FUNDING AGREEMENT between CITY OF NEW YORK and ROOSEVELT ISLAND OPERATING CORPORATION % 4 preted on paper contling 30% post-consumer mate Z0\0-O04578FUNDING AGREEMENT ("Agreement" or "Funding Agreement’) dated as of March 24 , 2010 between THE CITY OF NEW YORK (‘City’), acting by and through the Department of Parks and Recreation (the "Department’ or “Parks”), located at the Arsenal, Central Park, New York, New York 10021, and ROOSEVELT ISLAND OPERATING CORPORATION OF THE STATE OF NEW YORK (‘RIOC’), a New York State public benefit corporation and political subdivision of the State of New York organized and established under Chapter 899 of the Laws of 1984, having its principal office at §91 Main Street, Roosevelt Island, New York 10044, WHEREAS, the Department is charged with the management, maintenance and development of parkland in the City of New York pursuant to Section 533 of the Charter of the City of New York; WHEREAS, Roosevelt Island, a 147 acre tract of land located in the East River, owned by the City of New York and leased to the State of New York through December 23, 2068, is under the political jurisdiction of the borough of Manhattan; WHEREAS, RIOC is a state public benefit corporation created by the New York State Legislature in 1984, organized and existing under Chapter 196 of the Unconsolidated Laws of the State of New York, to maintain, operate and develop Roosevelt Island, and empowered to enter into contracts with governmental agencies to carry out this mandate; WHEREAS, the City has appropriated $4,738,000 (Four Million Seven Hundred and Thirty Eight Thousand Dollars) in City capital funds (‘City Funds’) for construction of Phase | of the Four Freedoms Park ("the Project’) located at the south end of Roosevelt Island, such City funds representing the amount needed to fund a portion of the Project; Paragraph 1. Statement of Justification; Purpose of the Agreement A. Statement of Justification ()_RIOC is a public benefit corporation of the State of New York constituting a Political subdivision of the State of New York that holds the lease from the City to Roosevelt Island, including the site of the proposed Four Freedoms Park , (ii) The City and RIOC desire to enable the development of a Louis Kahn- designed, public open space on an approximately 4.5 acre site at the southern point of Roosevelt Island (the "Project Site") for a memorial and open space area to be known as "Franklin D. Roosevelt Four Freedoms Park’, which will include a triangular, landscaped open garden room for passive public enjoyment, promenades along the perimeter of the Project Site, forecourt, sculpture court and a 12' x 72' x 72! open air plaza overlooking the East River at thesouthernmost part of the Project Site, as well as restructuring and stabilization of the existing rip-rap shoreline, and restoration of approximately one-half acres of US tidal wetiands/open water, all in accordance with the construction documents. completed in 1975 and the modifications enumerated during the scoping phase which form the basis for the final construction documents for the project (the foregoing, the "FDR Project"). (iii) To support development of the FDR Project, the City desires to provide funds to Franklin and Eleanor Roosevelt Institute ("FER"), a New York not-for- profit corporation which was designated by the City to receive capital funds to develop the Project. The City funds will be disbursed to RIOC and subsequently to Franklin D. Roosevelt Four Freedoms Park, LLC (the "FDR LLC") for construction of a portion of Phase | of the Project in accordance with an agreement for development and construction of all phases of the Project between RIOG and FDR LLC (the "Development Agreement’). FDR LLC is a New York limited liability company which is a wholly-owned subsidiary of FERI. The Project will involve complex scheduling and coordination so as to be completed as expeditiously as possible with minimal disruption to RIOC’s operations, and RIOC and FDR LLC are uniquely qualified to undertake the management of its design and construction. (iv) FERI estimates that the entire Project will cost approximately $40,000,000 to complete, the majority of which will come from private funds raised by FERI. The City has agreed to provide capital funding in a sum not to exceed $4,738,000 (Four Million Seven Hundred and Thirty Eight Thousand Dollars) towards the cost of a portion of Phase | of the Project, subject to the terms and conditions set forth in this Agreement. The cost of Phase | is estimated to be $15,700,000. (v) Upon completion of the Project, the Project area shall be