ORD 1203 05/09/2017 Ci
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"City of Choice"
ORDINANCE NO: 1 903
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CIBOLO,
TEXAS AUTHORIZING AND APPROVING AMENDMENTS TO THE
VALID AND EXISTING DEVELOPMENT AGREEMENT BETWEEN
THE CITY AND CIBOLO TURNPIKE L.P.; SPECIFYING THE FORM
BY WHICH SUCH AMENDMENTS TO THE EXISTING AGREEMENT
WILL BE MADE; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, representatives of the Texas Department of Transportation (TxDOT), the
City of Cibolo, Texas (the City), and Cibolo Turnpike L.P. (Turnpike, and together with the City,
the Parties) previously engaged in meaningful discussions, consistent with the City's
Thoroughfare Plan and Land Use Plan, to determine a method of easing traffic concerns in and
around the City; and
WHEREAS, the Parties and TxDOT identified a toll road highway and additions to
already planned improvements to FM 1103 as transportation improvements that would create
significant economic impact and benefits to the City and the surrounding area; and
WHEREAS, the City formed a Blue-Ribbon Committee (the Committee)to further study,
provide feedback, and ultimately make recommendations as to this transportation concept; and
WHEREAS, the Committee fully endorsed this project and recommended that the City
further proceed in analyzing this undertaking, whereby the City, with Turnpike's assistance,
performed a preliminary feasibility study to determine the viability of the identified project,
considering projected traffic flow, revenue generation, and estimated construction costs of such a
project; and
WHEREAS, the City held a series of public hearings to gather public input regarding the
prospective project, and afterward, the City Council of the City (the City Council) reviewed and
accepted the feasibility study and voted to move forward with the process, which included City
staff involvement in drafting and negotiating preliminary agreements to guide the Parties'
prospective actions; and
WHEREAS, on February 28, 2017, the City Council ordered that the City enter into a
Development Agreement (the Existing Agreement) with Turnpike, which specified and set forth
the terms for the prospective design, construction, operation, and maintenance of a segment of
FM 1103 within the City, add certain "express lane" flyovers thereto, and construct an additional
28227752.2
limited-access high speed tolled highway from Weil Road and FM 1103 to IH 10 (the Project);
and
WHEREAS, the Existing Agreement, a copy of which is attached hereto as Exhibit A,
represents a valid and existing contractual agreement between the Parties; and
WHEREAS, based on feedback from parties having an interest in the Project, the Parties
have agreed to amend certain terms and provisions of the Existing Agreement (the Amendment),
for the purposes of further describing and refining certain aspects of the Existing Agreement to
ensure accuracy of Project information contained therein, clarifying cost allocation
responsibilities (which clarifications are advantageous to the City) relating to and resultant from
Project development, editing minor typographical and formatting errors, and eliminating
reference to provisions that would otherwise indicate location of any Project component within
the City of Schertz, Texas; and
WHEREAS, the amendments to the Existing Agreement to be effectuated by the
Amendment are identified in the comparison document attached hereto as Exhibit B, which
amendments (and only which amendments) represent the subject of this Ordinance; and
WHEREAS, the amendments to the Existing Agreement identified in Exhibit B hereto
shall be memorialized in the Amendment, the form of which is attached hereto as Exhibit C, for
the purpose of future administrative ease in reference to a singular document and not in
substitution of the Existing Agreement (whose unamended terms remain valid and in effect as of
their date of inception); and
WHEREAS, the City Council hereby finds and determines that the adoption of this
Ordinance is in the best interests of the residents of the City; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CIBOLO, TEXAS
THAT:
SECTION 1. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Ordinance for all purposes and are adopted as a
part of the judgment and findings of the City Council.
SECTION 2. The City Council hereby approves the amendments to the Existing
Agreement identified in Exhibit B hereto. To memorialize such amendments to the Existing
Agreement, the City Council hereby authorizes the Mayor to execute the Amendment, in the
form attached hereto as Exhibit C, as evidence of the act and deed of the City Council for any
and all purposes.
SECTION 3. This Ordinance shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
SECTION 4. If any provision of this Ordinance or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Ordinance and the application
of such provision to other persons and circumstances shall nevertheless be valid, and the City
28227752.2 -2-
Council hereby declares that this Ordinance would have been enacted without such invalid
provision.
SECTION 5. This Ordinance shall not be deemed to supersede or replace any prior City
Council action relating to matters that may be determined to include the subject of this
Ordinance, including prior approval of the Existing Agreement. If for any reason the
Amendment is found to be invalid or unenforceable, the Existing Agreement, in its form as it
existed prior to the date hereof, shall represent the agreement of the Parties relative to the Project
(as it is therein further described and defined).
SECTION 6. It is officially found, determined, and declared that the meeting at which
this Ordinance is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Ordinance, was
given, all as required by Chapter 551, Texas Government Code, as amended.
SECTION 7. This Ordinance shall be in force and effect from and after the date of its
adoption, and it is so ordained.
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28227752.2 -3-
PASSED AND APPROVED, this the 9th day of May, 2017.
CITY OF CIBOLO, TEXAS
Mayor
ATTEST:
-` Z
City Secretary
(CITY SEAL)
28227752.2 -4-
EXHIBIT A
EXISTING AGREEMENT
28227752.2 A-1
DEVELOPMENT AGREEMENT
between
the City of Cibolo, Texas
and
Cibolo Turnpike L.P.
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is made and entered into as of
("lard" 1 o). .0I7 (the "Effective Date"), by and between the. city of Cibolo, Texas
("City"), and Cibolo Turnpike L.P., a Texas limited partnership ("Cibolo Turnpike").
Representatives of the City, the Texas Department of Transportation. ("TxDOT"), and
Cibolo Turnpike, by and among themselves, have engaged in meaningful discussions identifying
both a transportation improvement and a significant economic development, project that,
consistent with the scope of the City's Thoroughfare Plan and Land Use.Plan, would benefit the
City and the area around the proposed Project(as detailed below). The parties to the Agreement
believe that the Project offers a number of diverse, ongoing opportunities to maximize the.
economic benefits and opportunities for public and private entities within the City derived from a
limited-access high speed tolled highway. These benefits realized throughout the City include:
(1) an alternative separated grade crossing over the Union Pacific Railroad and FM 78; (2) a
bridged crossing over the frequently prone-to-flooding Cibolo Creek watershed; (3) additional
high speed northwest-southeast highway capacity; (4) development opportunities along the
proposed Project; (5) development,maintenance and diversification of the economy of the State;
(6) fostering the growth of enterprises based in the San Antonio metropolitan area and;
(7) development and expansion of transportation and commerce within the State.
PROJECT OVERVIEW
The Project that is the subject of this Agreement is comprised of three interrelated components;
(1) the "Cibolo Parkway", which is the design, build, finance; operation and maintenance of a
new tollroad facility extending approximately 7 miles from the intersection of Weil Road and
FM 1103 southeast to IH 10; (2) the "FM 1103 Improvements", which consists of the
improvements to FM 1.103 from IH 35 to Rodeo Way (a corridor of approximately 4 miles)to be
constructed by TxDOT; and (3)the"Cibolo Expressway",which consists of adding two express
lanes in the median of the FM 1103 Improvements. The term "Project" means the (1) design,
build and finance of the Cibolo Expressway and the Cibolo Parkway and (2) operation and
maintenance of the FM 1103 Improvements, the Cibolo Expressway, and the Cibolo Parkway.
Each Project component, as more fully described herein, is shown on the Project map attached
hereto and incorporated by reference as Exhibit 1.
Tollroad Feasibility Process
The City formed a Blue-Ribbon Committee comprised of diverse community membersto
consider the idea / concept of a tollroad within the community, and to be part of the City's
thoroughfare plan. The Blue-Ribbon Committee fully endorsed the tollroad concept and
recommended that the City further advance the tollroad.
The City with Cibolo Turnpike's assistance performed a Feasibility Study to analyze the viability
of a possible tollroad facility in the City. The Feasibility Study considered the projected traffic
and revenue and estimated project costs. Inaddition, as part of the study process a series of City
Public Hearings were held to gather citizen input about this possible Project. The City reviewed
Initials: CITE—, ) CIBOLO TURNPIKEc( /-- Page 1
and accepted the Feasibility Study, and voted to move forward with the process to develop the
Project.
Cibolo Expressway(FM 1103—Improvements)
TxDOT is currently planning improvements on FM 1103 from IH 35 to Rodeo Way Drive. The
proposed TxDOT improvements are to widen the existing two-lane facility to four-lanes,
including raised medians and left turn lanes,.two 5' bike lanes, curbs and gutters, underground
storm sewer system, and 6' sidewalks along both sides of the roadway (collectively referred to as
the "FM 1103 Improvements"). The existing FM 1103 right-of-way ("ROW") is 80 feet wide,
and the proposed ROW is 120 feet. TxDOT will acquire the additional ROW. The City will
request TxDOT that the design for the FM 1103 Improvements accommodate for the addition of
future express lanes within the median.
Under TxDOT's "Turnback Program" the City will request that upon TxDOT's completion of
the FM 1103 Improvements that T*DOT transfer to it (or an instrumentality thereof) ownership
of FM 1103 from IH 35 to Weil Road including the ROW.
Cibolo Turnpike proposes to add two express lanes within the median, a distance of
approximately 4 miles the "Cibolo Expressway. The Cibolo Expressway project would begin
after the completion of the TxDOT FM 1103 Improvements, and the City's acceptance of"FM.
1103 from TxDOT. The Cibolo Expressway will be funded solely by Cibolo Turnpike; and, as
provided herein, the construction of the Cibolo Expressway shall be coordinated with TxDOT so
that the construction of the express lanes shall occur simultaneously with the construction of the
proposed TxDOT improvements in order to minimize traffic disruption on FM 1103.
Cibolo Parkway
Cibolo Parkway is theproposed new tollroad facility from the intersection of Weil Road and FM
1103 to the Zuehl Road Exit on I-10.approximately 7 miles long, Cibolo Turnpike, on the City's
behalf, will develop Cibolo Parkway that will include the design (with a concrete surface in
accordance with TxDOT standards for roads having similar size and scope), environmental
studies,right-of-way acquisition, construction,maintenance, and operation.
Project Development.Process
Cibolo Turnpike will develop the Project in two phases with Phase I being development of a Pro
Forma Model to verify the financial viability of the Project, and Phase II being the detail design,
ROW acquisition, and construction of the Project.
RECITALS
A. Essential transportation improvements- in and around the City are required to
satisfy the accelerated growth being experienced there. Financial assistance from the State is not
currently available for all of the City's approved and critical projects; therefore, the City has
resourced another alternative to help provide the funding it needs.
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B. Extensive, prime economic development opportunities exist in an areaof the.City
bound by the FM 78 on the west and IH-10 on the east. These opportunities includecommercial
and residential growth along both of these major transportation corridors, as well as new
improvements to the City's infrastructure that Will implement and manage planned growth for
this undeveloped area of the City..
C. The City has determined that it would be in its best interests, in fulfilling its
public purpose and legislative mandate,to develop a limited-access high speed tolled highway to
satisfy economic and population growth issues as well as to provide an alternate
southeast/northwest route separated grade crossing over the Union Pacific.Railroad and FM 78,
between IH-35 and IH-l0.
D. The City wishes to further define the feasibility of the Project,, and thus Cibolo
Turnpike will undertake studies, including the Pro Forma Model, to determine whether the
Project appears to be feasible (financially and otherwise), and to determine Whether surplus
revenues under the Operating Agreement(as hereinafter defined) can be expected to support a
significant portion, if not all, of the Project's projected construction, operation and maintenance,
and finance costs.
E. As evidence of the City's desire to advance the PrOject, and in furtherance of the
Blue-Ribbon Committee's recommendations the City will do the following: execute this
Agreement; petition the Alamo Area Metropolitan Planning Organization (the "AAMPO") for
the adoption of the Project,and formally place the Project on the funded portion of the AAMPO's
Metropolitan Transportation Plan; and request that TxDOT enter into a Memorandum of
Understanding with Cibolo Turnpike for the development of the Project.
NOW, THEREFORE, in consideration of the premises, covenants, agreements and
obligations contained herein,the parties do hereby agree as follows:
ARTICLE I
SUBJECT OF AGREEMENT
A. Purpose of This Agreement
The purpose of this Agreement is for the development, finance, operation, management, and
maintenance of the Project by Cibolo Turnpike. This Agreement defines the development of the
Project, and an Operating Agreement defines the PrOject operating terms all as mutually agreed
upon by the Parties.
B. Parties to This Agreement
{
The City is a home rule municipality, exercising governmental functions and powers as a.home
rule city in the State of Texas. The "City," as used in this Agreement includes the City-of
Cibolo, Texas, and any assignee of, instrumentality of, or successor to its rights, powers, and
responsibilities.
Initials: CITY 4<4:1) CIBOLO TURNPIK�C✓ Page 3
Cibolo Turnpike, LP, is a Texas limited partnership and Cibolo Turnpike, GP, LLC, a Texas
limited liability company, is its sole general partner created for the development and operation of
the Project.
ARTICLE II
TERM AND CANCELLATION
Section 2.1
(a) This Agreement shall be for a term of fifty (50) years, plus additional
time, as needed to conform- with the Financial Model, beginning on the Effective Dateas'
defined herein (the "Term"). The Operating Agreement as part of this program will run co-
terminus with the Development Agreement.
(b) The City hereby authorizes, permits and grants a non-exclusive right to
Cibolo Turnpike, and to all agents, representatives, consultants, employees, and invitees of
Cibolo Turnpike, easement,,right-of-way, ingress, egress; access, and use rights in, over; upon,
across and along all ingress, egress and access portions of all streets adjacent to the Project
belonging to the City, to Cibolo Turnpike's for the development-and operation of the Project
and/or otherwise as provided for in this Agreement. Any temporary road closures and. / or
temporary detours will be coordinated:with the City.
ARTICLE III
GENERAL CONTRACT PROVISIONS
Section 3.1 General Contract Provisions. Notwithstanding anything.in this Agreement
to the contrary, to the extent applicable, any and every contract Cibolo Turnpike may negotiate:
or execute under the authority of this Agreement, either on behalf of itself,behalf of the City, or
both itself and the City shall be subject to terms and conditions of this Section 3.1,which are as
follows:
(a) Cibolo Parkway:
(i) Land Acquistion.
A. Costs: At its sole cost and expense, Cibolo Turnpike shall acquire all necessary
ROW for the Cibolo Parkway.
B. Land Acquisition Process. Cibolo Turnpike shall negotiate Cibolo Parkway
facility land acquisition transactions on a fair-market price basis, as determined by
independent appraisals; and, the City's institution of eminent domain shall only be
used as a last resort for the acquisition of any new ROW. All land acquisitions
shall also be subject to the following:
1. In 'the event that eminent domain is determined to be necessary, Cibolo
Turnpike shall reimburse the City for any and all costs the City incurs in
undertaking the eminent domain action.
(ii) Development of the Cibolo Parkway shall be subject to the following: �u
//��� k
Initials: CITY_ CIBOLO TURNPIKE`�/lIIL../ Page 4 ap
4
A. Route. As this is a community driven project, the City shall have the final
determination as to the Cibolo Parkway route, so that the route complies with the
City's Thoroughfare Plan and Future Land Use Plan and considers projected future
development.
B. Construction Standards. Cibolo Turnpike will develop the Cibolo Parkway using
TxDOT standards for roads of similar size and scope to ensure a quality design.
C. The Cibolo Parlcway road surface shall be concrete and the road construction shall
comply with the requirements of any City ordinance regulating road and street
construction.
(b) Cibolo Expressway:
(i) Development of Cibolo Expressway. TxDOT is currently planning improvements on
FM 1103 from IH 35 to Rodeo Way.Drive. The proposed TxDOT improvements are.
to widenthe existing two-lane facility to four-lanes, including raised medians and,left
turn lanes,two 5' bike lanes, curbs and gutters, underground storm sewer system, and
6' sidewalks along both sides of the roadway. (the "FM 1103 Improvements") The
existing FM 1103 right-of-way ("ROW") is 80 feet wide, and the proposed ROW is
120 feet. TxDOT will acquire this additional ROW. The City will request TxDOT
that the design for the FM 1103 Improvements accommodate for the addition of
future express lanes (being the Cibolo Expressway) within the median; and that
TxDOT coordinate the construction of the Cibolo Expressway express lanes with the
construction of the. proposed TxDOT improvements-'in order to minimize traffic
disruption on FM 1103.
(ii) Land Acquisition. In the event that additional ROW is needed for the Cibolo
Expressway project, beyond the additional ROW that TxDOT acquired as part of the
FM 1103 Improvements, Cibolo Turnpike shall.acquire the ROW following all City,
State, and Federal rules and procedures. Any ROW acquired shall be consistent with
the provisions of Section 4.8.
(c) Financing. The Project shall be financedsolely by Cibolo Turnpike from private capital-and
investment. Further,in no event shall the following ever occur:
a. Creation of a public improvement district to fund any aspect of the toll lanes of
Cibolo Expressway and Cibolo Parkway; or
b. The use of dedicated Local, State or Federal tax dollars to fundany aspect of the toll
lanes of Cibolo Expressway and Cibolo Parkway;or.
c. The use of public grants or direct governmental loans, such as Transportation
Infrastructure Finance or Innovation Act loans, to fund any aspect of the toll lanes-of
Cibolo Expressway and Cibolo Parkway.
(d) Transfer of Title. Upon completion of the Project, right of title and possession to the real
property and the improvements shall be transferred to the City(or an instrumentality thereof),
except for those rights of operation transferred to Cibolo Turnpike pursuant to the Operating
Agreement, unencumbered by any liens or restrictions against its use as. a public right-Of-
way, (including the right to place public utilities in such rights-of-way).
(e) Project Operation; The Operating Agreement. The right, duty and obligation to operate the
Project upon its completion shall be the responsibility of Cibolo Turnpike. Operational
requirements relative to the Project shall minimally include the following:
(i) That the term of the Operating Agreement shall run co-terminus with this Agreement.
Initials: CITYy CIBOLO TURNPIKEz —' Page.5
(ii) That tolls for vehicles traveling on the tolled portions of the Project shall be subject to the
provisions of Section 9.2(iii).
(iii) That the following vehicles shall not be subject to any toll for travel on the Project:
official City of Cibolo vehicles, official City of Schertz vehicles, official Schertz-Cibolo-
Universal. City Independent School District vehicles, and official :Guadalupe County
Sheriff's Office vehicles, vehicles being used by an entity to provide emergency services.
to the City of Cibolo under contract; orsuch other vehicles exempted by state law from
the payment of tolls;
(iv) That Cibolo Turnpike shall advise the City of the initial and future toll ratesat least 90
days before implementation;
(v) That the standards for Project operation shall, minimally, adhere to TxDOT's operational
protocol for projects of similar size, scope and traffic count;.
(vi) That the City shall be entitled to provide to Cibolo Turnpike input regarding Project
operation, which input shall be taken into consideration and, to the extent commercially
and practically reasonable (within the financing structure to which the Project is at such
time subject), implemented;
(vii) That the payment of operations and maintenance costs shall have a,first priority position
in the event of the operator's default or bankruptcy;
(viii) That Cibolo Turnpike shall maintain a customer service office within the corporate limits
of the City of Cibolo for the purpose of resolving claims of'erroneous toll charges and
related matters;
(ix) Requirement that operator to maintain adequate liability insurance;and
(x) A"buyback"provision,which shall state the terms and conditions by which the City may
buy Cibolo Turnpike's interest in the Operating Agreement at a future date.
(f) Prior to Financial Close, the City and Cibolo Turnpike shall negotiate the terms of a.stand-
alone "operating agreement" regarding the Project's operation that, minimally, encompasses
a. through g. of this Section 3.1(e), which operating agreement shall be presented to City
Council for consideration; provided, however, that the failure of the City and Cibolo
Turnpike to enter into a separate operating agreement shall riot invalidate Cibolo Turnpike's
right, duty and obligation to operate the Project as specified hereunder; provided further,
however, that any operation of the Project by Cibolo Turnpike shall be subject to the
minimum operational requirements specified in a. through g. of this Section 3.1(e). For
purposes of this Agreement, the term "Operating Agreement" shall mean any agreement
pursuant to which Cibolo Turnpike operates the Project, whether by separate agreement or'
pursuant to the provisions of-this Section 3.1(e) and other applicable provisions of this
Agreement.
(g) Non-Compete Language Prohibited. Cibolo Turnpike "shall never require the City to enter
into any "non-compete" agreement; and no contract authorized under this Agreement or the
Operating Agreement shall ever negate or diminish the City Council's authority to plan, fund
and construct future streets, roads, highways, mass transit, or other such improvements as
City Council may, in its sole discretion,find necessary to address the trausportation.needs of
the City and its citizens. Further,,should such a"non-compete"provision be incorporated in
any contract or agreementauthorized by this Agreement, it shall be void ab initio.
Initials: CITYa CIBOLO TURNPII{- Page 6
(h) Other Governmental Approvals. The obligationsof the.Pattiesshall be subject to the ability
to obtain any necessary approvals from other governmental entities that are required for
completion and operation of the Project.
ARTICLE IV
PROJECT DEVELOPMENT
Section 4.1 Project Development-Phase I.
(a) Pro Forma Model. During Phase I of Project Development, Cibolo
Turnpike shall cause to be prepared a.Pro Forma Model for the Project. Cibolo Turnpike will:
use the Pro Forma Model to determine the financial viability of the Project. The Pro Forma
Model analysis will include the preliminary determination of various risk factors as they relate to
development of the Project, suchas environmental, design, cost and traffic and revenue issues.
(b) Term of Phase I. Cibolo Turnpike shall begin Phase I upon the execution
of this Agreement, and will diligently work on the Pro Forma Model. Upon the completion of
the Pro Forma Model analysis, Cibolo Turnpike will present the results to the City, which shall
include Cibolo Turnpike's proposed plan for Project Development - Phase II. Phase I is
anticipated to take approximately 10-12 months to complete.
Section 4.2 Project Development-Phase II.
(a) Project Development - Phase II is the development of the Project.
including the detail design,ROW acquisition,bidding, and construction.Including.developing the
Financial Model (as detailed below in Section 4.2(c)), and securing the funding as required for
the development of the Project. Cibolo Turnpike shall comportwith the requirements Texas
Local Gov. Code Chapter 212, Subchapter C. ("Developer Participation in Contract for Public
Improvements")with respect to the development of the Project
(b) Term of Phase II. Phase II the development of the Project will begin after
Cibolo Turnpike completes Phase I. Pro Forma and determines that the Project is financially
viable. Commencement of Project construction shall not begin until Project funding) has
occurred.(as detailed below in Section 4.3. Phase II will be complete uponthe completion and
acceptance of the construction of the Project.
(c) Financial Model. Financial Model means the computerized financial
model including projections arid assumptions for operation of the Project showing; among other
things: (a) costs for the operation and maintenance of the Project, including management
payments to Cibolo Turnpike for its operation of the Project; (b) debt service costs for debt
incurred by Cibolo Turnpike related to the Project; (c) reserves for operations and for capital
improvements or such other reserves as may be required by sound engineering practice; (d)
payments to Cibolo' Turnpike as a return on equity invested by its partners, based on the Base
Case Equity IRR, as defined and set forth in the Financial Model; and (e) payments to the City
Initials: CITY 1(-7,49 CIBOLO TURNPIKE II,.... ._...�..�.�. Page 7
and Cibolo Turnpilce as a split of all remaining revenues from the operation of the Project,based
on the percentages as set forth in the Financial Model.
(d) Construction Contract. Cibolo Turnpike shall advertise for construction.
bids, issue bid proposals, receive and tabulate the bids, and award and administer the contract or
contracts for construction of the Project (the "Construction Contract"). Administration of the
Construction Contract shall include the responsibility for construction engineering, material
acceptance testing, and constructionquality acceptance, and for issuance of any change orders,
supplemental agreements, amendments, or additional work orders that may become necessary
after the award of the Construction Contract. The bidding process is to be competitive and.
comply with all applicable federal and state laws. Copies of the Construction Contract shall be
provided to the City, including any bond or insurance requirement as detailed herein.
(e) Insurance and Bonding Requirements
(i) Performance Bonds. Cibolo Turnpike will provide Performance
Bonds to ensure completion of the Project. In addition, included within any successful bidder's
Construction Contract, the successful bidder shall include a Performance Bond to ensure
completion of the Project.
(ii) Insurance Requirement. Cibolo Turnpike will provide the
appropriate construction and management insurance package for the development of the Project
(the "Insurance Coverage"). In addition, included within any successful bidder's Construction
Contract will be the applicable Insurance Coverage consistent with the City coverages and as
stated in Section 4.2(d) above.
(f) Development Standards / TxDOT Coordination. As part of the
development of the Project, Cibolo Turnpike will develop the Project using TxDOT standards
(for road projects of similar size and scope) to ensure a quality design. In addition, Cibolo
Turnpike will continually coordinate with TxDOT with all aspects of the Project including
environmental coordination / approvals, and design approvals. Cibolo Turnpike will follow
TxDOT's guidelines for `local let' projects. The Project is planned to have a concrete pavement
surface as previously described. Cibolo Turnpike will consult with TxDOT and the City
regarding pavement design.
(g) Construction Management Services. During the construction of the
Project, Cibolo Turnpike shall manage the progress of construction throughfinal completion of
the Project. Cibolo Turnpike shall monitor the timing of commencement, progress and
completion of Project construction by the contractor in accordance with the terms,of the design,
bid documents, environmental compliance issues, and the Construction Contract, and shall
coordinate with the City and TxDOT as necessary or advisable to ensure compliance with any
applicable State and federal requirements.
(h) Project Communication. During the construction of the Project, Cibolo
Turnpike shall periodically, and no event less than once every three months, report the Project.
progress to the City Council. The first report shall provide City Council with an estimated
timeline for completing each phase of the Project, the estimated 'Project costs, and any
Initials: CITY CIBOLO TURNPIKE CNC- Page 8
anticipated issues that may delay completion of the Project. Thereafter, Cibolo Turnpike.shall
update the City Council on construction progress and Project costs incurred during the preceding
quarter.
(i) Project Completion. When the Project is complete, Cibolo Turnpike shall
issue and sign a "Notification of Completion" certifying that all work has been completed in
accordance with the requirements of this Agreement, all governmental approvals, and applicable
laws.
Section 4.3 Development Funding. Cibolo Turnpike commits to use its commercially
reasonable efforts to raise sufficient capital, either debt and/or equity (the "Development
Capital") to be used to pay substantially all of the developmentcosts of the Project.Funds for the
development of the Project shall be secured prior to the commencement of Project construction
(evidence of acquisition of which financing is referred to herein as "Financial Closing").
Section 4.4 Authority and Responsibility of Cibolo Turnpike During Development
Period Regarding the Cibolo Parkway and Cibolo Expressway. The City acknowledges and
agrees that, consistent with and subject to the provisions of Article IV, during. Phase I and Phase.
II of the Project's development, Cibolo Turnpike shall be responsible for, and have the authority
to take, all actions it deems reasonably necessary to achieve the Financial Closing and thereafter
for any further actions reasonably necessary to pursue all or any part of:any Phase II (being the
Project's development period). As noted above, Cibolo Turnpike Will develop the Project
following Texas Local Gov. Code Chapter. 212, Subchapter C. (Developer Participation in
Contract for Public Improvements), which provides for Cibolo Turnpike managing the
development of the Project. There may be additional actions that may be subject to the consent
of City, which consent shall not be unreasonably withheld, may include, without limitation; the
following:
(a) Managing theday-to-day business affairs of City relating to the Project.
(b) Retaining engineers, consultants, attorneys, accountants,financial advisors
and other professionals andentering into contracts with Cibolo Turnpike.
(c) Identifying potential Project sites and negotiating for the acquisition of
such Project sites.
(d) Commissioning and preparing all Project studies.
(e) Selecting technology for the Project and-negotiating for the acquisition or
license of such technology.
(f) Designing or supervising the design of the Project; including size,
configuration,performance levels,operating parameters and related design matters.
(g) Applying for such governmental approvals as may be required for the
Project.
(h) Preparing such biddocuments as. may be required for the acquisition of
equipment, services and other assets necessary for the Project:
(i) Negotiating contracts for the procurement of materials and supplies to be
utilized by the Project.
(j) Negotiating the acquisition of(or options to acquire) easements and rights
of way as may be required for the Project. JJ
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(k) Negotiating contracts for Project utilities.
(1) Negotiatingcontracts for the sale or other disposition of property
determined to be surplus relative to the development of the Project.
(m) Developing a plan of financing, preparing financing documents,preparing
offering documents and doing all related work necessary to achieve Financial Closing.
(n) Developing a Market Standard package of insurance for the Project.
Section 4.5 Responsibility for Development Costs. Cibolo Turnpike shall be
responsible for the Project's development costs, including,the payment of all costs incurred by
Cibolo Turnpike in performing its obligations of the Agreement, (which costs are subject to
reimbursement from the Financial Closing).
Section 4.6 No Liability for the Development Costs. If the Financial Closing does not
occur, except as otherwise expressly set forth in the Agreement, neither City nor Cibolo
Turnpike shall have any obligation, express or implied, to reimburse the other Party for any
Project development cost, but any Party which breaches a material provision of this Agreement,
and fails to cure such breach, shall be liable for actual damages suffered by the other Party.
Section 4.7 Level of Effort; Cooperation.
(a) In developing the Project under this Agreement,. Cibolo Turnpike's
obligations shall be limited to commercially reasonable efforts. Nothing herein shall imply or
create the inference that if Cibolo Turnpike concludes, in its sole discretion, that the Project as
envisaged by the Agreement will not be economically feasible or are not capable of being
completed on a commercially reasonable basis,that Cibolo Turnpike must nonetheless continue
developing the Project and expending additionalfunds; provided that if Cibolo Turnpike reaches
a conclusion that the Project as envisaged by the.Agreement will not be economically feasible or
are not capable of being completed on a commercially reasonable basis, Cibolo Turnpike will
deliver a "Determination of Non-Feasibility" to the City, expressing this conclusion and the
reasons therefor. However, if Cibolo Turnpike reaches a conclusion that the Project, as
envisaged by the Agreement,will be economically feasible and capable of being completed on a
commercially reasonable basis, Cibolo Turnpike will deliver a"Determination of Feasibility"to
the City, expressing this conclusion before the date of termination, as stated in Section 4.10..
Upon the City's receipt of a "Determination of Feasibility" Cibolo Turnpike shall become
contractually obligated to fully complete the Project as envisaged by the Agreement.
(b) Subject to the other provisions of this Agreement, the Parties.hereto shall
cooperate fully with each other and their respective officers, directors; employees, agents,
counsel, accountants and other designees in connection with any steps required to be takenas a
part of the Project.
Section 4.8 Right of Way(ROW).
(a) ROW Coordination. The Parties agree to coordinate With TxDOT and any
other governmental authority in an effort to acquire any additional rights of way, including
railroad crossing permits/approvals or sites for the Project through the use of existing or acquired
road rights of way or other locations.
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(b) ROW Acquisition Process. Cibolo Turnpike will acquire the necessary
ROW for the Project. The ROW acquisition process will follow all applicable State and federal
rules regarding the acquisition of ROW. Cibolo Turnpike will keep the City informed-
throughout the ROW acquisition, including status, issues, and other items that may occur.
Cibolo Turnpike goal and as directed by the City, is to acquire the ROW through a negotiated
process and terms; however, only if all other means fail will the acquisition go to eminent
domain.
(c) Eminent Domain. Only, after Cibolo Turnpike's good faith attempt (as
established, minimally, as the basis upon which TxDOT exercises the power of eminent domain
in similar circumstances) to acquire the ROW, then does the City agree to allow the use of its
eminent domain authority, exercised only in accordance with the provisions of applicable Texas
law, to secure remaining ROW property on behalf of the City.
(d) ROW Title. Title of the ROW property will ultimately transfer to and be
held by the City (or an instrumentality thereof). During the ROW acquisition title of the ROW
may be with an another entity to facilitate the process. The identification and use of the entity
will be submitted for approval of the City,which approval shall not be unreasonably withheld.
Section 4.9 Ownership of the Studies; Government Approvals.
(a) In recognition of the fact that Cibolo Turnpike may have paid for the
studies, Cibolo Turnpike shall retain ownership of such studies and government approvalsissued
to Cibolo Turnpike during the Project's development. All other studies and government
approvals obtained by or issued to Cibolo Turnpike shall remain as the property of Cibolo
Turnpike and in the eventof a termination of this Agreement, all studies and government
approvals obtained by or issued to Cibolo Turnpike shall remain as the property of Cibolo
Turnpike. Nothing in this subsection shallpreclude the Parties from agreeing, on mutually
acceptable terms, for the transfers the studies and government approvals to the City.
(b) Provided Cibolo Turnpike proceeds with completion of the Project,should
any portion of the Project be. terminated or otherwise dropped from the' Project by City in
accordance.'with the terms of this Agreement, and Cibolo Turnpike is not in breach of this
Agreement or initiated a claim against the City under this Agreement, City agrees to transfer to
Cibolo Turnpike, at no cost to. Cibolo Turnpike, copies of all governmental approvals, studies
and all other rights held by City that are related to such terminated portions of the Project,to the
maximum extent permitted by law or by the terms of any such rights or governmental approval.
Section 4.10 Termination.
