INSURANCE, INDEMNITY AND SECURITY. 23.1 The Developer shall indemnify, defend and hold harmless the Municipality, and all of its respective officials, officers, employees and authorized representatives from and against any and all suits, actions, payments, legal or administrative proceedings, claims, demands, damages, liabilities, losses, interest, legal fees, costs and expenses sustained by the Municipality of every nature and description, whether arising before or after the completion of any activity, work, maintenance or construction as contemplated in this Agreement and in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, by reason of any act, error, omission or fault whether active or passive of the Developer, its employees, contractors, sub-contractors, engineers, agents or anyone acting under the Developer’s direction or control or on its behalf in connection with or incidental to the any activity, work, maintenance or construction contemplated herein. 23.2 The Developer covenants and agrees that it shall carry comprehensive liability insurance and that the following provisions shall apply to such insurance: (a) the Municipality shall be an additional insured in all public liability policies; (b) all policies shall provide that an event of default on the part of the Developer, its servants or agents, shall not be an event of default on the part of the Municipality; (c) none of the policies shall be cancelled unless thirty (30) days prior written notice of cancellation is first given to the Municipality; (d) copies of all policies of insurance shall immediately be provided to the Municipality upon written request by the Municipality; and 20 -DA- (e) unless otherwise noted, the insurance policies shall have a minimum limit coverage of not less than FIVE MILLION ($5,000,000.00) DOLLARS per occurrence and an annual aggregated limit of not less than TEN MILLION ($10,000,000.00) DOLLARS: (i) Public Liability or Property Damage - Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage (aggregate) each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS; (ii) Automobile Public Liability and Third Party Property Damage - Owned and Non-Owned Vehicles – Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage, each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS; and. (iii) Environmental Impairment Liability; which all shall be carried for such period as the Developer has any rights or obligations hereunder with respect to the Development Area, and a comprehensive liability policy, including extended coverage and malicious damage endorsement, as per industry standard, insuring the full value of the work undertaken by the Developer pursuant to this Agreement, automobile public liability and third party damage coverage, and environmental impairment liability. 23.3 In order to ensure full compliance by the Developer with the terms, covenants and conditions of this Agreement, the Developer hereby covenants and agrees that it shall deliver and deposit with the Municipality security in the form hereinafter prescribed and that the amount of the security required to be deposited with the Municipality prior to the Commencement of Construction shall be determined in accordance with the Municipality’s Development Agreement Security Policy A-PI-053, as attached to this Agreement as Schedule “I”. For purposes of this Section, the estimated cost for the Local Improvements shall be determined as follows: (a) if known at the time that this Agreement is entered into, as set out in Schedule "F" of this Agreement; (b) if unknown at the time that this Agreement is entered into, but where actual tendered costs are available the tendered costs shall be used; or (c) where actual tendered costs are not available, cost estimates prepared by the Developer’s Consultant under their professional seal which shall be submitted to the Municipality for approval together with all applicable background documentation, and if approved by the Municipality, such cost estimates shall be used. 23.4 The Developer understands and agrees that, during the term of this Agreement (including the Warranty Period for the Local Improvements prescribed by this Agreement), it will maintain in full force and effect all security and liability insurance prescribed herein. 23.5 The security referred to above shall consist of an "Irrevocable Letter of Credit" issued by a "Chartered Bank" or the "Treasury Branch", a Development Bond issued by, in the Municipality’s opinion, a reputable surety company, or such other security as may be approved by the solicitors for the Municipality, including a cash security deposit, in the amount of the security required from time to time as described above; provided that all security shall be in terms and form to be approved by the Municipality's solicitors. The Developer further covenants and agrees that upon a default on the part of the Developer under this Agreement, the Municipality may, at its option and without limiting any of its other remedies, draw on the security provided, accelerate and require payment in full of the security amount that would otherwise be required for a cash security deposit account, and such obligation shall be secured by the mortgage charge and/or encumbrance. 