PROCDA2019-000055 MASTER DEVELOPMENT AGREEMENT BETWEEN PUERTO RICO CONVENTION CENTER DISTRICT AUTHORITY AND BU HARBOUR PARTNERS, LLC wv 2659710MASTER DEVELOPMENT AGREEMENT This MASTER DEVELOPMENT AGREEMENT (this “Development Agreement” or this “Agreement”) dated as of the 29" day of March, 2019 (the “Effective Date”), by and between the PUERTO RICO CONVENTION CENTER DISTRICT AUTHORITY (the “Authority”), a body politic and corporate of the Commonwealth, duly established and existing under Act No. 351 of September 2, 2000, as amended (the “Enabling Act”), with a principal place of business at the Puerto Rico Convention Center, Third Floor, Isla Grande Sector of the municipality of San Juan, Puerto Rico, and BU HARBOUR PARTNERS, LLC, a limited liability company organized and existing under the laws of the Commonwealth, with a principal place of business in the municipality of San Juan, Puerto Rico (“Developer”). The Authority and Developer are referred to collectively herein as the “Parties” and, each, individually as a “Party”. Capitalized terms used ‘throughout this Development Agreement shall have the meaning given to them in Schedule I to this Development Agreement. RECITALS WHEREAS, the Authority is the owner in fee simple title (pleno dominio) of two parcels totaling approximately 56,362 m* known as the “Navy Frontier Pier” and identified as Lot L (which includes Lot K-1 and Lot K-2), and Lot M (collectively, the “Parcels”). The Parcels are located north of the San Antonio Channel, south of the Fernandez Juncos Avenue, west of the Federal Drug Administration property (the “EDA Parcel”) and east of the former headquarters of the United States Army Corps of Engineers parcel (the “USACE Parcel”). The Parcels are graphically depicted in the attached Schedule II and their legal descriptions are provided in the attached Schedule IIT. The FDA Parcel and USACE Parcel (collectively, the “Adjoining Parcels”) are also graphically depicted in the attached Schedule I and their legal descriptions are also provided in the attached Schedule UI. The maritime-terrestrial zone adjoining (i) the Parcels, hereinafter referred to as the “Parcels MTZ”, (ii) the FDA Parcel, hereinafter referred to as the “FDA MTZ” and (iii) the USACE Parcel, hereinafter referred to as the “USACE MTZ” (and together with the FDA MTZ, the “Adjoining Parcels MTZ”) are also graphically depicted in the attached Schedule II and their legal descriptions are also provided in the attached Schedule III; WHEREAS, Developer has proposed to the Authority and the Authority has accepted a proposal from Developer to (A) undertake, or cause the undertaking by any other Person, including but not limited to BUD, of, all the works required for the land assembly, permitting, design, land preparation and the pre-development aspects, which are more particularly described in the attached Exhibit B (collectively, the “Master Development Works”) of a mixed-use project to be developed within the boundaries of the Parcels and the Parcels MTZ (collectively, the “Property”) and to be known as the Bay Harbour Village and (B) upon the contribution by the Authority of the Parcels pursuant to the terms of the Operating Agreement and the other terms and conditions set forth in this Agreement, develop and construct, or cause the construction, at the Property of one or more ofthe following: (i) residences, apartments, rental apartments in condominiums and/or townhouses (the “Residential Development”), (ii) Class A office buildings (the “Office Buildings Development”), (ii) ground floor retail, restaurants and certain roof-top entertainment venues (the “Retail Development”), (iv) hotels to serve the Convention Center and the greater San Juan area (the “Hotel Development”), (v) a yacht marina, including capacity for mega yachts (the “Marina Development”), (vi) parking facilities (the “Parking Development”), and/or (vii) passive parks and recreational venues (the “Recreational Development”; and, together with the Residential 024597; 10Development, the Office Buildings Development, the Retail Development, the Hotel Development, the Marina Development and the Parking Development, the “Project Developments” and, each, a “Project Development”); and WHEREAS, in consideration of the development covenants undertaken by Developer pursuant to this Development Agreement, the Authority has agreed to: (i) grant to Developer the exclusive right to pursue and develop the Master Development Works and each Project Development, (ii) pursue and endeavor (A) the acquisition of the Adjoining Parcels, either directly or through Developer or any Wholly-Owned Subsidiary, and, upon its acquisition by the Authority, contribute them to Developer and/or any Wholly-Owned Subsidiary for their development and construction as part of the Project Developments; and (B) the granting by the corresponding Government Authorities of an exclusive concession agreement to Developer and/or any Wholly- ‘Owned Subsidiary for each of the Parcels MTZ (the “Parcels MTZ Concession”), the USACE MTZ (the “USACE MTZ Concession”) and the FDA MTZ (the “EDA MTZ Concession”); and together with the Parcels MTZ Concession and the USACE MTZ Concession, the “Concession Agreements”), and (iii) in the event that any Puerto Rico governmental entity other than the ‘Authority acquires the Adjoining Parcels or any portion thereof, to cause each such governmental entity to transfer the Adjoining Parcels to Developer or any Wholly-Owned Subsidiary, all of the foregoing subject to the satisfaction of certain conditions precedent, including the execution of this Development Agreement and the execution of an operating agreement between the Authority and BUD, wherehy they both besome member in Developers set fir in Section 13:24 (the “Operating Agreement”). NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Development Agreement, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties agree as follo ARTICLE | EXCLUSIVE USE OF THE PROPERTY 1.1 Exclusive Use of the Property. The Authority, for and in consideration of the execution of the Operating Agreement and the performance of the Master Development Works on the Property, the development and construction of the Project Developments and the covenants and agreements hereinafter contained on the part of Developer to be paid, kept and performed, hereby grants to Developer the exclusive right to (a) develop and perform, or cause the development and performance by any other Person, including but not limited to BUD, of, the Master Development ‘Works during the Pre-Development Period, and (b) upon fulfillment of the conditions set forth in Section 1.3, develop and construct, or cause the development and construction of, each Project Development on the Property during the Construction Period. 1.2 Pre-Development Period. Commencing on the Effective Date, Developer shall have a five (5) month pre-development period (the “Pre-Development Period”), during which it shall undertake, or cause the undertaking by any other Person, including, but not limited to, BUD, of, the Master Development Works. If Developer is unable to obtain the necessary permits for any of the Master Development Works during the Pre-Development Period or is unable to complete the Master Development Works within the Pre-Development Period due to any Force Majeure Event, 2059710Developer may, at its option and upon submittal to the Authority of evidence reasonably satisfactory to the Authority of its diligence in obtaining the necessary permits to begin construction of the Master Development Works and/or the occurrence of any Force Majeure Event and the need for an extension, extend the Pre-Development Period for up to six (6) additional ‘months by giving written notice to the Authority no later than twenty (20) days before the end of the Pre-Development Period. Any Force Majeure Event affecting the Master Development Works shall be credited to the Pre-Development Period. The Pre-Development Period is subject to the following terms and conditions: (@ The Authority shall retain title to, possession of and responsibility for the Property, subject to the terms and conditions of this Agreement; (®) Developer and any of its contractors, subcontractors, agents and representatives shall have the unfettered right, at its own cost, to enter the Property to conduct tests or for any other purpose conducive to the performance of the Master Development. Works; (© Developer shall indemnify the Authority against any claims or losses attributable to the activities of Developer (but excluding those attributable to the negligence or willful misconduct of the Authority and its directors, officers, employees and agents), or on Developer's behalf, which are not covered by any insurance policy, in the Property during the Pre-Development Period and Developer shall obtain such insurance coverage, and shall furnish to the Authority such insurance certificates, as required in Article 6; (@ The Authority shall not sell, lease, assign, transfer, option, dispose or encumber, or commit to sell, lease, assign, transfer, option, dispose or encumber, the Property or any portion thereof during the Pre-Development Period; (© The Authority shall not charge Developer any rent, fee or other form of compensation during the Pre-Development Period (even if such period is extended by Developer as provided herein); (© IfDevetoper elects not to pursue the Master Development Works in the Property, Developer, without fault by the Authority, shall assign to the Authority all plans and work product which is assignable and related to the Master Development Works (such assignment without representation, warranty or liability to Developer of any kind) and shall restore at its cost the Property to the condition existing on the Effective Date, wear and tear excepted, and excluding from this restoration obligation any structure or improvement that was demolished in furtherance of the ‘Master Development Works; (2) _ IfDeveloper decides not o pursue the Master Development Works on the Property (without fault by the Authority), this Development Agreement will be terminated without any liability of the Parties to each other; and(b) Developer shall submit to the Authority monthly progress report in relation to the conduct of the Master Development Works. 1.3. The Closing. Upon Developer (i) obtaining the Required Permits, with the cooperation of, but at no cost to the Authority; (ii) securing a binding Credit Support Commitment in form and substance reasonably acceptable to the Authority; (iii) obtaining, with the cooperation of, but at no cost to the Authority, from the corresponding Government Authorities (A) the permanent designation of the Parcels and the Parcels MTZ, and (B) a binding commitment to designate the Adjoining Parcels and the Adjoining Parcels MTZ, upon Developer's or any Wholly-Owned Subsidiary’s acquisition of fee simple title thereto or the corresponding Concession Agreement, as priority projects and/or residential priority projects, as the case may be, or any other designation, approval and/or endorsement required for the Master Development Works or any Project Development to qualify for the tax benefits and attributes, rights and entitlements (including expedite permitting process) under local and federal opportunity zones laws and regulations (the “Opportunity Zone Designation”), and (iv) securing any tax concession from the Puerto Rico ‘Tourism Company for the development, construction and operation of the Hotel Development and the Marina Development (the “Tax Concession Agreement”), on or before the end of the Pre- Development Period, as it may be extended (the “Closing Date”), the Authority shall (A) convey and transfer free and clear fee simple, recordable and insurable title (pleno dominio) to the Parcels to Developer and (B) cause the execution and delivery by the corresponding Government Authorities of the Parcels MTZ Concession in accordance with the Concessions Terms and Conditions, as part of the Authority's capital contributions to Developer agreed to and on the terms and conditions set forth in the Operating Agreement. 14 Land Assembly; Recording. The Parties recognize that neither Lot K-2, Lot K-I nor Lot L, which are graphically depicted in the attached Schedule TI, have been formed as individual parcels in the Registry of the Property of Puerto Rico (the “Registry”). The Authority shall choose the notary public for the drafting, execution and presentation of a Deed of Segregation and Consolidation of Properties to form at the Registry one parcel, together with any necessary easements for the development, construction, use, operation and disposition of any Project Development and eventual integration of the Parcels with the Adjoining Parcels, if the Authority acquires the fee simple title to the Adjoining Parcels or any portion thereof and contributes the same to Developer as provided in this Agreement and the Operating Agreement (the “Deed of Consolidation of Properties”), and a Deed of Conveyance to form and convey the Parcels to Developer (the “Deed of Conveyance”). A certified copy of the Deed of Consolidation of Properties and the Deed of Conveyance will be presented at the Registry on or about the Closing Date, and Developer shall be responsible for all costs related thereto, including recording fees, vouchers and stamps, and notarial tariff (the amount of which will be agreed upon with the acting notary public), which shall be paid on the Closing Date. 1.5 Title and Possession. The Authority represents and warrants to Developer that (i) it is the owner in fee simple recordable and insurable title (pleno dominio) of all the land that is needed to configure the Parcels into a single and independent property at the Registry, free and clear of all restrictions, covenants, liens and encumbrances (other than certain liens and encumbrances appearing of record that do not physically affect the Property nor prohibit, limit or curtail its intended development, construction and use for the Master Development Works and for each Project Development) and rights or claims of third parties, other than those set forth in the attachedSchedule V, and ofany kind. it has possession of the Parcels, free and clear of any occupants or squatters 1.6 Marina Development. The Authority represents and warrants to Developer that, with respect to the Marina Development, there are no rights granted to third parties in the vicinity of the Property and/or the Adjoining Parcels that prohibit the development, construction, use or operation of the Marina Development and that it will not grant or cause the grant of any right or entitlement to any third party that will contravene, limit or affect Developer's rights relating to the development, construction, use or operation of the Marina Development. However, Developer recognizes and acknowledges that either the Puerto Rico Ports Authority or the Puerto Rico Public Private Partnership Authority may grant development rights for the development, construction and ‘operation of marinas facilities along the San Antonio Channel and on Piers 7, 8, 9 and 10. 1.7 Off-Site Works. Developer shall not be bound to commence the construction of any Project Development until the Authority causes the corresponding Government Authority to provide all the Off-Site Utilities and off-site works up to the boundary line of the Property which are necessary for the development, construction, access (pedestrian and vehicular, including, but not limited to the proposed pedestrian bridge connecting the Condado area with the Property), use and operation of the Project Developments (“Off-Site Works”). The term “Off-Site Works” shall include all the Off-Site Utilities and any necessary improvements, enhancing and/or revamping thereof for the development, construction, use and operation of the Project Developments, and the completion of the proposed bulkhead improvements to be constructed at the maritime terrestrial zone adjoining to the Property (including the Adjoining Parcels) (the “Bulkhead Project”), as such zone is graphically depicted in the attached Schedule II. Any delay in the availability of any Off- Site Works will be considered an unavoidable delay to be credited to any timeline for the works to be constructed by Developer during the Construction Period. 