maintained as Public open space with access for all for the term of the City’s lease to RIOC. (vi) _RIOC shall enter into the Development Agreement with FOR LLC independently and not as an agent of the City for the performance of the Work by FDR LLC. The City shall be made, in the Development Agreement, a third-party beneficiary of FDR LLC's obligations with respect to Phase One of the Project under the Development Agreement, Notwithstanding the foregoing, RIOC shall have priority in enforcing its rights under the Development agreement if FDR LLC fails to perform in accordance with its obligations thereunder, The City shall have no obligations under the Development Agreement. (vii) For the avoidance of doubt, RIOC is acting as a conduit for purposes of causing the City Funding to be paid to FDR LLC towards the Eligible Costs of Phase One of the Project pursuant to the Development Agreement. The City understands that funds from other sources, including private funds and funds from other government agencies, are also expected to be granted, contributed, and paid to FDR LLC for completion of the Project. The City understands that (a)both the City and RIOC will look to FDR LLC, and hold FDR LLC responsible, for construction of Phase One of the Project in accordance with the terms, covenants, provisions, and conditions of the Development Agreement; and (b) RIOC will be entitled to rely, in its reasonable judgment, on certifications, representations, warranties, and submissions made or given by FDR LLC and/or Its contractors to RIOC under the Development Agreement. B. Purpose of the Agreement ‘The purpose of this Agreement is to offer City support for RIOC’s mission by providing funding through the City’s capital budget for a portion of Phase | of the Project to be undertaken as described in the section entitled “Scope of Work” (‘Scope of Work") contained in Exhibit A attached hereto and incorporated herein. Paragraph 2. Grant Amount; Completion of the Project A. In consideration for RIOC's agreement to administer the Development Agreement so that Phase | of the Project can be completed, the City shall pay RIOC an amount not to exceed $ $4,738,000 (Four Million Seven Hundred and Thirty Eight Thousand Dollars) ("Grant"), Such Grant shall be paid to RIOC for the reimbursement of FDR LLC for certain Eligible Project Costs inourred by FDR LLC in performing City-Funded Work in connection with Phase | of the Project as such costs are identified in the Project Spreadsheet set forth in Exhibit A, B. (i) In return for the City's agreement to make the Grant, and subject to any City review or approval required by this Agreement, RIOC agrees that it shall administer the Development Agreement in accordance with its terms and require FDR LLC to contract for, supervise and complete (a) the City-Funded Work in accordance with the Scope of Work and this Agreement, and (b) Phase | of the Project as defined in Exhibit D at no further cost to the City, and to comply with all the terms, covenants, conditions and provisions of the Development Agreement to be kept, performed and observed by FDR LLC . RIOC acknowledges that the Grant will not cover all costs associated with Phase | of the Project, and that FDR LLC is solely responsible for all costs incurred in completing the Phase | of the Project over and above the amount of the Grant. (ii) _As inducement for, and in consideration of, the City's award of the Grant, RIOC agrees to require FOR LLC to have available through Substantial Completion of Phase | the sum of at least $ 500,000 (the "Project Reserve") to be used by FDR LLC for the purpose of funding cost overruns in connection with Phase | of the Project. No withdrawals from the Project Reserve shall be made without the prior written approval of the City, which shall not be unreasonably withheld. Upon Substantial Completion of Phase |, FDR LLC may withdraw the Project Reserve. However, should the City agree before such Substantial Completion of Phase | to provide additional funds for the Project, RIOC shallrequire FDR LLC to maintain the Project Reserve for at least such time as is anticipated for the completion of additional City-funded construction. C. Atany time during FDR LLC's performance of Phase | of the Project, the City may request that RIOC, through FDR LLC/FERI, provide assurances that sufficient funds will be available to complete Phase | of the Project, including the non-City-Funded portion of the Work. Should the City determine after reviewing the information provided by FDR LLC/FERI that sufficient funds may not be available, the City may elect to withhold