LAND DEVELOPMENT JOINT VENTURE OPPORTUNITY ALEXANDRA, CENTRAL OTAGO. RESIDENTIAL BLOCK

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1 LAND DEVELOPMENT JOINT VENTURE OPPORTUNITY ALEXANDRA, CENTRAL OTAGO. RESIDENTIAL BLOCK Invitations are invited for parties to submit proposals to enter into a joint venture with the Council for development of 5.5 hectares approximately of residential land. Alexandra is experiencing significant growth with a shortage of residential sections available and so this is an opportunity for developers. A copy of the Invitation Document can be obtained from Council s website or by contacting Tara Bates, Property and Facilities Officer at the Central Otago District Council, tara.bates@codc.govt.nz. (03) Tenders close at 12pm on 22 December 2017.

2 CENTRAL OTAGO DISTRICT COUNCIL REQUEST FOR PROPOSAL IN CONNECTION WITH PROPOSED RESIDENTIAL DEVELOPMENT OF LAND AT ALEXANDRA DATED 27 November 2017 DJS V1

3 1 Nature of RFP, Background to RFP 1.1 Nature of RFP Neither this Request for Proposal (RFP) nor the submission of a proposal by a submitter creates, or is intended to create, a legal relationship between a submitter and Central Otago District Council (CODC), or any duties or obligations on the part of CODC. This RFP is an invitation to treat. CODC may decide upon receipt and review of proposals to explore, negotiate or otherwise deal with any submitter(s) or no submitters. Until a written agreement is made and executed by CODC, no contractual relationship of any kind will exist between a submitter and CODC. Unless CODC is expressly permitted or required by this RFP to act "reasonably", CODC are entitled to act in its respective sole, absolute and unfettered discretion in connection with the RFP process. 1.2 Background to RFP CODC is the registered proprietor of land at the end of Henderson Drive, Alexandra being 5.5 hectares approximately described as part of Lot 25 DP 3194 and part of Lot 6 DP as described in certificate of title 3329 and part unformed road (Property). This RFP is issued in connection with CODC s proposed development of part of the Property. CODC invites proposals from submitters to form a joint-venture for the subdivision development of 5.5 hectares (subject to survey) of the Property (Subdivision Area). The indicative location of the Subdivision Area (subject to final plans and survey) is highlighted on the plan attached as Annexure A to this RFP. As at the date of this RFP, CODC s preference is to form a joint-venture which provides for the following: CODC to contribute the Subdivision Area; Joint-venture partner to contribute all works and services for the subdivision development including subdivision design, all Resource Consents, construction and sale of Lots at the joint-venture partner s cost; Minimum return to CODC of $2,300,000 plus GST (if any) (being the assessed land value following the Council obtaining valuation advice) for the contribution of the Subdivision Area; CODC to receive 50% share of profit from the subdivision development, but with a minimum profit amount as proposed by the partner and accepted by Council but not being less than $500,000 plus GST (if any) to be paid to CODC. 1.3 Description of Works/Services This RFP invites proposals from suitably experienced and resourced submitters who can provide services as a joint-venture partner in connection with the development of the Subdivision Area and/or the sale of resulting freehold sections. The works/services that CODC expects a joint-venture partner to provide are as follows: Subdivision design, obtaining resource consent and all other approvals and consents as necessary. Management and funding (at the joint-venture partner s cost) of all subdivision development works and professional services, marketing, title issue, conveyancing and settlement for all Lots. The subdivision development works and professional services associated with the development shall include (without limitation) the following: DJS V1

4 o o o o o o o o o o Development shall be in accordance with the agreed subdivision plan and approved Resource Consent (including any subsequent amendments). Meets its obligations as a (Person Conducting the Business Undertaking) (PCBU) under the Health and Safety at Work Act In addition to all as-built plans and information for subdivision assets required as a result of the resource consent and Council s subdivision engineering standards, also required is a full inventory and asset information list acceptable to Council for all irrigation, lighting, plantings and footpaths. Producer Statements for irrigation and lighting. Control and/or mitigate the dispersal of dust outside of the land that may occur during development. Should grass in an area to vest in Council as reserve under the development be sown with grass after the commencement of the 12 month maintenance period as a result of the resource consent, then that reserve area shall be maintained for 12 months from the date it s development was complete. For the duration of the maintenance period of any area, the mowing standard applied to all grass shall be that the grass shall be kept to a height of between 60mm and 70mm and weed free. Landscaping shall be in accordance with a landscape concept plan designed by the joint venture partner as agreed. Felling of trees in a 20m wide buffer area outside the southern boundary of the subdivision area and development of that area in grass with a species as determined by Council and developed to a similar standard and specification to other Council greenways as determined by Council including full irrigation coverage. The developer shall explore the option of a bore outside the south eastern boundary of the subdivision area to supply irrigation water and develop that supply if viable. Provide robust project management processes to project manage the development to the agreed programme. Making all decisions with regard to engaging all contractors and determining all development costs, the Joint Venture Partner shall: - Provide copies of quotes or cost estimates from contractors for all development works. - Provide copies of all development cost invoices with full scheduled breakdowns to substantiate the invoice. Not withstanding the point above, all variations proposed once works commence that would result in a material change to design or increase in the financial results of the development are to be jointly agreed with the Council, through its appointed representative for the joint venture. Meet regularly with Councils representative for update meetings (2 weekly as a minimum). Invite Council s representative to all contractor meetings (excluding normal daily project manager/contractor discussions). Joint agreement of the JV partners to monthly contractor claims. 1.4 Contract Terms CODC and the successful submitter (if any) will have to negotiate and agree the terms and conditions of all transaction documents. DJS V1

