DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF HERCULES AND LD HERCULES LAND, LLC FOR THE CERTAIN PROPERTY KNOWN AS [MUIR POINTE /PARCEL C ]

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1 RECORDING REQUESTED BY: City of Hercules WHEN RECORDED, RETURN TO: City Clerk City of Hercules 111 Civic Drive Hercules, CA Space above this line for Recorder s use only DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF HERCULES AND LD HERCULES LAND, LLC FOR THE CERTAIN PROPERTY KNOWN AS [MUIR POINTE /PARCEL C ] 2014

2 DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF HERCULES AND LD HERCULES LAND, LLC FOR THE CERTAIN PROPERTY KNOWN AS [MUIR POINTE/PARCEL C ] This DEVELOPMENT AGREEMENT ( Agreement ) dated for reference purposes, 2014 is entered into by and between the CITY OF HERCULES, a public body existing and organized as a municipal corporation of the State of California ( City ), and LD HERCULES LAND, LLC, a Delaware limited liability company ( Developer ). City and Developer are collectively referred to herein as the Parties. RECITALS This Agreement is entered into on the basis of the following facts, understandings and intentions of the Parties: A. City has enacted a Development Agreement Ordinance establishing the procedures and requirements for the consideration of development agreements pursuant to California Government Code Section et seq. (Hercules Municipal Code, Title 10, Section 8, commencing with Section ) (collectively the Development Agreement Laws ). B. Developer is a limited liability company organized under the laws of the State of Delaware and qualified to conduct business in and currently operating in good standing under the laws of the State of California. C. The land that is the subject of this Agreement is a portion of that real property designated by Assessor s Parcel Number , consisting of approximately acres bounded on the south by John Muir Parkway and lying east of the current easterly terminus of Linus Pauling Drive as more particularly described in Exhibit A attached hereto and also described as Parcel C in Exhibit D (the Property ). Developer (by assignment from its affiliate Lewis Land Developers, LLC) is currently in contract under that certain Real Estate Purchase and Sale Agreement and Final Escrow Instructions dated September 12, 2013 as amended (the Purchase Contract ) to purchase the Property from the City of Hercules, as Successor Agency to the Hercules Redevelopment Agency for Non-Housing Assets (the Successor Agency ). D. Environmental review for development on the Property was first initiated with the Final City of Hercules General Plan Land Use and Circulation Updates and Redevelopment Plan Amendments Environmental Impact Report (1995)(SCH # ),(the Program EIR ) as amended by those Addenda to the Program EIR all as listed in Exhibit B attached hereto. An Addendum to the Program EIR for development of the Property in accordance with the Project Description and this Agreement has been completed by the City (the Project EIR Addendum ). E. Developer proposes to develop the Property as a new residential community as generally described in the Project Description (the Project ). To facilitate its proposal, Developer has applied to the City for, or intends to apply to the City for, the following land use and development entitlements and approvals concurrent with this Agreement: 1. General Plan amendment #GPA ( GPA ) to change the current General Plan land use designation for the Property from General Commercial (GC) to Planned Commercial-Residential (PC-R); 2

3 2. Zoning Ordinance Amendment #ZA ( ZA ) to re-zone the Property from General Commercial (GC) to Planned Commercial-Residential (PC-R); 3. Final Plan Development Plan #FPDP (which amends a portion of #PDP Bayside), ( PDP ); 4. Vesting Tentative Subdivision Map #9375 ( VTM ); 5. Tentative Parcel Map #MS ( TPM ); and 6. Design Review Approval #DRP ( DRA ). F. As part of the City s consideration and processing of Developer s applications, and pursuant to the requirements of the California Environmental Quality Act ( CEQA ) and its implementing regulations (the CEQA Guidelines ), the City evaluated the potential environmental impacts of Developer s proposed Project. Based on that evaluation, the City determined that: 1. Developer s proposed Project is within the scope of the development program for the Property that was described and analyzed in the Program EIR; 2. As compared to the development program for the Property that was described and analyzed in the Program EIR, Developer s proposed Project would not result in any new significant impacts or substantially increase the severity of any previously-identified significant impacts; 3. Developer s proposed Project would not require any new mitigation measures that were not already described in the Program EIR. Accordingly, and as provided by Section of the CEQA Guidelines, the City prepared, approved and adopted the Project EIR Addendum. G. On, 2014, after consideration of the staff report and all other documentary and oral evidence submitted at a duly noticed public hearing, the Planning Commission took appropriate action under CEQA, the Planning and Zoning Law (Government Code Section et seq.), and the City of Hercules Municipal Code, and made recommendations to the City Council regarding the Project and this Agreement. H. On, 2014, after consideration of the Planning Commission s recommendation, an updated staff report, and all other documentary and oral evidence submitted at a duly noticed public hearing, the City Council took the following actions with respect to Developer s applications for the Project: 1. Certified the Project EIR Addendum (IS # 14-01) (Resolution No ); 2. Approved the GPA which included amendments to the City s general plan land use map and to the text of the City s general plan (Resolution No. ); 3. Approved the ZA which included amendments to the City s zoning map and to the text of the City s zoning ordinance (Ordinance No. ); 4. Approved the VTM (Resolution No. ); 3

4 5. Approved the TPM; 6. Approved the PDP (Resolution No. ); No. ). 7. Approved and authorized execution of this Agreement (Ordinance Collectively, these actions are referred to herein as the Existing Approvals. I. On, 2014, following its second reading of Ordinance No. (hereafter, the Enacting Ordinance ), the City Council adopted the Enacting Ordinance approving this Agreement, which Enacting Ordinance took effect on thirty (30) days later. A true and correct copy of the Enacting Ordinance is attached hereto as Exhibit C. J. On, 2014, a Final Parcel Map # MS consistent with the TPM was approved by the City Council (the FPM ) and on, 2014 the FPM was recorded in the Official Records of the Contra Costa County Recorder. K. On, 2014, title to the Property was conveyed by the Successor Agency to Developer in accordance with the Purchase Contract. L. Development of the Project in a comprehensive and orderly fashion as contemplated in the Existing Approvals and this Agreement would result in substantial public benefits to the City, its residents and surrounding communities, including but not limited to the community improvements and amenities described in this Agreement, in the Project Description, and in the Existing Approvals. In exchange for these benefits to the City, Developer would receive the City s assurance that it may proceed to develop the Project in accordance with the laws, regulations, policies and standards in effect on the date the Project is approved, subject to the terms and conditions contained in this Agreement. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants contained in this Agreement, City and Developer agree as follows: Section 1. Definitions. Each capitalized reference in this Agreement to any of the following terms shall have the meaning set forth below: 1.1. Agreement means this Development Agreement Ancillary Hydrant Improvements shall have the meaning set forth in Section 4.15 of this Agreement Applicable Law shall have the meaning set forth in Section 4.3 of this Agreement Basin Costs shall have the meaning set forth in Section 4.13 of this Agreement Bayfront shall have the meaning set forth in Section 4.13 of this Agreement. 4

