Artic Incorporation Pennsylvania by bcn14815

VIEWS: 16 PAGES: 34

More Info
									                        DEVELOPMENT/ACQUISITION AGREEMENT


                                                Between


                                         CITY OF HAMPTON


                                                  and


                                    XL DEVELOPMENT GROUP I, L.P.




                                          As of January 5, 2007




Z:\Vanessa\19acres1-05-07.agr.doc
                      DEVELOPMENT/ACQUISITION AGREEMENT



       THIS DEVELOPMENT/ACQUISITION AGREEMENT (this “Agreement”) is made
as of the ___ day of ____________, 2007 by and between THE CITY OF HAMPTON, a
municipal corporation of the Commonwealth of Virginia (the "City") and XL
DEVELOPMENT GROUP I, L.P., a Pennsylvania limited partnership ("Developer").

                                            RECITALS

        A.      The City of Hampton has adopted the 2004 Coliseum Central Master Plan, as
amended (the “Plan”), which inter alia calls for the development of a hotel and a
restaurant/retail/entertainment venue on approximately 19 acres of City-owned real property
located in the Crossroads area of the Coliseum Central District at the intersection of Pine Chapel
Road and Coliseum Drive and more commonly known as the “19-Acre Mixed Use Site” (the
“Property”) in Hampton, Virginia. The Property is more particularly described on a sketch plat
attached hereto as Exhibit “A”.

         B.     In response to Request for Qualifications RFQ-9301-D issued by the City, the
Developer desires to construct a full service hotel, a theater, a combination of
retail/restaurants/entertainment with office/residential loft space built above the retail/restaurant
space, approximately 30 townhomes, a combination of surface and structured parking, and a
water feature to compliment the water feature at the Convention Center.

        C.      It is the intention of the parties hereto that (i) the City will contribute $6million
toward the Developer’s cost to design and construct a 2200 space parking garage on the
Property, which shall be available to the public; (ii) the City shall design and construct a water
feature located on the City’s property; and (iii) at its own cost and expense, the Developer will
design and construct all infrastructure to support the Project including the portion of the water
feature to be located on the Property, all utility connections (temporary and permanent), and any
reposition or relocation of existing power boxes and utilities, but excepting the existing pump
station which shall not be relocated or repositioned.

        D.      The Developer shall assume significant financial risk in undertaking the
development and construction of the Project and all risks of cost overruns, labor difficulties, and
the like that are integral to making the Project a success after fulfillment of the City’s obligations
hereunder, are the sole responsibility of the Developer.




                                                  2
                                        DEFINITIONS

        For the purposes of this Agreement, and in addition to terms defined elsewhere in this
Agreement, the following defined terms shall have the meanings described thereto in this
Definitions Section.

       “Act” shall have the meaning given in Section 3.2.

        “City” shall mean the City of Hampton, Virginia, a municipal corporation organized and
existing under the laws of the Commonwealth of Virginia.

       “Effective Date” shall mean the date on which this Agreement has been executed by
both parties hereto.

       “Event of Termination” shall mean those events listed in Article VII.

       “Hazardous Substances” shall have the meaning set forth in Section 3.2.

       “Phase I Improvements” means the construction and completion of the Hotel, the 2200
space Parking Garage, 35,000 square feet of the Retail/Restaurant/Entertainment space,
approximately 30 townhome residential units and a minimum of 35,000 square feet of
Office/Residential Loft space.

       “Phase II Improvements” means the construction and completion of the Theater, the
Water Feature, the remaining 65,000 square feet of the Retail/Restaurant/Entertainment space
and the remaining 65,000 square feet of the Office/Residential Loft space.

       “Plans” shall have the meaning set forth in Section 3.1.2.

       “Project” shall have the meaning set forth in Article I.

        “Zoning Requirements” means the building code and zoning laws, rules, regulations
and requirements of the City applicable to the Project including, without limitation, the 2004
Coliseum Central Master Plan, as amended, and the Hampton Crossroads Project Design
Guidelines.



                                        AGREEMENT

    In consideration of the mutual promises and undertakings of the parties, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Developer and the City agree as follows:




                                               3
                                           ARTICLE I

                                         THE PROJECT

       1.1              The Project. Subject to the other provisions of this Agreement, the
“Project” shall consist of eight (8) separate and distinct elements:

                1.1.1 Hotel. A 195-300 room full service hotel (the “Hotel”) of a quality equal
or better than the existing Embassy Suites. It is expressly understood and agreed by the parties
hereto that the City Representative shall have the right to approve the hotel flag for the Hotel.

               1.1.2 Theater. A theater with a minimum of 2000 seats offering a combination of
pre-programmed shows (the “Theater”). In addition to the pre-programmed shows, the Theater
will also book supplemental Theater productions and acts and will make same available for rent
for conventions as scheduling permits. The quality of all of the theater productions shall be
comparable to those offered in Branson, Missouri, and Myrtle Beach, South Carolina.

              1.1.3 Retail/Restaurants/Entertainment Space. In addition to the Hotel and the
Theater, the “Project” shall include the construction of a combination of
“Retail/Restaurant/Entertainment" space of at least 100,000 square feet in area of a quality
comparable to Southside Works of Pittsburgh, Pennsylvania. It is expressly understood and
agreed by the parties hereto that the City Representative shall have the right to approve the
development and leasing company for the "Retail/Restaurants/Entertainment Space".

                1.1.4 Office/Residential Lofts. The Project shall also include a combination of
“Office/Residential Loft” space built above the Retail/Restaurant/Entertainment space as a “build
to suit” shell.

                1.1.5 Townhomes. The Project shall also include approximately 30 townhome
residential units on the interior road fronting the parking garage and other areas of the Phase I
Improvements.

               1.1.6 Developer’s Water Feature. The Project shall also include a water feature
on the Property (the “Water Feature”) that will include some water steps that tie into and blend
with the City’s proposed water feature next to the Coliseum and the existing water feature at the
Convention Center.

               1.1.7 Parking Garage. Additionally, the Project shall include construction of a
parking garage to accommodate approximately 2200 parking spaces (the “Parking Garage”),
subject to change based on changes in the development program. The Parking Garage shall be
available for public parking.

              1.1.8 City’s Water Feature. The Project shall also include construction by the
City of a water feature that is located on City property.

        1.2      Other Infrastructure Improvements. The "Project" shall include construction of
on-site utilities infrastructure associated with the Project, which may include water, sewer, storm
drainage, street lights, irrigation systems, electricity and other utility services and shall include


                                                 4
(i) all utility connections (temporary and permanent), (ii) any reposition or relocation of existing
power boxes and utilities, but excepting the existing pump station which shall not be
repositioned or relocated, (iii) the portion of the Water Feature to be located on the Property, and
(iv) all surface parking and any parking structures other than the Parking Garage (collectively
referred to as “Other Infrastructure Improvements”). Developer shall construct and pay for all
such necessary Other Infrastructure Improvements to support the Project. The “Project” shall not
include off-site utilities.

                                          ARTICLE II

                                  CITY RESPONSIBILITIES

        2.1           City Responsibilities. Upon execution and delivery of this Agreement by
both parties, the City shall undertake the following responsibilities in connection with the
Project:

               2.1.1 Delivery of Title Documents. The City shall provide to the Developer,
all surveys, studies, reports, information and other materials it has in its actual possession
relating to the Property, including back title reports and any information relating to
environmental conditions on the Property. The Developer acknowledges that the City shall not
be held responsible for the content of any study, report, information, or other materials provided
to the Developer hereunder.

        2.2           City Representative. The City hereby appoints the City Manager or his
designee (“City Representative”) to receive any and all submissions and to grant any and all
approvals with respect to the Project, except as otherwise set forth in this Agreement. The City
reserves the right to modify or terminate such appointment and to appoint another City
Representative. Such modification or termination and appointment shall not become effective
until the City provides the Developer with a notice of such action, which notice contains a
reasonably detailed description of such action.

        2.3 Parking Garage/Payment Procedures/Progress Payments. Requests for payment for
all sums due for the design and construction of the Parking Garage shall be made by the
Developer in written payment requests in a form reasonably satisfactory to the City
Representative, given not more than once per month. Each such payment request shall include
documentation of costs and expenses. The City will issue payment to the Developer within 30
calendar days of receipt of the written request for payment. The City shall retain the right to
reduce or adjust progress payments to keep the total amount commensurate with the actual
percentage of work satisfactorily completed as determined by the City Engineer. The obligation
of the City to pay any such payment request shall not exceed the City’s $6 million contribution.

        2.4    Staging Site. Upon Settlement, the City shall provide Developer with the use of
approximately 2 acres of a City-owned parcel of land located at the corner of Pine Chapel Road
and Coliseum Drive, more commonly known as the “Best Products” site for construction staging
and stockpiling of materials and equipment (the “Staging Site”). If the Best Products site is not
available, the City will provide a comparable site mutually agreeable to the Developer and the
City (the “Alternative Staging Site”). The right to use the Staging Site or the Alternative Staging


                                                 5
Site as set forth in the Right of Entry Agreement attached hereto as Exhibit “C” will be at no
additional cost to the Developer.