5 The intended Development Deed of Agreement is Annexure B to this RFP. 2 RFP Process CODC expects to follow the process set out below in the sequence indicated: 2.1 Submission of proposals (a) (b) (c) (d) Each submitter may submit more than one proposal. Each proposal will be considered as a separate proposal. Proposals must be submitted by no later than 12pm on 22 December 2017 (Closing Date). Late proposals may be considered at CODC s sole discretion. Once a proposal has been submitted it is irrevocable and cannot be withdrawn or amended without CODC s prior written approval. All proposals shall have a validity period of 3 calendar months, calculated from the Closing Date. All proposals must be submitted to CODC for the attention of Tara Bates by to: tara.bates@codc.govt.nz. 2.2 Evaluation (a) (b) (c) (d) Following the deadline for submitting proposals CODC will evaluate each proposal. The basis on which CODC will evaluate proposals, and the weighting to be given to any evaluation criteria, will be determined by CODC at its sole discretion. Each proposal will be evaluated on the basis that the minimum profit amount to Council, the expenditure entailed and any other terms included in the proposal are the best that the submitter is able to offer. Any submitter that fails to put forward its best terms risks having their proposal excluded at the evaluation stage. CODC reserves the right, either directly or through its agents, to make enquiries regarding any submitter and/or any proposal, including due diligence investigations, and to consider any information it considers relevant information in the evaluation of the proposals, and may verify with any third parties any information included in the proposals or disclosed to CODC in connection with the proposals. 2.3 Negotiation (a) (b) (c) CODC either directly or through its agent, may negotiate with the submitter(s) of one or more proposals, in the latter case whether or not the acceptance of any submitter s proposal would exclude acceptance of any other submitter s proposal. The final pricing agreed for any part of the works or services may be different from the pricing put forward in the relevant proposals, as a result of the impact that other negotiated terms may have on price. CODC reserves the right to terminate negotiations with any submitter at any time and negotiate with any other submitter(s). DJS V1

6 2.4 Approval (a) (b) If CODC or its agent does not approve any proposed agreement with a submitter, then, without prejudice to CODC s other rights under this RFP, CODC may initiate negotiations with any other submitter(s). The RFP process will be complete once CODC has notified submitters of either: i. CODC s decision to accept one or more negotiated agreements with a submitter(s); or ii. the termination of the RFP process. 2.5 Anticipated Timeframe CODC anticipates the following timeline: Date Milestone 27 November 2017 RFP issued to selected parties 14 December 2017 by 4:00pm 19 December 2017 by 5pm 22 December 2017 by 12pm 26 January 2018 February 2018 February 2018 Late February/early March 2018 Late February/March 2018 Deadline for questions from submitters Deadline for CODC to answer submitters questions Closing Date for receipt of proposals via to tara.bates@codc.govt.nz Evaluation of proposals by CODC Includes: Chief Executive s assessment and determination. Preferred submitter(s) identified and notified; contract negotiation by the CEO on behalf of Council. Joint Venture partner develops draft subdivision plan for CEO discussion/agreement in principle. Vincent Community Board presented with draft subdivision plan. Subdivision Plan agreed. The above time frames are only approximate and may be extended by CODC if any stages of the RFP process take longer than anticipated. The above time frames are also subject to the terms and conditions of the final agreed contract(s). 2.6 RFP Clarification If a submitter has any questions about the content of this RFP, or about any matters relating to it (including as to any clarification of this RFP), the question must be directed in writing, and not verbally, to CODC s representative at the contact address set out at paragraph 2.1(d) before 4:00 DJS V1

7 p.m. on 14 December CODC does not intend to answer any questions received after that time, although it reserves the right to do so. CODC s representative will answer all questions in writing by Reserved rights (a) CODC reserves the right, in their respective absolute discretion: i. to make such adjustments to the above RFP process as it considers appropriate, at any time during the process, provided that it notifies submitters affected by those changes; ii. iii. iv. to waive any irregularities or informalities in the RFP process and/or any proposal; to meet with any submitter of a proposal to discuss their proposal; to decline to consider any proposal; v. to reject any proposal; vi. vii. viii. ix. to seek clarification of any proposal; to enter into any agreement or arrangement with any submitter, even though it may not be in accordance with the RFP document or it differs in material respects from that envisaged in this RFP; to enter into any agreement or arrangement with any submitter, notwithstanding that any other submitter may propose a lower cost method of achieving CODC s requirements; to terminate this RFP process at any time, by notifying submitters who submitted proposals; and x. to re-advertise for additional proposals. 2.8 Miscellaneous a) A submitter must not initiate or engage in any communication with other submitters in relation to the RFP, whether before or after submitting proposal(s), and shall not make any attempt to influence any other submitter to submit or not submit a proposal or to alter the proposed content of that submitter s proposal. b) A submitter must not at any time initiate or engage in any communication with any directors, officers or staff of CODC or Vincent Community Board with a view to influencing the outcome of this RFP process. c) Each submitter must pay its own costs for preparing and submitting its proposal(s). d) All submitters are deemed to have inspected the land and fully informed themselves with regard to all matters including, but not limited to, the 11Kva overhead powerline dissecting the property. e) Proposals are submitted in reliance on the submitter s own knowledge, skill, and independent advice, and not in reliance on any representations made by CODC or any of its representatives. CODC makes no representation or warranty (express or implied), and accepts no responsibility or liability for the accuracy or completeness of this RFP (including any schedules or appendices to it) or of any recorded or verbal information communicated or made available for inspection by CODC or its representatives. The sole risk, responsibility and liability connected with reliance by any submitter or any other person on the RFP or any other such information as is described in this paragraph is solely that of each submitter. f) All information provided by a submitter in, or in relation to, its proposal is warranted by that submitter to be complete and accurate in all material respects. Each submitter also warrants to DJS V1

