPOSE OF THIS AGREEMENT. 2.1 Parties to the Agreement.The Parties to this Agreement are City and Developer. (a)City.City is a municipal corporation and a political subdivision of the State of Arizona, duly organized and validly existing under the laws of the State of Arizona, exercising its governmental functions and powers. (b)Developer.Developer is Blount Rental Equipment, LLC, an Arizona private corporation, together with its successors in interest and assigns. 3. SCOPE AND REGULATION OF DEVELOPMENT. 3.1 Development Plans.Development of the Property shall be consistent with the Property's zoning and the City -approved site plan and shall be governed by the provisions, requirements and restrictions contained in this Agreement and by Applicable Laws (as defined herein). 3.1.1 Submissions by Developer. Developer shall submit complete applications with respect to all aspects of its development of the Property, including all information required by City to review and process Developer's applications. Developer's submissions shall include all information, 4 specifications and drawings reasonably requested by City and/or required by Applicable Laws. 3.2 Development Regulation. 3.3 City Development Fees.Developer shall pay all then -current City impact, development, and resource fees or exactions, currently in effect or as may be adopted in the future (referred to individually as a "City Development Fee"or collectively as "City Development Fees") as and when such City Development Fees are assessed, due or otherwise required to be paid by City. 4. PROPERTY IMPROVEMENTS. 4.1 Minimum Improvements and Full -Time Employee Staffing. Subject to the terms and conditions of this Agreement, the Minimum Improvements shall be developed on the Property as a heavy equipment rental and civil construction firm facility of approximately three thousand five hundred square feet (3,500 ft2) with a minimum staff of approximately two (2) full-time employees ("Full -Time Employee Staffing"). The Parties agree that Developer shall have no obligation to develop any more of the Property than the Minimum Improvements. 4.2 Completion of Construction. Developer agrees that Completion of Construction shall occur, subject to Enforced Delay (under 12.6 below), on or before December 31, 2015. 4.3 Conditions to Reimbursement. Completion of Construction of the Minimum Improvements and the Public Infrastructure Improvements by Developer as described in this Agreement and Developer's initial and continued compliance with the Full Time Employee Staffing requirement throughout the Terms of this Agreement are not contractual obligations of Developer, but rather are conditions to the obligations of City to provide the Economic Incentives to Developer provided in this Agreement. 5. PUBLIC INFRASTRUCTURE IMPROVEMENTS. Pursuant to A.R.S. § 34-201(L), as a condition of development of the Property imposed by City and as authorized by A.R.S.§9-463.01,Developer at its sole cost shall design, construct or cause to be constructed and dedicate to the City the Public Infrastructure Improvements,subject to the terms and conditions of this Agreement. 5.1 Construction and Phasing. The Public Infrastructure Improvements shall consist of construction of a twenty four foot (24') minimum pavement improvement along the east side of Vista Rd. alignment south of 12th Ave. for a distance of six hundred twenty (620') linear feet, pavement turnouts providing access to subject site, and drainage channel improvements along the west side of Vista Road and those additional improvements as described on Exhibit "C" to this Agreement.In the absence of a City -approved construction schedule, Developer shall cause the Public Infrastructure Improvements to be constructed in conjunction with Developer's construction of the Minimum Improvements. 5.2 Design,Bidding, Construction and Dedication.The Public Infrastructure Improvements shall be designed, bid, constructed and dedicated in accordance with Applicable Laws, including without limitation all City procurement and public bidding procedures as determined to be applicable by the City Attorney in his sole judgment. 5.3 City Review and Approval of Plans.Developer recognizes that its development and construction of the Minimum Improvements and Public Infrastructure Improvements pursuant to this Agreement are subject to City's normal plan submittal, review and approval processes and fees, and day-to-day inspection services. 5.4 Payment of Public Improvement Costs.Developer shall pay all Public Improvement Costs as the same become due, subject to the reimbursement provisions of Section 8 of this Agreement. 5.5 Dedication,Acceptance and Maintenance of Public Infrastructure Improvements: Limited Indemnity. When the Public Infrastructure Improvements or a discrete portion thereof, as determined by City, are completed (e.g.,all of the paving for a particular street within any designated section or phase of the Property),then upon written request of City or Developer, Developer shall dedicate and City shall accept such Public Infrastructure Improvements in accordance with Applicable Laws and upon such reasonable and customary conditions as City may impose,including without limitation a two (2)year workmanship and materials contractor's warranty.Upon acceptance by City, the Public Infrastructure Improvements shall become public facilities and property of City, and City shall be solely responsible for all subsequent maintenance,replacement or repairs.With respect to any claims arising prior to acceptance of the Public Infrastructure Improvements by City,Developer shall bear all risk of, and shall indemnify, defend, pay and hold harmless City and its officials,employees and City Councilmembers, for,from and against any claim arising from any injury (personal,economic or other)or property damage to any person, entity or utility, arising from the condition, loss, damage to or failure of any of the Public Infrastructure Improvements,except to the extent caused by the grossly negligent or willful acts or omissions of City or its officials, employees and City Councilmembers. 6.ADDITIONAL MUNICIPAL BENEFITS.In addition to the construction of the Public Infrastructure Improvements and the direct, pecuniary, indirect and intangible benefits City will realize as a consequence of the development of the Property as contemplated by this Agreement, Developer agrees to perform, 6 supply or comply with the Additional Municipal Benefits set forth in this Section, the covenants, terms and provisions of which shall survive the expiration or termination of the Term of this Agreement.City agrees and acknowledges that these Additional Municipal Benefits are of value to City and are in addition to those matters that can be compelled or exacted by City and confer economic and non -economic benefits upon City in excess of the economic and non- economic benefits conferred by Developer's construction of the Public Infrastructure Improvements. 6.1 Use of Property Name by City.Developer shall permit City to use the name of the Property and/or Project in City communications, including radio, television, internet and print advertisements, utility bill inserts and City publications, provided,however, that City shall submit to Developer drafts of any such City communication for Developer's review and approval, which shall not be unreasonably withheld. 