        2.5     Stormwater. Upon Settlement, the City will allow the Developer to utilize
Coliseum Lake for the Developer’s stormwater needs. Additionally, the stormwater system
currently located on Pine Chapel Road may be utilized partially or completely covered at the
Developer’s sole cost and expense and in compliance with all federal, state and local laws,
statutes, ordinances and regulations.

        2.6    Site Plan Approval. The City agrees to review and approve the site plan for the
Project in accordance with City standards and guidelines and in cooperation with the Developer
with respect to the building plans for the Project.

       2.7     Approvals. Whenever a matter requires the approval of the City under this
Agreement, the City shall work diligently and in good faith with the Developer to achieve the
high quality of the private and public improvements contemplated by this Agreement.

                                         ARTICLE III

            DEVELOPER RESPONSIBILITIES / PROJECT DEVELOPMENT

        3.1     Pre-Development/Design Development Phases. During the time periods set forth
below and prior to issuance of any land-disturbing or building permits, the Developer shall
provide the City the documents listed below as well as any other documents reasonably required,
and where necessary make the requisite filings of such documents with appropriate officials. The
Developer agrees that the design of the private improvements, including all geo-technical studies
for foundation design, and architectural plans for the private improvements and Other
Infrastructure Improvements, shall be prepared and finalized at the Developer’s sole cost and
expense. The Developer agrees to provide with respect to the Project the following:

               3.1.1 On or before 8 months after the Settlement Date, to the Director of Planning
and the City, for review and approval (i) a site plan for the Phase I Improvements, including the
Parking Garage and all Other Infrastructure Improvements supporting the Project; (ii) detailed
building elevations (all elevations) of the Phase I Improvements; (iii) detailed floor plans of the
Phase I Improvements; (iv)detailed lighting, signage, landscaping and streetscape plans for the
Phase I Improvements, (v) sample building materials, all of which shall comply with the 2004
Coliseum Central Master Plan, as amended , the Hampton Crossroads Project Design Guidelines
and the conceptual renderings as shown on Exhibit “B”. The foregoing items, once approved by
the City and the Director of Planning shall be referred to as the “Phase I Plans”;

               3.1.2 On or before fourteen (14) months after the Settlement Date, to the Director
of Planning and the City, for review and approval for the Phase II Improvements (i) a site plan,
that includes the Water Feature; (ii) detailed building elevations (all elevations); (iii) detailed
floor plans; (iv)detailed lighting, signage, landscaping and streetscape plans, and (v) sample
building materials, all of which shall comply with the 2004 Coliseum Central Master Plan, as
amended, the Hampton Crossroads Project Design Guidelines and the conceptual renderings as
shown on Exhibit “B”. The foregoing items, once approved by the City and the Director of


                                                6
Planning shall be referred to as the “Phase II Plans”, and collectively the Phase I Plans and the
Phase II Plans may be referred to as the “Plans”;

                3.1.3 Upon expiration of the Due Diligence Period and prior to Settlement, to the
City Attorney, for review and approval, certification by the Developer of a construction loan
commitment or other financing for the Project sufficient to cover the costs that the Developer
will incur in completing the Phase I Improvements;

               3.1.4 Upon expiration of the Due Diligence Date and prior to Settlement, to the
Director of Risk Management, a certificate of insurance evidencing that the Developer has
procured all insurance required hereunder;

               3.1.5 Upon expiration of the Due Diligence Date and prior to Settlement, to the
City Attorney, a certificate from the Virginia Board of Contractors or other evidence satisfactory
to the City Attorney that the Developer or its designated contractor is a registered contractor in
good standing with the Virginia Board of Contractors;

             3.1.6 No later than 14 months after the Settlement Date, predevelopment and
development phased construction schedule, acceptable to the City Engineer that includes an
estimated completion date, and periodically update the same, for all phases of the Project.

               3.1.7 At all times during construction, such other documentation including plans
and specifications, schematic drawings and renderings of the Phase I and Phase II Improvements
as may reasonably be requested by the City to insure the orderly development of the Project.

               Before any land-disturbing or construction activity commences on the Property
the City’s Representative shall have received a letter from the Director of Planning to the effect
that the proposed development as defined by the Phase I Plans above is consistent with the 2004
Coliseum Central Master Plan, as amended, Exhibit “B”, and this Agreement.

               Approval by the City and such City employees of any of the above-cited items
shall not be deemed to be an acknowledgment or certification by the City or such City employees
that such items are in compliance with any federal, state or local rules, regulations or building
codes.

        3.2      Hazardous Substances. The Developer shall accept the Property "as is, where is",
and the City shall not have any liability for the existence of hazardous substances (as such term
is defined in the Comprehensive Environmental Response, Compensation and Liability Act of
1980), as the same may be amended from time to time (the "Act"), or underground obstructions
or unsuitable soils on the Property in or on the removal or cleanup thereof. Notwithstanding the
foregoing, the Developer or its agents may enter upon the Property for such purposes as may be
necessary for the performance of any due diligence, surveys, environmental or any other studies
with prior notice to the City. The Developer is hereby granted one hundred twenty (120) days
from the date of full execution of this Agreement by all parties (the “Due Diligence Period”) to
inspect the Property in order to examine the soils and subsurface conditions of the Property are
suitable for its intended use and determine the existence of any adverse environmental matters or
conditions in, on, under, about, or migrating from or onto the Property. Such access shall be at


                                                7
Developer’s sole risk and expense. The City shall not be responsible for and the Developer shall
indemnify and hold harmless the City, and its agents, employees, volunteers, servants and
officials against any and all claims, obligations, demands, actions or suits for bodily injury or
property damage by any person arising from such access or the conduct of activities on the
Property by the Developer, its agents, contractors, representatives, successors and assigns.
Neither the Developer nor any of its agents or contractors shall suffer or cause to be created any
lien or encumbrance arising from such activities, and the Developer shall repair any damage to
the Property resulting from such access. If, in its sole discretion, the Developer determines
during the Due Diligence Period that the soils and subsurface conditions of the Property are not
suitable for its intended use, or determines the existence of any adverse environmental matters or
conditions in, on, under, about, or migrating from or onto the Property, the Developer may
terminate this Agreement by giving the City written notice of termination not later than 5:00 p.m.
on the last day of the Due Diligence Period. Upon receipt of such notification, the Deposit shall
be returned to the Developer within fourteen (14) business days and thereafter, neither party shall
have any further rights against or obligations or liability to the other hereunder except as
specified in this Section 3.2. Failure to notify the City of termination of this Agreement as
provided herein constitutes a waiver of Developer’s right to terminate for adverse environmental
or soils conditions and acceptance of the Property as aforesaid. The obligations set forth in this
Section 3.2 shall survive Settlement or termination of this Agreement.

        3.4 Zoning & Building Approvals. The Developer shall comply with, and apply for and
obtain such permits, authorizations, rezoning approvals, and any and all approvals from the City
as may be required by, all applicable Zoning Requirements. Additionally, the Developer shall
apply for and obtain all necessary permits, authorizations and approvals from the City to
construct the Project. Nothing contained in this Agreement shall be deemed a waiver of any of
the City’s normal permit and approval process, and the Developer recognizes and agrees that all
licenses, permits, consents, inspections and approvals which must be obtained for the
development of real estate in the Crossroads area of the City will likewise be required in
conjunction with the Project and are not waived by virtue of this Agreement, notwithstanding
any provision of this Agreement to the contrary.

        3.5 Construction Phase. The Developer will cause construction of the Phase I
Improvements to commence on or before fourteen (14) months from the Settlement Date and
will expeditiously pursue completion of construction of the Phase I Improvements with a
completion date not later than thirty-eight (38) months after the Settlement Date, subject to Force
Majeure. The Developer will cause construction of the Phase II Improvements to commence on
or before twenty-four (24) months from the Settlement Date and will expeditiously pursue
completion of construction of the Phase II Improvements with a completion date not later than
forty-eight (48) months after the Settlement Date, subject to Force Majeure. For purposes of this
Agreement, the term “completion” means the issuance of permanent Certificates of Occupancy
for the private improvements as set forth for each phase of the Project and acceptance of the
Public Improvements and infrastructure by the City; however, conditional Certificates of
Occupancy may be accepted for retail and residential/office space if deemed appropriate by the
Director of Codes Compliance and the Director of Planning on a case-by-case basis. During
construction of the Phase I Improvements and/or the Phase II Improvements, the Developer
agrees to the following conditions and instructions:


                                                8
        (a) To construct or cause to be constructed all phases and elements of the Project in
conformance with the final plans and specifications approved by the City and in accordance with
all applicable building codes and regulations and Zoning Requirements, including, but not
limited to, the 2004 Coliseum Central Master Plan, as amended, the Hampton Crossroads Project
Design Guidelines and the conceptual renderings as shown on Exhibit “B”;

        (b) To be fully responsible for causing all phases and elements of the Project to be
constructed and under no circumstances require the City to pay for any labor or material ordered
or purchased by the Developer in and about the construction of the Project with respect to the
private improvements or Other Infrastructure Improvements;

       (c) To the extent not the City's responsibility as set forth in Section 2.1 to apply for all
temporary and permanent utility connections that serve the Project and pay for all required utility
connection fees;

       (d) To apply for and obtain utility easements and permanent Certificates of Occupancy;
and

        (e) To provide the City with bi-weekly oral progress reports appropriate to keep the City
fully apprised of the progress of development, and, if requested by the City, provide the City
with monthly written progress reports.