8 CODC that the provision of such information, and the use of such information by CODC for the evaluation of proposals and the negotiation of any resulting contract, will not breach any third party intellectual property rights. g) CODC are not liable in any way whatsoever for any direct or indirect loss (including loss of profit, revenue or opportunity), damage or cost of any kind incurred by any submitter or any other person in relation to this RFP. h) CODC will consider all proposals and information exchanged between CODC and submitters in any negotiations relating to any proposals, excluding information already in the public domain, to be confidential to CODC and its employees, legal advisors and other consultants (Confidential Information). However, each submitter acknowledges that it may be necessary or appropriate for CODC to release Confidential Information: (i) (ii) (iii) pursuant to the Official Information Act 1982 and/or the Local Government Official Information and Meetings Act 1987; or in publicly notifying any approval by CODC of that agreement; or otherwise pursuant to law or any other legal obligations. i) CODC may consult with submitters before deciding whether to disclose Confidential Information for the purposes described in sub-clauses (i) to (iii) above. Submitters acknowledge, however, that it is for CODC to decide, in its absolute discretion, whether it is necessary or appropriate to disclose information for any of the above purposes, provided that CODC shall act in good faith in disclosing any Confidential Information. j) Each submitter must keep the contents of this RFP and all information and discussions relating to this RFP confidential. k) Submission of a proposal will be taken as acceptance by the submitter of the terms contained in this RFP. CODC may exclude any proposal if the submitter of that proposal does not comply with any of the terms contained in this RFP. 3 Information to be included in Submitter s proposal a) Name of submitter; b) Contact person; c) Contact details (address, telephone, fax etc.); d) Confirm the minimum profit amount to be paid to CODC of $ plus GST (if any). e) The submitter s own rationale for why it considers CODC should accept its proposal; f) Relevant expertise, experience and track record (evidence required); (i) (ii) (iii) Details of relevant expertise and experience (evidence required). Any references from existing customers of the submitter for the provision of similar works or services of contractors they have worked with in property development. Any references from existing customers of the submitter for the provision of similar works or services or contractors they have worked with in property development g) Information with regard to financial ability to fund development: (i) Confirm how the development will be funded prior to Lot sales settling. (a) Where development costs will be funded by other than funds on hand, what loan agencies will be providing funding and to what levels. DJS V1

9 (ii) (b) What will be the terms of advance for loan monies including level of interest and any requirements for advance of monies such as percent of Lots sell down prior to funding release. Any evidence the submitter may consider would assist to verify details. h) Will the submitter project manage the development and contractors directly or engage an engineer/consultant or project manager to manage development construction. If so provide a cost estimate for this cost being $..., which shall become the level of costs for project management plus or minus 15%. i) Provide an initial development cost estimate per lot being $... j) A declaration of any conflicts of interest that the submitter or an associated person or organisation may have that could affect or compromise the submitter or CODC in relation to the submitter s participation in this RFP process or performance of any agreement if successful; k) Any particular information the submitter considers CODC should take into account DJS V1

10 Annexure A Plan showing Subdivision Area DJS V1

11 DJS V1 Annexure B

12 BETWEEN CENTRAL OTAGO DISTRICT COUNCIL A N D DEVELOPMENT DEED PINES BLOCK, ALEXANDRA

13 THIS DEED is made the day of 2017 BETWEEN A N D CENTRAL OTAGO DISTRICT COUNCIL ("CODC") having its registered office at (registered company number XXXXX) ("Developer") BACKGROUND A. CODC is the registered proprietor of land at the east end of Henderson Drive, Alexandra, being 5.5 hectares approximately described as part of Lot 25 DP 3194 and part of Lot 6 DP as described in certificate of title 3329 and part unformed Boundary Road. B. This Deed records the development agreement between the CODC and the Developer for subdivision and development for residential purposes. AGREEMENT 1. INTERPRETATION 1.1 Definitions In this deed, unless the context otherwise requires: Approval means any approval, consent, authorisation, registration, permission, licence, permit, authority or exemption from, by or with a Government Agency and applying to, or required for, the Project; Business Day means any day on which banks are open for business in Alexandra, excluding a Saturday, Sunday or a public holiday; CODC s Representative means Mike Kerr, CODC Property and Facilities Manager or such other person nominated by the CODC pursuant to clause 7.1 from time to time; Commencement Date means the date of this Deed; Contractor means a contractor, subcontractor, consultant or supplier who enters into a contract with the Developer to carry out work, including supplying any materials, in respect of any part of the Project; Developer s Representative means or such other person nominated by the Developer pursuant to clause 7.4 from time to time; Development Programme means the development programme prepared and updated by the Developer pursuant to paragraph 2.1(b) of Schedule One;