1.8 Bulkhead Project and Off-Site Works. It is the intention of the Parties that the Bulkhead Project and the Off-Site Works are undertaken and defrayed by the Authority with the use of CDBG-DR’s funds or any other funds available to the Authority. The Authority will undertake its best efforts in pursuing the allocation, commitment and investment of CDBG-DR’s funds or any other funds for such purpose. In the event that, despite the Authority's best efforts, CDBG-DR’s funds or any other targeted funds are not available to the Authority for either the Bulkhead Project or the Off-Site Works, as the case may be, then, either, first (i) Developer, as its sole option, may decide to undertake the Bulkhead Project (including the Adjoining Parcels, but only if and to the extent they have been contributed to Developer) and/or the Off-Site Works, or any portion thereof, as the case may be, subject to the issuance of additional membership interests in Developer in favor of BUD and the corresponding dilution of the Authority’s membership interests in Developer, as provided in the Operating Agreement, or, second (ii) any Party may forthwith terminate this Agreement. In the event that Developer undertakes to perform the Bulkhead Project, the Off-Site Works, and/or any portion thereof, the Authority shall have the obligation to assist, and will cooperate with, Developer, but at no cost to the Authority, and act as sponsor/promoting agency in all permitting aspects of the Bulkhead Project, the Off-Site Works, and/or any portion thereof, as the case may be, and any delay in obtaining the permits for the Bulkhead Project, the Off-Site Works, and/or any portion thereof, as the case may be, shall be considered a Force Majeure Event.1.9 Other Representations. The Authority, on the Closing Date, will transfer to Developer the Parcels with all that the same contain or is appurtenant thereto, in the same condition in which such Parcels or any part thereof now is. From the Effective Date until the Closing Date, Developer will perform a full and complete examination of the Property, including, without limitation, utilities audit, soil subsurface conditions, existing structures thereon, the presence of any asbestos or other hazardous waste or materials located on the Property, legal title, their present uses and non-uses, and laws, ordinances, and regulations affecting the same, and Developer assumes all risks in connection therewith, without any representation or warranty, express or implied, in fact or by law, on the part of the Authority (except as otherwise expressly set forth herein) and without recourse to the Authority. If, prior to the Closing Date, Developer shall discover any material adverse conditions affecting the Property, or any portion thereof, which have not been previously identified by Developer, the Authority and Developer shall endeavor, in good faith, to address such conditions within the terms of this Agreement. If the Parties are unable to reasonably agree on an appropriate means to address the discovered material adverse conditions, Developer or the Authority may elect to terminate this Agreement and, in such event, both Parties shall be released from their respective obligations under this Agreement, and neither Party shall have any further obligations to the other. On the Closing Date, Developer shall accept the Parcels in their present “AS IS, WHERE IS, WITH ALL FAULTS” condition. ARTICLE 2 ADJOINING PARCELS AND ADJONING PARCELS MTZ, 2.1 Exclusivity on Adjoining Parcels and Adjoining Parcels MTZ. With regards to the Adjoining Pareels, the Authority acknowledges and agrees that any use thereof, or development thereat, other than as contemplated in this Development Agreement, would materially and adversely affect and impair the efficient completion of the Project Developments and their integration to the other developments envisioned by the Authority in the vicinity of the Parcels. Therefore, the Authority covenants and agrees with Developer to pursue and endeavor the acquisition, of the Adjoining Parcels from the United States Government, either directly by the ‘Authority, Developer or any Wholly-Owned Subsidiary, and, in furtherance of the foregoing, hereby grants to Developer the preferential and exclusive right of acquisition and development of the same in support of the Project Developments. This covenant includes the Authority's obligation to cause any other Commonwealth governmental entity that may have the right to otherwise acquire the FDA Parcel and/or the USACE Parcel, or any portion thereof, to honor Developer’s preferential and exclusive acquisition and development rights conferred herein. The Parties agree that the development or disposition of the FDA Parcel and/or the USACE Parcel to an entity other than Developer will materially and adversely affect and impair the fulfillment of the Project Developments and its components and, therefore, it is an essential and material condition of the Operating Agreement and this Development Agreement to pursue the acquisition of the Adjoining Parcels. Developer agrees to support, assist and cooperate with the Authority in any efforts relating to the acquisition of the Adjoining Parcels either by the Authority and/or directly by Developer or any Wholly-Owned Subsidiary. The foregoing shall neither be interpreted nor construed as a commitment from the Authority to acquire the fee simple title of the Adjoining Parcels in a direct transaction with the United States Government or through any agency or instrumentality of the Commonwealth or through Developer or a Wholly-Owned Subsidiary. The Authority’s commitment is strictly limited to diligently and timely pursue and endeavor such acquisition and determine the terms and conditions under which the United States Government% shall be willing to dispose both Adjoining Parcels and to provide and protect the preferential and exclusive acquisition rights mentioned above. In the event the Authority acquires the FDA Parcel, the USACE Parcel or any portion thereof directly, pending the transfer of the same to Developer as provided herein, the Authority covenants and agrees with Developer that it shall not assign, sell, convey, lease or transfer all or any portion of the acquired parcels to any Person. 2.2 Acquisition of Adjoining Parcels. Upon the acquisition by Developer and/or any Wholly- Owned Subsidiary of the Adjoining Parcels, or any portion thereof, and the granting of the corresponding Concession Agreements for the Adjoining Parcels MTZ, or any portion thereof, the definition of Property under this Agreement shall be amended, effective on the date of such acquisition or granting, as applicable, without any further formality, to include the Adjoining Parcels and the Concession Agreements for the Adjoining Parcels MTZ. ARTICLE 3 CONSTRUCTION OF THE PROJECT DEVELOPMENTS AND PERMITTED USES. 3.1 Construction of the Project Developments. Subject to delays due to Force Majeure Events, Developer shall forthwith after the Closing Date and the Final Completion of the Bulkhead Project and the Off-Site Works, commence and diligently and continuously prosecute or cause the ‘commencement and diligent prosecution, in a good workmanlike manner and at its sole cost and expense to the Final Completion of each Project Development, all in accordance with this Article 3, the attached Schedule IV and the Final Plans for such Project Development; provided, however, that the construction of the first phase of the Project Developments shall commence on late 2019 or early 2020, subject to Force Majeure Events; provided, further, that Developer may from time to time, supplement the attached Schedule IV to address any changes or trends in market conditions affecting any of the Project Developments, individually or as a whole, in order to mitigate or, to the extent possible, reduce any negative impact on the Project Developments of any such changes or trends, by giving notice to the Authority to such effect and detailing the reasons supporting the same (the “Construction Period”). The Project Developments to be constructed during the Construction Period shall be constructed wholly within the boundary lines of the Property and the areas covered by the Concession Agreements. Developer, shall, from time to time, forthwith diligently and continuously prosecute or cause the prosecution in a good workmanlike manner to Final Completion of the Project Developments in accordance with the attached Schedule IV. For purposes of this Development Agreement “Final Completion” of each component of the Master Development Works and the Project Developments means: () substantial completion of such improvements and readiness of the same for the Permitted Uses (if applicable), as evidenced by a certification of such substantial completion by the architect of the Master Development Works or of the corresponding Project Development, as the case may be, or (ii) the issuance of a permanent, full and unconditional certificate or certificates of occupancy (permiso de uso) for such Project Developments, as the case may be. Final Completion of the Project Developments shall occur not later than as contemplated in the attached Schedule TV, which constitutes the expiry date of the Construction Period, subject to delays due to Force Majeure Events (the “Final Completion Date”). 3.2 Easements. The Authority hereby (i) grants pedestrian and vehicular access easements rights over any property now or hereinafter owned by the Authority and adjoining the Property, infavor of Developer, the successors and assigns of Developer, guests and users of the Master Development Works and the Project Developments, contractors, suppliers and representatives of Developer, and their respective employees, and to any lenders and guarantors under any financing facility for the development, construction, use and operation of the Master Development Works and of the Project Developments, as well as to their respective successors and assigns (and the successors and assigns of those successors and assigns), agents, contractors, representatives and employees (the “Easement Beneficiaries”) in order to ensure all of the Easement Beneficiaries full and uninterrupted access to the Property, (ii) agrees to include in the Deed of Conveyance all required easements in form and substance satisfactory to Developer, and (iii) agrees to grant and record all such other easements as may be reasonably required by any Permitted Mortgagee in connection with the financing of the Master Development Works and of the Project Developments. Alll of the costs and out of pocket expenses related to the foregoing shall be for the account of Developer. 3.3 No Obligation of the Authority. After the Final Completion of the Bulkhead Project and of the Off-Site Works, the Authority shall in no event be required to maintain or repair or to make any alterations, rebuildings, replacements, changes, additions or improvements on or off those portions of the Property that have been contributed to Developer. Without limitation of the foregoing, the Authority shall not be liable (other than with respect to any liability resulting from the Authority’s membership interest in Developer) for any loss, damage o injury of whatever kind caused by, resulting from, or in connection with (j) the supply or interruption of water, gas, electric power, oil or any other utilities to those portions of the Property that have been contributed to Developer, (ii) water or rain which may leak or flow from any street, utility line or subsurface area to any portion of the Property that has been contributed to Developer, or (iii) other leakage from pipes, appliances, sewer or plumbing works therein or from any other place, excluding, however, those attributable to the negligence or willful misconduct of the Authority or its directors, officers, employees, contactors and/or agents. 3.4 — Approved Plans. Prior to entering into this Development Agreement, Developer has submitted to the Authority, and the Authority has approved, the Concept Schematic Design Drawings of the Project Developments (the “Concept Schematic Design Drawings”) attached to this Development Agreement as Exhibit A. Each Project Development shail be consistent with the Concept Schematic Design Drawings. Sixty (60) days prior to the commencement of actual material physical work, including, without limitation, site work on the Property, for each Project Development pursuant to the Required Permits (the “Construction Commencement Date”), Developer shall, for information purposes only, deliver to the Authority four (4) completed set of plans for such Project Development (including one digital set on AutoCAD or any other similar software), including, but not limited to, drawings, general and special provisions and construction specifications (the “Final Plans”). In addition, Developer shall deliver to the Authority, for information purposes only, copies of any ‘material amendments, revisions or updates to the Final Plans. 3.5 Construction Representatives. The Authority and Developer shall each de construction representative and, after notice thereof to the other Party and until such designation is changed or withdrawn, such construction representative shall deliver and receive all notices, approvals, communications, plans, specifications or other materials which are specifically requiredto be delivered or received under this Article 3, 3.6 — Phasing and Absorption Schedule. The matters described in the attached Schedule IV, including, without limitation, market absorption rates and its impact on the phasing, development, construction and sale of Project Developments, were prepared based on currently available information of market conditions and, therefore, are subject in all respects to changes in market trends and conditions. Based on the foregoing, the Authority hereby declares that Developer has not provided any representation, warranty or guaranty, or otherwise received any assurances, in connection with the matters described in the attached Schedule IV. 3.7 Required Permits. Developer shall pursue, at its sole cost and expense and utilizing reasonable commercial efforts, the procurement of the Required Permits for the construction of each of the Master Development Works and of Project Developments, in accordance with the attached Schedule IV, and for any other alterations, additions, changes or improvements to the Property (collectively with the Master Development Works and the Project Developments, the “Developer's Work”), and shall provide the Authority with a copy of each, so far as obtainable and for information purposes only, before beginning any Developer's Work. For purposes hereof, the term “Required Permits” shall be deemed to include, to the extent not previously obtained and, as applicable (i) all zoning approvals/variances or site approvals (consulta de ubicacién), and any amendment thereto, if necessary, preliminary development plan (plan de desarrollo preliminar), preliminary location (anteproyecto), approvals and endorsements, if necessary, and amendments thereto, highway access and intersection approvals, FAA approvals, environmental approvals and amendments thereto, if necessary, and all other permits, approvals, endorsements, consents and amendments, if necessary (but not including any operational licenses, permits or approvals) permitting the development and construction of the Master Development Work and the Project Developments, and (ji) all necessary endorsements and approvals for the availability of all water, telephone, sanitary sewer, storm sewer, gas, electricity and other utilities necessary for the development, construction and operation of the Developer's Work. For purposes of this Development Agreement, no Required Permit shall be deemed to have been obtained until the same has been validly issued on terms and conditions reasonably satisfactory to Developer and without qualification or under qualifications and conditions reasonably