(a) This Agreement shall terminate upon (i) the delivery by Cibolo Turnpike
to City of a Determination of Non-Feasibility; or (ii) notice by City at any time after
December 31,2018 (unless Cibolo Turnpike shall have notified City in writing that it has
reasonably determined that additional time is necessary to achieve the Initial Financial Closing,
but not to exceed 180 days) if the Financial Closing Date has not yet occurred; or (iii).the City
determines that that Cibolo Turnpike failed to coordinate with TxDOT the construction of the
TxDOT FM 1103 Improvements and the Cibolo Expressway express lanes, as described in
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Section 3.1(b)(i), so that such construction of both shall be accomplished simultaneously and
cause minimal traffic interruption on FM 1103.
(b) If this Agreement is terminated pursuant to Section 4.10(a), each Party
shall be released from its obligations under this.Agreement, other than liabilities for any breach
of this Agreement.
Section 4.11 Indemnification. Cibolo Turnpike shall indemnify, defend and hold
harmless the City and its respective City Council members, officers, employees,representatives,
attorneys and agents (the "City Indemnitees") from any losses or claims that may at any time be
imposed upon, asserted against or incurred by any City Indemnitee, to the extent such losses
arise out of:
(a) The inaccuracy in any material respect of any representation or warranty
of Cibolo Turnpike contained herein or the failure of Cibolo Turnpike in any material respect to
comply with any of its obligations under this Agreement; or
•
(b) Cibolo Turnpike's breach of a contract with a third party, or the negligent
acts or omissions, or the gross negligence, or the recklessness, or the willful misconduct of
Cibolo Turnpike or any of its partners, contractors, agents or affiliates in connection with the
Project.
Section 4.12 Limitation on Liability. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, NEITHER CIBOLO TURNPIKE NOR THE CITY,
NOR ANY OF THEIR RESPECTIVE PARTNERS, OFFICERS, EMPLOYEES, MEMBERS,
REPRESENTATIVES, ATTORNEYS OR AGENTS SHALL BE LIABLE TO THE OTHER,
WHETHER IN CONTRACT, TORT,WARRANTY,NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE, FOR ANY LOSS OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR.
DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
FAILURE OF PERFORMANCE RELATED HERETO,HOWSOEVER.CAUSED, WHETHER
ARISING FROM SUCH PERSON'S SOLE,JOINT OR CONCURRENT NEGLIGENCE;
. ARTICLE V
PROJECT CONTRACTS,APPROVAL RIGHTS AND AUTHORITY
Section 5.1 Cibolo Turnpike's Authority to Negotiate Project Contracts During_
Development Period. Tothe maximum extent permitted by law, City authorizes Cibolo
Turnpike to identify parties, including without limitation, Cibolo Turnpike, Texas Turnpike
Corporation and other affiliates of Cibolo Turnpike, to initiate and negotiate the terms of, all
Project contracts that Cibolo Turnpike reasonably determines must be negotiated or executed
prior to the Financial Closing and thereafter. Cibolo Turnpike will develop the Projectfollowing
Texas Local Gov. Code Chapter 212, Subchapter C. (Developer Participation in Contract for
Public Improvements), which provides for Cibolo Turnpike managing the development of the
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Project. Cibolo Turnpike's authority under this Section includes the authority to identify parties
to, and negotiate the terms of, Project contracts. Such Project contracts may include, Without
limitation, project design, environmental studies, traffic and revenue studies, construction
management agreements, agreements with investment bankers and other agreements related to.
the Financial Closing. To the extent practicable and consistent with the. timely achievement of
the Financial Closing, Cibolo Turnpike shall consult with City's Representative (as defined
below)regarding the selection of other partiestoProject contracts.
Section 5.2 Project Contract Provisions. Unlessotherwise agreed to by City or as
otherwise specifically provided in this Agreement, in connection with the negotiation of the
terms of Project contracts, Cibolo Turnpike shall use commercially reasonable efforts to include
the following provisions in Project contracts:
(a) The Construction Contract as recommended by Cibolo Turnpike based
upon the low bid by pre-approved qualified contractors.
(b) The party other than City (the "Contractor") shall use labor from the
Project's general area to the extent reasonably.available.
(c) The liability of City, if any, pursuant to,such Construction Contract shall
be limited to the assets of the Project.
(d) The Contractor shall indemnify City Indemnitees for any ,losses to
property, or liabilities to third parties directly or indirectly resulting from the negligence or
willful misconduct of the Contractor in the performance or failure to perform its obligations
under such Project contract, provided that such indemnity shall not apply to any such losses or
liabilities incurred by City Indemnitees by reason of City Indemnitees' gross negligence or
willful misconduct.
(e) The Contractor shall waive all indirect, incidental, consequential; special,
punitive or exemplary damages it might incur.
(f) No Project contract shall become effective until the.Financial Closing,
except for obligations to satisfy conditions precedent and Project contracts that, by their nature,
require effectiveness before such date(e.g.,investment banker engagement letter).
(g) The Contractor shall provide a performance, payment and completion
bond, or shall agree to such other assurances (as, for example, a letter of credit or
indemnification) as will provide reasonable assurance of performance,payment and:completion.
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ARTICLE VI
COMPENSATION
Section 6.1 Compensation/Return.
(a) Cibolo Parkway Facility. If Cibolo Turnpike undertakes the Project,
Cibolo Turnpike's base compensation will be as set forth in the Financial Model and City's.
compensation or return shall be an annual split of all remaining Surplus Revenues of the Project,
based on the percentages as set forth in the Financial Model, which includes those surplus funds
remaining under theindenture or other documents after providing for: (1) all operation and
maintenance expenses, (2) taxes, (3) all debtservice on debt incurred to finance or improve the
Project, (4) all contractual commitments (5) all required reserves as set forth in the Financial
Model, and (6) the necessary payments to Cibolo Turnpike to achieve a return on equity based
on the Base Case Equity internal rate of return, all as further identified within the Financial
Model or the Operating Agreement(as applicable).
(b) Cibolo Expressway Facility. If Cibolo Turnpike undertakes the Cibolo
Expressway and the Cibolo Expressway is financed as described herein, the parties'
compensation or return shall be as identified within the Financial Model or the Operating
Agreement(as applicable). In addition:
(i) reimbursement of "Development Capital", as defined and
identified in the Financial Model, for the Cibolo Turnpike and Cibolo Expressway to the extent
not paid pursuant to other provisions of this Agreement, shall be paid promptly, following the
Financial Closing for any of the Project, from the proceeds of suchfinancing, an amount equal to
the Development Capital actually expended or incurred by Cibolo Turnpike to the Cibolo
Turnpike and Cibolo Expressway,plus interest at a rate not to exceed 12%per annum; and
(ii) reimbursement shall be made to the City for staff time devoted to
bringing the project to fruition and consultant fees the City incurs directly related to the project,
which shall include: an amount equal to $15,000.00 to compensate the City for staff time, and,
reimbursement for legal, engineering and public relations consultant fees actually expended or
incured by the City,plus interest at a rate not exceed 12%per annum.
Section 6.2 Development Fee. Promptly following the Financial Closing for the 1
Project, Cibolo Turnpike shall be paid solely from the proceeds of such financing a Development
Fee equal to 2% of the principal amount, or if sold at a net premium, issue price, of such
financing.
Section 6.3 Project Management Fee. Cibolo Turnpike is authorized to receive an
appropriate Project Management Fee to oversee and manage the development of the Project.
The Project Management Fee shall equal to 3%of the estimated construction cost of the Project.
.t
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Section 6.4 Operating Management Fee. Cibolo Turnpike is authorized to receivean
appropriate Operating Management Fee.all of which is detailed under the Financial Model or the
Operating Agreement, as applicable. The Operating Management Fee is to cover the operations
and management of the Project.
Section 6.5 City. City's compensation shall be an annual split of all remaining
Surplus Revenues of the Project, based on the percentages as set forth in the'Financial Model,
which includes a portion of those surplus funds remaining under the :indenture or other
documents after providing for: (1)all operation and maintenance expenses, (2)taxes, (3) all debt
service on debt incurred to finance or improve the Project, (4) all contractual commitments (5)
all required reserves as set forth in the Financial Model, (5) the necessary payments to Cibolo
Turnpike to achieve a return on equity based on the Base Case Equity IRR.
ARTICLE VII
CITY RESPONSIBILITIES
Section 7.1 Cibolo Parkway Project Input, Alignment. The development. of Cibolo
Parkway is the responsibily of Cibolo Turnpike. The City and Cibolo Turnpike will work
together on the development of this portion of the Project. Cibolo Turnpike will seek input on
various components of this portion of the Project. City shall offer staff assistance and provide
input on the project development. The City shall provide guidance, direction and approval of the
alignment of the Cibolo Parkway. Such inputand approval on the alignment shall be in a timely
manner: The fmal alignment as agreed to by the parties isnot subject to changes and Cibolo
Turnpike can rely on that final alignment.
(a) Cibolo Expressway. The development of Cibolo Expressway will be the
responsibility of Cibolo Turnpike, The alignment for.Cibolo Expressway has been set as part of
the FM 1103 Improvements. Cibolo Turnpike will seek input on the Cibolo Expressway,and the
alignment and design for the additional lanes will comport with TXDOT guidelines.
Section 7.2 TxDOT FM 1103 Turnback. The -City; collaboratively with Cibolo
Turnpike,will negotiate with TxDOT on the tumback of the FM 1103 Improvements to the City.
Negotiation on the FM 1103 Improvements tumback to the City shall begin with the'execution of
this Agreement. Final acceptance of the FM 1103 Improvements would occur after theresults of
Project Development Phase I.
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ARTICLE VIII
FINANCING THE PROJECT
Section 8.1 The Project.
(a) Cibolo Turnpike shall be solely responsible for all costs associated with
the design and construction of the Project and any debt service related thereto. Cibolo,Turnpike
may elect to undertake the Project under the Operating, Agreement by either Texas Turnpike
Corporation or Cibolo Turnpike or an affiliate of them.
ARTICLE IX
OPERATING AGREEMENT
Section 9.1 Operating Agreement. The Operating Agreement to be negotiated and
executed by City, to Cibolo Turnpike, the Texas Turnpike Corporation or other-affiliated entity
designated by Cibolo Turnpike in accordance with this Agreement, shall be substantially in the
form attached to this Agreement as Appendix A. The parties further acknowledge that the
evolution of the Project may call for further modifications or amendments to the Operating
Agreement and the parties accordingly agree to negotiate in good faith to identify the terms of
any amendment that may be reasonably necessary, and to enter into such modifications of the
Operating Agreement as are called for either before or after it is executed in order substantially
to preserve the economic benefits to both Cibolo Turnpike and City as set forth in the Financial •
Model.
Section 9.2 Operating Agreement Terms. Subject to the provisions of 3.1(f); the
parties shall use their best efforts to negotiate the terms and. provisions of an Operating
Agreement prior to the end of Phase I. Such Operating Agreement shall provide, at a minimum:
(1) The term of the Operating Agreement to run co-terminus with this
Agreement;
(ii) The exclusive right and obligation to manager, operate, and
maintain the Project, including toll collections on the tolled portions thereof (being Cibolo
Expressway and Cibolo Parkway);
(iii) Included as part of the Operating Agreement are the following
provisions regarding tolled and non-tolled routes:
A. Trips beginning or ending on the Cibolo Expressway will
not have to pay any toll relating to the Cibolo Expressway only.
13. All trips beginning or ending on the Cibolo Parkway shall
pay that portion of the tolls applicable to and for such trip.
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C. All "through" trips,meaning any trip that does not orginate
or terminate in the City, shall pay tolls on both the Cibolo Expressway and the Cibolo
Parkway; and
(iv) The remaining requirements concering Projectoperation specified
in Section 3.1(e)hereof.
ARTICLE X
REPRESENTATIVES
Section 10.1 Cibolo Turnpike's Representative. Upon execution of the Agreement,
Cibolo Turnpike shall designate, in writing, to City, the name of the individual who is to be the
Cibolo Turnpike representative (the"Cibolo Turnpike's Representative") with full authority to
execute any and all instruments requiring Cibolo Turnpike's signature and to act on behalf of
Cibolo Turnpike with respect to all matters arising out of this Agreement. Cibolo Turnpike's
Representative shall represent the interests of Cibolo Turnpike, be responsible for overseeing all
aspects of design, construction and development of the Cibolo Turnpike and Cibolo Expressway,
and work closely with City's Representative (as defined below). Any consent, approval,
decision or determination hereunder made by Cibolo Turnpike's Representative shall be binding
on Cibolo Turnpike; provided, however; Cibolo Turnpike's Representative shall not have any
right to modify,waive or amend any provision of the Agreement, or terminate the Agreement:
Section 10.2 City's Representative. Upon execution of this Agreement, City shall
designate the City's representative (the "City's Representative") and will provide. Cibolo
Turnpike with written notice of the identity of such individual so designated. With respect to
any action, decision or determination which is to betaken or made by City under the Agreement,
City's Representative may take such action or make such decision or determination or shall
notify Cibolo Turnpike in writing of the persons) responsible for such action, decision or
determination and shall forward any communications and documentation to such person(s) for
response or action. Any consent, approval, decision or determination hereunder by City's
Representative shall be binding on City to the extent City has the legal power to delegate to an
individual the ability to give such consent or approval or make such decision or determination;
provided, however, City's Representative shall not have any right to modify, waive or amend
any provision of the Agreement, or terminate the Agreement. Cibolo Turnpike and any Person
dealing with City in connection with the Agreement or any matter governedby the Agreement
may rely and shall be fully protected in relying upon the authority and capacity of City's
Representative or any such designee toact for and bind City in any such matter,to the extent that
such delegation of authority is authorized by the City Charter and State law. I,
From time to time following the execution hereof; Cibolo Turnpike may change or
replace Cibolo Turnpike's Representative and City may change or replace City's Representative
upon five (5) business days' written notice to the other party, delivered to such party inthe
manner and at the address indicated in Section 13.7 hereof.
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ARTICLE XI
DEFAULT,ABANDONMENT
Section 11.1 Events of Default by City. The followingshall constitute Events of
Default by City under this Agreement:
(a) Failure to observe or perform any material term, provision, condition or
obligation under the Agreement, and failure to cure such default within thirty (30) days
following notice or discovery of such default;provided,however,that if the failure to observe or
perform cannot reasonably be cured within the thirty (30) day period, the failure to observe or
perform will not constitute an Event of Default if City begins corrective action within the thirty,
(30) day period and thereafter proceeds with reasonable diligence to effect the cure.as soon as
practicable.
(b) Any material representation or warranty made by City that is false,
misleading or inaccurate in any material respect at the time made.
(c) The failure of City to honor Cibolo Turnpike's option to enter into the
Operating Agreement.
(d) Default under the Operating Agreement.
(e) City shall (i) apply for or consent, to; or become subject. to, the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself
or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally
unable,to pay its debts as such debts generally become due, (iii)make a general assignment for.
the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy, Code
(as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law i
relating to bankruptcy, insolvency;reorganization, winding-up, or composition or adjustment of
debts, (vi) take any action for the purpose of effecting any of the foregoing, or (vii) be
adjudicated as bankrupt or insolvent by any court.
(f) Final legislative, administrative or judicial action after the date hereof that
limits City's authority so as tomaterially andadversely affect its ability to perform its
obligations under this Agreement or the Operating Agreement and City does not enter:into an
amendment to this.Agreement as provided in Section 12.3 within thirty (30) days of such final
legislative, administrative or judicial action. However, no future legislative changes shall ever
cause the financial obligations related to the Tollway to become obligations of the City..
Section 11.2 Events of Default by Cibolo Turnpike. The following shall constitute;
Events of Default by Cibolo Turnpike under the Agreement:
(a) Failure to observe or perform any material term, provision, condition or
obligation under the Agreement and failure to cure such default within thirty (30) days following
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{
notice or discovery of such default; provided, however, if the failure to 'observeor perform
cannot reasonably be cured within the thirty (30) day period, the failure to observe or perform
will not be an Event,of Default if Cibolo Turnpike begins corrective action'within the thirty(30)
day period and thereafter proceeds with reasonable diligence to effect the cure as soon as
practicable.
(b) Any representation or warranty made by Cibolo Turnpike that is false,
misleading or inaccurate in any material respect at the time made.
(c) Abandonment by Cibolo Turnpike except as specifically permitted by The
Agreement.
(d) Cibolo Turnpike shall (i) apply for or consent to,or become subject.to,the
appointment of or the taking of possession:by a receiver, liquidator, custodianor trustee of itself
or of all or a substantial part of its property; (ii) admit in writing its inability, or be generally
unable,to pay its debts as such debts generally become due, (iii) make a general assignment.for
the benefit of its.creditors, (iv) commence a voluntary case under the.Federal Bankruptcy Code
(as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of
debts, (vi)take any action for the purpose of effecting any of the foregoing, or (viii) be.
adjudicated as bankrupt or insolventby any court.
Section 11.3 Remedies for City Default.
•
(a) Upon the occurrence and continuance of an Event of Default by City
under the.Agreement,which City fails to cure, Cibolo Turnpike may suspend performance under
the Agreement and Cibolo Turnpike will have such remedies as may be available to it law or in
equity, subject to the limitations on adjudicated awards as set out in Texas Local Government
Code Chapter 271 Subchapter I,which shall be controlling.
(b) Upon the occurrence and continuance of an Event of Default by City
under Section 1.1.1(a) of this Agreement, Cibolo Turnpike shall be entitled to injunctive relief
against City.
(c) Upon the occurrence and continuance of an Event. of Default by City
under the Agreement, Cibolo Turnpike may terminate this Agreement by delivering notice in
writing to City specifying the nature of the Event of Default and establishing a termination date,
which date shall not be less than thirty (30) days following the date of delivery of the notice
whereupon the Agreement shall terminate on the specified termination date unless City shall
have cured the.Event of Default by such date, in which case the notice of termination shall be
cancelled. Liabilities of City accruing under this Agreement prior to the date of termination shall
survive any termination.
(d) Without prejudice to any other rights and remedies that the other party
may have, each of the parties agrees that damages may not be an adequate remedy for a breach
of Section 11.1(a) of the Agreement, and that the other party will, in such case, be entitled to the
Initials: CITY CIBOLO TURNPIKE Page 19
remedies of injunction, specific performance or other equitable relief for any threatened or actual
breach of Section 11.1(a) of this Agreement.
Section 11.4 Remedies for Cibolo Turnpike Default.
(a) Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under this Agreement,.City may suspend performance under this Agreement and City
will have such remedies as may be available under this Agreement.
(b) Upon the occurrence and continuance of an Event of Default.by Cibolo
Turnpike under the Agreement, City may terminate this Agreement by delivering notice in
writing to Cibolo Turnpike specifying the nature of the Event of Default and establishing a
termination date, which date shall be not less than thirty (30) days following the date of delivery
of the notice whereupon this Agreement shall terminate on the specified termination date unless
Cibolo Turnpike shall have cured the Event of Default by such date, in which case the notice of
termination shall be cancelled. Liabilities of Cibolo Turnpike accruing under this Agreement.
prior to the date of termination shall survive any termination.
(c) Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under this Agreement, which Cibolo Turnpike fails to cure, and which constitutes a
material misrepresentation, a negligent act or omission, or gross negligence, or recklessness, or
willful misconduct by Cibolo Turnpike or any of its partners, contractors, agents or-affiliates in
connection with the Project or City may suspend performance under this Agreement and the
City shall have such remedies as may be available to it law or inequity; including but not limited
to recovery of actual damages the City may incur as a result of the breach.
(d) Without prejudice to any other rights and remedies that the other party
may have, each of the parties agrees that damages may not be an adequate remedy for a breach
of Section 1.1.2(a) of the Agreement, and that the other party will, in such case,be entitled to the
remedies of injunction, specific performance or other equitable relief for any threatened or actual
breach of Section 11.2(a) of the Agreement.
(e) Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under Section 11.2(a) of the Agreement, City shall be entitled to injunctive relief
against Cibolo Turnpike.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
Section 12.1 Cibolo Turnpike's Representations and Warranties. Cibolo Turnpike
hereby represents and warrants to City that:
(a) Organization. Cibolo Turnpike is a Texas limited partnership duly
formed, validly existing and in good standing under the laws of the State. Cibolo Turnpike has
all requisite power and authority to enter into the Agreement and to perform, its obligations
hereunder.
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(b) Authorization;No Violation. The execution, delivery and performance by
Cibolo Turnpike of this Agreement have been duly authorized by all necessary action and will
not violate the organizational documents of Cibolo Turnpike or result in the breach of or
constitute a default under any loan or credit agreement, other material agreement, judgment or
decree to which Cibolo Turnpike is a party or by which Cibolo Turnpike, orits material assets,
may be bound or affected; the Agreement has been duly executed and delivered by Cibolo
Turnpike and the Agreement and the documents referred to herein constitute valid and binding
obligations of Cibolo Turnpike subject to bankruptcy,reorganization,moratorium and other laws
relating to the enforcement of creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against or.affecting Cibolo Turnpike which
could reasonably be expected to have a material adverse effect upon Cibolo Turnpike's
performance under the Agreement or the financial condition or business of Cibolo Turnpike.
There are no outstanding judgments against Cibolo Turnpike which would have a material
adverse effect upon its assets,properties or franchises.
(d) No Violation of Laws. Cibolo Turnpike has received no notice as of the
date of the Agreement asserting any noncompliance in any material respect by Cibolo Turnpike
with applicable statutes, rules and regulations of the United States of America, of the State, or of
any other state or municipality or agency having jurisdiction over and with respect to the
transactions contemplated in and by this Agreement; and Cibolo Turnpikeis not in default with
respect to any judgment, order, injunction or decree of any court, administrative agency, or other
governmental authority which is in any respect material to the transactions contemplated hereby.
Section 12.2 City's Representations and Warranties. As of the date of this Agreement,
City makes the following representations and warranties to Cibolo Turnpike:
(a) Organization. City is a public body and a political'subdivision of the State
and has all requisite power and authority to enter into this Agreement and to perform its
obligations hereunder.
(b) Authorization; No Violation. The execution, delivery and performance by
City of this Agreement have been duly authorized by all necessary action and will not violate
City's Home Rule Charter,ordinances, resolutions,or any applicable laws, or result in the breach
of any material agreement,judgment or decree to which City is a party; this Agreement has been
duly executed and delivered by City and the Agreement and the documents referredto herein
constitutevalid and binding obligations of City enforceable against City in accordance with its.
terms subject to bankruptcy, reorganization,, moratorium and other laws relating to the
enforcement of creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against Or affecting City which could
reasonably be expected to have a material adverse effect upon City's performance under this
Agreement.
Initials: CITY 4 ) CIBOLO TURNPIRE�IA ... Page 21
(d) No Violation.of Laws. City has received no notice as of the date of this
Agreement asserting any noncompliance in any material respect by City with applicable statutes,
rules and regulations of the United States of America,the State or any agency having jurisdiction
over and with respect to the transactions contemplated in and by this Agreement, and City is not
in default with respect to any judgment, order, injunction or decree of any court, administrative
agency, or other governmental authority which is in any respect material to the transactions
contemplated hereby.
Section 12.3 Mutual Representations and Warranties; Restructure Due to Legislative,
Administrative or Judicial Actions. In the event,of.a final legislative, administrative or judicial.
action after the date hereof that limits Cibolo Turnpike's authority or the City's authority so as to
materially and adversely affect either of said party's ability to perform its obligations under this
Agreement, City and Cibolo Turnpike will in good faith negotiatechanges to this Agreement
reasonably acceptable to both parties that accomplish the purposes of this Agreement in a
manner that preserves to the extent reasonably possible the economic benefits to both Cibolo
Turnpike and City as forth in the Financial Model.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Uncontrollable Circumstances. An "Uncontrollable Circumstance" is an
event or circumstance, including an action of a governmental entity or a change in law, which
prevents a party from performing its obligations under an agreement or which materially
increases the time for performing under an agreement, which event or circumstance was not
anticipated as of the date of the agreement, which is not within the reasonable control of, or the
result of the negligence of, the claiming party, and which, by the exercise of due diligence, the
claiming party is unable to overcome or avoid or cause to be avoided.Except as otherwise herein
expressly provided, if either City or Cibolo Turnpike shall be delayed or hindered in, or
prevented from, the performance of any covenant or obligation hereunder (other than the
payment of money), as a result of any Uncontrollable Circumstance, and,provided that the.party
delayed, hindered or prevented from performing notifies the other party both of the
commencement and of the expiration of such delay, hindrance or prevention (each noticebeing
required within ten (10) business days of the respective event), then the performance of such
covenant or obligation shall be excused for the period of such delay,hindrance or prevention and
the period for the performance of such covenant or obligation shall be extended by the number of
days equivalent to the number of days of the impact of such delay, hindrance or prevention.
Failure to so provide the foregoing notice will not result in waivers of either an excuse in
performance or an extension of time to perform under this Section 13.1 with respect to any such
delay,hindrance or prevention.
Section 13.2 Amendment; Waiver. No alteration, amendment or modification hereof
shall be valid unless executed by an instrument in writing by City and Cibolo Turnpike with the
same formality as this Agreement. The failure of City or Cibolo Turnpike to insist in any one or
more instances upon the strict performance of any of the covenants, agreements, terms,
provisions or conditions of this Agreement or to exercise any election or option herein contained
Initials: CITY_ CIBOLO TURNP.IKBZ Page 22
shall not be construed as a waiver or relinquishment for the future of such covenant, agreement,
term, provision, condition, election or option, and shall not be deemed to establish a course of
conduct among the parties, but the same shall continue and remain in full force and effect. No
waiver by City or Cibolo Turnpike of any covenant, agreement, term, provision or condition,
election or-option of this Agreement shall be deemed to have been made unless expressed in
writing and signed by an appropriate Official on behalf of Cibolo Turnpike or City, The parties
acknowledge that at the time this Agreement is executed, the precise details and scope of the
Project have not yet been determined. Moreover, the parties acknowledge and agree that future
efforts to pursue the development of the Project willevolve over time, and that subsequent
developments may impact the terms of this Agreement and call for a modification oramendment
of this Agreement. Accordingly,. the parties agreeto negotiate mutually and in good faith to,
enter into such amendments or modifications of this Agreement as may reasonably be indicated
by the subsequent details that evolve concerning the Project that preserve the economic benefits
to both Cibolo Turnpike and City as set forth in the Financial Model,
Section 13.3 Consent. Unless otherwise specifically provided herein, no consent or
approval by City or Cibolo Turnpike permitted or required under the terms of the Agreement
shall be valid or be of any validity whatsoever unless the same shall be in writing, signed by the
party by or on whose behalf such consent is given.
Section 13.4 Severability. If any provision of this Agreement is held by final judgment
of a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalid, illegal or
unenforceable provision shall be severed from the remainder of the Agreement, and the
remainder of this Agreement shall be enforced. In addition,the invalid, illegal or unenforceable
provision shall be deemed to be automatically modified, and, as so modified, to be included in.
this Agreement, such modification being made to'the minimum extent necessary to render'the
provision valid, legal and enforceable. Notwithstanding theforegoing, however, if the severed
or modified provision concerns all or a portion 'of the essential consideration to be delivered
under this Agreement by one party to the other,the remaining provisions of this Agreement shall
also be modified to the extent necessary to equitably adjust the parties' respective rights and
obligations hereunder.
Section 13.5 Binding Effect. Except as may otherwise be provided herein to the
contrary,this Agreement and eachof the provisions hereof shall be binding upon and inure to the
benefit of Cibolo Turnpike and City, and their respective permitted successors and assigns.
Section 1.3.6 Relationship of Parties. Nothing contained in this Agreement shall be
deemed or construed by City or Cibolo Turnpike hereto. or by any third party to create a
relationship,partnership,joint venture or any association between Cibolo Turnpike and City.
Section 13.7 Notices. Except as otherwise providedherein, all notices, demands,
consents, approvals, statements,requests and invoices to be,given under this Agreement shall be
in writing, signed by the party or officer, agent or attorney of the party giving the notice, and
shall be deemed effective upon receipt if hand delivered or if sent by telecopy with.transmission
' confirmation or overnight courier service; and if'sent by the United States mail,postage prepaid,
Initials: CITYC;70 CIB0LO TURNPIKE-C1/"C_ Page 23
certified mail, return receipt requested, then it shall be deemed effective three (3) businessdays
after mailing or the date of refusal, addressed as follows:
To City: City of Cibolo
200 S.Main St.
Cibolo,Texas 78.108
Attn: Robert T.Herrera, City Manager
To Cibolo Turnpike: Cibolo Turnpike L.P.
25 Highland Park Village#100-758
Dallas,Texas 75205
Attn: John N. Crew,Manager
Either City or Cibolo Turnpike may from time to time by written notice given to the other
pursuant to the terms of this Section 13.7 change the address or designees to which notices shall
be sent or designate one or more additional Persons to whom notices are to be sent.
Section 13.8 Governing Law. This Agreement and any matter relating to this
Agreement, including any matter in contract or tort or in equity or at law, shall be governed by
the laws of the State of Texas without regard to principles of conflicts of law that direct:the
application of the laws of a different state. If the partiesdo not agree to arbitration with
respect to a particular claim or dispute in accordance with the terms of this Agreement, the
parties agree that any legal action.shall be brought in a state or federal court of competent
jurisdiction in Guadalupe County, Texas, and the parties agree to establish venue in such
county. The parties further agree that any such lawsuit that may be brought shall be tried
by the court; without jury.
Section 13.9 Effective Date. This Agreement shall be a legally binding agreement, in
full force and effect, as of the date set forth in the first paragraph of this Agreement.
Section 13.10 Further Assurances. City and Cibolo Turnpike shall execute,
acknowledge and deliver, after the date hereof, without additional consideration, such further
assurances, instruments and documents, and shall take such further actions, as Cibolo Turnpike
or City shall reasonably request of the other in order to fulfill the intent of this Agreement and
the transactions contemplated hereby.
Section 13.11 Third-Party Beneficiary. The provisions of this Agreement are for the
exclusive benefit of City and Cibolo Turnpikeand not for the benefit of any third person, nor
shall this Agreement be deemed to have conferred any rights, express.or implied,upon any third
person unless otherwise expressly provided for herein.
Section 13.12 Counterparts. This Agreement may be executed in two or more
counterparts,each of which shall be deemed an original'but all of which together shall constitute
one and the same'instrument.
Initials: CIT ,--,` CIEOLO TURNPIKE t/,tAPage 24
Section 13.13 Prior. Agreements Superseded. This Agreement supersedes any prior
understanding or written or oral agreements between City or Cibolo Turnpike respecting the
within subject matter, and contains the entire understanding between the parties with respect.
thereto. There are no oral agreements between City and Cibolo Turnpike.
Section 13.14 Language. The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
Section 13.15 Computing Time, Saturday, Sunday or Holiday. The day of an act, event,
or default after which a designated period begins to run is not included when computing a period
prescribed or allowed in this Agreement. Thelast day of the period is included, but if that day is
a Saturday, Sunday or legalholiday of the City,the period extends to the end of the next day that
is not a Saturday, Sunday or legal holiday.
Section 13.16 Approvals by City. No approval by City shall impose, imply or be
construed as an assumption by City of any duties or responsibilities of others with respect to the
design or construction of the Project or for the construction means and methods employed by or
on behalf of Cibolo Turnpike or any person retained by or on behalf of Cibolo Turnpike.
Section 13.17 Lawsuits. To the extent permitted by law, and withoutimposing a'future
debt obligation on the, City, City agrees to cooperate with and assist Cibolo Turnpike in
connection with initiating or defending any'actions, including mediation, arbitration, or state or
federal administrative or court proceedings, against or brought by third parties that threaten to
stop, delay or increase the cost of(a) completion of the Project, (b)the imposition or collection
of any revenue necessary for the funding of the Project, (c) the remediation, if necessary, of the
Project Site, and (d) the negotiation, execution, or implementation of this Agreement or any
other agreement between City and Cibolo Turnpike or otherwise related to the Project, including
the enforcement of any indemnity provisions.
{
Section 13.18 Attorneys' Fees. I In the event of any controversy, claim or dispute
between City or Cibolo Turnpike arising from or relatingto.this Agreement(whether in litigation
or arbitration, and including the enforcement of any indemnity provisions), the prevailing:party
shall be entitled to recover reasonable and necessary costs, expenses and attorneys' fees. For all
purposes of this Agreement and any other documents relating to the Agreement, the terms
"attorneys' fees" or "counsel fees" shall be deemed to include paralegals' and legal assistants'
fees, and wherever provision is made herein or therein for the payment of attorneys'or counsel
fees or expenses, such provision shall include such fees and expenses (and any applicable sales
taxes thereon) incurred in any and all judicial, bankruptcy, reorganization, administrative or
other proceedings, including appellate proceedings, whether such fees or expenses arise before
proceedings are commenced or after entry of a ficial judgment.
Section 13.19 Assignment. Except for the City assignment to an instrumentality upon
City creation thereof at any time(which may occur without the consent of Cibolo Turnpike), any
assignment by either party musthave the written consent of the other, such consent not to be
unreasonably withheld. In the event that the City makes an assignment to an instrumentality,
City shall notify Cibolo Turnpike thereof.Any purported assignment in violation of this,Section
Initials: CIT -D CIBOLO TURNPIKE_� Page 25
13.19 shall be void. This section shall not limit the ability of Cibolo Turnpike to contract with
any third party, including its own affiliates,to provide services to or in support of the Project.
Section 13.20 Time of the Essence. Subject to the terms hereof, time is of the essence
with respect to the performance of each of the covenants and obligations contained in this
Agreement.
Section 13.21 Mediation.
(a) Any claim, dispute, or other matter in question arising,out of or related to
the Agreement shall be :subject to mediation as a condition precedent to arbitration or the
institution of legal or equitable proceedings by either party.
