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Development Services Agmt/Parking Garagedotloop signature verification: dtlp.us/hUa9-kykc-KYgp DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL ("OWNER") and MONTANA HOTEL DEVELOPMENT PARTNERS, LLC ("DEVELOPER") dotloop signature verification: dt1p.us/h1Ja9-kykc-KYgp TABLE OF CONTENTS ARTICLE I. APPOINTMENT AND PROVISIONS APPLICABLE TO ALL SERVICES ......... 1 1.1 Appointment...........................................................................................................................1 1.2 Supervision and Direction.....................................................................................................1 1.3 Relationship; Authority ..........................................................................................................1 1.4 Contracts.................................................................................................................................. 2 1.5 Performance of Others..........................................................................................................2 1.6 Approvals.................................................................................................................................2 1.7 Personnel.................................................................................................................................2 ARTICLE II. DEVELOPMENT SERVICES...........................................................................................3 2.1 Pre -Development Period.......................................................................................................3 2.2 Development Period.............................................................................................................. 3 2.3 Disbursements........................................................................................................................ 3 2.4 Changes to Plans.....................................................................................................................4 ARTICLE III. DEVELOPER FEES AND REIMBURSEMENTS.......................................................4 3.1 Pre -Development and Development Fee...........................................................................4 3.2 Reimbursement of Developer Expenses.............................................................................5 3.3 Late Payments......................................................................................................................... 5 ARTICLEIV. TERM.......................................................................................................................................5 4.1 Term......................................................................................................................................... 5 4.2 Defaults....................................................................................................................................5 ARTICLEV. MISCELLANEOUS..............................................................................................................8 5.1 Indemnification....................................................................................................................... 8 5.2 Insurance Policies................................................................................................................... 9 5.3 Attorneys' Fees........................................................................................................................9 5.4 Fair Interpretation................................................................................................................10 5.5 Captions.................................................................................................................................10 5.6 Notices...................................................................................................................................10 5.7 Invalidity ................................................................................................................................10 5.8 Governing Law, Jurisdiction & Law..................................................................................10 5.9 Grammar................................................................................................................................10 5.10 Assignment............................................................................................................................10 5.11 No Waiver..............................................................................................................................11 5.12 Confidentiality .......................................................................................................................11 5.13 Estoppel Certificate..............................................................................................................11 5.14 Further Assurances...............................................................................................................12 5.15 No Third Party Beneficiaries..............................................................................................12 5.16 Mutual Covenants Regarding Employees.........................................................................12 5.17 Survival...................................................................................................................................12 TABLE OF CONTENTS TO DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL AND MHDP, LLC Page i dotloop signature verification: ddp.us/hUa9-kykc-KYgp EXHIBITS The following Exhibits are made a part of this Agreement. A Definitions B Description of the Land C Development Services to be Performed During Pre -Development Period D Development Services to be Performed During Development Period E Developer's & Owner's Insurance Requirements F Development Budget G Building H Dispute Resolution Process I Approved Drawing Log DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL AND MHDP, LLC Page dotloop signature verification: dtlp.us/hUa9-kykc-KYgp DEVELOPMENT SERVICES AGREEMENT AN AGREEMENT by and between: "Owner" CITY OF KALISPELL "Developer" MONTANA HOTEL DEVELOPMENT PARTNERS, LLC, a MONTANA limited liability company. BACKGROUND A. The capitalized words and phrases used in this Background section and the other sections in this Agreement are defined in Exhibit A. B. The management of Developer is experienced in providing development services for projects similar in size and complexity to the Project. C. Owner and Developer entered into that certain Development Services Agreement dated as of February 15, 2022 (the "Original Agreement"). ARTICLE I. APPOINTMENT AND PROVISIONS APPLICABLE TO ALL SERVICES 1.1 Appointment. Owner engages Developer to perform the Developer Services and Developer accepts the engagement, each pursuant to the terms and conditions of this Agreement. Developer shall exert Commercially Reasonable Efforts in the performance of all Developer Services and acknowledges that in the performance of the Developer Services it will be held to the Commercially Reasonable Efforts standard. 1.2 Supervision and Direction. Owner has designated (i) Owner's Representative as its representative to act as Developer's routine point of contact and interface with Owner and (ii) the Project Accountant as the accountant for the Project and Developer's point of contact and interface with respect to the construction accounting for the Owner. Should Owner desire to designate a successor Owner's Representative or Project Accountant (in Owner's sole election), Owner shall notify Developer of such successor in writing. Developer may rely, and is hereby authorized, empowered and directed to rely, on the verbal or written directions, approvals and other communications from Owner's Representative as the actions of Owner. Developer shall use Commercially Reasonable Efforts to coordinate the performance of the Developer Services with Owner's Representative and Project Accountant. 1.3 Relationship. Authority. Developer is an independent contractor retained by Owner to perform the Developer Services. Developer has no power or authority to enter into, execute, make or acknowledge any contract, covenant, agreement or representation pertaining to the Project in the name of or on behalf of Owner except with respect to those matters for which Owner has expressly authorized in writing Developer to enter into and execute pursuant to the terms hereof. Developer DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 1 dotloop signature verification: dt1p.us/hUa9-kykc-KYgp shall represent Owner in the day-to-day administration and coordination of the development and construction of the Project, the Professionals and Operator during the Term in accordance with the terms hereof. 1.4 Contracts. Contracts that are contemplated to be executed in connection with the Project include, without limitation, contracts with the General Contractor, Construction project manager, architects, engineers, and similar Professionals, however, the Owner shall cooperate in procuring agreements with Governmental Authorities related to the Project with the advice and assistance of Developer. Developer shall propose to Owner for Owner's approval the parties to be engaged under any and all such contracts. Developer shall use Commercially Reasonable Efforts in the negotiation and document of such contracts. Any such contracts shall be in the name of Owner and may be executed by Developer on behalf of Owner except pursuant to Section 1.3 above. The form and substance of such contracts, and the actual contractors selected, shall be subject to the prior review and approval of Owner, in its sole discretion, and shall be executed by the Owner. All costs incurred under such contracts shall be included within the definition of "Project Costs" or paid separately by Owner. The Construction Contract, construction project management contract, architectural contract and any other Contract shall acknowledge the role of Developer in the Project pursuant to the terms of this Agreement and shall thereby authorize each party thereto to rely upon the directions of the Developer as the authorized agent of the Owner pursuant to each such agreement. 