6.2 Character,Theme, Design and Architectural Features. Developer shall cause the Property and Project to incorporate the character, theme, design and architectural features and improvements reasonably requested by City and consistent with the approved site plan, zoning and City's General Plan. 6.3 Access. In addition to access required by Applicable Laws, Developer shall permit access to the Property by City, its officials, personnel and designees, at reasonable times, subject to reasonable safety requirements as Developer may impose from time to time, to assure compliance with all Applicable Laws and with the terms of this Agreement. 6.4 Public Access. In addition to access required by Applicable Laws, Developer will grant to City recorded emergency vehicle access and use easements over and through the main entrance to the Property and other private roadways as may exist from time to time within the Property. 7.DEVELOPER ASSISTANCE.Developer, by notice to City,may request to have City implement an expedited review and/or inspection process; and if City consents,Developer (or City in its discretion)shall engage at Developer's cost such private independent consultants and advisors as are approved by and necessary to assist City in the review and/or inspection process; provided, that such consultants and advisors shall take instruction from, be controlled by, and be responsible to City rather than Developer and provided further, that to the extent City elects to use its own personnel and overtime and similar charges are incurred by City, Developer shall be responsible for incremental overtime costs incurred above City's ordinary operational expenses for such personnel, as determined by City. 7 8. PAYMENTS TO DEVELOPER. 8.1 Reimbursement Amount.City agrees to pay to Developer in accordance with the reimbursement provisions of this Agreement the sum of all Public Infrastructure Improvement costs evidenced by invoices or receipts or other evidence reasonably acceptable to City, but in no event more than fifty one thousand two hundred dollars ($51,200), but only to the extent that Sales Tax Revenues are available for such reimbursement as further set forth in Section 8 of this Agreement (the "Reimbursement Amount"). Developer understands and agrees that City shall not reimburse for Developer interest relating to the Public Infrastructure Improvement costs or any other sum arising from or relating to the fact that the reimbursements to Developer will be paid over time.The reimbursements payable under the Agreement shall be equal to and shall not exceed the actual Public Infrastructure Improvement Costs incurred, subject to the Reimbursement Amount limitation and all other limitations set forth in the Agreement.The reimbursements to be provided by the City are sometimes referred to herein as the "Economic Incentive." 8.2 Allocation and Deposit of Revenues. (a)Allocated Revenues.Subject to the limitations set forth in this Agreement, fifty percent (50%) of Sales Tax Revenues as defined in Section 1 of this Agreement shall be deposited by City in a segregated bookkeeping account (the "Special Account") for the purpose of measuring the payment required hereunder (the "Allocated Revenues"). The first entry into the Special Account shall be made within forty-five (45) calendar days following the end of the first calendar quarter following the date on which Sales Tax Revenues are collected (and verified and received by City from AZDOR)from any development or construction activity on, from or related to the Property, or the date that any sales or similar Project -related taxable activity occurs on or at the Property, and shall thereafter be made within forty-five (45) calendar days of the end of every subsequent quarter, until the Reimbursement Amount has been paid to Developer, or after an eight -year (8) payment period (measured from Completion of Construction) has occurred, whichever occurs first.City recognizes that Sales Taxes shall, in any event, be collected by AZDOR, sent to the City and deposited in the Special Account (i)from and after the commencement of any construction activity with respect to construction sales and use taxes, and (ii) from and after Grand Opening with respect to all Sales Taxes.Developer acknowledges, however, that no payment shall be due or made by City unless and until Completion of Construction has occurred. (b)Limited Obligations.The City's obligation to make the reimbursement payments described in this Agreement is limited to payment from Allocated Revenues received from the taxable activities described in Section 1 of this Agreement. Under no circumstances shall any obligation hereunder represent or constitute a general obligation of or pledge of the full faith and credit of the City, the State of Arizona or of any political subdivision thereof, nor require the levy of, or be payable from the proceeds of any ad valorem taxes. The obligation of City to reimburse or pay any amount pursuant to this Agreement shall not constitute an indebtedness of the City, the State of Arizona or any political subdivision thereof within the meaning of any Constitutional or statutory debt limitation or restriction or otherwise. The City and Developer agree and acknowledge that all obligations to make reimbursement payments pursuant to this Agreement are subordinate and subject to the lien and pledge of excise taxes pledged as security for the payment of all obligations of the City.Nothing in this Agreement shall be construed as a pledge of any City funds, assets or revenues nor shall Developer have any claim to or interest in the Special Account. 8.3 Payment Procedures. (a)Conditions Precedent to Reimbursement. Notwithstanding the accumulation of funds in the Special Account and the allocation of revenues under this Agreement,no payment shall be made to Developer as a debit against the Special Account until the Completion of Construction (of the Minimum Improvements and the Public Infrastructure Improvements); provided, however, that prior to Completion of Construction of the Minimum Improvements and the Public Infrastructure Improvements, Sales Tax Revenues shall be recorded in the Special Account for subsequent disbursement to Developer. Further, City shall have no obligation to make any payment to Developer from the Special Account until Developer shall have delivered to City evidence satisfactory to City in its sole discretion to support the claim by Developer for reimbursement for such Public Infrastructure Improvement Costs. (b) Quarterly Reimbursement Payments. (i)Subject to the provisions of Section 8.3(a), above reimbursement payments shall be made to Developer no less frequently than quarterly.The first quarterly reimbursement payment (which shall include all accumulated Allocated Revenues recorded in the Special Account) shall be made by City to Developer within, forty-five (45) calendar days following the last day of the calendar quarter in which Completion of Construction occurs, or such additional time the City deems appropriate to confirm payment of sales taxes were made to AZDOR from Developer and were received from AZDOR to the City. (ii) Reimbursement payments will continue to be made forty-five (45) calendar days after the last day of every quarter thereafter in which Sales Tax Revenues are collected from the Property until the Reimbursement Amount has been paid in full,or until eight (8) years from Completion of Construction, whichever first occurs.Any accrued but not yet disbursed Reimbursement Payments existing upon expiration of the Term of this Agreement shall be paid to Developer notwithstanding the fact that such 9 disbursement occurs after the expiration of the Term. 8.4 Determination of Amount of Allocated Revenues Received by City.City's Director of Finance (or his or her designee) shall determine, from sales tax returns and other appropriate financial records of City and AZDOR, the amount of Sales Tax Revenues and Allocated Revenues for each quarter (or partial quarter if appropriate).If Developer reasonably disputes such determination, Developer may request a review of such determination by the City Manager (or his designee), subject to any applicable laws relating to the confidentiality of taxpayer information or waiver authority thereof. 