5 1.6. Bayfront Project shall have the meaning set forth in Section 4.13 of this Agreement Bio-Retention Parcel shall have the meaning set forth in Section 4.13 of this Agreement Bio-Retention Basin Interim Improvements shall have the meaning set forth in Section 4.13 of this Agreement BRP Contract shall have the meaning set forth in Section 4.13 of this Agreement Building Codes shall mean the Uniform Building Codes adopted by City and in effect in City at the time Developer applies to City for a building permit for the Project CEQA shall have the meaning set forth in Recital F of this Agreement CEQA Guidelines shall have the meaning set forth in Recital F of this Agreement CFD shall have the meaning set forth in Section 4.19 of this Agreement Changes in the Law shall have the meaning set forth in Section 4.11(d) of this Agreement City Law shall have the meaning set forth in Section 4.4 of this Agreement Claims shall have the meaning set forth in Section 3.6 of this Agreement Development Agreement Laws shall have the meaning set forth in Recital A of this Agreement DIF shall have the meaning set forth in Section 4.18 of this Agreement DIF Control Period shall have the meaning set forth in Section 4.18 of this Agreement DRA shall have the meaning set forth in Recital E of this Agreement EDMUD shall have the meaning set forth in Section 3.2(a) of this Agreement Effective Date shall have the meaning set forth in Section Enacting Ordinance means Ordinance No., adopted by City Council on, approving this Agreement, as described in Recital I and attached as Exhibit C to this Agreement Estoppel Certificate shall have the meaning set forth in Section 9.15 of this Agreement Exactions means all exactions that will or may be imposed by the City as a condition of developing the Project, including but not limited to fees, in-lieu payments, or other monetary payments, requirements for acquisition, dedication or reservation of land, obligations to construct on-site or off-site public and private improvements called for in connection with the development of the Project under this Agreement, the Project Approvals, and the Applicable Law (defined in Section 5

6 4.3), whether such exactions constitute subdivision improvements, mitigation measures in connection with environmental review of the Project, or impositions made under the City Law (defined in Section 4.4 below) Existing Approvals means the approvals granted by the City Council on, 2014, described in Recital H of this Agreement Existing DIF shall have the meaning set forth in Section 4.18 of this Agreement Fee Credits shall have the meaning set forth in Section 4.18 of this Agreement FPM shall have the meaning set forth in Recital J of this Agreement Former DA shall have the meaning set forth in Section 4.10 of this Agreement GPA shall have the meaning set forth in Recital E of this Agreement Hydrants shall have the meaning set forth in Section 3.2(e) of this Agreement Life Station Parcel shall have the meaning set forth in Section 4.12 of this Agreement Mortgage shall have the meaning set forth in Section 8.3 of this Agreement Mortgagee shall have the meaning set forth in Section 8.3 of this Agreement Notices shall have the meaning set forth in Section 9.1 of this Agreement Park Fee Credits shall have the meaning set forth in Section 3.2(f) of this Agreement Periodic Review shall have the meaning set forth in Section 5.1(b) of this Agreement PDP shall have the meaning set forth in Recital E of this Agreement Program EIR shall have the meaning set forth in Recital D of this Agreement Program EIR Addendum shall have the meaning set forth in Recital D of this Agreement Project means the proposed improvements to the Property and associated off-site improvements described and depicted in Exhibit B to this Agreement Project Approvals means, collectively, the Existing Approvals (as defined in Section 1.5 above) and the Subsequent Approvals (as defined in Section 1.11 below) Property means that certain real property described in Exhibit A to this Agreement Purchase Contract shall have the meaning set forth in Recital C of this Agreement Residence shall have the meaning set forth in Section 6.6 of this Agreement. 6

7 1.47. Subsequent Approvals means all development approvals for development of the Project on the Property that may be issued by the City after the Effective Date of this Agreement Successor Agency shall have the meaning set forth in Recital C of this Agreement Term means the Term of this Agreement as provided in Section TPM shall have the meaning set forth in Recital E of this Agreement Transfer shall have the meaning set forth in Section 7.1(a) of this Agreement Transferee shall have the meaning set forth in Section 7.1(a) of this Agreement VTM shall have the meaning set forth in Recital E of this Agreement ZA shall have the meaning set forth in Recital E of this Agreement. Section 2. Effective Date; Recordation; Term 2.1. Effective Date; Recordation. This Agreement shall take effect on the thirtieth (30 th ) day following the adoption of the Enacting Ordinance by the City Council as specified in Recital I above, or the date upon which it is executed by both City and Developer, whichever is later ( Effective Date ). Not later than five (5) days after the Effective Date, the City Clerk shall cause this Agreement, including all Exhibits thereto, to be recorded in the Official Records of the County of Contra Costa, State of California Term. The term of this Agreement ("Term") shall commence on the Effective Date and shall expire five (5) years thereafter, unless sooner terminated or extended as hereinafter provided. With the approval of the City Manager, the Term may be extended for one (1) additional two (2) year period, so long as Developer has commenced the construction of the Project during the initial 3 years of the Term and delivered written notice of its election to extend the term for the additional 2 year period, not less than thirty (30) days prior to the lapse of the initial 3 year Term. The Term shall also extend by the time period of any Permitted Delays under Section 9.2. Following the expiration of the Term, this Agreement shall be deemed terminated and of no further force and effect, except for and subject to the following: Notwithstanding the foregoing, if City has approved a Final Map for any portion of the Property prior to the expiration of the Term, then Developer s obligations under Section 3 of this Agreement shall survive the termination of this Agreement and shall be binding upon Developer following the termination of this Agreement Termination of this Agreement shall not affect any rights arising from any other Project Approvals (other than the rights arising solely from the Development Agreement Laws pursuant to this Agreement shall terminate) and does not prevent development of the Project in accordance with all those Project Approvals. 2.3 Automatic Extension of Tentative Subdivision Maps. For as long as this Agreement remains in effect, the term of any tentative subdivision map approved for the Property shall 7

8 automatically be extended to the Term of this Agreement as provided under the provisions of Government Code section (a). Section 3. Developer s Promises As a material part of the consideration to City for entering into this Agreement, and subject to Developer completing the purchase of the Property, Developer hereby covenants and agrees to the following: 3.1 Use of the Property. Developer shall devote the Property solely and exclusively to the uses specified for the Property in the Project Approvals and this Agreement. 3.2 Community Infrastructure and Improvements. In addition to, and not in lieu of, all infrastructure and improvements required by City as conditions of the Existing Approvals, Developer agrees to the following: (a) Developer shall be responsible for all costs associated with connecting the Project to facilities of all necessary utility service providers, including but not limited to the East Bay Municipal Utilities District ( EBMUD ); (b) Developer l contributed its 46.70% fair share of the cost to the City to fund the acquisition of the Bio-Retention Parcel by its payment of the purchase price under the Purchase Contract. Unless Developer constructs the Bio-Retention Basin Interim Improvements as set forth in Section 4.13 below, then Developer agrees to pay up to 46.70% of any costs incurred by City for the construction of the Bio-Retention Basin as set forth in Section 4.13 below. (c) Developer shall install those public improvements listed in Schedule 1 attached hereto as required by the Existing Approvals, and shall fund the maintenance of those improvements by joining existing LLAD Bayside. (d) In addition to the complying with the LLD requirement in the preceding Section 3.2(c), Developer shall contribute proportionately to the existing City-wide Zone 10 LLD; (e) Developer shall pay the City for the labor and materials costs incurred by the City to install the six (6) fire hydrants ( Hydrants ) within the Project described in Section 4.15 with payment due upon recordation of the first final tract map for VTM #9375, provided this cost shall not include any costs for the water transmission line that will serve the Hydrants which water line costs are solely a City cost; (f) Developer shall pay the City for the costs incurred by the City to install those trail, sidewalk, and pathway improvements listed in Section 4.14 (i), (ii) and (iii) not to exceed $100,000 with payment due upon recordation of the first final tract map for VTM #9375, provided Developer may apply any DIF credits received by Developer for its construction of the Project parks and recreation facilities listed in Schedule 1 to reduce this payment to the City in accordance with Hercules Municipal Code, Title 10, Section (the Park Fee Credits ); (g) Developer shall ensure that any and all construction work undertaken to implement the Project does not result in damage to or degradation of existing public infrastructure, including but not limited to road and circulation infrastructure; and in the event of any damage or degradation of any public infrastructure, Developer shall be responsible for and bear all costs necessary to promptly restore such infrastructure to the condition in which it existed prior to the 8