14 2 Fees means the fees payable to the Developer in accordance with clause 10; Government Agency means any governmental, semi-governmental or local governmental authority, administrative judicial body, tribunal, department, commission, public authority, agency, minister or statutory corporation including without limitation Central Otago District Council, Otago Regional Council and Transit New Zealand; GST has the meaning set out in the Goods and Services Tax Act 1985; Insolvency Event means, in relation to a person, the occurrence of any of the following events: a) that person ceases or threatens to cease to carry on all or substantially all of its business or operations; b) an application is made (which is not stayed or dismissed within 15 Business Days of being made) to a court for an order, or an order is made, or an effective resolution is passed or legal proceedings issued, or any corporate action is taken, notice is given or other step is taken by that person or its board of directors (if applicable) for the dissolution, reorganisation, liquidation or winding-up of that person; c) that person convenes a meeting for the purpose of making, or proposes to enter into, any general assignment, arrangement, compromise or composition with or for the benefit of any of its creditors with a view to avoiding insolvency or a notice of intention to remove it from the register is given, in each case except for the purpose of a solvent reconstruction or voluntary liquidation previously approved in writing by the other party; d) an encumbrancer takes possession, or a trustee, receiver, receiver and manager, administrator, liquidator, provisional liquidator, inspector under any companies or securities legislation or similar official is appointed in respect of that person or the whole or any material part of its assets, or steps are taken or threatened against it with a view to any such appointment; or e) a distress, attachment or other execution for a sum exceeding $50,000 is levied or enforced upon, or commenced against, any material assets of that person and is not discharged or stayed within 15 Business Days, except, in each case, where the other party is satisfied that that person is contesting the same in good faith by appropriate proceedings; f) that person is declared or becomes insolvent, is unable to pay its debts when they fall due, or is presumed unable to pay its debts in accordance with any applicable legislation; g) that person stops or threatens to stop payments generally or a moratorium is agreed or declared in respect of or affecting all or any material part of its indebtedness; h) that person seeks or obtains protection from its creditors under any statute or any other law;

15 3 i) that person is declared to be a corporation at risk under the Corporations (Investigation and Management) Act 1989, any recommendation is made by the Financial Markets Authority or the Minister of Finance that that person or any associated person of that person be placed in statutory management or a statutory or judicial manager is appointed over all or any of that person's assets; j) all of the directors of that person resign or signal their intention to resign; or k) any event or circumstance having a substantially similar effect to any of the events specified in paragraphs a) j) above happens in respect of that person; Land means 5.5 hectares approximately described as part of Lot 25 DP 3194 and part of Lot 6 DP as described in certificate of title 3329 and part unformed boundary Road; Law means any legally binding law, legislation, statute, Act, rule, order or regulation which is enacted, issued or promulgated by the Parliament of New Zealand or a Government Agency; Minimum Sale Contract Parameters means those minimum Sale Contract parameters set out in Schedule Four, as may be amended from time to time by CODC; Profit Share means the Project profit being that amount equivalent to the total Sale Proceeds less the amounts set out in clause 11.3 a) to (d) and (f). Progress Report has the meaning set out in clause 8.2; Project means the proposed development and subdivision of the Subdivision Area and sale of resulting lots in accordance with the Development Plan and Resource Consent once granted, in order to achieve settlements under the Sale Contracts; Project Budget means the initial budget for the Project set out in Schedule Three; Project Costs means the actual costs of the Project and Services, and shall not include any costs or charge for recovering of the developers time; Project Group has the meaning set out in clause 8.1a); Project Meetings has the meaning set out in clause 8.1; Project Quantity Surveyor means the project quantity surveyor appointed by the Developer; Project Works means all works and services carried out on-site on the Subdivision Area for the Project; Sale Contracts means all sale contracts entered into between the CODC and a purchaser for the sale of a developed lot or any other lot in the Subdivision Area; Sale Proceeds means the aggregate proceeds of sale of lots resulting from the Subdivision Area and other revenue generated from the Project, including (without