       3.6 Construction Issues. The Developer agrees that the Project shall be constructed in
full compliance with all applicable federal, state and local laws, rules and regulations and that
all construction shall be of good quality and shall be made in a workmanlike manner consistent
with industry standards. The Developer agrees to supervise and direct the construction of the
Project using its best skill and attention, and agrees that it shall be solely responsible for all
construction methods, techniques and procedures.

       3.7 Maintenance of Property. During construction of the Project, the Developer shall
keep the Property clean and in good order, free of trash and construction debris. If the
Developer fails to do so, the City may issue a written warning to the Developer identifying the
section of the Property that the Developer has failed to maintain as set forth herein. If the
Developer does not correct the condition within thirty (30) days of its receipt of such written
notice, the City may clean the Property and charge the Developer for all its costs and expenses
incurred therein.

       3.8 Inspections. During construction of the Project, members of the City’s Department
of Codes Compliance and representatives of the City may make periodic inspections at
reasonable times without notice to the Developer to ensure ongoing compliance with approved
plans and specifications, and compliance with the Developer’s obligations under this Agreement.




                                                9
                                          ARTICLE IV

             SALE OF PROPERTY/REVERTER/RIGHT TO REPURCHASE

        4.1     Sale. So long as no Event of Termination on behalf of the Developer exists, or no
set of facts which, with the passage of time would constitute an Event of Termination, the
Developer shall have the right and option to purchase the Property as shown on Exhibit “A”
subject to the terms and conditions of this Agreement.

       4.2    Purchase Price. The total consideration is as follows: FIVE MILLION SEVEN
HUNDRED THOUSAND AND NO/100 DOLLARS ($5,700,000.00) (subject to adjustment
based on the final acreage of the Property and a per acre purchase price of $300,000/ac) (the
“Purchase Price”) in full for the Property shall be paid in lawful money of the United States of
America as follows:

       (a) A deposit (the “Deposit”) in the amount of FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000.00) shall be paid by the Developer to the City as Escrow Agent
(the “Escrow Agent”) upon execution of this Agreement by all parties in cash, by certified check
or by wire transfer. The Escrow Agent shall deposit the Deposit into the general fund, accruing
no interest, with the Deposit to be applied to the Purchase Price of the Property at the time of
settlement. The Deposit shall be held in accordance with the provisions of this Agreement.

        (b) The balance of the purchase price of the Property of FIVE MILLION TWO
HUNDRED THOUSAND AND NO/100 DOLLARS ($5,200,000.00) shall be paid in cash, by
certified check or by wire transfer at the time of settlement.

       4.3     Settlement/Conditions of Settlement. Settlement proceedings (“Settlement”) shall
be conducted at the Office of the Department of Economic Development, One Franklin Street,
Suite 600, Hampton, Virginia, 23669. Settlement shall occur no later than 30 days after the
expiration of the Due Diligence Period (the “Settlement Date”), time being expressly declared
and agreed to be of the essence in this Agreement. The Developer’s failure to comply with
the terms and provisions hereof at the time and in the manner herein prescribed shall be deemed
a material breach of this Agreement.

       In addition to the obligations to be performed hereunder by the parties at Settlement, each
party agrees to perform such other acts and to execute, acknowledge and deliver, subsequent to
settlement, such other instruments, documents and other material as the other party may
reasonably request and shall be necessary in order to effectuate the consummation of the
transaction contemplated herein and to vest title to the Property in the Developer. However,
notwithstanding the foregoing, the Developer acknowledges and agrees that the City has certain
powers, purposes and responsibilities by virtue of being a municipality, and as such, its ability to
execute instruments and documents or to perform certain acts is limited by the laws of the
Commonwealth of Virginia, including but not limited to, its defenses of sovereign immunity.
Nothing herein shall be construed to waive any of the powers, purposes, responsibilities or
defenses of the City as a municipality.



                                                10
       Settlement is EXPRESSLY CONDITIONED upon the Developer providing the City
Manager a fully executed contract with Gaylord/Corporate Magic for the management and
production of at least two shows of a quality comparable to those offered in Branson, Missouri or
Myrtle Beach, South Carolina (the “Theater Contract”) and letters of interest from a hotel
franchisor and at least two (2) anchor restaurants for Phase I (the “Letters of Interest”). The
Theater Contract and the Letters of Interest may be contingent upon closing on the Property.
However, the failure to provide the Theater Contract and the Letters of Interest on or before the
Settlement Date shall constitute an event of default under this Agreement.

       4.4    Prorations. All rents, interest, taxes, utilities and other appropriate items shall be
prorated and apportioned as of the Settlement Date. Assessments, general or special in nature,
pending or confirmed, shall be paid or satisfied in full by the City at Settlement.

       4.5     Settlement Costs and Expenses. The Developer shall bear cost of obtaining a
survey, title report for the Property and all other closing costs associated with settlement
including all recording costs, except for grantor’s tax and transfer taxes, and all title insurance
premiums and its own attorney’s fees and costs.

       The City shall prepare the special warranty deed (the “Deed”) conveying title to the
Property to the Developer and shall pay all expenses of preparation of the Deed and its own
attorney’s fees and costs. The City is exempt from grantor’s taxes.

       4.6     Conveyance/Title.

       (a) The City agrees to deliver to the Developer at Settlement the Deed and to convey
good, marketable title to the Property, in fee simple, free and clear of all mortgages, liens,
encumbrances, leases, parties in possession, security interests, restrictions, rights-of-way,
easements or encroachments other than the Permitted Exceptions (as hereinafter defined) and in
proper form for recording.

        (b) Prior to the expiration of the Due Diligence Period, the Developer shall examine the
record title to the Property, have the Property surveyed, furnish the City with a title commitment
(the “Title Commitment”) and notify the City of any title/survey objections disclosed by such
examination (the “Title/Survey Objections”). The City shall notify the Developer within ten (10)
business days after receipt of the Developer’s notice of any Title/Survey Objections that the City
elects not to cure or is unable to cure prior to the Settlement Date. The City agrees to cure all
other Title/Survey Objections prior to the Settlement Date. If the City notifies the Developer of
any Title/Survey Objections that it cannot or will not cure prior to the Settlement Date, then the
Developer shall have the option either (i) to terminate this Agreement by written notice to Seller.
Upon receipt of such notification, the Deposit shall be returned to the Developer within fourteen
(14) business days and thereafter, neither party shall have any further rights against or
obligations or liability to the other hereunder except as specified in Section 3.2, or (ii) to accept
any remaining uncured Title/Survey Objections. If the Developer does not exercise the option to
terminate, the Developer shall accept title to the Property subject to such title defects, the
provisions of subparagraph (a) of this Section 4.6 notwithstanding. It is understood and agreed
that any objections to title not raised by the Developer in accordance with this Section 4.6 shall
be deemed waived.

                                                 11
        (c) If the City fails to notify the Developer of its inability or election not to cure the Title
Objections in accordance with Section 4.6(b) above, then the City shall be deemed to have
elected to cure all Title Objections prior to Settlement. If the City has failed to cure any one or
more of the Title Objections it has elected to cure prior to Settlement and is not diligently
proceeding to complete such cure, then the Developer may, at its option, either (i) postpone
Settlement until the City has completed such cure, (ii) terminate this Agreement and demand
return of its Deposit subject to Section 3.2 or (iii) agree to accept any remaining uncured Title
Objections.

        (d). All restrictions, rights-of-way, easements and encroachments of record on the date of
execution of this Agreement, and all existing utilities, power boxes and stormwater facilities
shown on a physical survey, and Title/Survey Objections which are either (i) cured by the City or
(ii) subsequently accepted by the Developer in writing as provided above, shall be referred to
collectively as the “Permitted Exceptions”.

       4.7      Possession. Actual possession shall be given upon transfer of legal title at
settlement, free and clear of any tenancies or parties in possession.

        4.8       Risk of Loss. Risk of loss or damage to the Property by fire, wind, storm, or other
casualty, or by exercise of the power of eminent domain, shall remain upon the City until transfer
of legal title at settlement.

         4.9 Reverter. In the event that the Developer fails to commence construction in good
faith of the Phase I Improvements as set forth in Section 3.5 of this Agreement, the City shall
have the right to repurchase the Property at the original per acre purchase price of THREE
HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00), whereupon the Developer
shall forthwith convey the Property back to the City by special warranty deed free and clear of
liens and encumbrances other than (i) those encumbering the Property at the time conveyed by
the City to the Developer, (ii) those contained in the deed from the City to the Developer, or (iii)
those otherwise created or approved by the City. Settlement shall take place in the Office of the
Department of Economic Development within thirty (30) days after the City’s written notice to
the Developer to repurchase the Property. In the event the Developer for any reason fails or
refuses to convey title back to the City as required herein, then, the City shall have the right to
enter upon and take possession of said Property, along with all rights and causes of action
necessary to have title to the Property conveyed back to the City. Notwithstanding the
foregoing, the City will agree to release the reverter, at the sole cost and expense of the
Developer, upon evidence of (i) a fully executed franchise or contract with an approved hotel
flag, (ii) a fully executed construction contract for at least the Phase I Improvements, (iii) a fully
executed construction mortgage for at least the Phase I Improvements, and (iv) commencement
of construction of the Phase I Improvements pursuant to approved land disturbing and building
permits.