9 commencement of any work to implement the Project, as determined by City; and (h) Developer shall be responsible for funding and installing such minor traffic controls determined by the City to be required for the Project; provided that such minor traffic controls shall be limited to installing stop signs and other traffic signs, re-striping traffic lanes and parking spaces, installing crosswalks, and other similar measures Project Schedule. The parties acknowledge that the Developer cannot at this time predict when or the rate at the Property will be developed and this Agreement does not require that Developer commence or complete development of any phase of the development of the Property or any portion thereof within any period of time set by City. Such decisions depend upon numerous factors which are not within the control of the Developer, such as market orientation and demand, interest rates, absorption, completion and other similar factors. Except as expressly provided by this Agreement, the rate, timing, phasing, and sequencing of development shall be at the discretion of the Developer. In the event that any City Law is enacted, whether by action of the City Council or by initiative or otherwise, which governs the rate, timing, phasing or sequencing of new development or construction in the City, such City Law shall not apply to the Property or the Project or any portion thereof. The intent of the parties in agreeing to this subsection is to avoid the result in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984) where a subsequent growth management program adopted by initiative prevailed over a prior land use agreement which did not expressly address the timing, phasing or sequencing of Development. It is the intention of this provision that Developer be able to develop the Property in accordance with Developer s own schedule. 3.4 Taxes and Assessments. Developer shall pay when due all ad valorem property taxes and special assessments imposed on the Property and the improvements thereon, in accordance with Applicable Law. 3.5 Third Party Legal Actions. If there are any third party administrative, legal or equitable actions challenging any of the Existing Approvals, or any of the Subsequent Approvals, including without limitation this Agreement and all CEQA processes and actions by City relating to the Project, Developer shall defend and indemnify the City against any and all fees and costs arising out of the defense of such actions, including the reasonable fees and costs of City s in-house or special legal counsel retained to protect the City s interests. In the event of such third party action, each Party shall be entitled to legal counsel of its choice, at Developer s expense. The Parties and their respective counsel shall cooperate with each other in the defense of any such actions, which cooperation shall extend to any negotiations to settle such actions. If a court in any such action awards any form of money damages to such third party, or any attorneys fees and costs to such third party, Developer shall bear full and complete responsibility to comply with the requirements of such award, and hereby agrees to timely pay all fees and costs on behalf of the City. 3.6 Hold Harmless and Indemnification. Developer shall indemnify, defend, and hold harmless City (including its elected officials, officers, agents, and employees) from and against any and all claims, demands, damages, liabilities, costs, and expenses (including court costs and attorney's fees) (collectively, "Claims") resulting from or arising out of the development contemplated by this Agreement, other than a liability or claim based upon City's negligence or willful misconduct. The indemnity obligations of this Agreement shall not extend to Claims arising from activities associated with the use by City or public of any of the Property that has been accepted for dedication by the City or arising from the maintenance or repair by the City or any other public agency of improvements that have been accepted for dedication by the City or such other public agency. 9

10 Section 4. City Promises As a material part of the consideration to Developer for entering into this Agreement, the City hereby covenants and agrees to the following: 4.1 Vested Rights. Developer shall have the vested right, and the obligation, to develop the Project on the Property in accordance with the terms and conditions of this Agreement, the Project Approvals, and any amendments to any of them as shall, from time to time, be approved pursuant to this Agreement. 4.2 Permitted Uses of the Property. The permitted uses of the Property, the density, intensity, rate and timing of development; the maximum height, bulk and size of proposed buildings; provisions for the acquisition, reservation or dedication of land for public purposes; location of public improvements; location of public utilities; and other terms and conditions of development applicable to the Property shall be those set forth in the Project Approvals and this Agreement. 4.3 Applicable Law. The local laws, rules, regulations, official policies, standards and specifications applicable to the Project and the Property (collectively, the Applicable Law ) shall be those in force and effect on the Effective Date, except as provided herein, including the Existing Approvals. Notwithstanding the foregoing, the Building Codes (as defined in Section 1.3 above) applicable to each structure on the Property shall be the Building Codes in effect at the time of issuance of a building permit for such structure. In the event of any conflict between the terms of this Agreement and Applicable Law, the terms and conditions of this Agreement shall prevail. 4.4 No Conflicting Enactments. Except as otherwise specifically set forth herein, City, whether by action of the City Council, or by initiative or referendum, or otherwise, and whether through the exercise of City s police power or its taxing power, shall not apply to the Property any ordinance, resolution, rule, regulation, standard, directive, condition or other measure (each, individually, a City Law ) that conflicts with Applicable Law (including this Agreement) or that reduces the rights provided by this Agreement unless agreed to in writing by Developer. A City Law shall be deemed to conflict with Applicable Law, including this Agreement, or shall be deemed to reduce the rights provided by this Agreement, if it would result in any of the following: (a) reduce the number of residential units permitted to be developed in the Project, as identified in the Project Approvals or revise the distribution of those units by density as provided in the Project Approvals; (b) change any land use designation or permitted use of the Property as set forth in the Existing Approvals, except pursuant to an application for a Subsequent Approval; (c) arbitrarily limit or control the availability of public utilities, services or facilities or any privileges or rights to public utilities, services or facilities (for example sewage capacity rights, sewer connections, etc.) for the Property; (d) arbitrarily limit or control the rate, timing, phasing or sequencing of the approval, development or construction of the Project other than as set forth in this Agreement and the Applicable Law or materially delays the Project by moratoria or otherwise; (e) apply to the Project or the Property any new City law otherwise allowed by this Agreement that is not uniformly applied on a City-wide basis to all substantially similar types of development projects; (f) unreasonably limit the processing of applications for, or the obtaining of, Subsequent Approvals; or 10

11 (g) imposes Exactions not required in the Existing Approvals or this Agreement, unless such Exactions are imposed as a result of a new City law that is uniformly applied on a Citywide basis to all substantially similar types of development projects except any such uniformly applied Exactions and any New DIF (as defined in Section 4.17) shall not apply to the Project or the Property until the earlier of (i) two (2) years after the first building permit for a residential unit is issued by the City for the Project or (ii) three (3) years after the Effective Date. Notwithstanding the forgoing, no Exactions for the provision of affordable housing shall ever apply to the Project during the Term of this Agreement as set forth in Section Subsequent Approvals. Developer shall submit applications for any and all Subsequent Approvals as necessary to develop the Project, subject to the City s discretionary police powers. Upon submission by Developer of any application, City shall promptly commence and diligently complete all steps necessary to review and process the requested Subsequent Approval subject to the terms and conditions of this Agreement and Applicable Law. Subsequent Approvals contemplated for the Project include, without limitation; (a) (b) Building Permits (as needed); Certificates of Occupancy under Chapter et seq.; (c) Construction easements and encroachment permits as necessary to install all necessary utilities and the Bio-Retention Basin described in Section 3.2(b) and Section (d) (e) Improvement Plans; and Final Map(s) 4.6. Environmental Review of Subsequent Approvals. In connection with City processing and consideration of any application for a Subsequent Approval, City shall timely commence and process such preliminary reviews, initial studies and other assessments required by CEQA and shall first consider whether the proposed Subsequent Approval is within the scope of the development described and evaluated in the Program EIR and Project EIR Addendum, such that the Subsequent Approval may properly be issued on the basis of the Program EIR and Project EIR Addendum, as provided by Section of the CEQA Guidelines, before requiring any new or supplemental environmental review or documentation, consistent with the requirements of Section of the Public Resources Code, provided, to the fullest extent provided by law, the City shall not require a supplemental or subsequent CEQA document prior to considering or approving an application for a Subsequent Approval unless the City is required to pursuant to either: (a) a judgment in a third-party legal challenge or (b) the requirements of CEQA Section and Section of the current CEQA Guidelines, as they may be amended from time to time. Except as set forth in the Existing Approvals, Developer shall comply with the Applicable Mitigation Measures described in Exhibit B attached hereto Cooperation in Obtaining Other Governmental Permits. In the event that Developer is required to obtain permits and approvals from other governmental agencies to construct, operate and maintain the Project, City shall reasonably cooperate with Developer, during the Term of this Agreement, to facilitate Developer s efforts to obtain such permits and approvals. 11