16 4 limitation) any GST, settlement adjustments and all forfeited deposits and interests on deposits paid under the Sale Contracts; Services means the development and management services to be provided by the Developer as set out in this Deed including Schedule One; Subdivision Area means that Land described in this agreement; Subdivision Plan means the plan for the Project attached to this deed as Schedule Two, as may be amended from time to time in accordance with this Deed; Termination Date means the earlier of: (a) the date on which the sale of the last lot developed pursuant to the Development Plan has been completed and contract maintenance periods from issue of any practical completion certificates issued to Contractors for all constructed elements have expired; or (b) the date on which this Deed is terminated in accordance with clause 15; 1.2 Interpretation (a) Unless the context otherwise requires: (i) (ii) the singular includes the plural and vice versa; a reference to a person includes any other entity or association recognised by law and the reverse; b) references to any legislation or to any provision of any legislation shall be deemed to be references to that legislation or provision as from time to time amended, re-enacted, consolidated or substituted and, unless otherwise stated, to New Zealand legislation, and, shall also include any laws issued under any such legislation or provision; c) references to any document (however described) shall include references to that document as modified, novated, supplemented, varied or replaced from time to time; d) references to any party to a document includes its successors and permitted assigns and transferees; and e) everything expressed or implied in this deed which involves more than one person binds and benefits those persons jointly and severally. 2. TERM 2.1 Term: This Deed will come into effect on the Commencement Date and will, subject to clause 3.3, terminate on the Termination Date (unless otherwise terminated by the parties by written agreement).

17 5 3. DEVELOPMENT SERVICES 3.1 Appointment of Development Manager: CODC appoints the Developer to provide the Services in accordance with the terms of this Deed. 3.2 Funding Services: The Developer shall provide and fund the Services at the Developer s cost and expressly agrees that CODC shall not be required to provide the Land and Subdivision Area as security for any funding. 3.3 Term: The term of the Developer s appointment shall initially be 18 months from the Commencement Date, and shall automatically renew a successive one year period until the Termination Date, provided that at the time of renewal; - there are no material outstanding breaches of this Deed which are not remedied, or being remedied by the Developer; and, - Section 224c has issued for the development. The purpose of the renewal shall be for the purpose of completing the sale and settlement all Lots, not yet settled. 3.4 Standard of performance: The Developer shall perform the Services with the degree of professional skill, care and diligence expected of a skilled professional development manager experienced in carrying out the same or similar size, scope and nature of services. 3.5 Compliance with Approvals and Laws: The Developer shall perform the Services in compliance with all Approvals and Laws applicable to the Project and the Project Works. 3.6 Obligations of Developer under Sale Contracts: Without limiting any of the specific obligations in this Deed, the Developer will, as far as it is reasonably able, perform all Services necessary in an efficient and timely manner to ensure all the obligations of CODC under each Sale Contract are fulfilled. 4. CONTRACTORS 4.1 Engagement: The Developer shall engage all Contractors necessary for the Project at the Developer s cost. 4.2 Inform CODC: The Developer shall keep CODC informed as to all Contractors engaged on the Project and shall provide CODC s Representative (on a monthly basis) with copies of quotes or cost estimates from Contractors and copies of all Project invoices from Contractors with full scheduled breakdowns to substantiate the invoice. 4.3 Payment to Contractors:

18 6 a) The Developer shall not make any payments to Contractors unless those payments have been approved in writing by CODC s Representative (such approval not to be unreasonably withheld). b) The Developer shall make all payments to Contractors when due. 4.4 Meetings: The Developer shall ensure that CODC s Representative is invited to all meetings with Contractors (excluding normal daily project manager/contractor discussions). 5. HEALTH & SAFETY, AND LIABILITY FOR CLAIMS 5.1 Management and control: The Developer acknowledges and agrees that during the Project the Subdivision Area and the Project Works shall be under the Developer s management and control. 5.2 Risks to health and safety: During the Project the Developer shall ensure, so far as is reasonably practicable, that the Subdivision Area and Project Works are without risks to the health and safety of any persons. 5.3 Notifiable Events: The Developer shall: a) ensure that all persons under the Developer s control are appropriately supervised; b) keep a record or ensure all Contractors keep a record of all deaths, injuries, illnesses and incidents which are required by law to be notified to a public authority (Notifiable Events) for at least 5 years from the date on which notice of the relevant event is given to the public authority; c) as soon as possible after becoming aware that a Notifiable Event arising out of the carrying out of the Project Works has occurred, ensure that CODC and the relevant public authority is notified of the event; and d) take all reasonable steps to ensure that the Subdivision Area or the Project Works where the Notifiable Event occurred is not disturbed until authorised by the relevant public authority. e) provide at each Project Meeting (referred to in clause 8): (i) (ii) a report of all Notifiable Events that occurred during the previous period setting out the steps taken and/or to be taken as a result thereof; and an updated report on any Notifiable Events previously reported on where steps are still being taken as a result. 5.4 Policy: The Developer will ensure that the Developer and all Contractors have a written Health & Safety Policy which satisfies the Ministry of Business, Innovation and Employment and/or occupational safety and health standards. In particular, the Developer will comply with, and will ensure that all Contractors