1.5 Performance of Others. Developer is not guaranteeing or warranting the performance of the Professionals, or others employed, engaged or retained by Owner in connection with the Project; however, Developer will (a) recommend and investigate Persons intending to contract with Owner as contemplated by this Agreement, (b) as contemplated hereby, during the Term, supervise (on -site), coordinate and evaluate the performance of the Operator and Professionals under their respective contracts with Owner, and (c) coordinate the design, construction, development and equipping of the Project to provide for (i) substantial conformity with this Agreement, the Construction Contract, the Construction Documents, Governmental Authorizations, Governmental Requirements, any and all Project financing, the Project Budget, the Project Schedule, and Restrictions, and (ii) the efficient, economic and effective management of the Project and the interaction of the Professionals and Operator with other Persons involved with the Project. 1.6 Approvals. All approvals required to be made by Owner under this Agreement, unless otherwise provided in this Agreement, must be in writing and approved by Owner (and, if necessary pursuant to the Decision Procedure, by Operator) pursuant to the Decision Procedure. 1.7 Personnel. Developer shall at all times supply sufficient experienced personnel, organization and management which are necessary to carry out the requirements of this Agreement and shall provide Owner with a staffing chart, listing the personal and professional details of such personnel. Developer covenants to cooperate with Owner, Master, and contractors in furthering the interests of Owner. Developer shall use Commercially Reasonable Efforts to ensure the efficient administration of the Project and supervision of the Professionals and other contractors and persons in their performance of the required work and services, and to cause all work on the Project to be performed in an expeditious and economical manner in accordance with the requirements of this Agreement and in all respects consistent with the interests of Owner, the Project Budget, the Design Development Plan and the Construction Documents. All persons employed or engaged by Developer in connection with the Development Services to be rendered by Developer to Owner hereunder shall DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 2 dotloop signature verification: dt1p.us/hUa9-kykc-KYgp be Developer's employees or independent contractors, as applicable, and shall not be the employees or agents of Owner, and Developer shall be solely responsible for the salaries of Developer's employees and any employee benefits. Developer shall not utilize any employee or independent contractor on the Project if Owner complies with the Decision Process and thereby requests in writing that such employee or independent contractor not be so utilized. In performing Developer's duties and obligations under this Agreement, Developer agrees it will comply with all laws, rules and regulations applicable to Developer and this Agreement and will not refuse any employee because of race, color, religion, national origin, sex, marital status or physical disability. ARTICLE II. DEVELOPMENT SERVICES 2.1 Pre -Development Period. Developer shall use Commercially Reasonable Efforts to perform the Pre -Development Period Developer Services described on Exhibit H during the Pre - Development Period, which Pre -Development Period Developer Services shall be performed in accordance with the Development Budget attached hereto as Exhibit F. 2.2 Development Period. Developer shall use Commercially Reasonable Efforts to perform the Developer Services described on Exhibit D during the Development Period, which Developer Services shall be performed in accordance with the Project Budget and which period shall not commence until the Project Budget has been finalized pursuant to Exhibit H. 2.3 Disbursements. 2.3.1 Status Reports, Requisition and Disbursement Procedures. On or about the first (15) Business Day of each month, Developer will assemble and submit to Owner: (i) a monthly status report, which will include (a) an executive summary of the status of the Project, (b) an updated Project schedule, (c) contingency log, (d) change order and potential change order log, (e) Project cost projection, (f submittal log and (g) request for information log, and (ii) a requisition package prepared as of the last day of the prior month containing (a) during the Development Period, the request for payment submitted by the General Contractor and approved by the Architect, (b) during the Development Period, unconditional lien waivers executed by the General Contractor and all material subcontractors and materialmen covering all payments to them through the previous month's disbursement and conditional lien waivers executed by the General Contractor and all material subcontractors and materialmen covering all payments to them through the requested disbursement, (c) invoices from the other Professionals, (d) invoices for any other Project Costs then due to third Persons and fees due Developer under Section 3 hereof, and (e) an invoice for reimbursement of any other Project Costs then due to Developer. The requisition package, together with all demands for payment and draw requests, shall be made on a form of draw request agreed to by Owner, Lender and Developer. 2.3.2 Analysis of Requisition. Developer will investigate and analyze the information to be submitted to Owner as part of the requisition package pursuant to Section 2.3.1 above and shall prepare and report its findings to Owner concurrently with the delivery of the requisition package as to (a) the propriety of the amounts requisitioned under the Construction Contract or any other applicable agreement or invoice and the identification of any requisitioned amount which Developer recommends be excluded, if any, whether in DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 3 dotloop signature verification: dt1p.us/h1Ja9-kykc-KYgp whole or in part, from the Disbursement so requested; (b) any material variances between the actual costs and budgeted costs in each line item category of the Project Budget; (c) material variances between the Disbursements and the Project Draw Schedule for the Construction Contract; (d) any line item or cost category of the Project Budget which will be materially exceeded by the aggregate of past Disbursements in that category and the currently requisitioned Disbursement or which Developer expects will be materially exceeded by future requisitions; (e) a course of action to be taken by reason of the overages described in clauses (b) or (d); (0 savings achieved in line items of the Project Budget where the work performed or the materials supplied or the item is complete or completely known; (g) the conformity of the Project to the Project Schedule; and (h) a course of action to deal with delays encountered from the Project Schedule. 2.3.3 Payment of Disbursements. Owner will authorize the requisitioned amounts within ten (10) calendar days after delivery of the requisition package pursuant to Section 2.3.2. If Owner requests revisions to the requisition package or additional information relating to the request for payment within such ten (10) calendar day period, then Developer will provide satisfactory revisions or additional information to Owner, and Owner will pay the requisitioned amounts into the Account within five (5) Business Days after receipt of such revisions or additional information or the expiration of such ten (10) calendar day period, whichever is later. Promptly upon payment by Owner of the requisitioned amounts into the Account, Developer will make the payments described in the requisition package to the appropriate person or entity from the Account. Developer has no obligation to make any payments which Owner has not funded into the Account. The mechanics of the disbursements are subject to any disbursing requirements of Lender for the Project. 2.3.4 Developer shall coordinate with Lender on all draw requests, subject to approval by Owner. 2.4 Changes to Plans. If at any time Owner, Developer, or any Professional desires a change in the Design Development Plans or Construction Documents, Developer will submit such change request to Owner for Owner's review and approval. If such change request is approved by Owner, Developer will cause, if necessary, the Professional to prepare a change order proposal stating the increase or decrease, if any, in the Project Budget. Developer will review, analyze and advise Owner with respect to such change orders and, except as provided below, no such change order shall be implemented without Owner's prior written approval. Subject to the provisions of the Management Contracts, Developer will cause each Professional to act in accordance with any applicable change order initiated or approved by Owner. Notwithstanding the foregoing, Owner approval shall not be required for any change provided that such change (i) does not increase the Project Budget, (ii) does not extend the projected date of Substantial Completion, (iii) is not a structural change, (iv) does not require approval from Operator; and (v) does not require approval from Lender. ARTICLE III. DEVELOPER FEES AND REIMBURSEMENTS 3.1 Pre -Development and Development Fee. 3.1.1 During the Pre -Development Period, Developer shall be paid a pre - development fee (the "Pre -Development Fee") of Fifty Thousand Dollars ($50,000) per DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 4 dotloop signature verification: dt1p.us/h1Ja9-kykc-KYgp month on or before the fifteenth (15th) day of each calendar month during the Pre - Development Period, with the final Pre -Development Fee payment being made by the fifteenth (15th) day of the first month during the Development Period. The monthly Pre - Development Fee may be prorated in the event of partial months. No Pre -Development Fee shall accrue during the Development Period and the amount of the Pre -Development Fee paid to Developer shall be credited against the Development Fee paid in accordance with Section 3.1.2. 3.1.2 During the approved Development Period, as identified in the Exhibit F, Owner shall pay Developer a development fee (the "Development Fee") in the amount of five percent (50/6) of Project Costs. The Development Fee shall be payable in equal monthly installments based on the amount of the Project Costs in Exhibit F divided equally over the Development Period, or as otherwise may be required by Lender. 3.2 Late Payments. All payments due to Developer under this Section 3 shall be paid within the time periods set forth in Section 2.3.3 above. Any payments not made within such time frames shall thereafter include a late fee in an amount equal to two percent (21/6) of the payment amount and, if such payment is more than thirty (30) days past due, shall also bear interest at twelve percent (129/6) per annum from the date so past due until paid. ARTICLE IV. TERM 4.1 Term. Unless earlier terminated pursuant to the terms of this Agreement, the Developer Services under this Agreement shall be for a term beginning upon the Agreement Date and ending on Project Close -Out (the "Term"). 