12 4.8 No Affordable Housing Requirement. In consideration for the other benefits provided by this Agreement, City waives any applicable City requirements for provision of affordable housing and/or payment of housing in-lieu fees for the Project and the Property. 4.9 Moratorium Not Applicable. Notwithstanding anything to the contrary contained herein, in the event an ordinance, resolution or other measure is enacted, whether by action of City, by initiative, referendum, or otherwise, that imposes a building moratorium which affects the Project on all or any part of the Property, City agrees that such ordinance, resolution or other measure shall not apply to the Project, the Property, this Agreement or the Project Approvals unless the building moratorium is imposed as part of a declaration of a local emergency or state of emergency as defined in Government Code Prior Development Agreement Not Applicable. The Parties acknowledge that the prior development agreement applicable to the Bayside Project dated November 14, 2003, and recorded against the Property and other property as document no (the Former DA ), is no longer applicable to the Property and by the approval and recordation of this DA has been terminated as an encumbrance against the Property. Notwithstanding that termination, City agrees that except as expressly required in the Existing Approvals or this Agreement, all of the obligations of the Developer under the Former DA which concern or relate to the Property have been completed to the satisfaction of the City or waived by the City Exceptions. Notwithstanding the foregoing, the following provisions shall apply: (a) Processing Fees. City may charge Developer such fees for reviewing and processing applications for all Subsequent Approvals and other City actions required to implement the Project as City customarily charges for reviewing and processing development applications, including but not limited to fees for City staff time and fees to pay the costs to City of retaining third party professionals and consultants including but not limited to environmental, engineering, economic and fiscal, and legal consultants. (b) Changes in Applicable Law. Developer may, in its sole discretion, elect to comply with and receive the benefits of changes in Applicable Law by providing written notice to City of such election. (c) City s Defense of Voter - Approved Measures. The Parties recognize that City may be required by law to defend the validity of any voter-approved City initiative or referendum. The undertaking and provision of any such defense by City shall not be construed in any manner as a violation or default of this Agreement. (d) Changes in State and Federal Law. As provided in Government Code section , this Agreement shall not preclude the application to the Property of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in state or federal laws or regulations ( Changes in the Law ). In the event the Changes in the Law prevent or preclude compliance with one or more provisions of this Agreement, such provisions of the Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with the Changes in the Law, and City and Developer shall take such action as may be required pursuant to this Agreement, including, without limitation, Section 6 (Cancellation, Modification, Amendment) and Section 9.2 (Permitted Delay;) of this Agreement Sewer Lift Station. The Property does not include that land described as Parcel A on Exhibit D improved with a sewer lift station (the Lift Station Parcel ). Title to the Lift Station Parcel 12

13 will be retained by the City under the Purchase Contract. City grants Developer a temporary construction access easement along the boundary lines of the Lift Station Parcel that are adjacent to the Property boundary lines for a distance of fifteen (15) feet within the Lift Station Parcel for access to facilitate grading and the installation of landscaping and related utilities within the Property for the Project as required in the Existing Approvals Bio-Retention Parcel. The Property does l not include that portion of the Property described as Parcel B on Exhibit D to be improved by the City with a Bio Retention Basin (the Bio- Retention Parcel ). Title to the Bio-Retention Parcel will be retained by the City under the Purchase Contract. City agrees to commence construction of the Bio-Retention Basin by June 1, 2015 and to complete construction of the Bio-Retention Basin generally in accordance with the plans in Exhibit D-1 (and as necessary for the development of the Project) by August 1, Developer shall pay to City, within thirty (30) days after written notice to Developer by City that a contract has been awarded for the construction of the Bio-Retention Basin (the BRP Contract ), up to 46.70% of the costs to construct the Bio-Retention Basin (the Basin Costs ) as estimated in Exhibit D-2. If City fails to commence or complete construction of the Bio-Retention Basin by the dates set forth above, Developer shall have the right but not the obligation to construct those interim improvements to the Bio-Retention Basin as shown on Exhibit D-3 (the Bio-Retention Basin Interim Improvements ) upon satisfying all of the terms, conditions and requirements set forth in Schedule 3 attached hereto and after fifteen (15) days prior written notice to the City. City agrees that the costs incurred by Developer to complete such Bio-Retention Basin Interim Improvements shall be deemed to constitute Developer s 46.70% fair share of the Basin Costs and Developer shall have no obligation to pay any of the Basin Costs later incurred by City to complete its construction of the remainder of the Bio-Retention Basin. City shall require and cause Hercules Bayfront, LLC, ( Bayfront ) the owner of the Bayfront Project described in Schedule 2 (the Bayfront Project ), to pay to City the sum of $55,000 as and when required by Bayfront s development agreement with the City for the Bayfront Project for its share of the Bio-Retention Parcel acquisition costs, which payment shall then be delivered by City to Developer to reimburse Developer for Bayfront s share of the costs paid by Developer under the Purchase Contract allocable to the acquisition cost of the Bio Retention Parcel. City grants Developer (i) a temporary construction access easement along the boundary lines of the Bio Retention Parcel that are adjacent to the Property boundary lines for a distance of fifteen (15) feet within the Bio-Retention Parcel for access to facilitate grading and the installation of drainage improvements and utilities within the Property for the Project as required in the Existing Approvals, including the connection of such drainage improvements and utilities to the Bio-Retention Basin improvements as necessary to service the Project, and (ii) a temporary construction access easement to construct the Bio-Retention Basin Interim Improvements if Developer elects to construct those improvements as set forth above City Trail/Sidewalk Improvements. City shall complete those improvements listed below in subsections (i) to (iii) as part of the City s widening of John Muir Parkway. Developer s fair share of the costs of such work shall be paid by Developer as set forth in Section 3.2(f) subject to application of the Developer s excess Park Fee Credits, if any, as set forth in Section 3.2(f) above; (i) One (1) two-foot (2 ) wide decomposed granite pathway on each side of the existing ten-foot (10 ) wide concrete sidewalk on the creek side of John Muir Parkway between Alfred Nobel Drive and North Channel; (ii) One (1) ten-foot (10 ) wide concrete sidewalk on the creek side of John Muir Parkway from San Pablo Avenue to Alfred Nobel Drive; (iii) One (1) two-foot (2 ) wide decomposed granite pathway on each side 13