23.6 Any Irrevocable Letter of Credit provided as security by the Developer shall contain provisions for either: 20 -DA- (a) a covenant by the issuer that if the issuer has not received a release from the Municipality sixty (60) days prior to the expiry date of the security, then the security shall automatically be renewed, upon the same terms and conditions, for a further period of one (1) year; or (b) a right on the part of the Municipality to draw upon the full amount of the Irrevocable Letter of Credit, or any portion thereof, in the event that the Municipality has not received a replacement letter, or confirmation of an extension or renewal of the existing letter, at least sixty (60) days prior to the expiry of the security. 23.7 Any Development Bond provided as security by the Developer shall be in the form attached hereto as Schedule “J”, which shall contain the following terms and provisions: (a) a statement that the Development Bond is issued in favour of the Municipality as the sole obligee (the Municipality) and in reference to this Agreement and all its obligations thereunder; (b) an acknowledgement by the issuing surety company that: (i) the Municipality shall be entitled to make a claim against the Development Bond in accordance with the provisions of this Agreement; (ii) that such claim against the Development Bond shall be payable upon demand; and (iii) the surety company undertakes to act promptly and in good faith of any review of a claim submitted by the Municipality; (c) a statement that the Development Bond will permit partial claims and draws up to the total of the value of the Development Bond; and (d) a condition that the Development Bond shall remain in effect until the obligations of this Agreement are completed and approved by the obligee (Municipality), and may only be terminated upon the proper notice of the obligee (Municipality). 23.8 When all Local Improvements described in this Agreement are completed and approved by the obligee (Municipality) and the Warranty Period for such Local Improvements under this Agreement has expired, the obligee (Municipality) shall return the Development Bond to the surety company for termination or advise the surety company in writing that the Development Bond is terminated. 23.9 The Developer acknowledges and agrees, in the event that the Development Bond is to expire before completion of the Developer’s obligations under this Agreement and it is not replaced prior to the said expiration, the Municipality may, at its sole option, demand payment under such Development Bond and retain the funds as security for the performance of the Developer's obligations pursuant to this Agreement. (a) any cash security deposit, Irrevocable Letter of Credit, Development Bond or other security required or otherwise provided by the Developer to the Municipality pursuant to this Agreement is hereby assigned and pledged to the Municipality as security for the performance of the Developer’s obligations as contemplated herein (such assignment and pledge to be perfected by possession and/or registration); (b) the Developer acknowledges having received a copy of this Agreement, and the security terms contemplated herein, and waives any right it may have to receive a copy of any Financing Statement or Financing Charge Statement in relation hereto; and (c) notwithstanding any other provision of this Agreement and further, without prejudice to any other right or remedy of the Municipality, the obligation of the Municipality or its solicitor to release any security funds held by it under or in connection with this Agreement (including, without restriction, any cash security) is subject to the Municipality’s right to deduct or set off any amount which may be due by the Developer to the 20 -DA- Municipality or the amount of any claim by the Municipality against the Developer under this Agreement (including, without limitation, the amount of any liquidated damages). Without limitation, if the Developer is in breach or default of any provision of this Agreement and, after receiving notice thereof, the Developer does not promptly remedy such default or breach or commence and diligently prosecute the remedy of such breach or default, the Municipality may (but shall not be obligated to) take any measures it considers necessary to remedy such default or breach and any costs or liabilities incurred by the Municipality in respect thereof may be deducted from or set off against any amount(s) to be paid or released to the Developer under this Agreement. This provision shall survive the termination of this Agreement for any reason whatsoever.
Appears in 2 contracts
Samples: Development Agreement, Development Agreement
INSURANCE, INDEMNITY AND SECURITY. 23.1 The Developer shall indemnify, defend and hold harmless the Municipality, and all of its respective officials, officers, employees and authorized representatives from and against any and all suits, actions, payments, legal or administrative proceedings, claims, demands, damages, liabilities, losses, interest, legal fees, costs and expenses sustained by the Municipality of every nature and description, whether arising before or after the completion of any activity, work, maintenance or construction as contemplated in this Agreement and in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, by reason of any act, error, omission or fault whether active or passive of the Developer, its employees, contractors, sub-contractors, engineers, agents or anyone acting under the Developer’s direction or control or on its behalf in connection with or incidental to the any activity, work, maintenance or construction contemplated herein.