4.2 Defaults. 4.2.1 Events of Default. The term "Event of Default," as used herein, shall mean the occurrence or happening, at any time and from time to time, of any one or more of the following: 4.2.1.1 if (i) Developer shall institute proceedings of any nature under the Federal Bankruptcy Code, or any similar state or Federal law now or hereafter in effect for the relief of debtors, effect a general assignment for the benefit of creditors or admit in writing that it is unable to pay its debts as they mature; or (ii) there be instituted against Developer a proceeding under any section or chapter of the Federal Bankruptcy Code, or any similar Federal or state law now or hereafter in effect for the relief of debtors, which proceeding is not dismissed or discharged within a period of sixty (60) days after the filing thereof; 4.2.1.2 if there shall be an attachment, execution or other judicial seizure of (i) all or any substantial part of the assets of Developer; or (ii) Developer's interest under this Agreement, such attachment, execution or seizure remaining undismissed or undischarged for a period of sixty (60) days after levy thereof; 4.2.1.3 if either (i) there shall occur any default in performance of, or failure to comply with, any agreements, obligations or undertakings of Developer set forth in DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 5 dotloop signature verification: dt1p.us/hUa9-kykc-KYgp this Agreement, which default or failure continues for ten (10) days following the date of written notice thereof given by Owner, provided that, as to non -monetary defaults not susceptible to cure within such ten-day period, the period of cure shall be extended to the extent necessary to achieve the cure so long as Developer (1) commences to cure within the ten-day period; (2) at all times thereafter diligently pursues the cure; and (3) in any event effects the cure within thirty (30) days following notice of the failure; or (ii) any representation or warranty of Developer set forth herein is determined to be false, misleading or erroneous when given and Developer has not caused such representation or warranty to become true within ten (10) days following the date of written notice thereof given by Owner; 4.2.1.4 If (i) Developer or any of its members, managers, principals, directors, officers, shareholders, general partners, or employees, shall have engaged in fraud, embezzlement, or gross negligence; or (h) Developer shall have (1) forfeited any license necessary to conduct Developer's, Owner's, or any Affiliate's (of either Developer or Owner) business in connection with the performance of this Agreement; or (2) dissolved or otherwise ceased to exist; and/or 4.2.1.5 If Robert Watson, John Costa and/or Bill Goldberg are no longer involved in the day-to-day management of Developer. 4.2.2 Rights Upon Developer Default. Upon the occurrence of any Event of Default by Developer under Section 4.2.1.3, the Owner shall pursue the Dispute Resolution Process set forth on Exhibit H attached hereto, and if such process is unsuccessful in resolving such Event of Default to the Owner's satisfaction or upon the occurrence of any Event of Default other than under Section 4.2.1.3, then Owner shall be entitled to do any or all of the following: (a) cause the termination of this Agreement and the Profits Interest Agreement by giving written notice to Developer setting forth the Event of Default that exists and the effective date of such termination (without prejudice to any claims which Owner may have against Developer); and (b) subject as provided below, exercise each and every other right or remedy available to Owner with respect to such Event of Default under this Agreement and/or the Profits Interest Agreement, at law or in equity. On the effective date of such termination, this Agreement and the Profits Interest Agreement shall be of no further force or effect and the parties shall have no further rights or obligations hereunder, except for (i) those obligations expressly set forth in this Agreement and the Profits Interest Agreement to survive termination hereof; and (ii) any claims Owner may have against Developer. In addition, if a dispute exists between Owner and Developer as to whether an Event of Default by Developer exists, Owner shall be permitted to suspend or replace Developer pending resolution of such dispute. During the pendency of such dispute, Developer would retain the right to accrue additional fees until the dispute is finally resolved, provided that it is determined that an Event of Default did not occur. 4.2.3 Owner's Default. Owner shall be in default under this Agreement (an "Owner's Default") if (i) Owner shall fail to pay to Developer any portion of the Development Fee, as set forth in the Project Budget, which is not then the subject of a good faith bona fide dispute between Owner and Developer, within twenty (20) days after such payment shall be due and payable under this Agreement, provided that Developer shall notify Owner in writing at the end of such 20 day period that such payment has not been made and DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 6 dotloop signature verification: dt1p.us/hUa9-kykc-KYgp Owner shall thereafter fail to make such payment for more than ten (10) days after receiving such notice, or (ii) there shall occur any default in performance of, or failure to comply with, any agreements, obligations or undertakings of Owner set forth in this Agreement, which default or failure continues for ten (10) days following the date of written notice thereof given by Developer, provided that, as to non -monetary defaults not susceptible to cure within such ten-day period, the period of cure shall be extended to the extent necessary to achieve the cure so long as Owner (1) commences to cure within the ten-day period; (2) at all times thereafter diligently pursues the cure; and (3) in any event effects the cure within sixty (60) days following notice of the failure. Upon the occurrence of an Owner's Default under item (ii) above, the Developer shall pursue the Dispute Resolution Process set forth on Exhibit H attached hereto, and if such process is unsuccessful in resolving such Owner's Default to the Developer's satisfaction or if such Owner's Default is not related to item (ii) above, then Developer shall be entitled to terminate this Agreement by giving Owner at least five (5) Business Days' prior written notice thereof, which notice shall set forth the termination date (which shall not be more than ten (10) days after the delivery of such notice), and unless Owner shall have cured such Owner's Default prior to such termination date (in which event such termination notice shall be null and void and this Agreement shall continue in full force and affect), this Agreement shall terminate on such termination date without any further action by the parties. In addition, upon such termination, Owner shall pay Developer any and all amounts due hereunder that have been earned by Developer through the date of termination, including without limitation (i) Developer's out-of-pocket expenses incurred in accordance with Section 3_2 above (ii) that portion of Pre -Development Fee and Development Fee, if any, that has accrued through the date of such termination, and (iii) any amounts that be due or may become due under the Profits Interest Agreement. In the event of such termination, the parties shall have no further rights or obligations hereunder, except those obligations expressly set forth in this Agreement to survive termination hereof. 4.2.4 Effect of Termination. If Owner or Developer shall terminate this Agreement as permitted under this Article IV, Developer shall (a) immediately after the effective date of such termination, return to Owner all design documents and all other documents and/or information pertaining to the Project in Developer's possession or control, which obligation shall survive the termination of this Agreement; and (b) use all necessary efforts to cooperate with, and assist, Owner in the prompt and diligent transition of Developer's duties and obligations under this Agreement to Owner or any person or entity designated by Owner that will assume such duties and obligations, which obligation shall survive the termination of this Agreement for a reasonable time thereafter but Developer has no obligation to incur any cost or expenses in connection with same. 4.2.5 Owner's Limitation of Liability. Notwithstanding any provisions in this Agreement to the contrary, the aggregate liability of Owner under this Agreement is limited to Owner's ownership interest in the Project, and is non -recourse to any and all officers, managers, directors, members, partners, or shareholders of Owner. 4.2.6 Accounting. Developer will assist the Project Accountant in performing all accounting functions for the Project during the portion of the Term through Project Close - Out. In the event of termination or expiration of this Agreement, Developer will, within ten (10) Business Days after the termination or expiration is effective: DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 7 dodaop signature verification: dt1p.us/hUa9-kykc-KYgp 4.2.6.1 at Owner's cost, deliver to Owner all Project records and documents in Developer's possession or control (including computer records and operational programs in a format usable by Owner, together with any required licenses); 4.2.6.2 promptly remove from the Project all property owned or leased by Developer (other than any property the cost of which was reimbursed or paid for by Owner) and repair any damage caused by such removal; 4.2.6.3 leave the areas of the Project occupied by Developer in a neat and orderly condition; and 4.2.6.4 promptly remove all of Developer's employees and agents and vacate the Project. ARTICLE V. MISCELLANEOUS 5.1 Indemnification. 