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of the Crow's Nest. City shall disburse Reimbursement Funds to Meritage upon the completion of the Crow's Nest building. Meritage shall have obligation to complete the Crow's Nest building prior to the actual receipt of the Reimbursement Funds from the City. Section 2. Conditions to Disbursement. Payments under this Agreement shall be disbursed subject to the following conditions and procedures. The City shall make a one-time reimbursement payment to Developer in the amount of Eight Hundred Thousand Dollars ($800,000) upon the satisfaction of all of the following conditions: 1. Completion of Improvements: Developer shall complete construction of the Crow's Nest in accordance with the plans and specifications approved by the City and attached as Exhibit `A', and in compliance with all applicable laws, codes, and City standards. 2. City Inspection and Acceptance: Developer shall notify the City in writing upon substantial completion of the Improvements. The City shall, within ten (10) business days of such notice, conduct a final inspection. Reimbursement shall not be issued unless and until the City has provided written confirmation of its acceptance of the Improvements as complete and satisfactory. 3. Submittal of Documentation: Developer shall submit the following to the City prior to disbursement: • A final cost summary of the Improvements • Copies of all relevant invoices and proof of payment • Lien releases from all contractors, subcontractors, and material suppliers • Any required as -built plans 4. No Outstanding Defaults: Developer shall not be in default under any agreement with the City related to the development project at the time of reimbursement. City acknowledges and agrees that if Meritage determines that the Funds are insufficient to cover 100% of the cost of the Improvement Work, including without limitation, as a result of any changes to the plans and specifications set forth on Exhibit A that are required by the City, then Meritage shall have the right to require that the City, as a condition to any obligation of Meritage to cause any of the Improvement Work to be undertaken, either: (a) make an additional reimbursement of funds to cover any overage subject to the same disbursement terms as above; or (b) agree to such modifications of the plans and specifications as are needed so that the Funds will cover the Improvement Work. If the City does not, for any reason, make either election within a reasonable period of time, then Meritage shall be entitled to, and the City will accept, a return of the Reimbursement Funds as provided above, in which event Meritage shall not be required to undertake any of the Improvement Work. Section 3. Compliance with California Labor Code. In performing the Improvement Work, Meritage shall comply with all applicable federal, state, and local laws, including, but not limited to, any applicable provisions of the California Labor Code. City makes no representation to Meritage as to whether the Improvement Work constitutes a "Public Work" as that term is defined by California Labor Code section 1720, and Meritage acknowledges and agrees that Meritage shall be solely responsible and liable for the determination of whether such Improvement Work constitutes a "Public Work." Meritage further acknowledges and agrees that City's sole obligation under this Agreement is to provide Meritage with the Reimbursement Funds, and that 2 I9cmo\AgreememsWeritage Homes Coyne Park Agreement (Crows Nest) FY25-0092 (v.4).docx-ms