23.2 The Developer covenants and agrees that it shall carry comprehensive liability insurance and that the following provisions shall apply to such insurance:
(a) the Municipality shall be an additional insured in all public liability policies;
(b) all policies shall provide that an event of default on the part of the Developer, its servants or agents, shall not be an event of default on the part of the Municipality;
(c) none of the policies shall be cancelled unless thirty (30) days prior written notice of cancellation is first given to the Municipality;
(d) copies of all policies of insurance shall immediately be provided to the Municipality upon written request by the Municipality; and 20 -DA-and
(e) unless otherwise noted, the insurance policies shall have a minimum limit coverage of not less than FIVE MILLION ($5,000,000.00) DOLLARS per occurrence and an annual aggregated limit of not less than TEN MILLION ($10,000,000.00) DOLLARS:
(i) Public Liability or Property Damage - Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage (aggregate) each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS;
(ii) Automobile Public Liability and Third Party Property Damage - Owned and Non-Owned Vehicles – Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage, each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS; and.
(iii) Environmental Impairment Liability; which all shall be carried for such period as the Developer has any rights or obligations hereunder with respect to the Development Area, and a comprehensive liability policy, including extended coverage and malicious damage endorsement, as per industry standard, insuring the full value of the work undertaken by the Developer pursuant to this Agreement, automobile public liability and third party damage coverage, and environmental impairment liability.
23.3 In order to ensure full compliance by the Developer with the terms, covenants and conditions of this Agreement, the Developer hereby covenants and agrees that it shall deliver and deposit with the Municipality security in the form hereinafter prescribed and that the following provisions shall apply in determining the amount of the security required to which security shall be deposited with the Municipality prior to the Commencement of Construction Construction.
(a) the security in respect of the Development Area, shall be determined an amount equal to FIFTY (50%) per cent of the estimated costs of constructing and installing all of the Local Improvements, and such other amounts as are required elsewhere under the provisions of this Agreement; or
(b) in accordance with the Municipality’s event the Developer is requesting endorsement of a Plan of Subdivision within the Development Agreement Security Policy A-PI-053Area prior to the issuance of the Construction Completion Certificates for the underground and surface Local Improvements, the security in respect of the Development Area shall be an amount equal to ONE HUNDRED AND TWENTY FIVE (125%) per cent of the estimated costs of constructing and installing all of the Local Improvements and such other amounts as attached to are required elsewhere under the provisions of this Agreement as Schedule “I”. For Agreement; and
(c) for purposes of this Section, the estimated cost for the Local Improvements shall be determined as follows:
(ai) if known at the time that this Agreement is entered into, as set out in Schedule "F" of this Agreement;
(bii) if unknown at the time that this Agreement is entered into, but where actual tendered costs are available the tendered costs shall be used; or
(ciii) where actual tendered costs are not available, cost estimates prepared by the Developer’s Consultant under their professional seal which shall be submitted to the Municipality for approval together with all applicable background documentation, and if approved by the Municipality, such cost estimates shall be used.
23.4 The Developer understands and agrees that, during the term of this Agreement (including the Warranty Period for the Local Improvements prescribed by this Agreement), it will maintain in full force and effect all security and liability insurance prescribed herein.
23.5 The security referred to above shall consist of an "Irrevocable Letter of Credit" issued by a "Chartered Bank" or the "Treasury Branch", a Development Bond issued by, in the Municipality’s opinion, a reputable surety company, or such other security as may be approved by the solicitors for the Municipality, including a cash security deposit, in the amount of the security required from time to time as described above; provided that all security shall be in terms and form to be approved by the Municipality's solicitors. The Developer further covenants and agrees that upon a default on the part of the Developer under this Agreement, the Municipality may, at its option and without limiting any of its other remedies, draw on the security provided, accelerate and require payment in full of the security amount that would otherwise be required for a cash security deposit account, and such obligation shall be secured by the mortgage charge and/or encumbrance.