5.1.1 Subject to the provisions set forth in Section 5.1.3 below, to the fullest extent permitted by law, Owner shall, and does hereby, indemnify, defend, protect and hold harmless Developer and Developer's partners, officers, directors, shareholders, members, owners, professional advisors, agents and employees, and each of their respective successors and assigns, from and against any and all claims, demands, actual damages, actual losses, lawsuits and other proceedings, judgments, causes of action, liabilities, claims of lien, liens, civil or criminal penalties and charges, costs and expenses (including, without limitation, reasonable attorneys' fees and costs) (collectively, "Claims") arising by reason of any action taken or omitted to be taken pursuant to this Agreement by Owner or its respective partners, officers, directors, shareholders, members, owners, professional advisors, agents and employees, and each of their respective successors and assigns, or otherwise arising from or related to the Project, except for Claims for which Developer has released pursuant to Section 5.1.2 below. All costs and expenses incurred by Owner in performing its obligations under this Section 5.1 shall be at Owner's sole cost and expense. The indemnity provided for in this Section 5.1.1 shall not apply to the extent of any liability resulting from the fraudulent acts, willful misconduct or grossly negligent acts or omissions of the Developer. This section is not intended to relieve and does not relieve the Developer from its obligation to ensure that all facets of the construction project subject to this agreement fully comply with all building and design standards applicable to construction projects conducted within the City of Kalispell, Montana. 5.1.2 Subject to the provisions set forth in Section 5.1.3 below, to the fullest extent permitted by law, Developer shall indemnify, defend, protect and hold harmless Owner and Owner's partners, officers, directors, shareholders, members, owners, professional advisors, agents and employees, and each of their respective successors and assigns, from and against any and all Claims arising out of or resulting from (a) Developer's grossly negligent acts, fraud, or willful misconduct, or (b) an Event of Default by Developer as determined by the final judgment or determination of a court or an arbitrator. All costs and expenses incurred by Developer in performing its obligations under this Section 5.1.2 shall be at its own expense. DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 8 dodoop signature verification: ddp.us/hUa9-kykc-KYgp The indemnity provided for in this Section 5.1.2 shall not apply to the extent of any liability resulting from the fraudulent acts, willful misconduct or grossly negligent acts or omissions of the Owner. 5.2 Insurance Policies. Developer and Owner will obtain and purchase within 30 days after the Agreement Date, and thereafter maintain all of the insurance described in the attached Exhibit E (the cost of all such insurance shall be paid as a Project Cost in accordance with the Disbursement provisions of this Agreement). Liability insurance policies may be maintained as a Project Cost for at least one (1) year following Project Close -Out. Each of Developer and Owner shall (i) add the other as additional insured to each of such insurance policy, and (ii) furnish the other evidence of such insurance coverage. 5.3 Attorneys' Fees. In the event any Party shall bring legal action or mediation under the dispute resolution provisions of Exhibit H for the breach of or to enforce or interpret this Agreement, the substantially prevailing party (after a final non -appealable judgment or final ruling of the arbitrator) shall be entitled to reasonable attorneys' fees, expenses and court costs. 5.4 Fair Interpretation. This Agreement has been carefully reviewed and negotiated by all parties and shall be given fair and reasonable interpretation in accordance with the words contained in it without any weight being given to whether a provision was drafted by one party or its counsel. 5.5 Captions. The descriptive headings of the sections of this Agreement are inserted for convenience only. They are not intended to and shall not be construed to limit, enlarge, or affect the scope or intent of this Agreement or the meaning of any provision of it. Obligations of the parties set forth in the definitions appearing on Exhibit A shall have the same force and effect as though set forth in another Section of this Agreement. 5.6 Notices. All notices, demands, statements, approvals, acceptances and communications ("Notices") required under this Agreement shall be in writing and, if intended for Owner, shall be addressed to Owner at the address set forth opposite Owner's signature; and if intended for Developer, shall be addressed to the Developer at the addresses set forth opposite Developer's signature, or to such other address as such party may by written notice, given in accordance with this Section 5.6, advise the other parties. Only if the Notice is service of any summons or legal process, a notice of breach or default, or a demand for performance must such Notice be sent to counsel designated to receive a copy opposite Developer's or Owner's signature. Any such written notice, request, demand, claim or other communication hereunder shall be sent by (i) personal delivery (including receipted courier service) or overnight delivery service, with confirmation of receipt, (ii) facsimile or by electronic email transmission with confirmation of receipt to the number or email address indicated, (iii) reputable commercial overnight delivery service courier, with confirmation of receipt, or (iv) registered or certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth herein. All such notices, requests, consents and other communications shall be deemed to have been given (i) if sent by personal delivery (including receipted courier service) or overnight delivery service, on the next business day, (ii) if sent by facsimile or by electronic email transmission, on the day sent, (iii) if sent by reputable commercial overnight delivery service courier, on the next business day, and (iv) if sent by registered or certified mail, three business days following deposit with the U.S. Postal Service. Either party may change its email address, facsimile number or its address to which notices, requests, demands, claims and other DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 9 dot:oop signature verification: dt1p.us/hUa9-kykc-KYgp communications hereunder are to be delivered by giving the other parties hereto notice in the manner then set forth. 5.7 Invalidiiy. In case any one 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 any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 5.8 Governing Law.- jurisdiction & Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the state of Montana, regardless of its the conflict of laws principles. The parties consent to the jurisdiction of the courts of Flathead County in the State of Montana, in the event of any litigation arising out of this Agreement. By execution and delivery of the Agreement, Owner and Developer irrevocably accept and submit to, for themselves and, subject to the terms and conditions of Sections 4.2.2 and 4.2.3 above and the Dispute Resolution Process set forth on Exhibit H, in respect of their property, generally and unconditionally, the nonexclusive jurisdiction of any such court, and to all proceedings in such courts. In addition to any method provided by applicable law, the parties each irrevocably consent to service of any summons or legal process or both by registered or certified United States mail, postage prepaid, to such party's address set forth at the end of this Agreement, such method of service to constitute, in every respect, sufficient and effective service of process in any such legal action or proceeding. Nothing in this Agreement or elsewhere shall affect either party's right to serve process in any other manner permitted by law or limit the right of either party to bring actions, suits or proceedings in the courts of any other jurisdiction. To the extent not prohibited by law, the parties agree that final non -appealable judgment in any such legal action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, within or outside the United States of America, by suit on the judgment. A certified or exemplified copy of the final judgment shall be conclusive evidence of the fact and the amount of the liability. OWNER AND DEVELOPER EACH HEREBY KNOWINGLY, INTENTIONALLY, FULLY AND IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT. 5.9 Grammar. The word "including" or derivatives thereof shall be deemed to mean "including, but not limited thereto." As the context requires the singular shall include the plural and the plural shall include the singular, and references to any one gender shall include each other gender. 5.10 Assignment. 5.10.1 Except as provided herein, neither Developer nor Owner shall assign this Agreement in whole or in part or delegate or subcontract its duties under this Agreement without the prior approval of the other, which consent may be granted, withheld or conditioned in the reasonable discretion of the Party whose consent is requested. 5.10.2 Notwithstanding the provisions of Section 5.10.1., Owner shall have the right to collaterally assign and grant a security interest in all of Owner's right, title and interest in, to and under this Agreement to any third -party lender or mortgages which shall provide to Owner debt financing for the development, design, construction or operation of the Project, or otherwise related thereto. Developer hereby (a) consents to any such assignment, DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 10 d(Woop signature verification: dtlp.us/hUa9-kykc-KYgp (b) acknowledges and agrees that Developer's right, title and interest in, to and under this Agreement shall be at all times subordinate, inferior and subject to the lien of any and all present and future third -party mortgages, deeds of trust, financing statements and security agreements affecting or encumbering all or any portion of the Project and any and all renewals, extensions, modifications or reinstallations thereof, and (c) acknowledges and agrees that Developer will, if requested by Owner, sign, deliver and record in the official records of the county in which the Land is located any agreement or instrument reasonably requested by Owner which evidences (i) the consent to any assignment as set forth in Section 5.10.1. above and this Section 5.10.2., (ii) the subordination of Developer's right, title and interest in, to and under this Agreement to the lien of any third -party mortgages, deed of trust, financing statement or security agreement, and (iii) Developer's agreement, in the event any third -party lender or mortgages which provides funds for the development, design, construction or operation of the Project, or otherwise related thereto, succeeds to the rights of Owner in the Project by foreclosure, deed in lieu of foreclosure or otherwise, to attorn to such lender or mortgages and recognize such lender or mortgages as the successor to Owner hereunder, provided such successor to Owner agrees to be bound by the terms and conditions of this Agreement and agrees to pay to Developer all past due amounts due to Developer at the time of such assumption hereunder. 