further payments under this Agreement until it receives reasonable assurances from RIOC, through FOR LLC/FERI, that the necessary funds are available. D, For the avoidance of doubt and to avoid duplication, the submission of any report, submittal, or other document or submission required or permitted hereunder to be made by RIOC may be done by FDR LLC (and FDR LLC's submission shall be deemed that of RIOC for purposes of this Agreement). It is understood, also, that FDR LLC will contract with the Architect, the Construction Manger, and the Construction Contractors for construction of Phase | of the Project. E, RIOC has engaged an owner's representative to provide project management and administrative services for purposes of Phase | of the Project: Works-In-Progress Associates ("WPA") 33 Rector Street, 14th Floor New York, NY 10006 phone: (212) 871-0933 fax: (212) 777-4781 The City agrees to accept submission of reports, submittals, and other documents or submissions under this Agreement from WPA as if from RIOC.. Paragraph 3, Agreement Term The City shall undertake to register this Agreement with the Comptroller and this Agreement shall become effective upon the date that it is registered by the Comptroller (“Effective Date") and shall terminate two (2) years after the Effective Date or on the Punch List Completion Date for Phase |, whichever is earlier (‘Term’), unless extended or sooner terminated in accordance with its terms. Time being of the essence, Performance under this Agreement shall be commenced within a reasonable period of time, but in no event later than ninety (90) days after the Effective Date. Upon the request of RIOC pursuant to §4-03 of the Rules of the Procurement Policy Board, the City shall have the option of extending the Term of this Agreement to allow for completion of the City-Funded Work or the Project, by notifying RIOC in writing of such extension.Paragraph 4. Project Commencement Meeting; Project Schedule A. Project Commencement Meeting The initial meeting ("Project Commencement Meeting’) for the Grant shall be held within thirty (30) days after the Effective Date. At the Project Commencement Meeting, FDR LLC shall submit the Schedule for Phase | of the Project described in Paragraph 4(B) and such information as may be specified by the City, including but not limited to a draft of the Quarterly Progress Report referred to in Paragraph 10(A) and a list of potential bidders or of the Construction Contractors already selected for the City-Funded Work. Additionally, the parties and FDR LLC shall agree upon the following: + A schedule for regular meetings of the parties with FDR LLC, such meetings to be held as often as once a month at the discretion of the City; and ‘+ The date for submission of the following items: + Quarterly Progress Reports pursuant to Paragraph 10(A); + Monthly Payment Requests pursuant to Paragraph 11(A); and B. Project Schedule (A project schedule for Phase | (the "Project Schedule") has been submitted by FDR LLC and accepted by the City prior to the signing of this Agreement. Among other items, the Project Schedule outlines the date of commencement and the date of completion for each of the following: + Each Significant Milestone for the design and construction of Phase | of the Project that has not yet been completed as of the Effective Date; * Bidding and award of each Construction Contract and Consultant Contract awarded or to be awarded which will be City-Funded; and * To the extent reasonably known, application for and issuance of all Required Approvals for the City-Funded Work, including but not limited to inspections and approvals from the Department of Buildings, Fire Department, Public Design Commission, Board of Standards and Appeals, and/or any other regulatory approvals or certifications necessary to make the Project eligible for beneficial occupancy. (ii) RIOC shall require FDR LLC to (a) use best efforts to cause the Project to proceed in conformity with the Project Schedule, (b) promptly advise the City of any events that may cause FDR LLC to fail to achieve any of the dates set forth in such schedule, and (c) update the Project Schedule as needed with the submission of each Quarterly Progress Report.