23.6 Any Irrevocable Letter of Credit provided as security by the Developer shall contain provisions for either: 20 -DA-:
(a) a covenant by the issuer that if the issuer has not received a release from the Municipality sixty (60) days prior to the expiry date of the security, then the security shall automatically be renewed, upon the same terms and conditions, for a further period of one (1) year; or
(b) a right on the part of the Municipality to draw upon the full amount of the Irrevocable Letter of Credit, or any portion thereof, in the event that the Municipality has not received a replacement letter, or confirmation of an extension or renewal of the existing letter, at least sixty (60) days prior to the expiry of the security.
23.7 Any Development Bond In regards to security provided as security by the Developer shall be in the form attached hereto as Schedule “J”under this Agreement, which shall contain the following terms and provisionsconditions shall apply:
(a) a statement that the Development Bond is issued in favour of the Municipality as the sole obligee (the Municipality) and in reference to this Agreement and all its obligations thereunder;
(b) an acknowledgement by the issuing surety company that:
(i) the Municipality shall be entitled to make a claim against the Development Bond in accordance with the provisions of this Agreement;
(ii) that such claim against the Development Bond shall be payable upon demand; and
(iii) the surety company undertakes to act promptly and in good faith of any review of a claim submitted by the Municipality;
(c) a statement that the Development Bond will permit partial claims and draws up to the total of the value of the Development Bond; and
(d) a condition that the Development Bond shall remain in effect until the obligations of this Agreement are completed and approved by the obligee (Municipality), and may only be terminated upon the proper notice of the obligee (Municipality).
23.8 When all Local Improvements described in this Agreement are completed and approved by the obligee (Municipality) and the Warranty Period for such Local Improvements under this Agreement has expired, the obligee (Municipality) shall return the Development Bond to the surety company for termination or advise the surety company in writing that the Development Bond is terminated.
23.9 The Developer acknowledges and agrees, in the event that the Development Bond is to expire before completion of the Developer’s obligations under this Agreement and it is not replaced prior to the said expiration, the Municipality may, at its sole option, demand payment under such Development Bond and retain the funds as security for the performance of the Developer's obligations pursuant to this Agreement.
(a) any cash security deposit, Irrevocable Letter of Credit, Development Bond Credit or other security required or otherwise provided by the Developer to the Municipality pursuant to this Agreement is hereby assigned and pledged to the Municipality as security for the performance of the Developer’s obligations as contemplated herein (such assignment and pledge to be perfected by possession and/or registration);
(b) the Developer acknowledges having received a copy of this Agreement, and the security terms contemplated herein, and waives any right it may have to receive a copy of any Financing Statement or Financing Charge Statement in relation hereto; and
(c) notwithstanding any other provision of this Agreement and further, without prejudice to any other right or remedy of the Municipality, the obligation of the Municipality or its solicitor to release any security deposit funds held by it under or in connection with this Agreement (including, without restriction, any cash security) is subject to the Municipality’s right to deduct or set off any amount which may be due by the Developer to the 20 -DA- Municipality or the amount of any claim by the Municipality against the Developer under this Agreement (including, without limitation, the amount of any liquidated damages). Without limitation, if the Developer is in breach or default of any provision of this Agreement and, after receiving notice thereof, the Developer does not promptly remedy such default or breach or commence and diligently prosecute the remedy of such breach or default, the Municipality may (but shall not be obligated to) take any measures it considers necessary to remedy such default or breach and any costs or liabilities incurred by the Municipality in respect thereof may be deducted from or set off against any amount(s) to be paid or released to the Developer under this Agreement. This provision shall survive the termination of this Agreement for any reason whatsoever.
23.8 Any security or insurance herein required to be deposited by the Developer may be required to be increased or decreased by the Municipality upon written notice to the Developer at any time during the term of this Agreement if it appears to the Municipality, in its sole discretion, that the security or insurance deposited is excessive or insufficient in relation to the costs of the Local Improvements or for protection of the Municipality for which security or insurance has been provided. Without limiting the generality of the foregoing the Municipality may also require an increase in the amount of security required if the Developer has been issued a notice of default under Section 21.