8.5 Computation of Sales Tax Revenues.Within forty-five (45) calendar days following the end of each City fiscal year, or such additional time the City deems appropriate to confirm payment of sales taxes were made to AZDOR from Developer and were received from AZDOR to the City.City will deliver to Developer a statistical report of all Sales Tax Revenues (classified, if appropriate, to prevent the disclosure of confidential information) received from the Property and/or the Project.Such report shall specifically identify any offsets,credits,exclusions or other deductions from the gross sales tax revenues generated by or attributable to the Property and/or Project which have been utilized by City in computing the Sales Tax Revenues for purposes of this Agreement. 8.6 City's Prepayment Right.City shall have the right to prepay the Reimbursement Amount, in whole or in part at any time, without premium or penalty. 8.7 Repayment to City. Without limiting City's rights arising under Section 14.9(b) of this Agreement, in the event that subsequent to the Effective Date: (i) any State of Arizona legislation is enacted that retroactively amends, modifies or otherwise rescinds or limits the effect of A.R.S. § 42-6010 (or any successor statute) with respect to Reimbursements made or paid to Developer in accordance with this Agreement, or would result in reduced state- shared revenue to City or any other financial loss or penalty to City as a result of or otherwise with respect to Reimbursements made or paid to Developer in accordance with this Agreement, and such legislation (following a challenge initiated and maintained by the City) is upheld by a court of competent jurisdiction, with such ruling being affirmed in whole or part by the Arizona Court of Appeals; or (ii) any order or other final decision (each, an "Order") is entered by a court of competent jurisdiction that declares, imposes or otherwise orders or determines that the Reimbursements to Developer in accordance with this Agreement in any way violate A.R.S. §42-6010 (or any successor statute) or any other State of Arizona legislation presently existing or enacted hereafter, and 10 that a financial loss or penalty thereupon is imposed upon the City pursuant to A.R.S. § 42-6010 (or any successor statute) or any other or any other State of Arizona legislation presently existing or enacted hereafter with respect to such Reimbursements, and the Order thereafter is affirmed in whole or part by the Arizona Court of Appeals or Arizona Supreme Court, then Developer, immediately upon demand from City, shall repay City all amounts charged against or assessed to the City as a financial loss or penalty, and any further obligations of the City to make Reimbursements pursuant to this Agreement that would constitute acts giving rise to penalties imposed pursuant to A.R.S. § 42- 6010 (or any successor statute) with respect to such Reimbursements, shall be deemed withdrawn in their entirety, and Developer shall have no further rights with respect to such Reimbursements;provided, however, that City and Developer thereupon shall meet and negotiate in good faith in an effort to replace the invalidated provision or provisions with other economic incentives from City that may be available to Developer in lieu of the Reimbursements. 9. INDEMNITY; RISK OF LOSS. 9.1 Indemnity by Developer. Developer shall pay, defend, indemnify and hold harmless City and its City Council members, officers and employees from and against all claims, demands, fines, penalties, costs, expenses, damages, losses, obligations, judgments, liabilities,and suits (including attorneys fees, expert fees and court costs) which arise from or relate in any way to any act or omission of Developer, or its employees, contractors, subcontractors, agents or representatives in implementing the terms of this Agreement. The provisions of this Section 9.1, however, shall not apply to loss or damage or claims therefore which are attributable to the grossly negligent or intentional acts or omissions of City, its agents or employees.The foregoing indemnity obligations of Developer shall survive the expiration or termination of this Agreement for a period equal to the applicable statute of limitations period. 9.2 Risk of Loss. Developer assumes the risk of any and all loss, damage or claims to any portion of the Public Infrastructure Improvements unless and until title to the Public Infrastructure Improvements is transferred to City. At the time title to the Public Infrastructure Improvements is transferred to City by dedication deed, plat recordation, or otherwise, Developer will, to the extent allowed by law, assign to City all unexpired warranties relating to the design, construction and/or composition of such Public Infrastructure Improvements. Further, acceptance of the Public Infrastructure Improvements shall be conditioned on City's receipt of a two (2) year warranty of workmanship, materials and equipment,in form and content reasonably acceptable to City; provided,however,that such warranty or warranties may be provided by Developer's contractor or contractors directly to City and are not required from Developer, and that any such warranties shall extend from the date of completion of any Public Infrastructure Improvement, any component thereof, or the work of any specific trade or contractor, as applicable. 11 9.3 Insurance.During the period of any construction involving the Public Infrastructure Improvements , and with respect to any construction activities relating to the Public Infrastructure Improvements, Developer will obtain and provide City with proof of payment of premiums and certificates of insurance showing that Developer is carrying, or causing its contractor(s) to carry, builder's risk insurance,comprehensive general liability and worker's compensation insurance policies in amounts and coverages set forth on Exhibit "D."Such policies of insurance shall be placed with financially sound and reputable insurers, require the insurer to give at least thirty (30) calendar days' advance written notice of cancellation to City, and will name City as an additional insured on all such policies. 10.CITY REPRESENTATIONS.City represents and warrants to Developer that: 10.1 The City's execution and approval of this Agreement have been made in compliance with the procedural requirements of the Apache Junction City Code. 10.2 The City will execute and acknowledge when appropriate all documents and instruments and take all actions necessary to implement and evidence this Agreement. 10.3 As of the date of this Agreement, the City knows of no litigation, proceeding,initiative,referendum, or investigation contesting the powers of the City or its officials with respect to this Agreement, that has not been disclosed in writing to Blount. 10.4 The execution, delivery and performance of this Agreement by the City is not prohibited by, and does not conflict with, any other agreements, instruments or judgments or decrees to which the City is a party or is otherwise subject. 10.5 The City has been assisted by counsel of its own choosing in connection with the preparation and execution of this Agreement. 11.DEVELOPER REPRESENTATIONS.Developer represents and warrants to City that: 11.1 Developer has the full right, power and authorization to enter into and perform this Agreement and of the obligations and undertakings of Developer under this Agreement, and the execution, delivery and performance of this Agreement by Developer has been duly authorized and agreed to in compliance with the organizational documents of Developer. 