acceptable to Developer. Upon full or partial completion of each phase of the Project Developments and prior to occupying any part of the Property for any purpose other than performing the Project Developments, and upon completion of any other Developer's Work, Developer shall obtain all approvals (collectively, “Required Approvals”) as may be necessary to permit such part of the Property to be used and occupied for the Permitted Uses, such as the permanent cettificate of ‘occupancy (permiso de uso) and the certificate of compliance issued by the Puerto Rico Fire Department under the purview of the Puerto Rico Fire Prevention Regulation. Developer may ‘occupy all or part of the Property under temporary or conditional certificates of occupancy, but shall not be relieved from the obligation of obtaining a permanent, full and unconditional certificate of occupancy for each phase of the Project Developments. Each Required Approval shall be deemed to have been obtained when the same has been validly issued on terms and conditions reasonably satisfactory to Developer, without qualification (except such qualifications as shall be reasonably acceptable to Developer) and all appeal periods have expired or, if appealed, a final decision has been entered upholding the Required Approval, as issued, which final judgment is itself unappealable.The Authority, without cost to it, shall execute and deliver any required documents which may be necessary to obtain or maintain any Required Permit or Required Approval and shall further cooperate with and assist Developer in obtaining or maintaining any Required Permit or Required Approval, as Developer may from time to time reasonably request; provided, however, that, the Authority shall in no event be required to join in or become a party to any document or proceeding in which it will oppose the Commonwealth or any agency, authority, branch, commission, division, office or subdivision of the Commonwealth, nor shall the Authority be required in connection with any such document or proceeding or otherwise to oppose in any way any policy previously established and made public by the Authority nor to take a position inconsistent with a position previously taken and made public by the Authority. Developer may contest, in good faith, the validity or applicability of any law, rule, ordinance, order, regulation or code which is the basis for any Required Permit or Required Approval. 3.8 Construction Compliance. All Developer’s Work shall be constructed in compliance with Article 11 and all requirements of law, and with all applicable ordinances, orders, rules, regulations and requirements of all Government Authority relating thereto, including, without limitation, the Building Code of Puerto Rico. .9 Force Majeure. A delay in, or a failure of, performance by Developer in the performance of its obligations under this Agreement shall not constitute a default under this Development ‘Agreement to the extent that such delay or failure of performance (i) was caused by the Authority, or any of its officers, directors, agents, contractors or subcontractors; (ii) was caused by an act, event, circumstance or condition which was unforeseeable or, if foreseeable, could not be avoided or prevented by Developer's exercise of reasonable diligence and materially interferes with the performance of Developer's obligations under this Development Agreement; (ili) results from acts of God, act of terrorism, bioterrorism, act of war (declared or undeclared), riot or revolution, act of public enemy, civil insurrection, fire, or any natural disaster (including without limitation, hurricanes and earthquakes); (iv) results from strikes or other labor disturbances not attributable to the failure of Developer to perform its obligations under any applicable labor contract or law that directly and adversely affect Developer; (v) was caused by the revocation or suspension of effectiveness of any Required Permit or Required Approval after it was final and unappealable and all applicable statutory and administrative requirements were satisfied and complied with by Developer during the application and implementation process; (vi) any delay in the issuance of any Required Permit and in the availability of any Off-Site Works and the Bulkhead Project ‘without prejudice to the termination rights afforded to the Parties in Section 1.8 and the rights of Developer to pursue the Off-Site Works and the Bulkhead Project, or any portion thereof, and/or (vii) was caused by an act of civil disobedience (events in () through (vii), each, a “Force Majeure Event”). The following shall, in no event, be deemed to be Force Majeure Events: inability to obtain financing or draws thereunder; inability to obtain permits and approvals, including without limitation all Required Permits and Required Approvals; delays due to existing soil conditions; delays of, or changes in, or cancellation of the construction of roadways, transportation infrastructure and related improvements not affecting the viability of the Master Development Works or the construction of any phase of the Project Developments; inability to obtain construction supplies; any act, event or circumstance that would not have occurred if Developer has complied in all material respects with its obligations under this Development Agreement; 10changes in interest rates; inflation rates; wage rates; insurance costs; commodity prices; currency values, exchange rates or other general economic or financial conditions; changes in Developer's financial condition; change in law unrelated to the effectiveness of any Required Permit or Required Approval duly obtained by Developer through its regulatory process (it being agreed that a change in law which is related to the effectiveness of a Required Permit or Required Approval 0 obtained, shall be deemed a Force Majeure Event); any impact of prevailing wage or similar law, customs or practices on Developer's costs; or mechanical failure of equipment; provided. however, that if any of the excluded factors arise from or is affected by a Force Majeure Event, then their occurrence (and any subsequent delay caused thereby) is also considered a Force Majeure Event. Developer agrees to use diligent commercial efforts to minimize the delay and other adverse effects of any Force Majeure Event and effect all commercially reasonable mitigation actions necessary and available to revert to compliance with this Development Agreement. A breach of the foregoing covenant shall be deemed an Event of Default; provided. however, that a prior written notice is given to Developer and a reasonable time to cure any such breach is granted; provided. further, that if during the continuance of an Force Majeure Event and such curing period, Developer is undertaking commercially reasonable efforts to cure any such Event of Default by mitigation of the effects of such Force Majeure Event, then, such curing period shall be extended during such period of time within which Developer is actively pursuing the cure of any such Event of Default. 3.10 Notice of Force Majeure Event. Developer shall provide the Authority with prompt written notice in accordance with the provisions of Section 13.2 of any Force Majeure Event or any alleged default by the Authority excusing its delay or non-performance. Developer shall keep the Authority reasonably informed of any development pertaining to such Force Majeure Event. 3.11 Reproducible Drawings. Upon Final Completion of each Project Development, or any portion thereof, Developer shall prepare, at its expense, and deliver to the Authority, for information purposes only, one reproducible set and one in digital form of as-built plans showing such Project Development. 3.12 Prevailing Wage. All contracts for the construction of the Developer's Work shall require Developer’s contractors and their subcontractors to pay the prevailing level of wages, as established by the United States Congress or by the corresponding Federal governmental authority. 3.13 Payment and Performance Bonds. Developer shall, prior to commencing work on each component of the Developer's Work (or any alteration thereof or any other phase of the Project Developments, with an aggregate cost in excess of $2,000,000), cause to be obtained and delivered by the subcontractors of the general contractor of such component of the Developer's Work with contracts in excess of $1,000,000 payment and performance bonds naming the Authority or any Permitted Mortgagee (if so required), as an obligee thereunder, in form and substance and with sureties reasonably satisfactory to the Authority and the Permitted Mortgage, if any (each, a “Payment and Performance Bond”); provided, however, that the foregoing shall be subject and subordinate in all respects to any and all rights of the Permitted Mortgages, in and to any Payment and Performance Bonds under the terms of such agreements providing for financing for the development and construction of any of the Developer’s Work. The Permitted Mortgage shall control the uses to which the proceeds shall be applied. The Permitted Mortgagee shall notify the Authority of any disbursement requests made under the Payment and Performance Bonds and shall nprovide evidence of the application of such proceeds. 3.14 Damage to Infrastructure or Improvements, Construction and other activities conducted by Developer shall not result in any unreasonable interference, damage or alteration to any infrastructure constructed by the Authority, if any, at any of the Project Developments. Developer agrees to indemnify, defend and hold harmless the Authority, its directors, officers, officials, employees and agents, against any and all claims, damages, expenses (including reasonable attomeys’ fees and court costs) and liabilities of any nature whatsoever asserted against, or incurred by the same, in connection with any damage or alteration to such infrastructure caused by Developer, its officers, employees, agents or independent contractors, excluding, however, those attributable to the negligence or willful misconduct of the Authority or its directors, officers, officials, employees, contactors and/or agents. 3.15 Liability. Neither the Authority nor any of its employees, officers, directors or agents, shall be liable for any claims, expenses or damages (whether direct, indirect, consequential or otherwise) to Developer, its Affiliates, subsidiaries, successors, assigns, agents, employees, contractors, subtenants, concessionaires or invitees or to any user of the Property or to any other party arising out of, caused by or in connection with: (a) the approval or disapproval or failure to approve or disapprove any plans or Required Permit or Required Approval; (b) enforcement or failure to enforce any site maintenance or similar requirements imposed upon Developer; (c) the approval or disapproval of any plans for improvement to any parcels adjacent to, or in the proximity of, the Property (other than with respect to the Adjoining Parcels); (d) the development or construction of, or the failure to develop or construct, any improvements (including landscaping) on parcels adjacent to, or in the proximity of, the Property; or (e) defects (whether latent or otherwise) in the approved plans or deficiencies in the Required Permits and the Required Approvals. Developer and its successors and assigns shall indemnify, defend and hold harmless the Authority and its officers, directors, employees or agents from any and all liability, damages and costs, including reasonable attorneys’ fees and court costs actually incurred, regardless of whether suit is brought or any appeal is taken therefrom, arising out of, caused by or in connection with (but excluding those attributable to the negligence or willful misconduct of the Authority and directors, officers, employees and agents) (a) any approval given or denied by the Authority to Developer under this Development Agreement; (b) any failure to maintain a parcel as required herein; (c) any breach by Developer of its obligations under this Development Agreement or under Applicable Law or (4) any negligent act of Developer or its employees, officers, directors and agents. 3.16 Other Phases of the Project Developments. The provisions of this Article 3 shall apply to the development and construction by Developer of any subsequent phase of the Project Developments in the Property and the Adjoining Parcels and the Adjoining Parcels MTZ. 3.17 Permitted Uses. Subject to the restrictions and conditions stated in this Development Agreement, Developer shall use the Property for the construction, development, use, management, ‘operation, lease or disposition of any Project Development and other accessory facilities, amenities and improvements necessary or appropriate in connection therewith (the “Permitted Uses”), and for no other uses. Developer shall not, under any circumstances, modify the Concept Schematic Design Drawings in any material respect, or convert the Property, or any portion thereof, to uses other than those specified herein, if any such modification or alteration will cause a materialadverse effect on the Project Developments taken as whole and not individually, except with the express written consent of the Authority, not to be unreasonably denied, withheld, conditioned or delayed; provided, however, and for the avoidance of any doubt, that any modification, alteration or deviation from the Concept Schematic Design Drawings that is consistent with industry practices in the development and construction of similar projects, will not require the Authority’s consent and will not be considered to have a material adverse effect to the Project Developments. ARTICLE 4 PUBLIC SPHERE AND NON-ASSESSMENT OF BENEFIT CHARGES. Developer shall undertake, or cause the undertaking by third parties, at its or such third party’s sole cost and expense, the construction and operation of all common areas that will serve the Project Developments, such as all public streets within the Parcels, its adjoining sidewalks and all other areas that will comprise the public realm of the Project Developments. Specifically, Developer will, or will cause the undertaking by third parties to, light, equip, repair, maintain and replace all elements which are part of the common areas serving and benefitting the Project Developments. The Authority will not assume any of the foregoing undertakings. Given that the Authority will not construct, operate and maintain the common areas of the Property and will not fund any improvement that may be construed as a Betterment or Improvement Project (Proyecto de Mejoramiento), as such term is defined in Section 1.03 (f) of the Enabling Act, the Authority will not assess and charge any “Benefit Charge” under Section 4.02(b) of the Enabling Act. ARTICLE 5 REPAIRS, MAINTENANCE AND ALTERATIONS Developer shall take, or cause third parties to take, good care, or shall cause through recorded covenants and conditions consistent with projects of similar size and type (the “RCC”) on each private parcel where each Project Development shall be constructed that good care be taken, of the Property (including, without limitation, all improvements now or hereafter erected thereon, all doors, windows and their appurtenant equipment, mechanical and manual barriers, directional markers and signs, painting, lights, electrical systems, sanitary facilities, plumbing, and all other equipment and appurtenances used in the operation of each Project Development) and all sidewalks, curbs and entrance ways adjoining the same, cleaning and laridscaping, lighting, and shall keep the same, or cause to be Kept, in good order and condition, and shall make, or cause to bbe made, all necessary repairs thereto, interior and exterior, structural and non-structural, ordin; and extraordinary and foreseen and unforeseen, except for (i) reasonable wear and tear, and (ii) damage from a taking or from fire or other casualty; provided, however, that any default by any Person subject to the RCC shall not be a default by Developer and Developer's only liability will be to pursue, or cause a third party to pursue, in the ordinary course, the compliance by any such Person with the RCC. 13ARTICLE 6 INSURANCE AND INDEMNITY 6.1 Insurance. (@) Casualty Insurance. Developer, at its sole cost and expense, shall keep in fall force and effect casualty insurance on the Master Development Works and cause to be kept in full force and effect casualty insurance on each Project Development through recorded covenants and restrictions including equipment, trade fixtures, furniture, furnishings and other personal property supplied or installed by Developer, in amounts sufficient at all times to prevent Developer or the sub-tenant from becoming a co-insurer under the provisions of applicable policies of insurance or ‘under such terms and conditions as may be required under any Permitted Mortgage or related loan document. (b) Builder's Risk. During the construction of any permitted alteration or such other improvements as are located on the Property, Developer shall also keep in full force and effect, at sole cost and expense, builder’s risk insurance against loss or damage on a completed value non-reporting basis covering such hazards and in such amounts as the Authority may reasonably require. 