5.11 No Waiver. The failure of any party to seek redress for violation, or to insist upon strict performance, of any covenant, agreement, provision or condition of this Agreement shall not constitute a waiver of such violation, act or omission. 5.12 Confidentiality. Developer and Owner will keep the specific terms of this Agreement confidential and not disclose same to any third party. The prohibitions set forth in the preceding sentence shall not apply to information which: (i) as to all economic, marketing, and financial information, is or becomes generally available to the public other than as a result of a disclosure by the party bound hereunder; or (h) is required to be disclosed by law or by regulatory or judicial process. Each party has the right to disclose information to its actual and prospective partners, investors, shareholders, members, officers, principals, employees, lenders, attorneys, accountants, agents, advisors, developers and other Persons acting for or on behalf of such party, each with a reasonable need -to -know such information, provided such party shall inform each Person that receives any of the confidential information of the requirements of this Agreement. In addition to the foregoing, Developer and Owner agree to comply with the confidentiality provisions and pre -approval of any marketing or press statement provisions of any letter of intent for hotel management, and any Management Contracts and any other confidentiality, disclosure or public statement limitations contained in any other documents with Operator, whether or not such letter of intent or Management Contracts have been executed or are in draft form between Owner or Operator. 5.13 Estoppel Certificate. Any party, at any time and from time to time, but no more than four (4) times per calendar year, will, within ten (10) days after any other parry's written request, execute, acknowledge and deliver to the requesting party or its designee without charge an estoppel certificate pursuant to which such party shall certify (a) that this Agreement is unmodified and in full force and effect (or, if there shall have been modifications, that the same is in full force and effect as modified and stating any such modifications or a copy of the agreement, as so modified being attached thereto), (b) the dates through which the Development Fee have been paid and the amount of the Development Fee which have been paid, (c) whether or not, to the Knowledge of such party, any party hereto is in default of its obligations hereunder and, if so, specifying each such default, DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 11 dodoop signature verification: dt1p.us/hUa9-kykc-KYgp (d) whether, to the Knowledge of such party, there exists any condition or circumstance which, with the passage of time or the giving of notice or both, would constitute an Event of Default hereunder, and (e) such other information as the requesting party or its designee may reasonably request, it being intended that any such estoppel certificate delivered pursuant to this Section 5.13 may be relied upon only by a prospective assignee of the requesting party's interest in Owner or the Agreement, as the case may be, or any prospective mortgagee of Owner's interest in the Project. 5.14 Further Assurances. Each party hereto shall, from time to time, execute, deliver and furnish such documents as any other party may reasonably deem necessary or desirable to (a) correct any scrivener errors which may be contained in this Agreement or (b) consummate fully the transactions contemplated under this Agreement. 5.15 No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and their successors and assigns permitted under this Agreement, and no provisions of this Agreement shall be deemed to confer upon any other person any remedy, claim, liability, reimbursement, cause of action or other right. 5.16 Mutual Covenants Regarding Employees. Each party hereto covenants and agrees with the others that for a period ending upon the earlier of the completion of the construction of the Project, such party, and its Affiliates, will not hire or engage, or solicit the hiring or engagement of, any current or future employee of the other party. 5.17 Survival. Notwithstanding the expiration or earlier termination of this Agreement, the rights and obligations of either party expressly accruing or earned prior to the expiration or termination of this Agreement under Section 2, Section 3, Section 5.1. Section 5.3. Section 5.8 and Section 5.12 shall survive such expiration or termination. [Signature Pages Follow.] DEVELOPMENT SERVICES AGREEMENT CITY OF KALISPELL and MHDP, LLC Page 12 dodoop signature verification: dtlp us/hUa9-kykc-KYgp Designated Address for Developer: Montana Hotel Development Partners, LLC 208 1 st Ave E Kalispell, Montana. 59901 Attention: Robert Watson Email: rwatson@bondpartners.us Designated Address for Owner: City of Kalispell 201 1 st Ave E Kalispell, MT 59901 Attention: Doug Russell Email: cityrmanager,kalis eln l.com Developer: MONTANA HOTEL DEVELOPMENT PARTNERS, LLC a Montana limited liability company By: Bond Partners, LLC, Member a Delaware limited liability company dodoop verified I 7 03/16/22 10:29 AM PDT By: WNMP•OWEA-61A3-X2P� Name: Robert Watson Its: Chief Executive Officer Owner: CITY OF KALISPELL By: ou ssell DEVELOPMENT SERVICES AGREEMENT BURP, LLC and MHDP, LLC Signature Page dot oop signature verification: dt1p.us/hUa9-kykc-KYgp EXHIBIT A DEVELOPMENT SERVICES AGREEMENT Definitions For purposes of the Agreement to which this is an exhibit, the terms underlined in the sections of this exhibit shall have the meaning set forth next to the underlined term. AAA. Defined in Section (9) of Exhibit H. Account. An interest -bearing account to be established by Owner prior to the expiration of the Pre -Development Period at a bank satisfactory to Owner, in the name of Developer (unless required by lenders to be in Owner's name), as agent for Owner. A representative of Owner and a representative of Developer shall each have signature authorization on the Account. Affiliate. Any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Person in question. As used in this definition of "Affiliate," the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. AUe� em ent. This Development Services Agreement, its Exhibits and any written amendments to this Agreement or Exhibits that may be executed from time to time by Owner and Developer. Agreement Date. This Agreement is dated effective as of February 15, 2022. Each party authorizes the endorsement of such date for administrative reference in the space provided in the heading of this Agreement. Architect. To be selected thru RFP process Authorized Individuals. Defined in Section (3) of Exhibit H. Building. Defined in Exhibit G. Business Days. Monday through Friday of each calendar week, exclusive of federal bank holidays. Claims. Defined in Section 5.1. Commercially Reasonable Efforts. The highest level of professional care, skill, judgment and diligence commensurate with that practiced by Persons regularly performing services of the type in connection with which this term is employed. Concept Drawings. Defined in paragraph 5(a) of Exhibit C. Construction Contract. The guaranteed maximum price, construction contract for construction of the Project executed or to be executed by and between Developer and General Contractor, as it may be amended pursuant to its terms. EXHIBIT A TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC age 1 dodoop signature verification: dt1p.us/h1Ja9-kykc-KYgp Construction Documents. Defined in paragraph 11(d) of Exhibit C. The term Construction Documents shall include any changes or revisions to them authorized under Section 2.5 hereof. Decision Procedure. Except as expressly provided otherwise herein, whenever under this Agreement an approval or consent is required, the party asked to give consent shall respond to a request for such approval or consent within seven (7) Business Days after receipt of such request, except for Construction Documents, which shall be within sixty (60) Calendar Days for the initial review of Construction Documents for all required city review or within fifteen (15) business days for all other document review thereafter. All approvals and consents requested or to be obtained pursuant to this Agreement shall, except to the extent expressly provided otherwise in this Agreement by reference to "sole discretion", be subject to a reasonableness standard and shall not be unreasonably withheld, conditioned or delayed. If the party from who consent is sought does not approve in writing or provide written comments or corrections to the other party within such required responses described above„ as applicable, the party seeking consent shall send an additional notice, which shall contain the following language at the top of the notice: "URGENT NOTICE: YOUR RIGHTS MAY BE IMPAIRED BY OUR FAILURE TO RESPOND". If the party from who consent is sought fails to respond to such urgent notice within two (2) Business Days, the materials submitted or approvals requested shall be deemed to be disapproved. Any disapprovals (except deemed disapprovals) shall be accompanied by the specific objections and/or required changes necessary for approval. The party requesting the approval may then provide a second submittal clearly indicating that it constitutes a "second submittal", and that the failure to respond within seven (7) Business Days to the second submittal shall be deemed an approval. The receiving party shall have seven (7) Business Days following any such second submittal in which to approve in writing or provide written comments or corrections. If such party fails to approve in writing or provide written comments or corrections within such seven (7) Business Day period, the submitted materials or requested approvals shall be deemed disapproved. Design Development Plans. Defined in paragraph 11(c) of Exhibit C. The term Design Development Plans shall include any changes or revisions to them authorized under Section 2.5. Developer. Identified on the first page of this Agreement. Developer Services. The services to be performed by Developer under this Agreement. Development Fee. Defined in Section 3.1. Development Period. The time period (a) beginning with the closing of the Owner's financing for the Project, and (b) ending on Project Close -Out. Disbursement(s). Payments of Project Costs made in accordance with this Agreement. Dispute. Defined in Section (1) of Exhibit H. Event of Default. Defined in Section 4.2.1. Force Majeure Event. Any "Act of God", labor dispute, governmental pre-emption of property, public emergency, shortages of