11.2 All consents and approvals necessary to the execution, delivery and performance of this Agreement have been obtained, and no further 12 action needs to be taken in connection with such execution, delivery and performance. 11.3 Developer will execute and acknowledge when appropriate all documents and instruments and take all actions necessary to implement, evidence and enforce this Agreement. 11.4 As of the date of this Agreement,Developer knows of no litigation, proceeding or investigation pending or threatened against or affecting Developer,which could have a material adverse affect on Developer's performance under this Agreement that has not been disclosed in writing to City. 11.5 This Agreement (and each undertaking of Developer contained herein)constitutes a valid, binding and enforceable obligation of Developer, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors' rights and by equitable principles,whether considered at law or in equity. Developer will defend the validity and enforceability of this Agreement in the event of any proceeding or litigation arising from its terms that names Developer as a party or which challenges the authority of Developer or City to enter into or perform any of its obligations hereunder and will cooperate with City in connection with any other action by a Third Party in which City is a party and the benefits of this Agreement to City are challenged and Developer shall indemnify and hold harmless City against all costs, expenses and attorneys' fees incurred in connection with any such action. 11.6 The execution, delivery and performance of this Agreement by Developer is not prohibited by, and does not conflict with,any other agreements, instruments, judgments or decrees to which Developer is a party or to which Developer is otherwise subject. 11.7 Developer has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement other than normal costs of conducting business and costs of professional services such as the services of architects, engineers and attorneys. 11.8 Developer has been assisted by counsel of its own choosing in connection with the preparation and execution of this Agreement. 12. EVENTS OF NON-PERFORMANCE; REMEDIES. 12.1 Events of Non -Performance by Developer. "Non- Performance" or an "Event of Non -Performance" by Developer under this Agreement shall mean one or more of the following: 13 (a)Any representation or warranty made in this Agreement by Developer was materially inaccurate when made or shall prove to be materially inaccurate during the Term; (b)Developer fails to comply with the dates established in this Agreement for the Commencement of Construction or the Completion of Construction, for any reason other than an Enforced Delay; (c)Foreclosure (or deed in lieu of foreclosure) upon any mechanic's, materialmen's or other lien on the Property prior to Completion of Construction or upon any improvements on the Property, but such lien shall not constitute an Event of Non -Performance if Developer deposits in escrow sufficient funds to discharge the lien or otherwise bonds over such liens in a customary fashion; (d)Developer transfers or attempts to transfer or assign this Agreement in violation of Section 14.2; or (e)Developer fails to observe or perform any other material covenant, obligation -or agreement required of it under this Agreement. 12.2 Events of Non -Performance by City. Non -Performance or an Event of Non -Performance by City under this Agreement shall mean one or more of the following: (a)Any representation or warranty made in this Agreement by City was materially inaccurate when made or shall prove to be materially inaccurate during the Term; (b)City fails to make the reimbursement payments to Developer as provided in this Agreement; or (c)City fails to observe or perform any other material covenant, obligation or agreement required of it under this Agreement. 12.3 Grace Periods; Notice and Cure.Upon the occurrence of an Event of Non -Performance by any Party, such Party shall, upon written notice from the other Party,proceed immediately to cure or remedy such Non- Performance and, in any event, such Non -Performance shall be cured within ninety (90)calendar days (or twenty. (20) calendar days in the event of a monetary Non -Performance) after receipt of such notice. 12.4 Remedies for Non -Performance. Whenever any Event of Non- Performance occurs and is not cured by the non -performing Party in accordance with Section 12.3 of this Agreement, the other Party may take any of one or more of the following actions: 14 (a)Remedies of City. City's exclusive remedies for an Event of Non -Performance by Developer shall consist of, and shall be limited to the following: If an Event of Non -Performance by Developer occurs prior to Completion of Construction and with respect to Developer's failure to construct or develop the Minimum Improvements and/or the Public Infrastructure Improvements in accordance with the terms of this Agreement, City may suspend any of its obligations under this Agreement, other than the recording of the Sales Taxes in the Special Account pursuant to Section 8.2(a), during the period of the Non -Performance. (ii) If the Event of Non -Performance under Section 12.4(a)(i) is not cured within the period provided in Section 12.3 after written notice by City to Developer of such Non -Performance, City may terminate this Agreement by written notice thereof to Developer, in which event the Special Account also shall terminate and all reimbursement payments paid to Developer shall be returned to City free of any claim or interest of Developer. (iii)At any time, City may seek special action or other similar relief (whether characterized as mandamus, injunction or otherwise), requiring Developer to undertake and to fully and timely address a public safety concern or to enjoin any construction or activity undertaken by Developer that is not in accordance with the terms of this Agreement. (iv)If an Event of Non -Performance occurs after Completion of Construction, City shall have all rights and remedies available at law, in equity or under this Agreement, subject to any express limitations set forth in this Agreement. (b)Remedies of Developer. Developer's exclusive remedies for an Event of Non -Performance by City shall consist of and shall be limited to the following: (i) Recovery of damages for unpaid amounts due in accordance with the reimbursement provisions of this Agreement.Such damages shall consist solely of Developer's actual damages as of the time of entry of judgment (meaning only the right to receive reimbursement payments of Allocated Revenues to be applied to the Reimbursement Amount in accordance with and limited by this Agreement).Developer waives any right to seek consequential, punitive, multiple, exemplary or any other damages from City. (ii) If an Event of Non -Performance by City occurs at any time, whether prior to or after Completion of Construction, Developer may seek special action or other similar relief (whether characterized as mandamus, injunction or otherwise), requiring City to undertake and to fully 15 and timely perform its obligations under this Agreement, including, but not limited to,the collection,deposit, allocation, and disbursement of reimbursement payments to Developer in accordance with the terms of this Agreement. 