62 Liability Insurance. Up to Final Completion of the last phase of the Project Developments, Developer shall maintain for the mutual benefit of the Authority and Developer, ‘and naming the Authority as an additional insured, comprehensive broad form commercial general liability insurance (including garage liability with auto liability, pollution liability, and premises liability with coverage for property in the care, custody, or control of the insured) against claims for personal injury, death, and property damage arising from the conduct of the Developer’s Works and occurring upon, in or about the Property, and on, in or about the adjoining sidewalks and passageways or other areas appurtenant to the Property (including, without limitation, personal injury, death, and property damage resulting directly or indirectly from any change, alteration, improvement or repair thereof) with limits reasonably deemed adequate by the Authority to protect against judgments being awarded in the Commonwealth for injury, death and property damage. ‘AS of the date hereof, a combined single limit policy in the amount of $2,000,000 for bodily injury and death and for property damage shall be deemed adequate. 6.3 Insurance Carriers, Policies. All insurance provided for in this Article 6 shall be effected under valid and enforceable policies, issued by insurers of recognized responsibility licensed and doing business in the Commonwealth and having a so-called AM Best’s Rating of “A-” (Excellent) or better, or, if such rating is no longer issued, an equal or better rating by a successor insurance carrier rating service reasonably acceptable to the Authority. Prior to the Effective Date, and thereafter not less than ten (10) days prior to the expiration dates from time to time of the policies required pursuant to this Article 6, certificates of such insurance or, upon request of the Authority, duplicate originals of the policies, in either case bearing notations evidencing the payment of premiums or accompanied by other evidence reasonably satisfactory to the Authority of such payment shall be delivered by Developer to the Authority. ‘Nothing in this Article 6 shall prevent Developer from taking out insurance of the kind and in the amounts provided for under this Article under a blanket insurance policy or policies covering 4other properties as well as the Property; provided, however, that any such policy or policies of blanket insurance (a) shall specify therein, or in a written statement from the insurers under such policy or policies specifying the amount of the total insurance allocated to the Property, which amounts shall not be less than the amounts required by Sections 6.1, and 6.2, and (b) such amounts so specified shall be sufficient to prevent any of the insureds from becoming a co-insurer within the terms of the applicable policy or policies, and provided further, however, that any such policy or policies of blanket insurance shall otherwise comply as to endorsements and coverage with the provisions of this Article 6. 64 No Separate Insurance. Neither the Authority nor Developer shall take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article 6 to be furnished by, or which may reasonably be required to be furnished by Developer, unless the Authority and Developer are included therein as the insureds, with loss payable as provided in this Development Agreement. Each Party shall immediately notify the other of the placing of any such separate insurance and shall cause the same to be delivered pursuant to the requirements set forth in Section 6.3. All liability insurance policies obtained in accordance with this Article 6 shall be primary, over and above any other policy held by the Authority. 6.5 Adjustment. All policies of insurance provided for in Section 6.1 shall name Developer ‘or the Permitted Mortgagee as loss payee, as the case may be. Inthe case of damage or destruction, the loss shall be adjusted by Developer or by the Permitted Mortgage, as the case may be, and the proceeds of any such insurance, as so adjusted, shall be payable to Developer and disbursed to Developer to fund the restoration of the Project Development, as provided in Section 7.1(b) or applied in reduction of the obligations secured by the pledge of the mortgage note in turn secured by the Permitted Mortgage. All such policies shall provide that the loss, if any, thereunder shall be adjusted and paid as herein provided. Each such policy shall, to the extent obtainable, contain a provision that no act or omission of Developer or any tenant, guest, licensee, operator, or other ‘occupant of the Project Development shall affect or limit the obligation of the insurance company so to pay the amount of any loss sustained. 6.6 — Non-caneellation. Each policy or certificate issued by an insurer shall, to the extent obtainable, contain an agreement by the insurer that such policy shall not be canceled, non-renewed ‘or substantially modified without at least thirty (30) days” prior written notice to the Authority. 6.7 Waiver of Subrogation. If, and only if, permitted by the policies of insurance relating to the Property and the Developer's Work maintained by Developer, Developer hereby waives all rights of recovery against the Authority or any of its directors, officers, employees, agents and representatives, on account of loss or damage occasioned to Developer or its property or the property of others under its control to the extent that such loss or damage is insured against under ‘any insurance policies which Developer may have in force at the time of such loss or damage. Developer shall, upon obtaining policies of insurance relating to the Property and the Developer's Work, or portions thereof, which permit the aforesaid waiver, give notice to the insurance carrier or carriers that the foregoing waiver of subrogation is contained in this Development Agreement, and Developer shall endeavor to cause each such insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against the Authority or any of its directors, officers, employees or agents in connection with any damage covered by any such policy, at the sole cost of Developer. nes 10 1568 Developer Indemnification. Developer shall indemnify and save the Authority its directors, officers, employees and agents (each an “Authority Indemnified Party”) harmless to the extent permitted by law against and from all liabilities, obligations, damages, penalties, claims, ‘costs, charges and expenses, including without limitation reasonable architects’, engineers’ and attorneys’ fees, which may be imposed upon or incurred by or asserted against an Authority Indemnified Party by reason of any of the following occurrences after the Effective Date (but excluding those arising from negligence or willful misconduct of an Authority Indemnified Party, or their invitees, servants, licensees or contractors): (@ __ any work or thing done in, on or about the Property or any part thereof by Developer, its employees, contractors, agents, servants, or licensees; (6) any use, non-use, possession, occupation, condition, operation, maintenance or management of the Property, or any part thereof including any sidewalk, curb or other area appurtenant to the Property and, if outside the Property, under the control of Developer, by Developer, its employees, contractors, agents, servants, or licensees; (© _any negligence on the part of Developer or any of its agents, contractors, servants, employees, subtenants, licensees, operators, or invitees; © any accident, injury or damage to any Person or property occurring in, on or about the Property or any part thereof, including any sidewalk, curb or other area appurtenant to the Property and, if outside the Property, under the control of Developer, unless the same occurs solely as a result of the negligence or wrongful act of the Authority, its employees, contractors, agents, invitees, servants, licensees, or any other party; and (©) any failure on the part of Developer to perform or comply with any of the covenants, agreements, terms, provisions, conditions or limitations contained in this Development Agreement on its part to be performed or complied with. In case any action or proceeding is brought against the Authority or any the Authority Indemnified Party by reason of any claim arising out of any of the occurrences which Developer is required, pursuant to the preceding paragraph, to indemnify and save the Authority and any the Authority Indemnified Party harmless against and from, Developer upon written notice from the Authority shall at Developer's reasonable expense defend such action or proceeding using legal counsel reasonably satisfactory to the Authority. Developer shall not be obligated to indemnify the Authority or the Authority Indemnified Party to the extent that such losses, claims, damages, liabilities or related expenses result from the negligence, wrongful act or willfull misconduct of the Authority or such the Authority Indemnified Party. In the course of such defense conducted by Developer no compromise or settlement of such claims may be effected by Developer without the Authority's consent unless (i) there is no finding or admission of any violation of legal requirements or any violation of rights of any Person, and (ji) the sole relief provided is monetary damages that are paid in full by Developer. The Authority shall have no liability with respect to any compromise or settlement of such claims without its consent. ‘The foregoing express obligation of indemnification shall not be construed to negate or abridge any other obligation of indemnification running to the Authority or any the Authority Indemnified Party which would exist at common or civil law or under any other provision of this Development Agreement, and the extent of the obligation of indemnification shall not be limited 650; 10 16by any provision of insurance undertaken in accordance with this Article 6, but without duplication. The provisions of this Section 6.8 shall survive termination or expiration of this Development Agreement for a period of two (2) years. 6.9 Inconsistencies: Commercially Available. All the provisions of this Article 6 are limited and subject in all respects to the provisions of any Permitted Mortgagee loan documents and to the extent there is any inconsistency with any Permitted Mortgage loan documents, the requirement of the Permitted Mortgage loan documents shall prevail. Furthermore, the requirement under this Article 6 to obtain any specific insurance policy, limit, sublimit or scope of coverage, shall be limited to such insurance policy, limit, sublimit or scope of coverage being available in the Commonwealth at commercially reasonable terms, price and con: ARTICLE 7 DAMAGE OR DESTRUCTION 7.1 Casualty. In the event the whole of any undeveloped portion of the Property or a material portion thereof (which, for purposes hereof, shall mean such portion thereof as in the reasonable opinion of Developer renders the remainder of the Property not suitable for restoration to their pre~ existing condition or makes the operation thereof not economically viable) is destroyed, damaged or lost by fire or other casualty, while Developer is the owner, then Developer, at its sole and exclusive option, except as otherwise provided below, and subject to any agreement with any Permitted Mortgagee, by written notice to the Authority and to the Permitted Mortgagee, as may be required under the applicable Permitted Mortgage delivered within ninety (90) days following such casualty, shall elect any one of the following alternatives: (@ Election to Sell. In the event that Developer elects not to rebuild upon the ‘occurrence of a casualty described above, the Authority, subject to the rights of a Permitted Mortgages, shall have the right but not the obligation to repurchase the Property from Developer, for a price equal to the appraised value of the Property in its current as is condition, as established pursuant to Section 12.1. The Authority’s right to repurchase the Property shall expire one hundred and fifty (150) days after the casualty. Any amounts paid by the Authority shall first be applied to the satisfaction of any obligation directly related to the Developer's Work secured by a Permitted ‘Mortgage after the application of one hundred percent (100%) of the net insurance proceeds paid out from the policy required under Section 6.1. This in no way shall be interpreted as an acknowledgement of liability by the Authority before any Permitted Mortgage. Any amounts payable by the Authority, shall be calculated after deducting all Authority’s reasonable expenses ‘incurred in good faith in connection with the enforcement of the above remedies. The provisions of this Section 7.1 (a) shall survive the expiration or termination of this Agreement. If the Authority elects not or fails to exercise its right to repurchase, or in the event that it exercises such right, but fails to close prior to the expiration of the aforesaid one hundred and fifty (150) day period, Developer shall have the right to sell the Property to a purchaser that satisfies the requirements of Section 9.1 (6) Election to Rebuild. Developer may elect to promptly rebuild. In such event, Developer shall fully and promptly complete with diligence such reconstruction subject to the construction conditions of Article 3 and subject to the availability of insurance proceeds. In the event that a non-material portion of the Developer's Work is destroyed, damaged or lost by fire or other casualty (which for purposes hereof, shall mean such portion as in the 7reasonable opinion of Developer is suitable for restoration to its pre-existing condition and does not adversely affect the operation of the Project Developments during the restoration period), Developer, subject to the availability of insurance proceeds, shall restore, repair, replace, rebuild or alter the same as nearly as possible to its condition immediately prior to such damage or destruction, all in conformity with and subject to the conditions of Article 3. Developer shall timely commence and complete the restoration, repairs, replacements, rebuildings or alteration immediately after the later of (i) the date insurance proceeds are made available by the insurance company; and (ji) the date on which all Required Permits have been obtained and Developer shall thereafter prosecute the same continuously to completion with diligence. 