19 7 comply with, all the requirements of the Health and Safety at Work Act 2015, including any regulations made pursuant to that Act, any other legal and statutory health and safety obligations and published codes of practice, standards and guidelines, and the CODC s health and safety protocols. The Developer warrants to the CODC that the Developer will take all reasonably practicable steps to ensure that no act or omission: a) causes a hazard, significant hazard, harm or serious harm to any employee of the Developer, any Contractor or any person at the Subdivision Area or in the vicinity of the Subdivision Area; or b) is a breach of duty or obligation of the Developer under the Health and Safety at Work Act 2015; or c) does or is likely to give rise to the issue of an improvement or prohibition notice, enforcement proceedings or a prosecution under the Health and Safety at Work Act 2015 against the CODC, the Developer, or any Contractors. 5.5 Prior to commencing work: The Developer must, prior to commencing work on the Subdivision Area and to the absolute satisfaction of the CODC: a) Ensure, establish, document and maintain an occupational safety and health system(s) or ensure the Contractor(s) have done so; and b) share with CODC the Developer s or Contractor(s) occupational safety and health records to enable monitoring / surveillance if required by the CODC. 5.6 From Contractors: The Developer undertakes that before a Contractor commences work on the Subdivision Area, the Developer will obtain similar warranties to those stated in clause 5.4 from that Contractor in relation to the subcontract works. 5.7 Co-ordination: Where there is more than one person on the Subdivision Area who has a duty under the Health and Safety at Work Act 2015 the Developer will ensure that they co-ordinate and consult with those other persons in respect of the above duties and duties under the Health and Safety at Work Act Indemnity: To the extent permitted by law, the Developer indemnifies CODC and will keep CODC indemnified against all fines, penalties, costs, actions, demands, losses, damages and expenses for which CODC becomes or may become liable (whether in the Owner s capacity as owner of the Land or otherwise) in respect of or arising from the Developer s failure to observe or otherwise comply with Laws including without limitation, the Resource Management Act 1991, the Building Act 2004 and the Health and Safety at Work Act 2015 (or any replacement or equivalent legislation) arising from the Developer s activities relating to the Project, except as arising from CODC s own direct activities relating to the Project.

20 8 6. SALE CONTRACTS 6.1 Entry into Sale Contracts: The Developer acknowledges and agrees that only CODC as landowner can enter into and sign Sale Contracts. CODC agrees that it will enter into Sale Contracts that are consistent with the Project, Development Programme and the Minimum Sale Contract Parameters. 6.2 CODC s solicitor: All Sale Contracts shall be prepared by CODC s solicitor or subject to confirmation by Council s solicitor as to form and content. 6.3 No authority to Developer: The Developer is authorised to negotiate Sale Contracts on a without prejudice non-binding basis subject to CODC s signature as landowner required to create a binding agreement. The Developer will advise all prospective purchasers that a binding agreement will not exist until CODC has signed the relevant Sale Contract. 6.4 CODC decision: CODC undertakes to consider, make a decision and sign (or otherwise refuse to sign) any agreement for sale and purchase forwarded to CODC within two working days of its receipt by CODC s Representative. 7. REPRESENTATIVES 7.1 CODC Appointment: CODC appoints CODC s Representative to represent the interests of CODC and liaise with the Developer in respect of development matters for the Project. CODC may replace CODC s Representative from time to time by notice in writing to the Developer. 7.2 Contact details: The contact details for the initial CODC s Representative are: Name: Mike Kerr Title: Property and Facilities Manager mike.kerr@codc.govt.nz Telephone: (03) Mobile: (0274) Approvals: Where any matter requires the consent, approval or agreement of CODC, CODC agrees that the Developer may rely on the written consent, approval or agreement of CODC s Representative, except for agreements for sale and purchase for which the signatory shall be the Council s Chief Executive officer or acting Chief Executive Officer. 7.4 Developer s Appointment: The Developer appoints the Developer s Representative to represent the interests of the Developer and liaise with CODC in respect of development matters for the Project. The Developer may replace the Developer s Representative from time to time by notice in writing to CODC. 7.5 Contact details: The contact details for the initial Developer s Representative are: Name: Title:

21 9 Telephone: Mobile: 7.6 Approvals: Where any matter requires the consent, approval or agreement of the Developer, the Developer agrees that CODC may rely on the written consent, approval or agreement of the Developer s Representative. 8. PROJECT MEETINGS 8.1 Meetings: During the term of this Deed meetings will be held every two weeks ("Project Meetings") in relation to the progression of the Project. Each Project Meeting: a) shall be attended by CODC s' Representative and the Developer s Representative and (if required by the parties) the Project Quantity Surveyor ("Project Group"); b) shall be held in Cromwell fortnightly, at dates as agreed. 8.2 Progress reports: Prior to each Project Meeting the Developer will prepare a written report ("Progress Report") detailing: a) overall progress of the Project construction progress against the Development Programme; b) update of Project Costs and Sales Contracts signed against the Project Budget for the purpose of profit estimate updating; c) updates on progress of Relevant Consents, any issues with design issues and the performance of Contractors; d) an update on the marketing of any sections not sold; e) details of any major occurrence which may affect the works forming part of the Project; f) details of any issues with any Contractor including, without limitation, issues which may impact on industrial relations for the Project; a report on Notifiable Events in accordance with clause 5; and g) any other information in relation to the Project as may be reasonably requested by a member of the Project Group. 8.3 The Progress Report shall be circulated to the Project Group not less than three Business Days prior to the relevant Project Meeting.