(b) City and Cibolo Turnpike shall endeavor"to resolve claims, disputes and
other matters in question between them by mediation which, unless the parties mutually agree
otherwise, shall be in accordance with the Construction Industry Mediation Rules of the
American Arbitration Association then currently in effect. Request for mediation shall be filed
in writing with the other party to this Agreement and with the.American Arbitration Association.
The request may be made concurrently with the filing of a demand for arbitration but, in such
event, mediation shall proceed in advance of arbitration or legal or equitable proceedings,which
shall be stayed pending mediation for a period of thirty (30) days from the date of filing unless
stayed for a longer period by agreement of the parties or court order.
(c) City or Cibolo Turnpike agree to split the'mediator's fee and any filing
fees equally.The mediation shall be held in Guadalupe County,Texas, unless another locationis
mutually agreed upon. Written agreements reached in mediation shall be enforceable as
settlement agreements in any court having jurisdiction thereof.
Section 13.22 Dispute Resolution. Any claim, dispute or other Matter in question arising
out of or related to this Agreement or otherwise arising from the design and construction of the
Project, shall first be subject to mediation in accordance with the provisions of Section 13.21
prior to instituting litigation. Claims, disputes and other matters in question between the parties
may be decided by arbitration,but only if both Cibolo Turnpike and City so agree.at the time the
dispute arises.
Section 13.23 Arbitration. Intentionally deleted.
Section 13.24 Injunctive Relief. Notwithstanding the foregoing, the provisions of
Section 13.22 and Section 13.23 shall not apply to an actionfor injunctive relief or a writ of
mandamus filed in connection with this Agreement.
{
Initials: CITY CIBOLO TURNPIKE At Page 26
Section 13.25 Confidentiality;Open Records Act.
(a) Each party to this Agreement agrees to keep confidential and not use,
reveal, provide or transfer to any thirdparty any Confidential Information.(as defined below) it
obtains or has obtained concerning the other party to this Agreement or the Project, except as
follows:
(i) subject to Section 13.25(b), to the extent that disclosure to a third
party is required by applicable law or regulation;
(ii) information which, at the time of disclosure, is generally available
to the public (other than as a result of a breach of this Agreement or any other confidentiality
agreement to which a party to this Agreement is a party or of which ithas knowledge), as
evidenced by generally available documents or publications;
(iii) information that was in its possession prior to disclosure (as
evidenced by appropriate written materials) and was not acquired directly or indirectly from any
other party to this Agreement;
(iv) to the extent disclosure is necessary or advisable,to its employees,
consultants or advisors, or to its affiliates or their employees, consultants or advisors, in each
case solely for the purpose of carrying out their duties under this Agreement;
(v) to banks or other financial 'institutions or agencies or any
independent accountants or legal counsel or investment advisors employed in connection with
the Project, or by any party to this Agreement,to the extent disclosure is necessary or advisable
to obtain financing, including, without limitation, the Project financing and the raising of the
Development Capital by Cibolo Turnpike;
(vi) to potential investors in connection with the Project financing and
raising the Development Capital;
(vii) to potential purchasers of a party to this Agreement or any affiliate
of a party to this Agreement thatdirectly or indirectly owns an equity interest in such party to
this Agreement;
(viii) to the extent necessary, disclosure to third parties to enforce this
Agreement;
(ix) to another party to this Agreement; or
(x) to parties that have signed or agreed to be bound by this
confidentiality provision;provided, however,that in each case of disclosure pursuant to (iv), (v),
(vi), (vii) or (ix), the persons or entities to whom disclosure is made agree to be bound by this
confidentiality provision. The obligation of each party not to disclose Confidential .information
except as provided herein shall not be affected by the termination of this Agreement. As used in
this Section, the term "Confidential Information" shall mean information, which is clearly
marked confidential, concerning this Agreement and the properties, operations, business, trade
secrets, technical know-how and other non-public information and data of or relating to the
parties to this Agreement or the Project.
Initials: CITY ) CIBOLO TURNPIKE4L--- Page 27
The restrictions on disclosure of Confidential Information set forth above in
Section 13.25(a) shall lapse two (2) years from the date of the termination of the Project. In the
event a party withdraws from the Project, such party shall remain subject to the restrictions on
disclosure of Confidential Information for two (2)years froth the date of such party's withdrawal..
(b) If any Person requests City to disclose any Confidential Information under
the Texas Open Records Act (Tex. Gov't Code Ann. § 552.001 et seq.) or equivalent or
successor statute (the "Open Records Act"), prior to making such disclosure, City shall notify
Cibolo Turnpike of such request, in which case Cibolo Turnpike shall promptly and timely
inform City whether any of the requestedmaterials constitute confidential, proprietary,
commercial, financial or trade secret information of Cibolo Turnpike which may be exempted
from disclosure under the Open Records Act, and, in that event,.City and Cibolo Turnpike shall
cooperate with each other in preparing appropriate responses or filings to the Attorney General
of the State and to any Person making such request, including any appeals involved therein, to
prevent a disclosure of such information. In such event, each party shall further cooperate with
the other to promptly identify any possiblethird party whose privacy or property interests may
be implicated by any suchrequest to disclose information in orderto enable Cibolo Turnpike to
timely furnishto any such third party any statutory notice required by the Open Records Act and
seek any applicable exemptions from disclosureunder the Open Records Act. So long as Cibolo
Turnpike is pursuing the actions described above in a timely manner, City shall protect
confidential, proprietary or trade secret information of Cibolo Turnpike as to which .Cibolo
Turnpike requests City to do so, unless otherwise compelled by court order, or by opinion of the
Texas Attorney General. All reasonable and necessary costs associated with City's cooperation
with Cibolo Turnpike hereunder in connection with any proceedings shall be borne by Cibolo
Turnpike, and City shall be fully reimbursed for any ofsuch costs it has reasonably incurred
including reasonable attorneys' fees.
Section 13.26 No Recourse to Cibolo Turnpike. The obligations of Cibolo Turnpike
under this Agreement are recourse solely to the interest of Cibolo Turnpike in the Project. No
recourse or liability shall be had against any director, officer, employee, agent, member
shareholder or partner of Cibolo Turnpike or of Texas Turnpike Corporation or their respective
affiliates.
Waiver of DTPA. CITY AND CIBOLO TURNPIKE HAVE ASSESSED THEIR
RESPECTIVE RIGHTS, LIABILITIES AND OBLIGATIONS UNDER THE. TEXAS
DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS & COMMERCE CODE (THE "DTPA"). THE PARTIES AGREE THAT
THE DTPA DOES NOT APPLY TO EITHER CITY OR CIBOLO TURNPIKE BECAUSE
NEITHER QUALIFY AS A "CONSUMER" UNDER SECTION 17.45(4) OF THE DTPA.
BUT IN THE EVENT THE DTPA IS DEEMED TO BE APPLICABLE BY A COURT OF
COMPETENT JURISDICTION, CITY AND CIBOLO TURNPIKE HEREBY WAIVE THEIR
RIGHTS UNDER THE DTPA, A LAW TIIAT GIVES CONSUMER SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH ATTORNEYS OF THEIR OWN 3
SELECTION, CITY AND CIBOLO TURNPIKE CONSENT TO THIS WAIVER. THE
PARTIES AGREE THAT THIS SECTION 13.27 CONSTITUTES A CONSPICUOUS •
LEGEND. [Signature,page follows.]
Initials: CITY ) CIBOLO TURNPIKE JUC Page 28
IN WITNESS WHEREOF, the,parties hereto have caused this Agreement to be executed
by their proper officers respectively, being thereunto duly authorized, and their respective seals
to be hereto affixed, as of the day and year first above written..
City of Cibolo:
P 61 By:
Allen Dunn
Mayor, City of Cibolo
Attest:
' / 9
By: / ... ..q47� Za-P-0---'4
Peggy Cimics, City Secretary
Cibolo Turnpike:
On behalf of CIBOLO TURNPIKE, LP, a Texas limited
partnership
'�Y
1
By: CIBOLO TURNPIKE, GP,LLC,
a Texas limited liability company;its General
Partner j
By: TEXAS TURNPIKE CORPORATION,
a Texas corporation, its Sole Member and '
Sole Manager
_
By. it r r
. n N. Crew,President and
hief Executive Officer
Signature Page to Development Agreement
EXHIBIT 1
PROJECT MAP
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APPENDIX A
FORM OF OPERATING AGREEMENT
Exhibit 1
TTC Draft: 02/24/2017
r -
w
OPERATING AGREEMENT �.
between
the City,,of Cibolo 'Texa`s:
and
Cibolo--Turnpike L.P.
'
4835-4014-1108v.3 46831-4
TTC Draft: 02/24/2017
OPERATING AGREEMENT
This Operating Agreement (the "Agreement") is made and entered into as of
, 2017 (the "Effective Date"), by and between the City of Cibolo, Texas ("City"),
and Cibolo Turnpike L.P., a Texas limited partnership ("Cibolo Turnpike").
PROJECT OVERVIEW
The Project that is the subject of this Agreement is comprised of three interrelated projects
the Cibolo Parkway which is the design, build, finance, operate and maintain a new tollroad
facility extending approximately 7 miles from the intersection of Weil Road and FM 1103
southeast to IH 10, the "Cibolo Parkway"; the FM 1103 Improvements which consists of the
improvements to FM 1103 from IH 35 to Rodeo Way, the."FM 1103 Improvements"; and
Cibolo Expressway which consists of adding two express lanes`in the median of FM 1103
from IH 35 to Weil Road approximately 4 miles;,.the "Cibolo Expressway." Collectively the
"Project" includes the Cibolo Parkway, 'the;;FM 1103 Improvements, and the Cibolo
Expressway, each more fully described herein, and as shown on the Project map, Exhibit 1,
attached hereto and incorporated by reference.
RECITALS'
A. The Parties have entered into a, Development Agreement dated as of
, 2017 (the-”Development Agreement")--pursuant to.,which Cibolo Turnpike will
develop the Project. '' f
B. In accordance with the plan"desc'ribed in the Development Agreement, this
Agreement sets forth the terms upon which Cibolo Turnpike will operate and maintain the
Project as a City owned facility.`':
`NOW, THEREFORE, 'in consideration of the premises, covenants, agreements and
obligations contained herein;'the parties,do hereby agree as follows:
ARTICLE I
I SUBJECT OF AGREEMENT
Section 1.1 Purpose of This Agreement. The purpose of this Agreement is to
effectuate the operation, management, and maintenance of the Project. This Agreement defines
the operating terms mutually agreed upon by the Parties.
Section 1.2 Parties to This Agreement
(a) The City is a home rule municipality, exercising governmental functions
and powers as a home rule city in the State of Texas. The "City," as used in this Agreement
includes the City of Cibolo, Texas, and any assignee of, instrumentality of, or successor to its
rights,powers, and responsibilities.
1
TTC Draft: 02/24/2017
(b) Cibolo Turnpike, LP, is a Texas limited partnership and Cibolo Turnpike,
GP, LLC, a Texas limited liability company, is its sole general partner created for the
development and operation of the Project.
ARTICLE II
GRANT OF AUTHORITY AND TERM
Section 2.1 Term. This Operating Agreement shall be for a term of fifty (50) years,
plus additional time, as needed to conform with the Financial Model, beginning on the Effective
Date as defined herein (the "Term"). The Development Agreement as part of this program will
run co-terminus with this Operating Agreement. '
Section 2.2 Authorization. The City hereby authorizes;,permits and grants a non-
exclusive right to Cibolo Turnpike, and to all agents, representatives,,consultants, contractors,
employees, and invitees of Cibolo Turnpike, easement, right-of-way, ingress,.,egress, access, and
use rights in, over, upon, across and along all ingress, egress"and access portions of all streets
adjacent to the Project belonging to the City, to.,Cibolo-Turnpike for the)operation and
maintenance of the the Project and/or Otherwise as 'provided for in this Agreement. Any
temporary road closures and/or temporary detours will be coordinated with the City.
Section 2.3 Operations in General. The"Cibolo Turnpike agrees to manage and operate
the Project in a professional,,,efficient and businesslike•manner, consistent with prevailing good
practices for the operation of a tellroad in,Texas.- The,operations and procedures shall be
conducted in all material respects in conformity with a procedures manual that details the
specifics on the operations,.and.maintence of-'the, Project, the "Operations and Maintenance
Procedures Manual:" This-Operations,and:.Maintenance Procedures Manual will be developed
by Cibolo Turnpike withtiassistance and guidance from TxDOT and the City. The Operations and
Maintenance Procedures Manual will be presented;to the City for approval.
Section.2.4 Grant-of Rights. The City hereby grants to Cibolo Turnpike the exclusive
right, acting'through its contractors, subcontractors, agents and employees, to manage and
control all aspects -of the operation and management of the Project, subject to the terms of this
Agreement and to the provision's of the Operations and Maintenance Procedures Manual.
ARTICLE III
OPERATIONS -COOPERATION
Section 3.1 Level of Effort; Cooperation.
(a) Under this Agreement, Cibolo Turnpike shall be obligated to use its
commercially reasonable efforts in the operation of the toll roads; provided, however, it shall not
2
TTC Draft: 02/24/2017
be obligated to fund those operations from its own resources, and its obligation to provide
financing shall be only as set forth in the Development Agreement.
(b) Subject to the other provisions of this Agreement, the parties hereto shall
cooperate fully with each other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps required to be taken to
promote the financial viability of the Project.
ARTICLE IV
•
TOLL RATES; REPORTS `y
Section 4.1 Toll Rates. Cibolo Turnpike will'.at all'^times fix charge and collect such
tolls as are required in order that toll revenues equal 1.50'timesthe net revenue requirement (as
defined in the Financial Model) for each year. The toll rates will be established as part of the
Financial Model for the Project, and such rates shall be presented to,the City Council before
implementation. Financial Model means the.computerized financial model including projected
revenues, expenses, projections and assumptions* operation of the Project showing, among
other things: (a) costs for the operation and maintenance of the Project, including management
payments to Cibolo Turnpike for its 'operation of the-Project; (b) debt service' costs for debt
incurred by Cibolo Turnpike related to,,,the-Project; (c)-reserves for operations and for capital
improvements or such other reserves.,as,,inaybe required- by sound engineering practice; (d)
payments to Cibolo Turnpike as a return`on equity'inyested'by'its partners, based on the Base
Case Equity IRR, as defined and set forth in,the Financial,Model;'and (e) payments to the City
and Cibolo Turnpike as a split of all remaining, evenues from-the operation of the Project, based
on the percentages as set forth in the,Financial Model
Section 4.2 Changes inRates,.Included within the Financial Model will be a schedule
of toll rates that will provide 'sufficient revenue.,in the following year. If Cibolo Turnpike
determines that revenue'projections are iriadequate'to meet the requirements as set forth in the
Financial Model, it will have a traffic,engineering study performed so as to recommend a new
schedule of tolls which will then provide.for sufficient revenue projections in the following year
to comply with the Financial Model. Cibolo Turnpike shall present the schedule of toll rates to
the City and shall notify the City of any potential increase of toll rates at least 90 days before
such increases are effective.
Section 4.3 Annual-Report. Cibolo Turnpike shall provide an annual report to the City
90 days following each anniversary date of toll operations. The Annual Report shall contain the
following: Strategic Plan, Revenue Report, Expense Report, Roadway Conditions, a summary of
Cibolo Turnpike's annual audited financial statements; and information by which the City can
verify the amounts payable to the City under this Agreement.
ARTICLE V
COMPENSATION
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Section 5.1 Compensation / Revenue Sharing. This section details the anticipated
Compensation and Revenue Sharing associated with the Project. Any revenue sharing will be
based on the Financial Model as developed for the Project. If Cibolo Turnpike has undertaken
the construction and operation of the Project, Cibolo Turnpike's and City's compensation or
return shall be payable annually in the following order of priority from the Project revenues
remaining after payment of:
(a) Expenses: operation and maintenance expenses on the Project; taxes on
the Project; management fees; reserves for capital improvements to the Project as set forth in the
Financial Model or as otherwise required by sound engineering practice; all contract payments;
and Debt service on debt incurred by Cibolo Turnpike to finance or improve the Project.
(b) Distribution Priority:
(i) Payment to Cibolo Turnpike`as:a return on equity based on the
Base Case Equity IRR; then
(ii) A split of all remaining revenue of,the Project, based on the
percentages as set forth in the Financial Model.
- ARTICLE VI '
CITY RESPONSIBILITIES
Section 6.1 Governmental Approvals. City shall assist Cibolo Turnpike in obtaining
all governmental approvals-required for the'operation ofthe=Projeet:-To the extent application for
a governmental approval must be made in the'name of City..,: City authorizes Cibolo Turnpike
(a)to prepare and submit to the permitting entity such information and analysis as may be
required or requested by. such 'entity, (b) to,complete such forms, applications or other
agreements that may be required to,be executed by City, (c) to negotiate and otherwise develop
appropriate permit conditions and (d) to take;all 'other actions reasonably required to obtain
governmental approvals. '' If required by law-,.. and notwithstanding any provision in this
Agreement to the contrary,'City will execute such forms, applications or other agreements as
may be reasonably requested,by Cibolo'Turnpike in order to obtain governmental approvals
subject to review'by City. Notwithstanding any provision in this Agreement to the contrary, City
agrees to accept any-governmental approval that must be issued in the name of City as may be
required for the development,`construction or operation of all or any portion of the Project,
provided that the governmental approval does not impose any financial obligation on City, nor
any conditions on City that materially and adversely affect any operation of City.
Section 6.2 Tax Benefits. If Cibolo Turnpike reasonably determines that
(commercially reasonable) structural or contractual arrangements related to the Project will
maximize the availability of tax or other state or federal government benefits, City shall approve
such structural or contractual arrangements and take such other actions as are necessary to
maximize the availability of such benefits, including, without limitation City's actions in
entering into an operating or similar agreement for any future portion of the Project to Cibolo
Turnpike, or its affiliate or designee to obtain the benefits of depreciation deductions, tax credits
or similar tax benefits.
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ARTICLE VII
OTHER PROVISIONS
Section 7.1 Other Provisions. This Agreement has or requires:
(i) The exclusive right to operate and maintain the Project, subject to
the terms of this Agreement;
(ii) The unrestricted ability to impose,and raise tolls on the Project in
order to meet all necessary financial obligations as established'in the Financial Model subject to
the terms of this Agreement;
(iii) Cibolo Turnpike shall-Maintain during,the term of this Agreement
market insurance provisions related to the operation of the Project;
(iv) Agreement of',Cityto cooperate and assist with all required
governmental approvals, including, but not limited>to, environmental approvals required in the
operation of the Project; f
(v) Agreement`'of City to coordinate with the TxDOT and any other
governmental authority in an effort td acquire-any additional`rights of way or sites for any future
expansion of the Project through the use-,of`existing or acquired road rights of way or other
locations;
(vi)
-LL " In,recognition.,of,City's.development of the Project the following
provisions regarding tolled and non-tolled routes-are not subject to amendment, unless at the
City's sole discretion, the City determines to make`an adjustment or amendment:
A:` YTrips--beginning,,or ending on the Cibolo Expressway will
not have to-pay any toll;relating to the Cibolo,Expressway only.
B. ., All trips beginning or ending on the Cibolo Parkway shall
pay that portion of tlie,'tolls applicable to and for such trip.
C., ;
All through trips —any trip that does not orginate or
terminate.-in the City shall pay tolls on both the Cibolo Expressway and the Cibolo
Parkway. , '
(vii) .'`The'following vehicles shall not be subject to any toll for travel on
the Project: official City of:Cibolo vehicles, official City of Schertz vehicles, official Schertz-
Cibolo-Universal City Independent School District vehicles, and official Guadalupe County
Sheriffs Office vehicles, vehicles being used by an entity to provide emergency services to the
City of Cibolo under contract; or such other vehicles exempted by state law from the payment of
tolls.
(viii) Notwithstanding any provision to the contrary nothing in this
Agreement shall be construed to require the City to enter into any"non-compete" agreement; and
no contract authorized under this Agreement shall ever negate or diminish the City Council's
authority to plan, fund and construct future streets, roads, highways, mass transit, or other such
improvements as City Council may, in its sole discretion, find necessary to address the
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transportation needs of the City and its citizens. Further, should such a "non-compete"provision
be incorporated in any contract or agreement authorized by this Agreement, it shall be void ab
initio.
(ix) Operator's insurance requirements (worker's comp., automobile,
liability) Cibolo Turnpike will provide the appropriate operator's insurance for the Project,
including worker's comp, and general liability coverage (the "Insurance Coverage"). The
Insurance Coverage consistent with the City coverages and requirements and such insurance will
be included and delineated within the Operation and Maintenance Procedures Manual.
Section 7.2 Indemnification. Cibolo Turnpike shall°,,indemnify, defend and hold
harmless the City and its respective City Council members, officers, employees, representatives,
attorneys and agents (the "City Indemnitees") from any,losses or claims that may at any time be
imposed upon, asserted against or incurred by any City'Indehnitee, to the extent such losses
arise out of:
(a) The inaccuracy in any material respect of any representation or warranty
of Cibolo Turnpike contained herein or the failure of Cibolo Turnpikein any material respect to
comply with any of its obligations under this Agreement; or ,- ; '1.
(b) Cibolo Turnpike's breach of a.contract,with a third party, or the negligent
acts or omissions, or the gross negligence, or the recklessness, or the willful misconduct of
Cibolo Turnpike or any of its partners;=contractors, agents`or affiliates in connection with the
Project.
ARTICLE VIII
CITY'S`RIGHT:TO EARLY BUY OUT THE PROJECT
Section_8.1 If the City<<wishes`to terminate this Agreement without cause, it will
require them to provide for a one-time termination payment which shall include; (1) amounts
sufficient to yay all debt'incurred'by Cibolo Turnpike in connection with financing the Project;
(2)any swap_termination payments related to any debt incurred in connection with the Project;
and, (3)a make-whole payment in U.S:,;dollars equal to the Net Present Value of all future
Distributions, through the complete term of this Agreement, as indicated by the Financial Model.
The discount rate to be.,used ons such calculation shall be the 20 year U.S. Treasury Bond rate or
the Prime Rate, whichever is lower, on the day prior to closing as shown in the Wall Street
Journal or, if not available `there, then some other nationally recognized daily financial
publication.
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ARTICLE IX
REPRESENTATIVES
Section 9.1 Cibolo Turnpike's Representative. Upon execution of the Agreement,
Cibolo Turnpike shall designate, in writing, to City, the name of the individual who is to be the
Cibolo Turnpike representative (the "Cibolo Turnpike's Representative")with full authority to
execute any and all instruments requiring Cibolo Turnpike's signature and to act on behalf of
Cibolo Turnpike with respect to all matters arising out of this Agreement. Cibolo Turnpike's
Representative shall represent the interests of Cibolo Turnpike,-be responsible for overseeing all
aspects of design, construction and development of the City Facilities, and work closely with
City's Representative (as defined below). Any consent; approval, decision or determination
hereunder made by Cibolo Turnpike's Representative shall.'be binding on Cibolo Turnpike;
provided, however, Cibolo Turnpike's Representative�•shall not„have any right to modify, waive
or amend any provision of the Agreement, or terminate the Agreeinent.-
Section 9.2 City's Representative. - Upon execution of this, Agreement, City shall
designate a board member to be City's representative (the "City's Representative") and provide
Cibolo Turnpike with written notice of the identity of ,such`/individual so',,designated. With
•
respect to any action, decision or determination which;;is.to be taken or made by'City under the
Agreement, City's Representative may'take`such action'°or,make such decision or determination
or shall notify Cibolo Turnpike in writing Oft* person(s)-responsible for such action, decision
or determination and shall forward any communications and documentation to such person(s) for
response or action. AnyT;consent, approval, decision or determination hereunder by City's
Representative shall,bebinding;on,City to the;extent,City.has-:the legal power to delegate to an
individual the ability to give such,consent or'sapproval or makej`such decision or determination;
provided, however, City's'aRepresentative shall;not have any right to modify, waive or amend
any provision..of_.the Agreement, or terminate the,;Agreement. Cibolo Turnpike and any Person
dealing with City_in connection with the Agreement or any matter governed by the Agreement
may rely and shall' be fully protected in 'relying, upon the authority and capacity of City's
Representative or any such designee to•act for and bind City in any such matter.
From time to time following the'execution hereof, Cibolo Turnpike may change or
replace Cibolo Turnpike's Representative and City may change or replace City's Representative
upon five (5) business days' written notice to the other party, delivered to such party in the
manner and at the address indicated in Section 12.7 hereof.
ARTICLE X
DEFAULT,ABANDONMENT
Section 10.1 Events of Default by City. The following shall constitute Events of
Default by City under this Agreement:
(a) Failure to observe or perform any material term, provision, condition or
obligation under the Agreement, and failure to cure such default within thirty (30) days
following notice or discovery of such default; provided, however, that if the failure to observe or
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perform cannot reasonably be cured within the thirty (30) day period, the failure to observe or
perform will not constitute an Event of Default if City begins corrective action within the thirty
(30) day period and thereafter proceeds with reasonable diligence to effect the cure as soon as
practicable.
(b) Any material representation or warranty made by City that is false,
misleading or inaccurate in any material respect at the time made.
(c) City shall (i) apply for or consent to, or become subject to, the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself
or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as such debts generally become due, (iii).make a general assignment for
the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code
(as now or hereafter in effect), (v) file a petition seeking-to�take advantage of any other law
relating to bankruptcy, insolvency, reorganization,,winding-up; orcomposition or adjustment of
debts, (vi) take any action for the purpose of'effecting any`‘of=the foregoing, or (vii) be
adjudicated as bankrupt or insolvent by any court::
(d) Final legislative, admin strative or judicial action after'the date hereof that
limits City's authority so as to materially and'.adversely affect its ability,.to perform its
obligations under this Agreement and'City does not enter,into an amendment to,this Agreement
as provided in Section 11.3 within thirty (30) days of'such final legislative, administrative or
judicial action. However, no future legislative changes shall,ever cause the financial obligations
related to the Project to become obligations.,of the City...
Section 10.2 ,Events -of Default by Cibolo Turnpike The following shall constitute
Events of Default by Cibolo Turnpike under theAgreement:
(a) Failure.to,observe.,or perform any material term, provision, condition or
obligation under the Agreement and failure to cure such default within thirty (30) days following
notice or'discovery of such default; provided;:however, if the failure to observe or perform
cannot reasonably be cured,,withinthe thirty (30)-day period, the failure to observe or perform
will not be an Event of Default.if Cibolo Turnpike begins corrective action within the thirty(30)
day period and thereafter proceeds with`reasonable diligence to effect the cure as soon as
practicable.
(b) . Any representation or warranty made by Cibolo Turnpike that is false,
misleading or inaccurate-iin.any material respect at the time made.
(c) Abandonment by Cibolo Turnpike except as specifically permitted by the
Agreement.
(d) Cibolo Turnpike shall (i) apply for or consent to, or become subject to, the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself
or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as such debts generally become due, (iii) make a general assignment for
the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code
(as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law
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relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of
debts, (vi)take any action for the purpose of effecting any of the foregoing, or (viii) be
adjudicated as bankrupt or insolvent by any court.
Section 10.3 Remedies for City Default.
(a) Upon the occurrence and continuance of an Event of Default by City
under the Agreement, Cibolo Turnpike may suspend performance under the Agreement and
Cibolo Turnpike will have such remedies as may be available to it law or in equity.
(b) Upon the occurrence and continuance of,an Event of Default by City
under Section 10.1(a) of this Agreement, Cibolo Turnpike shall be entitled to injunctive relief
against City.
(c) Upon the occurrence and continuance ofy,an, Event of Default by City
under the Agreement, Cibolo Turnpike may terminate this Agreement by delivering notice in
writing to City specifying the nature of the Eyerit of Default and establishing a termination date,
which date shall not be less than thirty (30) days\,following the date of delivery of the notice
whereupon the Agreement shall terminate on the.,specified.termination date unless City shall
have cured the Event of Default by such date, in whicli-'case'"the notice of termination shall be
cancelled. Liabilities of City accruing:under,this Agreeinent.prior to the date of termination shall
survive any termination.
(d) Without prejudice'yto'any other'tights and remedies that the other party
may have, each of the parties agrees that damages may not be an'adequate remedy for a breach
of Section 10.1(a) of the.Agreement; and that.tlieother party will, in such case, be entitled to the
remedies of injunction,.specific performance or other equitable relief for any threatened or actual
breach of Section 10.1(a) of this Agreement.
Section 10.4 Remedies for Cibolo Turnpike.Default.
(a) Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under this Agreement; City may,suspend performance under this Agreement and City
will have such remedies as may, be available under this Agreement.
(b) - Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under the Agreement, City may terminate this Agreement by delivering notice in
writing to Cibolo Turnpike specifying the nature of the Event of Default and establishing a
termination date, which date-shall be not less than one hundred and twenty (120) days following
the date of delivery of the notice whereupon this Agreement shall terminate on the specified
termination date unless Cibolo Turnpike shall have cured the Event of Default by such date, in
which case the notice of termination shall be cancelled. Liabilities of Cibolo Turnpike accruing
under this Agreement prior to the date of termination shall survive any termination.
(c) Upon the occurrence and continuance of an Event of Default by Cibolo
Turnpike under this Agreement, which Cibolo Turnpike fails to cure, and which constitutes a
material misrepresentation, gross negligence, or recklessness, or willful misconduct by Cibolo
Turnpike or any of its partners, contractors, agents or affiliates in connection with the Project, the
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City may suspend performance under this Agreement and the City shall have such remedies as
may be available to it by law or in equity; including but not limited to recovery of actual
damages the City may incur as a result of the breach.
(d) Without prejudice to any other rights and remedies that the other party
may have, each of the parties agrees that damages may not be an adequate remedy for a breach
of Section 10.1(a) of this Agreement, and that the other party will, in such case,be entitled to the
remedies of injunction, specific performance or other equitable relief for any threatened or actual
breach of Section 10.1(a) of this Agreement.
(e) Upon the occurrence and continuance'of an Event of Default by Cibolo
Turnpike under Section 10.2(a) of this Agreement, City'shalltbe entitled to injunctive relief
against Cibolo Turnpike.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
Section 11.1 Cibolo Turnpike's Representations/and Warranties:_ 'Cibolo Turnpike
hereby represents and warrants to City•that: , ,
(a) Organization. ,,Cibolo,:Turnpike 'is a :Texas limited partnership duly
formed, validly existing and in good standing under-the laws.ofthe State. Cibolo Turnpike has
all requisite power and,.authority to enter into the,;Agreement.and to perform its obligations
hereunder. --
(b) Authorization;WO Violation:''The execution, delivery and performance by
Cibolo Turnpike of this Agreement have been duly authorized by all necessary action and will
not violate--the'-organizational,documents- of Cibolo Turnpike or result in the breach of or
constitute a,default.under any loan or credit;agreement, other material agreement, judgment or
decree to which Cibolo=:Turnpike is'a party or by which Cibolo Turnpike, or its material assets,
may be bound or affected; the Agreement has been duly executed and delivered by Cibolo
Turnpike and the Agreement,and the documents referred to herein constitute valid and binding
obligations of Cibolo Turnpike,subject to bankruptcy, reorganization, moratorium and other laws
relating to the enforcement ofs creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against or affecting Cibolo Turnpike which
could reasonably be expected to have a material adverse effect upon Cibolo Turnpike's
performance under the Agreement or the financial condition or business of Cibolo Turnpike.
There are no outstanding judgments against Cibolo Turnpike which would have a material
adverse effect upon its assets,properties or franchises.
(d) No Violation of Laws. Cibolo Turnpike has received no notice as of the
date of this Agreement asserting any noncompliance in any material respect by Cibolo Turnpike
with applicable statutes, rules and regulations of the United States of America, of the State, or of
any other state or municipality or agency having jurisdiction over and with respect to the
transactions contemplated in and by this Agreement; and Cibolo Turnpike is not in default with
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respect to any judgment, order, injunction or decree of any court, administrative agency, or other
governmental authority which is in any respect material to the transactions contemplated hereby.
Section 11.2 City's Representations and Warranties. As of the date of this Agreement,
City makes the following representations and warranties to Cibolo Turnpike:
(a) Organization. City is a public body and a political subdivision of the State
and has all requisite power and authority to enter into the Agreement and to perform its
obligations hereunder.
(b) Authorization; No Violation. The execution, delivery and performance by
City of the Agreement have been duly authorized by all necessary action and will not violate
City's articles of incorporation or bylaws or any applicablelaws, or result in the breach of any
material agreement, judgment or decree to which City-is a.party; the Agreement has been duly
executed and delivered by City and the Agreement_ and the documents referred to herein
constitute valid and binding obligations of City enforceable against'City in accordance with its
terms subject to bankruptcy, reorganization;- moratorium and `other laws relating to the
enforcement of creditors' rights generally and;to general equitable principles (regardless of
whether enforcement is sought in a proceeding at..law or in equity).
(c) Litigation. No,suit is pending against or affecting'City which could
reasonably be expected to have a`material adverse effect;upon City's performance under this
Agreement. .