7.2 Inconsistencies. Ail the provisions of this Article 7 are limited and subject in all respects to the provisions of any Permitted Mortgagee loan documents and to the extent there is any inconsistency with any Permitted Mortgagee loan documents, the requirements of the Permitted Mortgagee loan documents shalll prevail ARTICLE 8 EMINENT DOMAIN 8.1 Authority's Power of Eminent Domain. Nothing in this Development Agreement shall limit the eminent domain power of the Authority. Developer reserves to itself, however, any and all ofits rights to object to any eminent domain proceeding or taking (except that Developer shall not object to such a proceeding or taking on the grounds that the Authority has contracted away its eminent domain powers) and to pursue any and all remedies in connection with an eminent domain proceeding and not for breach of contract or any other claim in connection with this Development ‘Agreement. ARTICLE 9 TRANSFERS OF DEVELOPER'S INTEREST 9.1 Assignment. Except as otherwise provided herein and in Section 9.4 and as otherwise permitted in the Operating Agreement, Developer shall not directly or indirectly assign, transfer, or otherwise alienate its estate-or other interest under this Development Agreement without the prior written consent of the Authority, which may be withheld or granted in the Authority's sole discretion during the Construction Period. Without limiting the provisions Section 9.2 and 9.3 belo®, after the Final Completion of the last Project Development, Developer, subject to the provisions of Sections 9.4 and with the Authority's and any applicable Permitted Mortgagee’s consent, which shall not be unreasonably withheld, delayed, conditioned or denied, may assign its interest under this Development Agreement, except that Developer or the permitted assignee may not convert the Property or any portion thereof to other uses other than the Permitted Uses or modify the Concept Schematic Drawings in violation of Section 3.17. In furtherance but not in limitation of the foregoing, it shall be reasonable for the Authority and any applicable Permitted Mortgagee to withhold each of their consent in the event the proposed assignee (i) does not have the financial wherewithal to perform the obligations of Developer under this Development Agreement; (ji) the assignee does not have property management experience and good qualifications in the operation of projects similar to the Project Developments then being operated con the Property; (ii) has been subjected to a successful foreclosure or bankruptcy proceeding; and (iv) because of the Authority's special concems as a public entity, does not have acceptable character or reputation in the community, whether or not such concerns would be important to a e500 18commercial enterprise. In conjunction with Developer's request for the Authority's and the Permitted Mortgagee’s required approval pursuant to this Section 9.1, Developer shall provide the Authority and the Permitted Mortgage with banking and financial information with respect to the proposed assignee reasonably sufficient to enable the Authority and the Permitted Mortgagee to determine the creditworthiness of the proposed assignee and such other information as the Authority and the Permitted Mortgage may reasonably request in connection with the Authority's and the Permitted Mortgagee’s evaluation of the proposed assignee. Upon making an assignment in accordance with this Section 9.1, Developer shall furnish the Authority and the Permitted Mortgagee promptly with an executed copy of the instrument of assignment executed by the assignee, in which such assignee assumes and agrees to observe and perform all the covenants, conditions and agreements set forth in this Development Agreement on the part of Developer to be observed or performed. Upon the execution and delivery of such assumption agreement consistent with the conditions contained herein and, to the extent applicable, compliance by such assignee with the Applicable Laws or any successor statutes, the assignor shall be relieved from all further liabilities and obligations hereunder, but until such time, and in respect of obligations arising prior to such time, the assignor will remain fully and directly liable on all Developer's obligations hereunder. The foregoing provisions concerning assignments and transfers shall apply to voluntary and involuntary assignments and transfers (other than to a Permitted Mortgagee), and to assignments and transfers by operation of law, and shall include transfer, sale, merger or consolidation of the stock or partnership or other beneficial interests of Developer or any beneficiary of Developer. In addition to the foregoing, Developer may assign or transfer, in whole or in part, its rights, title and interests under this Development Agreement to any Wholly-Owned Subsidiary, affiliate or parent entity of Developer without the Authority’s and any Permitted Mortgagee’s consent (unless otherwise provided in the Permitted Mortgage holding the first rank or in any other loan document related thereto), but subject however to a prior thirty (30) day written notification to the Authority and to the Permitted Mortgagee. In the event of an assignment to an affiliate or subsidiary of Developer, Developer shall remain fully liable under this Development Agreement. Any attempted assignment or transfer in violation of this Section shall be void. 9.2 Leases: Surface Rights: Sale or Disposition. Notwithstanding any other provision contained herein to the contrary (a) Developer and Developer's permitted successors and assigns shall have the right without the Authority's consent to enter into a lease and/or any surface right with any Person of any portion of the Property for any of the Permitted Uses and other uses that are customary for each of the components of the Project Developments. (b) Developer shall have the right to sell, contribute or otherwise transfer title to any portion of the Property to any Person, subject to the RCC and with the purpose of such Person assuming the obligation to develop, construct, use and operate the corresponding Project Development in any such portion of the Property in accordance with the terms of this Agreement. 93 Mortgages. Developer and its successors and assigns shall have the right to, from time to ‘time, mortgage, pledge or conditionally assign the Property (each a “Permitted Mortgage”) to any lender (each a “Permitted Mortgagee). 199.4 Prohibited Transfers. Notwithstanding any other provision contained herein to the contrary and except as otherwise provided in the Operating Agreement, Developer shall not assign, lease, encumber or otherwise transfer any of Developer's interest in the Property or in any of the Project Developments (collectively, “Developer's Interest in the Property”) or any equity interest in Developer in excess of five percent (5%) of all equity interests in Developer (unless a transfer of a lesser interest is prohibited by law), to any Disqualified Person; provided, however, that with respect to the sale of residential units, Developer will not have the obligations to confirm the eligibility of any Person buying such residential unit. The term “Disqualified Person” shall mean: (@__AnyPerson (or any Person whose operations are directed or controlled by a Person) that Developer has actual knowledge has been convicted of or has pleaded guilty in a criminal proceeding for a felony or a crime listed in Act Number 2 approved on January 4, 2018 or that is an on-going target of a grand jury investigation convened pursuant to applicable requirements concerning organized crime prior to the effective date of the proposed assignment, sublease, encumbrance or other transfer of Developer's Interest in the Property; or (b) Any Person organized in or controlled from a country, the effects of the activities with respect to which are regulated or controlled pursuant to the following United States laws and the regulations or executive orders promulgated thereunder: (i) the Trading with the Enemy Act of, 1917, 50 U.S.C. App. § 1, et seq., as amended; (ii) the Intemational Emergency Economic Powers Act of 1976, 50 U.S. C. § 1701, et seq., as amended; (iii) the Anti-Terrorism and Arms Export Amendments Act of 1989, codified at Article 6(j) of the Export Administration Act of 1979, 50 U.S.C. App. § 2405W, as amended; (©) __A Specially Designated National or Blocked Person or an entity in which a Specially Designated National or Blocked Person has an interest. For purposes of this Development Agreement “Specially Designated National or Blocked Person” means (i) a person or entity designated by the U.S. Department of Treasury's Office of Foreign Assets Control from time to time as.a “specially designated national or blocked person” or similar status, or (ii) a person or entity described in Article 1 of U.S. Executive Order 13224, issued on September 23, 2001. As of the Effective Date, a list of such designations and the text of the Executive Order are published under the Intemet website address. http://www treasury. ov/resource-center/sanction: List/Pages/default.aspx; or (Any Affiliate of any of the Persons described in paragraphs (a), (b) or (c) above. ARTICLE 10 TERMINATION AND DEFAULT 10.1 Events of Default. If any one or more of the following events (each, an “Event of Default”) shall occur, the Authority may declare Developer in default under this Development Agreement and terminate the same upon due notice as provided herein below: (If the Closing Date does not occur on or prior to the expiry date of the Pre- Development Period, subject to delay caused by Force Majeure or delays caused by the Authority; or (b) _If Developer has failed to complete the performance of each and every Master Development Work prior tothe expiry date of the Pre-Development Period, subject to delay caused caszet710 20by Force Majeure or delays caused by the Authority; or (© If the Construction Commencement Date of each Project Development is not attained prior to the expiration of a twenty-four month period after the groundbreaking period or groundbreaking date set forth in the attached Schedule IV; or @ If any representation or warranty provided by Developer in this Development Agreement shall be false or misleading in any material manner and such default is not remedied within thirty (30) days after Developer's receipt of written notice from the Authority specifying the items in default; or (©) If defaule shall be made in the performance of or compliance with any of the agreements, terms, covenants or conditions in Article 11, for a period of ninety (90) days after notice from the Authority to Developer specifying the items in default; provided, however, that the Authority and Developer agree that, during such ninety (90) day period, the Authority and Developer shall negotiate in good faith to agree on a remediation program or plan to be thereafter undertaken to provide for the performance of or compliance with such agreements, terms, covenants and conditions that is reasonably acceptable to the Authority and Developer, and in the event that the Authority and Developer shall so agree, any such default shall be deemed to have been cured hereunder, provided Developer is diligently proceeding with such remediation program or plan; or () Ifa default shall be made by Developer in the performance of or compliance with any of the agreements, terms, covenants or conditions in this Development Agreement, other than those referred to in paragraphs (a) - (€) of this Section, for a period of thirty (30) days after notice fiom the Authority to Developer specifying the items in default, or in the case of a default or a contingency which cannot with due diligence be cured within the thirty (30) day period, Developer fails to proceed within such thirty (30) day period to cure the same and thereafter to prosecute the curing of such default with diligence (it being intended in connection with a default not susceptible of being cured with diligence within such thirty (30) day period that the time of Developer within which to cure the same shall be extended for such period as may be necessary to complete the same with all diligence); then, and upon the occurrence of any event described in paragraphs (a), (b) and (4) through (f) of this Section, the Authority, at any time thereafter, may give written notice to Developer specifying such Event or Events of Default and stating that this Development Agreement shall expire and terminate on the date specified in such notice, which shall be at least thirty (30) days after the giving of such notice, and upon the date specified in such notice this Development Agreement and all rights of Developer under this Development Agreement shall expire and terminate (unless prior to the date specified for termination, the Event or Events of Default shall have been cured). With respect to a default under paragraph (c) of this Section, the Authority shall have the right to repurchase, within one hundred and fifty (150) days from receipt by Developer of the notice of default sent by the Authority, the portion of the Property where the defaulting Project Development is located or Would have been located, for a price equal to the appraised value of such portion of the Property, in its current as is condition, as established pursuant to Section 12.1. If the Authority elects not to, or fails to, exercise its right to repurchase, or in the event that it exercises such right, but fails to close prior to the expiration of the aforesaid one hundred and fifty (150) day period, Developer shall have the right to sell the Property to a purchaser that satisfies the requirements of 21Section 9.1. 10.2 No Waiver. No failure by either the Authority or Developer to insist upon the strict performance of any agreement, term, covenant or condition hereof or to exercise any right or remedy consequent upon a breach thereof and no failure to declare an Event of Default, shall constitute a waiver of any such breach or of such agreement, term, covenant or condition. No agreement, term, covenant or condition hereof to be performed or complied with by either the Authority or Developer, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by the Parties. No waiver by the Authority or Developer of any breach shall affect or alter this Development Agreement, but each and every agreement, term, covenant and condition hereof shall continue in full force and effect with respect to any other then existing ‘r subsequent breach thereof. 10.3 Injunctive Relief. In the event of any breach or threatened breach by the Authority or Developer of any of the agreements, terms, covenants or conditions contained in this Development Agreement, the Authority or Developer as the case may be, shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though other remedies were not provided for in this Development Agreement. 104 Remedies Cumulative. Each right and remedy provided for in this Development Agreement shall be cumulative and shall be in addition to every other right or remedy provided for in this Development Agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Authority or Developer of any ‘one or more of the rights or remedies provided for in this Development Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous of later exercise by the Party in question of any or all other rights or remedies provided for in this Development Agreement or now or hereafter existing at law or in equity or by statute or otherwise. 