23.9 In regards to any reduction of security provided under this Agreement, the following terms and conditions shall apply:
(a) The amount of security provided by the Developer to the Municipality may, in the sole and absolute discretion of the Municipality, be reduced on application by the Developer upon the Developer having received Construction Completion Certificates for the surface and underground Local Improvements provided that after the issuance of those Construction Completion Certificates and prior to the issuance of Final Acceptance Certificates for all of the surface and underground Local Improvements, the security maintained by the Municipality is not less than:
i. twenty-five (25%) per cent of the estimated costs of the surface and underground Local Improvements that were the subject of the Construction Completion Certificate; and
ii. one hundred (100%) per cent of the estimated costs of all of the Landscaping requirements and the remaining Local Improvements (e.g. second lift of asphalt).
(b) The amount of the security provided by the Developer to the Municipality may, in the sole and absolute discretion of the Municipality, be further reduced on application by the Developer upon the Developer having received Final Acceptance Certificates for the surface and underground Local Improvements and a Construction Completion Certificate for the Landscaping Local Improvements provided that at all times thereafter the security maintained by the Municipality shall not be less than one hundred (100%) per cent of the estimated costs of constructing and installing all of the Landscaping and any remaining Local Improvements.
(c) Upon the issuance of the Final Acceptance Certificate for the Landscaping and any remaining Local Improvements, the Developer may apply to the Municipality, and the Municipality may, in its sole and absolute discretion, approve a third and final reduction in the security provided by the Developer pursuant to the terms of this Agreement to an amount determined by the Municipality in its sole and absolute discretion.
23.10 In the event that the Municipality is of the opinion that:
(a) a default by the Developer has not been rectified by the Developer in accordance with the provisions of this Agreement;
(b) a default by the Developer has been rectified by the Municipality in accordance with the provisions of this Agreement and the Developer has failed to pay the costs and expenses of such rectification within thirty (30) days after receipt from the Municipality of an account therefore;
(c) emergency repair work has been done to Local Improvements by the Municipality in accordance with the provisions of this Agreement and the Developer fails to pay the costs and expenses of such repair work within thirty (30) days after receipt from the Municipality of an account therefore;
(d) the Developer by any act or omission is in default of any term, condition or covenant of this Agreement; or
(e) the security to be provided by the Developer to the Municipality pursuant to this Agreement is due to expire within a period of sixty (60) days and the Developer has not deposited with the Municipality a renewal or replacement of such security in terms and form acceptable to the Municipality's solicitors, the Municipality may invoke the provisions of this Section, and make demands as payee and beneficiary under the security provided by the Developer to the Municipality pursuant to this Agreement.
23.11 In the event that the Municipality has negotiated, called upon, or otherwise received proceeds from, the security to be deposited by the Developer for any reason contemplated within this Agreement, then the Municipality shall be entitled to hold and apply any such funds as a security deposit in lieu of the original security.
23.12 In the event that the Municipality has negotiated or called upon the security to be deposited by the Developer with the Municipality, the Municipality may, at its option and discretion, use any funds thereby obtained in any manner the Municipality deems fit to discharge the obligations of the Developer pursuant to this Agreement.
Appears in 1 contract
Samples: Development Agreement
INSURANCE, INDEMNITY AND SECURITY. 23.1 15.1 The Developer shall indemnify, defend indemnify and hold save harmless the Municipality, Municipality and all of its respective officials, officers, employees employees, agents and authorized representatives contractors from and against any and all suitslosses, costs (including, without restriction, all legal costs on a solicitor and his own client full indemnity basis), damages, actions, paymentscauses of action, legal suits, claims and demands resulting from anything done or administrative proceedings, claims, demands, damages, liabilities, losses, interest, legal fees, costs and expenses sustained omitted to be done by the Municipality Developer in pursuance or purported pursuance of every nature and description, whether arising before or after the completion of any activity, work, maintenance or construction as contemplated in this Agreement and in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, by reason of any act, error, omission or fault whether active or passive of the Developer, its employees, contractors, sub-contractors, engineers, agents or anyone acting under the Developer’s direction or control or on its behalf in connection with or incidental to the any activity, work, maintenance or construction contemplated hereinAgreement.