(iii) In the event of any substantial deviation from the approved Project Schedule, the City, in its discretion, may withhold payments under this Agreement until such time as the City is assured that the Phase One Project will be substantially completed by the Substantial Completion Date specified in such Project Schedule, or within a reasonable period of time thereafter. For the avoidance of doubt, the City acknowledges that FDR LLC has already selected the Architect and the Construction Manager. Paragraph 5. City Review of Design Documents; Approval of Changes A. Non-City-Funded Design In those instances where the City has not agreed to reimburse any portion of the design costs for the Project, FDR LLC has made a presentation of the Design Documents to the City, which are now ready for construction. B. City-Funded Design (i) The City has agreed to reimburse FDR LLC, through RIOC, for all the design costs for the Project shown in the spreadsheet attached as Exhibit A and has been advised by FDR LLC that the Architect and all other City-Funded Consultants have been selected in the manner set forth in Paragraph 8(A)(1). The City acknowledges that RIOC has not participated in the selection of the Architect or other City-funded Consultants. (ji) FOR LLC has made a presentation to the City of the plans and specifications for such work, along with the corresponding cost estimate at each Significant Milestone, all of which are ready for construction, (ii) At its discretion, the City may elect to: * Attend all design meetings held in connection with the Project, in which instance RIOC or FDR LLC shall provide the City with prior written notice of the date, time and location of all design meetings; and/or * Limit its review of Design Documents to those pertaining to the City-Funded Work, C. Material Change During the performance of the Agreement, no Material Change to the Project shall be made until RIOC and FDR LLC have reviewed such change with the City and have been advised in writing that the City has no objection to such change. In addition, all changes to the City-Funded Work (Material Changes and non-Material Changes) are subject to the provisions of Paragraph 11(A)(ii). For purposes of this Agreement, a "Material Change” constitutes a change that may (i) significantly alter what was approved by the Board of Directors of RIOC and as set forth in Exhibit D; (ji) adversely affect RIOC's ability to comply with the covenant requiring the Project to be used as public open space; or (ii) result in the Grant not being used for Eligible Project Costs. Non-Material Changes made to the non-City-Funded Work shall not require the City's prior review. However, to the extent indicated in Paragraph 10(A) of this Agreement, RIOC, through FDR LLC, shall provide the City with information about changes in the Project in its Quarterly Progress Report. Paragraph 6. Insurance: Risk of Operations and Indemnification; Bonding A. Insurance At all times during the Term of this Agreement, RIOC shall require FDR LLC, all Construction Contractors and Consultants performing work on the Project to maintain insurance in accordance with the terms set forth in Exhibit C of this Agreement, attached hereto and incorporated herein. B. Risk of Operations and Indemnification At all times during the Term of this Agreement, RIOC shall require FDR LLC, all Construction Contractors and Consultants who or which are required to obtain insurance under this Agreement to assume the risk of operations and provide indemnification in accordance with the requirements contained in Section 2 of Exhibit B of this Agreement, attached hereto and incorporated herein. C. Bonding In every City-Funded Construction Contract in a contract amount equal to or greater than $100,000, the entity awarding the contract shall require such Contractor to obtain performance and payment bonds, each in an amount not less than the amount of such contract. Each such required bond shall be obtained by that contractor, shall be in effect on or before the commencement of performance under the relevant contract, and shall remain in effect until the completion and final acceptance of such contractor's work under such contract. The bonds required pursuant to this Paragraph 6(C) shall be issued by such surety or sureties as are licensed to issue stich bonds in the State of New York and are approved by the City, and shall identify both the entity awarding the contract and the City as co-obligees. The performance and payment bonds required hereunder shall be on forms required by the City, including a special form of performance bond for City-Funded Construction Contracts that do not exceed $5 milion, which form has been approved by the U.S. Small Business Administration for participation in its bond guarantee program, all as contained in Exhibit E. Paragraph 7. Compliance with Applicable Law; NYC AppendixA. RIOC shall comply with all applicable law, and shall require FOR LLC to comply, with all local, state and federal