MARE ISLAND REMEDIATION AGREEMENT (LENNAR) BY AND BETWEEN THE CITY OF VALLEJO AND LENNAR MARE ISLAND, LLC

Transcription

1 MARE ISLAND REMEDIATION AGREEMENT (LENNAR) BY AND BETWEEN THE CITY OF VALLEJO AND LENNAR MARE ISLAND, LLC APRIL 16, 2001

2 TABLE OF CONTENTS Page RECITALS AGREEMENTS... 3 ARTICLE I SCOPE AND PURPOSE... 3 Section 1O1. Section 102. Performance of Environmental Services... 3 Performance Method... 5 ).. ARTICLE II DEFINITIONS... 6 Section 201. Agreement Section 202. Contractor... 6 Section 203. ESCA... 6 Section 204. Fiscal Agent Section 205. Fiscal Agent Agreement... 6 Section 206. GFPC... 6 Section 207. LMI... 6 Section 208. Missing Documentation Account... 6 Section 209. Payment Account... 7 Section 210. Other Defined Terms... 7 ARTICLE Ill OBLIGATIONS OF THE PARTIES... 7 Section 301. Obligations of LMI... 7 Section 302. Certain Obligations Section 303. Integration with Disposal Process ) ARTICLE IV FUNDING LIMITATION AND BUDGETING Section 401. Navy's Funding Limitation Section 402. City's Funding Limitation Section 403. LMl's Funding Limitation :MIRA i 4/16/01

3 Page ARTICLEV PAYMENT SCHEDULE Section 501. General Section 502. Payments Section 503. City Administrative Fee ' ) ARTICLE VI PAYMENT ARTICLE VII GENERAL PROVISIONS Section 701. Term of Agreement Section 702. Amendment of Agreement and the ESCA Section 703. Successors and Assigns Section 704. Entire Agreement section 705. Severability Section 706. Waiver of Breach Section 707. Notices Section 708. Conflict of Interest [Intentionally Deleted] Section 709. Access to and Retention of Records Section 710. Change of Circumstances...:.. 28 Section 711. Liability and Indemnity Section 712. Liability and Insurance Section 713. Reports Section 714. Officials Not to Benefit Section 715. Representations Section 716. No Partnerships, Joint Ventures, etc Section 717. No Third Party Beneficiaries Section 718. Estoppel Certificates Section 719. Non-standard Explosive Devices Section 720. RAB Continuation Section 721. Exhibits :MIRA ii 4/16/01

4 Page ARTICLE VIII APPLICABLE LAWS AND REGULATIONS Section 801. Applicable Law and Venue Section 802. Governing Regulations Section 803. Environmental Protection Section 804. Other Laws ARTICLE IX PROCUREMENT Section 901. Section 902. City Contracts LMl's Contracts ARTICLEX TERMINATION, ENFORCEMENT, CLAIM AND DISPUTE RESOLUTION Section Dispute Resolution Section Enforcement Section Termination Section Effects of Suspension and Termination ARTICLE XI LEGAL AUTHORITY Section Legal Authority EXHIBIT NO. 1 COPY OF ESCA EXHIBIT NO. 2 COPY OF NAVY LETTER ivllra iii 4/16/01

5 o MARE ISLAND REMEDIATION AGREEMENT (LENNAR) THIS MARE ISLAND REMEDIATION AGREEMENT (this "Agreement") is entered into as of April, 2001, by and between the CITY OF VALLEJO, a municipal corporation (the "City") and LENNAR MARE ISLAND, LLC, a California limited liability company (the "LMI"). Recitals A. The City and the United States Government, acting by and through the Naval Facilities Engineering Command, Department of the Navy (the "Navy") have entered I T\_ into an Environmental Services Cooperative Agreement dated as of April ~ (the "ESCA"), pursuant to which the City has agreed to assume responsibility for Environmental Services (as defined therein) on Areas r.overed by Environmental Services ("ACES") (as defined therein) on the former Mare Island Naval Shipyard ("MINS") in consideration of payments by the Navy to the City to fund the costs associated with such Environmental Services. A copy of the ESCA is attached hereto as Exhibit No. 1. B. The ESCA is in furtherance of an anticipated early transfer by the Navy to the City and then immediately from the City to LMI of the ACE8 pursuant to a Finding of Suitability for Early Transfer ("FOSET") to be ~1Jb.... i ~e1 i b~' ~ l1e Ma 1y for the Eastern Early Transfer Parcel (as defined in the ESL:1\),,; whi ~-:"1 th-:: ACES are a substantial part, subject to the approval of the Governor ;.Yi California of a covenant deferral request by the Navy. The ESCA will terminate according to its terms if the early transfer of the ACES is not approved by the Governor within a specified time. (_ C. In connection with the ESCA, the City and LMI have entered into a Consent Agreement ("Consent Agreement") with the California Department of Toxic Substance MIRA 1 4/16/01