A•
(d) No Violation of Laws. City has received no notice as of the date of this
Agreement asserting any:noricompliance in any material-respect by City with applicable statutes,
rules and regulations,of the-United States ofAmerica,-the-State•or any agency having jurisdiction
over and with respect to',the transactions contemplated in and bythis Agreement; and City is not
in default with respect to'any judgment, order, injunction or decree of any court, administrative
agency, or other governmental authority"which':is'\in any respect material to the transactions
contemplated hereby
-Section 11.3 Mutual Representations and Warranties; Restructure Due to Legislative,
Administrative or Judicial`'-Actions. In the event of a final legislative, administrative or judicial
action after the`date hereof that 1'imits Cibolo Turnpike's authority or the City's authority so as to
materially and adversely affect‘either of said party's ability to perform its obligations under this
Agreement, Cityand Cibolo Turnpike will in good faith negotiate changes to this Agreement
reasonably acceptable'to both-.parties that accomplish the purposes of this Agreement in a
manner that preserves 'to'the` extent reasonably possible the economic benefits to both Cibolo
Turnpike and City as set forth:hi the Financial Model.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Uncontrollable Circumstances. An uncontrollable circumstance is an
event or circumstance, including an action of a governmental entity or a change in law, which
prevents a party from performing its obligations under an agreement or which materially
increases the time or cost for performing under an agreement, which event or circumstance was
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not anticipated as of the date of the agreement, which is not within the reasonable control of, or
the result of the negligence of, the claiming party, and which, by the exercise of due diligence,
and commercially reasonable efforts, the claiming party is unable to overcome or avoid or cause
to be avoided ("Uncontrollable Circumstance"). Except as otherwise herein expressly provided,
if either City or Cibolo Turnpike shall be delayed or hindered in, or prevented from, the
performance of any covenant or obligation hereunder (other than the payment of money), as a
result of any Uncontrollable Circumstance, and, provided that the party delayed, hindered or
prevented from performing notifies the other party both of the commencement and of the
expiration of such delay, hindrance or prevention (each notice being required within ten (10)
business days of the respective event), then the performance of such covenant or obligation shall
be excused for the period of such delay, hindrance or, prevention and the period for the
performance of such covenant or obligation shall be extended='by the number of days equivalent
to the number of days of the impact of such delay, hindrance'or;prevention. Failure to so provide
the foregoing notice will not result in waivers of either an excuse-in,performance or an extension
of time to perform under this Section 12.1 with respect to \anysuch delay, hindrance or
prevention.
Section 12.2 Amendment; Waiver. No.alteration, amendment Or modification hereof
shall be valid unless executed by an instrument in writing-by City and Cibolo,Turnpike with the
same formality as this Agreement. 06-failure of City�or Cibolo Turnpike to insist in any one or
more instances upon the strict performance of any`'of'the covenants, agreements, terms,
provisions or conditions of this Agreement or to exercise any election or option herein contained
shall not be construed as a waiver or relinquishment'for the future of such covenant, agreement,
term, provision, condition, election or option, and shall not be deemed to establish a course of
conduct among the parties, but the•.same shall continue and remain in full force and effect. No
waiver by City or Cibolo Turnpike'of any covenant, agreement, term, provision or condition,
election or option of this Agreement shall be'deemed to have been made unless expressed in
writing and,signed by an appropriate official on behalf of Cibolo Turnpike or City. The parties
acknowledge that at the time this-/Agreement-is executed, the precise details and scope of the
Project have not yet been.deterinined. Moreover,°the parties acknowledge and agree that future
efforts for the operation of the Projectevolve over time, and that subsequent developments
may impact the terms of this\Agreement and call for a modification or amendment of this
er
Agreement. Accordingly, th ,:parties agee' to negotiate mutually and in good faith to enter into
such amendments 'or modifications of this Agreement as may reasonably be indicated by the
subsequent details`thatevolve concerning the Project that preserve the economic benefits to both
Cibolo Turnpike and'City,as set forth in the Financial Model
Section 12.3 Consent'. Unless otherwise specifically provided herein, no consent or
approval by City or Cibolo Turnpike permitted or required under the terms of the Agreement
shall be valid or be of any validity whatsoever unless the same shall be in writing, signed by the
party by or on whose behalf such consent is given.
Section 12.4 Severability. If any provision of this Agreement is held by final judgment
of a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalid, illegal or
unenforceable provision shall be severed from the remainder of this Agreement, and the
remainder of this Agreement shall be enforced. In addition, the invalid, illegal or unenforceable
provision shall be deemed to be automatically modified, and, as so modified, to be included in
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this Agreement, such modification being made to the minimum extent necessary to render the
provision valid, legal and enforceable. Notwithstanding the foregoing, however, if the severed
or modified provision concerns all or a portion of the essential consideration to be delivered
under this Agreement by one party to the other, the remaining provisions of this Agreement shall
also be modified to the extent necessary to equitably adjust the parties' respective rights and
obligations hereunder.
Section 12.5 Binding Effect. Except as may otherwise be provided herein to the
contrary, this Agreement and each of the provisions hereof shall be binding upon and inure to the
benefit of Cibolo Turnpike and City, and their respective permitted successors and assigns.
Section 12.6 Relationship of Parties. Nothingcontained in this Agreement shall be
deemed or construed by City or Cibolo Turnpike hereto of,by any third party to create a
relationship,partnership,joint venture or any association:betweeri Cibolo Turnpike and City.
•
Section 12.7 Notices. Except as otherwise provided herein,, all notices, demands,
consents, approvals, statements, requests and'invoices to be given under this Agreement shall be
in writing, signed by the party or officer, agent or\,attorney of the part gi iing the notice, and
shall be deemed effective upon receipt if hand delivered or if"sent by telecopy with transmission
confirmation or overnight courier service; and if sent`by the-United States mail;,pbstage prepaid,
certified mail, return receipt requested, then-it shall be deemed effective three (3) business days
after mailing or the date of refusal, ad'dressed.as follows:
To City: Cityof„Cibolo"
- 200 S::Main
r • ` . Cibolo,``Texas.78108 '`
'Attn: Robert T. Herrera, City Manager
To Cibolo Turnpike:'°ti. Cibolo.Turnpike.L.P.
25 Highland Park Village#100-758
Dallas, Texas'75205
`Attu: John N. Crew, Manager
Either City or Cibolo;Turnpike may from time to time by written notice given to the other
pursuant to the terms of'this Section 12.7 change the address or designees to which notices shall
be sent or designate one or more.additional Persons to whom notices are to be sent.
Section 12.8 Governing Law. This Agreement and any matter relating to this
Agreement, including any matter in contract or tort or in equity or at law, shall be governed by
the laws of the State of Texas without regard to principles of conflicts of law that direct the
application of the laws of a different state. If the parties do not agree to arbitration with
respect to a particular claim or dispute in accordance with the terms of this Agreement, the
parties agree that any legal action shall be brought in a state or federal court of competent
jurisdiction in Guadalupe County, Texas, and the parties agree to establish venue in such
county. The parties further agree that any such lawsuit that may be brought shall be tried
by the court, without a jury.
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Section 12.9 Effective Date. This Agreement shall be a legally binding agreement, in
full force and effect, as of the date set forth in the first paragraph of this Agreement.
Section 12.10 Further Assurances. City and Cibolo Turnpike shall execute,
acknowledge and deliver, after the date hereof, without additional consideration, such further
assurances, instruments and documents, and shall take such further actions, as Cibolo Turnpike
or City shall reasonably request of the other in order to fulfill the intent of this Agreement and
the transactions contemplated hereby.
Section 12.11 Third-Party Beneficiary. The provisions of this Agreement are for the
exclusive benefit of City and Cibolo Turnpike and not for.the benefit of any third person, nor
shall this Agreement be deemed to have conferred any rights,,express or implied, upon any third
person unless otherwise expressly provided for herein.
Section 12.12 Counterparts. This Agreement may be "executed in two or more
counterparts, each of which shall be deemed an'original but all of which.together shall constitute
one and the same instrument.
Section 12.13 Prior Agreements Superseded:,. This Agreement supersedes any prior
understanding or written or oral agreements between'City,or Cibolo Turnpike'respecting the
within subject matter, and contains,the,:entire understanding between the parties with respect
thereto. There are no oral agreements"between City and Cibolo Turnpike.
Section 12.14 Non-Exclusive Remedies. ,Except as"otherwise provided herein, no
remedy herein conferred or reserved is intended to,,be exclusive of ariy other available remedy or
remedies, and each and every such:remedy shall be.cumulative and shall be in addition to every
such remedy given under this Agreement or now;or hereafter existing at law or in equity or by
statute. It is expressly agreed that the-.remedy`at law for breach by a party of its obligations
hereunder,May be inadequate inview of the complexities and uncertainties in measuring the
actual damages'which,would be,sustained by reason of either party's failure to comply fully with
each of.such obligations; Accordingly, the obligations of each party hereunder are expressly
made enforceable by specific performance, except as otherwise specifically provided herein.
Section,12.15 Language. ;The language used in this Agreement shall be deemed to be the
language chosen'by the parties hereto to express their mutual intent, and no rule of strict
construction shall be..applied against any party.
Section 12.16 Computing Time, Saturday, Sunday or Holiday. The day of an act, event,
or default after which a designated period begins to run is not included when computing a period
prescribed or allowed in this Agreement. The last day of the period is included, but if that day is
a Saturday, Sunday or legal holiday, the period extends to the end of the next day that is not a
Saturday, Sunday or legal holiday.
Section 12.17 Lawsuits. To the extent permitted by law, City agrees to cooperate with
and assist Cibolo Turnpike in connection with initiating or defending any actions, including
mediation, arbitration, or state or federal administrative or court proceedings, against or brought
by third parties that threaten to stop, delay or increase the cost of(a) completion of the Project,
(b) the imposition or collection of any revenue necessary for the funding of the Project, (c) the
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remediation, if necessary, of the Project Site, and (d) the negotiation, execution, or
implementation of this Agreement or any other agreement between City and Cibolo Turnpike or
otherwise related to the Project, including the enforcement of any indemnity provisions. Cibolo
Turnpike shall reimburse the City for all costs and expenses, the City actually incurs in providing
assistance to Cibolo Turnpike in the initiation or defense of any action pursuant to this section,
including, but not limited to, the City's actual attorney's fees.
Section 12.18 Attorneys' Fees. In the event of any controversy, claim or dispute
between City or Cibolo Turnpike arising from or relating to this Agreement(whether in litigation
or arbitration, and including the enforcement of any indemnity-provisions), the prevailing party
shall be entitled to recover reasonable costs, expenses and attorneys' fees. For all purposes of
this Agreement and any other documents relating to the,Agteement, the terms "attorneys' fees"
or "counsel fees" shall be deemed to include paralegals' and,legal assistants' fees, and wherever
provision is made herein or therein for the payment'of attorrieys',or counsel fees or expenses,
such provision shall include such fees and expenses (and any applicable sales taxes thereon)
incurred in any and all judicial, bankruptcy, reorganization, administrative or other proceedings,
including appellate proceedings, whether such fees or expenses arise before proceedings are
commenced or after entry of a final judgment. '
Section 12.19 Assignment. Any assignment by either party must `have the written
consent of the other, such consent not:to_be.unreasonably withheld, delayed or conditioned; but
excluding any assignment by the City,to aii iiistru~mentality;'created by the City created at any
time such assignment not requiring the'consent'ofCibolo Turnpike. In the event that the City
makes such assignment-fa' an. instrumentality, City shall notify. Cibolo Turnpike of such
assignment. Any purported' assignment in`violation of this Section 12.19 shall be void. This
section shall not limit the ability of'Cibolo Turnpike to contract with any third party, including
its own affiliates, to provide services to or in support of the Project.
4 s
Section 12.20 Time 'of theE"ssence.'-Subject'to the terms hereof, time is of the essence
with respect'to.the''performance`'of each of tlie-covenants and obligations contained in this
Agreement.
Section 12.21 Medialion. s,
(a) Any claim, dispute, or other matter in question arising out of or related to
the Agreement shall be, subject to mediation as a condition precedent to arbitration or the
institution of legal or equitable proceedings by either party.
(b) City and Cibolo Turnpike shall endeavor to resolve claims, disputes and
other matters in question between them by mediation which, unless the parties mutually agree
otherwise, shall be in accordance with the Construction Industry Mediation Rules of the
American Arbitration Association then currently in effect. Request for mediation shall be filed
in writing with the other party to this Agreement and with the American Arbitration Association.
The request may be made concurrently with the filing of a demand for arbitration but, in such
event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which
shall be stayed pending mediation for a period of thirty (30) days from the date of filing unless
stayed for a longer period by agreement of the parties or court order.
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(c) City or Cibolo Turnpike agree to split the mediator's fee and any filing
fees equally. The mediation shall be held in Guadalupe County, Texas, unless another location is
mutually agreed upon. Written agreements reached in mediation shall be enforceable as
settlement agreements in any court having jurisdiction thereof.
Section 12.22 Dispute Resolution. Any claim, dispute or other matter in question arising
out of or related to this Agreement or otherwise arising from the design, construction and
operation of the Project, shall first be subject to mediation in accordance with the provisions of
Section 12.22. Claims, disputes and other matters in question between the parties may be
decided by arbitration, but only if both Cibolo Turnpike and City so agree at the time. Any such
arbitration shall be conducted in accordance with the provisions of Section 12.23.
Section 12.23 Arbitration.
(a) If the parties agree as providedinSection,12.22, any claim, dispute or
other matter in question arising out of or related tO this Agreement or,otherwise arising from the
design and construction of the Project shall be subject to arbitration. .
(b) The arbitration shall be in accordance with the Federal Arbitration Act and
the Construction Industry Arbitration Rules currently-,in effectand as modified.herein. Demand
for arbitration shall be filed in writing by both parties..to this Agreement 'with, the American
Arbitration Association.
(c) A request for arbitratioif:shall be made within a reasonable time after the
claim, dispute or other matter in question has arisen: -In no event shall a request for arbitration be
made after the date when institution of legal or-equitable proceedings based on such claim,
dispute, or other matter-in.question-would b'e.barred by the pplicabl statute of limitations.
(d) Ah arbitration arising'~out'of or related to the Agreement may be
consolidated with an arbitration with the parties,.or entities involved in the design, development,
and construction-ofthe Projectif such-arbitrationinvolves common issues of fact relating to the
parties' obligations under thisAgreement: ;_f
(e) All statements'submitted`by the parties to the arbitrator(s) which include
any monetaryfclaim, counterclaim or:cross-claim must state the monetary amount being sought.
In the event that the monetary`:amount,is.;unliquidated or has not been fully determined, the
statement seeking, such recovery} shall State, in good faith, the minimum amount of such
monetary claim, exclusive of interest and attorneys' fees.
(f) All,arbitrations involving monetary claims in excess of two hundred fifty
thousand dollars ($250,000), 'exclusive of interest and attorneys' fees, shall be decided by an
arbitration panel consisting Of three(3)persons.
(g) The arbitrator (or panel of arbitrators, if applicable) shall establish
reasonable procedures and requirements for the production of relevant documents and require the
exchange of information concerning witnesses to be called. For arbitrations involving monetary
claims in excess of fifty thousand dollars ($50,000): (1) the parties shall be entitled to discover
all documents and information reasonably necessary for a full understanding of any legitimate
issue raised in the arbitration and (2) the parties may use all methods of discovery available
under the Federal Rules of Civil Procedure, as modified by the Local Court Rules of the United
States District Court for the Northern District of Texas, and shall be governed thereby. Prior to
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the deposition of any expert witness, the party proposing to call such a witness shall provide a
full and complete report by the expert, together with the expert's calculations and other data by
which the expert reached any opinions concerning the subject matter of the arbitration. The
report shall be provided no less than ten (10) days prior to the date set for the expert witness'
deposition. Any disputes arising from such discovery shall be decided by the arbitrator(or panel)
and such decision or action taken by the arbitrator (or panel) shall be final as in all factual
matters.
(h) There shall be a prehearing meeting between City and Cibolo Turnpike at
which each party shall present a memorandum disclosing the factual basis of its claim and
defenses and disclosing legal issues raised. The memorandum shall also disclose the names of
any expert a party shall present as a witness during the proceedings. At the prehearing meeting,
the arbitrator (or panel) shall make and set schedules for hearings consistent with the powersas
set forth herein.
(i) If the arbitrator(or panel) finds,after affording:an opportunity to be heard,
that City or Cibolo Turnpike has abused the discovery process or has failed to act in good faith
with regard to discovery or these arbitration rules;.the arbitrator (or panel) shall have, in addition
to any other powers conferred by law or the Constructiop Industry Arbitration Rules, those
powers conferred upon trial courts by the Federal Rtiles of Civil Procedure, subject to the same
conditions and limitations set forth therein.
(j) The Federal Rules'of.Evidence shall be applied by the arbitrator(or panel)
but liberally construed to allow for the admission of evidence that is helpful in resolving the
controversy. Rulings oh.--the-admission 'of•;evidence made by the arbitrator (or panel) at the
hearing shall be final arid not:subject to any'appeal.-At the time of the award, the arbitrator (or
panel) shall prepare and providétothe parties findings of fact-arid conclusions of law supporting
the award. When such-.findings offact and conclusions of law are provided, the findings of fact
shall be final.
.(k) - The award of the-arbitrator(or panel) shall be final except that either City
or Cibolo Turnpike'may request judicial review of,the award for errors of law (other than errors
relating,-to .discovery disputes and,admissibility of evidence). Such review must be filed in a
court in Guadalupe County;Texas, having jurisdiction thereof no later than thirty (30) days after
the party seekingreview receives,or is deemed to have received notice of the award. When such
action for judicialreview has been timely and properly filed, no other action for enforcement of
the award shall beinitiated or) shall proceed until a final judgment has been rendered in the
proceeding for review.of.•the award for errors of law.
Section 12.24 Injunctive Relief. Notwithstanding the foregoing, the provisions of
Sections 12.20, 12.22 or 12:23 shall not apply to an action for injunctive relief or a writ of
mandamus filed in connection with this Agreement.
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Section 12.25 Confidentiality; Open Records Act.
(a) Each party to this Agreement agrees to keep confidential and not use,
reveal, provide or transfer to any third party any Confidential Information (as defined below) it
obtains or has obtained concerning the other party to this Agreement or the Project, except as
follows:
(i) subject to Section 12.2560, to the extent that disclosure to a third
party is required by applicable law or regulation;
(ii) information which, at the time ofdisclosure, is generally available
to the public (other than as a result of a breach of this Agreement or any other confidentiality
agreement to which a party to this Agreement is a party or Of which it has knowledge), as
evidenced by generally available documents or publications;.'
(iii) information that was:.in t-its possession prior to disclosure (as
evidenced by appropriate written materials) and was not acquired directly or indirectly from any
other party to this Agreement;
(iv) to the extent disclosure is necessary or advisable, to its employees,
consultants or advisors, or to its affiliates or their employees;consultants or advisors, in each case
solely for the purpose of carrying ou(tlieir duties under,,.this Agreement;
(v) to baiiks':;or~other financial .institutions or agencies or any
independent accountants or legal counsel or investment advisors employed in connection with the
Project, or by any party to_this Agreement;oto the extent fiisclosure,is necessary or advisable to
obtain financing, including;„without limitation, the Project financing and the raising of the
Development Capital by Cibolo Turnpike;
(vi)`. to investors in connection with the Project financing and raising
the Development Capital•, -
• - _ (vii) to potential`purchasers of a party to this Agreement or any affiliate
of a party to this Agreement thatdirectly or indirectly owns an equity interest in such party to this
Agreement;
(viii) ,to'the extent necessary, disclosure to third parties to enforce this
Agreement;
,(ix) to'another party to this Agreement; or
(x) , /to parties that have signed or agreed to be bound by this
confidentiality provision; provided, however, that in each case of disclosure pursuant to (iv), (v),
(vi), (vii) or (ix), the persons or entities to whom disclosure is made agree to be bound by this
confidentiality provision. The obligation of each party not to disclose Confidential Information
except as provided herein shall not be affected by the termination of this Agreement. As used in
this Section, the term "Confidential Information" shall mean information concerning this
Agreement and the properties, operations, business, trade secrets, technical know-how and other
non-public information and data of or relating to the parties to this Agreement or the Project.
The restrictions on disclosure of Confidential Information set forth above shall
lapse two (2) years from the date of the termination of the Project. In the event a party
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withdraws from the Project, such party shall remain subject to the restrictions on disclosure of
Confidential Information for two (2)years from the date of such party's withdrawal.
(b) If any Person requests City to disclose any Confidential Information under
the Texas Open Records Act (Tex. Gov't Code Ann. § 552.001 et seq.) or equivalent or
successor statute (the "Open Records Act"), prior to making such disclosure, City shall notify
Cibolo Turnpike of such request, in which case Cibolo Turnpike shall promptly and timely
inform City whether any of the requested materials constitute confidential, proprietary,
commercial, financial or trade secret information of Cibolo Turnpike which may be exempted
from disclosure under the Open Records Act, and, in that event, City and Cibolo Turnpike shall
cooperate with each other in preparing appropriate responses or`filings to the Attorney General
of the State and to any Person making such request, including any appeals involved therein, to
prevent a disclosure of such information. In such event, each party shall further cooperate with
the other to promptly identify any possible third party whose•,privacy or property interests may
be implicated by any such request to disclose information in order'tosenable Cibolo Turnpike to
timely furnish to any such third party any statutory notice required by the Open Records Act and
seek any applicable exemptions from disclosure under the Open Records Act. So long as Cibolo
Turnpike is pursuing the actions described"4abbye in a timely mariner';\City shall protect
confidential, proprietary or trade secret information,of Cibolo Turnpike*,"to which Cibolo
Turnpike requests City to do so, unless-otherwise compelled by court order, o'r 1by opinion of the
Texas Attorney General. All reasonable and necessary costs associated with City's cooperation
with Cibolo Turnpike hereunder in corinectioir--with any proceedings shall be borne by Cibolo
Turnpike, and City shall be fully reimbursed`for any of such costs it has reasonably incurred
including reasonable attorneys-'fees.
Section 12.26 No Recourse,to Cibolo.Turnpike. The'.obligations of Cibolo Turnpike
under this Agreement are,,recourse.solely to the iriterest of Cibolo Turnpike in the Project. No
recourse or liability shall-be had "against any director, officer, employee, agent, member
shareholder or partner of Cibolo.Turnpike.or of Texas Turnpike Corporation or their respective
affiliates.
Section 12.27 Waiver-of DTPA:, CITY AND CIBOLO TURNPIKE HAVE ASSESSED
THEIR RESPECTIVE RIGHTS, LIABILITIES AND OBLIGATIONS UNDER THE TEXAS
DECEPTIVE TRADE PRACTICES-CQNSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS,&.,COMMERCE CODE (THE "DTPA"). THE PARTIES AGREE THAT
THE DTPA DOES NOT APPLY TO EITHER CITY OR CIBOLO TURNPIKE BECAUSE
NEITHER QUALIFY AS. A "CONSUMER" UNDER SECTION 17.45(4) OF THE DTPA.
BUT IN THE EVENT THE DTPA IS DEEMED TO BE APPLICABLE BY A COURT OF
COMPETENT JURISDICTION, CITY AND CIBOLO TURNPIKE HEREBY WAIVE THEIR
RIGHTS UNDER THE DTPA, A LAW THAT GIVES CONSUMER SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH ATTORNEYS OF THEIR OWN
SELECTION, CITY AND CIBOLO TURNPIKE CONSENT TO THIS WAIVER. THE
PARTIES AGREE THAT THIS SECTION 12.27 CONSTITUTES A CONSPICUOUS
LEGEND.
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[Signature page follows.]
•
4,
\ • ,
„
' — 4
•
•
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their proper officers respectively, being thereunto duly authorized, and their respective seals
to be hereto affixed, as of the day and year first above written.
City of Cibolo:
By:
Allen Dunn .„
Mayor, City of Cibolo
Cibolo
On behalf of CIBOLO TURNPIKE,,LP, a Texas limited
partnership•,",, N
By: CIBOLO.TURNPIKE, GP, LLC,',,
,
, a Texas limited liability company, its General
• .,,,
•• - 'Partner
• - ,
By: -•-„TEXAS TURNPIKE CORPORATION,
alTexas-icorpOtation, its Sole Member and
Sole Manager
,
John N. Crew, President and
• Chief Executive Officer
Signature Page to Operating Agreement
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EXHIBIT 1
PROJECT MAP
.g*
—,
a r
rr
Exhibit 1
EXHIBIT B
AMENDMENTS TO EXISTING AGREEMENT
•
28227752.2 B-1
FIRST AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
between
the City of Cibolo, Texas
and
Cibolo Turnpike L.P.
FIRST AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
This First Amended and Restated Development Agreement (the "Agreement") is
made and entered into as of May 9, 2017 (the "Effective Date");by and
between the City of Cibolo, Texas ("City"), and Cibolo Turnpike L.P., a Texas limited
partnership ("Cibolo Turnpike")- for the purpose of memorializing certain amendments to
• ' P - -_sou -_,_ -- u - , s - i . . I . . 0 ; 11 • !_ • •!I • i_ " '_ ', •, • . t
Cit and Cibolo Turnpike by action of the City Council of the City taken on February 28,
2017.
Representatives of the City, the Texas Department of Transportation ("TxDOT"), and
Cibolo Turnpike, by and among themselves, have engaged in meaningful discussions identifying
both a transportation improvement and a significant economic development project that,
consistent with the scope of the City's Thoroughfare Plan and Land Use Plan, would benefit the
City and the area around the proposed Project (as detailed below). The parties to the Agreement
believe that the Project offers a number of diverse, ongoing opportunities to maximize the
economic benefits and opportunities for public and private entities within the City derived from a
limited-access high speed tolled highway. These benefits realized throughout the City include:
(1) an alternative separated grade crossing over the Union Pacific Railroad and FM 78; (2) a
bridged crossing over the frequently prone-to-flooding Cibolo Creek watershed; (3) additional
high speed northwest-southeast highway capacity; (4) development opportunities along the
proposed Project; (5) development, maintenance and diversification of the economy of the State;
(6) fostering the growth of enterprises based in the San Antonio metropolitan area and; (7)
development and expansion of transportation and commerce within the State.
On February 28, 2017, the City Council of the City authorized the City's entering into and
execution of the illnitial Development Agreement between the City and the Cibolo Turnpike.
This Agreement, which is an amendment and restatement of the eriginalJnitial Development
Agreement, is nowentered i to betwee^executed by such parties to clarify certain aspects of the
hereinafter-defined and described Project that is the subject hereof and to eliminate reference to
any Project component located in the City of Schertz, Texas. Upon execution of both parties
hereteOn the Effective Date, this Agreement replaces and supersedes in all manner and respect
the initiallnitial Development Agreement.
PROJECT OVERVIEW
The Project that is the subject of this Agreement is comprised of three interrelated
components: (1) the "Cibolo Parkway" (as further described and defined in Section 3.1(a)
hem, which is generally the design, build, finance, operation and maintenance of a new
tellfeadtoll road facility extending approximately 7 miles from the intersection of Weil Road and
FM 1103 southeast to IH 10 and10, (2) the "Cibolo Expressway" (as further described and
defined in Section 3.1(b) hereof), which generally consists of three "flyover" lanes on FM 1103
over Orth Lane, Green Valley Road, and near or around Saddle Spoke Road/Gatewood Bay,
being three cross streets within the City and that intersect FM 1103, which "flyover" lanes are in
addition to the improvements to the approximately 2.8 mile corridor of FM 1103 (from the City's
Initials: CITY (YU CIBOLO TURNPIKE Page 1
corporate limits near the intersection of FM 1103 and Chelsea/Old WiinWiederstein Road
to the intersection of FM 1103 and Rodeo Way) to be constructed by TxDOT (such
TxDOT-constructed improvements, as further described and defined herein, the "FM 1103
Improvements")fie, and (3) maintenance and operation of the foregoing by Cibolo Turnpike.
Accordingly the term "Project" means the (1) design, build and finance of the Cibolo
Expressway and the Cibolo Parkway and (2) operation and maintenance of the FM 1103
Improvements that are "turned back" to the City (such portion of the FM 1103 Improvements
herein referred to as the ETurnback FM 11032), the Cibolo Expressway, and the Cibolo Parkway.
Each Project component, as more fully described herein, is shown on the Project map attached
hereto and incorporated by reference as Exhibit 1; conceptual depictions of the Cibolo
Expressway are shown in Exhibit 2 and are also incorporated herein by reference.
eadToll Road Feasibility Process
The City formed a Blue-Ribbon Committee comprised of diverse community members to
consider the idea / concept of a tellreadtoll road within the community and to be part of the
City's thoroughfare plan. The Blue-Ribbon Committee fully endorsed the tellreadtoll road
concept and recommended that the City further advance the tellreadtoll road.
The City with Cibolo Turnpike's assistance performed a Feasibility Study to analyze the
viability of a possible tellreadtoll road facility in the City. The Feasibility Study considered the
projected traffic and revenue and estimated project costs. In addition, as part of the study process
a series of City Public Hearingspublic hearings were held to gather citizen input about this
possible Project. The City reviewed and accepted the Feasibility Study, and voted to move
forward with the process to develop the Project.
Cibolo Expressway(FM 1103 —Improvements)
TxDOT, in addition to planned improvements to other sections of FM 1103,is currently
planning improvements on FM 1103 from the City's corporate limits near the intersection of FM
1103 and Chelsea/Old Wiederstein Road to Rodeo Way Drive. The proposed TxDOT
improvements are to widen the existing two-lane facility to four-lanes, including raised medians
and left turn lanes, two 5' bike lanes, curbs and gutters, underground storm sewer system, and 6'
sidewalks along both sides of the roadway (collectively referred to as the "FM 1103
Improvements"). The - • - e _ _ , . " e " • :. -- .. . -
proposed ROW is 120 feet. TxDOT will acquire the additional ROW. The City will request
TxDOT that the design for the FM 1103 Improvements along that stretch of FM 1103 hereafter
defined as the Turnback FM 1103 accommodatethe-adelitierl-ef the Cibolo Expressway.
Under TxDOT's "Turnback Program" the City will request that upon TxDOT's
completion of the FM 1103 Improvements that TxDOT transfer to it (or an instrumentality
thereof) ownership of FM 1103 from the City's corporate limits near the intersection of FM 1103
and Chelsea/Old Wiederstein Road to Weil Road including the right-of-wayROW" (the
"Turnback 1103").
Cibolo Turnpike proposes to addconstruct the Cibolo Expressway" to the as
improvements to the Turnback FM 1103 in addition to the TxDOT-constructed FM 1103
Initials: CIT164 O •CIBOLO TURNPIKE C% Page 2
Improvements,- to such section of FM 1103. The Cibolo Expressway will be funded solely by
Cibolo Turnpike; and, as provided herein (and to the extent practicable), the construction of the
Cibolo Expressway shall be coordinated with TxDOT so that its construction shall occur
simultaneously with the construction of the proposed TxDOT—imprerts-constructed FM
1103 Improvements in order to minimize traffic disruption on FM 1103.
Cibolo Parkway
Cibolo Parkway is the proposed new tollreadtoll road facility from the intersection of
Weil Road and FM 1103 to the Zuehl Road Exit on I-10 approximately 7 miles long. Cibolo
Turnpike, on the City's behalf, will develop Cibolo Parkway that will include the design (with a
concrete surface in accordance with TxDOT standards for roads having similar size and scope),
environmental studies, right-of-way acquisition, construction, maintenance, and operation.
Project Development Process
Cibolo Turnpike will develop the Project in two phases,with Phase I being development
of a Pro Forma Model to verify the financial viability of the Project, and Phase II being the detail
design, ROW acquisition, and construction of the Project. As the Project develops, the parties
retain the ability to add additional components to provide drivers with an improved
transportation experience and improved access to destinations.
RECITALS
A. Essential transportation improvements in and around the City are required to
satisfy the accelerated growth being experienced there. Financial assistance from the State is not
currently available for all of the City's approved and critical projects; therefore, the City has
resourced another alternative to help provide the funding it needs.
B. Extensive, prime economic development opportunities exist in an area of the City
bound by the FM 78 on the west and IH-10 on the east. These opportunities include commercial
and residential growth along both of these major transportation corridors, as well as new
improvements to the City's infrastructure that will implement and manage planned growth for
this undeveloped area of the City.
C. The City has determined that it would be in its best interests, in fulfilling its
public purpose and legislative mandate, to develop a limited-access high speed tolled highway to
satisfy economic and population growth issues as well as to provide an alternate
southeast/northwest route separated grade crossing over the Union Pacific Railroad and FM 78,
between IH-35 and IH-10.
D. The City wishes to further define the feasibility of the Project, and thus Cibolo
Turnpike will undertake studies, including the Pro Forma Model, to determine whether the
Project appears to be feasible (financially and otherwise), and to determine whether surplus
revenues under the Operating Agreement (as hereinafter defined) can be expected to support a
significant portion, if not all, of the Project's projected construction, operation and maintenance,
and finance costs.
Initials: CIT " 0 CIBOLO TURNPIKE Page 3
E. As evidence of the City's desire to advance the Project, and in furtherance of the
Blue-Ribbon Committee's recommendations the City will do the following: execute this
Agreement; petition the Alamo Area Metropolitan Planning Organization (the "AAMPO") for
the adoption of the Project and formally place the Project on the funded portion of the AAMPO's
Metropolitan Transportation Plan; and request that TxDOT enter into a Memorandum of
Understanding with Cibolo Turnpike for the development of the Project.
NOW, THEREFORE, in consideration of the premises, covenants, agreements and
obligations contained herein, the parties do hereby agree as follows:
ARTICLE I
SUBJECT OF AGREEMENT
A. Purpose of This Agreement
The purpose of this Agreement is for the development, finance, operation, management,
and maintenance of the Project by Cibolo Turnpike. This Agreement defines the development of
the Project, and an Operating Agreement defines the Project operating terms all as mutually
agreed upon by the Parties.
B. Parties to This Agreement
The City is a home rule municipality, exercising governmental functions and powers as a
home rule city in the State of Texas. The "City," as used in this Agreement includes the City of
Cibolo, Texas, and any assignee of, instrumentality of, or successor to its rights, powers, and
responsibilities.