14 of the new sidewalk described in the preceding Section 3.2(b) (ii); and 4.15 Project Fire Hydrants. City shall be responsible for ensuring that the six (6) fire hydrants are installed along the Projects southerly boundary adjacent to John Muir Parkway, to the satisfaction of the EBMUD and the Rodeo-Hercules Fire District, prior to the issuance of the first building permit for a dwelling unit on the Property. City agrees to commence construction of the Hydrants by June 1, 2015 and complete construction of these hydrants by August 1, If the City fails to commence or complete the Hydrants by the dates required above, then, Developer shall have the right but not the obligation to complete construction of (i) the Hydrants together with (ii) any waterlines or other improvements necessary for the Hydrants to be operational (the Ancillary Hydrant Improvements ) upon fifteen (15) days prior written notice and all costs to complete construction of the Ancillary Hydrant Improvements (exclusive of the Hydrants) incurred by Developer shall be paid or reimbursed to Developer promptly by the City City Processing. City will agree, at Developer s cost, to retain additional staff if requested by Developer to expedite the processing of Developer s development applications and permits. City shall furnish Developer a rate schedule for this service upon request of Developer. Without limiting the foregoing, to complete the improvement plan and final map review, City agrees that it shall make a good faith effort to return first check prints to Developer no later than four (4) calendar weeks from the date of submittal to City. Upon receipt by City of the second submittal, City shall, provided that Developer adequately responds to City s comments on the first check prints, make a good faith effort to review and verify whether or not the second submittal satisfactorily addresses all City comments within two (2) weeks of City s receipt of such second submittal. City shall make a good faith effort to issue final approval of completed plans and maps, evidenced by the requisite signatures of appropriate City staff members, within one (1) week of City s receipt of completed plans and maps which are deemed ready for approval, and to place such maps on the next available City Council hearing agenda Easements/Right of Way Acquisition. The City agrees to use reasonable, good faith efforts to assist Developer in acquiring, vacating, and otherwise modifying easements on the Property for the purpose of completing the Project. The easement interests include any necessary utility and/or access easement vacations, relocations and quitclaims to allow for development of the Project in accordance with this Agreement, including, without limitation, the quitclaim, relocation or vacation of those easements identified on Exhibit E. Developer agrees to indemnify, defend and hold harmless the City, and to reimburse the City for actual costs incurred, in implementing this Section Development Fees/Fee Credits. Except as expressly modified in this Agreement, Developer shall pay only those Development Impact Fees ( DIF ) listed on Schedule 3 attached hereto (the Existing DIF ) charged by the City in the amounts in effect on the Effective Date as set forth in Schedule 3, until the earlier of (i) two (2) years after the first building permit is issued by the City for the Project or (ii) three (3) years after the Effective Date (the DIF Control Period ). Following the DIF Control Period, and for the remainder of the Term of this Agreement, all Existing DIFs shall be subject to upward adjustments, provided that such upward adjustments are uniformly applied to all similarly-situated properties and projects in the City and Developer shall pay any new DIF not listed on Schedule 3 adapted by the City after the DIF Control Period if uniformly applied throughout the City. DIF payments shall be made to the CITY at the time of the issuance of building permits. Whenever Developer builds or otherwise provides an item of public infrastructure for which the Developer would be entitled to fee credits under the City Law (the Fee Credits ), including those improvements listed in Schedule 1 attached hereto, City agrees that the amount of the Fee Credit the City will give Developer will be equal to the maximum construction cost amount 14

15 established by the public improvement program for that particular item of infrastructure in accordance with Hercules Municipal Code, Title 10, Section The West County Subregional Transportation Mitigation Fee on Schedule 3 is not subject to the foregoing restriction on fee increases during the DIF Control Period CFD. Developer may elect to petition the City to finance all or portions of the costs of any of the Project s development impact fees or any public improvements to be constructed by Developer in lieu of the payment of such fees using a Community Facilities District ( CFD ). Upon the receipt of such a petition, the City agrees to use reasonable, good faith efforts to promptly proceed with all the actions required to authorize such financing subject to all applicable laws, including Government Code Sections to , inclusive, and all public hearing and validation requirements. Developer agrees that the Property shall be included in a CFD to be formed by the City with other properties that benefit from the Bio-Retention Basin, including the Bayfront Project, to fund the on-going operation and maintenance of the Bio-Retention Basin after construction of the entire Bio-Retention Basin is completed. Section 5. Periodic Review of Compliance; Default; Remedies. 5.1 Periodic Compliance Review. (a) Developer shall within ten (10) days after written notice from the City Planning Director in accordance with Hercules Municipal Code, Title 10, Sections and , submit to the City Planning Director, for review and approval by City, an annual Compliance Report describing and documenting Developer s good faith compliance with the terms of this Agreement. (b) The annual compliance review ( Periodic Review ) initiated by the City Planning Director under Section 5.1(a) above shall be conducted in accordance with the Development Agreement Statute and City s Development Agreement Procedures set forth in Article 6, Chapter 8 of Title 10 of the City of Hercules Municipal Code. (c) If City determines that Developer is in compliance with all provisions of this Agreement based on the most recent Periodic Review, then within thirty (30) days following a written request from Developer that may be made from time to time, City shall execute and deliver to Developer (or to any party requested by Developer) a written Notice of Compliance in recordable form, duly executed and acknowledged by City, that certifies: (i) This Agreement is unmodified and in full force and effect, or if there have been modifications hereto, that this Agreement is in full force and effect as modified and stating the date and nature of such modifications; (ii) There are no current uncured defaults as to the requesting Developer under this Agreement or specifying the dates and nature of any such default; and (iii) Any other information reasonably requested by Developer. Developer shall have the right, at its sole discretion, to record the Notice of Compliance. 5.2 Default. (a) Any failure by City or Developer to perform any material term or condition of this Agreement, which failure continues uncured for a period of thirty (30) days following written notice of such failure from the other Party (unless such period is extended by written mutual 15

16 consent), shall constitute a default under this Agreement. Any notice given pursuant to the preceding sentence shall specify the nature of the alleged failure and, where appropriate, the manner in which such alleged failure satisfactorily may be cured. If the nature of the alleged failure is such that it cannot reasonably be cured within such 30-day period, then the commencement of the cure within such time period, and the diligent prosecution to completion of the cure thereafter, shall be deemed to be a cure within such 30-day period. (b) No failure or delay by a Party in giving notice of a default shall constitute a waiver of the default by such Party; provided, however, that the provision of notice and opportunity to cure shall nevertheless be a prerequisite to the enforcement or correction of any default. (c) During any cure period specified under this Section and during any period prior to any delivery of notice of default, the Party charged shall not be considered in default for purposes of this Agreement. If there is a dispute regarding the existence of a default, the Parties shall continue to perform their obligations hereunder, to the maximum extent practicable in light of the disputed matter and pending its resolution or formal termination of the Agreement as provided herein. 5.3 Remedies; No Money Damages. (a) In the event either Party is in default under the terms of this Agreement, the non-defaulting Party may elect, in its sole and absolute discretion, to either waive such default, terminate this Agreement by delivery of written notice of termination to the defaulting party which shall be effective 30 days after its delivery, or seek administrative or judicial remedies consistent with the terms of this Agreement. For purposes of instituting a legal action under this Agreement, any City Council determination under this Agreement as it relates to an alleged default hereunder shall be deemed a final agency action. (b) The Parties hereby acknowledge that neither the City nor Developer would have entered into this Agreement if doing so would subject it to the risk of incurring liability in money damages, either for breach of this Agreement, anticipatory breach, repudiation of the Agreement, or for any actions with respect to its negotiation, preparation, implementation, application or enforcement. The Parties further acknowledge that money damages and remedies at law generally are inadequate, and specific performance is the most appropriate remedy for the enforcement of this Agreement and should be available to all Parties for the following reasons: (i) Money damages are excluded; and (ii) Due to the nature of the Project, it may not be practical or possible to restore the property to its original condition once implementation of this agreement has begun. After such implementation, Developer may be foreclosed from other choices it may have had to utilize the property or portions thereof. Developer has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Developer for such efforts. Therefore, the Parties hereby acknowledge and agree that it is a material part of Developer s consideration to City that City shall not be at any risk whatsoever to liability for money damages relating to or arising from this Agreement, and except for non-damages remedies, including the remedy of specific performance, Developer, on the one hand, and the City, on the other hand, for 16