12.5 Delays. Except as otherwise expressly provided in this Agreement, any delay by any Party in asserting any right or remedy under this Agreement shall not operate as a waiver of any such rights or limit such rights in any way; and any waiver in fact made by a Party with respect to any Non- Performance by the other Party shall not be considered as a waiver of rights with respect to any other Non -Performance by the performing Party or with respect to the particular Non -Performance except to the extent specifically waived in writing. 12.6 Enforced Delay in Performance for Causes Beyond Control of Party. Neither City nor Developer, as the case may be, shall be considered not to have performed its obligations under this Agreement in the event of enforced delay (an "Enforced Delay") due to causes beyond its control and without its fault or negligence or failure to comply with Applicable Laws, including, but not restricted to,acts of God,fires, floods, epidemics, pandemics, quarantine, restrictions, embargoes,labor disputes, and unusually severe weather or the delays of subcontractors or materialmen due to such causes, acts of a public enemy, war, terrorism or act of terror (including but not limited to bio-terrorism or eco-terrorism), nuclear radiation, blockade, insurrection, riot, labor strike or interruption, extortion, sabotage, or similar occurrence or any exercise of the power of eminent domain any governmental body on behalf of any public entity, or a declaration of moratorium or similar hiatus directly affecting the Property (whether permanent or temporary)by any public entity. In no event will Enforced Delay include any delay resulting from general economic or market conditions, unavailability for any reason of particular tenants or purchasers of portions of the Property, labor shortages, unavailability of financing, or the unavailability for any reason of particular contractors, subcontractors, vendors, investors or lenders desired by Developer in connection with the Property. Developer agrees that Developer alone will bear all risks of delay which are not Enforced Delay. In the event of the occurrence of any such Enforced Delay, the time or times for performance of the obligations of the Party claiming delay shall be extended for a period of the Enforced Delay; provided, however, that the Party seeking the benefit of the provisions of this Section shall, within thirty (30) calendar days after such Party knows or should know of any such Enforced Delay, first notify the other Party of the specific delay in writing and claim the right to an extension for the period of the Enforced Delay; and provided further that in no event shall a period of Enforced Delay exceed ninety (90) days. 12.6 Rights and Remedies Cumulative. The rights and remedies of the Parties are cumulative, and the exercise by either Party of any one or more of such rights shall not preclude the exercise by it, at the same or different 16 times, of any other right or remedy for any other Non -Performance by the other Party. 13. COOPERATION AND ALTERNATIVE DISPUTE RESOLUTION. 13.1 Representatives.To further the cooperation of the Parties in implementing this Agreement,City and Developer each shall designate and appoint a representative to act as a liaison between City and its various departments and Developer.The initial representative for City shall be City Manager (the "City Representative") and the initial representative for Developer shall be its Project Manager, as identified by Developer from time to time (the "Developer Representative"). City's and Developer's Representatives shall be available at all reasonable times to discuss and review the performance of the Parties to this Agreement and the development of the Property. 14.MISCELLANEOUS PROVISIONS. 14.1 Governing Law; Choice of Forum. This Agreement shall be deemed to be made under, shall be construed in accordance with, and shall be governed by the internal, substantive laws of the State of Arizona (without reference to conflict of law principles). Any action brought to interpret, enforce or construe any provision of this Agreement shall be commenced and maintained in the Superior Court of the State of Arizona in and for the County of Pinal (or, as may be appropriate, in the Justice Courts of Pinal County, Arizona, or in the United States District Court for the District of Arizona, if, but only if, the Superior Court lacks or declines jurisdiction over such action).The Parties irrevocably consent to jurisdiction and venue in such courts for such purposes and agree not to seek transfer or removal of any action commenced in accordance with the terms of this Section 14.1. 14.2 Restrictions on Assignment and Transfer. 14.2.1 Definitions. For purposes of Section 14.2 of this Agreement, the following terms shall have the meanings ascribed to them below: (a) "Control" means the power to control the management and policies of a person, as a result of stock or membership interest ownership,operating agreement provisions, management agreement or otherwise; (b) "Transfer" means a transfer or assignment, directly or indirectly, through transfer of a manager or member interest in a limited liability company or otherwise, of all or part of the rights or obligations of any Party under this Agreement; 17 (c)"Transfer Notice" means a prior written notice to be delivered to City not fewer than fifteen (15) calendar days in advance of certain Transfers, describing the rights, obligations and/or interests to be transferred or assigned and providing the name and address of the transferee. 14.2.2 Restriction on Transfers. Except as provided in this Section 14.2, prior to Completion of Construction, no Transfer by Developer shall occur without the prior written consent of City, which consent may be given or withheld in City's sole and unfettered discretion.The restrictions set forth in Section 14.2 of this Agreement shall terminate automatically, and without further notice or action, upon Completion of Construction. No voluntary or involuntary successor in interest to Developer shall acquire any rights or powers under this Agreement, except as expressly set forth herein. 14.2.3 Exclusions/Permitted Transfers. The restriction on Transfer set forth in Section 14.2.2 of this Agreement shall not apply to the following: (a)any Transfer, where after completion of the Transfer, Control of Developer and ownership of not less than fifty-one percent (51%) of the total ownership interests in Developer remains in the person and entities constituting Developer on the date of this Agreement; (b)a pledge, collateral assignment, encumbrance or similar financing or refinancing transaction (including, without limitation, assignment of any right to receive any payment or reimbursement from City under this Agreement) to any Lender which provides acquisition, construction, permanent, working capital, tenant improvement or other financing to Developer for all or any part of the Property; and (c)a Transfer to a successor in interest to Developer with respect to all or part of the Property and the Project, if Developer remains responsible for the performance of its obligations under this Agreement (i.e., if the Transfer does not result in a novation). 14.2.4 Notice of Transfer.Developer shall provide a Transfer Notice to City with respect to: (a)any sale or assignment of any interest in Developer which results in ownership of less than fifty-one percent (51%) of the total ownership interests in Developer being held by the persons and entities constituting Developer on the date of this Agreement; (b)any Transfer referred to in Section 14.2.3(c) or (d) of this Agreement. 18 14.2.5 Transfers by City.City's rights and obligations under this Agreement shall be non -assignable and non -transferable, without the prior express written consent of Developer, which consent may be given or withheld in Developer's reasonable discretion. 