Cibolo Turnpike, LP, is a Texas limited partnership and Cibolo Turnpike, GP, LLC, a
Texas limited liability company, is its sole general partner created for the development and
operation of the Project.
ARTICLE II
TERM AND CANCELLATION
Section 2.1
(a) This Agreement shall be for a term of fifty(50)years,plus additional time, as
needed to conform with the Financial Model, beginning on the Effective Date as defined
her-eineffective date of the Initial Development Agreement (the "Term"). The Operating
Agreement as part of this program will run co-terminus with the Development Agreement.
(b) The City hereby authorizes,permits and grants a non-exclusive right to Cibolo
Turnpike, and to all agents, representatives, consultants, employees, and invitees of Cibolo
Turnpike, easement, right-of-way, ingress, egress, access, and use rights in, over, upon, across
and along all ingress, egress and access portions of all streets adjacent to the Project belonging to
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the City, to Cibolo Turnpike's for the development and operation of the Project and/or otherwise
as provided for in this Agreement. Any temporary road closures and/ or temporary detours will
be coordinated with the City.
ARTICLE III
GENERAL CONTRACT PROVISIONS
Section 3.1 General Contract Provisions. Notwithstanding anything in this Agreement
to the contrary, to the extent applicable, any and every contract Cibolo Turnpike may negotiate or
execute under the authority of this Agreement, either on behalf of itself, behalf of the City, or
both itself and the City shall be subject to terms and conditions of this Section 3.1, which are as
follows:
(a) Cibolo Parkway:
(i) Land Acquistion.
A. CostK. At its sole cost and expense, Cibolo Turnpike shall acquire
in the name of the City (or an instrumentality thereof) all necessary ROW for the
Cibolo Parkway.
B. Land Acquisition Process. Cibolo Turnpike shall negotiate Cibolo
Parkway facility land acquisition transactions on a fair-market price basis, as
determined by independent appraisals; and, the City's institution of eminent
domain shall only be used as a last resort for the acquisition of any new ROW. All
• . • - •• • •- • • • -• - -- • ::In the event that eminent
domain is determined to be necessary, Cibolo Turnpike shall reimburse the City
for any and all costs the City incurs in undertaking the eminent domain action.
undertaking the eminent domain action.
(ii) Development of the Cibolo Parkway shall be subject to the following:
A. Route. As this is a community driven project, the City shall have
the final determination as to the Cibolo Parkway route, so that the route complies
with the City's Thoroughfare Plan and Future Land Use Plan and considers
projected future development.
B. Construction Standards. Cibolo Turnpike will develop the Cibolo
Parkway using TxDOT standards for roads of similar size and scope to ensure a
quality design.
C. The Cibolo Parkway road surface shall be concrete and the road
construction shall comply with the requirements of any City ordinance regulating
road and street construction.
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(b) Cibolo Expressway:
(i) Development of Cibolo Expressway. TxDOT is currently planning
improvements on FM 1103 from the City's corporate limits near the intersection of FM
1103 and Chelsea/Old Wiederstein Road to Rodeo Way Drive. The proposed TxDOT
improvements are to widen the existing two-lane facility to four-lanes, including raised
medians and left turn lanes, two. 5' bike lanes, curbs and gutters, underground storm
sewer system, and 6' sidewalks along both sides of the roadway. (the "FM 1103
Improvements") The existing FM 1103 right- of- way ("ROW") is 80 feet wide, and
the proposed ROW is 120 feet. TxDOT will acquire this additional ROW. The City will
request TxDOT that the design for the FM 1103 Improvements along that stretch of FM
1103 herein defined as the Tumback FM 1103 accommodate for the addition of the
Cibolo Expressway; and that TxDOT coordinate (to the extent practicable) the
construction of the Cibolo Expressway with the construction of the FM 1103
Improvements in order to minimize traffic disruption on FM 1103.
(ii) Land Acquisition. In the event that additional ROW is needed for the
Cibolo Expressway : :•- , :- .: - : -- .: :' '. -. ► e . . • e . : .' -: .
the FM 1103 Improvements, Cibolo Turnpike shall acquire the ROW following all City,
State, and Federal rules and procedures. Any ROW acquired shall be consistent with the
provisions of Section 4.8.
(c) Financing. The Project shall be financed solely by Cibolo Turnpike from private
capital and investment. Further, in no event shall the following ever occur:
(i) a:-Creation of a public improvement district to fund any aspect of the toll
lanes of Cibolo Expressway and Cibolo Parkway; or
(ii) b-The use of dedicated Local, State or Federal tax dollars to fund any
aspect of the toll lanes of Cibolo Expressway and Cibolo Parkway; or
Lill) e-The use of public grants or direct governmental loans, such as
Transportation Infrastructure Finance or Innovation Act loans, to fund any aspect of the
toll lanes of Cibolo Expressway and Cibolo Parkway.
(d) Transfer of Title. Upon completion of the Project, right of title and
possession to the real property and the improvements shall be transferred to the City (or an
instrumentality thereof), except for those rights of operation transferred to Cibolo Turnpike
pursuant to the Operating Agreement, unencumbered by any liens or restrictions against its use as
a public right-of-way, (including the right to place public utilities in such rights-of-way).
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(e) Project Operation; The Operating Agreement. The right, duty and obligation to
operate the Project upon its completion shall be the responsibility of Cibolo Turnpike.
Operational requirements relative to the Project shall minimally include the following:
(i) That the term of the Operating Agreement shall run co-terminus with this
Agreement.
(ii) That tolls for vehicles traveling on the tolled portions of the Project shall
be subject to the provisions of Section 9.2(i ).
(iii) That the following vehicles shall not be subject to any toll for travel on the
Project: official City of Cibolo vehicles, official City of Schertz vehicles, official
Schertz-Cibolo-Universal City Independent School District vehicles, and official
Guadalupe County Sheriff s Office vehicles, vehicles being used by an entity to provide
emergency services to the City of Cibolo under contract; or such other vehicles exempted
by state law from the payment of tolls;
(iv) That Cibolo Turnpike shall advise the City of the initial and future toll
rates at least 90 days before implementation;
(v) That the standards for Project operation shall,minimally, adhere to
TxDOT's operational protocol for projects of similar size, scope and traffic count;
(vi) That the City shall be entitled to provide to Cibolo Turnpike input
regarding Project operation, which input shall be taken into consideration and, to the
extent commercially and practically reasonable (within the financing structure to which
the Project is at such time subject), implemented;
(vii) That the payment of operations and maintenance costs shall have a first
priority position in the event of the operator's default or bankruptcy;
(viii) That Cibolo Turnpike shall maintain a customer service office within the
City's corporate limits of the City of Cibolo for the purpose of resolving claims of
erroneous toll charges and related matters;
(ix) Requirement that operator-to maintain adequate liability insurance; and
(x) A"buyback"provision, which shall state the terms and conditions by
which the City may buy Cibolo Turnpike's interest in the Operating Agreement at a
future date.
(f) Negotiation of Operating Agreement. Prior to Financial Close(as defined herein),
the City and Cibolo Turnpike shall negotiate the terms of a stand-alone "operating agreement"
regarding the Project's operation that, minimally, encompasses a. through g. of this Section
3 3.1, which operating agreement shall be presented to City Council for consideration;
provided, however, that the failure of the City and Cibolo Turnpike to enter into a separate
operating agreement shall not invalidate Cibolo Turnpike's right, duty and obligation to operate
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the Project as specified hereunder; provided further, however, that any operation of the Project by
Cibolo Turnpike shall be subject to the minimum operational requirements specified in a.
through g. of this Section 34(4-IL For purposes of this Agreement, the term "Operating
Agreement" shall mean any agreement pursuant to which Cibolo Turnpike operates the Project,
whether by separate agreement or pursuant to the provisions of this Section 3.1(e) and other
applicable provisions of this Agreement.
(g) Non-Compete Language Prohibited. Cibolo Turnpike shall never require the City
to enter into any"non-compete" agreement;, and no contract authorized under this Agreement or
the Operating Agreement shall ever negate or diminish the City Council's authority to plan, fund
and construct future streets, roads, highways, mass transit, or other such improvements as City
Council may, in its sole discretion, find necessary to address the transportation needs of the City
and its citizens. Further, should such a"non-compete" provision be incorporated in any contract
or agreement authorized by this Agreement, it shall be void ab initio.
(h) Other Governmental Approvals. The obligations of the Parties shall be subject to
the ability to obtain any necessary approvals from other governmental entities that are required
for completion and operation of the Project.
ARTICLE IV
PROJECT DEVELOPMENT
Section 4.1 Project Development-Phase I.
(a) Pro Forma Model. During Phase I of Project Development, Cibolo Turnpike shall
cause to be prepared a Pro Forma Model for the Project. Cibolo Turnpike will use the Pro Forma
Model to determine the financial viability of the Project. The Pro Forma Model analysis will
include the preliminary determination of various risk factors as they relate to development of the
Project, such as environmental, design, cost and traffic and revenue issues.
(b) Term of Phase I. Cibolo Turnpike shall begin Phase I upon the execution of this
Agreement, and will diligently work on the Pro Forma Model. Upon the completion of the Pro
Forma Model analysis, Cibolo Turnpike will present the results to the City, which shall include
Cibolo Turnpike's proposed plan for Project Development - Phase II. Phase I is anticipated to
take approximately 10-12 months to complete.
Section 4.2 Project Development- Phase II.
(a) Project Development. Phase II is the development of the Project including the
detail design, ROW acquisition, bidding, and construction nalu ' g aevelopi„ and
development of the Financial Model (as detailed below in Section 4.2(c)), and securing the
funding as required for the development of the Project. Cibolo Turnpike shall comport with the
requirements Texas Local Gov. Code Chapter 212, Subchapter C: ("Developer Participation in
Contract for Public Improvements")with respect to the development of the Project
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(b) Term of Phase II. Phase II the development of the Project will begin after Cibolo
Turnpike completes Phase I Pro Forma and determines that the Project is financially viable.
Commencement of Project construction shall not begin until Project funding) has occurred (as
detailed below in Section '1.3. 4.3). Phase II will be complete upon the completion and
acceptance of the construction of the Project. Notwithstanding the foregoing, this Agreement
shall terminate if Financial Closing (as hereafter defined) does not occur within two years
following commencement of Phase II.
(c) Financial Model. Financial Model means the computerized financial model
including projections and assumptions for operation of the Project showing, among other things:
(a) costs for the operation and maintenance of the Project, including management payments to
Cibolo Turnpike for its operation of the Project; (b) debt service costs for debt incurred by
Cibolo Turnpike related to the Project; (c) reserves for operations and for capital improvements
or such other reserves as may be required by sound engineering practice; (d) payments to Cibolo
Turnpike as a return on equity invested by its partners, based on the Base Case Equity IRR, as
defined and set forth in the Financial Model; and (e) payments to the City and Cibolo Turnpike
as a split of all remaining revenues from the operation of the Project,based on the percentages as
set forth in the Financial Model.
(d) Construction Contract. Cibolo Turnpike shall advertise for construction bids,
issue bid proposals, receive and tabulate the bids, and award and administer the contract or
contracts for construction of the Project (the "Construction Contract"). Administration of the
Construction Contract shall include the responsibility for construction engineering, material
acceptance testing, and construction quality acceptance, and for issuance of any change orders,
supplemental agreements, amendments, or additional work orders that may become necessary
after the award of the Construction Contract. The bidding process is to be competitive and
comply with all applicable federal and statee laws. Copies of the Construction Contract shall
be provided to the City, including any bond or insurance requirement as detailed herein.
(e) Insurance and Bonding Requirements
(i) Performance Bonds. Cibolo Turnpike will provide Performance Bonds to
ensure completion of the Project. In addition, included within any successful bidder's
Construction Contract, the successful bidder shall include a Performance Bond to ensure
completion of the Project.
(ii) Insurance Requirement. Cibolo Turnpike will provide the appropriate
construction and management insurance package for the development of the Project (the
"Insurance Coverage"). In addition, included within any successful bidder's Construction
Contract will be the applicable Insurance Coverage consistent with the City coverages and as
stated in Section 4.2(d) above.
(f) Development Standards/TxDOT Coordination. As part of the development of
the Project, Cibolo Turnpike will develop the Project using TxDOT standards (for road projects
of similar size and scope) to ensure a quality design. In addition, Cibolo Turnpike will
continually coordinate with TxDOT with all aspects of the Project including environmental
coordination / approvals, and design approvals. Cibolo Turnpike will follow TxDOT's
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guidelines for `local let' projects. The Project is planned to have a concrete pavement surface as
previously described. Cibolo Turnpike will consult with TxDOT and the City regarding
pavement design.
(g) Construction Management Services. During the construction of the Project,
Cibolo Turnpike shall manage the progress of construction through final completion of the
Project. Cibolo Turnpike shall monitor the timing of commencement, progress and completion
of Project construction by the contractor in accordance with the terms of the design, bid
documents, environmental compliance issues, and the Construction Contract, and shall
coordinate with the City and TxDOT as necessary or advisable to ensure compliance with any
applicable State and federal requirements.
(h) Project Communication. During the construction of the Project, Cibolo Turnpike
shall periodically, and no event less than once every three months, report the Project progress to
the City Council. The first report shall provide City Council with an estimated timeline for
completing each phase of the Project, the estimated Project costs, and any anticipated issues that
may delay completion of the Project. Thereafter, Cibolo Turnpike shall update the City Council
on construction progress and Project costs incurred during the preceding quarter.
(i) Project Completion. When the Project is complete, Cibolo Turnpike shall issue
and sign a '"_`Notification of Completion'-" certifying that all work has been completed in
accordance with the requirements of this Agreement, all governmental approvals, and applicable
laws.
Section 4.3 Development Funding. Cibolo Turnpike commits to use its commercially
reasonable efforts to raise sufficient capital, either debt and/or equity (the "Development
Capital") to be used to pay substantially all of the development costs of the Project. Funds for
the development of the Project shall be secured prior to the commencement of Project
construction (evidence of acquisition of which financing is referred to herein as "Financial
Closing").
Section 4.4 Authority and Responsibility of Cibolo Turnpike During Development
Period Regarding the Cibolo Parkway and Cibolo Expressway. The City acknowledges and
agrees that, consistent with and subject to the provisions of Article IV, during Phase I and Phase
II of the Project's development, Cibolo Turnpike shall be responsible for, and have the authority
to take, all actions it deems reasonably necessary to achieve the Financial Closing and thereafter
for any further actions reasonably necessary to pursue all or any part of any Phase II (being the
Project's development period). As noted above, Cibolo Turnpike will develop the Project
following Texas Local Gov. Code Chapter 212, Subchapter C. (Developer Participation in
Contract for Public Improvements), which provides for Cibolo Turnpike managing the
development of the Project. There may be additional actions that may be subject to the consent
of City, which consent shall not be unreasonably withheld, may include, without limitation, the
following:
(a) Managing the day-to-day business affairs of City relating to the Project.
(b) Retaining engineers, consultants, attorneys, accountants, financial advisors
and other professionals and entering into contracts with Cibolo Turnpike.
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(c) Identifying potential Project sites and negotiating for the acquisition of
such Project sites.
(d) Commissioning and preparing all Project studies.
(e) Selecting technology for the Project and negotiating for the acquisition or
license of such technology.
(f) Designing or supervising the design of the Project, including size,
configuration, performance levels, operating parameters and related design matters.
(g) Applying for such governmental approvals as may be required for the
Project.
(h) Preparing such bid documents as may be required for the acquisition of
equipment, services and other assets necessary for the Project.
(i) Negotiating contracts for the procurement of materials and supplies to be
utilized by the Project.
(j) Negotiating the acquisition of(or options to acquire) easements and rights
of way as may be required for the Project.
(k) Negotiating contracts for Project utilities.
(1) Negotiating contracts for the sale or other disposition of property
determined to be surplus relative to the development of the Project.
(m) Developing a plan of financing,preparing financing documents,preparing
offering documents and doing all related work necessary to achieve Financial Closing.
(n) Developing a Market Standard package of insurance for the Project.
Section 4.5 Responsibility for Development Costs. Cibolo Turnpike shall be
responsible for the Project's development costs, including the payment of all costs incurred by
Cibolo Turnpike in performing its obligations of the Agreement (which costs are subject to
reimbursement from the Financial Closing).
Section 4.6 No Liability for the Development Costs. If the Financial Closing does not
occur, except as otherwise expressly set forth in the Agreement, neither the City nor Cibolo
Turnpike shall have any obligation, express or implied, to reimburse the other Party for any
Project development cost, but any Partys which breaches a material provision of this
Agreement, and fails to cure such breach, shall be liable for actual damages suffered by the other
Part
Section 4.7 Level of Effort; Cooperation.
(a) In developing the Project under this Agreement, Cibolo Turnpike's obligations
shall be limited to commercially reasonable efforts. Nothing herein shall imply or create the
inference that if Cibolo Turnpike concludes, in its sole discretion, that the Project as envisaged
by the Agreement will not be economically feasible or are not capable of being completed on a
commercially reasonable basis, that Cibolo Turnpike must nonetheless continue developing the
Project and expending additional funds; provided that if Cibolo Turnpike reaches a conclusion
that the Project as envisaged by the Agreement will not be economically feasible or are not
capable of being completed on a commercially reasonable basis, Cibolo Turnpike will deliver a
"Determination of Non-Feasibility" to the City, expressing this conclusion and the reasons
therefor. However, if Cibolo Turnpike reaches a conclusion that the Project, as envisaged by the
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Agreement, will be economically feasible and capable of being completed on a commercially
reasonable basis, Cibolo Turnpike will deliver a "Determination of Feasibility" to the City,
expressing this conclusion before the date of termination, as stated in Section 4.10. Upon the
City's receipt of a -`Determination of Feasibility; Cibolo Turnpike shall become contractually
obligated to fully complete the Project as envisaged by the Agreement.
(b) Subject to the other provisions of this Agreement, the Parties hereto shall
cooperate fully with each other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps required to be taken as a
part of the Project.
Section 4.8 Right of Way(ROW).
(a) ROW Coordination. The Parties agree to coordinate with TxDOT and any other
governmental authority in an effort to acquire any additional rights of way, including railroad
crossing permits/approvals or sites for the Project through the use of existing or acquired road
rights of way or other locations.
(b) ROW Acquisition Process. Cibolo Turnpike will acquire the necessary ROW for
the Project. The ROW acquisition process will follow all applicable State and federal rules
regarding the acquisition of ROW. Cibolo Turnpike will keep the City informed throughout the
ROW acquisition, including status, issues, and other items that may occur. Cibolo Turnpike goal
and as directed by the City, is to acquire the ROW through a negotiated process and terms;
however, only if all other means fail will the acquisition go to eminent domain.
(c) Eminent Domain. Only, after Cibolo Turnpikes must make a good faith attempt
(as established, minimally, as the basis upon which TxDOT exercisesprocedures dictate the
ROW acuisition process prior to the exercise of the power of eminent domain in similar
circumstances) to acquire the ROW, then does. Only thereafter shall the City agree to allow the
use of its eminent domain authority, exercised only in accordance with the provisions of
applicable Texas law, to secure remaining ROW property on behalf of the City.
(d) ROW Title. Title of the ROW property will ultimately transfer to and be held by
the City (or an instrumentality thereof). During the ROW acquisition title of the ROW may be
with an another entity to facilitate the process. The identification and use of the entity will be
submitted for approval of the City, which approval shall not be unreasonably withheld.
Section 4.9 Ownership of the Studies; Government Approvals.
(a) In recognition of the fact that Cibolo Turnpike may have paid for the studies,
Cibolo Turnpike shall retain ownership of such studies and government approvals issued to
Cibolo Turnpike during the Project's development. All other studies and government approvals
obtained by or issued to Cibolo Turnpike shall remain as the property of Cibolo Turnpike and in
the event of a termination of this Agreement, all studies and government approvals obtained by
or issued to Cibolo Turnpike shall remain as the property of Cibolo Turnpike. Nothing in this
subsection shall preclude the Parties from agreeing, on mutually acceptable terms, for the
transfers the studies and government approvals to the City.
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(b) Provided Cibolo Turnpike proceeds with completion of the Project, should any
portion of the Project be terminated or otherwise dropped from the Project by City in accordance
with the terms of this Agreement, and Cibolo Turnpike is not in breach of this Agreement or
initiated a claim against the City under this Agreement, City agrees to transfer to Cibolo
Turnpike, at no cost to Cibolo Turnpike, copies of all governmental approvals, studies and all
other rights held by City that are related to such terminated portions of the Project, to the
maximum extent permitted by law or by the terms of any such rights or governmental approval.
Section 4.10 Termination.
(a) This Agreement shall terminate upon(i) the delivery by Cibolo Turnpike to City
of a Determination of Non-Feasibility; or (ii) notice by City at any time after December 31, 2018
(unless Cibolo Turnpike shall have notified City in writing that it has reasonably determined that
additional time is necessary to achieve the Initial Financial Closing, but not to exceed 180 days)
if the Financial Closing Date has not yet occurred; or (iii) the City determines that that Cibolo
Turnpike failed to coordinate with TxDOT the construction of the FM 1103 Improvements and
the Cibolo Expressway, as described in Section 3.1(b)(i), so that such construction of both shall
be accomplished simultaneously and cause minimal traffic interruption on FM 1103.
(b) If this Agreement is terminated pursuant to Section 4.10(a), each Party shall be
released from its obligations under this Agreement, other than liabilities for any breach of this
Agreement.
Section 4.11 Indemnification. Cibolo Turnpike shall indemnify, defend and hold
harmless the City and its respective City Council members, officers, employees, representatives,
attorneys and agents (the "City Indemnitees") from any losses or claims that may at any time be
imposed upon, asserted against or incurred by any City Indemnitee, to the extent such losses arise
out of:
(a) The inaccuracy in any material respect of any representation or warranty of Cibolo
Turnpike contained herein or the failure of Cibolo Turnpike in any material respect to comply
with any of its obligations under this Agreement; or
(b) Cibolo Turnpike's breach of a contract with a third party, or the negligent acts or
omissions, or the gross negligence, or the recklessness, or the willful misconduct of Cibolo
Turnpike or any of its partners, contractors, agents or affiliates in connection with the Project.
Section 4.12 Limitation on Liability. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, NEITHER CIBOLO TURNPIKE NOR THE CITY,
NOR ANY OF THEIR RESPECTIVE PARTNERS, OFFICERS, EMPLOYEES, MEMBERS,
REPRESENTATIVES, ATTORNEYS OR AGENTS SHALL BE LIABLE TO THE OTHER,
WHETHER IN CONTRACT, TORT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE, FOR ANY LOSS OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
FAILURE OF PERFORMANCE RELATED HERETO, HOWSOEVER CAUSED, WHETHER
ARISING FROM SUCH PERSON'S SOLE, JOINTI• OR CONCURRENT NEGLIGENCE.
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ARTICLE V
PROJECT CONTRACTS,APPROVAL RIGHTS AND AUTHORITY
Section 5.1 Cibolo Turnpike's Authority to Negotiate Project Contracts During
Development Period. To the maximum extent permitted by law, City authorizes Cibolo
Turnpike to identify parties, including without limitation, Cibolo Turnpike, Texas Turnpike
Corporation and other affiliates of Cibolo Turnpike, to initiate and negotiate the terms of, all
Project contracts that Cibolo Turnpike reasonably determines must be negotiated or executed
prior to the Financial Closing and thereafter. Cibolo Turnpike will develop the Project following
Texas Local Gov. Code Chapter 212, Subchapter C. (Developer Participation in Contract for
Public Improvements), which provides for Cibolo Turnpike managing the development of the
Project. Cibolo Turnpike's authority under this Section includes the authority to identify parties
to, and negotiate the terms of, Project contracts. Such Project contracts may include, without
limitation, project design, environmental studies, traffic and revenue studies, construction
management agreements, agreements with investment bankers and other agreements related to
the Financial Closing. To the extent practicable and consistent with the timely achievement of
the Financial Closing, Cibolo Turnpike shall consult with City's Representative (as defined
below)regarding the selection of other parties to Project contracts.
Section 5.2 Project Contract Provisions. Unless otherwise agreed to by City or as
otherwise specifically provided in this Agreement, in connection with the negotiation of the
terms of Project contracts, Cibolo Turnpike shall use commercially reasonable efforts to include
the following provisions in Project contracts:
(a) The Construction Contract as recommended by Cibolo Turnpike based upon the
low bid by pre-approved qualified contractors.
(b) The party other than City(the"Contractor") shall use labor from the Project's
general area to the extent reasonably available.
(c) The liability of City, if any,pursuant to such Construction Contract shall be
limited to the City's interest in Project assets of the Project.
(d) The Contractor shall indemnify City Indemnitees for any losses to property, or
liabilities to third parties directly or indirectly resulting from the negligence or willful
misconduct of the Contractor in the performance or failure to perform its obligations under such
Project contract, provided that such indemnity shall not apply to any such losses or liabilities
incurred by ' . . -•• -• -- . . : City Indemnitees by reason of City Indemnitees' gross
negligence or willful misconduct.
(e) The Contractor shall waive all indirect, incidental, consequential, special,punitive
or exemplary damages it might incur.
(f) No Project contract shall become effective until the Financial Closing, except for
obligations to satisfy conditions precedent and Project contracts that, by their nature, require
effectiveness before such date(e.g., investment banker engagement letter).
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(g) The Contractor shall provide a performance, payment and completion bond, or
shall agree to such other assurances (as, for example, a letter of credit or indemnification) as will
provide reasonable assurance of performance,payment and completion.
ARTICLE VI
COMPENSATION
Section 6.1 Compensation/Return.
(a) Cibolo Parkway Facility. If Cibolo Turnpike undertakes the Project, Cibolo
Turnpike's base compensation will be as set forth in the Financial Model and City's
compensation or return shall be an annual split of all remaining Surplus Revenues of the Project,
based on the percentages as set forth in the Financial Model, which includes those surplus funds
remaining under the indenture or other documents after providing for: (1) all operation and
maintenance expenses, (2) taxes, (3) all debt service on debt incurred to finance or improve the
Project, (4) all contractual commitments (5) all required reserves as set forth in the Financial
Model, and (6) the necessary payments to Cibolo Turnpike to achieve a return on equity based on
the Base Case Equity internal rate of return, all as further identified within the Financial Model
or the Operating Agreement(as applicable).
(1}) Cibolo Expressway Facility. If Cibolo Turnpike undertakes the Cibolo
Agreement(as applicable). In addition:
(b) (})-Cibolo Expressway Facility. If Cibolo Turnpike undertakes the Cibolo
Expressway and the Cibolo Expressway is financed as described herein, the parties'
compensation or return shall be as identified within the Financial Model or the Operating
Agreement (as applicable). In addition, reimbursement of "Development Capital", as defined
and identified in the Financial Model, for the Cibolo Turnpike and Cibolo Expressway to the
extent not paid pursuant to other provisions of this Agreement, shall be paid promptly, following
the Financial Closing for any of the Project, from the proceeds of such financing, an amount
equal to the Development Capital actually expended or incurred by Cibolo Turnpike to the
Cibolo Turnpike and Cibolo Expressway, plus interest at a rate not to exceed 12% per annum;—
(ii) reimbursement shall be made to the City for staff time devoted to
bringing the project to fruition and consultant fees the City incurs directly related to the project,
... .. -
incured by the City,plus interest at a rate not to exceed 12%per annum.
Section 6.2 Development Fee. Promptly following the Financial Closing for the
Project, Cibolo Turnpike shall be paid solely from the proceeds of such financing a Development
Fee equal to 2% of the principal amount, or if sold at a net premium, issue price, of such
financing.
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Section 6.3 Project Management Fee. Cibolo Turnpike is authorized to receive an
appropriate Project Management Fee to oversee and manage the development of the Project. The
Project Management Fee shall equal to 3% of the estimated construction cost of the Project.
Section 6.4 Operating Management Fee. Cibolo Turnpike is authorized to receive an
appropriate Operating Management Fee all of which is detailed under the Financial Model or the
Operating Agreement, as applicable. The Operating Management Fee is to cover the operations
and management of the Project.
Section 6.5 City. City's compensation shall be an annual split of all remaining
Surplus Revenues of the Project, based on the percentages as set forth in the Financial Model,
which includes a portion of those surplus funds remaining under the indenture or other
documents after providing for: (1) all operation and maintenance expenses, (2)taxes, (3) all debt
service on debt incurred to finance or improve the Project, (4) all contractual commitments (5) all
required reserves as set forth in the Financial Model, (5) the necessary payments to Cibolo
Turnpike to achieve a return on equity based on the Base Case Equity IRR.
Section 6.6 Reimbursement of City Expenses. As compensation for the City's costs
incurred in connection with this Agreement, Cibolo Turnpike shall reimburse the City for staff
time devoted to bringing the Project to fruition and consultant fees the City incurs directly related
to t- '_s•- . ,• $... _ .1 -• : , _ ,Ole . . ,. . 111 11 . .,s .-s e 1 - I_
staff time, and (B) reimbursement to the City for the costs of legal, engineering and public
relations consultant fees actually expended or incured by the City, plus interest at a rate not to
exceed 12% per annum (accruing from the date of the City's payment of such costs through its
receipt of reimbursement from Cibolo Turnpike). Cibolo Turnpike shall pay to the City these
reimbursement during Phase I of Project Development(which is described in Section 4.1 hereof).
ARTICLE VII
CITY RESPONSIBILITIES
Section 7.1 Cibolo Parkway Project Input, Alignment. The development of Cibolo
Parkway is the - .- .• - .. '.'_•s of Cibolo Turnpike. The City and Cibolo Turnpike will
work together on the development of this portion of the Project. Cibolo Turnpike will seek input
on various components of this portion of the Project. The City shall offer staff assistance and
provide input on the Project development. The City shall provide guidance, direction and
approval of the alignment of the Cibolo Parkway. Such input and approval on the alignment
shall be in a timely manner. The final alignment as agreed to by the parties is not subject to
changes and Cibolo Turnpike can rely on that final alignment.
Section 7-2 (a) Cibolo Expressway. The development of Cibolo Expressway will be
the responsibility of Cibolo Turnpike. The Cibolo Expressway has been set aswill
be constructed on the Turnback FM 1103 and therefore comprise part of the FM 1103
Improvements. These improvements are in addition to the TxDOT-constructed FM 1103
Improvements to be made to such stretch of FM 1103. Cibolo Turnpike will seek input from
TxDOT on the design of the Cibolo Expressway, and such design therefor will
comport with applicable TxDOT guidelines. (�
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Section 7 3 Section 7.2 TxDOT FM 1103 Turnback. The City, collaboratively with
Cibolo Turnpike, will negotiate with TxDOT on the turnback of the Turnback FM 1103
Improvements to the City. Negotiation on the Turnback_EM 1103 Improvements turnback to the
City shall begin with the execution of this Agreement. For the avoidance of doubt, under no
circumstances shall the Turnback_EM 1103 include any portion of that facility that is located
within the City of Schertz, Texas. Final acceptance of the Turnback_EM 1103 would occur after
the results of Project Development Phase I.
ARTICLE VIII
FINANCING THE PROJECT
Section 8.1 The Project.
(a) Cibolo Turnpike shall be solely responsible for all costs associated with
the design and construction of the Project and any debt service related thereto. Cibolo Turnpike
may elect to undertake the Project under the Operating Agreement by either Texas Turnpike
Corporation or Cibolo Turnpike or an affiliate of them.
ARTICLE IX
OPERATING AGREEMENT
Section 9.1 Operating Agreement. The Operating Agreement to be negotiated and
executed by City, to Cibolo Turnpike, the Texas Turnpike Corporation or other affiliated entity
designated by Cibolo Turnpike in accordance with this Agreement, shall be substantially in the
form attached to this Agreement as Appendix A. The parties further acknowledge that the
evolution of the Project may call for further modifications or amendments to the Operating
Agreement and the parties accordingly agree to negotiate in good faith to identify the terms of
any amendment that may be reasonably necessary, and to enter into such modifications of the
Operating Agreement as are called for either before or after it is executed in order substantially to
preserve the economic benefits to both Cibolo Turnpike and City as set forth in the Financial
Model.
Section 9.2 Operating Agreement Terms. Subject to the provisions of Section 3.1(f),
the parties shall use their best efforts to negotiate the terms and provisions of an Operating
Agreement prior to the end of Phase I. Such Operating Agreement shall provide, at a minimum:
(a) (i)The term of the Operating Agreement to run co-terminus with this Agreement;
(b) (ii)The exclusive right and obligation to managenam operate, and maintain
the Project, including toll collections on the tolled portions thereof (being '.. . - .
and Cibolo Parkway);
(c) (iii) Included as part of the Operating Agreement are the following provisions
regarding tolled and non-tolled routes:
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(i) A--Trips beginning or ending on the Cibolo Expressway will not have to
pay any toll relating to the Cibolo Expressway only.
(ii) 13—All trips beginning or ending on the Cibolo Parkway shall pay that
portion of the tolls applicable to and for such trip.
�iii� All "through"trips,meaning any trip that does not orginate or terminate
in the City, shall pay tolls on both the Cibolo Expressway and the Cibolo Parkway; and
(d) (iv)The remaining requirements concering Project operation specified in Section
3.1(e)hereof.