         4.10 Right to Repurchase. In addition to the reverter set forth above, the City shall
have the right and option to repurchase the remaining undeveloped portion of the Property
(“Residual Property”) in the event XL fails to commence construction of the Phase II
Improvements on or before twenty-four (24) months after Closing. In the event the City
exercises this right to repurchase the Residual Property, the purchase price will be at fair market


                                                  12
value. If the Developer and the City are unable to agree upon the fair market value of the
Residual Property, each shall within ten (10) days after written demand by the other, select one
MAI Appraiser to participate in the determination of fair market value. Within ten (10) days of
such selection, the MAI appraisers so selected by the Developer and the City shall select a third
MAI Appraiser. The three (3) selected MAI Appraisers shall each determine the fair market
value of the Residual Property within thirty (30) days of the selection of the third appraiser. The
Developer and the City shall jointly pay the fees and expenses of the MAI Appraisers. In the
event either the Developer or the City fails to select an MAI Appraiser within the time period set
forth in the foregoing paragraph, the MAI Appraiser selected by the other party shall alone
determine the fair market value of Residual Property and the fair market value so determined
shall be binding upon the Developer and the City.

        In the event the MAI Appraisers selected by the Developer and the City are unable to
agree upon a third appraiser within the time period set forth herein, either the Developer or the
City shall have the right to apply at their joint expense to the Circuit Court of the City of
Hampton to name a third MAI Appraiser.

         Within five (5) days after the completion of the third MAI Appraiser's appraisal, all
three MAI Appraisers shall meet and a majority of the MAI Appraisers shall attempt to
determine the fair market value of the Residual Property. If a majority is unable to determine the
fair market value at such meeting, the three appraisals shall be added together and their total
divided by three. The resulting quotient shall be the fair market value of the Residual Property.
If, however, either or both of the low appraisal or the high appraisal are more than ten percent
(10%) lower or higher than the middle appraisal, any such lower or higher appraisal shall be
disregarded. If only one appraisal is disregarded, the remaining two appraisals shall be added
together and their total divided by two, and the resulting quotient shall be such fair market value.
If both the lower appraisal and higher appraisal are disregarded as provided herein, the middle
appraisal shall be the fair market value. In any event, the result of the foregoing appraisal
process shall be final and binding.

         “MAI Appraiser” shall mean an appraiser licensed or other wise qualified to do
business in the Commonwealth of Virginia and who has substantial experience in performing
appraisals of properties similar to the Residual Property and is certified as a member of the
American Institute of Real Estate Appraisers or certified as a SRPA by the Society of Real Estate
Appraisers, or, if such organizations no longer exist or certify appraisers, such successor
organization.

         Once the fair market value of the Residual Property has been determined, the City
Representative must notify the Developer in writing of the City’s approval to purchase the
Residual Property at the fair market value (the “Approval Notice”) no later than thirty (30) days
after the appraisal process has been completed. If the City elects to purchase the Residual
Property at the fair market value, the closing thereon shall occur no later than sixty (60) days
after the date of the Approval Notice relating thereto (or as soon thereafter as the closing
documents for the Residual Property are prepared and ready for execution by the parties), and the
Developer shall forthwith convey the Residual Property back to the City by special warranty
deed free and clear of liens and encumbrances not encumbering the Residual Property at the time
conveyed by the City to the Developer, contained in the deed from the City to the Developer,


                                                13
except for those encumbrances necessary in connection with developed portions of the Residual
Property not being repurchased (such as utility and access easements) or otherwise created or
approved by the City. Settlement shall take place in the Office of the Department of Economic
Development. In the event the Developer for any reason fails or refuses to convey title back to
the City as required herein, then, the City shall have the right to enter upon and take possession
of said Residual Property along with all rights and causes of action necessary to have title to the
Residual Property conveyed back to the City. The parties acknowledge and agree that developed
areas to be retained by the Developer shall include not only building areas and associated
parking, but also all necessary access ways and other facilities and amenities that support the
applicable development of the Phase I Improvements. Notwithstanding the foregoing, the City
will agree to release the repurchase right, at the sole cost and expense of the Developer, upon
evidence of (i) a fully executed contract for the construction of the theater, (ii) a fully executed
construction mortgage for at least the theater, and (iii) commencement of construction of the
theater pursuant to approved land disturbing and building permits.

       The foregoing provisions including the construction phase requirement of Section 3.5 of
this Agreement shall be continuing obligations which shall be included in a Post-Closing
Agreement to be recorded at the Developer’s expense and simultaneously with the Deed in the
Office of the Clerk of the Circuit Court for the City of Hampton or the Agreement itself may be
recorded in the alternative.

                                        ARTICLE V
                                      EMINENT DOMAIN

               5.1 Eminent Domain. In the event the City or the Developer becomes aware that
the Property or any part of it is or will become the subject of a condemnation proceeding by the
Commonwealth of Virginia or the United States of America, whether for public or quasi-public
use, the party will immediately give notice to the other party of the condemnation proceeding.
Upon the giving or receipt of this notice, the Developer will have the option, by giving notice to
the City within 30 days following receipt of notice of condemnation proceeding.

               (a) To permit the City to negotiate with condemning authority and receive the
condemnation award, in which event the Developer will take title to the remaining Property in
accordance with the terms and conditions of this Agreement, and the Purchase Price will be
reduced by the amount received or receivable by the City as compensation for that portion of the
Property so taken;

              (b) To take title in accordance with the terms and conditions of this Agreement
and negotiate with the condemning authority for the condemnation award and receive its
benefits; or

               (c)     To terminate this Agreement and receive a refund of the Deposit subject to
the provisions of Section 3.2.




                                                14
                                     ARTICLE VI
                         POST CONSTRUCTION OBLIGATIONS

        6.1    Developer's Obligations. Upon completion of construction of each Phase of the
Project substantially in accordance with this Agreement, the Developer shall provide the City’s
Representative with the following:

              (a)   A copy of the final certificate(s) of occupancy for the private improvements
and the Parking Garage from the appropriate officials of the City;

                (b)     A long form release of mechanic's liens (unless the title insurance
company waives the long form requirement) executed by all persons providing labor and/or
materials to the Developer in and about the construction of the private improvements or a letter
from a title insurance company doing business in the City and reasonably acceptable to the City
and stating that it will issue a title policy to the Developer without excepting filed and unfiled
mechanic's liens from coverage under the policy, whichever alternative the Developer elects;

              (c)    A certification from the Project Architect that the particular phase of the
Project has been substantially completed in accordance with the final plans and specifications;
and

              (d)      An "as-built" survey of all improvements prepared by a registered
surveyor or engineer, as each phase is completed.

                                        ARTICLE VII

                                EVENTS OF TERMINATION

      7.1 Events of Termination by Developer. Each of the following shall constitute an
Event of Termination by the Developer:

               7.1.1    Breach of any material covenant, obligation or requirement of the
developer arising under this Agreement not specifically named as an Event of Termination in
this Section 7.1, or the breach of any requirement or provision in the Right of Entry Agreement,
and the continuation of such breach for thirty (30) days after receipt of written notice from the
City specifying the nature and extent of such breach, or if such breach cannot reasonably be
cured within such 30 day period, the failure of the Developer to commence to cure such breach
within such 30 day period and to diligently pursue same to completion.

              7.1.2 The filing by the Developer of a voluntary proceeding or the consent by
the Developer to an involuntary proceeding under present or future bankruptcy, insolvency, or
other laws respecting debtor’s rights.

              7.1.3   The entering of an order for relief against the Developer or the
appointment of a receiver, trustee, or custodian for all or a substantial part of the property or
assets of the Developer in any involuntary proceeding, and the continuation of such order,
judgment or degree unstayed for any period of ninety (90) consecutive days.



                                               15
                7.1.4     The failure of the Developer to remove or cause to be removed, by
bonding or otherwise, any and all liens for work done for the Developer or materials furnished to
the Developer with respect to the Property upon which the Public Improvements are located
within thirty (30) days after written notice by the City to the Developer of the filing thereof.

                7.1.5 Subject to the force majeure provisions of Section 11.8, the failure of the
Developer to complete, or cause others to complete construction no later than thirty-eight (38)
months after the Settlement Date for the Phase I Improvements and forty-eight (48) months after
the Settlement Date for the Phase II Improvements which failure is not cured within sixty (60)
days after the date the City notifies the Developer in writing of such failure.

       7.2 Events of Termination by the City. Each of the following shall constitute an Event
of Termination by the City:

                 7.2.1 The failure of the City to perform or to observe any covenant, obligation
or requirement of this Agreement not specifically named as an Event of Termination in this
Section 7.2 or the breach of any requirement or provision in the Right of Entry Agreement, and
the continuation of such failure for sixty (60) days after receipt of written notice from the
Developer specifying the nature and extent of any such default, or if such default cannot
reasonably be cured within such 60-day period, the failure of either (i) to commence to cure such
default within such 60-day period and to diligently continue to pursue such efforts to cure to
completion, or (ii) to cure such event of termination within a reasonable time after the expiration
of the first 60 day period, and to diligently pursue the same to completion.