laws, rules, regulations and Mayoral Executive Orders now in force or which may later be adopted (“Legal Requirements”), as such Legal Requirements may be applicable to the Project. As part of such compliance, RIOC shall require FDR LLC to: (i) obtain, at its own expense, all Required Approvals; (i) ensure that any architect or engineer hired to perform Work is registered in the State of New York; (ii) pay applicable prevailing wages, and perform all the enforcement obligations set forth in §220 of the Labor Law to ensure that FDR LLC and its contractors and subcontractors pay applicable prevailing wages, as such rates are established pursuant to Section 220(3) of the Labor Law of the State of New York; (iv) cémply with the requirements of Local Laws 77 of 2003 (Ultra Low Sulfur Diesel Fuel), 38 of 2002 (Living Wage), 118, 119, 120 and 121 of 2005 (Environmentally Preferable Purchasing) and 86 of 2005 (Green Building Standards Law); (v) comply with the applicable provisions of the New York City Noise Control Code (Administrative Code §24-216 et seq. as amended, and related regulations); (vi) comply with Labor Law Section 220-e and any regulations promulgated thereunder. B. The City shall cooperate with RIOC and furnish such information and complete any applications that may be requested by RIOC for the purpose of enabling FDR LLC to comply with the requirements of Paragraph 7(A). C. This Agreement is subject to and incorporates those provisions attached as the NYC Appendix. Paragraph 8. Bidding and Contract Requirements A. Procurement Requirements, All contracts awarded by FDR LLC, and all subcontracts, shall be procured in accordance with applicable laws and regulations. Copies of FDR LLC’s contracts and subcontracts for the Project shall be provided to the City upon request. B. Contract Requirements()) Insurance. With regard to each Construction Contract and each Consultant Contract for the performance of work on Phase | of the Project, such contract shall be subject to and shall incorporate the relevant terms and conditions of this, Agreement including, but not limited to, the contract requirements contained in Exhibit B, Section 1 of this Agreement. (ii) Risk of Operations and Indemnification. With regard to each Construction Contract and each Consultant Contract for the performance of work on Phase | of the Project, such contract shall be subject to and shall incorporate the relevant terms and conditions of this Agreement including, but not limited to, the contract requirements contained in Exhibit B, Section 2 of this Agreement. (ii) Bonding. With regard to each City-Funded Construction Contract, such contract shall be subject to and shall incorporate the relevant terms and conditions of this Agreement including, but not limited to, the contract requirements contained in Exhibit B, Section 3 of this Agreement. (iv) Legal Requirements. With regard to each City-Funded Construction Contract and City-Funded Consultant Contract, such contract shall be subject to and shall incorporate the relevant terms and conditions of this Agreement including, but not limited! to, the contract requirements contained in Exhibit B, Section 4 of this Agreement. (v) Assignment of Contract to City. With regard to each City-Funded Construction Contract and City-Funded Consultant Contract to perform Work involving facilities owned by the City, such contract shall be subject to and shall incorporate the contract requirement contained in Exhibit B, Section 5 of this Agreement. (vi) Independent Entity. With regard to each City-Funded Construction Contract and City-Funded Consultant Contract, such contract shall be subject to and shall incorporate the contract requirement contained in Exhibit B, Section 6 of this Agreement. Paragraph 9, .Assignment of Contracts to RIOC. RIOC will be receiving a collateral assignment of all construction contracts from FDR LLC. If FOR LLC defaults in the performance of its obligations under the Development Agreement, the City agrees to accept performance of FDR LLC's obligations by RIOC or any surety of FDR LLC's obligations as if they had been performed by FDR LLC, and the City shall cause the City Funding to be paid to RIOC upon RIOC's (or the surety's) performance of FDR LLC's obligations thereunder. RIOC shall be a third party beneficiary of the City’s obligations to FDR LLC under this Funding Agreement, and RIOC shall be subrogated to all rights which FDR LLC might have against the City with respect to the City Funding. Paragraph 10. Submission of ReportsA. Quarterly Progress Report During the Term, RIOC shall cause FDR LLC to submit a quarterly