ARTICLE X
REPRESENTATIVES
Section 10.1 Cibolo Turnpike's Representative. Upon execution of the Agreement,
Cibolo Turnpike shall designate, in writing, to City, the name of the individual who is to be the
Cibolo Turnpike representative (the"Cibolo Turnpike's Representative") with full authority to
execute any and all instruments requiring Cibolo Turnpike's signature and to act on behalf of
Cibolo Turnpike with respect to all matters arising out of this`Agreement. Cibolo Turnpike's
Representative shall represent the interests of Cibolo Turnpike, be responsible for overseeing all
aspects of design, construction and development of the Cibolo Turnpike and Cibolo Expressway,
and work closely with City's Representative (as defined below). Any consent, approval, decision
or determination hereunder made by Cibolo Turnpike's Representative shall be binding on
Cibolo Turnpike; provided, however, Cibolo Turnpike's Representative shall not have any right
to modify, waive or amend any provision of the Agreement, or terminate the Agreement.
Section 10.2 City's Representative. Upon execution of this Agreement, City shall
designate the City's representative (the "City's Representative") and will provide Cibolo
Turnpike with written notice of the identity of such individual so designated. With respect to any
action, decision or determination which is to be taken or made by City under the Agreement,
City's Representative may take such action or make such decision or determination or shall
notify Cibolo Turnpike in writing of the person(s) responsible for such action, decision or
determination and shall forward any communications and documentation to such person(s) for
response or action. Any consent, approval, decision or determination hereunder by City's
Representative shall be binding on City to the extent City has the legal power to delegate to an
individual the ability to give such consent or approval or make such decision or determination;
provided, however, City's Representative shall not have any right to modify, waive or amend any
provision of the Agreement, or terminate the Agreement. Cibolo Turnpike and any Person
dealing with City in connection with the Agreement or any matter governed by the Agreement
may rely and shall be fully protected in relying upon the authority and capacity of City's
Representative or any such designee to act for and bind City in any such matter, to the extent that
such delegation of authority is authorized by the City Charter and State law.
From time to time following the execution hereof, Cibolo Turnpike may change or
replace Cibolo Turnpike's Representative and City may change or replace City's Representative
Initials: CITYc 4 ) CIBOLO TURNPIKE ()IC- Page 18
upon five (5) business days' written notice to the other party, delivered to such party in the
manner and at the address indicated in Section 13.7 hereof.13.7.
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ARTICLE XI
DEFAULT,ABANDONMENT
Section 11.1 Events of Default by City. The following shall constitute Events of
Default by City under this Agreement:
(a) Failure to observe or perform any material term,provision, condition or obligation
under the Agreement, and failure to cure such default within thirty(30) days following notice or
discovery of such default; provided, however, that if the failure to observe or perform cannot
reasonably be cured within the thirty (30) day period, the failure to observe or perform will not
constitute an Event of Default if City begins corrective action within the thirty (30) day period
and thereafter proceeds with reasonable diligence to effect the cure as soon as practicable.
(b) Any material representation or warranty made by City that is false,misleading or
inaccurate in any material respect at the time made.
(c) The failure of City to honor Cibolo Turnpike's option to enter into the Operating
Agreement.
(d) Default under the Operating Agreement.
(e) City shall (i) apply for or consent to, or become subject to, the appointment of or
the taking of possession by a receiver, liquidator, custodian or trustee of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its
debts as such debts generally become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi)
take any action for the purpose of effecting any of the foregoing, or (vii) be adjudicated as
bankrupt or insolvent by any court.
(f) Final legislative, administrative or judicial action after the date hereof that limits
City's authority so as to materially and adversely affect its ability to perform its obligations under
this Agreement or the Operating Agreement and City does not enter into an amendment to this
Agreement as provided in Section 12.3 within thirty (30) days of such final legislative,
administrative or judicial action. However, no future legislative changes shall ever cause the
financial obligations related to the Tollway to become obligations of the City.
Section 11.2 Events of Default by Cibolo Turnpike. The following shall constitute
Events of Default by Cibolo Turnpike under the Agreement:
(a) Failure to observe or perform any material term,provision, condition or obligation
under the Agreement and failure to cure such default within thirty (30) days following notice or
discovery of such default; provided, however, if the failure to observe or perform cannot
Initials: CITY6.21-D CIBOLO TURNPIKE - Page 20
reasonably be cured within the thirty(30) day period, the failure to observe or perform will not be
an Event of Default if Cibolo Turnpike begins corrective action within the thirty (30) day period
and thereafter proceeds with reasonable diligence to effect the cure as soon as practicable.
(b) Any representation or warranty made by Cibolo Turnpike that is false,misleading
or inaccurate in any material respect at the time made.
(c) Abandonment by Cibolo Turnpike except as specifically permitted by the
Agreement.
(d) Cibolo Turnpike shall (i) apply for or consent to, or become subject to,the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself
or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as such debts generally become due, (iii) make a general assignment for
the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code
(as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of
debts, (vi) take any action for the purpose of effecting any of the foregoing, or (viii) be
adjudicated as bankrupt or insolvent by any court.
Section 11.3 Remedies for City Default.
(a) Upon the occurrence and continuance of an Event of Default by City under the
Agreement, which City fails to cure, Cibolo Turnpike may suspend performance under the
Agreement and Cibolo Turnpike will have such remedies as may be available to it law or in
equity, subject to the limitations on adjudicated awards as set out in Texas Local Government
Code Chapter 271 Subchapter I, which shall be controlling.
(b) Upon the occurrence and continuance of an Event of Default by City under
Section 11.1(a) of this Agreement, Cibolo Turnpike shall be entitled to injunctive relief against
City.
(c) Upon the occurrence and continuance of an Event of Default by City under the
Agreement, Cibolo Turnpike may terminate this Agreement by delivering notice in writing to
City specifying the nature of the Event of Default and establishing a termination date, which date
shall not be less than thirty (30) days following the date of delivery of the notice whereupon the
Agreement shall terminate on the specified termination date unless City shall have cured the
Event of Default by such date, in which case the notice of termination shall be cancelled.
Liabilities of City accruing under this Agreement prior to the date of termination shall survive
any termination.
(d) Without prejudice to any other rights and remedies that the other party may have,
each of the parties agrees that damages may not be an adequate remedy for a breach of Section
11.1(a) of the Agreement, and that the other party will, in such case, be entitled to the remedies
of injunction, specific performance or other equitable relief for any threatened or actual breach of
Section 11.1(a) of this Agreement.
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Section 11.4 Remedies for Cibolo Turnpike Default.
(a) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under this Agreement, City may suspend performance under this Agreement and City will have
such remedies as may be available under this Agreement.
(b) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under the Agreement, City may terminate this Agreement by delivering notice in writing to
Cibolo Turnpike specifying the nature of the Event of Default and establishing a termination
date, which date shall be not less than thirty(30) days following the date of delivery of the notice
whereupon this Agreement shall terminate on the specified termination date unless Cibolo
Turnpike shall have cured the Event of Default by such date, in which case the notice of
termination shall be cancelled. Liabilities of Cibolo Turnpike accruing under this Agreement
prior to the date of termination shall survive any termination.
(c) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under this Agreement, which Cibolo Turnpike fails to cure, and which constitutes a material
misrepresentation, a negligent act or omission, or gross negligence, or recklessness, or willful
misconduct by Cibolo Turnpike or any of its partners, contractors, agents or affiliates in
connection with the Project or City may suspend performance under this Agreement and the City
shall have such remedies as may be available to it law or in equity; including but not limited to
recovery of actual damages the City may incur as a result of the breach.
(d) Without prejudice to any other rights and remedies that the other party may have,
each of the parties agrees that damages may not be an adequate remedy for a breach of Section
11.2(a) of the Agreement, and that the other party will, in such case, be entitled to the remedies
of injunction, specific performance or other equitable relief for any threatened or actual breach of
Section 11.2(a) of the Agreement.
(e) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under Section 11.2(a) of the Agreement, City shall be entitled to injunctive relief against Cibolo
Turnpike.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
Section 12.1 Cibolo Turnpike's Representations and Warranties. Cibolo Turnpike
hereby represents and warrants to City that:
(a) Organization. Cibolo Turnpike is a Texas limited partnership duly formed,
validly existing and in good standing under the laws of the State. Cibolo Turnpike has all
requisite power and authority to enter into the Agreement and to perform its obligations
hereunder.
(b) Authorization;No Violation. The execution, delivery and performance by Cibolo
Turnpike of this Agreement have been duly authorized by all necessary action and will not
Initials: CITY( l) CIBOLO TURNPIKE cpt Page 22
violate the organizational documents of Cibolo Turnpike or result in the breach of or constitute a
default under any loan or credit agreement, other material agreement, judgment or decree to
which Cibolo Turnpike is a party or by which Cibolo Turnpike, or its material assets, may be
bound or affected; the Agreement has been duly executed and delivered by Cibolo Turnpike and
the Agreement and the documents referred to herein constitute valid and binding obligations of
Cibolo Turnpike subject to bankruptcy, reorganization, moratorium and other laws relating to the
enforcement of creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against or affecting Cibolo Turnpike which could
reasonably be expected to have a material adverse effect upon Cibolo Turnpike's performance
under the Agreement or the financial condition or business of Cibolo Turnpike. There are no
outstanding judgments against Cibolo Turnpike which would have a material adverse effect upon
its assets,properties or franchises.
(d) No Violation of Laws. Cibolo Turnpike has received no notice as of the date of
the Agreement asserting any noncompliance in any material respect by Cibolo Turnpike with
applicable statutes, rules and regulations of the United States of America, of the State, or of any
other state or municipality or agency having jurisdiction over and with respect to the transactions
contemplated in and by this Agreement; and Cibolo Turnpike is not in default with respect to any
judgment, order, injunction or decree of any court, administrative agency, or other governmental
authority which is in any respect material to the transactions contemplated hereby.
Section 12.2 City's Representations and Warranties. As of the date of this Agreement,
City makes the following representations and warranties to Cibolo Turnpike:
(a) Organization. City is a public body and a political subdivision of the State and
has all requisite power and authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Authorization; No Violation. The execution, delivery and performance by City of
this Agreement have been duly authorized by all necessary action and will not violate City's
Home Rule Charter, ordinances, resolutions, or any applicable laws, or result in the breach of any
material agreement, judgment or decree to which City is a party; this Agreement has been duly
executed and delivered by City and the Agreement and the documents referred to herein
constitute valid and binding obligations of City enforceable against City in accordance with its
terms subject to bankruptcy, reorganization, moratorium and other laws relating to the
enforcement of creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against or affecting City which could reasonably be
expected to have a material adverse effect upon City's performance under this Agreement.
(d) No Violation of Laws. City has received no notice as of the date of this
Agreement asserting any noncompliance in any material respect by City with applicable statutes,
rules and regulations of the United States of America, the State or any agency having jurisdiction
over and with respect to the transactions contemplated in and by this Agreement, and City is not
Initials: CITY ap CIBOLO TURNPIKE V Page 23
in default with respect to any judgment, order, injunction or decree of any court, administrative
agency, or other governmental authority which is in any respect material to the transactions
contemplated hereby.
Section 12.3 Mutual Representations and Warranties; Restructure Due to Legislative,
Administrative or Judicial Actions. In the event of a final legislative, administrative or judicial
action after the date hereof that limits Cibolo Turnpike's authority or the City's authority so as to
materially and adversely affect either of said party's ability to perform its obligations under this
Agreement, City and Cibolo Turnpike will in good faith negotiate changes to this Agreement
reasonably acceptable to both parties that accomplish the purposes of this Agreement in a manner
that preserves to the extent reasonably possible the economic benefits to both Cibolo Turnpike
and City as set forth in the Financial Model.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Uncontrollable Circumstances. An"Uncontrollable Circumstance"is an
event or circumstance, including an action of a governmental entity or a change in law, which
prevents a party from performing its obligations under an agreement or which materially
increases the time for performing under an agreement, which event or circumstance was not
anticipated as of the date of the agreement, which is not within the reasonable control of, or the
result of the negligence of, the claiming party, and which, by the exercise of due diligence, the
claiming party is unable to overcome or avoid or cause to be avoided. Except as otherwise herein
expressly provided, if either City or Cibolo Turnpike shall be delayed or hindered in, or
prevented from, the performance of any covenant or obligation hereunder (other than the
payment of money), as a result of any Uncontrollable Circumstance, and, provided that the party
delayed, hindered or prevented from performing notifies the other party both of the
commencement and of the expiration of such delay, hindrance or prevention (each notice being
required within ten (10) business days of the respective event), then the performance of such
covenant or obligation shall be excused for the period of such delay, hindrance or prevention and
the period for the performance of such covenant or obligation shall be extended by the number of
days equivalent to the number of days of the impact of such delay, hindrance or prevention.
Failure to so provide the foregoing notice will not result in waivers of either an excuse in
performance or an extension of time to perform under this Section 13.1 with respect to any such
delay, hindrance or prevention.
Section 13.2 Amendment; Waiver. No alteration, amendment or modification hereof
shall be valid unless executed by an instrument in writing by City and Cibolo Turnpike with the
same formality as this Agreement. The failure of City or Cibolo Turnpike to insist in any one or
more instances upon the strict performance of any of the covenants, agreements, terms,
provisions or conditions of this Agreement or to exercise any election or option herein contained
shall not be construed as a waiver or relinquishment for the future of such covenant, agreement,
term, provision, condition, election or option, and shall not be deemed to establish a course of
conduct among the parties, but the same shall continue and remain in full force and effect. No
waiver by City or Cibolo Turnpike of any covenant, agreement, term, provision or condition,
Initials: CITY CIBOLO TURNPIKE ANU Page 24
election or option of this Agreement shall be deemed to have been made.unless expressed in
writing and signed by an appropriate official on behalf of Cibolo Turnpike or City. The parties
acknowledge that at the time this Agreement is executed, the precise details and scope of the
Project have not yet been determined. Moreover, the parties acknowledge and agree that future
efforts to pursue the development of the Project will evolve over time, and that subsequent
developments may impact the terms of this Agreement and call for a modification or amendment
of this Agreement. Accordingly, the parties agree to negotiate mutually and in good faith to enter
into such amendments or modifications of this Agreement as may reasonably be indicated by the
subsequent details that evolve concerning the Project that preserve the economic benefits to both
Cibolo Turnpike and City as set forth in the Financial Model.
Section 13.3 Consent. Unless otherwise specifically provided herein, no consent or
approval by City or Cibolo Turnpike permitted or required under the terms of the Agreement
shall be valid or be of any validity whatsoever unless the same shall be in writing, signed by the
party by or on whose behalf such consent is given.
Section 13.4 Severability. If any provision of this Agreement is held by final judgment
of a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalid, illegal or
unenforceable provision shall be severed from the remainder of the Agreement, and the
remainder of this Agreement shall be enforced. In addition, the invalid, illegal or unenforceable
provision shall be deemed to be automatically modified, and, as so modified, to be included in
this Agreement, such modification being made to the minimum extent necessary to render the
provision valid, legal and enforceable. Notwithstanding the foregoing, however, if the severed or
modified provision concerns all or a portion of the essential consideration to be delivered under
this Agreement by one party to the other, the remaining provisions of this Agreement shall also
be modified to the extent necessary to equitably adjust the parties' respective rights and
obligations hereunder.
Section 13.5 Binding Effect. Except as may otherwise be provided herein to the
contrary, this Agreement and each of the provisions hereof shall be binding upon and inure to the
benefit of Cibolo Turnpike and City, and their respective permitted successors and assigns.
Section 13.6 Relationship of Parties. Nothing contained in this Agreement shall be
deemed or construed by City or Cibolo Turnpike hereto or by any third party to create a
relationship, partnership,joint venture or any association between Cibolo Turnpike and City.
Section 13.7 Notices. Except as otherwise provided herein, all notices, demands,
consents, approvals, statements, requests and invoices to be given under this Agreement shall be
in writing, signed by the party or officer, agent or attorney of the party giving the notice, and
shall be deemed effective upon receipt if hand delivered or if sent by telecopy with transmission
confirmation or overnight courier service; and if sent by the United States mail, postage prepaid,
certified mail, return receipt requested, then it shall be deemed effective three (3) business days
after mailing or the date of refusal, addressed as follows:
Initials: CITE CIBOLO TURNPIKE ark., Page 25
To City: City of Cibolo
200 S. Main St.
Cibolo, Texas 78108
Attn: Robert T. Herrera, City Manager
To Cibolo Turnpike: Cibolo Turnpike L.P.
25 Highland Park Village#100-758
Dallas, Texas 75205
Attn: John N. Crew, Manager
Either City or Cibolo Turnpike may from time to time by written notice given to the other
pursuant to the terms of this Section 13.7 change the address or designees to which notices shall
be sent or designate one or more additional Persons to whom notices are to be sent.
Section 13.8 Governing Law. This Agreement and any matter relating to this
Agreement, including any matter in contract or tort or in equity or at law, shall be governed by
the laws of the State of Texas without regard to principles of conflicts of law that direct the
application of the laws of a different state. If the parties do not agree to arbitration with respect
to a particular claim or dispute in accordance with the terms of this Agreement, the parties
agree that any legal action shall be brought in a state or federal court of competent jurisdiction
in Guadalupe County, Texas, and the parties agree to establish venue in such county. The
parties further agree that any such lawsuit that may be brought shall be tried by the court,
without a jury.
Section 13.9 Effective Date. This Agreement shall be a legally binding agreement, in
full force and effect, as of the date set forth in the first paragraph of this Agreement.
Section 13.10 Further Assurances. City and Cibolo Turnpike shall execute, acknowledge
and deliver, after the date hereof, without additional consideration, such further assurances,
instruments and documents, and shall take such further actions, as Cibolo Turnpike or City shall
reasonably request of the other in order to fulfill the intent of this Agreement and the transactions
contemplated hereby.
Section 13.11 Third-Party Beneficiary. The provisions of this Agreement are for the
exclusive benefit of City and Cibolo Turnpike and not for the benefit of any third person, nor
shall this Agreement be deemed to have conferred any rights, express or implied, upon any third
person unless otherwise expressly provided for herein.
Section 13.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
Section 13.13 Prior Agreements Superseded. This Agreement supersedes any prior
understanding or written or oral agreements between City or Cibolo Turnpike respecting the
within subject matter, and contains the entire understanding between the parties with respect
thereto. There are no oral agreements between City and Cibolo Turnpike.
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Section 13.14 Language. The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
Section 13.15 Computing Time, Saturday, Sunday or Holiday. The day of an act, event,
or default after which a designated period begins to run is not included when computing a period
prescribed or allowed in this Agreement. The last day of the period is included, but if that day is
a Saturday, Sunday or legal holiday of the City, the period extends to the end of the next day that
is not a Saturday, Sunday or legal holiday.
Section 13.16 Approvals by City. No approval by City shall impose, imply or be
construed as an assumption by City of any duties or responsibilities of others with respect to the
design or construction of the Project or for the construction means and methods employed by or
on behalf of Cibolo Turnpike or any person retained by or on behalf of Cibolo Turnpike.
Section 13.17 Lawsuits. To the extent permitted by law, and without imposing a future
debt obligation on the City, City agrees to cooperate with and assist Cibolo Turnpike in
connection with initiating or defending any actions, including mediation, arbitration, or state or
federal administrative or court proceedings, against or brought by third parties that threaten to
stop, delay or increase the cost of(a) completion of the Project, (b) the imposition or collection
of any revenue necessary for the funding of the Project, (c) the remediation, if necessary, of the
Project Site, and (d)the negotiation, execution, or implementation of this Agreement or any other
agreement between City and Cibolo Turnpike or otherwise related to the Project, including the
enforcement of any indemnity provisions.
Section 13.18 Attorneys' Fees. In the event of any controversy, claim or dispute between
City or Cibolo Turnpike arising from or relating to this Agreement (whether in litigation or
arbitration, and including the enforcement of any indemnity provisions), the prevailing party
shall be entitled to recover reasonable and necessary costs, expenses and attorneys' fees. For all
purposes of this Agreement and any other documents relating to the Agreement, the terms
"attorneys' fees" or "counsel fees" shall be deemed to include paralegals' and legal assistants'
fees, and wherever provision is made herein or therein for the payment of attorneys' or counsel
fees or expenses, such provision shall include such fees and expenses (and any applicable sales
taxes thereon) incurred in any and all judicial,bankruptcy, reorganization, administrative or other
proceedings, including appellate proceedings, whether such fees or expenses arise before
proceedings are commenced or after entry of a final judgment.
Section 13.19 Assignment. Except for the City assignment to an instrumentality upon
City creation thereof at any time (which may occur without the consent of Cibolo Turnpike), any
assignment by either party must have the written consent of the other, such consent not to be
unreasonably withheld. In the event that the City makes an assignment to an instrumentality,
City shall notify Cibolo Turnpike thereof Any purported assignment in violation of this Section
13.19 shall be void. This section shall not limit the ability of Cibolo Turnpike to contract with
any third party, including its own affiliates,to provide services to or in support of the Project.
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Section 13.20 Time of the Essence. Subject to the terms hereof,time is of the essence
with respect to the performance of each of the covenants and obligations contained in this
Agreement.
Section 13.21 Mediation.
(a) Any claim, dispute, or other matter in question arising out of or related to the
Agreement shall be subject to mediation as a condition precedent to arbitration or the institution
of legal or equitable proceedings by either party.
(b) City and Cibolo Turnpike shall endeavor to resolve claims, disputes and other
matters in question between them by mediation which, unless the parties mutually agree
otherwise, shall be in accordance with the Construction Industry Mediation Rules of the
American Arbitration Association then currently in effect. Request for mediation shall be filed in
writing with the other party to this Agreement and with the American Arbitration Association.
The request may be made concurrently with the filing of a demand for arbitration but, in such
event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which
shall be stayed pending mediation for a period of thirty (30) days from the date of filing unless
stayed for a longer period by agreement of the parties or court order.
(c) City or Cibolo Turnpike agree to split the mediator's fee and any filing fees
equally. The mediation shall be held in Guadalupe County, Texas, unless another location is
mutually agreed upon. Written agreements reached in mediation shall be enforceable as
settlement agreements in any court having jurisdiction thereof.
Section 13.22 Dispute Resolution. Any claim, dispute or other matter in question arising
out of or related to this Agreement or otherwise arising from the design and construction of the
Project, shall first be subject to mediation in accordance with the provisions of Section 13.21
prior to instituting litigation. Claims, disputes and other matters in question between the parties
may be decided by arbitration, but only if both Cibolo Turnpike and City so agree at the time the
dispute arises.
Section 13.23 Arbitration. .SECTION INTENTIONALLY
DELETED.
Section 13.24 Injunctive Relief. Notwithstanding the foregoing, the provisions of
Section 13.22 and Section 13.23 shall not apply to an action for injunctive relief or a writ of
mandamus filed in connection with this Agreement.
Section 13.25 Confidentiality; Open Records Act.
(a) Each party to this Agreement agrees to keep confidential and not use,reveal,
provide or transfer to any third party any Confidential Information (as defined below) it obtains
or has obtained concerning the other party to this Agreement or the Project, except as follows:
(i) subject to Section 13.25(b), to the extent that disclosure to a third party is
required by applicable law or regulation; ee �
Initials: CIT CIBOLO TURNPIKE -c.�f'�- Page 28
(ii) information which, at the time of disclosure, is generally available to the
public (other than as a result of a breach of this Agreement or any other confidentiality agreement
to which a party to this Agreement is a party or of which it has knowledge), as evidenced by
generally available documents or publications;
(iii) information that was in its possession prior to disclosure(as evidenced by
appropriate written materials) and was not acquired directly or indirectly from any other party to
this Agreement;
(iv) to the extent disclosure is necessary or advisable, to its employees,
consultants or advisors, or to its affiliates or their employees, consultants or advisors, in each
case solely for the purpose of carrying out their duties under this Agreement;
(v) to banks or other financial institutions or agencies or any independent
accountants or legal counsel or investment advisors employed in connection with the Project, or
by any party to this Agreement, to the extent disclosure is necessary or advisable to obtain
financing, including, without limitation, the Project financing and the raising of the Development
Capital by Cibolo Turnpike;
(vi) to potential investors in connection with the Project financing and raising
the Development Capital;
(vii) to potential purchasers of a party to this Agreement or any affiliate of a
party to this Agreement that directly or indirectly owns an equity interest in such party to this
Agreement;
(viii) to the extent necessary, disclosure to third parties to enforce this
Agreement;
(ix) to another party to this Agreement; or
(x) to parties that have signed or agreed to be bound by this confidentiality
provision; provided, however, that in each case of disclosure pursuant to (iv), (v), (vi), (vii) or
(ix), the persons or entities to whom disclosure is made agree to be bound by this confidentiality
provision. The obligation of each party not to disclose Confidential Information except as
provided herein shall not be affected by the termination of this Agreement. As used in this
Section, the term "Confidential Information" shall mean information, which is clearly marked
confidential, concerning this Agreement and the properties, operations, business, trade secrets,
technical know-how and other non-public information and data of or relating to the parties to this
Agreement or the Project.
The restrictions on disclosure of Confidential Information set forth above in
Section 13.25(a) shall lapse two (2) years from the date of the termination of the Project. In the
event a party withdraws from the Project, such party shall remain subject to the restrictions on
disclosure of Confidential Information for two (2) years from the date of such party"_s
withdrawal.
(b) If any Person requests City to disclose any Confidential Information under the
Texas Open Records Act (Tex. Gov't Code Ann. § 552.001 et seq.) or equivalent or successor
statute (the "Open Records Act"), prior to making such disclosure, City shall notify Cibolo
Turnpike of such request, in which case Cibolo Turnpike61shall promptly and timely inform City
Initials: CITY(L CIBOLO TURNPIKE iAt Page 29
whether any of the requested materials constitute confidential, proprietary, commercial, financial
or trade secret information of Cibolo Turnpike which may be exempted from disclosure under
the Open Records Act, and, in that event, City and Cibolo Turnpike shall cooperate with each
other in preparing appropriate responses or filings to the Attorney General of the State and to any
Person making such request, including any appeals involved therein, to prevent a disclosure of
such information. In such event, each party shall further cooperate with the other to promptly
identify any possible third party whose privacy or property interests may be implicated by any
such request to disclose information in order to enable Cibolo Turnpike to timely furnish to any
such third party any statutory notice required by the Open Records Act and seek any applicable
exemptions from disclosure under the Open Records Act. So long as Cibolo Turnpike is
pursuing the actions described above in a timely manner, City shall protect confidential,
proprietary or trade secret information of Cibolo Turnpike as to which Cibolo Turnpike requests
City to do so, unless otherwise compelled by court order, or by opinion of the Texas Attorney
General. All reasonable and necessary costs associated with City's cooperation with Cibolo
Turnpike hereunder in connection with any proceedings shall be borne by Cibolo Turnpike, and
City shall be fully reimbursed for any of such costs it has reasonably incurred including
reasonable attorneys' fees.
Section 13.26 No Recourse to Cibolo Turnpike. The obligations of Cibolo Turnpike
under this Agreement are recourse solely to the interest of Cibolo Turnpike in the Project. No
recourse or liability shall be had against any director, officer, employee, agent, member
shareholder or partner of Cibolo Turnpike or of Texas Turnpike Corporation or their respective
affiliates.
Section 13.27 Waiver of DTPA. CITY AND CIBOLO TURNPIKE HAVE ASSESSED
THEIR RESPECTIVE RIGHTS, LIABILITIES AND OBLIGATIONS UNDER THE TEXAS
DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS & COMMERCE CODE (THE "DTPA"). THE PARTIES AGREE THAT
THE DTPA DOES NOT APPLY TO EITHER CITY OR CIBOLO TURNPIKE BECAUSE
NEITHER QUALIFY AS A "CONSUMER" UNDER SECTION 17.45(4) OF THE DTPA.
BUT IN THE EVENT THE DTPA IS DEEMED TO BE APPLICABLE BY A COURT OF
COMPETENT JURISDICTION, CITY AND CIBOLO TURNPIKE HEREBY WAIVE THEIR
RIGHTS UNDER THE DTPA, A LAW THAT GIVES CONSUMER SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH ATTORNEYS OF THEIR OWN
SELECTION, CITY AND CIBOLO TURNPIKE CONSENT TO THIS WAIVER. THE
PARTIES AGREE THAT THIS SECTION 13.27 CONSTITUTES A CONSPICUOUS
LEGEND. . . - . . . .
f Signature page follows.]
Initials: CITYQa CIBOLO TURNPIKE ( Page 30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their proper officers respectively, being thereunto duly authorized, and their respective seals
to be hereto affixed, as of the day and year first above written.
City of Cibolo,Texas:
By:
Allen Dunn
Mayor, City of Cibolo
Attest:
By:
Peggy Cimics, City Secretary
Cibolo Turnpike:
On behalf of CIBOLO TURNPIKE, LP, a Texas limited
partnership
By: CIBOLO TURNPIKE, GP, LLC,
a Texas limited liability company, its General
Partner
By: TEXAS TURNPIKE CORPORATION,
a Texas corporation, its Sole Member and
Sole Manager
By: (9
di/4-j
J .rd N. Crew, President and
of Executive Officer
Signature Page to Development Agreement
EXHIBIT 1
PROJECT MAP
{Unchanged from Existing Agreement)
Exhibit 1
EXHIBIT 2
CIBOLO EXPRESSWAY CONCEPTUAL DESIGN
Exhibit 2
APPENDIX A
FORM OF OPERATING AGREEMENT
jUnchanged from Existing Agreement'
Appendix A
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Document 1 ID interwovenSite://US DMS/US2016/23315803/2
Description #23315803v2<US2016> - Cibolo Turnpike L P
Development Agreement - Final 03-08-17
Document 2 ID interwovenSite://US DMS/US2016/23315803/3
Description #23315803v3<US2016> - Cibolo Turnpike L P
Development Agreement - Final 03-08-17
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EXHIBIT C
AMENDMENT
28227752.2 C-1
FIRST AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
between
the City of Cibolo, Texas
and
Cibolo Turnpike L.P.
FIRST AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
This First Amended and Restated Development Agreement (the "Agreement") is
made and entered into as of May 9, 2017 (the "Effective Date") by and between the City of
Cibolo, Texas ("City"), and Cibolo Turnpike L.P., a Texas limited partnership ("Cibolo
Turnpike") for the purpose of memorializing certain amendments to the Development
Agreement (the "Initial Development Agreement") entered into by the City and Cibolo
Turnpike by action of the City Council of the City taken on February 28, 2017.
Representatives of the City, the Texas Department of Transportation ("TxDOT"), and
Cibolo Turnpike, by and among themselves, have engaged in meaningful discussions identifying
both a transportation improvement and a significant economic development project that,
consistent with the scope of the City's Thoroughfare Plan and Land Use Plan, would benefit the
City and the area around the proposed Project (as detailed below). The parties to the Agreement
believe that the Project offers a number of diverse, ongoing opportunities to maximize the
economic benefits and opportunities for public and private entities within the City derived from a
limited-access high speed tolled highway. These benefits realized throughout the City include:
(1) an alternative separated grade crossing over the Union Pacific Railroad and FM 78; (2) a
bridged crossing over the frequently prone-to-flooding Cibolo Creek watershed; (3) additional
high speed northwest-southeast highway capacity; (4) development opportunities along the
proposed Project; (5) development, maintenance and diversification of the economy of the State;
(6) fostering the growth of enterprises based in the San Antonio metropolitan area and;
(7) development and expansion of transportation and commerce within the State.
On February 28, 2017, the City Council of the City authorized the City's entering into
and execution of the Initial Development Agreement between the City and the Cibolo Turnpike.
This Agreement, which is an amendment and restatement of the Initial Development Agreement,
is now executed by such parties to clarify certain aspects of the hereinafter-defined and described
Project that is the subject hereof and to eliminate reference to any Project component located in
the City of Schertz, Texas. On the Effective Date, this Agreement replaces and supersedes in all
manner and respect the Initial Development Agreement.
PROJECT OVERVIEW
The Project that is the subject of this Agreement is comprised of three interrelated
components: (1) the "Cibolo Parkway" (as further described and defined in Section 3.1(a)
hereof), which is generally the design, build, finance, operation and maintenance of a new toll
road facility extending approximately 7 miles from the intersection of Weil Road and FM 1103
southeast to IH 10, (2) the "Cibolo Expressway" (as further described and defined in Section
3.1(b) hereof), which generally consists of three "flyover" lanes on FM 1103 over Orth Lane,
Green Valley Road, and near or around Saddle Spoke Road/Gatewood Bay, being three cross
streets within the City and that intersect FM 1103, which "flyover" lanes are in addition to the
improvements to the approximately 2.8 mile corridor of FM 1103 (from the City's corporate
limits near the intersection of FM 1103 and Chelsea/Old Wiederstein Road to the intersection of
FM 1103 and Rodeo Way) to be constructed by TxDOT (such TxDOT-constructed
Initials: CITY -&-r`--9 CIBOLO TURNPIKE V l Page 1
improvements, as further described and defined herein, the "FM 1103 Improvements"), and (3)
maintenance and operation of the foregoing by Cibolo Turnpike. Accordingly the term
"Project" means the (1) design, build and finance of the Cibolo Expressway and the Cibolo
Parkway and (2) operation and maintenance of the FM 1103 Improvements that are "turned
back" to the City (such portion of the FM 1103 Improvements herein referred to as the Turnback
FM 1103), the Cibolo Expressway, and the Cibolo Parkway. Each Project component, as more
fully described herein, is shown on the Project map attached hereto and incorporated by
reference as Exhibit 1; conceptual depictions of the Cibolo Expressway are shown in Exhibit 2
and are also incorporated herein by reference.
Toll Road Feasibility Process
The City formed a Blue-Ribbon Committee comprised of diverse community members to
consider the idea / concept of a toll road within the community and to be part of the City's
thoroughfare plan. The Blue-Ribbon Committee fully endorsed the toll road concept and
recommended that the City further advance the toll road.