       7.3    City Remedies.

              7.3.1 Should an Event of Termination by the Developer occur hereunder, the
City may terminate this Agreement by written notice to the Developer.

               7.3.2 In addition to the remedy provided in Section 7.3.1, if an Event of
Termination occurs prior to the Settlement Date, other than as otherwise set forth in Sections 3.3
and 4.6, the City shall retain the Deposit.

               7.3.3 In addition to the remedies provided in Sections 7.3.1 and 7.3.2, the City
may exercise any remedies available to it at law or in equity, except that the Developer shall not
be liable to the City for damages that are consequential in nature, but shall be liable only for
recovery of out-of-pocket costs actually incurred after execution of this Agreement. All
remedies provided to the City under this Agreement shall be cumulative and not restrictive of
other remedies, including, without limitation, specific performance.

       7.4 Developer’s Remedies. Should an Event of Termination by the City occur
hereunder, the Developer may, by written notice to the City, terminate this Agreement, upon
which termination the Developer may demand return of its Deposit if the Event of Termination
occurs before the Settlement Date, and may exercise any remedies available to it at law or in
equity, except that the City shall not be liable to the Developer for damages that are
consequential in nature, including, but not limited to any lost opportunities, but shall be liable
only for recovery of out-of-pocket costs, hard construction costs for the Facilities and the Access
Improvements, actually incurred after execution of this Agreement and any hard costs incurred in

                                                16
the reconstruction of the Park invoiced but not paid at the time of the Event of Termination. All
remedies provided to the Developer hereunder shall be cumulative and not restrictive of other
remedies, including, without limitation, specific performance.



                                       ARTICLE VIII

   INSURANCE; INDEMNIFICATION; ENVIRONMENTAL CONSIDERATIONS

         8.1 General Liability Insurance. During construction of the Project, the Developer or
its designated contractor shall carry and maintain such liability and other insurance insuring the
City and the Developer against any and all liability for (i) claims under workers’ compensation,
disability benefits and other similar employees benefit acts; (ii) claims for injury to or death of a
person or persons and for damage to property in any way occasioned by or arising out of the
activities of the Developer and its agents, contractors or employees, in connection with the
design and construction of the Project; and (iii) claims for damages because of bodily injury or
death of any person or property damage arising out of the ownership, maintenance or use of any
motor vehicle.

                8.1.1 Liability insurance shall include all major divisions of coverage and be on
a comprehensive basis including (i) Premises-Operations; (ii) Products and Completed
Operations; (iii) Contractual- including specified provision for the Developer’s obligations; (iv)
owned, non-owned, and hired motor vehicles; (v) broad coverage for property damage; (vi) fire
and extended coverage; and (vi) excess liability umbrella coverage. The Developer may procure
and maintain a “blanket” All Risk policy to satisfy the requirements of this Section 8.1, which
may cover other property or locations of the Developer and its affiliates, so long as the coverage
required in this Section 8.1 is separate and specific to the Project.

        8.2 Policy Requirements. The following general requirements shall apply to all
insurance coverage carried by the Developer pursuant to Section 6.1:

             8.2.1 Waiver of Subrogation. To the extent available, each policy shall contain a
clause whereby the insurer waives all rights of subrogation against the City.

              8.2.2   Additional Insured. The City shall be named as additional insured in all
policies hereunder.

               8.2.3 Financially Sound Company. Such policies shall be procured from
financially sound and reputable insurers licensed to conduct the business of insurance in the
Commonwealth of Virginia and have an A.M. Best rating of not less than A-8 or, if not rated
with A.M. Best, the equivalent of A.M. Best’s surplus size of A-8 (or otherwise approved by the
City).

            8.2.4 Certificates of Insurance. The Developer shall deliver to the City’s Director
of Risk Management policies or certificates of insurance evidencing such coverage before the
commencement of construction of the Project.



                                                 17
               8.2.5 Replacement Certificates of Insurance. Within thirty (30) days before
expiration of coverage, or as soon as practicable, renewal policies or certificates of insurance
evidencing renewal and payment of premium shall be delivered by the Developer to the City’s
Director of Risk Management.

                8.2.6 Non-Cancelable Without Notice. The coverages shall be non-cancelable
unless the carrier gives to the City thirty (30) days prior written notice of cancellation.

       8.3     Workers' Compensation Insurance.

               8.3.1 The Developer shall maintain such workers' compensation insurance as
may be required pursuant to the laws of the Commonwealth of Virginia, and shall indemnify and
hold harmless the City and all entities claiming by, through or under the City from and against all
claims, suits, actions and proceedings whatsoever which may be brought by the Developer's
employees and statutory employees, as determined under the workers' compensation laws of the
Commonwealth of Virginia.

              8.3.2 The Developer shall ensure that its contractor and each subcontractor
performing work on the Facility shall obtain and maintain, for the duration of such work, such
workers' compensation insurance as may be required pursuant to the laws of the Commonwealth
of Virginia.

      8.4 Comprehensive General Liability. (Including Premises-Operation; Products and
Completed Operations; Broad Form Property damage):

                   a. Bodily Injury: $1,000,000 each occurrence, $2,000,000 General Aggregate

                   b. Property Damage: $1,000,000 each occurrence, $2,000,000 General
                      Aggregate

                   c. Products and Completed Operations:           $1,000,000 each occurrence,
                      $2,000,000 General Aggregate

                   d. Property damage: Liability Insurance shall include coverage for the
                      following hazards: X (Explosion), C (Collapse), U (Underground)

                   e. Contractual Liability (Indemnity Coverage)

                   f. Personal Injury, with Employment Exclusion deleted

       8.5   Comprehensive Automobile Liability. (Owned, non-owned, hired);

                   a. Bodily Injury: $1,000,000 Each Person, $1,000,000 Each Accident

                   b. Property Damage: $1,000,000 Each Occurrence;

       8.6   Excess Liability Umbrella. $5,000,000



                                                18
         8.7 Builder’s Risk Coverage. The Developer shall provide builder's risk coverage on
the full insurable value of the Facility.

        8.8 Fire and Extended Coverage. With a commercially reasonable deductible in an
amount not less than 100% of the actual replacement cost (“Full Insurable Value”) of the private
and Public Improvements exclusive of foundations or footings. Such Full Insurable Value shall
be determined at the expense of the Developer, by the fire insurance company carrying the
highest amount of fire insurance on the Facilities or its agent. A copy of the determination shall
be sent to the City’s Director of Risk Management.

        8.9     The Developer shall indemnify, defend and hold harmless the City and all entities
claiming by, through or under the City from and against all claims, suits, actions and proceedings
whatsoever which may be brought or instituted on account of, growing out of, occurring from,
incident to or resulting from, directly or indirectly, any and all injuries or damages (including,
without limitation, death) to persons or property arising out of the construction of the Project,
and the negligent and willful acts and omissions of the Developer and its contractors,
subcontractors, employees and those for whom the Developer is legally liable, and all losses,
costs, damages and expenses (including, without limitation, reasonable attorneys' fees and other
costs of defending against such claims, suits, actions and proceedings), unless such injuries or
damages (including, without limitation, death) result from, or are claimed to have resulted from
the sole gross negligence of the City. The Developer shall assume on behalf of the City and all
entities claiming by, through or under the City, and conduct with due diligence and in good faith,
the defense of all such claims, suits, actions and proceedings against the City or any entity
claiming by, through or under the City, whether or not the Developer is joined therein, even if
such claims, suits, actions or proceedings be groundless, false or fraudulent. The Developer shall
bear the costs of all judgments and settlements in connection therewith; provided, however,
without relieving the Developer of the Developer’s obligations under this Agreement, the City or
any entity claiming by, through or under the City may defend or participate in the defense of any
or all of such claims, suits, actions or proceedings. Maintenance of the insurance referred to in
this Agreement shall not affect the obligations of the Developer’s under this Agreement, and the
limits of such insurance shall not constitute a limit on the liability of the Developer under this
Section 8.9. This Section 8.9 shall survive the delivery of the Deed and termination of this
Agreement.

        8.10 Environmental Considerations. Any costs or expenses associated with
environmentally related violations of the law, the creation or maintenance of a nuisance, or
releases of hazardous substances, including, but not limited to, the cost of any clean up activities,
removals, remediations, responses, damages, fines, administrative or civil penalties or charges
imposed on the City, whether because of actions or suits by any governmental or regulatory
agency or by any private party, as a result of the storage, accumulation, or release of any
hazardous substances, or any noncompliance with or the failure to meet any federal, state or local
standards, requirements, laws, statutes, regulations, or the law of nuisance by the Developer (or
by its agents, officers, employees, contractors, subcontractors, consultants, subconsultants, or
any other persons, corporations or legal entities employed, utilized or retained by the Developer)
during its occupancy of the Property in the performance of this Agreement or related activities,
shall be paid by the Developer. This Section shall survive the delivery of the Deed and the
termination or expiration of this Agreement.