10.5 Termination on Dissolution of the Authority. This Development Agreement shall not be affected by the dissolution of the Authority or transfer of its properties to the Commonwealth ‘or any other entity and the rights created hereby shall continue in effect, notwithstanding such dissolution or transfer. If, notwithstanding the foregoing, the Authority is dissolved by the Commonwealth pursuant to the Enabling Act or otherwise, and either the courts or the successor agency to the Authority, if any, is successful in terminating this Development Agreement, such termination shall be deemed a default by the Authority hereunder and, in addition to whatever other remedies it may have, Developer shall be entitled to liquidated damages in an amount which is the greater of (i) the fair market value of the Property, as established pursuant to Section 12.1 or (i) the sum ofall the then outstanding indebtedness (including all prepayment penalties, premiums or other similar charges due or payable upon premature payment thereof) secured by any Permitted Mortgage. Such a termination of this Development Agreement shall not be deemed successfully concluded for the purposes of this provision until (x) Developer consents to such termination in writing, or (y) a court of competent jurisdiction shall have upheld such a termination and i decision is final beyond all appeals and applicable appeal periods. The Authority shall be obligated to pay the reasonable legal costs incurred by Developer in connection with such termination and the collection of liquidated damages hereunder. The provisions of this Section shall survive the 0630597:10termination of this Development Agreement. ARTICLE 11 NON-DISCRIMINATION AND EQUAL OPPORTUNITY COVENANTS 11.1 Non-Diserimination. With respect to its exercise of all rights and privileges granted herein, Developer agrees that Developer will and will contractually obligate its successors in interest, sub-lessees, licensees, operators, and assigns to: (@) Not discriminate against any Person, employee, or applicant for employment because of race, color, religion, national origin, age, sex, sexual orientation, disability, or Vietnam era veteran status in the use of the Property and the Project Developments, including the hiring and discharging of employees, the provision or use of services, and the selection of suppliers and contractors. (©) Conspicuously post notices to employees and prospective employees setting forth the fair employee practices law of the Commonwealth. (© Comply with all Applicable Laws, and the Authority's rules and orders (provided and orders, copies of such rules and orders have been rights and equal opportunity unless otherwise exempt, that, provided to Developer) pertaining to ci therefrom. 11.2 Non-Compliance. Non-compliance by Developer, its successors in interest, sub- lessees, licensees, operators or assigns with the above provision of this Article shall constitute a material breach of this Development Agreement. Developer shall indemnify and hold harmless the Authority from any claims and demands of third parties resulting from non-compliance with any of the provisions of this Article 11. This Article 11 shall survive the expiration or earlier termination of this Development Agreement. ARTICLE 12 APPRAISAL 12.1 Appraisal. As set forth in Sections 7.1, 10.1, and 10.5 above, in the event that a determination of the fair market value of the Property pursuant to those Sections cannot be made by agreement of the Authority and Developer, such determination shall be made in accordance with the following procedures (the “Appraisal”): (@) __ the Authority and Developer shall each name one (1) impartial appraiser with a third impartial appraiser to be chosen, if necessary, as below provided. The Party calling for use of the Appraisal shall appoint its appraiser in its notice to the other Party requiring use of the Appraisal, and the other Party shall appoint its appraiser by written notice within fifteen (15) days after receipt of notice by it from the first Party. Ifthe second Party does not appoint its appraiser within fifteen (15) days after receipt of notice, the appraiser designated by the first Party shall decide the dispute on its own. Any and all such impartial appraisers (including the third appraiser, if it is necessary for a third appraiser to be chosen) shall be qualified, independent professionals having at least ten (10) years ownership, management or consulting experience in real estatetransactions involving similar commercial properties in the Commonwealth, and shall be “Member, Appraisal Institute” or “Society of Real Estate Appraisers” appraisers (or appraisers certified by any successor entity to any such organization). (6) The impartial appraisers appointed as set forth above shall have thirty (30) days after appointment of the second appraiser (or expiration of the termn to appoint the same) to review all relevant documentation and to make their determination of fair market value and to submit their determination in writing to the Authority and Developer. (©) The unanimous written decision of the two first chosen appraisers (or one, if applicable), without selection and participation of a third appraiser, or otherwise the written decision of the three appraisers chosen as hereinafter provided, shall be conclusive and binding upon the Authority and Developer. If such two appraisers shall not have reached a unanimous decision within thirty (30) days after the appointment of the second such appraiser as set forth above, they shall select an impartial third appraiser, with the qualifications set forth in clause (a) hereof, to participate in making such determination. In the event such two (2) appraisers cannot agree on the selection of the third impartial appraiser, the selection shall be made by the American Arbitration Association. Such third and the first two chosen appraisers shall render their decision within thirty (30) days following the date of appointment of the third appraiser and shall notify the Authority and Developer thereof in writing. If the three (3) appraisers cannot reach un: the determination of fair market value, the average obtained by determining the total of those two of the three different values determined by the three appraisers which are the closest to each other and dividing such total by two shall be the fair market value. All decisions rendered pursuant to this Section shall be certified by the signature of all three appraisers (or of the first two appraisers chosen, where a determination is made without selection and participation of a third appraiser). Enforcement of any determination may be entered by any court of competent jurisdiction. 12.2 Rees and Expenses. The Authority and Developer shall each pay the fees and expenses of the appraiser appointed by them and shall divide equally all fees and expenses of the third appraiser, if appointed. ARTICLE 13 ‘MISCELLANEOUS 13.1 Entry on Property by the Authority. Developer shall permit the Authority and its authorized representatives to enter the Property at all reasonable times for the purpose of inspecting the same for compliance with the covenants and obligations of this Development Agreement and/or to gather empirical data relative to the usage of the Property as it affects the neighboring street system, or traffic conditions, provided that such inspections shall be subject to a reasonable prior notice to Developer and be conducted so as not to unreasonably interfere with the conduct of business therein by Developer. 13.2 Notices. Any and all notices, demands, requests, submissions, approvals, consents, disapproval, objections, offers or other communications or documents required to be given, delivered or served, or which may be given, delivered or served, under or by the terms and provisions of this Development Agreement or pursuant to law or otherwise, shall be in writing and shall be (i) delivered by hand; (i) sent by registered or certified mail, return receipt requested; (iisent by nationally recognized overnight delivery service; or (iv) sent by facsimile transmittal or email to the appropriate Party at the address specified below, or at such other address of which the other Party shall be duly notified: (@) Inthe case of notice or communication to Developer to: witn a copy to: or to such other address as Developer may from time to time designate by written notice to the Authority (6) Inthe case of notice or communication to the Authority with copy to: or to such other address as the Authority may from time to time designate by written notice to Developer.All notices shall be deemed received when (i) actually delivered if delivered by hang; (ii) on the receipt confirmation date if transmitted by facsimile or email; (iii) on the Business Day following the deposit of the notice with a nationally recognized overnight delivery service; and (iv) on the fifth (5") Business Day following mailing in the event the notice is mailed as provided above. 13.3. Severability. If any term or provision of this Development Agreement or the application thereof to any Person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Development 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 not be affected thereby, and each term and provision of this Development Agreement shall be valid and be enforced to the fullest extent permitted by law. 13.4 Estoppel Certificates, The Authority and Developer shall, without charge, at any time and from time to time, within ten (10) days after request by the other Party, certify by written instrument, duly executed, acknowledged and delivered to the Party making such request, or any other Person, specified by such Party: (2) that this Development Agreement is unmodified and in full force and effect, or, if there have been any modifications, that the same is in full force and effect as modified and stating the modifications; (b) that there has not occurred an Event of Default, or if there has occurred an Event of Default, a description of its nature; (©) whether or not, to the best knowledge of the Person executing the certificate on behalf of the Authority or Developer, there are then existing any claimed set-offs or defenses against the enforcement of any of the agreements, terms, covenants or conditions hereof and any ‘modifications hereof upon the part of the other Party to be performed or complied with, and, if so, specifying the same. Said certificate shall be substantially in the form of that attached hereto as Exhibit C. 13.5 Choice of Venue and Waiver of Jury Trial. The Parties submit to the jurisdiction of the Court of First Instance of the Commonwealth, San Juan Part. The Parties waive a trial by jury of any and all issues arising in any action or proceeding between them or their successors or assigns under or connected with this Development Agreement or any of its provisions, any negotiations in connection therewith, or Developer's use or occupation of the Property. 13.6 NoBrokers. The Authority and Developer mutually represent that they have dealt with no broker in connection with this Development Agreement. The Authority and Developer agree to indemnify and save the other harmless from any and all loss, cost, damage or expense incurred arising from their respective dealing with a broker. 13.7 Consents. Notwithstanding anything contained elsewhere in this Development Agreement, Developer shall have no claim, and hereby waives the right to any claim, against the 26‘Authority for money damages by reason of any refusal, withholding or delaying by the Authority of any consent, approval or statement of satisfaction, and, in such event, Developer's only remedies therefor shall be an action for specific performance or injunction to enforce any such requirement. Developer shall promptly reimburse the Authority, on demand, for all reasonable expenses including, without limitation, reasonable attorneys” fees and administrative fees incurred by the Authority (with the exception of any expenses incurred by the Authority in the review and approval of plans and specifications) in connection with all requests by Developer for the Authority’s consent or approval under this Development Agreement (including, without limitation review of assignments requests and request for the execution and delivery of non-disturbance and altormment agreements) and in connection with any amendments or modifications of this Development Agreement or any Permitted Mortgage. 13.8 Integration. All prior understandings and agreements between the Parties are merged within this Development Agreement, which alone fully and completely sets forth the understanding of the Parties; and this Development Agreement may not be changed or terminated orally or in any manner other than by an agreement in writing and signed by the Party against ‘whom enforcement of the change or termination is sought. The Recitals, Schedules and Exhibits are an integral part of this Development Agreement and by this reference are incorporated herein as an acknowledgment and acceptance of the declarations made therein, 13.9 Bind and Inure. The covenants and agreements herein contained shall bind and inure to the benefit of the Authority, its successors and assigns, and Developer and its permitted successors and assigns. 13.10 [Intentionally Omitted. 13.11 Enforcement of the Authority’s Liability. Anything contained in this Development Agreement to the contrary notwithstanding, but without limitation of Developer's equitable rights and remedies, the Authority’s liability under this Development Agreement shall be enforceable only out of the Authority's membership interests in Developer, and the right to receive distributions therefrom, and the assets applied by the Authority exclusively to the implementation of the Master Site Plan; and there shall be no other recourse or right to seek a deficiency judgment against the Authority, not shall there be any personal liability on the part of any member of its board of directors or any officer or employee of the Authority, or its agents and contractors, with respect to any obligations to be performed hereunder. 13.12. Captions. The captions of this Development Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Development Agreement nor in any way affect this Development Agreement. 13.13 [intentionally Omitted.] 13.14 Puerto Rico Law Governs. This Development Agreement shall be governed exclusively by, and construed and interpreted in accordance with, the laws of the Commonwealth, without, regard to rules of conflicts of law. 2713.15 ime of the Essence. Time shall be of the essence hereof. 13.16 Other Developments. Each Party acknowledges that the other Party owns (directly or through any Affiliate) and may acquire other properties in the vicinity of the Property. Nothing in this Development Agreement shall restrict each Party's right to own, operate, lease and otherwise engage in real estate activities with respect to such other properties (other than, in the case of the Authority with respect to its obligations relating to the Adjoining Parcels and the Adjoining Parcels MTZ), whether or not any such projects compete with the Property. 13.17 Reimbursements. The Authority and Developer acknowledge and agree that Developer's any agreement in this Development Agreement to pay or reimburse the Authority for any fees, costs and/or expenses incurred by the Authority for attomeys, engineers, consultants, accountants or the like, shall in all events be deemed to refer to and include only such reasonable fees, costs and/or expenses as the Authority may incur retaining outside third party attorneys, engineers, consultants, accountants and the like, and in no event shall the same be deemed to refer or include, ‘or constitute Developer's agreement to pay or reimburse the Authority for, any of the same incurred with respect to any of the Authority’s in-house attorneys, engineers, consultants, accountants or the like. 13.18 Independent Covenants. Each Party acknowledges and agrees that all of its covenants ‘and obligations contained herein are independent of the other Party’s covenants and obligations contained herein, Each Party shall neither be relieved from the performance of any of its covenants and obligations nor entitled to terminate this Development Agreement, due to a breach or a default by the other Party of any of its covenants or obligations, unless expressly permitted by the terms of this Development Agreement. 13.19 Special Government Requirements, (@ Economic Interests of Government Employees. Developer certifies that at the time of execution of this Development Agreement, it has no particular interest in any case or matter of any kind which involves a conflict of interest or conflict of public policy and will not accept any agreement of any kind which may cause a conflict of interest or a conflict of public policy with the Commonwealth, its agencies, instrumentalities and public corporations. To the best of Developer's knowledge no public official or employee who is empowered to evaluate, consider, approve, authorize or execute a contract in the name of the Authority, has or has had, during the last four (4) years before taking office, a direct or indirect pecuniary interest in Developer or any of its subsidiaries, parent entity or its Affliates. Developer certifies as to itself, its members, officers, managers and employees, or any member of their family unit, as it is defined in Act No. 12 of July 24, 1985, as amended, and, to the best of Developer's knowledge, as to its agents, that at the time of execution of this Development Agreement, they did not hold office as an employee of the Authority during the two 2) years before the execution of this Development Agreement. 