14.3 Notice of Intent/Development Agreement Approval. Both Parties agree and understand this Agreement is subject to approval by the Mayor and City Council.To effectuate proper approval, the Mayor and City Council must approve a Notice of Intent to enter into this Agreement at least fourteen (14) days before this Agreement is considered.The Mayor and City Council must then approve the Agreement by a two-thirds majority vote. 14.4 Limited Severability.City and Developer each believes that the execution, delivery and performance of this Agreement are in compliance with all Applicable Laws. However, in the unlikely event that any provision of this Agreement is declared void or unenforceable (or is construed as requiring City to do any act in violation of any Applicable Laws) such provision shall be deemed severed from this Agreement and this Agreement shall otherwise remain in full force and effect; provided that, if the City Attorney determines that such action is legally permissible, this Agreement shall retroactively be deemed reformed to the extent reasonably possible in such a manner so that the reformed agreement (and any related agreements effective as of the same date) provide essentially the same rights and benefits (economic and otherwise) to the Parties as if such severance and reformation were not required; provided, however, in no event shall such reformation require any general fund expenditure or incurrence of indebtedness by City. The Parties further agree, in such circumstances, to do all acts and to execute all amendments, instruments and consents necessary to accomplish and to give effect to the purposes of this Agreement, as reformed. 14.5 Construction.The terms and provisions of this Agreement represent the results of negotiations between the Parties, each of which has been or has had the opportunity to be represented by counsel of its own choosing, and none of which has acted under any duress or compulsion, whether legal, economic or otherwise.Consequently, the terms and provisions of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings,and the Parties each hereby waive the application of any rule of law which would otherwise be applicable in connection with the interpretation and construction of this Agreement that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party who prepared or whose attorney prepared the executed Agreement or any earlier draft of the same. 14.6 Notices. (a)Addresses.Except as otherwise required by law, any notice required or permitted under this Agreement shall be in writing and shall be given by personal delivery, or by deposit in the United States mail, certified 19 or registered, return receipt requested,postage prepaid, addressed to the Parties at their respective addresses set forth below, or at such other address as a Party may designate in writing pursuant to the terms of this Section, or by telecopy or telefacsimile machine, or by any nationally recognized express or overnight delivery service (e.g.Federal Express or UPS), delivery charges prepaid: If to City: City of Apache Junction Attn: City Manager 300 E. Superstition Blvd. Apache Junction, Arizona 85119-2899 Telephone: (480) 474-5066 Facsimile: (480) 474-5110 With a required copy to: City of Apache Junction Attn: City Attorney 300 E. Superstition Blvd. Apache Junction, Arizona 85119-2899 Telephone: (480) 474-5105 Facsimile: (480) 982-5883 If to Developer: Blount Rental Equipment, LLC Attn: Randy Blount 820 North 111thStreet Mesa, Arizona 85207 Telephone: (480) 985-2112 Facsimile: (480) 985-7727 (b)Effective Date of Notices.Any notice sent by United States Postal Service certified or registered mail shall be deemed to be effective the earlier of the actual delivery, or three (3) business days after deposit in a post office operated by the United States Postal Service.Any notice sent by a recognized national overnight delivery service shall be deemed effective one (1) business day after deposit with such service. Any notice personally delivered or delivered through a same -day delivery/courier service shall be deemed effective upon its receipt (or refusal to accept receipt) by the addressee. Any notice sent by telecopy or telefacsimile machine shall be deemed effective only upon confirmation of the successful transmission by the sender's telecopy or telefacsimile machine, followed by deposit of a "hard copy" for next business- day delivery by a recognized national overnight delivery service. (c)Payments.Payments shall be made and delivered in the same manner as Notices and shall be deemed made at the same time that a notice would be deemed given. 14.7 Time of Essence. Time is of the essence of this Agreement and each provision hereof. 20 14.8 Section Headings.The Section headings contained in this Agreement are for convenience in reference only and are not intended to define or limit the scope of any provision of this Agreement. 14.9 Attorneys' Fees and Costs; Indemnity. (a) In the event of commencement of a legal action in an appropriate forum by a Party to enforce any covenant or any of such Party's rights or remedies under this Agreement, including any action for declaratory or equitable relief, the prevailing Party in any such action shall be entitled to recovery of its reasonable attorneys' fees and court costs and expenses, including, but not limited to, its costs of expert witnesses,transportation, lodging and meal costs of the Parties and witnesses,costs of transcript preparation and other reasonable and necessary direct and incidental expenses associated with such dispute. (b) Developer shall indemnify, defend, pay and hold City harmless for, from and against any and all claims made or asserted against City in connection with City's entering into this Agreement, including but not limited to claims alleging the illegality, unconstitutionality or unenforceability or any or all of the terms or provisions of this Agreement. City may, in its sole discretion, select its own counsel to defend any matters subject to this indemnity. Further, in the event that any provisions of Article 8 of this Agreement is determined to be illegal,unconstitutional or unenforceable, then the obligations of City hereunder shall terminate, and neither Developer nor the other Owners shall have any rights under this Agreement, including but not limited to the right to receive payment of Reimbursable Sales Taxes. In addition, in the event that City is determined to have made any payment of Reimbursable Sales Taxes that requires a forfeiture, penalty or payment of any amounts from City (or its general fund) to the State of Arizona or any other governmental agency, then in that event Developer (in addition to any other indemnity obligations, but subject to the rights and obligations of the parties described in Section 8.7) shall immediately upon written demand from City, reimburse City for all such amounts so that the net effect to City of such illegality, unconstitutionality or unenforceability is zero. (c) Any obligation of indemnity by Developer of City that has been reduced to judgment or is otherwise liquidated in amount may be offset by City against any amount of Reimbursement then or to be owing to Empire. 14.10 Waiver. Without limiting the provisions of Section 12.5 of this Agreement, the Parties agree that neither the failure nor the delay of any Party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver of such right, remedy, power or privilege, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege,nor shall any waiver of any right, remedy, power or privilege with 21 respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.No waiver shall be effective unless it is in writing and is signed by the Party asserted to have granted such waiver. 