fuel, supplies or labor, or any other cause beyond Developer's reasonable control. Economic hardship of or suffered by a party shall not constitute a Force Majeure Event. EXHIBIT A TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC age 2 dodoop signature verification: diip.us/hUa9-kykc-KYgp General Contractor. The general contractor selected to construct the Project, and any general contractor who replaces or supplements the work of such general contractor. General Contractor will be chosen thru and RFP process. Governmental Authorities. Any and all federal, state, county, parish, city, town, other municipal corporation, governmental or quasi -governmental board, agency, authority, department or body having jurisdiction over the Land or the Project. Governmental Authorizations. The permits, variances, approvals and other actions which under Governmental Requirements applicable to the Project have been or must be issued, granted, or taken by Governmental Authorities in connection with the Project. Governmental Requirement(sl. Building, zoning, site planning, drainage and water detention, water quality, subdivision, traffic, parking, land use, environmental, occupancy, health, accessibility for disabled, low-income housing and all other applicable laws, statutes, codes, ordinances, rules, regulations, requirements, and decrees, of any federal, state, county, parish, municipal or other governmental or quasi -governmental authority, or agency regarding (i) the Project or any portion thereof, (ii) the use and operation of the Project for its intended purpose, or (iii) if the context of the sentence establishes this term is being used in connection with a different subject than those described in clauses (i) or (ii), then the subject matter described in the section in which the term is used. This term shall include the conditions or requirements of Governmental Authorizations. Hazardous Substances. The term includes (a) any chemical, material, element, compound, solution, mixture, substance, or other matter of any kind whatsoever which is defined, classified, listed, designated or regulated as hazardous, toxic or radioactive by any federal statute, ordinance, regulation, order, rule or directive, or any statute, ordinance, regulation, order, rule or directive of the state where the Project is located, any political subdivisions of that state, any municipal corporation of that state, or any board, agency, authority or body associated with any of the foregoing or any quasi - governmental body or agency with jurisdiction over such matters and having jurisdiction over the Land or the Project, (b) PCBs or asbestos or materials containing PCBs or asbestos, (c) petroleum and petroleum -based chemicals and substances, and (d) urea formaldehyde. Incentive Agreements: One or more agreements between a Government Authority and one or more Owners providing economic development incentives to the Projects, if any, as amended. Initiating Party. Defined in Section (2) of Exhibit H. Knowled . Information (a) appearing in the files or records of such party, (b) actually known by one or more of the persons currently employed by such party with a level of responsibility generally considered to be "top management"; and/or (c) which would have become known by one or more of such persons in the exercise of that level of professional care, skill, judgment and diligence commensurate with that practiced by Persons regularly performing services of the type in connection with which this term is employed. Land. The parcel of real property legally described on Exhibit B. Lender. TBD, or such other financial institution providing construction financing for the Projects. EXHIBIT A TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC age 3 dotloop signature verification: dtlp.us/hUa9-kykc-KYgp Notice. Defined in Section 5.6. Notice to Proceed. A notice from Developer on behalf of Owner to General Contractor to proceed with the work under the Construction Contract. Owner. Identified on the first page of this Agreement. Owner's Representative. A person to be named by Owner prior to financial closing or such successor as provided in Section 1.2. Person. An individual, corporation, limited liability company, association, trust or other entity or organization. Plans. The Concept Drawings, Schematic Plans, Design Development Plans, and Construction Documents defined in Exhibit C. Pre -Development Budget. The budget for the Pre -Development Period Development Services as set forth on Exhibit F. Developer will submit a revised Pre -Development Budget to Owner when information has been presented that confirms that the existing Pre -Development Budget is no longer accurate, and the Pre -Development Budget, as so revised and approved by Owner, shall become the new Pre -Development Budget. Pre -Development Fee. Defined in Section 3.1. Pre -Development Period. The time period beginning on the March 1, and ending on the earlier of (a) April 29, 2022, or (2) the date Owner closes on its construction financing for the Project. Pre -Development Period Development Services. The Development Services to be performed by the Developer during the Pre -Development Period as set forth in Exhibit C. Procedure. Defined in Section (1) of Exhibit H. Professionals. The Construction Project Manager, General Contractor, the Architect, the, and the other parties, including, but not limited to subcontractors, engineers, who are necessary to the design, equipping and construction of the Project. Profits Interest. Defined in Section 3.5. Profits Interest Agreement. Defined in Section 3.5. p Project. A collective reference to (a) the Land, (b) the Building. The descriptions in this Agreement and the Exhibits as to the number of stories or floors, square feet, the number of parking spaces in the Project, and any similar descriptions, are all approximations and, like the inclusion in the Project of any component, are subject to change by Owner, in Owner's sole discretion. Project Accountant. TBD or such other accountant selected by Developer. Project Budget. The budget for the development and construction of the Project, which may be modified from time to time in accordance with paragraph (7) of Exhibit C. EXHIBIT A TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC age 4 dotloop signature verification: dt1p.us/hUa9-kykc-KYgp Project Close -Out. The occurrence or the accomplishment following Substantial Completion of the final completion by each of the Professionals of such work, if any, as necessary to entitle each such Professional to payment under the applicable contract of all holdbacks conditioned upon the final completion by such Professional of any work. Project Costs. The aggregate of all amounts paid or incurred, directly or indirectly, for the ownership, development, financing and construction of the Project (excluding Land) to and through the Project Close -Out. Project Costs will include the cost of the project staff, including out-of-pocket costs of such project staff. Project Management. Compass Management Servicers, LLC Project Schedule. The schedule for completion of the Project, which may be modified from time to time in accordance with Exhibit C. Punch List Work. Minor items of work necessary to complete the Project which will not interfere with the opening or materially interfere with the operation of the Garage and which are otherwise of a scope and nature as this term is commonly understood in the construction industry. Required Contributions. Contributions to or toward the cost of constructing, installing, operating or maintaining public improvements, installations or facilities and other special taxes, assessments, licenses, fees, or impact or mitigation charges or contributions required under Governmental Requirements or Restrictions for the Project or otherwise undertaken in connection with the Project. Restrictions. Any and all restrictions, easements, conditions, covenants, and other agreements recorded against the Land or the Project, whether recorded prior to the Agreement Date or during the Term provided notice thereof is given to Developer. Schematic Plans. Defined in paragraph 5(b) of Exhibit C. Substantial Completion. The issuance by (a) the General Contractor of a Certificate of Substantial Completion and (b) the Governmental Authorities of a final certificate of occupancy or its equivalent for the Garage Structure. Term. Defined in Section 4.1. EXHIBIT A TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC age 5 dotloop signature verification: dtlp.us/hUa9-kykc-KYgp EXHIBIT B DEVELOPMENT SERVICES AGREEMENT Description of the Land EXHIBIT B TO DEVELOPMENT SERVICES AGREEMENT City of Kalispell and MHDP, LLC Page 1 dodoop signature verification: dt1p.us/hUa9-kykc-KYgp EXHIBIT C DEVELOPMENT SERVICES AGREEMENT Pre -Development Period The following Developer Services and other obligations of Developer during the Pre -Development Period, are as follows: Pre -Development Period Development Services: (1) Selection of Professionals. Developer shall (a) propose for Owner's approval any such parties, including the name and proposed scope of work for such parties, (b) coordinate with Owner on the format of the agreements with the Professionals, (c) negotiate, in consultation with Owner any such agreements, and (d) cause any such agreements to be execute. (2) Schematic Design. Developer shall work with the Architect to develop Project requirements and design criteria to incorporate into the schematic design drawings for the Project prepared by the Architect to Owner for Owner's approval. (3) Traffic Study Analysis. Developer will commission a 3rd Party Traffic study. (4) Project Budget and Project Schedule. Developer shall prepare and submit a proposed budget and schedule for the development, and construction of the Project. Upon approval by Owner, such schedule shall be the "Project Schedule". Developer will submit a revised Project Schedule to Owner when needed, and the Project Schedule as so revised and when approved by Owner, shall become the new Project Schedule. Developer will submit a revised Project Budget to Owner when needed, and the Project Budget as so revised and when approved by Owner shall become the new Project Budget. (5) Pricing. Developer will assist Owner with obtaining initial pricing for the Design Development Plans, as well as bids for final pricing based on the Construction Documents. (6) Financing. Developer shall procure debt financing for the Project, including providing information to prospective lenders, responding to inquiries and otherwise assisting such parties with inspections and evaluations of the Project. (7) Budgets/Schedules. During the Pre -Development Period and Development