28Developer certifies as to itself, its members, officers, managers, agents or employees, that at the time of execution of this Development Agreement, to the best of Developer’s knowledge, no public official or employee of the Authority, nor any member of their family unit, as itis defined in Act No. 12 of July 24, 1985, as amended, has or has had, during the last four (4) years before taking office, a direct or indirect pecuniary interest in Developer and that it does not know of any ‘employee of the Commonwealth who is part or has any interest in the gains or benefits of this Development Agreement. (©) Criminal Convictions. Developer certifies and guarantees that, at the execution of this Development Agreement, neither Developer nor any of its members, officers, managers or ‘managerial employees, have been convicted, and Developer has no knowledge of it or any of the aforesaid Persons being investigated, indicted or convicted in a criminal procedure in state or federal court for criminal charges related to the public treasury, the public trust, a public function, or a fault that involves criminal misuse of public funds or property or for any of the felonies or misdemeanors mentioned in Act No. 2 of January 4, 2018. It is expressly acknowledged that this certification is an essential condition of this Development Agreement. If the foregoing certification is false, it shall constitute sufficient cause to enable the Authority to terminate this Development Agreement immediately, and, if such conviction is related to this particular transaction, the Authority shall be entitled to require that Developer reimburse the Authority any amount of money Developer may have received from the Authority under this Development Agreement. Developer has also executed a sworn statement, attached herein as Exhibit D, to this effect and in accordance with Act No. 2 of January 4, 2018. If the status of Developer or its members, officers, managers, or managerial employees with regards to the criminal convictions previously mentioned in this clause should change at any time during the term of this Development Agreement, the Authority shall be immediately notified. The failure to comply with such notification obligations shall constitute a violation of this clause and shall result in the termination of this Development Agreement. (© Income Tax Retums. Developer certifies that at the Effective Date of this Development Agreement, Developer has submitted all income tax returns, if any, that were required to be submitted in the Commonwealth during the past five (5) years and that neither Developer nor its principals have any Tax Indebtedness with the Commonwealth or, if there is any such indebtedness, the same is subject to a payment plan approved by the corresponding governmental agency and that Developer or its principals, as the case may be, is current under the terms of any such payment plan. For purposes of this Development Agreement, a “ Indebtedness” means any debt for income, excise, property (personal and real estate) taxes, special assessments, license fees, and withholding of taxes as required by law, unemployment, disability and chauffeur’s insurance (if applicable). @ Submission of Certificates. Developer agrees, with respect to itself and to each of its principals, to submit to the Authority immediately after the Effective Date of this Development Agreement, the Certification of Filing of Returns (Form SC 2888) for the last five (5) years, a Certificate of Indebtedness (Form SC 3537 or such other form that may be adopted for said purpose by the Treasury Department), and the corresponding certificates of indebtedness issued by the Municipal Revenues Collection Center (CRIM), with respect to Developer, from the Department of Labor and Human Resourees concerning unemployment, disability and chauffeurs insurance, 29xs State Insurance Fund, ASUME concerning pensions for child support and by the corresponding ‘Municipality, as the case may be. © Tax Indebtedness Under Revision or Subject to Adjustment. Developer certifies that, to the best of its knowledge, it and its members do not currently have any tax indebtedness being revised or subject to adjustment by the Treasury Department of the Commonwealth. In the event that at any time during the term of this Development Agreement, Developer or any of its ‘members has a Tax Indebtedness that is being revised or subject to adjustment by the Treasury Department, Developer shall submit quarterly reports certified by the Treasury Department describing the status of the proceeding; provided further that Developer agrees that if, within thirty (G0) days of a final administrative determination Developer has not paid any Tax Indebtedness administratively determined to be due, the Authority may terminate this Development Agreement. (© _ Delivery of Organizational Documents. Prior to the execution of this Development Agreement, Developer shall have delivered to the Authority a copy of its organizational documents whereby Developer was constituted, and a good standing certificate issued by the State Department of the Commonwealth. 13.20 Developer’s Representations and Warranties. In order to induce the Authority to enter into this Development Agreement, Developer makes the following representations and warranties to the Authority, each of which shall survive the execution and delivery of this Development Agreement and shall be and remain true and correct at all times: (@) Existence and Capacity. Developer is a limited liability company duly organized and validly existing and in good standing under the laws of the Commonwealth and has full power and capacity to own its properties, to carry on its business as presently conducted, and to enter into and perform the transactions contemplated by this Development Agreement. (6) Authorization _and_Non-Contravention. Developer's execution, delivery and performance of this Development Agreement and the transactions contemplated herein have been duly authorized by all necessary corporate and/or legal actions and do not and shall not conflict with or constitute a default under its organizational documents, or any indenture, agreement or instrument to which Developer is a party or by which Developer or Developer's property may be bound or affected. (©) Compliance. Developer is and shall remain in full compliance with all covenants, terms, conditions and representations contained in this Development Agreement. Developer also shall comply at all times with all terms and conditions of any restrictive covenants affecting the Property, and with all Applicable Laws (including regulations promulgated by the local Board of Fire Underwriters for the prevention of fires). @ Binding _Obligations. This Development Agreement constitutes the valid and binding obligations of Developer, enforceable against Developer in accordance with its terms. (©) Hazardous Substances. Developer represents and warrants that it has not caused nor shall cause or permit the violation of any law relating to industrial hygiene or environmental conditions in connection with the Property, including soi! and ground water conditions, or use, 30generate, manufacture, store ot dispose of any Hazardous Substances on, under or about the Property. Developer shall take all remedial action as required by Applicable Law with respect to any Hazardous Substance on, under or about the Property not identified by Developer at or prior to the Effective Date or attributable to the actions or omissions of Developer. Without the Authority’s prior written consent, Developer shall not enter into any settlement agreement, consent decree or other compromise or agreement relating to any such Hazardous Substance which would adversely affect the Authority’s interest in the Property, or impose any liability on the Authority, except for emergency actions or actions required by Government Authority. Developer shall indemnify and hold the Authority harmless from any loss, liability, cost, expense and/or claim (including without limitation the cost of any fines, remedial action, damage to the environment and clean up and the fees and costs of attorneys and other experts but excluding those attributable to the negligence or willful misconduct of the Authority and its directors, officers, employees and agents) arising from the use, release or disposal of any Hazardous Substance on, under or about the Property by Developer or the transport of any Hazardous Substances to or from the Property by or for Developer; and the violation by Developer of any law, rule or regulation relating to industrial hygiene or environmental conditions in connection with the Property, including soil and ‘ground water conditions; the breach of any of the representations, warranties and covenants of Developer with respect to Hazardous Substances, and the actual or alleged contamination by Developer of the Property by hazardous waste or Hazardous Substances. The indemnification and hold harmless provisions of this paragraph will survive the termination or early cancellation of this Development Agreement. For purposes of this Agreement the term “Hazardous Substances” shall ‘mean any substance or material defined or designated as a hazardous or toxic waste material or substance, or other similar term by any Federal, Commonwealth or local environmental statute, regulation or ordinance presently or hereafter in effect, as such statute, regulation or ordinance may be amended from time to time except those substances that may be used in amounts reasonably necessary for the intended use of the Property as contemplated herein and in compliance with applicable environmental legal requirement. (f) Litigation. As of the date of this Development Agreement, there are no actions, suits or proceedings pending against or affecting Developer with respect to the Property or this Development Agreement before any court of law or equity or any administrative board or tribunal or before or by any Government Authority. 13.21 Third Party’s Beneficiary. Each Permitted Mortgagee shall be a third- party beneficiary with respect to the rights granted hereunder to Permitted Mortgages. 13.22 Authority's Cooperation. The Authority shall cooperate, at no out of pocket cost to the Authority, in securing tax grants (including, without limitation, under the Tourism Development Act of 2010 and the Tourism Industry Support Act of 2016), including the Tax Concession Agreement, permits, incentives, wage subsidies, marketing grants, rebates and other requirements specially related to any component of the Developer’s Work, including, without limitation the Opportunity Zone Designation. The Authority's cooperation shall include, but not be limited to, attending meetings with the Puerto Rico Department of the Treasury and the Puerto Rico Tourism Company, permitting agencies and financial institutions, and supporting and endorsing in writing any and all of the Project Developments and the relevant applications for tax exemption, permits and financing, upon request by Developer. Developer hereby declares that the Authority has not provided any representation or warranty or received any assurances in connection with the issuance of tax grants, permits, subsidies, marketing grants, rebates and the satisfaction of other 06205710, 31development requirements. The Authority declares and Developer accepts that it has received no assurances from the Authority in connection with the availability of a financing facility from any financial institution. 13.23 Compliance with the Enabling Act. Developer shall abide by the laws, ordinances, rules and regulations of the Commonwealth, and all other legal requirements, including without limitation, the Enabling Act, any rules and regulations approved thereunder and the Building Code of Puerto Rico. Developer hereby acknowledges the existence of the Master Site Plan and agrees to that it will notify the Authority any substantial or material modification or change thereto as and to the extent required by Applicable Law. 13.24 Operating Agreement. The Parties hereby covenant and agree to negotiate in good faith the terms and conditions that shall govern the Operating Agreement during a period of thirty (30) days following the Effective Date, such Operating Agreement to be consistent with the terms and conditions of this Agreement and, to the extent not inconsistent with this Agreement, the provisions of the Commitment Letter signed by the Authority and BUD on February 12, 2019 (the “Commitment Letter”). Without limiting the generality of the foregoing statement, the Parties hereby acknowledge and agree that the Operating Agreement shall address the matters set forth in the following sections of the Commitment Letter, in accordance with the framework established in such Commitment Letter: (i) The Joint Venture; (i) Purpose; (iii) Financing Capacity; (iv) Land Value; Capital Contribution; Financing; Distributions; ‘Transfers / Redemption / Buy-Out; Major Decisions; Manager; Related-Party Transactions; Other Provisions; Indemnification; and Assignability [SIGNATURE PAGE FOLLOWS] 32IN WITNESS WHEREOF, the Parties execute this Agreement as of the 29" day of March, 2019. AUTHORITY: DEVELOPER: PUERTO RICO CONVENTION CENTER — BU HARBOUR PARTNERS, LLC By: eet ‘Name: Federico J. Sanchez Ortiz Title: Authorized Representative Schedule I Definitions Schedule I — Graphical Description of the Parcels, the Adjoining Parcels, the Parcels MTZ. and the Adjoining Parcels MTZ Schedule III - Legal Description of the Parcels, the Adjoining Parcels, the Parcels MTZ and the Adjoining Parcels MTZ ‘Schedule IV — Phasing and Absorption ‘Schedule V—Permitted Encumbrances Exhibit A — Concept Schematic Design Drawings Exhibit B— Pre-Development Works Exhibit C— Form of Estoppel Certificate Exhibit D -Swom Statement cesaas97;10 33SCHEDULE DEFINITIONS As used in this Development Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): jing Parcels” has the meaning set forth in the recitals to this Development “Adjoining Parcels MTZ” has the meaning set forth in the recitals to this Development Agreement. “Agreement” has the meaning set forth in the introduction to this Development Agreement. “Affiliate” means, when used with respect to a specific Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the specified Person. “Applicable Law” means any law, ordinance, rule, regulation or requirement that is specifically applicable or related to the conduct of the Permitted Uses, or which shall affect the interior or exterior of the Project Development, or shall necessitate structural changes or improvements, or shall interfere with the use and enjoyment of the Property. XE “Appraisal” has the meaning set forth in Section 12.1. “ASUME” means Administracién para el Sustento de Menores. “Authority” has the meaning set forth in the introduction to this Development Agreement. Kk “Authority Indemnified Party” has the meaning set forth in Section 6.8. “BUD” means BU Development LLC, a Puerto Rico limited liability company. “Building Code of Puerto Rico” means the Puerto Rico Building Code of 2011, adopted by Regulation No. 7964 of December 22, 2011, including any amendment thereof. “Bulkhead Project” has the meaning set forth in Section 1.7. “Business Days” means any day except Saturday, Sunday and any other day which shall the Commonwealth a legal holiday. “Closing Date” has the meaning set forth in Section 1.3, 34.