progress report (the “Quarterly Progress Report") covering activities during the preceding three calendar months, such Quarterly Progress Reports to be submitted on the dates agreed to at the Project Commencement Meeting. The Quarterly Progress Report shall include the following: * Updated Project Schedule; * Project directory of all Design Consultants and Construction Contractors for the City-Funded Work, including contact information (in subsequent updates, changes should be highlighted); * Progress photos of the City-Funded Work since the last Quarterly Progress Report; * Updated Project Budget, including narrative which explains any significant deviations from the previous budget; «Updated change order log, including summary sheet; « Updates on bidding and award of contracts for the City-Funded Work; «Status of Required Approvals for the City-Funded Work; + ltemization of all costs paid to Design Consultants and Construction Contractors for the Project, including non-City-Funded Work; * Both for the City-Funded Work and the entire Project, a narrative summarizing work accomplished the previous quarter, any Significant Milestones achieved, and any problems that have occurred; and * Projection of Work to be accomplished during the three month period following the quarter being reported on, both for the City-Funded Work and the entire Project, and an itemization by contract of costs to be paid in connection with such Work. B. Close-out Report close-out report (the "Close-out Report”) shall be submitted along with the Final Payment Request, and shall include the following: * Final accounting of (i) all amounts still owed by the City, and (ji) if requested by the City, all costs incurred in connection with Phase One of the Project; * Certification by the Architect and Construction Manager that all of the City- Funded Work, including the Final Punch List, has been completed in substantial conformity with the Construction Documents; 10‘+ If applicable and at the discretion of the City, certification by the Architect and the Construction Manager that the Project as a whole, or the applicable phase, has been Completed; * As-bullt drawings for the Project in a format to be specified by the City; and + RIOC's release to the City as provided in Paragraph 11(C) of this Agreement, Paragraph 11. Monthly Payment; Retainage; Final Payment A. Monthly Payment (i) Funding pursuant to this Agreement shall be paid out in the form of payments, requested no more than once monthly, with each monthly payment reflecting Eligible Project Costs incurred by FOR LLC in connection with the City-Funded Work during the month for which payment is requested, but not including any Substantial Completion or Punch List Retainage that may be withheld by the City as set forth in Paragraph 11(B). Payments by the City shall be made solely (a) for Eligible Project Costs, and (b) on a reimbursement basis reflecting FDR LLC's actual paid expenditures without mark-up or interest charges of any kind. The City shall pay the requested Eligible Project Costs within thirty (30) days after submission of the request for payment. Within five (5) days of receipt of payment by the City, RIOC shall make reimbursement to JP Morgan Chase Bank, N.A., for the account of FOR LLC (ii) Each monthly payment shall be made by the City on the basis of a payment request by RIOC, which may also be submitted directly to the City by FDR LLC, to be submitted in a format to be provided by the City on the dates specified at the Project Commencement Meeting (each, a “Monthly Payment Request’). For each quarter in which a Quarterly Progress Report is due, the Monthly Payment Request shall be accompanied by the relevant Quarterly Progress Report. Among other items, the Monthly Payment Request shall contain, at a minimum: * A certification by the Architect or Construction Manager of Eligible Project Costs incurred by FDR LLC in connection with the City-Funded Work during the relevant month; + The information specified in subparagraph (iv) below; and * Supporting invoices and such other evidence as the City may reasonably request demonstrating that FDR LLC has already paid those costs for which it seeks reimbursement from RIOC by way of the City. (i) No payment will be made by the City for Material Changes to the City- Funded Scope of Work unless (a) to the extent required by Paragraph 5(C), the City has stated in writing that it has no objection to such change, and (b) the Work for which FOR LLC requests payment in connection with such change meets the definition of Eligible Project Costs. Notwithstanding the foregoing: 1