17 themselves, their successors and assignees, hereby release one another s officers, trustees, directors, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments of the United States Constitution, or any other law or ordinance which seeks to impose any money damages, whatsoever, upon the Parties because the Parties entered into this Agreement, because of the terms of this Agreement, or because of the manner of implementation or performance of this Agreement. Section 6. Cancellation, Modification and Amendment In General. Except as provided in Section 5.3 relating to termination in the event of default, this Agreement may be canceled, modified or amended only by mutual written consent of the Parties. 6.2 Procedure. The procedure for amending or cancelling this Agreement shall be that set forth in Article 4 of Chapter 8 of Title 10 of the City of Hercules Municipal Code (Sections through ). Ministerial modifications to any Project Approvals which the City of Hercules Municipal Code permits authorizes the City Manager or other City official to approve without Planning Commission or City Council approval shall not also require an amendment to this Agreement to be valid and enforceable as an Existing Approval Recordation of Amendment. The City shall record an appropriate notice of any amendment, cancellation or termination of this Agreement with the Contra Costa County Recorder not later than ten (10) days after the effective date of the amendment, cancellation or termination, accompanied by a legal description of the Property. 6.6 Termination Upon Sale/Lease to Public. This Agreement shall automatically terminate and cease to apply to any residential dwelling unit (a Residence ) without the execution or recordation of any further document upon satisfaction of all of the following conditions: (i) A final certificate of occupancy or similar certificate has been issued for the Residence; and (ii) The Residence has been sold or leased (for a period of at least one (1) year) and is used by its occupant as the occupant s primary residence. Section 7. Sales, Transfers and Assignments; Agreement Binding On Successors. 7.1 Sale, Transfer and Assignment of Agreement. (a) No sale, transfer or assignment of this Agreement, or of any right or interest under this Agreement ( Transfer ), shall release Developer from its obligations under this Agreement without the prior written consent of the City, which consent may not be unreasonably withheld. Within ten (10) days prior to any such sale, transfer or assignment of this Agreement, Developer shall notify City of such pending sale, transfer or assignment and the name of the purchaser, transferee or assignee ( Transferee ). City may request Developer to provide additional information relating to the Transfer or to the proposed Transferee. City shall review and approve or disapprove Developer s request for City s consent to release Developer from its obligations under this Agreement within 30 days following Developer s satisfactory provision of any such additional information requested by City. Factors that the City may consider with respect to 17

18 any proposed Transfer may include, without limitation, the financial ability of the proposed Transferee to satisfy the Developer s obligations under this Agreement, and the experience of the proposed Transferee in developing, constructing, operating and maintaining development projects similar to the Project. City may, if reasonably necessary based upon the financial ability of the proposed Transferee to satisfy the Developer s obligations under this Agreement, require that the Transferee provide the City with security reasonably satisfactory to City to secure the performance of the transferred obligations under this Agreement. (b) Prior to the effective date of any Transfer by Developer, Developer shall provide City with an executed assignment agreement, in a form reasonably acceptable to City, executed by the Transferee, providing that such Transferee expressly and unconditionally assumes all the duties and obligations of Developer under this Agreement as it relates to the Property subject to the Transfer. Notwithstanding the failure of any Transferee to execute such agreement, the burdens of this Agreement shall be binding upon such Transferee, but the benefits of this Agreement shall not inure to such Transferee until and unless such agreement has been executed by such Transferee. (c) In no event shall any rights, duties or obligations conferred upon Developer pursuant to this Agreement be at any time sold, transferred or assigned except in connection with a sale, transfer or assignment of an ownership interest in the Project and the Property. (d) Notwithstanding any Transfer by Developer of this Agreement, the Project, or the Property, Developer shall continue to be obligated under this Agreement unless and until Developer is given a release in writing by City as set forth in Section 7.1(a) above. (e) Nothing in this Section 7.1 shall prevent a transfer of the Property to an institutional lender or Mortgagee as a result of a foreclosure of a Mortgage or deed in lieu of foreclosure, and any lender or Mortgagee acquiring the Property as a result of a foreclosure of a Mortgage or deed in lieu of foreclosure shall take the Property subject to the terms of this Agreement; provided, however, that in no event shall any such lender or Mortgagee be liable for any defaults or monetary obligations of Developer arising prior to acquisition of title to the Property by lender or Mortgagee; and provided further, that in no event shall any such lender or Mortgagee or its successors or assigns be entitled to a building permit or occupancy certificate for any portion of the Project until all obligations of Developer then due under this Agreement have been performed, and all outstanding defaults by Developer have been cured Agreement Binding on Successors. Subject to the limitations on sales, transfers and assignments set forth in Section 7.1 above, the burdens of this Agreement shall be binding on, and the benefits of this Agreement shall inure to, all successors-in-interest to the City and Developer pursuant to Government Code section Section 8. Mortgagee Protections. 8.1 Discretion to Encumber. This Agreement shall not prevent or limit Developer from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust, UCC financing statement or fixture filing, or other security device securing financing of the Project or any portion thereof, or Developer s use of the Property as collateral or security for any purpose. 8.2 Mortgagee Rights and Obligations; Notice to City of Default. A Mortgagee of the Property or any portion thereof shall be entitled, upon written request to City, to receive from City 18

19 written notification of any default of Developer and any successor or assign of the performance of Developer s (or such successor s or assign s) obligations under this Agreement which has not been cured within the time required, and subject to the provisions of Section 5.2; provided that the failure by City to provide such notice shall not affect the status of Developer s default but shall extend the time for the Mortgagee s right to cure the default which shall not commence to run until it receives such written notice. In accordance with Section 2924 of the California Civil Code, City hereby requests that a copy of any Notice of Default and a copy of any notice of sale under any mortgage or deed of trust be mailed to City in accordance with Section 9.1 of this Agreement. 8.3 Mortgagee Protection. This Agreement shall be superior and senior to any lien placed upon the Property, or any portion thereof after the date of recording this Agreement, including the lien for any deed of trust or mortgage ("Mortgage"). Notwithstanding the foregoing, no breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, provided however City shall have the right to terminate this Agreement and all the terms, conditions, rights and obligations contained in this Agreement in the event Developer or a Mortgagee does not cure an event of default pursuant to Section 5.2 above. It shall be a default hereunder, and City shall have the right, but not the obligation, to terminate this Agreement and all the terms, conditions, rights and obligations contained in this Agreement in the event any person or entity, including any deed of trust beneficiary or mortgagee ("Mortgagee") acquires title to the Property, or any portion thereof, by foreclosure, trustee's sale, deed in lieu of foreclosure unless such Mortgagee elects, within five (5) business days of such acquisition of title, to assume the obligations hereunder as provided in Section 7 above. If at any time there is more than one mortgage constituting a lien on any portion of the Property, the lien of the Mortgagee prior in lien to all others on that portion of the mortgaged property shall be vested with the rights under this Section 8.3 to the exclusion of the holder of any junior mortgage; provided, however, that if the holder of the senior mortgage notifies the City that it elects not to exercise the rights sets forth in this Section 8.3, then each holder of a mortgage junior in lien in the order of priority of their respective liens shall have the right to exercise those rights to the exclusion of junior lien holders. Neither a failure by the senior Mortgagee to exercise its rights under this Agreement nor a delay in the response of a Mortgagee to any notice by the City shall extend Developer s or any Mortgagee s rights under this Section 8. For purposes of this Section 8, in the absence of an order of a court of competent jurisdiction that is served on the City, a then-current title report of a title company licensed to do business in the State of California and having an office in the City setting forth the order of priority of lien of the mortgages shall be reasonably relied upon by the City as evidence of priority. 8.4 Mortgagee Not Obligated. No Mortgagee shall have any obligation or duty under this Agreement, after foreclosure or a deed in lieu of foreclosure, to construct or complete the construction of improvements, or to guarantee such construction of improvements, or to guarantee such construction or completion, or to pay, perform or provide any fee, dedication, improvements or other exaction or imposition; provided, however, that a Mortgagee shall not be entitled to develop the Property to any use or to construct any improvements thereon other than those uses or improvements provided for or authorized by the General Plan or any Project Approvals which shall remain in full force and effect with any terms of this Agreement. 8.5 No Impairment of Lien. Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any existing or future mortgage, deed of trust, or other security instrument recorded against the Property. 8.6 Election to Assume Obligations. Except as may be provided to the contrary in this Agreement, no Mortgagee or beneficiary shall have an obligation or duty under this Agreement to 19