14.11 Third Party Beneficiaries.No person or entity shall be a third party beneficiary of this Agreement,except for permitted transferees, assignees, or lenders under Section 14.2 to the extent that they assume or succeed to the rights and/or obligations of Developer under this Agreement, and except that the indemnified parties referred to in the indemnification provisions of Sections 9.1 (or elsewhere in this Agreement) shall be third party beneficiaries of such indemnification provisions. 14.12 Exhibits. Without limiting the provisions of Section 1 of this Agreement, the Parties agree that all references to this Agreement include all Exhibits designated in and attached to this Agreement, such Exhibits being incorporated into and made an integral part of this Agreement for all purposes. 14.13 Integration.Except as expressly provided herein,this Agreement constitutes the entire agreement between the Parties with respect to the subject matters hereof and supersedes any prior agreement, understanding, negotiation or representation regarding the subject matters covered by this Agreement. 14.14 Further Assurances. Each Party agrees to perform such other and further acts and to execute and deliver such additional agreements, documents, affidavits, certifications, acknowledgments and instruments as any other Party may reasonably require to consummate, evidence, confirm or carry out the matters contemplated by this Agreement or confirm the status of: (a) this Agreement as in full force and effect; and (b) the performance of the obligations hereunder at any time during its Term. 14.15 Business Days. If the last day of any time period stated in this Agreement or the date on which any obligation to be performed under this Agreement shall fall on a Saturday, Sunday or legal holiday, then the duration of such time period or the date of performance, as applicable, shall be extended so that it shall end on the next succeeding day which is not a Saturday, Sunday or legal holiday. 14.16 Consents and Approvals. Wherever this Agreement requires or permits the consent or approval of a Party to any act, document, use or other matter, such consent or approval shall be given or denied by such Party in its reasonable discretion, unless this Agreement expressly provides otherwise. 14.17 Covenants Running With Land: Inurement.The covenants, conditions, terms and provisions of this Agreement shall run with the Property and shall be binding upon, and shall inure to the benefit of the Parties and their 22 respective permitted successors and assigns with respect to such Property. Wherever the term "Party" or the name of any particular Party is used in this Agreement such term shall include any such Party's permitted successors and assigns. 14.18 Recordation.Within ten (10) calendar days after this Agreement has been approved by City and executed by the Parties (together with the execution of the Landowners' Consents hereto), City shall cause this Agreement to be recorded in the Official Records of Pinal County, Arizona. 14.19 Amendment.No change or addition is to be made to this Agreement except by written amendment executed by City and Developer. Within ten (10) calendar days after any amendment to this Agreement, such amendment shall be recorded in the Official Records of Pinal County, Arizona. Upon amendment of this Agreement as established herein, references to "Agreement" shall mean the Agreement as amended. 14.20 Good Faith of Parties.Except where any matter is expressly stated to be in the sole discretion of a Party, in performance of this Agreement or in considering any requested extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily or capriciously and will not unreasonably withhold, delay or condition any requested approval, acknowledgment or consent. 14.21 Survival. All indemnifications contained in Sections 9.1 of this Agreement (or elsewhere in this Agreement) shall survive the execution and delivery of this Agreement, the closing of any transaction contemplated herein, and the rescission, cancellation, expiration or termination of this Agreement upon the terms and for the period of any applicable statute of limitations. 14.22 Nonliability of City Officials. Etc., and of Employees, Members and Partners, Etc. of Developer.No City Council member, official, representative, agent, attorney or employee of City shall be personally liable to any of the other Parties hereto, or to any successor in interest to any of the other Parties, in the event of any Non -Performance by City or for any amount which may become due to any other Party or its successor, or with respect to any obligation of City under the terms of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the liability of Developer under this Agreement shall be limited solely to the assets of Developer and shall not extend to or be enforceable against the individual assets of any of the individuals or entities who are members or managers of Developer. 14.23 Conflict of Interest Statute.This Agreement is subject to, and may be terminated by City in accordance with, the provisions of A.R.S. § 38-511. 14.24 Waiver of Claims Pursuant to A.R.S. § 12-1134 et seq. Developer hereby waives and releases City from any and all claims under A.R.S. 23 § 12-1134 et seq.including any right to compensation for reduction to the fair market value of the Property, as a result of City's approval of this Agreement, application of, all related zoning, use, building and development matters arising from, related or appurtenant to or reasonably inferable from this Agreement. The terms of this waiver shall run with the land and shall be binding upon all subsequent landowners and shall survive the expiration or earlier termination of this Agreement. 14.25 Term. Unless otherwise terminated pursuant to the terms of this Agreement, this Agreement shall expire and terminate on the date on which all payment and/or performance obligations of the Parties have been satisfied or fifteen (15) years from the date of this Agreement, whichever is first to occur (the "Term"); provided,however,that all indemnification obligations of the Parties shall survive expiration or termination for the period of any applicable statute of limitations. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above. ATTEST: By: Kathy Connelly, City Clerk APPROVED AS TO FORM: By: R. Joel Stern, City Attorney BLOUNT RENTAL EQUIPMENT, LLC, an Arizona private corporation By: Its: CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation By: John S. Insalaco Its: Mayor 24 STATE OF ARIZONA ) ) ss. County of ) The foregoing was acknowledged before me this day of , 2014, by and , the Managers of Blount Rental Equipment, LLC, an Arizona private corporation, on behalf of the corporation. Notary Public My Commission Expires: (seal) STATE OF ARIZONA ) ) ss. COUNTY OF ) The foregoing was acknowledged before me this day of , 2014, by John S. Insalaco, the mayor of City of Apache Junction, Arizona, an Arizona municipal corporation, who acknowledged that he signed the foregoing instrument on behalf of City. My Commission Expires: (seal) Notary Public 25 EXHIBIT A MAP AND LEGAL DESCRIPTION OF THE PROPERTY 1353 South Vista Road, Apache Junction, AZ 85119 APN 103-19-023A LEGAL DESCRIPTION (PER ALTA SURVEY) THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 27, TOWNSHIP 1 NORTH, RANGE 8 EAST OF THE GILA AND SALT RIVER MERIDIAN, PINAL COUNTY ARIZONA. EXHIBIT B PROPOSED SITE PLAN An original copy of Exhibit B is on file with the City's Principal Economic Development Specialist. EXHIBIT C PUBLIC IMPROVEMENTS In addition to any Public Improvements specified in the Agreement and any improvements outlined in submitted and approved plans, the Public Improvements shall also include, but not be limited to, the following: 1. Developer shall provide a minimum twenty four foot (24') pavement improvement along the east side of the Vista Road alignment south of 12th Avenue for a distance of six hundred twenty (620') linear feet per the approved plans. 