The City with Cibolo Turnpike's assistance performed a Feasibility Study to analyze the
viability of a possible toll road facility in the City. The Feasibility Study considered the
projected traffic and revenue and estimated project costs. In addition, as part of the study
process a series of City public hearings were held to gather citizen input about this possible
Project. The City reviewed and accepted the Feasibility Study, and voted to move forward with
the process to develop the Project.
Cibolo Expressway (FM 1103 -Improvements)
TxDOT, in addition to planned improvements to other sections of FM 1103, is currently
planning improvements on FM 1103 from the City's corporate limits near the intersection of FM
1103 and Chelsea/Old Wiederstein Road to Rodeo Way Drive. The proposed TxDOT
improvements are to widen the existing two-lane facility to four-lanes, including raised medians
and left turn lanes, two 5' bike lanes, curbs and gutters, underground storm sewer system, and 6'
sidewalks along both sides of the roadway (collectively referred to as the "FM 1103
Improvements"). . The City will request TxDOT that the design for the FM 1103
Improvements along that stretch of FM 1103 hereafter defined as the Turnback FM 1103
accommodate the Cibolo Expressway.
Under TxDOT's "Turnback Program" the City will request that upon TxDOT's
completion of the FM 1103 Improvements that TxDOT transfer to it (or an instrumentality
thereof) ownership of FM 1103 from the City's corporate limits near the intersection of FM 1103
and Chelsea/Old Wiederstein Road to Weil Road including the right-of-way or "ROW" (the
"Turnback FM 1103").
Cibolo Turnpike proposes to construct the Cibolo Expressway as improvements to the
Turnback FM 1103 in addition to the TxDOT-constructed FM 1103 Improvements to such
section of FM 1103. The Cibolo Expressway will be funded solely by Cibolo Turnpike; and, as
provided herein (and to the extent practicable), the construction of the Cibolo Expressway shall
be coordinated with TxDOT so that its construe ion shall occur simultaneously with the
Initials: CITYCAD CIBOLO TURNPIKE & Page 2
construction of the proposed TxDOT-constructed FM 1103 Improvements in order to minimize
traffic disruption on FM 1103.
Cibolo Parkway
Cibolo Parkway is the proposed new toll road facility from the intersection of Weil Road
and FM 1103 to the Zuehl Road Exit on I-10 approximately 7 miles long. Cibolo Turnpike, on
the City's behalf, will develop Cibolo Parkway that will include the design (with a concrete
surface in accordance with TxDOT standards for roads having similar size and scope),
environmental studies, right-of-way acquisition, construction, maintenance, and operation.
Project Development Process
Cibolo Turnpike will develop the Project in two phases, with Phase I being development
of a Pro Forma Model to verify the financial viability of the Project, and Phase II being the detail
design, ROW acquisition, and construction of the Project. As the Project develops, the parties
retain the ability to add additional components to provide drivers with an improved
transportation experience and improved access to destinations.
RECITALS
A. Essential transportation improvements in and around the City are required to
satisfy the accelerated growth being experienced there. Financial assistance from the State is not
currently available for all of the City's approved and critical projects; therefore, the City has
resourced another alternative to help provide the funding it needs.
B. Extensive, prime economic development opportunities exist in an area of the City
bound by the FM 78 on the west and IH-10 on the east. These opportunities include commercial
and residential growth along both of these major transportation corridors, as well as new
improvements to the City's infrastructure that will implement and manage planned growth for
this undeveloped area of the City.
C. The City has determined that it would be in its best interests, in fulfilling its
public purpose and legislative mandate, to develop a limited-access high speed tolled highway to
satisfy economic and population growth issues as well as to provide an alternate
southeast/northwest route separated grade crossing over the Union Pacific Railroad and FM 78,
between IH-35 and IH-10.
D. The City wishes to further define the feasibility of the Project, and thus Cibolo
Turnpike will undertake studies, including the Pro Forma Model, to determine whether the
Project appears to be feasible (financially and otherwise), and to determine whether surplus
revenues under the Operating Agreement (as hereinafter defined) can be expected to support a
significant portion, if not all, of the Project's projected construction, operation and maintenance,
and finance costs.
E. As evidence of the City's desire to advance the Project, and in furtherance of the
Blue-Ribbon Committee's recommendations the Cityi�'�� will do the following: execute this
Initials: CITY(c,4 CIBOLO TURNPIKE -.1/V--- Page 3
Agreement; petition the Alamo Area Metropolitan Planning Organization (the "AAMPO") for
the adoption of the Project and formally place the Project on the funded portion of the AAMPO's
Metropolitan Transportation Plan; and request that TxDOT enter into a Memorandum of
Understanding with Cibolo Turnpike for the development of the Project.
NOW, THEREFORE, in consideration of the premises, covenants, agreements and
obligations contained herein, the parties do hereby agree as follows:
ARTICLE I
SUBJECT OF AGREEMENT
A. Purpose of This Agreement
The purpose of this Agreement is for the development, finance, operation, management,
and maintenance of the Project by Cibolo Turnpike. This Agreement defines the development of
the Project, and an Operating Agreement defines the Project operating terms all as mutually
agreed upon by the Parties.
B. Parties to This Agreement
The City is a home rule municipality, exercising governmental functions and powers as a
home rule city in the State of Texas. The "City," as used in this Agreement includes the City of
Cibolo, Texas, and any assignee of, instrumentality of, or successor to its rights, powers, and
responsibilities.
Cibolo Turnpike, LP, is a Texas limited partnership and Cibolo Turnpike, GP, LLC, a
Texas limited liability company, is its sole general partner created for the development and
operation of the Project.
ARTICLE II
TERM AND CANCELLATION
Section 2.1
(a) This Agreement shall be for a term of fifty (50) years, plus additional time, as
needed to conform with the Financial Model, beginning on the effective date of the Initial
Development Agreement (the "Term"). The Operating Agreement as part of this program will
run co-terminus with the Development Agreement.
(b) The City hereby authorizes, permits and grants a non-exclusive right to Cibolo
Turnpike, and to all agents, representatives, consultants, employees, and invitees of Cibolo
Turnpike, easement, right-of-way, ingress, egress, access, and use rights in, over, upon, across
and along all ingress, egress and access portions of all streets adjacent to the Project belonging to
the City, to Cibolo Turnpike's for the development and operation of the Project and/or otherwise
Initials: CITE) CIBOLO TURNPIKE 4W ' Page 4
as provided for in this Agreement. Any temporary road closures and / or temporary detours will
be coordinated with the City.
ARTICLE III
GENERAL CONTRACT PROVISIONS
Section 3.1 General Contract Provisions. Notwithstanding anything in this Agreement
to the contrary, to the extent applicable, any and every contract Cibolo Turnpike may negotiate
or execute under the authority of this Agreement, either on behalf of itself, behalf of the City, or
both itself and the City shall be subject to terms and conditions of this Section 3.1, which are as
follows:
(a) Cibolo Parkway:
(i) Land Acquistion.
A. Costs. At its sole cost and expense, Cibolo Turnpike shall acquire
in the name of the City (or an instrumentality thereof) all necessary ROW for the
Cibolo Parkway.
B. Land Acquisition Process. Cibolo Turnpike shall negotiate Cibolo
Parkway facility land acquisition transactions on a fair-market price basis, as
determined by independent appraisals; and, the City's institution of eminent
domain shall only be used as a last resort for the acquisition of any new ROW. In
the event that eminent domain is determined to be necessary, Cibolo Turnpike
shall reimburse the City for any and all costs the City incurs in undertaking the
eminent domain action.
(ii) Development of the Cibolo Parkway shall be subject to the following:
A. Route. As this is a community driven project, the City shall have
the final determination as to the Cibolo Parkway route, so that the route complies
with the City's Thoroughfare Plan and Future Land Use Plan and considers
projected future development.
B. Construction Standards. Cibolo Turnpike will develop the Cibolo
Parkway using TxDOT standards for roads of similar size and scope to ensure a
quality design.
C. The Cibolo Parkway road surface shall be concrete and the road
construction shall comply with the requirements of any City ordinance regulating
road and street construction.
(b) Cibolo Expressway:
(i) Development of Cibolo Expressway. TxDOT is currently planning
improvements on FM 1103 from the City's corporate limits near the intersection of FM
1103 and Chelsea/Old Wiederstein Road to Rodeo Way Drive. The proposed TxDOT
improvements are to widen the existing two-lane facility to four-lanes, including raised
Initials: CITY6D CIBOLO TURNPIKE C- Page 5
medians and left turn lanes, two 5' bike lanes, curbs and gutters, underground storm
sewer system, and 6' sidewalks along both sides of the roadway. (the "FM 1103
Improvements"). The existing FM 1103 right of way ("ROW") is 80 feet wide, and the
proposed ROW is 120 feet. TxDOT will acquire this additional ROW. The City will
request TxDOT that the design for the FM 1103 Improvements along that stretch of FM
1103 herein defined as the Turnback FM 1103 accommodate the Cibolo Expressway; and
that TxDOT coordinate (to the extent practicable) the construction of the Cibolo
Expressway with the construction of the FM 1103 Improvements in order to minimize
traffic disruption on FM 1103.
(ii) Land Acquisition. In the event that additional ROW is needed for the
Cibolo Expressway, Cibolo Turnpike shall acquire the ROW following all City, State,
and Federal rules and procedures. Any ROW acquired shall be consistent with the
provisions of Section 4.8.
(c) Financing. The Project shall be financed solely by Cibolo Turnpike from private
capital and investment. Further, in no event shall the following ever occur:
(i) Creation of a public improvement district to fund any aspect of the toll
lanes of Cibolo Expressway and Cibolo Parkway; or
(ii) The use of dedicated Local, State or Federal tax dollars to fund any aspect
of the toll lanes of Cibolo Expressway and Cibolo Parkway; or
(iii) The use of public grants or direct governmental loans, such as
Transportation Infrastructure Finance or Innovation Act loans, to fund any aspect of the
toll lanes of Cibolo Expressway and Cibolo Parkway.
(d) Transfer of Title. Upon completion of the Project, right of title and
possession to the real property and the improvements shall be transferred to the City (or an
instrumentality thereof), except for those rights of operation transferred to Cibolo Turnpike
pursuant to the Operating Agreement, unencumbered by any liens or restrictions against its use
as a public right-of-way, (including the right to place public utilities in such rights-of-way).
(e) Project Operation; The Operating Agreement. The right, duty and obligation to
operate the Project upon its completion shall be the responsibility of Cibolo Turnpike.
Operational requirements relative to the Project shall minimally include the following:
(i) That the term of the Operating Agreement shall run co-terminus with this
Agreement.
(ii) That tolls for vehicles traveling on the tolled portions of the Project shall
be subject to the provisions of Section 9.2(c).
(iii) That the following vehicles shall not be subject to any toll for travel on the
Project: official City of Cibolo vehicles, official City of Schertz vehicles, official Schertz-
Initials: CITY4 CIBOLO TURNPIKE 0' (' Page 6
Cibolo-Universal City Independent School District vehicles, and official Guadalupe
County Sheriffs Office vehicles, vehicles being used by an entity to provide emergency
services to the City under contract; or such other vehicles exempted by state law from the
payment of tolls;
(iv) That Cibolo Turnpike shall advise the City of the initial and future toll
rates at least 90 days before implementation;
(v) That the standards for Project operation shall, minimally, adhere to
TxDOT's operational protocol for projects of similar size, scope and traffic count;
(vi) That the City shall be entitled to provide to Cibolo Turnpike input
regarding Project operation, which input shall be taken into consideration and, to the
extent commercially and practically reasonable (within the financing structure to which
the Project is at such time subject), implemented;
(vii) That the payment of operations and maintenance costs shall have a first
priority position in the event of the operator's default or bankruptcy;
(viii) That Cibolo Turnpike shall maintain a customer service office within the
City's corporate limits for the purpose of resolving claims of erroneous toll charges and
related matters;
(ix) Requirement that operator maintain adequate liability insurance; and
(x) A "buyback" provision, which shall state the terms and conditions by
which the City may buy Cibolo Turnpike's interest in the Operating Agreement at a
future date.
(f) Negotiation of Operating Agreement. Prior to Financial Close (as defined
herein), the City and Cibolo Turnpike shall negotiate the terms of a stand-alone "operating
agreement" regarding the Project's operation that, minimally, encompasses a. through g. of this
Section 3.1, which operating agreement shall be presented to City Council for consideration;
provided, however, that the failure of the City and Cibolo Turnpike to enter into a separate
operating agreement shall not invalidate Cibolo Turnpike's right, duty and obligation to operate
the Project as specified hereunder; provided further, however, that any operation of the Project
by Cibolo Turnpike shall be subject to the minimum operational requirements specified in a.
through g. of this Section 3.1. For purposes of this Agreement, the term "Operating
Agreement" shall mean any agreement pursuant to which Cibolo Turnpike operates the Project,
whether by separate agreement or pursuant to the provisions of this Section 3.1 and other
applicable provisions of this Agreement.
(g) Non-Compete Language Prohibited. Cibolo Turnpike shall never require the City
to enter into any "non-compete" agreement, and no contract authorized under this Agreement or
the Operating Agreement shall ever negate or diminish the City Council's authority to plan, fund
and construct future streets, roads, highways, mass transit, or other such improvements as City
Initials: CITY CIBOLO TURNPIKE L— Page 7
Council may, in its sole discretion, find necessary to address the transportation needs of the City
and its citizens. Further, should such a "non-compete"provision be incorporated in any contract
or agreement authorized by this Agreement, it shall be void ab initio.
(h) Other Governmental Approvals. The obligations of the Parties shall be subject to
the ability to obtain any necessary approvals from other governmental entities that are required
for completion and operation of the Project.
ARTICLE IV
PROJECT DEVELOPMENT
Section 4.1 Project Development- Phase I.
(a) Pro Forma Model. During Phase I of Project Development, Cibolo Turnpike shall
cause to be prepared a Pro Forma Model for the Project. Cibolo Turnpike will use the Pro Forma
Model to determine the financial viability of the Project. The Pro Forma Model analysis will
include the preliminary determination of various risk factors as they relate to development of the
Project, such as environmental, design, cost and traffic and revenue issues.
(b) Term of Phase I. Cibolo Turnpike shall begin Phase I upon the execution of this
Agreement, and will diligently work on the Pro Forma Model. Upon the completion of the Pro
Forma Model analysis, Cibolo Turnpike will present the results to the City, which shall include
Cibolo Turnpike's proposed plan for Project Development - Phase II. Phase I is anticipated to
take approximately 10-12 months to complete.
Section 4.2 Project Development- Phase II.
(a) Project Development. Phase II is the development of the Project including the
detail design, ROW acquisition, bidding, and construction, and development of the Financial
Model (as detailed below in Section 4.2(c)), and securing the funding as required for the
development of the Project. Cibolo Turnpike shall comport with the requirements Texas Local
Gov. Code Chapter 212, Subchapter C ("Developer Participation in Contract for Public
Improvements") with respect to the development of the Project
(b) Term of Phase II. Phase II the development of the Project will begin after Cibolo
Turnpike completes Phase I Pro Forma and determines that the Project is financially viable.
Commencement of Project construction shall not begin until Project funding has occurred (as
detailed below in Section 4.3). Phase II will be complete upon the completion and acceptance of
the construction of the Project. Notwithstanding the foregoing, this Agreement shall terminate if
Financial Closing (as hereafter defined) does not occur within two years following
commencement of Phase II.
(c) Financial Model. Financial Model means the computerized financial model
including projections and assumptions for operation of the Project showing, among other things:
(a) costs for the operation and maintenance of the Project, including management payments to
Cibolo Turnpike for its operation'of the Project; (b) debt service costs for debt incurred by
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Cibolo Turnpike related to the Project; (c) reserves for operations and for capital improvements
or such other reserves as may be required by sound engineering practice; (d) payments to Cibolo
Turnpike as a return on equity invested by its partners, based on the Base Case Equity IRR, as
defined and set forth in the Financial Model; and (e) payments to the City and Cibolo Turnpike
as a split of all remaining revenues from the operation of the Project, based on the percentages as
set forth in the Financial Model.
(d) Construction Contract. Cibolo Turnpike shall advertise for construction bids,
issue bid proposals, receive and tabulate the bids, and award and administer the contract or
contracts for construction of the Project (the "Construction Contract"). Administration of the
Construction Contract shall include the responsibility for construction engineering, material
acceptance testing, and construction quality acceptance, and for issuance of any change orders,
supplemental agreements, amendments, or additional work orders that may become necessary
after the award of the Construction Contract. The bidding process is to be competitive and
comply with all applicable federal and State laws. Copies of the Construction Contract shall be
provided to the City, including any bond or insurance requirement as detailed herein.
(e) Insurance and Bonding Requirements
(i) Performance Bonds. Cibolo Turnpike will provide Performance Bonds to
ensure completion of the Project. In addition, included within any successful bidder's
Construction Contract, the successful bidder shall include a Performance Bond to ensure
completion of the Project.
(ii) Insurance Requirement. Cibolo Turnpike will provide the appropriate
construction and management insurance package for the development of the Project (the
"Insurance Coverage"). In addition, included within any successful bidder's Construction
Contract will be the applicable Insurance Coverage consistent with the City coverages and as
stated in Section 4.2(d) above.
(f) Development Standards / TxDOT Coordination. As part of the development of
the Project, Cibolo Turnpike will develop the Project using TxDOT standards (for road projects
of similar size and scope) to ensure a quality design. In addition, Cibolo Turnpike will
continually coordinate with TxDOT with all aspects of the Project including environmental
coordination / approvals, and design approvals. Cibolo Turnpike will follow TxDOT's
guidelines for `local let' projects. The Project is planned to have a concrete pavement surface as
previously described. Cibolo Turnpike will consult with TxDOT and the City regarding
pavement design.
(g) Construction Management Services. During the construction of the Project,
Cibolo Turnpike shall manage the progress of construction through final completion of the
Project. Cibolo Turnpike shall monitor the timing of commencement, progress and completion
of Project construction by the contractor in accordance with the terms of the design, bid
documents, environmental compliance issues, and the Construction Contract, and shall
coordinate with the City and TxDOT as necessary or advisable to ensure compliance with any
applicable State and federal requirements.
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(h) Project Communication. During the construction of the Project, Cibolo Turnpike
shall periodically, and no event less than once every three months, report the Project progress to
the City Council. The first report shall provide City Council with an estimated timeline for
completing each phase of the Project, the estimated Project costs, and any anticipated issues that
may delay completion of the Project. Thereafter, Cibolo Turnpike shall update the City Council
on construction progress and Project costs incurred during the preceding quarter.
(i) Project Completion. When the Project is complete, Cibolo Turnpike shall issue
and sign a "Notification of Completion" certifying that all work has been completed in
accordance with the requirements of this Agreement, all governmental approvals, and applicable
laws.
Section 4.3 Development Funding. Cibolo Turnpike commits to use its commercially
reasonable efforts to raise sufficient capital, either debt and/or equity (the "Development
Capital") to be used to pay substantially all of the development costs of the Project. Funds for
the development of the Project shall be secured prior to the commencement of Project
construction (evidence of acquisition of which financing is referred to herein as "Financial
Closing").
Section 4.4 Authority and Responsibility of Cibolo Turnpike During Development
Period Regarding the Cibolo Parkway and Cibolo Expressway. The City acknowledges and
agrees that, consistent with and subject to the provisions of Article IV, during Phase I and Phase
II of the Project's development, Cibolo Turnpike shall be responsible for, and have the authority
to take, all actions it deems reasonably necessary to achieve the Financial Closing and thereafter
for any further actions reasonably necessary to pursue all or any part of any Phase II (being the
Project's development period). As noted above, Cibolo Turnpike will develop the Project
following Texas Local Gov. Code Chapter 212, Subchapter C (Developer Participation in
Contract for Public Improvements), which provides for Cibolo Turnpike managing the
development of the Project. There may be additional actions that may be subject to the consent
of City, which consent shall not be unreasonably withheld, may include, without limitation, the
following:
(a) Managing the day-to-day business affairs of City relating to the Project.
(b) Retaining engineers, consultants, attorneys, accountants, financial advisors
and other professionals and entering into contracts with Cibolo Turnpike.
(c) Identifying potential Project sites and negotiating for the acquisition of
such Project sites.
(d) Commissioning and preparing all Project studies.
(e) Selecting technology for the Project and negotiating for the acquisition or
license of such technology.
(f) Designing or supervising the design of the Project, including size,
configuration, performance levels, operating parameters and related design matters.
(g) Applying for such governmental approvals as may be required for the
Project.
(h) Preparing such bid documents as may be required for the acquisition of
equipment, services and other assets necessary for the Project.
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(i) Negotiating contracts for the procurement of materials and supplies to be
utilized by the Project.
(j) Negotiating the acquisition of(or options to acquire) easements and rights
of way as may be required for the Project.
(k) Negotiating contracts for Project utilities.
(1) Negotiating contracts for the sale or other disposition of property
determined to be surplus relative to the development of the Project.
(m) Developing a plan of financing, preparing financing documents, preparing
offering documents and doing all related work necessary to achieve Financial Closing.
(n) Developing a Market Standard package of insurance for the Project.
Section 4.5 Responsibility for Development Costs. Cibolo Turnpike shall be
responsible for the Project's development costs, including the payment of all costs incurred by
Cibolo Turnpike in performing its obligations of the Agreement (which costs are subject to
reimbursement from the Financial Closing).
Section 4.6 No Liability for the Development Costs. If the Financial Closing does not
occur, except as otherwise expressly set forth in the Agreement, neither the City nor Cibolo
Turnpike shall have any obligation, express or implied, to reimburse the other Party for any
Project development cost, but any party which breaches a material provision of this Agreement,
and fails to cure such breach, shall be liable for actual damages suffered by the other party.
Section 4.7 Level of Effort; Cooperation.
(a) In developing the Project under this Agreement, Cibolo Turnpike's obligations
shall be limited to commercially reasonable efforts. Nothing herein shall imply or create the
inference that if Cibolo Turnpike concludes, in its sole discretion, that the Project as envisaged
by the Agreement will not be economically feasible or are not capable of being completed on a
commercially reasonable basis, that Cibolo Turnpike must nonetheless continue developing the
Project and expending additional funds; provided that if Cibolo Turnpike reaches a conclusion
that the Project as envisaged by the Agreement will not be economically feasible or are not
capable of being completed on a commercially reasonable basis, Cibolo Turnpike will deliver a
"Determination of Non-Feasibility" to the City, expressing this conclusion and the reasons
therefor. However, if Cibolo Turnpike reaches a conclusion that the Project, as envisaged by the
Agreement, will be economically feasible and capable of being completed on a commercially
reasonable basis, Cibolo Turnpike will deliver a "Determination of Feasibility" to the City,
expressing this conclusion before the date of termination, as stated in Section 4.10. Upon the
City's receipt of a Determination of Feasibility, Cibolo Turnpike shall become contractually
obligated to fully complete the Project as envisaged by the Agreement.
(b) Subject to the other provisions of this Agreement, the Parties hereto shall
cooperate fully with each other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps required to be taken as a
part of the Project.
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Section 4.8 Right of Way (ROW).
(a) ROW Coordination. The Parties agree to coordinate with TxDOT and any other
governmental authority in an effort to acquire any additional rights of way, including railroad
crossing permits/approvals or sites for the Project through the use of existing or acquired road
rights of way or other locations.
(b) ROW Acquisition Process. Cibolo Turnpike will acquire the necessary ROW for
the Project. The ROW acquisition process will follow all applicable State and federal rules
regarding the acquisition of ROW. Cibolo Turnpike will keep the City informed throughout the
ROW acquisition, including status, issues, and other items that may occur. Cibolo Turnpike goal
and as directed by the City, is to acquire the ROW through a negotiated process and terms;
however, only if all other means fail will the acquisition go to eminent domain.
(c) Eminent Domain. Cibolo Turnpike must make a good faith attempt (as
established, minimally, as the basis upon which TxDOT procedures dictate the ROW acuisition
process prior to the exercise of the power of eminent domain in similar circumstances) to acquire
the ROW. Only thereafter shall the City agree to allow the use of its eminent domain authority,
exercised only in accordance with the provisions of applicable Texas law, to secure remaining
ROW property on behalf of the City.
(d) ROW Title. Title of the ROW property will ultimately transfer to and be held by
the City (or an instrumentality thereof). During the ROW acquisition title of the ROW may be
with an another entity to facilitate the process. The identification and use of the entity will be
submitted for approval of the City, which approval shall not be unreasonably withheld.
Section 4.9 Ownership of the Studies; Government Approvals.
(a) In recognition of the fact that Cibolo Turnpike may have paid for the studies,
Cibolo Turnpike shall retain ownership of such studies and government approvals issued to
Cibolo Turnpike during the Project's development. All other studies and government approvals
obtained by or issued to Cibolo Turnpike shall remain as the property of Cibolo Turnpike and in
the event of a termination of this Agreement, all studies and government approvals obtained by
or issued to Cibolo Turnpike shall remain as the property of Cibolo Turnpike. Nothing in this
subsection shall preclude the Parties from agreeing, on mutually acceptable terms, for the
transfers the studies and government approvals to the City.
(b) Provided Cibolo Turnpike proceeds with completion of the Project, should any
portion of the Project be terminated or otherwise dropped from the Project by City in accordance
with the terms of this Agreement, and Cibolo Turnpike is not in breach of this Agreement or
initiated a claim against the City under this Agreement, City agrees to transfer to Cibolo
Turnpike, at no cost to Cibolo Turnpike, copies of all governmental approvals, studies and all
other rights held by City that are related to such terminated portions of the Project, to the
maximum extent permitted by law or by the terms of any such rights or governmental approval.
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Section 4.10 Termination.
(a) This Agreement shall terminate upon (i) the delivery by Cibolo Turnpike to City
of a Determination of Non-Feasibility; or (ii) notice by City at any time after December 31, 2018
(unless Cibolo Turnpike shall have notified City in writing that it has reasonably determined that
additional time is necessary to achieve the Initial Financial Closing, but not to exceed 180 days)
if the Financial Closing Date has not yet occurred; or (iii) the City determines that Cibolo
Turnpike failed to coordinate with TxDOT the construction of the FM 1103 Improvements and
the Cibolo Expressway, as described in Section 3.1(b)(i), so that such construction of both shall
be accomplished simultaneously and cause minimal traffic interruption on FM 1103.
(b) If this Agreement is terminated pursuant to Section 4.10(a), each Party shall be
released from its obligations under this Agreement, other than liabilities for any breach of this
Agreement.
Section 4.11 Indemnification. Cibolo Turnpike shall indemnify, defend and hold
harmless the City and its respective City Council members, officers, employees, representatives,
attorneys and agents (the "City Indemnitees") from any losses or claims that may at any time be
imposed upon, asserted against or incurred by any City Indemnitee, to the extent such losses
arise out of:
(a) The inaccuracy in any material respect of any representation or warranty of
Cibolo Turnpike contained herein or the failure of Cibolo Turnpike in any material respect to
comply with any of its obligations under this Agreement; or
(b) Cibolo Turnpike's breach of a contract with a third party, or the negligent acts or
omissions, or the gross negligence, or the recklessness, or the willful misconduct of Cibolo
Turnpike or any of its partners, contractors, agents or affiliates in connection with the Project.
Section 4.12 Limitation on Liability. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, NEITHER CIBOLO TURNPIKE NOR THE CITY,
NOR ANY OF THEIR RESPECTIVE PARTNERS, OFFICERS, EMPLOYEES, MEMBERS,
REPRESENTATIVES, ATTORNEYS OR AGENTS SHALL BE LIABLE TO THE OTHER,
WHETHER IN CONTRACT, TORT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE, FOR ANY LOSS OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
FAILURE OF PERFORMANCE RELATED HERETO, HOWSOEVER CAUSED, WHETHER
ARISING FROM SUCH PERSON'S SOLE, JOINT OR CONCURRENT NEGLIGENCE.
ARTICLE V
PROJECT CONTRACTS, APPROVAL RIGHTS AND AUTHORITY
Section 5.1 Cibolo Turnpike's Authority to Negotiate Project Contracts During
Development Period. To the maximum extent permitted by law, City authorizes Cibolo
Turnpike to identify parties, including without limitation, Cibolo Turnpike, Texas Turnpike
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Corporation and other affiliates of Cibolo Turnpike, to initiate and negotiate the terms of, all
Project contracts that Cibolo Turnpike reasonably determines must be negotiated or executed
prior to the Financial Closing and thereafter. Cibolo Turnpike will develop the Project following
Texas Local Gov. Code Chapter 212, Subchapter C. (Developer Participation in Contract for
Public Improvements), which provides for Cibolo Turnpike managing the development of the
Project. Cibolo Turnpike's authority under this Section includes the authority to identify parties
to, and negotiate the terms of, Project contracts. Such Project contracts may include, without
limitation, project design, environmental studies, traffic and revenue studies, construction
management agreements, agreements with investment bankers and other agreements related to
the Financial Closing. To the extent practicable and consistent with the timely achievement of
the Financial Closing, Cibolo Turnpike shall consult with City's Representative (as defined
below) regarding the selection of other parties to Project contracts.
Section 5.2 Project Contract Provisions. Unless otherwise agreed to by City or as
otherwise specifically provided in this Agreement, in connection with the negotiation of the
terms of Project contracts, Cibolo Turnpike shall use commercially reasonable efforts to include
the following provisions in Project contracts:
(a) The Construction Contract as recommended by Cibolo Turnpike based upon the
low bid by pre-approved qualified contractors.
(b) The party other than City (the "Contractor") shall use labor from the Project's
general area to the extent reasonably available.
(c) The liability of City, if any, pursuant to such Construction Contract shall be
limited to the City's interest in Project assets.
(d) The Contractor shall indemnify City Indemnitees for any losses to property, or
liabilities to third parties directly or indirectly resulting from the negligence or willful
misconduct of the Contractor in the performance or failure to perform its obligations under such
Project contract, provided that such indemnity shall not apply to any such losses or liabilities
incurred by City Indemnitees by reason of City Indemnitees' gross negligence or willful
misconduct.
(e) The Contractor shall waive all indirect, incidental, consequential, special, punitive
or exemplary damages it might incur.
(f) No Project contract shall become effective until the Financial Closing, except for
obligations to satisfy conditions precedent and Project contracts that, by their nature, require
effectiveness before such date (e.g., investment banker engagement letter).
(g) The Contractor shall provide a performance, payment and completion bond, or
shall agree to such other assurances (as, for example, a letter of credit or indemnification) as will
provide reasonable assurance of performance,payment and completion.
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ARTICLE VI
COMPENSATION
Section 6.1 Compensation/Return.
(a) Cibolo Parkway Facility. If Cibolo Turnpike undertakes the Project, Cibolo
Turnpike's base compensation will be as set forth in the Financial Model and City's
compensation or return shall be an annual split of all remaining Surplus Revenues of the Project,
based on the percentages as set forth in the Financial Model, which includes those surplus funds
remaining under the indenture or other documents after providing for: (1) all operation and
maintenance expenses, (2) taxes, (3) all debt service on debt incurred to finance or improve the
Project, (4) all contractual commitments (5) all required reserves as set forth in the Financial
Model, and (6) the necessary payments to Cibolo Turnpike to achieve a return on equity based
on the Base Case Equity internal rate of return, all as further identified within the Financial
Model or the Operating Agreement (as applicable).
(b) Cibolo Expressway Facility. If Cibolo Turnpike undertakes the Cibolo
Expressway and the Cibolo Expressway is financed as described herein, the parties'
compensation or return shall be as identified within the Financial Model or the Operating
Agreement (as applicable). In addition, reimbursement of "Development Capital", as defined
and identified in the Financial Model, for the Cibolo Turnpike and Cibolo Expressway to the
extent not paid pursuant to other provisions of this Agreement, shall be paid promptly, following
the Financial Closing for any of the Project, from the proceeds of such financing, an amount
equal to the Development Capital actually expended or incurred by Cibolo Turnpike to the
Cibolo Turnpike and Cibolo Expressway,plus interest at a rate not to exceed 12%per annum.
Section 6.2 Development Fee. Promptly following the Financial Closing for the
Project, Cibolo Turnpike shall be paid solely from the proceeds of such financing a Development
Fee equal to 2% of the principal amount, or if sold at a net premium, issue price, of such
financing.
Section 6.3 Project Management Fee. Cibolo Turnpike is authorized to receive an
appropriate Project Management Fee to oversee and manage the development of the Project.
The Project Management Fee shall equal to 3% of the estimated construction cost of the Project.
Section 6.4 Operating Management Fee. Cibolo Turnpike is authorized to receive an
appropriate Operating Management Fee all of which is detailed under the Financial Model or the
Operating Agreement, as applicable. The Operating Management Fee is to cover the operations
and management of the Project.
Section 6.5 City. City's compensation shall be an annual split of all remaining
Surplus Revenues of the Project, based on the percentages as set forth in the Financial Model,
which includes a portion of those surplus funds remaining under the indenture or other
documents after providing for: (1) all operation and maintenance expenses, (2) taxes, (3) all debt
service on debt incurred to finance or improve the Project, (4) all contractual commitments (5)
Initials: CITYCc) CIBOLO TURNPIKE / Page 15
all required reserves as set forth in the Financial Model, (5) the necessary payments to Cibolo
Turnpike to achieve a return on equity based on the Base Case Equity IRR.