                                                 19
                                       ARTICLE IX

        EQUAL OPPORTUNITY EMPLOYER/DRUG-FREE WORKPLACE

     9.1 Equal Opportunity Employer. During the term of this Agreement:

               9.1.1 The Developer shall not discriminate against any applicant for employment
because of race, religion, color, national origin, age, disability or any other basis prohibited by
State law relating to discrimination in employment, except where there is a bona fide
occupational qualification reasonably necessary to the normal operation of the Developer. In
addition, the Developer will use its best efforts to recruit well-qualified minorities for its work
force, and the Developer's representatives will meet with representatives of the City from time to
time to identify appropriate techniques for such recruitment. The Developer shall also require
that each of its contractors and subcontractors be also Equal Opportunity Employers and that
they extend the same policies as set forth in this Article IX to its respective personnel.

               9.1.2 The Developer will post in conspicuous places, available to employees and
applicants for employment, notices setting forth the provisions of Section 9.1 hereof. Notices,
advertisements and solicitations placed in accordance with federal law, rule or regulation shall be
deemed sufficient for the purpose of meeting the requirements of this Section 9.1.

       9.2 The Developer will provide a "drug-free workplace" for its employees, with "drug-
free workplace" meaning a site for the performance of work where the employees are prohibited
from engaging in the unlawful manufacture, sale, distribution, dispensation, possession or use of
any controlled substance or marijuana during the performance of the Agreement.

                9.2.1 The Developer will post in conspicuous places, available to employees and
applicants for employment, a statement notifying employees that the unlawful manufacture, sale,
distribution, dispensation, possession, or use of a controlled substance or marijuana is prohibited
in the contractor's or subcontractor's workplace and specifying the actions that will be taken
against employees for violations of such prohibition.

               9.2.2 The Developer will state in all solicitations or advertisements for employees
placed by or on behalf of the Developer that the Developer maintains a drug-free workplace.

        9.3 The Developer agrees to insert the foregoing requirements set forth in Sections 9.1
and 9.2 in all contracts, subcontracts and purchase orders of over $10,000 pertaining to the
Project.

THE CITY OF HAMPTON DOES NOT DISCRIMINATE AGAINST FAITH-BASED
ORGANIZATIONS

                                        ARTICLE X

            REPRESENTATIONS AND WARRANTIES OF DEVELOPER

       In order to induce the City to enter into this Agreement, the Developer represents and
warrants to the City as follows:


                                                20
      10.1 The Developer is a duly organized and validly existing limited partnership under the
laws of the Commonwealth of Pennsylvania and registered to do business in the Commonwealth
of Virginia and has the power to own its properties and other assets and to transact the business
in which it is now engaged or proposed to engage.

      10.2 The Developer has the power to execute, deliver and carry out the terms and
provisions of this Agreement and all other instruments to be executed and delivered by The
Developer in connection with its obligations hereunder. The execution, delivery and
performance by the Developer of this Agreement have been duly authorized by all requisite
action by the Developer, and this Agreement is a valid and binding obligation of the Developer
enforceable in accordance with its respective terms, except as may be affected by applicable
bankruptcy or insolvency laws affecting creditors' rights generally.

       10.3 The Developer is not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any evidence of indebtedness of the
Developer or contained in any instrument under or pursuant to which any such evidence of
indebtedness has been issued or made and delivered. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, will conflict with or
result in a breach of any of the terms, conditions or provisions of the Articles of Organization of
the Developer or of any agreement or instrument to which the Developer is now a party or
otherwise bound or to which any of its properties or other assets is subject, or of any order or
decree of any court or governmental instrumentality, or of any arbitration award, franchise or
permit, or constitute a default thereunder, or, except as contemplated hereby, result in the
creation or imposition of any lien or other encumbrance upon any of the properties or other
assets of the Developer.

        10.4 There are no actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Developer) pending or, to the knowledge of the Developer,
threatened against or affecting the Developer or the Project, or any other of the assets or
properties of the Developer at law or in equity or before or by a governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or before an
arbitrator of any kind, which involve the possibility of liability in excess of $100,000 or of any
material adverse effect on the business operations, prospects, properties or other assets or in the
condition, financial or otherwise, of the Developer and the Developer is not in default with
respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.

        10.5 To its best knowledge, the Developer is not a party to or otherwise bound by any
agreement or instrument or subject to any other restriction or any judgment, order, writ,
injunction, decree, award, rule or regulation which materially and adversely affect the business,
operations, prospects, properties or other assets, or the condition, financial or otherwise, of the
Developer. The Developer has received no notice of, and to its best knowledge, is not in default
(a) under any obligation for borrowed money, or (b) in the performance, observance or
fulfillment or any of the obligations, covenants or conditions contained in any other agreement or
instrument to which it is a party, by which it is otherwise bound or to which any of its property.



                                                21
        10.6 To the Developer's best knowledge, neither this Agreement nor any document,
certificate or financial statement furnished to the City by or on behalf of the Developer in
connection herewith, contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact known to the Developer which materially adversely affects or in the
future may (so far as it is now known to the Developer) have a material adverse effect upon the
business, operations, prospects, property, other assets or financial condition of the Developer
which has not been set forth in this Agreement or in other documents, certificates and financial
statements furnished to the City or on behalf of the Developer in connection with the transactions
contemplated hereby.

       10.7 The Theater shall have at least 2000 seats and the quality of all of the theater
productions in the Theater shall be comparable to those offered in Branson, Missouri, and Myrtle
Beach, South Carolina.

       10.8    The Retail/Restaurants/Entertainment space shall be of a quality comparable to
Southside Works of Pittsburgh, Pennsylvania.

        10.9 The Hotel shall have 195-300 rooms and shall be of a quality equal or better than
the existing Hampton Embassy Suites.

                                         ARTICLE XI

                                     MISCELLANEOUS

        11.1   Binding Agreement/Assignment.

              11.1.1 This Agreement is binding upon and shall inure to the benefit of the City
and the Developer and their respective successors and assigns.

                11.1.2 The Developer may not assign, hypothecate, or otherwise dispose of its
interest or any part thereof in this Agreement without the prior written consent of the City on the
instrument of assignment, which consent shall not be unreasonably withheld; provided, however,
that no such assignment shall relieve the Developer of any liability hereunder, and upon such approval,
the assignee shall assume all of the obligations of the Developer under this Agreement and shall
not relieve the assignor of any liability hereunder. A copy of such assignment shall be provided
to the City. Any approved assignment shall not be interpreted as an agreement to extend the Due
Diligence Period, Settlement Date or any of the provisions of this Agreement. At the City’s
option, any attempted assignment or transfer in violation of the foregoing provisions may be
deemed an Event of Termination by the Developer under this Agreement.

       11.2 Consents and Approvals. The City and the Developer commit to work harmoniously
with each other, and except in instances (if any) where a consent or approval is specified to be
within the sole discretion of either party, any consent or approval contemplated under this
Agreement shall not be unreasonably withheld, conditioned or delayed, except that the Developer
acknowledges that this covenant does not apply to permits required from the City in connection
with the private improvements.



                                                  22
        11.3 Entire Agreement. This Agreement and the Exhibits incorporate all prior
negotiations and discussions between the parties regarding its subject matter and represent the
entire agreement of the City and the Developer all elements of the Project. This Agreement may
only be modified by written instrument executed by the City and the Developer.

        11.4 Headings. The captions and headings of the articles and sections contained herein
are for convenience of reference only and shall not be considered in any interpretation of the
provisions of this Agreement.

        11.5 Notices. A notice, communication, or request under this Agreement by the City to
the Developer or by the Developer to the City shall be sufficiently given or delivered if
dispatched by either (a) certified mail, postage prepaid, return receipt requested, (b) nationally
recognized overnight delivery service (next business day service), or (c) hand-delivery (if receipt
is evidenced by a signature of the addressee or authorized agent), and addressed to the applicable
parties as follows:

        As to City:           City of Hampton, Virginia
                              City Manager
                              Eighth Floor
                              22 Lincoln Street
                              Hampton, VA 23669
        Copy to:               Vanessa T. Valldejuli, Esquire
                               Deputy City Attorney
                               One Franklin Street, Suite 600
                               Hampton, VA 23669


       The Developer:

                              XL Development Group I, L.P.
                              c/o: XL Development Group, LLC
                              Attn: Vincent W. Falleroni, Managing Director
                              22 Wabash Street, 2nd Level
                              Pittsburgh, PA 15220

        Copy to:              Attn: Richard Ferris
                                    Attorney At Law
                                    Boyce Plaza I
                                    1035 Boyce Road, Suite 121
                                    Upper St. Clair, PA 15241

Any notice, communication, or request so sent shall be deemed to have been "given" (a) as of the
next business day after being sent, if sent by nationally recognized express mail service, (b) as of
the fifth business days after being sent, if sent by Registered or Certified U.S. Mail or (c) upon
receipt, if sent by hand delivery. Either party may change its address for notice purposes by



                                                23
giving notice thereof to the other parties, except that such change of address notice shall not be
deemed to have been given until actually received by the addressee thereof.