6 Control ("DTSC"), which provides for a requirement to enter into a Land Use Covenant ("LUC"}, and the City and LMI will be subject to an Order ("Order") of the Regional Water Quality Control Board ("RWQCB"). Satisfaction of the requirements of the Consent Agreement and the Order to achieve Regulatory Closure are included in the Environmental Services to be performed by the City under the ESCA. ) D. As a material inducement to the City to enter into the ESCA and Consent Agreement and to subject the City to the Order, LMI has agreed to enter into this Agreement with the City pursuant to which LMI agrees to perform or cause to be performed the City's obligations to perform Environmental Services under the ESCA, in addition to other obligations of LMI under this Agreement. This Agreement is a critical part of a transaction between the City and LMI for the City to obtain an early transfer of the ACES in order to convey the ACES to LMI. LMI is agreeing to be obligated under this Agreement in anticipation of obtaining title to the ACES. LMI and City expect that no work will be performed on the ACES, other than investigation and other work of documentation and preparation of reports and plans under the terms of the Consent Agreement, prior to LMl's obtaining title to the ACES. Any work performed prior to LMl's obtaining title to the ACES shall be performed under a license from the Navy and in accordance with the terms of this Agreement. E. In connection with the performance of the Contractor's obligations, LMI and its Contractor have obtained insurance in the form of a remediation stop-loss policy with policy limits of approximately $55 million ("Remediation Stop-Loss Policy") and an environmental liability policy with policy limits of $150 million including a self insured retention paid from the grant funds provided by the Navy ("Environmental Liability Policy") (collectively, "Environmental Insurance Policies"), naming the City as a named or additional insured with respect to certain coverages. F. This Agreement is for the mutual benefit of the City and LMI because itfacilitates early transfer to and immediate reuse by LMI, as developer, of a substantial portion of the Eastern Early Transfer Parcel by allowing LMI to perform or cause to be performed, :MIRA 2 4/16/01

7 on behalf of the City, certain remediation activities and redevelopment as defined herein and in the ESCA. G. This Agreement provides for the public and private funding of environmental remediation activities imposed on the City and LMI in accordance with schedules and requirements imposed by State regulatory agencies having jurisdiction over such activities. Accordingly this Agreement constitutes a contract or other evidence of indebtedness under California Government Code Section which the parties intend shall govern the statute of limitations and procedures for challenging this Agreement. H. For ease of reference, the organization of this Agreement follows, to the extent practicable, the organization of the ESCA. AGREEMENTS ) In consideration of, and subject to, the provisions, conditions and limitations in this Agreement, the City and LMI agree as follows: ARTICLE I SCOPE AND PURPOSE Section 101. Performance of Environmental Services. A. In consideration of the payments made by the City in accordance with Article V of this Agreement, and subject to the terms of this Agreement, LMI hereby agrees to perform or cause to be performed the Environmental Services required to be performed by the City under the ESCA in the same manner, at the time and to the extent the City is required to perform the Environmental Services under the ESCA. Without limiting the generality of the foregoing, LMl's performance of the Environmental Services under this Agreement shall include activities necessary to achieve Regulatory Closure in compliance with the Consent Agreement, LUC, and the Order, and maintenance of and compliance with the requirements of the Environmental Insurance MIRA 3 4/16/01