2. Pavement shall be installed per attached geotechnical analysis prepared by Smith & Annala Engineering Company dated 11/22/2013, and Memorandum No. 2 to the above referenced geotechnical report. 3. Developer shall install two pavement turnouts providing access to the subject site from the Vista Road alignment. Pavement turnouts shall be constructed to the same structural section of the pavement in Vista Road. 4. Developer shall improve the drainage channel along the west side of the Vista Road Federal Patent Easement according to the design on the approved plans. EXHIBIT D CITY OF APACHE JUNCTION INSURANCE REQUIREMENTS A. Property. During the period of any construction involving the Public Improvements, builder's risk insurance on an all-risk, replacement cost basis for the Public Improvements. B. Liability.During the period of any construction involving the Public Improvements, insurance covering the Developer and (as an additional insured) the City against liability imposed by law or assumed in any written contract, and/or arising from personal injury, bodily injury or property damage, with a limit of liability of $5,000,000.00 per occurrence with a $5,000,000.00 products/completed operations limit and a $10,000,000.00 general aggregate limit.Such policy must be primary and written to provide blanket contractual liability, broad form property damage,premises liability and products and completed operations. C. Contractor.During the period of any construction involving the Public Improvements, each of the general or other contractors with which the Developer contracts for any such construction shall be required to carry liability insurance of the type and providing the minimum limits set forth below: i) Worker's Compensation insurance and Employer's Liability with limits of $1,000,000.00 per accident, $1,000,000.00 per disease and $1,000,000.00 policy limit disease. ii) Commercial general liability insurance on a $5,000,000.00 per occurrence basis providing coverage for: Products and Completed Operations Blanket Contractual Liability Personal Injury Liability Broad Form Property Damage X.C.U. iii) Business automobile liability including all owned, non -owned and hired autos with a limit of liability of not less than $1,000,000.00 combined single limit for personal injury, including bodily injury or death, and property damage. D. Architect. In connection with any construction involving the Public Improvements, the Developer's architect shall be required to provide architect's or engineer's professional liability insurance with a limit of $1,000,000.00 per claim. This policy, or other policies, shall cover claims for a period of not less than three (3) years after the completion of construction involving the Parcels and the Public Improvements. E. Engineer. In connection with any construction involving the Public Improvements, the Developer's soils engineer or environmental contractor shall be required to provide engineer's professional liability insurance with a limit of $1,000,000.00 per claim. This policy, or other policies, shall cover claims for a period of not less than three (3) years after the completion of the construction involving the Property and the Public Improvements. 1 F. CPI Adjustments. The minimum coverage limits set forth above shall be adjusted every five (5) years by rounding each limit up to the million dollar amount which is nearest the percentage of change in the Consumer Price Index (the "CPI") determined in accordance with this paragraph.In determining the percentage of change in the CPI for the adjustment of the insurance limits for any year, the CPI for the month October in the preceding year, as shown in the column for "All Items" in the table entitled "All Urban Consumers" under the "United States City Averages" as published by the Bureau of Labor Statistics of the United States Department of Labor, shall be compared with the corresponding index number for the month of October one (1) year earlier. G. Primary Coverage. Developer's insurance coverage shall be primary insurance with respect to the City, its officers, officials, agents, and employees. Any insurance or self-insurance maintained by the City, its officers, officials, agents, and employees shall be in excess of the coverage provided by Developer and shall not contribute to it. H. Indemnities. Coverage provided by the Developer shall not be limited to the liability assumed under the indemnification provisions of the Agreement. I.Waiver of Subrogation. The policies shall contain a waiver of subrogation against the City, its officers, officials, agents, and employees Property. J. Notice of Cancellation: Each insurance policy shall include provisions to the effect that it shall not be suspended, voided, cancelled, reduced in coverage of in limits except after thirty (30) calendar days' prior written notice has been given to the City. Such notice shall be sent directly to City Manager, 300 East Superstition Blvd., Apache Junction, AZ 85119, and shall be sent by certified mail, return receipt requested. K.Acceptability of Insurers: Insurance is to be placed with insurers duly licensed of approved unlicensed companies in the State of Arizona and with an "A.M. Best" rating of not less than A- VII.The City in no way warrants that the above -required minimum insurer rating is sufficient to protect Developer from potential insurer insolvency. L.Verification of Coverage:Developer shall furnish the City with original certificates of insurance (ACCORD form or equivalent approved by the City) as required herein. The certificates for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf.Any policy endorsements that restrict of limit coverage shall be clearly noted on the certificate of insurance. All certificates are to be received and approved by the City before the Commencement of Construction. Each insurance policy must be in effect at or prior to the Commencement of Construction and must remain in effect for the duration of the Agreement. Failure to maintain the insurance policies as 2 required by this Agreement or to provide timely evidence of renewal will be considered a material breach of the Agreement. All certificates required by this Agreement shall be sent directly to City of Apache Junction, Attn:City Manager,300 East Superstition Blvd., Apache Junction,Arizona 85119. The City reserves the right to require complete, certified copies of all insurance policies and endorsements required by this Insurance Exhibit at any time. M. Approval: Any modification or variation from the insurance requirements in Insurance Exhibit must have prior approval from the City Manager's Office whose decision shall be final.Such action will not require formal contract amendment, but may be made by administrative action. N. Miscellaneous.References to Developer herein shall mean Developer and/or its general contractor(s).References herein to the Agreement shall mean the Development Agreement of which this Exhibit is a part.Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. The City in no way warrants that the minimum limits contained herein are sufficient to protect Developer from liabilities that might arise and Developer may purchase such additional insurance as Developer determines necessary. 3