“Commitment Letter” has the meaning set forth in Section 13.24. “Commonwealth” means the Commonwealth of Puerto Rico. “Concept Schematic Design Drawings” has the meaning set forth in Section 3.4. “Concession Agreements” has the meaning set forth in the recitals to this Development ‘Agreement. “Concessions Terms and Conditions” means, as part of the Project Developments, the exclusive right to, and the quiet enjoyment of, the use, exploitation, design, development, financing, maintenance and operation of the maritime terrestrial zone, together with all buildings, structures, improvements, additional and permanent installations constructed and installed therein or thereon from time to time as follows (i) a period of no less than thirty (30) years; (ii) at least three (3) renewal periods of the original term; (iii) payment of a concession fee consistent with current practices of the applicable Government Authority; (iv) right to record at the Registry the same, in the name of Developer or any Wholly-Owned Subsidiary; (v) right to mortgage and/or collaterally assign its rights thereunder and; (vi) Developer and/or any Wholly-Owned Subsidiary to be the owners during the term and any renewal thereof, of all improvements erected or constructed therein or thereon. “Construction Commencement Date” has the meaning set forth in Section 3.4. “Construction Period” has the meaning set forth in Section 3.1. “Construction Project” has the meaning set forth in Section 3.1. “Control” means the possession, directly or indirectly, of the power to direct, or cause the tion of, the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto. “Credit Support Commitment” means that certain line of credit, equity contribution or credit enhancement to be provided by AECOM, any other financial institution, any private equity fund and/or any other forms of capital or financing sources in an amount sufficient to meet the required capital contributions (in the form of equity or debt) to support Developer’s obligations for the development of the Developer's Work, and as part of BUD’s initial capital contribution into Developer. “Deed of Consolidation of Properties” has the meaning set forth in Section 1.4. “Deed of Conveyance” has the meaning set forth in Section 1.4. “Developer” has the meaning set forth in the introduction to this Development Agreement. 35“Developer's Interest in the Property” has the meaning set forth in Section 9. “Developer’s Work” has the meaning set forth in Section 3.7 “Development Agreement” has the meaning set forth in the introduction to this Development Agreement. “Disqualified Person” has the meaning set forth in Section 9.4. “Easement Beneficiaries” has the meaning set forth in Section 3.2. “Effective Date” has the meaning set forth in the introduction to this Development Agreement. “Enabling Act” has the meaning set forth in the introduction to this Development Agreement. ‘Event of Default” has the meaning set forth in Section 10.1. “FAA” means the Federal Aviation Administration. “FDA MTZ” has the meaning set forth in the recitals to this Development Agreement. “EDA MTZ Concession” has the meaning set forth in the recitals to this Development Agreement. “EDA Parcel” has the meaning set forth in the recitals to this Development Agreement. a “Final Completion” has the meaning set forth in Section 3.1. “Fi “Fin: Completion Date” has the meaning set forth in Section 3.1. Plans” has the meaning set forth in Section 3.4. “Force Majeure Event” has the meaning set forth in Section 3.9. “Government Authority” means any federal, state, Commonwealth or local government or other political subdivision. “Hazardous Substances” has the meaning set forth in Section 13.20(¢). “Hotel Development” has the meaning set forth in the recitals to this Development Agreement. cosasso.10 36“Marina Development” has the meaning set forth in the recitals to this Development Agreement. “Master Development Works” has the meaning set forth in the recitals to this Development Agreement. “Master Site Plan” means the master plan for the Bahfa Urbana District as approved by the Puerto Rico Planning Board on its Resolution dated September 7, 2010 in Case Number 2008- 79-0620-IGU. “Off-Site Utilities” means, collectively, the water, sewer, electric and telecommunications utilities necessary up to the boundary line of the Property for the development, construction, use and operation of the Project Developments. “Off-Site Works” has the meaning set forth in Section 1.7. “Office Buildings Development” has the meaning set forth in the recitals to this Development Agreement. “Operating Agreement” has the meaning set forth in the recitals to this Development Agreement. “Opportunity Zone Designation” has the meaning set forth in Section 1.3. “Parcels” has the meaning set forth in the recitals to this Development Agreement. “Parcels MTZ” has the meaning set forth in the recitals to this Development Agreement. “Parcels MTZ Coneession” has the meaning set forth in the recitals to this Development Agreement. “Parking Development” has the meaning set forth in the recitals to this Development ‘Agreement. “Parties” has the meaning set forth in the introduction to this Developmént Agreement. “Party” has the meaning set forth in the introduction to this Development Agreement. “Payment and Performance Bonds” has the meaning set forth in Section 3.13. “Permitted Mortgage” means a mortgage held over the Property by any Permitted Mortgagee as authorized in Section 9.3. ones 0 37“Permitted Mortgage” has the meaning set forth in Section 9.3. “Permitted Uses” has the meaning set forth in Section 3.17. “Person” means and include any individual, partnership, joint venture, trust, unincorporated organization, company, association, corporation, limited liability company, institution, entity or party or a Governmental Authority “Pre-Development Period” has the meaning set forth in Section 1.2. “Pre-Development Works” has the meaning set forth in the Recitals. “Project Development” has the meaning set forth in the recitals to this Development Agreement. “Project Developments” has the meaning set forth in the recitals to this Agreement. “Property” has the meaning set forth in the recitals to this Development Agreement. “RCC” has the meaning set forth in Article 5. “Recreational Development” has the meaning set forth in the recitals to this Development Agreement. “Registry” has the meaning set forth in Section 1.4. “Required Approvals” has the mea ig set forth in Section 3.7. “Required Permits” has the meaning set forth in Section 3.7. “Residential Development” has the meaning set forth in the recitals to this Development Agreement. “Retail Development” has the meaning set forth in the recitals to this Development reement. “Specially Designated National or Blocked Person” has the meaning set forth in Section 9.4(C). “Tax Concession Agreement” has the meaning set forth in Section 1.3. “Tax Indebtedness” has the meaning set forth in Section 13.19(c). 38“USACE MTZ” has the meaning set forth in the recitals to this Development Agreement. “USACE MTZ Concession” has the meaning set forth in the recitals to this Development Agreement. “USACE Parcel” has the meaning set forth in the recitals to this Development Agreement. “Wholly-Owned Subsidiary(ies)” shall mean one or more wholly-owned subsidiaries of Developer constituted, created or formed to own, develop, construct and/or operate one or more of the Project Developments. 2859716 39SCHEDULE I LEGAL DESCRIPTION OF THE PARCELS, THE ADJOINING PARCELS, THE PARCELS MTZ AND THE ADJOINING PARCELS MTZ Parcels: (@ Lot L (which includes Lot K-1 and K-2) Property number 338, recorded in the Registry of the Property of Puerto Rico, First Section of San Juan, at page 14 of volume 17 of Puerta de Tierra, which is described as follows: “URBAN: Parcel of land comprising Parcels K-1, K-2 and L in the Fernandez Juncos Reservation Drawing, located in the Barrio of Puerta de Tierra, within the Municipality of San Juan, Puerto Rico, having a total area of 57,275.3699 square meters, equivalent to 14.5724 cuerdas, bounded on the NORTH, by the sidewalk that runs along Fernandez Juncos Avenue, which has been dedicated to public use and Parcel I; on the SOUTH, by the San Patricio Channel and Parcel J; on the EAST, by Parcel H and the Club Nautico; and on the WEST, by Parcel M.” (b) Lot M Property number 1,028, recorded in the Registry of the Property of Puerto Rico, First Section of San Juan, at page 160 of volume 44 of Puerta de Tierra, which is described as follows: “URBAN: Parcel of land marked as Parcel M, in the Ferndndez Juncos Reservation Drawing, located in the Barrio of Puerta De Tierra, within the Municipality of San Juan, Puerto Rico, having an area of 6,137.5025 square meters, equivalent to 1.5615 cuerdas, bounded on the NORTH, by the sidewalk that runs along Fernandez Juncos Avenue, which has been dedicated to public use; on the SOUTH, by the San Antonio Channel; on the EAST, by “Parcel L”; and on the WEST, by “Parcel N°.” Adioining Parcels: (@) FDA Parcel Property number 1,025 Bis, recorded in the Registry of the Property of Puerto Rico, First Section of San Juan, at page 146 of volume 44 of Puerta de Tierra, which is described as follows: “URBAN: Parcel of land marked as “Parcel I” on the Fernindez Juncos Reservation Drawing, located on the Barrio of Puerta de Tierra, within the Municipality of San Juan, Puerto Rico, having an area of 16,563.8955 square meters, equivalent to 4.2143 cuerdas, bounded on the NORTH, by the side walk that runs along Fernandez Juncos Avenue, which has been dedicated to public; on the SOUTH, by “Parcel K-2” and “Parcel K-1”; on the EAST, by “Parcel H”; and on the WEST, by “Parcel L” (b) USACE Parcel Property number 1,027 Bis, recorded in the Registry of the Property of Puerto Rico, First Sectionof San Juan, at page 155 of volume 44 of Puerta de Tierra, which is described as follows: “URBAN: Parcel of land marked as “Parcel N” in the Ferndndez Juncos Reservation Drawing, located in the Barrio of Puerta de Tierra, within the municipality of San Juan, Puerto Rico, having and atea of 15,529.8456 square meters, equivalent to 3.9512 cuerdas. Bounded on the NORTH, by the side walk that runs along Femnéndez Juncos Avenue which has been dedicated to public use; on the SOUTH, by the San Antonio Channel; on the EAST, by “Parcel M”; and on the WEST, by lands belonging to the Commonwealth of Puerto Rico.” Parcels MTZ and Adj Property number 1,026 Bis, recorded in the Registry of the Property of Puerto Rico, First Section of San Juan, at page 150 of volume 44 of Puerta de Tierra, which is described as follows: “URBAN: Parcel of land marked as “Parcel J” in the Fernandez Juncos Reservation Drawing, located on the Barrio of Puerta de Tierra, within the Municipality of San Juan, Puerto Rico, having an area of 2,088.1658 square meters, equivalent to 0.5313 cuerdas, bounded on the NORTH, by “Parcel K-1”; on the SOUTH, by the San Antonio Channel; on the EAST, by “Parcel K-1"; and on the WEST, by “Parcel L”.”SCHEDULE IV PHASING AND ABSORPTION im Semen Pe Site Development & ‘Spring 2019-Spring 2020 ‘Subject to Off-Site Works Infrastructure schedule Marina ‘Spring 2020 Subject Bulkhead Project schedule Hotel A Summer 2020 Up to 36 months Residential A Winter 2020 Up to 36 months. Parking Garage A ‘Summer 2021, Up to 24 months Office A ‘Spring 2022 Up to 36 months nme Bienen Residential B Fall-Winter 2022 Up to 36 months Hotel 8 Summer 2023 Up to 36 months. Parking Garage 8 Summer 2024 Up to 24 months. Office B ‘Summer 2025 Up to 36 months: ‘+ Developer will be responsible for master development of the Project Developments. The intention is that individual developers, including, but not limited to, Wholly-Owned Subsidiaries and entities related to Developer and/or BUD, will buy/lease portions of the Property from Developer to execute the development thereof, ‘+ The proposed schedule for Phase TI is a target that will depend on market conditions in the future that are understandably still unknown. Phase II projects, such as Residential and Office, will be commenced once similar projects in Phase I have been absorbed by the market, ‘+ Developer reserves the right to Property. ‘* The timeframes set forth above are subject to the provisions of Sections 3.1 and 3.9 of this Development Agreement. tly undertake the development of portions of theSCHEDULE V PERMITTED ENCUMBRANCES To be provided. 062057, 10EXHIBITA CONCEPT SCHEMATIC DESIGN DRAWINGS [See attached] oosnss710EXHIBITB MASTER DEVELOPMENT WORKS [See attached]EXHUBIT C FORM OF ESTOPPEL CERTIFICATE ESTOPPEL CERTIFICATE [Name and Address of Addressee] [Re: The Bay Harbour Village Project] Ladies and Gentlemen: ‘The undersigned hereby acknowledges and certifies that as of the date hereof: 1. _ The Master Development Agreement dated as of March 29", 2019 by and between the Puerto Rico Convention Center District Authority, as grantor of developing rights, and the BU HARBOUR PARTNERS, LLC, as developer (the “Developer”) for the design, development, construction and operation of [ project] to be developed on L (the “Agreement”) is in full force and effect. 2. The Agreement has not been amended, supplemented or modified and the Agreement is the only agreement between the Authority and the Developer regarding the development of the [ |, except as set forth on Exhibit 1. 3. The address for notices and other communications to be sent to the undersigned is as follows: 4, All obligations of the undersigned under the Agreement have commenced, and all conditions to the performance of the undersigned’s obligations under the Agreement have been satisfied and all conditions to the obligations of the undersigned to observe and perform its covenants, with respect to the development of the have been satisfied. 5. _ Tothe best knowledge of the undersigned there are no outstanding defenses, counterclaims or offsets against the [Authority / Developer] under the Agreement. 6. To the best knowledge of the undersigned, the [Authority / Developer] is not in default under the Agreement, no event exists which with the passage of time or giving of notice, or both, would constitute a default, and no notice has been given which has not been cured. 7. There are no actions, whether voluntary or, to our best knowledge otherwise, pending against the undersigned under the bankruptcy or insolvency laws of the United States or any state thereof, except as specified on Exhibit 1.8. The undersigned, and the person or persons executing this certificate on behalf of the undersigned, have the power and authority to execute this certificate. { and/or their respective affiliates or subsidiaries and their respective successors and assigns (collectively * *) and their lender with respect to (the “Lender”) may rely upon the truth and accuracy of the certifications contained herein, and said certifications shall be binding upon the undersigned and its successors and assigns, and inure to the benefit of and the Lender.} Dated: By: ‘Name: Title:EXBIBITD SWORN STATEMENT ACT NO. 2 OF JANUARY 4, 2018, I, Federico Juan Sanchez Ortiz, of legal age, married, business executive and resident of San Juan, Puerto Rico, in my capacity as Authorized Representative of BU HARBOUR PARTNERS, LLC (the “Company”), being duly swom, depose and state that: 1, My personal circumstances are as above mentioned. 2. Tam the Authorized Representative of the Company, with power and authority to execute this statement. 3. The Company has not been convicted or found guilty of any of the offenses mentioned in Act No. 2 of January 4, 2018. 4, In addition, to the best of my knowledge and believe, the Company is not under investigation pursuant to a legislative, judicial or administrative proceeding, in the Commonwealth of Puerto Rico, the United States of America or any other jurisdiction, 5. The Company has filed all tax returns and paid all taxes required by the laws of the Commonwealth of Puerto Rico. IN WITNESS WHEREOF, I have hereunto signed my name, on this__ day of March, 2019. BU HARBOUR PARTNERS, LLC By: Name: Federico Juan Sanchez Ortiz, Title: Authorized Representative Date: March __, 2019 Affidavit Number: ‘Subscribed before me by Federico Juan Sanchez Ortiz, of legal age, married, business executive and resident of San Juan, Puerto Rico, in his capacity as Authorized Representative of BU HARBOUR PARTNERS, LLC, who is personally known to me. In San Juan, Puerto Rico, on this day of March 2019. ‘Notary Public nse 10