8 Policies. LMI shall also perform or cause to be performed the additional services and work required of LMI under this Agreement. B. Whenever this Agreement requires LMI "to perform or cause to be performed" obligations of LMI under this Agreement, the City recognizes that LMI intends to require its contractor, CH2M Hill ("Contractor" including any successor thereto approved by the City under Section 208 of this Agreement), to perform the Environmental Services under this Agreement and the ESCA on behalf of LMI and the City. Accordingly, this Agreement grants certain rights in the Contractor to act on behalf of LMI under this Agreement in order for the Contractor to meet its obligations to satisfy LMl's obligations to the City under this Agreement. Nothing in this Agreement shall restrict LMI from contracting with its Contractor to perform LMl's obligations under this Agreement; provided, that: (1) the Contractor shall not be deemed a party or third party beneficiary under this Agreement, (2) City approval of LMl's contract with the Contractor shall not relieve LMI of its obligations under this Agreement, and (3) LMI shall be solely responsible to the City for the performance of its obligations under this Agreement irrespective of the performance, or failure to perform, on the part of the Contractor. C. To the extent LMl's obligations hereunder are derived from the City's rights and obligations under the ESCA, LMI shall perform or cause to be performed such obligations in such a manner that the corresponding rights and obligations of the City under the ESCA are deemed performed by the City in compliance with the ESCA. 0. LMI acknowledges and agrees that any reference to permitted or intended uses for the ACES or EETP set forth in the Consent Agreement, LUC, Order, GFPC, or Environmental Insurance Policies, as the case may be, is not binding on the City as to any uses that have not been approved by the City as part of its planning process, and that the City's execution of or consent to the Consent Agreement, LUC, Order, GFPC, or Environmental Insurance Policies, or any amendments thereto, does not constitute such planning approval by the City; nor shall such reference to permitted or intended uses affect or otherwise limit LMl's obligations under this Agreement. City agrees that any subsequent city planning actions or approvals with respect to the uses permitted for 4 4/16/01

9 ) ) the ACES shall be subject to City's compliance with the terms of that certain Development Agreement between the City and LMI approved March 20, E. LMI acknowledges that the provisions of Section 101 of the ESCA govern the Environmental Services that LMI is to perform or cause to be performed under this Agreement. F. To provide assurances to the City that it will perform its obligations under this Agreement, LMI agrees that: (1) LMI will enter into and comply with the terms of the Fiscal Agent Agreement referred to in Section 502 of this Agreement; (2) the City shall have rights under the GFPC referred to in Section 902 of this Agreement to enforce the GFPC and assume the rights of LMI under the GFPC, under certain circumstances and subject to certain conditions, in the event of a material uncured default by LMI; (3) at all times under this Agreement LMI will maintain a capitalization and net worth (or financial commitments from its members in lieu thereof) which is sufficient, in the exercise of its reasonable business judgment, to enable it to timely perform its obligations under this Agreement, and that it will promptly notify the City if, for any reason, it will not be able to timely perform its obligations under this Agreement; and (4) LMI shall deliver to the City on or before May 1 of each calendar year commencing with 2002, annual financial statements covering its activities on the MINS pursuant to this Agreement and other agreements with the City certified as true and correct by a responsible officer. Section 102. Performance Method. A. LMI acknowledges that the provisions of Section 102 of the ESCA govern the Environmental Services that LMI is to perform or cause to be performed under this Agreement. B. This Agreement in no way restricts the City and LMI from mutually modifying the Consent Agreement or Order and documents referenced therein, pursuant to the terms thereof, before or after the remediation or closure efforts at the ACES have begun; however, any such modifications shall not eliminate or change the City's or Navy's obligations under the ESCA or the City's or LMl's obligations under this Agreement. Subject to the foregoing, the City shall not unreasonably withhold its consent to any such modification proposed by LMI. MIRA 5 4/16/01

10 ARTICLE II DEFINITIONS Section 201. Agreement. The term "Agreement" means this Mare Island Remediation Agreement, including exhibits, attachments and appendices hereto (each of which is incorporated by reference and made a part of this Agreement). Section 202. Contractor. The term "Contractor" means CH2MHill or any successor thereto designated by LMI and approved by the City, such approval not to be withheld unreasonably if such successor contractor is qualified to perform the Environmental Services under the ESCA, the Consent Agreement, the Order and the Environmental Insurance Policies. Section 203. ESCA. The term "ESCA" means the Environmental Services Cooperative Agreement between the United States of America, Department of the Navy, and the City of Vallejo, referenced in Recital A above. Section 204. Fiscal Agent. The term "Fiscal Agent" is defined in Section 502.A hereof. Section 205. Fiscal Agent Agreement. The term "Fiscal Agent Agreement" is defined in Section 502.A hereof. Section 206. GFPC. The term "GFPC" means the agreement between LMI and Contractor, the terms of which have been approved by the City pursuant to Section 902 of this Agreement. Section 207. LMI. The term "LMI" means Lennar Mare Island, LLC, a California limited liability company, the co-managing members of which are Lennar Corporation and LNR Property Corporation. Section 208. Missing Documentation Account. The term "Missing Documentation Account" is defined in Section 502.B hereof. MIRA 6 4/16/01

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