23.2 15.2 The Developer covenants and agrees that it shall carry comprehensive liability insurance in the amount of $2,000,000.00 per occurrence, which insurance shall name the Municipality as an additional insured (as its interest may appear, including with respect to any and all operations by the Developer or its contractors upon or affecting property owned by, or under the care, control and management of, the Municipality) and require that the following provisions shall apply to such insurance:
(a) the Municipality shall be an additional insured in all public liability policies;
(b) all policies shall provide that an event of default on the part of the Developer, its servants or agents, shall not be an event of default on the part of the Municipality;
(c) none of the policies shall be cancelled unless thirty receive Thirty (30) days prior written days’ notice of cancellation is first given to the Municipality;
(d) copies of all policies of insurance shall immediately be provided to the Municipality upon written request by the Municipality; and 20 -DA-
(e) unless otherwise noted, the insurance policies shall have a minimum limit coverage of not less than FIVE MILLION ($5,000,000.00) DOLLARS per occurrence and an annual aggregated limit of not less than TEN MILLION ($10,000,000.00) DOLLARS:
(i) Public Liability change or Property Damage - Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage (aggregate) each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS;
(ii) Automobile Public Liability and Third Party Property Damage - Owned and Non-Owned Vehicles – Bodily Injury - each person TWO MILLION ($2,000,000.00) DOLLARS; each accident FOUR MILLION ($4,000,000.00) DOLLARS - Property Damage, each accident FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS; andcancellation.
(iii) Environmental Impairment Liability; which all shall be carried for such period as the Developer has any rights or obligations hereunder with respect to the Development Area, and a comprehensive liability policy, including extended coverage and malicious damage endorsement, as per industry standard, insuring the full value of the work undertaken by the Developer pursuant to this Agreement, automobile public liability and third party damage coverage, and environmental impairment liability.
23.3 15.3 In order to ensure to the Municipality full compliance by the Developer with the terms, covenants and conditions of this Agreement, the Developer hereby covenants and agrees that it shall deliver and deposit with the Municipality Municipality, security in the form hereinafter prescribed and that the following provisions shall apply to determining the amount of the security required to and the time or times at which the security shall be deposited with the Municipality:
(a) the security shall be deposited by the Developer with the Municipality upon the earlier of submission for registration of a Plan of Subdivision for the Development Area and prior to the Commencement sale of Construction any lots covered by a Plan of Subdivision, and commencement of construction of the Improvements;
(b) the security in respect of the Development Area, shall be determined in accordance with an amount equal to Twenty-Five (25%) percent of the Municipality’s Development Agreement Security Policy A-PI-053estimated costs of constructing and installing all of the Improvements, including landscaping, at a minimum amount of no less than $150,000, and such other amounts as attached to are required elsewhere under the provisions of this Agreement as Schedule “I”. For Agreement; and
(c) for purposes of this Section, the estimated cost for the Local Improvements shall be determined as follows:
(ai) if known at the time that this Agreement is entered intomade, as set out in Schedule "FE" of this Agreement;
(bii) if unknown at the time that this Agreement is entered intomade, but where actual tendered costs are available the tendered costs shall be used; or;
(ciii) where actual tendered costs are not available, the Developer's Consultant shall prepare cost estimates prepared by the Developer’s Consultant under their professional seal which shall be submitted to the Municipality for approval together with all applicable background documentation, and if approved by the Municipality, such cost estimates shall be used; and
(iv) where actual tendered costs are not available, and the Developer and the Developer's Consultant has not provided estimates for the Municipality to approve, the Municipality may establish estimated costs in its sole discretion for the purposes of establishing the required security.
23.4 The Developer understands and agrees that, during the term of this Agreement (including the Warranty Period for the Local Improvements prescribed by this Agreement), it will maintain in full force and effect all security and liability insurance prescribed herein.