22 10 9. MINIMUM RETURNS TO CODC 9.1 Minimum returns: The Developer represents and warrants to CODC that: a) CODC shall receive a minimum sum of $2,300,000 plus GST (if any) from the Sale Proceeds as payment for the Land ( Minimum Sale Proceeds ); and b) CODC shall receive a further minimum amount of $ plus GST (if any) ( Minimum Profit ) which shall be deducted when calculating its share of the Profit Share. 10. FEES 10.1 Fees: The Developer shall be entitled to the Project Costs and the Developer s share of the Profit Share (if any) subject to, and in accordance with, clause No other reward: For the avoidance of any doubt the parties acknowledge that the Developer s only compensation for the undertaking of the Project Works and completion of the Project shall be the receipt of the Project Costs and its share of the Profit Share (if any) subject to and in accordance with clause SETTLEMENT OF SALE CONTRACTS AND APPLICATION OF SALE PROCEEDS 11.1 Settlement: All Sales Contracts shall be settled by CODC using CODC s nominated solicitors from time to time Trust account: The proceeds from the sale of lots shall be held in the trust account of CODC s nominated solicitors from time to time and CODC shall apply those proceeds in accordance with this clause Application of Sale Proceeds: The Developer acknowledges and agrees that the Sale Proceeds on each sale of lots resulting from the Subdivision Area shall, upon settlement of that sale, be applied and paid in the following order of priority: a) First: payment of GST on the relevant sale. b) Second: payment of commission and selling costs on the relevant sale. c) Third: payment to the Developer of a fixed portion of the estimated Project Development Costs per lot as specified in the Initial Budget Estimate as included in Schedule Three. d) Fourth: payment of all of the balance to CODC until it has received a sum of $2,300,000 plus GST (if any) e) Fifth: payment of all of the balance to CODC until it has received a further sum of $ plus GST (if any).

23 11 f) Sixth: payment of all of the balance to the Developer for actual Project Costs incurred in accordance with this Agreement. g) Seventh: payment of all of the balance amounts (being the Profit Share) to be divided 50 / 50 (after allowance for payment of the Minimum Profit amount in (e) above) between CODC and Developer. 12. DISCLOSURE 12.1 Disclosure obligations: The Developer shall: a) keep CODC fully and properly informed of all material matters relevant to the management of the Project; b) promptly notify CODC of all matters of which it is aware which are material, or which could reasonably be considered to be material, in relation to the Project; c) promptly provide CODC with copies of all correspondence, reports and other documents (including, by way of example and without limitation, the Development Programme) within its power, possession or control which are necessary to ensure that CODC is at all times kept fully advised as to all material matters relating to the Project; d) promptly provide any further information, documents or amendments relating to the Project as may be requested by CODC (acting reasonably) Review of documents: CODC may review any information and documents provided by the Developer pursuant to clause 12.1 and provide any comments. If requested by CODC (and to the extent practicable and reasonable), the Developer must amend any relevant documents submitted to reflect the reasonable comments of CODC and resubmit the amended document to CODC for its approval. 13. VARIATIONS 13.1 Material variations: Any alteration, amendment or other variation to the Development Plan, financial forecasts, Development Programme, Project Budget or the Project that is material or which may result in a breach by CODC of a Sale Contract shall be subject to the prior written consent of CODC Definition of material: For the purposes of this clause 13 material means any alteration, amendment or other variation that would result in: a) a change or impact on value of $10,000 or more per event or $25,000 or more in any 12-month period; or b) a delay to any milestones or dates in the Development Programme by more than 4 weeks.

24 INDEMNITY 14.1 Indemnity by Developer: The Developer will indemnify and keep indemnified CODC against all claims, expenses, losses, damages and costs sustained or incurred by CODC arising from: a) Any breach by the Developer of this Deed or any other agreement, contract or document concerning the Project Works or the Project; b) Any negligent or wrongful act or omission of the Developer or any of its employees, agents or Contractors in the course of or related to the performance of, or failure to perform, any of the Developer s obligations under this Deed; or c) Any breach of any Law or Approval by the Developer or any of its employees, agents or Contractors in the course of or related to the performance of, or failure to perform, any of the Developer s obligations under this Deed. 15. DEFAULT AND TERMINATION 15.1 Default: a) If: (i) (ii) (iii) a party defaults on an obligation under this Deed; or an Insolvency Event occurs in respect of a party; or if CODC (acting reasonably) considers that the Developer has not made reasonable progress in completion of the Project within one (1) month from the date of this Deed, the party not in default may give notice of default to the other party; b) Subject to clause 15.1(d) and (g), upon receipt of notice of default pursuant to clause 15.1(a) (Default Notice), the relevant party (Defaulting Party) must cure the default referred to in the Default Notice within 20 Business Days (Cure Period); c) If the Defaulting Party requires an extension to the Cure Period it must, as soon as possible (but no later than five Business Days prior to the expiration of the current Cure Period), give to the party who gave the Default Notice (Notifying Party): (i) a plan (Cure Plan), which details: (1) if and why an extension of the Cure Period is required; (2) the time required to cure the relevant default; and