        11.6 Partial Invalidity. If any term, covenant, condition, or provision of this Agreement,
or the application to any person or circumstance shall, at any time or to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable, shall
(except to the extent such result is clearly unreasonable) not be affected thereby, and under such
circumstances each term, covenant, condition, and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by law, insofar as such enforcement is not clearly
unreasonable.

        11.7 Governing Law and Venue. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Virginia, including conflicts
of laws. The parties designate the Circuit Court of the City of Hampton, Virginia or, if
applicable, the United States District Court for the Eastern District of Virginia, Norfolk Division
for purposes of all litigation and venue.

        11.8 Force Majeure. For the purpose of any of the provisions of this Agreement, neither
the City, nor the Developer, as the case may be, nor any successor in interest, shall be considered
in breach of or default in any of its obligations, including, but not limited to, the beginning and
completion of construction, or progress in respect thereto, in the event of enforced delay in the
performance of such obligations due to causes beyond its control, including but not restricted to,
strikes, lockouts, actions of labor unions, riots, storms, floods, litigation, explosions, acts of God
or of the public enemy, acts of government, insurrection, mob violence, civil commotion,
sabotage, terrorism, malicious mischief, vandalism, inability (notwithstanding good faith and
diligent efforts) to procure, or general shortage of, labor, equipment, facilities, materials, or
supplies in the open market, defaults of independent contractors or subcontractors (provided that
remedies are being diligently pursued against the same), failures of transportation, fires, other
casualties, epidemics, quarantine restrictions, freight embargoes, severe weather, inability
(notwithstanding good faith and diligent efforts) to obtain governmental permits or approvals, or
delays of subcontractors due to such causes, it being the purpose and intent of this Section 11.8
that in the event of the occurrence of any such enforced delays, the time or times for the
performance of the covenants, provisions, and agreements of this Agreement shall be extended
for the period of the enforced delay (including any time reasonably required to recommence
performance due to such enforced delay). The affected party shall use reasonable efforts to
remedy with all reasonable dispatch the cause or causes preventing it from carrying out its
agreements; and provided further, that the settlement of strikes, lockouts, and other industrial
disturbances shall be entirely within the discretion of the affected party, and the affected party
shall not be required to make settlement of strikes, lockouts, and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is, in the judgment of
the affected party, unfavorable to the affected party. Notwithstanding the above, (a) the
Developer may not rely on its own acts or omissions as grounds for delay in its performance, and
(b) the absence of immediately available funds shall not be grounds for delay by the Developer.

       11.9 Representatives Not Individually Liable.         No councilmember, official,
representative, or employee of the City shall be personally liable to the Developer or any


                                                 24
successor in interest in the event of any default or breach by the City for any amount which may
become due to the Developer or successor or on any obligations under the terms of the
Agreement. No officer, director, representative, or employee of the Developer shall be
personally liable to the City in the event any default or breach by the Developer for any amount
which may become due to the City or on any obligations under the terms of this Agreement.

        11.10 Ancillary Documents. The City Representative or the City Engineer as set forth
in this Agreement is hereby authorized, on behalf of the City, to execute any and all other
documents necessary or appropriate to effectuate the transactions contemplated by this
Agreement, provided such documents do not materially alter the relationship of the parties or the
principal elements of the Project, and to grant such approvals and consents on behalf of the City.

        11.11 Broker. The City and the Developer each represent and warrant for itself that it
has not dealt with any broker in connection with this Agreement.

       11.12 Third Party Beneficiary. Nothing contained in this Agreement shall be construed
to confer upon any other party the rights of a third party beneficiary.

       11.13 Performance on Saturday, Sunday, or Holiday. Whenever the provisions of this
Agreement call for the performance of any act, including the expiration date of any cure periods
provided herein, on or by a date that is not a "Business Day", then such payment or such
performance shall be required on or by the immediately succeeding "Business Day", which term
shall mean a day other than a Saturday, Sunday, or legal holiday in the Commonwealth of
Virginia.

       11.14 Incorporation into Agreement. All exhibits, schedules, and recitals form a part of
this Agreement.

       11.15 Conflict of Terms. It is the intention of the City and the Developer that if any
provision of this Agreement is capable of two constructions, one of which would render this
provision valid and enforceable, then the provision shall have the meaning that renders it valid
and enforceable.

       11.16 No Waiver. No failure on the part of the City or the Developer to enforce any
covenant or provision contained in the Agreement nor any waiver of any right under this
Agreement shall discharge or invalidate such covenant or provision or affect the right of the
other party to enforce the same in the event of any subsequent default.

       11.17 Compliance with Laws. The Developer shall, at all times, be subject to all
applicable governmental laws, ordinances, rules and regulations (collectively, the "Applicable
Laws") pertinent to this Agreement, and the Developer’s actions in connection with this
Agreement. Nothing in this Section 11.17 or any other part of this Agreement, however, shall be
construed to (a) limit or prevent the Developer from challenging at law or in equity the
applicability of any Applicable Law and/or pursuing its rights in furtherance thereof through
appropriate judicial proceedings or (b) constitute a waiver of due process. Notwithstanding
anything to the contrary contained in this Agreement, no provision of this Agreement shall be
construed to require the Developer to comply with any Applicable Law during the period that the
Developer may be pursing a bona fide challenge of the applicability, lawfulness, and/or

                                               25
enforceability of such Applicable Law (unless such law requires compliance during any such
challenge). If the Developer's challenge is successful, the Developer shall not be required by the
provisions of this Agreement to comply with such Applicable Law.

         11.18 Good Faith and Fair Dealing. The parties covenant and agree each to the other
that its conduct under this Agreement, and the interpretation and enforcement of the provisions
hereof, shall be characterized by good faith and fair dealings so that the objectives of each party
as set forth in this Agreement may be achieved.

        WITNESS the following signatures:

                                             THE CITY OF HAMPTON


                                             By:     _____________________________(SEAL)
                                                     City Manager/Authorized Designee
ATTEST: (SEAL)

_______________________________
Clerk of Council


COMMONWEALTH OF VIRGINIA
CITY OF HAMPTON, to-wit:

     The foregoing instrument was acknowledged before me this ____ day of ____________,
2007, by __________________________, City Manager/Authorized Designee of the City
Manager of the City of Hampton, Virginia on its behalf. He/She is personally known to me.

                                             __________________________________________
                                             Notary Public

My commission expires: __________________

COMMONWEALTH OF VIRGINIA
CITY OF HAMPTON, to-wit:

     The foregoing instrument was acknowledged before me this ____ day of ____________,
2007, by __________________________, Clerk/Deputy Clerk of Council for the City of
Hampton, Virginia on its behalf. She is personally known to me.

                                      __________________________________________
                                      Notary Public
My commission expires: __________________


                                                26
Approved as to Content:                          Approved as to Legal Sufficiency:



____________________________                     ________________________________
Dept. of Economic Development                    Deputy City Attorney



Certified as to Availability of Funds
As to Public Improvements:


_________________________
Department of Finance


                                          XL DEVELOPMENT GROUP I, L.P., a
                                          Pennsylvania limited partnership

                                          By: XL Development Group, LLC, a Pennsylvania
                                          limited partnership, General Partner

                                          By :_____________________________( SEAL)
                                             Vincent W. Falleroni, Managing Director



COMMONWEALTH OF PENNSYLVANIA

CITY /COUNTY OF ___________________, to-wit:

     The foregoing instrument was acknowledged before me this ____ day of ____________,
2007, by Vincent W. Falleroni, Managing Director of XL Development Group, LLC, a
Pennsylvania limited liability company, General Partner of XL Development Group I, L.P., a
Pennsylvania limited partnership on its behalf. He is personally known to me or has produced
_______________ as identification.

                                          ______________________________________
                                          Notary Public


My commission expires: __________________




                                            27
    EXHIBIT A

PLAT OF PROPERTY

  (to be attached)




        28
     EXHIBIT B

CONCEPTUAL DRAWINGS
     (to be attached)




      29
                                             EXHIBIT C
                           RIGHT OF ENTRY AGREEMENT

               THIS RIGHT OF ENTRY AGREEMENT made this ______ day of
_____________, 2007, by and between the CITY OF HAMPTON, a municipal corporation of
the Commonwealth of Virginia (“City”) and XL DEVELOPMENT GROUP I, L.P. a
Pennsylvania limited partnership (“XL”).

              WHEREAS, the City is the owner of approximately 2 acres of land in the City of
Hampton located at the corner of Pine Chapel Road and Coliseum Drive, more commonly
known as the “Best Products” site and designated as a portion of RCP# 7001217 (the “Staging
Site”) and shown on Exhibit “A” attached hereto and made a part hereof; and

               WHEREAS, pursuant to that certain Development/Acquisition Agreement
between XL and the City dated February__, 2007 (the “Development Agreement”), XL desires
to enter upon and utilize the Staging Site for the purpose of construction staging and stockpiling
of materials and equipment for the development of the 19 Acres Mixed use Development (the
“Project”).

               NOW, THEREFORE, the City does hereby give to XL the right and permission
to enter upon the Staging Site to temporarily use it for a period not to exceed the duration of
construction of the Project or five (5) years from the date this Right of Entry Agreement is fully
executed by all parties, whichever occurs first, at no rental cost to XL, for the purpose of
construction staging and the stockpiling of materials and equipment, subject to the following
terms and conditions:

              1. XL’s use of the Staging Site shall be limited to those areas required to effect
construction staging and the stockpiling of materials and equipment for a period not to exceed
the duration of construction of the Project. Any unauthorized use is strictly prohibited.