23.5 15.4 The security referred to above shall consist of an "Irrevocable Letter of Credit" issued by a "Chartered Bank" or the "Treasury Branch", a Development Bond cash security deposit, or “Subdivision Bond” issued byby an approved surety company (which amount can be no greater than Ten (10%) percent of the total requried security), in the Municipality’s opinion, or a reputable surety companycombination thereof, or such other security as may be approved by the solicitors for the Municipality, including a cash security deposit, in the amount of the security required from time to time as described above; provided PROVIDED, that all security shall be in terms and form to be approved by the Municipality's solicitors. The Provided further that the Developer further covenants and agrees that upon the occurrence of a default on the part of the Developer under this Agreement, the Municipality may, at its option and without limiting any of its other remedies, draw on the security provided, accelerate and require payment in full of the security amount that would otherwise be required for a cash security deposit account, and such obligation shall be secured by the mortgage charge and/or encumbrance.
23.6 15.5 Any Irrevocable Letter irrevocable letter of Credit credit provided as security by the Developer shall contain provisions terms that provide for either: 20 -DA-:
(a) a covenant by the issuer that if the issuer has not received a release from the Municipality sixty SIXTY (60) days prior to the expiry date of the security, then the security shall automatically be renewed, upon the same terms and conditions, for a further period of one ONE (1) year; or
(b) a right on the part of the Municipality to draw upon the full amount of the Irrevocable Letter irrevocable letter of Creditcredit, or any portion thereof, in the event that the Municipality has not received a replacement letter, or confirmation of an extension or renewal of the existing letter, at least sixty SIXTY (60) days prior to the expiry of the security.
23.7 15.6 Any Development Subdivision Bond provided as security by the Developer shall be approved by the Municipality and its solicitor in the form attached hereto as Schedule “J”its sole discretion but, which in any event, shall contain the following terms and provisions:
(a) a statement that the Development Subdivision Bond is issued in favour of the Municipality as the sole obligee (the Municipality) Obligee and in reference to this Agreement and all its obligations thereunder;
(b) an acknowledgement by the issuing surety company that:
(i) that the Municipality shall be entitled to make a claim against the Development Subdivision Bond in accordance with the provisions of this Agreement;
(ii) , that such claim against the Development Subdivision Bond shall be payable upon demand; and
(iii) , and an undertaking by the issuing surety company undertakes to that it shall act promptly and in good faith of any review of a claim submitted by the Municipality;
(c) a statement that the Development each Subdivision Bond will permit partial claims and draws up to the total of the value of the Development Subdivision Bond; and
(d) a condition of each Subdivision Bond that the Development Bond it shall remain in effect until the obligations of this Agreement that are related to the construction, installation and maintenance of the Municipal Improvements are completed and approved by the obligee Obligee (Municipality), and may only be terminated upon the proper notice of the obligee Obligee (Municipality).
23.8 When . In that regard, when all Local Municipal Improvements described in this Agreement are completed and approved by the obligee Obligee (Municipality) and the Warranty Maintenance Period for such Local Municipal Improvements under this Agreement has expired, the obligee Obligee (Municipality) shall return the Development Subdivision Bond to the surety company for termination or advise the surety company in writing that the Development Subdivision Bond is terminated.
23.9 The Developer acknowledges and agrees, in the event that the Development Bond is 15.7 In regards to expire before completion of the Developer’s obligations security provided under this Agreement and it is not replaced prior to the said expirationAgreement, the Municipality may, at its sole option, demand payment under such Development Bond following terms and retain the funds as security for the performance of the Developer's obligations pursuant to this Agreement.conditions shall apply:
(a) any irrevocable letter of credit, or cash security deposit, Irrevocable Letter deposit (where an irrevocable letter of Credit, Development Bond credit has been called upon) or other security required or otherwise provided by the Developer to the Municipality pursuant to this Agreement is hereby assigned and pledged to the Municipality as security for the performance of the Developer’s obligations as contemplated herein (such assignment and pledge to be perfected by possession and/or registration);
(b) the Developer acknowledges having received a copy of this Agreement, and the security terms contemplated herein, and waives any right it may have to receive a copy of any Financing Statement or Financing Charge Statement in relation hereto; and
(c) notwithstanding any other provision of this Agreement and further, without prejudice to any other right or remedy of the Municipality, the obligation of the Municipality or its solicitor to release any security deposit funds held by it under or in connection with this Agreement (including, without restriction, any cash securitydeposit) is subject to the Municipality’s right to deduct or set off any amount which may be due by the Developer to the 20 -DA- Municipality or the amount of any claim by the Municipality against the Developer under this Agreement (including, without limitation, the amount of any liquidated damages). Without limitation, if the Developer is in breach or default of any provision of this Agreement or of any provision of any contract with any project manager(s), subcontractor or supplier, and, after receiving notice thereof, the Developer does not promptly remedy such default or breach or commence and diligently prosecute the remedy of such breach or default, the Municipality may (but shall not be obligated to) take any measures it considers reasonably necessary to remedy such default or breach and any costs or liabilities incurred by the Municipality in respect thereof may be deducted from or set off against any amount(s) to be paid or released to the Developer under this Agreement. This provision shall survive the termination of this Agreement for any reason whatsoever.