Period, Developer will promptly notify Owner if Developer obtains Knowledge that the Project Schedule or Project Budget (including if the actual cost for any line item in the Project Budget is likely to materially exceed the amount budgeted for such line item), or any part of them are no longer accurate. Developer will recommend to Owner when a Notice to Proceed should be issued and delivered to General Contractor under the Construction Contract and Owner shall not unreasonably withhold nor delay issuance of such Notice to Proceed. (8) Plans. (a) Concept Drawings. Shall mean the concept drawings for the Project which have previously been approved as identified on Exhibit J attached hereto. EXHIBIT C TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 1 dotloop signature verification: ddp.us/hUa9-kykc-KYgp (b) Schematic Plans. Shall mean the schematic drawings for the Project which have yet to be created and approved. (c) Design Development Plans. Developer shall submit the equivalent of the "Design Development Documents" that is consistent with the International Building Code and as described in the AIA Standard Form of Agreement Between Owner and Architect to Owner for Owner's approval, and shall also include preliminary designs, materials and finish treatments for the Project, including landscaping, and color boards. All of the documents described in the previous sentence shall conform in all material respects to, or be a logical extension of, the Schematic Plans and shall be consistent with the Project Budget, as same may be revised pursuant to paragraph 4 of this Exhibit C. Upon final approval by Owner, such preliminary plans and specifications shall be the "Design Development Plans." (d) Construction Documents. Developer will submit the equivalent of the "Construction Documents" that is consistent with the International Building Code and as described in AIA Standard Form of Agreement Between Owner and Architect to Owner for Owner's approval, and shall also include final designs, the form for all bid documents and application documents for a Conditional Use Permit, materials and finish treatment for the Project, including landscaping, and color boards. All of the documents described in the previous sentence will conform in all material respects to, or be a logical extension of, the Design Development Plans and will be consistent with the Project Budget, as same may be revised pursuant to paragraph 4 of this Exhibit C. Upon final approval by Owner, such final plans for the Project shall be the "Construction Documents" and shall define the scope of the work for the Construction Contract. (9) Budgets/Schedules. During the Pre -Development Period and Development Period, Developer will promptly notify Owner if Developer obtains Knowledge that the Project Schedule or Project Budget (including if the actual cost for any line item in the Project Budget is likely to materially exceed the amount budgeted for such line item), or any part of them are no longer accurate. Developer will recommend to Owner when a Notice to Proceed should be issued and delivered to General Contractor under the Construction Contract and Owner shall not unreasonably withhold nor delay issuance of such Notice to Proceed. EXHIBIT C TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 2 dotloop signature verification: c1dp.us/hUa9-kykc-KYgp EXHIBIT D DEVELOPMENT SERVICES AGREEMENT Development Period The Developer Services and other obligations of Developer during the Development Period are as follows: (1) Construction of Project. Following the issuance of a Notice to Proceed, Developer will use its Commercially Reasonable Efforts to coordinate all construction through completion, supervise and manage the Professionals and Operator, and coordinate the interaction of the Professionals and Operator with the Owner and other Persons involved with the Project. Developer shall also oversee the start-up and commissioning of all Building mechanical systems. (2) Hazardous Substances. Developer will provide or make available to Owner copies of any soils, geotechnical or environmental reports obtained or prepared by or under the control of Developer or its Affiliates in connection with the Project. Owner has authorized Developer and Operator to procure and store in or about the Project cleaning supplies used in the construction and operation of the Project which may qualify as Hazardous Substances. The use and storage of such cleaning supplies shall be permitted as reasonably required for and are in quantities appropriate to the construction and operation of the Project and are stored, handled and disposed of in accordance with all applicable laws. (3) Easements and Other Agreements. In the event any other agreements are required in connection with the Project that require execution by Owner, Developer will submit such agreements to Owner for Owner's review and approval and make appropriate recommendations concerning same. (4) Proceedings_. Developer (without obligation to incur any external out-of-pocket cost or expense) will assist Owner in connection with any administrative proceedings, litigation or dispute resolution proceeding of any kind between Owner and the Professionals relating to the design, construction, use or occupancy of the Project, including any defense of any mechanic's, materialmen's, contractor's or subcontractor's claim or any claim against the General Contractor's bonding company, if applicable. As provided in Section 5.1 of the Agreement, Owner will indemnify and hold Developer harmless from and against any cost or expense associated with any such proceedings or litigation. (5) General Services. Developer will timely (a) assist Owner in performing any obligations or services to be performed by Owner described in the Construction Contract and any other agreement entered into by Owner regarding the Project, including any other agreements with Operator, (b) provide Owner with copies of the Construction Documents and all approved change orders and change directives, and (c) advise Owner of all scheduled job site meetings prior to the date of such meetings and provide Owner with copies of project schedules, job minutes and other information that allows Owner to evaluate the quality and progress of the work on the Project. EXHIBIT D TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page I dotloop signature verification: (6) Project Close -Out. Developer will assist in inspecting completed portions of the Garage and obtain approvals and necessary documents from Operator and the Professionals so as to achieve the completion of Punch List Work and the accomplishment of the other requirements for Project Close -Out within a reasonable time after Substantial Completion. The foregoing shall not be construed to be a guarantee of timely completion of Project Close - Out and, so long as Developer has exercised Commercially Reasonable Efforts in obtaining approvals and necessary documents from Operator and the Professionals, the failure to achieve the completion of Punch List Work and the accomplishment of the other requirements for Project Close -Out within a reasonable time after Substantial Completion will not constitute a default hereunder. (7) Notices to Owner. Promptly after Developer obtains Knowledge, Developer shall notify Owner that (a) any Person or party is or may be in breach of any of its material obligations under the Construction Contract, any and all Project financing, or other material agreement or contract relating to the Project, (b) there is any pending or threatened litigation or proceeding affecting the Project, or (c) any fact or condition specific to the Project exists that would materially impair the current or contemplated use or fair market value of the Project or the cost of operating the Project. (8) Timing for Substantial Completion. Developer will manage the Professionals in such a manner as to achieve Substantial Completion on or before the date set forth for Substantial Completion in the Project Schedule, as it may be adjusted by Owner. The foregoing shall not be construed to be a guarantee of timely completion of the Project and, so long as Developer has exercised Commercially Reasonable Efforts in the management of such Professionals, the failure to achieve Substantial Completion on or before the date set forth for Substantial Completion in the Project Schedule, as it may be adjusted by Owner, will not constitute a default hereunder. Promptly after Developer obtains Knowledge, Developer will notify Owner of the occurrence of any Force Majeure Event or any other event or condition which can be reasonably expected to have a material and adverse impact on the Project Schedule. (9) Prohibition Against Mechanic's Liens. Developer will not file or permit to be filed on behalf of Developer (or by, or on behalf of, any Affiliate of Developer) against the Project any lien, encumbrance, charge or mechanic's, materialmen's, contractor's or subcontractor's liens arising from any claim growing out of the work of any construction, repair, restoration, reinstallation or improvement, or any other claim arising out of this Agreement. If any such lien, encumbrance or charge is filed against the Project, Developer will cause its removal and otherwise resolve the claim upon which it is based. This paragraph is not intended to deal with any liens that may be filed by the General Contractor, Architect, any Professional or any other contractor or subcontractor engaged directly by Owner or by the Persons listed in this sentence. (10) Record Keeping. Developer will maintain records of the progress of the work on the Projects, and retain copies of the Construction Documents, change orders, shop drawings, applicable manuals and handbooks, maintenance and operating manuals and instructions, warranties, purchase orders, contracts, agreements, and approvals related to the Project for four (4) years after the date of such document. Developer will maintain the books and records of requests for payments, amounts disbursed and similar relevant information. Such documentation materials will be kept at Developer's principal place of business in Kalispell, Montana. Owner, EXHIBIT D TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 2 dotloop signature verification: dtlp.us/hUa9-kykc-KYgp with forty-eight (48) hours' prior notice and during regular business hours, has the right to review and copy, at such Owner's cost, such materials and other documentation. Developer will assist Owner in reviewing accounting records kept by Developer relating to the Project, and will advise and counsel Owner concerning the information disclosed by such records. EXHIBIT D TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 