20 perform the obligations of Developer hereunder, or to guarantee such performance, and no Mortgagee shall be liable for any defaults or monetary obligations of Developer arising prior to the acquisition of title to the Property or applicable portion thereof by the Mortgagee or successors or assigns; provided, however, that except to the extent any covenant to be performed by Developer is a condition to the performance of covenant by City, the performance thereof shall continue to be a condition precedent to City s performance. In the event a Mortgagee elects to develop the Property or applicable portion thereof in accordance with this Agreement and the Project Approvals, the Mortgagee shall be required to assume and perform the obligations of Developer under this Agreement. 8.7 Constructive Notice. Every person or entity who now or hereafter owns or acquires any right, title or interest in or to any portion of the Project or the Property is, and shall be, constructively deemed to have consented to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project or the Property. Section 9. Miscellaneous Provisions Notices. Any notice or communication required pursuant to this Agreement by any party ( Notices ) shall be in writing and shall be given either personally, by electronic mail ( ) if receipt is confirmed by the recipient, by Federal Express or other similar courier promising overnight delivery, or by regular U. S. mail. (a) If given by Federal Express or similar courier, the Notice shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. (b) If personally delivered, a Notice shall be deemed to have been given when actually delivered to the party to whom it is addressed. (c) If delivered by , a Notice shall be deemed to have been given upon receipt confirmed by the receiving party. Notice transmitted after 5:00 p.m. or on Saturday or Sunday shall be deemed to have been given on the next business day provided receipt is confirmed on such date. (d) If delivered by regular U. S. mail, a Notice shall be deemed to have been given five (5) calendar days after deposit with the U. S. Postal Service. (e) Notices shall be given to the Parties at their addresses set forth below: To City: City of Hercules Attention: City Clerk Attention: City Manager 111 Civic Drive Hercules, CA Telephone:(510) Fax: (510) MRoberts@ci.hercules.ca.us PBatchelor@ci.hercules.ca.us 20

21 With copy to: To Developer: With copy to: City of Hercules Attention: City Attorney 111 Civic Drive Hercules, CA Telephone: (510) Fax: (510) Lewis Land Developers, LLC Attention: Douglas V. Mull 9216 Kiefer Blvd., Suite 4 Sacramento, CA Telephone: (916) Fax: (916) doug.mull@lewisop.com Lewis Operating Corp. Attention: W. Bradford Francke, Esq. P. O. Box 670 Upland, CA Telephone: (909) Fax: (909) brad.francke@lewisop.com (f) Any party may change its mailing address or contact person(s) at any time by giving written notice of such change to the other party in the manner provided herein at least ten (10) days prior to the date such change is effected. (g) Every Notice (other than the giving or withholding of consent, approval or satisfaction under this Agreement but including requests therefor) given to a party shall comply with the following requirements. Each such Notice shall state the Section of this Agreement pursuant to which the Notice is given. Each request for consent or approval shall contain reasonably sufficient data or documentation to enable the recipient to make an informed decision Permitted Delays. In addition to any specific provisions of this Agreement, performance by any party of its obligations hereunder may be excused and the Term of this Agreement shall be extended by a period of time equal to any period of delay caused by reason of (i) war, civil commotion or riots; (ii) damage to work in process by reason of earthquake, extraordinary rains causing flooding, or other natural casualties; (iii) restrictions or delays caused, imposed or mandated by governmental or quasi-governmental entities; (iv) failure of nonparty agencies to timely process and grant a Project application in the normal course of its operations; (v) litigation challenging the validity of this Agreement or any Project Approval; or (vi) unusually severe winter weather causing an inability to undertake construction activities in accordance with standard industry practice. Notwithstanding the above, the failure to pay any fees for the Project required to be paid by a Party shall not constitute a permitted delay under this Section. Each party shall promptly notify the other Parties of any delay hereunder as soon as possible after the same has been ascertained. Subject to the foregoing, the deadlines set forth herein and the Term of this Agreement shall be extended by the period of any delay hereunder Negation of Partnership, City and Joint Venture. The City and Developer specifically acknowledge that the Project is a private development, that no party is acting as the agent of the 21

22 other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. None of the provisions of this Agreement shall be deemed to create a partnership between or among the Parties in the businesses of Developer, or the affairs of City, or otherwise, nor shall it cause them to be considered joint venturers or members of any joint enterprise. This Agreement is not intended nor shall it be construed to create any third party beneficiary rights in any person who is not expressly made a party and signatory to this Agreement Severability. Invalidation of any provision of this Agreement, or of the application thereof to any person, by judgment or court order shall in no way affect any of the other provisions hereof or the application thereof to any other person or circumstances and the same shall remain in full force and effect, unless enforcement of this Agreement as so invalidated would be unreasonable or grossly inequitable under all the circumstances or would frustrate the purposes of this Agreement Incorporation by Reference. The Program EIR and all subsequent CEQA documents adopted and certified for the Property; the Applicable Law; and the Existing Approvals and all associated conditions of approval, are deemed incorporated by reference into this Agreement as if set forth in full, to the extent applicable to the Project Entire Agreement. This Agreement and the Exhibits hereto contain all the representations and the entire agreement between the Parties with respect to the subject matter hereof. Except as otherwise specified in this Agreement, all prior correspondence, memoranda, agreements, warranties or representations are superseded in total by this Agreement and the Exhibits hereto Further Documents. Each party shall execute and deliver such further documents as may be reasonably necessary to achieve the objectives of this Agreement Governing Law; Interpretation of Agreement. This Agreement shall be governed by and interpreted in accordance with the laws of the United States, the State of California and the City of Hercules Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original Agreement Time of Essence. Time is of the essence of this Agreement and of each and every term and condition hereof Notice of Termination. Upon the expiration or earlier termination of this Agreement, the Parties hereto shall, if requested by another party, execute for recordation in the Official Records of Contra Costa County, a notice stating that this Agreement has expired or has been terminated, and, to the extent applicable, that the Parties have performed all their duties and obligations hereunder Agreement Negotiated; Interpretation. The language in this Agreement shall be construed in accordance with its fair meaning and not strictly for or against a Party hereto. The Parties acknowledge that this Agreement has been prepared by both of the Parties hereto and shall not be interpreted or construed against the Party preparing or drafting it or any portion hereof. The Parties hereto have been represented by counsel of their own choosing through the negotiation and preparation of this Agreement. As a consequence, the presumptions of Civil Code Section 1654 relating to the interpretation of contracts against the drafter shall not be applied to the interpretation 22

23 of this Agreement Recitals Incorporated. The Parties hereby acknowledge and agree that the Recitals to this Agreement are true and correct and are hereby incorporated herein and by this reference made a part hereof Purchase Agreement. If Developer does not close escrow and acquire fee title to the Property pursuant to the Purchase Contract, this Agreement shall terminate and be of no further force or effect, concurrently with the termination of the Purchase Agreement Estoppel Certificate. A party may at any time deliver written notice to the other party requesting an estoppel certificate (the Estoppel Certificate ). A party receiving a request for an Estoppel Certificate shall provide a signed certificate to the requesting party within thirty (30) days after receipt of the request. The City Manager or any person designated by the City Manager may sign Estoppel Certificates on behalf of the City. Any officer or the managing member of a private party may sign on behalf of that party. An Estoppel Certificate is intended to be relied on by assignees and mortgagees. If one party requests an Estoppel Certificate from the other, the requesting party shall, upon request of the other party, reimburse the other party for all reasonable costs and fees incurred by such party with respect thereto Exhibits/Schedules. The following exhibits and schedules are attached to this Agreement and incorporated herein for all purposes: Exhibit A Exhibit B Exhibit C Exhibit D Exhibit D-1 Exhibit D-2 Exhibit D-3 Exhibit E Schedule 1 Schedule 2 Schedule 3 Schedule 4 Legal Description of the Property Previous CEQA Documentation/Mitigation Measures Enacting Ordinance Sewer Lift Station/Bio-Retention Parcel Descriptions Bio-Retention Facility Plans Bio-Retention Basin Cost Estimate Bio-Retention Interim Improvements Easements List of Project Public Improvements Description of Bayfront Project List of DIF Fees Bio-Retention Basin Interim Improvement Requirements 23