Section 6.6 Reimbursement of City Expenses. As compensation for the City's costs
incurred in connection with this Agreement, Cibolo Turnpike shall reimburse the City for staff
time devoted to bringing the Project to fruition and consultant fees the City incurs directly
related to the Project, which shall include: (A) an amount equal to $15,000.00 to compensate the
City for staff time, and (B) reimbursement to the City for the costs of legal, engineering and
public relations consultant fees actually expended or inured by the City, plus interest at a rate
not to exceed 12% per annum (accruing from the date of the City's payment of such costs
through its receipt of reimbursement from Cibolo Turnpike). Cibolo Turnpike shall pay to the
City these reimbursement during Phase I of Project Development (which is described in Section
4.1 hereof).
ARTICLE VII
CITY RESPONSIBILITIES
Section 7.1 Cibolo Parkway Project Input, Alignment. The development of Cibolo
Parkway is the responsibility of Cibolo Turnpike. The City and Cibolo Turnpike will work
together on the development of this portion of the Project. Cibolo Turnpike will seek input on
various components of this portion of the Project. The City shall offer staff assistance and
provide input on the Project development. The City shall provide guidance, direction and
approval of the alignment of the Cibolo Parkway. Such input and approval on the alignment
shall be in a timely manner. The final alignment as agreed to by the parties is not subject to
changes and Cibolo Turnpike can rely on that final alignment.
Section 7.2 Cibolo Expressway. The development of Cibolo Expressway will be the
responsibility of Cibolo Turnpike. The Cibolo Expressway will be constructed on the Turnback
FM 1103 and therefore comprise part of the FM 1103 Improvements. These improvements are
in addition to the TxDOT-constructed FM 1103 Improvements to be made to such stretch of FM
1103. Cibolo Turnpike will seek input from TxDOT on the design of the Cibolo Expressway
and such design will comport with applicable TxDOT guidelines.
Section 7.3 TxDOT FM 1103 Turnback. The City, collaboratively with Cibolo
Turnpike, will negotiate with TxDOT on the turnback of the Turnback FM 1103 Improvements
to the City. Negotiation on the Turnback FM 1103 Improvements turnback to the City shall
begin with the execution of this Agreement. For the avoidance of doubt, under no circumstances
shall the Turnback FM 1103 include any portion of that facility that is located within the City of
Schertz, Texas. Final acceptance of the Turnback FM 1103 would occur after the results of
Project Development Phase I.
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ARTICLE VIII
FINANCING THE PROJECT
Section 8.1 The Project. Cibolo Turnpike shall be solely responsible for all costs
associated with the design and construction of the Project and any debt service related thereto.
Cibolo Turnpike may elect to undertake the Project under the Operating Agreement by either
Texas Turnpike Corporation or Cibolo Turnpike or an affiliate of them.
ARTICLE IX
OPERATING AGREEMENT
Section 9.1 Operating Agreement. The Operating Agreement to be negotiated and
executed by City, to Cibolo Turnpike, the Texas Turnpike Corporation or other affiliated entity
designated by Cibolo Turnpike in accordance with this Agreement, shall be substantially in the
form attached to this Agreement as Appendix A. The parties further acknowledge that the
evolution of the Project may call for further modifications or amendments to the Operating
Agreement and the parties accordingly agree to negotiate in good faith to identify the terms of
any amendment that may be reasonably necessary, and to enter into such modifications of the
Operating Agreement as are called for either before or after it is executed in order substantially
to preserve the economic benefits to both Cibolo Turnpike and City as set forth in the Financial
Model.
Section 9.2 Operating Agreement Terms. Subject to the provisions of Section 3.1(f),
the parties shall use their best efforts to negotiate the terms and provisions of an Operating
Agreement prior to the end of Phase I. Such Operating Agreement shall provide, at a minimum:
(a) The term of the Operating Agreement to run co-terminus with this Agreement;
(b) The exclusive right and obligation to manage, operate, and maintain the Project,
including toll collections on the tolled portions thereof(being Cibolo Parkway);
(c) Included as part of the Operating Agreement are the following provisions
regarding tolled and non-tolled routes:
(i) Trips beginning or ending on the Cibolo Expressway will not have to pay
any toll relating to the Cibolo Expressway only.
(ii) All trips beginning or ending on the Cibolo Parkway shall pay that portion
of the tolls applicable to and for such trip.
(iii) All "through"trips, meaning any trip that does not orginate or terminate in
the City, shall pay tolls on both the Cibolo Expressway and the Cibolo Parkway; and
(d) The remaining requirements concering Project operation specified in Section
3.1(e) hereof.
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ARTICLE X
REPRESENTATIVES
Section 10.1 Cibolo Turnpike's Representative. Upon execution of the Agreement,
Cibolo Turnpike shall designate, in writing, to City, the name of the individual who is to be the
Cibolo Turnpike representative (the "Cibolo Turnpike's Representative") with full authority to
execute any and all instruments requiring Cibolo Turnpike's signature and to act on behalf of
Cibolo Turnpike with respect to all matters arising out of this Agreement. Cibolo Turnpike's
Representative shall represent the interests of Cibolo Turnpike, be responsible for overseeing all
aspects of design, construction and development of the Cibolo Turnpike and Cibolo Expressway,
and work closely with City's Representative (as defined below). Any consent, approval,
decision or determination hereunder made by Cibolo Turnpike's Representative shall be binding
on Cibolo Turnpike; provided, however, Cibolo Turnpike's Representative shall not have any
right to modify, waive or amend any provision of the Agreement, or terminate the Agreement.
Section 10.2 City's Representative. Upon execution of this Agreement, City shall
designate the City's representative (the "City's Representative") and will provide Cibolo
Turnpike with written notice of the identity of such individual so designated. With respect to
any action, decision or determination which is to be taken or made by City under the Agreement,
City's Representative may take such action or make such decision or determination or shall
notify Cibolo Turnpike in writing of the person(s) responsible for such action, decision or
determination and shall forward any communications and documentation to such person(s) for
response or action. Any consent, approval, decision or determination hereunder by City's
Representative shall be binding on City to the extent City has the legal power to delegate to an
individual the ability to give such consent or approval or make such decision or determination;
provided, however, City's Representative shall not have any right to modify, waive or amend
any provision of the Agreement, or terminate the Agreement. Cibolo Turnpike and any Person
dealing with City in connection with the Agreement or any matter governed by the Agreement
may rely and shall be fully protected in relying upon the authority and capacity of City's
Representative or any such designee to act for and bind City in any such matter, to the extent that
such delegation of authority is authorized by the City Charter and State law.
From time to time following the execution hereof, Cibolo Turnpike may change or
replace Cibolo Turnpike's Representative and City may change or replace City's Representative
upon five (5) business days' written notice to the other party, delivered to such party in the
manner and at the address indicated in Section 13.7.
ARTICLE XI
DEFAULT,ABANDONMENT
Section 11.1 Events of Default by City. The following shall constitute Events of
Default by City under this Agreement:
(a) Failure to observe or perform any material term, provision, condition or
obligation under the Agreement, and failure to cure such default within thirty (30) days
following notice or discovery of such default; provided, however, that if the failure to observe or
A.Initials: CIT .) CIBOLO TURNPIKEt, Page 18
perform cannot reasonably be cured within the thirty (30) day period, the failure to observe or
perform will not constitute an Event of Default if City begins corrective action within the thirty
(30) day period and thereafter proceeds with reasonable diligence to effect the cure as soon as
practicable.
(b) Any material representation or warranty made by City that is false, misleading or
inaccurate in any material respect at the time made.
(c) The failure of City to honor Cibolo Turnpike's option to enter into the Operating
Agreement.
(d) Default under the Operating Agreement.
(e) City shall (i) apply for or consent to, or become subject to, the appointment of or
the taking of possession by a receiver, liquidator, custodian or trustee of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its
debts as such debts generally become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi)
take any action for the purpose of effecting any of the foregoing, or (vii) be adjudicated as
bankrupt or insolvent by any court.
(f) Final legislative, administrative or judicial action after the date hereof that limits
City's authority so as to materially and adversely affect its ability to perform its obligations
under this Agreement or the Operating Agreement and City does not enter into an amendment to
this Agreement as provided in Section 12.3 within thirty (30) days of such final legislative,
administrative or judicial action. However, no future legislative changes shall ever cause the
financial obligations related to the Tollway to become obligations of the City.
Section 11.2 Events of Default by Cibolo Turnpike. The following shall constitute
Events of Default by Cibolo Turnpike under the Agreement:
(a) Failure to observe or perform any material term, provision, condition or
obligation under the Agreement and failure to cure such default within thirty (30) days following
notice or discovery of such default; provided, however, if the failure to observe or perform
cannot reasonably be cured within the thirty (30) day period, the failure to observe or perform
will not be an Event of Default if Cibolo Turnpike begins corrective action within the thirty (30)
day period and thereafter proceeds with reasonable diligence to effect the cure as soon as
practicable.
(b) Any representation or warranty made by Cibolo Turnpike that is false, misleading
or inaccurate in any material respect at the time made.
(c) Abandonment by Cibolo Turnpike except as specifically permitted by the
Agreement.
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(d) Cibolo Turnpike shall (i) apply for or consent to, or become subject to, the
appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself
or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally
unable, to pay its debts as such debts generally become due, (iii) make a general assignment for
the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code
(as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of
debts, (vi)take any action for the purpose of effecting any of the foregoing, or (viii) be
adjudicated as bankrupt or insolvent by any court.
Section 11.3 Remedies for City Default.
(a) Upon the occurrence and continuance of an Event of Default by City under the
Agreement, which City fails to cure, Cibolo Turnpike may suspend performance under the
Agreement and Cibolo Turnpike will have such remedies as may be available to it law or in
equity, subject to the limitations on adjudicated awards as set out in Texas Local Government
Code Chapter 271 Subchapter I, which shall be controlling.
(b) Upon the occurrence and continuance of an Event of Default by City under
Section 11.1(a) of this Agreement, Cibolo Turnpike shall be entitled to injunctive relief against
City.
(c) Upon the occurrence and continuance of an Event of Default by City under the
Agreement, Cibolo Turnpike may terminate this Agreement by delivering notice in writing to
City specifying the nature of the Event of Default and establishing a termination date, which date
shall not be less than thirty (30) days following the date of delivery of the notice whereupon the
Agreement shall terminate on the specified termination date unless City shall have cured the
Event of Default by such date, in which case the notice of termination shall be cancelled.
Liabilities of City accruing under this Agreement prior to the date of termination shall survive
any termination.
(d) Without prejudice to any other rights and remedies that the other party may have,
each of the parties agrees that damages may not be an adequate remedy for a breach of Section
11.1(a) of the Agreement, and that the other party will, in such case, be entitled to the remedies
of injunction, specific performance or other equitable relief for any threatened or actual breach of
Section 11.1(a) of this Agreement.
Section 11.4 Remedies for Cibolo Turnpike Default.
(a) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under this Agreement, City may suspend performance under this Agreement and City will have
such remedies as may be available under this Agreement.
(b) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under the Agreement, City may terminate this Agreement by delivering notice in writing to
Cibolo Turnpike specifying the nature of the Event of Default and establishing a termination
date, which date shall be not less than thirty (30) days following the date of delivery of the notice
Initials: CITYKAD CIBOLO TURNPIKE AC, Page 20
whereupon this Agreement shall terminate on the specified termination date unless Cibolo
Turnpike shall have cured the Event of Default by such date, in which case the notice of
termination shall be cancelled. Liabilities of Cibolo Turnpike accruing under this Agreement
prior to the date of termination shall survive any termination.
(c) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under this Agreement, which Cibolo Turnpike fails to cure, and which constitutes a material
misrepresentation, a negligent act or omission, or gross negligence, or recklessness, or willful
misconduct by Cibolo Turnpike or any of its partners, contractors, agents or affiliates in
connection with the Project or City may suspend performance under this Agreement and the
City shall have such remedies as may be available to it law or in equity; including but not limited
to recovery of actual damages the City may incur as a result of the breach.
(d) Without prejudice to any other rights and remedies that the other party may have,
each of the parties agrees that damages may not be an adequate remedy for a breach of Section
11.2(a) of the Agreement, and that the other party will, in such case, be entitled to the remedies
of injunction, specific performance or other equitable relief for any threatened or actual breach of
Section 11.2(a) of the Agreement.
(e) Upon the occurrence and continuance of an Event of Default by Cibolo Turnpike
under Section 11.2(a) of the Agreement, City shall be entitled to injunctive relief against Cibolo
Turnpike.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
Section 12.1 Cibolo Turnpike's Representations and Warranties. Cibolo Turnpike
hereby represents and warrants to City that:
(a) Organization. Cibolo Turnpike is a Texas limited partnership duly formed,
validly existing and in good standing under the laws of the State. Cibolo Turnpike has all
requisite power and authority to enter into the Agreement and to perform its obligations
hereunder.
(b) Authorization; No Violation. The execution, delivery and performance by Cibolo
Turnpike of this Agreement have been duly authorized by all necessary action and will not
violate the organizational documents of Cibolo Turnpike or result in the breach of or constitute a
default under any loan or credit agreement, other material agreement, judgment or decree to
which Cibolo Turnpike is a party or by which Cibolo Turnpike, or its material assets, may be
bound or affected; the Agreement has been duly executed and delivered by Cibolo Turnpike and
the Agreement and the documents referred to herein constitute valid and binding obligations of
Cibolo Turnpike subject to bankruptcy, reorganization, moratorium and other laws relating to the
enforcement of creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
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(c) Litigation. No suit is pending against or affecting Cibolo Turnpike which could
reasonably be expected to have a material adverse effect upon Cibolo Turnpike's performance
under the Agreement or the financial condition or business of Cibolo Turnpike. There are no
outstanding judgments against Cibolo Turnpike which would have a material adverse effect upon
its assets,properties or franchises.
(d) No Violation of Laws. Cibolo Turnpike has received no notice as of the date of
the Agreement asserting any noncompliance in any material respect by Cibolo Turnpike with
applicable statutes, rules and regulations of the United States of America, of the State, or of any
other state or municipality or agency having jurisdiction over and with respect to the transactions
contemplated in and by this Agreement; and Cibolo Turnpike is not in default with respect to any
judgment, order, injunction or decree of any court, administrative agency, or other governmental
authority which is in any respect material to the transactions contemplated hereby.
Section 12.2 City's Representations and Warranties. As of the date of this Agreement,
City makes the following representations and warranties to Cibolo Turnpike:
(a) Organization. City is a public body and a political subdivision of the State and
has all requisite power and authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Authorization; No Violation. The execution, delivery and performance by City of
this Agreement have been duly authorized by all necessary action and will not violate City's
Home Rule Charter, ordinances, resolutions, or any applicable laws, or result in the breach of
any material agreement, judgment or decree to which City is a party; this Agreement has been
duly executed and delivered by City and the Agreement and the documents referred to herein
constitute valid and binding obligations of City enforceable against City in accordance with its
terms subject to bankruptcy, reorganization, moratorium and other laws relating to the
enforcement of creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(c) Litigation. No suit is pending against or affecting City which could reasonably be
expected to have a material adverse effect upon City's performance under this Agreement.
(d) No Violation of Laws. City has received no notice as of the date of this
Agreement asserting any noncompliance in any material respect by City with applicable statutes,
rules and regulations of the United States of America, the State or any agency having jurisdiction
over and with respect to the transactions contemplated in and by this Agreement, and City is not
in default with respect to any judgment, order, injunction or decree of any court, administrative
agency, or other governmental authority which is in any respect material to the transactions
contemplated hereby.
Section 12.3 Mutual Representations and Warranties; Restructure Due to Legislative,
Administrative or Judicial Actions. In the event of a final legislative, administrative or judicial
action after the date hereof that limits Cibolo Turnpike's authority or the City's authority so as to
materially and adversely affect either of said party's ability to perform its obligations under this
Agreement, City��and Turnpike will in good faith negotiate changes to this Agreement
Initials: CITY CD CIBOLO TURNPIKE JAI& Page 22
reasonably acceptable to both parties that accomplish the purposes of this Agreement in a
manner that preserves to the extent reasonably possible the economic benefits to both Cibolo
Turnpike and City as set forth in the Financial Model.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Uncontrollable Circumstances. An "Uncontrollable Circumstance" is an
event or circumstance, including an action of a governmental entity or a change in law, which
prevents a party from performing its obligations under an agreement or which materially
increases the time for performing under an agreement, which event or circumstance was not
anticipated as of the date of the agreement, which is not within the reasonable control of, or the
result of the negligence of, the claiming party, and which, by the exercise of due diligence, the
claiming party is unable to overcome or avoid or cause to be avoided. Except as otherwise herein
expressly provided, if either City or Cibolo Turnpike shall be delayed or hindered in, or
- prevented from, the performance of any covenant or obligation hereunder (other than the
payment of money), as a result of any Uncontrollable Circumstance, and, provided that the party
delayed, hindered or prevented from performing notifies the other party both of the
commencement and of the expiration of such delay, hindrance or prevention (each notice being
required within ten (10) business days of the respective event), then the performance of such
covenant or obligation shall be excused for the period of such delay, hindrance or prevention and
the period for the performance of such covenant or obligation shall be extended by the number of
days equivalent to the number of days of the impact of such delay, hindrance or prevention.
Failure to so provide the foregoing notice will not result in waivers of either an excuse in
performance or an extension of time to perform under this Section 13.1 with respect to any such
delay, hindrance or prevention.
Section 13.2 Amendment; Waiver. No alteration, amendment or modification hereof
shall be valid unless executed by an instrument in writing by City and Cibolo Turnpike with the
same formality as this Agreement. The failure of City or Cibolo Turnpike to insist in any one or
more instances upon the strict performance of any of the covenants, agreements, terms,
provisions or conditions of this Agreement or to exercise any election or option herein contained
shall not be construed as a waiver or relinquishment for the future of such covenant, agreement,
term, provision, condition, election or option, and shall not be deemed to establish a course of
conduct among the parties, but the same shall continue and remain in full force and effect. No
waiver by City or Cibolo Turnpike of any covenant, agreement, term, provision or condition,
election or option of this Agreement shall be deemed to have been made unless expressed in
writing and signed by an appropriate official on behalf of Cibolo Turnpike or City. The parties
acknowledge that at the time this Agreement is executed, the precise details and scope of the
Project have not yet been determined. Moreover, the parties acknowledge and agree that future
efforts to pursue the development of the Project will evolve over time, and that subsequent
developments may impact the terms of this Agreement and call for a modification or amendment
of this Agreement. Accordingly, the parties agree to negotiate mutually and in good faith to
enter into such amendments or modifications of this Agreement as may reasonably be indicated
Initials: CITY at ) CIBOLO TURNPIKE Page 23
by the subsequent details that evolve concerning the Project that preserve the economic benefits
to both Cibolo Turnpike and City as set forth in the Financial Model.
Section 13.3 Consent. Unless otherwise specifically provided herein, no consent or
approval by City or Cibolo Turnpike permitted or required under the terms of the Agreement
shall be valid or be of any validity whatsoever unless the same shall be in writing, signed by the
party by or on whose behalf such consent is given.
Section 13.4 Severability. If any provision of this Agreement is held by final judgment
of a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalid, illegal or
unenforceable provision shall be severed from the remainder of the Agreement, and the
remainder of this Agreement shall be enforced. In addition, the invalid, illegal or unenforceable
provision shall be deemed to be automatically modified, and, as so modified, to be included in
this Agreement, such modification being made to the minimum extent necessary to render the
provision valid, legal and enforceable. Notwithstanding the foregoing, however, if the severed
or modified provision concerns all or a portion of the essential consideration to be delivered
under this Agreement by one party to the other, the remaining provisions of this Agreement shall
also be modified to the extent necessary to equitably adjust the parties' respective rights and
obligations hereunder.
Section 13.5 Binding Effect. Except as may otherwise be provided herein to the
contrary, this Agreement and each of the provisions hereof shall be binding upon and inure to the
benefit of Cibolo Turnpike and City, and their respective permitted successors and assigns.
Section 13.6 Relationship of Parties. Nothing contained in this Agreement shall be
deemed or construed by City or Cibolo Turnpike hereto or by any third party to create a
relationship, partnership,joint venture or any association between Cibolo Turnpike and City.
Section 13.7 Notices. Except as otherwise provided herein, all notices, demands,
consents, approvals, statements, requests and invoices to be given under this Agreement shall be
in writing, signed by the party or officer, agent or attorney of the party giving the notice, and
shall be deemed effective upon receipt if hand delivered or if sent by telecopy with transmission
confirmation or overnight courier service; and if sent by the United States mail, postage prepaid,
certified mail, return receipt requested, then it shall be deemed effective three (3) business days
after mailing or the date of refusal, addressed as follows:
To City: City of Cibolo
200 S. Main St.
•
Cibolo, Texas 78108
Attn: Robert T. Herrera, City Manager
To Cibolo Turnpike: Cibolo Turnpike L.P.
25 Highland Park Village #100-758
Dallas, Texas 75205
Attn: John N. Crew, Manager
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Either City or Cibolo Turnpike may from time to time by written notice given to the other
pursuant to the terms of this Section 13.7 change the address or designees to which notices shall
be sent or designate one or more additional Persons to whom notices are to be sent.
Section 13.8 Governing Law. This Agreement and any matter relating to this
Agreement, including any matter in contract or tort or in equity or at law, shall be governed by
the laws of the State of Texas without regard to principles of conflicts of law that direct the
application of the laws of a different state. If the parties do not agree to arbitration with
respect to a particular claim or dispute in accordance with the terms of this Agreement, the
parties agree that any legal action shall be brought in a state or federal court of competent
jurisdiction in Guadalupe County, Texas, and the parties agree to establish venue in such
county. The parties further agree that any such lawsuit that may be brought shall be tried
by the court, without a jury.
Section 13.9 Effective Date. This Agreement shall be a legally binding agreement, in
full force and effect, as of the date set forth in the first paragraph of this Agreement.
Section 13.10 Further Assurances. City and Cibolo Turnpike shall execute,
acknowledge and deliver, after the date hereof, without additional consideration, such further
assurances, instruments and documents, and shall take such further actions, as Cibolo Turnpike
or City shall reasonably request of the other in order to fulfill the intent of this Agreement and
the transactions contemplated hereby.
Section 13.11 Third-Party Beneficiary. The provisions of this Agreement are for the
exclusive benefit of City and Cibolo Turnpike and not for the benefit of any third person, nor
shall this Agreement be deemed to have conferred any rights, express or implied, upon any third
person unless otherwise expressly provided for herein.
Section 13.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
Section 13.13 Prior Agreements Superseded. This Agreement supersedes any prior
understanding or written or oral agreements between City or Cibolo Turnpike respecting the
within subject matter, and contains the entire understanding between the parties with respect
thereto. There are no oral agreements between City and Cibolo Turnpike.
Section 13.14 Language. The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
Section 13.15 Computing Time, Saturday, Sunday or Holiday. The day of an act, event,
or default after which a designated period begins to run is not included when computing a period
prescribed or allowed in this Agreement. The last day of the period is included, but if that day is
a Saturday, Sunday or legal holiday of the City, the period extends to the end of the next day that
is not a Saturday, Sunday or legal holiday.
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Section 13.16 Approvals by City. No approval by City shall impose, imply or be
construed as an assumption by City of any duties or responsibilities of others with respect to the
design or construction of the Project or for the construction means and methods employed by or
on behalf of Cibolo Turnpike or any person retained by or on behalf of Cibolo Turnpike.
Section 13.17 Lawsuits. To the extent permitted by law, and without imposing a future
debt obligation on the City, City agrees to cooperate with and assist Cibolo Turnpike in
connection with initiating or defending any actions, including mediation, arbitration, or state or
federal administrative or court proceedings, against or brought by third parties that threaten to
stop, delay or increase the cost of(a) completion of the Project, (b) the imposition or collection
of any revenue necessary for the funding of the Project, (c) the remediation, if necessary, of the
Project Site, and (d) the negotiation, execution, or implementation of this Agreement or any
other agreement between City and Cibolo Turnpike or otherwise related to the Project, including
the enforcement of any indemnity provisions.
Section 13.18 Attorneys' Fees. In the event of any controversy, claim or dispute
between City or Cibolo Turnpike arising from or relating to this Agreement(whether in litigation
or arbitration, and including the enforcement of any indemnity provisions), the prevailing party
shall be entitled to recover reasonable and necessary costs, expenses and attorneys' fees. For all
purposes of this Agreement and any other documents relating to the Agreement, the terms
"attorneys' fees" or "counsel fees" shall be deemed to include paralegals' and legal assistants'
fees, and wherever provision is made herein or therein for the payment of attorneys' or counsel
fees or expenses, such provision shall include such fees and expenses (and any applicable sales
taxes thereon) incurred in any and all judicial, bankruptcy, reorganization, administrative or
other proceedings, including appellate proceedings, whether such fees or expenses arise before
proceedings are commenced or after entry of a final judgment.
Section 13.19 Assignment. Except for the City assignment to an instrumentality upon
City creation thereof at any time (which may occur without the consent of Cibolo Turnpike), any
assignment by either party must have the written consent of the other, such consent not to be
unreasonably withheld. In the event that the City makes an assignment to an instrumentality,
City shall notify Cibolo Turnpike thereof. Any purported assignment in violation of this Section
13.19 shall be void. This section shall not limit the ability of Cibolo Turnpike to contract with
any third party, including its own affiliates, to provide services to or in support of the Project.
Section 13.20 Time of the Essence. Subject to the terms hereof, time is of the essence
with respect to the performance of each of the covenants and obligations contained in this
Agreement.
Section 13.21 Mediation.
(a) Any claim, dispute, or other matter in question arising out of or related to the
Agreement shall be subject to mediation as a condition precedent to arbitration or the institution
of legal or equitable proceedings by either party.
(b) City and Cibolo Turnpike shall endeavor to resolve claims, disputes and other
matters in question between them by mediation which, unless the parties mutually agree
Initials: CITY CIBOLO TURNPIKE & Page 26
otherwise, shall be in accordance with the Construction Industry Mediation Rules of the
American Arbitration Association then currently in effect. Request for mediation shall be filed
in writing with the other party to this Agreement and with the American Arbitration Association.
The request may be made concurrently with the filing of a demand for arbitration but, in such
event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which
shall be stayed pending mediation for a period of thirty (30) days from the date of filing unless
stayed for a longer period by agreement of the parties or court order.
(c) City or Cibolo Turnpike agree to split the mediator's fee and any filing fees
equally. The mediation shall be held in Guadalupe County, Texas, unless another location is
mutually agreed upon. Written agreements reached in mediation shall be enforceable as
settlement agreements in any court having jurisdiction thereof.
Section 13.22 Dispute Resolution. Any claim, dispute or other matter in question arising
out of or related to this Agreement or otherwise arising from the design and construction of the
Project, shall first be subject to mediation in accordance with the provisions of Section 13.21
prior to instituting litigation. Claims, disputes and other matters in question between the parties
may be decided by arbitration, but only if both Cibolo Turnpike and City so agree at the time the
dispute arises.
Section 13.23 Arbitration. SECTION INTENTIONALLY DELETED.
Section 13.24 Injunctive Relief. Notwithstanding the foregoing, the provisions of
Section 13.22 and Section 13.23 shall not apply to an action for injunctive relief or a writ of
mandamus filed in connection with this Agreement.
Section 13.25 Confidentiality; Open Records Act.
(a) Each party to this Agreement agrees to keep confidential and not use, reveal,
provide or transfer to any third party any Confidential Information (as defined below) it obtains
or has obtained concerning the other party to this Agreement or the Project, except as follows:
(i) subject to Section 13.25(b), to the extent that disclosure to a third party is
required by applicable law or regulation;
(ii) information which, at the time of disclosure, is generally available to the
public (other than as a result of a breach of this Agreement or any other confidentiality
agreement to which a party to this Agreement is a party or of which it has knowledge), as
evidenced by generally available documents or publications;
(iii) information that was in its possession prior to disclosure (as evidenced by
appropriate written materials) and was not acquired directly or indirectly from any other party to
this Agreement;
(iv) to the extent disclosure is necessary or advisable, to its employees,
consultants or advisors, or to its affiliates or their employees, consultants or advisors, in each
case solely for the purpose of carrying out their duties under this Agreement;
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(v) to banks or other financial institutions or agencies or any independent
accountants or legal counsel or investment advisors employed in connection with the Project, or
by any party to this Agreement, to the extent disclosure is necessary or advisable to obtain
financing, including, without limitation, the Project financing and the raising of the Development
Capital by Cibolo Turnpike;
(vi) to potential investors in connection with the Project financing and raising
the Development Capital;
(vii) to potential purchasers of a party to this Agreement or any affiliate of a
party to this Agreement that directly or indirectly owns an equity interest in such party to this
Agreement;
(viii) to the extent necessary, disclosure to third parties to enforce this
Agreement;
(ix) to another party to this Agreement; or
(x) to parties that have signed or agreed to be bound by this confidentiality
provision; provided, however, that in each case of disclosure pursuant to (iv), (v), (vi), (vii) or
(ix), the persons or entities to whom disclosure is made agree to be bound by this confidentiality
provision. The obligation of each party not to disclose Confidential Information except as
provided herein shall not be affected by the termination of this Agreement. As used in this
Section, the term "Confidential Information" shall mean information, which is clearly marked
confidential, concerning this Agreement and the properties, operations, business, trade secrets,
technical know-how and other non-public information and data of or relating to the parties to this
Agreement or the Project.
The restrictions on disclosure of Confidential Information set forth above in
Section 13.25(a) shall lapse two (2) years from the date of the termination of the Project. In the
event a party withdraws from the Project, such party shall remain subject to the restrictions on
disclosure of Confidential Information for two (2) years from the date of such party's
withdrawal.
(b) If any Person requests City to disclose any Confidential Information under the
Texas Open Records Act (Tex. Gov't Code Ann. § 552.001 et seq.) or equivalent or successor
statute (the "Open Records Act"), prior to making such disclosure, City shall notify Cibolo
Turnpike of such request, in which case Cibolo Turnpike shall promptly and timely inform City
whether any of the requested materials constitute confidential, proprietary, commercial, financial
or trade secret information of Cibolo Turnpike which may be exempted from disclosure under
the Open Records Act, and, in that event, City and Cibolo Turnpike shall cooperate with each
other in preparing appropriate responses or filings to the Attorney General of the State and to any
Person making such request, including any appeals involved therein, to prevent a disclosure of
such information. In such event, each party shall further cooperate with the other to promptly
identify any possible third party whose privacy or property interests may be implicated by any
such request to disclose information in order to enable Cibolo Turnpike to timely furnish to any
such third party any statutory notice required by the Open Records Act and seek any applicable
exemptions from disclosure under the Open Records Act. So long as Cibolo Turnpike is
pursuing the actions described above in a timely manner, City shall protect confidential,
Initials: CITY CIBOLO TURNPIKE Li Page 28
proprietary or trade secret information of Cibolo Turnpike as to which Cibolo Turnpike requests
City to do so, unless otherwise compelled by court order, or by opinion of the Texas Attorney
General. All reasonable and necessary costs associated with City's cooperation with Cibolo
Turnpike hereunder in connection with any proceedings shall be borne by Cibolo Turnpike, and
City shall be fully reimbursed for any of such costs it has reasonably incurred including
reasonable attorneys' fees.
•
Section 13.26 No Recourse to Cibolo Turnpike. The obligations of Cibolo Turnpike
under this Agreement are recourse solely to the interest of Cibolo Turnpike in the Project. No
recourse or liability shall be had against any director, officer, employee, agent, member
shareholder or partner of Cibolo Turnpike or of Texas Turnpike Corporation or their respective
affiliates.
Section 13.27 Waiver of DTPA. CITY AND CIBOLO TURNPIKE HAVE ASSESSED
THEIR RESPECTIVE RIGHTS, LIABILITIES AND OBLIGATIONS UNDER THE TEXAS
DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS & COMMERCE CODE (THE "DTPA"). THE PARTIES AGREE THAT
THE DTPA DOES NOT APPLY TO EITHER CITY OR CIBOLO TURNPIKE BECAUSE
NEITHER QUALIFY AS A "CONSUMER" UNDER SECTION 17.45(4) OF THE DTPA.
BUT IN THE EVENT THE DTPA IS DEEMED TO BE APPLICABLE BY A COURT OF
COMPETENT JURISDICTION, CITY AND CIBOLO TURNPIKE HEREBY WAIVE THEIR
RIGHTS UNDER THE DTPA, A LAW THAT GIVES CONSUMER SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH ATTORNEYS OF THEIR OWN
SELECTION, CITY AND CIBOLO TURNPIKE CONSENT TO THIS WAIVER. THE
PARTIES AGREE THAT THIS SECTION 13.27 CONSTITUTES A CONSPICUOUS
LEGEND.
[Signature page follows.]
Initials: CITYc4J) CIBOLO TURNPIKE..f40-' Page 29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their proper officers respectively, being thereunto duly authorized, and their respective seals
to be hereto affixed, as of the day and year first above written.
City of Cibolo, exas:
By.
Allen Dunn
Mayor, City of Cibolo
Attest:
By:
Peggy Cimics, City Secretary
Cibolo Turnpike:
On behalf of CIBOLO TURNPIKE, LP, a Texas limited
partnership
By: CIBOLO TURNPIKE, GP, LLC,
a Texas limited liability company, its General
Partner
By: TEXAS TURNPIKE CORPORATION,
a Texas corporation, its Sole Member and
Sole Manager
BY: 4/' SeL)
Jed", N. Crew, President and
ief Executive Officer
Signature Page to Development Agreement
EXHIBIT 1
PROJECT MAP
[Unchanged from Existing Agreement]
Exhibit 1
EXHIBIT 2
CIBOLO EXPRESSWAY CONCEPTUAL DESIGN
Exhibit 2
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APPENDIX A
FORM OF OPERATING AGREEMENT
[Unchanged from Existing Agreement]
Appendix A