15.8 In the event that the irrevocable letter of credit shall expire prior to the date for release of the security under this Agreement, and the Developer has failed to provide a replacement letter of credit or evidence of renewal satisfactory to the Municipality not less than Thirty (30) days prior to that expiration date, the Municipality may draw upon all or any portion of the security and hold or apply the proceeds in the same manner as a cash security deposit.
15.9 The Municipality and the Developer agree that any amounts of money presently or hereafter owing by the Developer to the Municipality pursuant to the provisions of this Agreement, whether by way of a liquidated or unliquidated claim, and howsoever arising, shall be a first financial charge and encumbrance against the lands described in Schedule "A" of this Agreement, the Developer does hereby mortgage, charge and encumber the said lands as security for the payment or performance of the Developer’s obligations within this Agreement, and further, that the Municipality shall be entitled to recover any such monies owing, together with all costs on a solicitor and client basis, by enforcing the charge and encumbrance against the lands described in Schedule "A" of this Agreement.
15.10 It is understood and agreed by the Developer that the Developer shall, during the currency of this Agreement (including any Guarantee Period for the Improvements prescribed by this Agreement), maintain in full force and effect all security and liability insurance prescribed herein.
15.11 Any security or insurance herein required to be deposited by the Developer may be required to be increased or decreased by the Municipality upon written notice to the Developer at any time during the currency of this Agreement if it shall appear to the Municipality, in its discretion, that the security or insurance deposited is excessive or insufficient in relation to the costs or protection to the Municipality, for which security or insurance has been provided. Without limiting the generality of the foregoing the Municipality may require an increase in security if the Developer has failed to comply with the construction timetable approved under Section 3.1, or if the Developer has been issued a notice of default under Section 13.
15.12 The amount of security and insurance to be provided by the Developer may, in the sole and absolute discretion of the Municipality, be reduced on application by the Developer upon the Developer having received a Construction Completion Certificate or Final Acceptance Certificate for the Improvements, or any of them, so completed; PROVIDED THAT, after the issuance of any Construction Completion Certificates and prior to the issuance of Final Acceptance Certificates for all of the Improvements, the security maintained by the Municipality shall not be less than:
(a) Fifteen (15%) percent of the estimated costs of the Improvements located on or under Public Property only which were the subject of the Construction Completion Certificate; and
(b) Twenty-Five (25%) percent of the estimated costs of constructing and installing all of the Improvements yet to be completed, being all those portions of the Improvements for which no Construction Completion Certificate has been issued.
15.13 In the event that the Municipality is of the opinion that:
(a) a default by the Developer has not been rectified by the Developer in accordance with the provisions of this Agreement;
(b) a default by the Developer has been rectified by the Municipality in accordance with the provisions of this Agreement and the Developer has failed to pay the costs and expenses of such rectification within Thirty (30) days after receipt from the Municipality of an account therefore;
(c) emergency repair work has been done to Improvements by the Municipality in accordance with the provisions of this Agreement and the Developer fails to pay the costs and expenses of such repair work within Thirty
Appears in 1 contract
Samples: Development Agreement