3 dotloop signature verification:,Jilp.us/hUa9-kykc-KYqp EXHIBIT E DEVELOPMENT SERVICES AGREEMENT Developer's Insurance Requirements Insurance Coverage & Limits Workers' Statutory Limits Compensation Employer's Liability $1,000,000 each accident for bodily injury by accident $1,000,000 each employee for bodily injury by disease $1,000,000 bodily injury by disease for entire policy Commercial General $1,000,000 per occurrence Liability $2,000,000 general aggregate (Occurrence Basis) $2,000,000 product -completed operations aggregate limit $1,000,000 personal and advertising injury limit $1,000,000 damage to premises rented to you limit medical ex ense limit: Not Applicable Excess Liability $5,000,000 each occurrence/general aggregate ($5 million) Occurrence Basis Owner's Insurance Requirements Insurance: Coverage & Limits Montana Municipal Interlocal Authority General Liability $750,000 per occurrence $1,500,000 general aggregate (Statutory Limits) Excess Liability $10,000,000 each occurrence/general aggregate (Occurrence Basis) EXHIBIT E TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 1 dotloop signature verification: ddp.us/hUa9-kykc-KYgp EXHIBIT F DEVELOPMENT SERVICES AGREEMENT Development Budget =,aispell Parking Garage Anticipated Project Cost Item Approved Budget Budget Changes Committed Approved Current Change Orders Commitment ils M. Development Fee 5% of HC + CM 357,770 Financing Fees - 2% Project Cost - Architectural/Consultants 600,000 Impact FeestTap Fees/Taxes 125,000 Interest during construction 400,000 Insurance 225,000 Legal 50,000 Origination Fee Environmental/Traffic Study 25,000 Building Permits 75,000 Soft Cost Total 1,867,770 - General Contractor 239 Spaces X $26,000 per space 6,214,000 Construction Contingency 10% 621,400 Hard Cost Total 6,835,400 - 7�Construcfion Mgt 220,000 core Software/Site Monitoring Equip. 50,000 struction Testing on behalf of Owner 50,000 Construction Mgt 320,000 Project Subtotal 9,013,170 - Project Contingency 2.51/6 225,329 EXHIBIT F TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 1 dotloop signature verification: dtlp.us/hUa9-kykc-KYgp EXHIBIT G DEVELOPMENT SERVICES AGREEMENT Garage EXHIBIT G TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 1 dotloop signature verification: ddp.us/hUa9-kykc-KYgp EXHIBIT H DEVELOPMENT SERVICES AGREEMENT Dispute Resolution Process (1) Agreement to Use Procedure. Developer and Owners have entered into this Agreement in good faith and in the belief that it is mutually advantageous to them. It is with that same spirit of cooperation that they pledge to attempt to resolve any dispute amicably without the necessity of litigation. Accordingly, they agree that if any alleged Event of Default occurs (the "Dispute"), then prior to the commencement of any legal action to interpret or enforce this Agreement, the Dispute will be subject to the alternative dispute resolution procedures described in the remainder of this Exhibit H (the "Procedure"). (2) Initiation of Procedure. The Party seeking to initiate the Procedure (the "Initiating Party") shall give written notice to the other Party, describing in general terms the Event of Default, the Initiating Party's claim for relief and identifying one or more individuals with authority to settle the Dispute on such Party's behalf. The Party receiving such notice shall have five (5) Business Days within which to designate by written notice to the Initiating Party one or more individuals with authority to settle the Dispute on such Party's behalf. The individuals so designated shall be known as the "Authorized Individuals." (3) Direct Negotiations. The Authorized Individuals shall be entitled to make such reasonable investigation of the Dispute as they deem appropriate, but agree to meet promptly, and in no event later than ten (10) days from the date of receipt of the Initiating Party's written notice, to discuss resolution of the Dispute. The Authorized Individuals shall meet at such times and places and with such frequency as they may reasonably agree. If the Dispute has not been resolved within five (5) days from the date of their initial meeting, either Party may cease direct negotiations and shall submit the Dispute to mediation in accordance with the procedures described in the remainder of this Exhibit H. (4) Selection of Mediator. Within five (5) days after direct negotiations cease as provided above, the Authorized Individuals shall attempt, in good faith, to select a mutually acceptable mediator. If they do not do so, each Authorized Individual, within three (3) days after the expiration of such five (5) day period, shall submit to the other a list of three acceptable mediators (listed in order of preference). If only one person appears on both lists, that person shall be the mediator. If more than one person appears on both lists, the person with the highest average ranking shall be the mediator, or if each of such two persons has the same average ranking, the mediator shall be one of those two persons decided by a coin -flip. If no mediator has been selected under this procedure, the Parties agree jointly to request an Eleventh District Court Judge of their choosing to supply within ten (10) days a list of three potential qualified mediators from that Court's list of Settlement Masters. Within five (5) days of receipt of the list, each Authorized Individual shall rank the proposed mediators in numerical order of preference and shall simultaneously exchange such list. The mediator shall be the individual receiving the highest average ranking. If two persons have the same average ranking, the mediator shall be one of those two persons decided by a coin -flip. If such mediator is not available to serve within the time period stated in Paragraph (5) of this Exhibit H, they shall proceed to contact the mediator who has the next highest average ranking until they are able to select a mediator. EXHIBIT H TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 1 dotloop signature verification: dtip.us/h1Ja9-kykc-KYgp (5) Time and Place for Mediation. In consultation with the mediator selected, the Parties shall promptly designate a mutually convenient time and place in the county where the Project is located, for the mediation, and unless circumstances require otherwise, such time is to be not later than fifteen (15) days after selection of the mediator. (6) Exchange of Information. In the event a Party to this Agreement has substantial need for information in the possession of the other Party to this Agreement in order to prepare for the mediation, all Parties shall attempt in good faith to agree on procedures for the expeditious exchange of such information, with the help of the mediator if required. (7) Summary of Views. At least seven (7) days prior to the first scheduled session of the mediation, each Party shall deliver to the mediator and to the other Party a concise written summary of its views on the matter in Dispute and such other matters as may be required by the mediator. The mediator also may request that a confidential issue paper be submitted to him by each Party. (8) Parties to be Represented. In the mediation, each Party shall be represented by an Authorized Individual and may be represented by counsel. In addition, each Party may, with permission of the mediator, bring such additional persons as are needed to respond to questions, contribute information and participate in the negotiations. (9) Conduct of Mediation. The mediator shall determine the format for the meetings, designed to assure that both the mediator and the Authorized Individuals have an opportunity to hear an oral presentation of each Party's views on the matter in dispute, and that the Authorized Individuals attempt to negotiate a resolution of the matter in dispute, with or without the assistance of counsel or others, but with the assistance of the mediator. To this end, the mediator is authorized to conduct both joint meetings and separate private caucuses with the Parties. The mediation session shall be private. The mediator will keep confidential all information learned in private caucus with any Party unless specifically authorized by such Party to make disclosure of the information to the other Party. The Parties agree to sign a document agreeing that the mediator shall be governed by the provisions of Commercial Arbitration Rules of the AMERICAN ARBITRATION ASSOCIATION (as then in effect) and such other rules as the mediator shall reasonably prescribe. The Parties commit to participate in the proceedings in good faith with the intention of resolving the Dispute, if at all possible. (10) Termination of Mediation. The Parties agree to participate in the mediation procedure to its conclusion. The mediation shall be terminated by (a) the execution of a settlement agreement by the Parties, (b) a declaration of the mediator that the mediation is terminated; or (c) a written declaration of a Party to the effect that the mediation process is terminated at the conclusion of one (1) full day's mediation session. Upon termination of Mediation, any further remedies are governed by Section 4.2 of the Agreement. (11) Confidentiality. Mediation is a compromise negotiations for purposes of the Federal and State Rules of Evidence and constitutes privileged communication under the law of the state where the Project is located. To the extent permitted by law applicable to municipalities, the entire mediation process is confidential, and no stenographic, visual or audio record shall be made. All conduct, statements, promises, offers, views and opinions, whether oral or written, made in the course of the mediation by any Party, by their agents, employees, representatives or other invitees and by the mediator are confidential and shall, in addition and where allowable, be deemed to be privileged. Such EXHIBIT H TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 2 doVoop signature verification: ddp.us/hUa9-kykc-KYgp conduct, statements, promises, offers, views and opinions shall not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the Parties and shall not be disclosed to anyone not an agent, employee, expert, witness or representative of any of the Parties; provided, however, that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the mediation. (14) Time Periods. If any time period set forth above ends on a Saturday, Sunday or national bank holiday, the last day of such time period shall be extended to the next Business Day. (15) Attorneys' Fees. The terms and provisions of Section 5.3 of the Agreement are hereby incorporated into this Exhibit H by reference. EXHIBIT H TO DEVELOPMENT SERVICES AGREEMENT. City of Kalispell and MHDP, LLC Page 3