               2. XL expressly agrees to indemnify and save harmless the City from and against
any and all claims, loss, damage, injury and liability however caused, resulting from, arising out
of , or in any way connected with XL’s use or occupation of the Staging Site during construction
of the Project and the negligent and willful acts and omissions of XL and its contractors,
subcontractors, employees and those for whom XL is legally liable, and all losses, costs,
damages and expenses (including, without limitation, reasonable attorneys' fees and other costs
of defending against such claims, suits, actions and proceedings), unless such injuries or
damages (including, without limitation, death) result from, or are claimed to have resulted from
the sole gross negligence of the City. XL shall assume on behalf of the City and all entities
claiming by, through or under the City, and conduct with due diligence and in good faith, the
defense of all such claims, suits, actions and proceedings against the City or any entity claiming
by, through or under the City, whether or not XL is joined therein, even if such claims, suits,
actions or proceedings be groundless, false or fraudulent. XL shall bear the costs of all
judgments and settlements in connection therewith; provided, however, without relieving XL of
its obligations under this Right of Entry Agreement, the City or any entity claiming by, through
or under the City may defend or participate in the defense of any or all of such claims.
Maintenance of the insurance referred to in this Right of Entry Agreement shall not affect the


                                               30
obligations of the Developer’s under this Right of Entry Agreement, and the limits of such
insurance shall not constitute a limit on the liability of XL under this Section 2.

              In connection with XL’s use of the Staging Site, any costs associated with
violations of the law including, but not limited to, remediation, clean up costs, fines,
administrative, criminal or civil penalties or charges, and third party claims imposed on the City
by any regulatory agency or by any third party as a result of the noncompliance with federal,
state or local environmental laws and regulations or nuisance statutes by XL or by
subcontractors, consultants, subconsultants, or any other persons, corporations, or legal entities
retained by XL for the Project, shall be paid by XL.

            The provisions of this Paragraph 2 shall survive the termination of this Right of
Entry Agreement.

               3. XL shall comply with all federal, state and local statues, ordinances, and
regulations now in effect or hereafter adopted, in the temporary use of the Staging Site and the
construction staging and the stockpiling of materials and equipment. XL represents that it
possesses all necessary licenses and permits required to conduct its business and will acquire any
additional licenses and permits necessary for its use of the Staging Site prior to entry upon the
Staging Site. XL shall at all times observe all health and safety measures and precautions
necessary for the sanitary and safe use of the Staging Site.

                4. This Agreement shall be deemed to be a Virginia contract and shall be
governed as to all matters whether of validity, interpretations, obligations, performance or
otherwise exclusively by the laws of the Commonwealth of Virginia, and all questions arising
with respect thereto shall be determined in accordance with such laws. Regardless of where
actually delivered and accepted, this Agreement shall be deemed to have been delivered and
accepted by the parties in the Commonwealth of Virginia. Any and all suits for any claims or for
any and every breach or dispute arising out of this Agreement shall be maintained in the
appropriate court of competent jurisdiction in the City of Hampton or, if applicable, the United
States District Court for the Eastern District of Virginia, Norfolk Division.

                5. Upon completion of the Project, at its sole cost and expense, XL will cause
any portion of the Staging Site damaged during its use and occupation to be restored
substantially to its present condition.

               6. XL shall not assign its rights and duties under this Right of Entry Agreement
without the prior written consent of the City.

               7. XL agrees that the City shall not be responsible or liable for any maintenance
work whatsoever to the areas used by XL pursuant to and during the term of this Right of Entry
Agreement. During construction of the Project, XL shall keep the Staging Site clean and in
good order, free of trash and construction debris. If XL fails to do so, the City may issue a
written warning to XL identifying the section of the Staging Site that XL has failed to maintain
as set forth herein. If XL does not correct the condition within thirty (30) days of its receipt of
such written notice, the City may clean the Staging Site and charge XL for all its costs and
expenses incurred therein.


                                               31
                8. If requested by the City, as a result of needed repairs or maintenance to above-
ground or underground utilities or facilities located on any portion of the Staging Site, XL shall
remove any fence(s), structure(s), equipment, stockpile(s), materials or parked vehicle(s) within
seventy-two (72) hours to one hundred forty-four (144) hours of receipt of written notice
requesting such removal to allow the City to perform the needed repairs or maintenance. In an
emergency or failure to remove after written notice, the City will remove, or have removed by
others, any impediment to access, maintenance, or repair of the utilities or facilities located on
the Staging Site, and XL agrees that XL shall be responsible for replacement of said fence(s),
structure(s), equipments, stockpile(s), materials, or parked vehicle(s) at XL's sole expense.

                 9. In the event of an emergency or the need to exercise governmental
responsibilities, the City may at any time, suspend or terminate this Right of Entry Agreement by
written notice to XL specifying the termination date, which shall not be less than sixty (60) days
from the date such notice is delivered to XL. If the City terminates this Right of Agreement
under this provision, XL shall withdraw its personnel, materials and equipment from the Staging
Site, and shall cease any further use of the Staging Site. The City agrees to provide an
Alternative Staging Site, at no rental cost to XL, within close proximity of the Project as set forth
in the Development Agreement between the City and XL. In the event of violations of federal,
state or local law, safety or health standards and regulations, this Right of Entry Agreement may
be immediately canceled and terminated by the City and the provisions for written notice and
providing an Alternative Staging Site shall not be applicable.

                10. XL agrees to secure and maintain in full force and effect at all times during
the period this Right of Entry Agreement is in effect Comprehensive General Liability Insurance,
including contractual liability and products and completed operations liability coverages in an
amount not less than One Million and No/100 Dollars ($1,000,000) combined single limits
(CSL). Such insurance shall name the City as an additional insured.

               All policies of insurance required herein shall be written by insurance companies
licensed to conduct the business of insurance in the Commonwealth of Virginia and acceptable to
the City, and shall carry the provision that the insurance will not be canceled or materially
modified without thirty (30) days prior written notice to the City.

               11. Nothing contained herein shall be construed to authorize XL to subject the
Staging Site to any liens of mechanics, artisans, laborers, materialmen, contractors or
subcontractors, or to any other liens or charges whatsoever arising out of any construction and
development work or arising in any other manner in connection with the Project; and XL is
hereby expressly prohibited from subjecting the Staging Site to any such liens or charges. XL
agrees to promptly discharge at its own cost and expense (either by payment or by filing of the
necessary bond, or otherwise) any mechanics', materialmen's or other lien against the Staging
Site (whether or not such lien is valid or enforceable as such) that may arise out of any payment
due for, or purported to be due for, any construction and development work or any other labor,
services, materials, supplies or equipment furnished or alleged to have been furnished to or for
the Project.

               12. A breach of any of the provisions of this Right of Entry Agreement shall
constitute and be deemed an Event of Termination under the Development Agreement.


                                                 32
               13. There may be no modification of this Agreement, except in writing, executed
by the authorized representatives of the parties.


              WITNESS the following signatures and seals:

                                           CITY OF HAMPTON


                                           By: ___________________________
                                              City Manager/Authorized Designee
                                               of City Manager
(SEAL)

ATTEST:

_____________________________
Clerk/Deputy Clerk of Council
                                           XL DEVELOPMENT GROUP I, L.P., a
                                           Pennsylvania limited partnership

                                           By: XL Development Group, LLC, a Pennsylvania
                                           limited liability company, General Partner

                                           By:                           _ (SEAL)
                                             Vincent W. Falleroni, Managing Director



COMMONWEALTH OF VIRGINIA
CITY OF HAMPTON, to-wit:

              The foregoing instrument was acknowledged before me this ____ day of

____________, 2007, by                       , City Manager/Authorized Designee of the City

Manager of the City of Hampton, on its behalf. He/She is personally known to me.




                                           ___________________________________
                                           Notary Public

My commission expires: _________________




                                             33
COMMONWEALTH OF VIRGINIA
CITY OF HAMPTON, to-wit:

              The foregoing instrument was acknowledged before me this ____ day of

____________, 2007, by ___________________________________________ Clerk/Deputy

Clerk of Council for the City of Hampton, Virginia, on its behalf. She is personally known to

me.

                                          ____________________________________
                                          Notary Public

My commission expires: ________________


COMMONWEALTH OF PENNSYLVANIA
CITY/COUNTY OF_____________________________, to-wit:

              The foregoing instrument was acknowledged before me this ____ day of

____________, 2007, by Vincent W. Falleroni, Managing Director of XL Development Group,

LLC, a Pennsylvania limited liability company, General Partner of XL Development Group I,

L.P., a Pennsylvania limited partnership on its behalf. He is personally known to me or has

produced ___________________________ as identification.


                                          ____________________________________
                                          Notary Public

My commission expires: ________________


Approved as to Content:                           Approved as to Risk Management:

_________________________________                 ____________________________________
City Engineer                                     Risk Management


Approved as to Legal Sufficiency:

_________________________________
Deputy City Attorney


                                             34

								
To top