25 13 (3) a work plan setting out each task to be undertaken in order to cure the default and the time for each task to be completed, or (ii) evidence that the Defaulting Party has diligently pursued and is continuing to diligently pursue a cure but that the default cannot, with reasonable diligence, be cured within the current Cure Period. d) The Notifying Party must not unreasonably refuse to grant an extension of the Cure Period where the Defaulting Party has satisfied the requirements of this clause e) If the Notifying Party grants an extension, the Defaulting Party must comply with the Cure Plan. f) If the relevant breach is not (in the reasonable opinion of the Notifying Party) capable of cure, the Notifying Party shall stipulate this fact in the Default Notice. If, in the reasonable opinion of the Defaulting Party, the breach can be cured, the Defaulting Party must give notice of that opinion to the Notifying Party within five Business Days of receipt of the Default Notice, and clauses (c) to (f) shall apply. In the absence of such notice by the Defaulting Party, the Defaulting Party shall be deemed to have failed to comply with the Default Notice within the Cure Period. g) If the Default Notice issued under clause 15.1(a) is based on CODC considering that the Developer has not made reasonable progress in completion of the Project then the Developer shall be deemed to be in default and the breach shall be deemed to be incapable of cure if, as at the date of the Default Notice, a certificate under section 224(c) of the Resource Management Act 1991 has not been issued within seven (7) months from the date of this Deed Termination: If the Defaulting Party has failed to comply, or is deemed to have failed to comply, with a Default Notice within the Cure Period or any extended Cure Period contemplated by clause 15.1, the Notifying Party may terminate this Deed immediately by giving written notice to the Defaulting Party Effect of termination: The parties obligations under this deed shall cease upon termination of this Deed pursuant to clause 15.1 provided that nothing in this clause 15.3 affects the parties rights or remedies, including any rights of payment to any amounts to which a party is entitled as at the date of termination Survival of provision: Clause 15.3 shall survive the termination of this Deed.

26 FURTHER ASSURANCES 16.1 Promotion of joint interest: The parties confirm their intention to promote the best interests of the Project and to consult fully on all matters materially affecting the project. Each party shall act in good faith towards the other in order to promote the success of the Project Associated persons: Each party covenants that it will ensure that all contracts made by it with Associated Persons, if permitted by this Deed, are made on an arms length commercial basis and on terms that are not unfairly prejudicial to the interests of the other party. Each party undertakes to the other to use all reasonable endeavours to ensure that such terms are negotiated and settled in good faith. 17. CODC ACTING AS TERRITORIAL AUTHORITY 17.1 The Developer acknowledges that: a) CODC, in its capacity as a territorial authority, is required to carry out its statutory functions under the Building Act 2004, the Resource Management Act 1991 and the Local Government Act 1974 and 2002 in accordance with the provisions of those statutes. b) The granting by CODC of any consent or approval by CODC as territorial authority under either of those Acts will not of itself be deemed to be a consent or approval by the CODC under this Agreement (and vice-versa). c) CODC is bound by statutory obligations to exercise its powers, including discretionary powers and duties under either of those Acts without regard to any relationship it may have with the Developer under this Agreement. 18. GENERAL 18.1 Entire agreement: This Deed constitutes the entire agreement between the parties as to its subject matter and (excluding the Proposal) supersedes all earlier communications, representations and warranties No partnership: Nothing in this Deed (or any of the arrangements contemplated in this Deed) shall be deemed to constitute a partnership between the parties nor constitute either party the agent of the other party for any purpose No agency: Except as expressly set out in this Deed, no party has the authority to act for or incur any obligation on behalf of the other party Amendment: No amendment to this Deed will be effective unless it is in writing and signed by a duly authorised senior representative of each party Assignment: No party will, without the prior written approval of all other parties (which approval shall not be unreasonably withheld) and except on such reasonable terms

27 15 and conditions as are determined in writing by the non-assigning party, assign this Deed. Any change to the persons who, as at the date of this deed, effectively control a party shall be a deemed assignment by the relevant Nominee: The Developer shall not nominate a nominee to be the developer under this Deed without the prior written approval of CODC (which approval shall not be unreasonably withheld) and except on such reasonable terms and conditions as are determined in writing by CODC Notices and other communications: a) A notice, demand, consent, approval or communication under this Deed (Notice) must be: (i) (ii) in writing, in English and signed by a person duly authorised by the sender; and hand delivered or sent by prepaid post or facsimile to the recipient's address for Notices specified below, as varied by any Notice given by the recipient to the sender CODC: P O Box 122, Alexandra Developer: b) A Notice given in accordance with clause 18.7a) takes effect when taken to be received (or at a later time specified in it), and is taken to be received; (i) (ii) (iii) if hand delivered, on delivery; if sent by prepaid post, on the second Business Day after the date of posting (or on the seventh Business Day after the date of posting if posted to or from a place outside New Zealand); or if sent by facsimile, when the sender's facsimile system generates a message confirming successful transmission of the entire Notice unless, within eight Business Hours after the transmission, the recipient informs the sender that if has not received the entire Notice, but if the delivery, receipt or transmission is not on a Business Day or is after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on the next Business Day Costs: Each party must bear its own costs for preparing, negotiating and executing this Deed Waiver: Any waiver by a party of any of its rights or remedies under this Deed will be effective only if it is recorded in writing and signed by a duly authorised senior representative of that party. If the waiver relates to a breach of any provision of this Deed, this will not (unless stated otherwise) operate as a waiver of any other breach of that provision. No waiver of any breach, or failure to enforce any provision, of this