24 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below. CITY: CITY OF HERCULES, a public body corporate and politic Dated: ATTEST: By: Mayor City Clerk/City Secretary APPROVED AS TO FORM: By City Attorney of the City of Hercules DEVELOPER: LD HERCULES LAND, LLC, a Delaware limited liability company By: LEWIS LAND DEVELOPERS, LLC, a Delaware limited liability company, Its sole member By: Lewis Operating Corp. Its Manager Dated: City Clerk/City Secretary By: John M. Goodman Senior VP/CEO/CFO APPROVED AS TO FORM: By Attorney for Lewis Land Developers, LLC 24

25 STATE OF CALIFORNIA ) ) ss. COUNTY OF CONTRA COSTA ) On,, before me,, the undersigned, personally appeared, ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature STATE OF CALIFORNIA ) ) ss. COUNTY OF CONTRA COSTA ) On,, before me,, the undersigned, personally appeared ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature 25

26 STATE OF CALIFORNIA ) ) ss. COUNTY OF CONTRA COSTA ) On,, before me,, the undersigned, personally appeared, ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature STATE OF CALIFORNIA ) ) ss. COUNTY OF CONTRA COSTA ) On,, before me,, the undersigned, personally appeared ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature 26

27 EXHIBIT A Legal Description of Property Parcel C of Parcel Map No. MS filed in the Office of the Recorder of Contra Costa County, California on, 2014, in Book of Parcel Maps, Pages to. 27

28 Previous CEQA Documentation EXHIBIT B Previous CEQA Documentation//Mitigation Measures 1995 City of Hercules General Plan Land Use and Circulation Element Update and Redevelopment Plan Amendments Environmental Impact Report (State Clearinghouse # ) (the General Plan Update EIR ) Addendum to the General Plan Update EIR for the Bayside Project (SCH # ) Addendum to the General Plan Update EIR for the Sycamore North Project (SCH # ) Addendum to the General Plan Update EIR for the Town Centrale (formerly Sycamore North) Project. Applicable Mitigation Measures Developer shall adhere to the following applicable Mitigation Measures identified in the Project EIR Addendum affecting the Project: a) The project landscape plan shall provide for screening of parking areas by use of vegetation or trees, use of hoods for light fixtures for parking areas, loading docks and use of regular windows instead of glass walls or massive reflective windows (General Pan EIR). b) The project developer shall meet a performance standard of no increase in lighting spillover into adjacent "light-sensitive" areas (Central Hercules Plan). c) The project developer shall maintain and operate equipment to minimize exhaust emissions, including tune up and inspection of equipment (General Plan EIR). d) Construction of the project shall be phased to minimize overlapping air emissions (General Plan EIR). e) The following dust control measures shall be implemented during grading and construction activities, where applicable (Updated Redevelopment Plan EIR): During all construction phases: 1. Water all active construction areas at least twice daily. 2. Water or cover stockpiles of debris, soil, sand, or other materials that can be blown by the wind. 3. Cover all trucks hauling soil, sand, and other loose materials, or require all trucks to maintain at least 2 feet of freeboard. 4. Pave, apply water three times daily, or apply (non-toxic) soil stabilizers on all unpaved 28

29 access roads, parking areas, and staging areas at construction sites. 5. Sweep daily (with water sweepers) all paved access roads, parking areas, and staging areas at construction sites. 6. Sweep streets daily (with water sweepers) if visible soil material is carried onto adjacent public streets. 7. Hydroseed or apply (non-toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more. 8. Enclose, cover, water twice daily, or apply (non-toxic) soil binders to exposed stockpiles (dirt, sand, etc.). 9. Limit traffic speeds on unpaved roads to 15 miles per hour. 10. Install sandbags or other erosion control measures to prevent silt runoff to public roadways. 11. Replant vegetation in disturbed areas as quickly as possible. f) The following additional mitigation measures, which are recommended by the BAAQMD to reduce engine exhaust emissions, shall be considered for construction activities but are not required to reduce construction impacts to a less-than-significant level: 1. Use alternative fueled construction equipment; 2. Minimize idling time (5 minutes maximum); 3. Maintain properly tuned equipment; 4. Limit the hours of operation of heavy equipment and/or the amount of equipment in use. g) The project developer shall implement feasible BAAQMD mitigation measures for reducing vehicle and area source emissions from suburban residential projects (Updated Redevelopment Plan EIR). 1. Provide bicycle lanes, sidewalks, and/or paths connecting project residences to adjacent schools, parks, nearest transit stop and nearby commercial areas. 2. Construct transit amenities such as bus turnouts/bus bulbs, benches, shelters, etc. 3. Provide direct, safe, attractive pedestrian access from project land uses to transit stops and adjacent development. 4. Utilize reflective (or high albedo) and emissive roofs and light colored construction materials to increase the reflectivity of roads, driveways, and other paved surfaces, and include shade trees near buildings to directly shield them from the sun's rays and reduce local air temperature and cooling energy demand. 29

30 5. Eliminate wood burning fireplaces or devices. Install a gas outlet in proposed outdoor recreational fireplaces or pits. Offer as an option on homes to install a gas outlet for use with outdoor cooking appliances, such as a gas barbeque. 6. Use efficient heating and other appliances, such as water heaters, cooking equipment, refrigerators, furnaces, and boiler units that meet or exceed Title 24 requirements (Energy Efficiency Standards for Residential and Nonresidential Buildings and Green Building Standards). Use window glazing and insulation, wall insulation, and efficient ventilation methods. 7. Encourage the use of battery-powered or electrical landscaping equipment and discourage the use of leaf blowers and other dust producing equipment by installing electrical outlets on the exterior walls of both the front and back of all residences and requiring home owners associations prohibit the use of leaf blowers. 8. Landscape with drought resistant and low maintenance species of plants, trees, and shrubs to reduce the demand for gas-powered landscape maintenance equipment. 9. Provide a 220-volt utility drop or other dedicated outlet that is adaptable for use by electric or rechargeable hybrid vehicles that are generally available to consumers. h) The Landscape Plan for the project shall use native plants and, in area with a lower water table, drought tolerant plant material (General Plan EIR). i) The project developer shall install for fencing along any streets or property boundaries that abut natural areas (Central Hercules Plan Regulating Code). j) Construction plans and specifications for the project shall specify that construction personnel that they: not disturb artifacts; identify a qualified archeologist in the event of finding an artifact; and develop an appropriate course of action, including scientific analysis (General Plan EIR). k) The project developer shall submit runoff increase calculations to be measured against estimates of existing runoff to ensure that no flooding will occur (General Plan EIR). l) The project shall adhere to all goals and policies contained in the Land Use Element & Growth Management Element to reduce any land use incompatibilities to a less-than-significant level (General Plan EIR). m) A Construction Noise Management Plan shall be prepared to include limitation of construction activities to certain hours and days of the week, s pre-drilling of piles to reduce noise, where feasible, installation of temporary noise barriers adjacent to sensitive noise receptors and equipping construction equipment with mufflers (General Plan EIR). n) The project developer shall coordinate with the School District regarding timely and proper payment of required impact fees (General Plan EIR). o) The project developer shall fund a fair share of costs for City park development (General Plan EIR). 30

31 EIR). EIR). p) The project developer shall pay its fair share of traffic improvements (General Plan q) Dwellings within the project shall include low-flush plumbing fixtures (General Plan 31

32 EXHIBIT C Enacting Ordinance Ordinance No. (adopted, 2014) 32

33 EXHIBIT D Sewer Lift Station/Bio-Retention Parcel Description Sewer Lift Station Parcel Description: Parcel A of Parcel Map No. MS filed in the Office of the Recorder of Contra Costa County, California on, 2014, in Book of Parcel Maps, Pages to. Bio-Retention Parcel Description: Parcel B of Parcel Map No. MS filed in the Office of the Recorder of Contra Costa County, California on, 2014, in Book of Parcel Maps, Pages to. 33

34 34

35 EXHIBIT D-1 Bio-Retention Facility Plan 35

36 36

37 EXHIBIT D-2 Bio-Retention Basin Cost Estimate 37

38 EXHIBIT D-3 Bio-Retention Interim Improvements 38

39 39