Agenda packet — Finance Committee, October 14, 2025

City Council Chambers
29844 Haun Road
Menifee, CA 92586
Dean Deines, District 4
Dan Temple, District 3
AGENDA
Finance Committee
Special Meeting Agenda
Tuesday, October 14, 2025
4:00 PM Special Meeting
Travis Hickey, Chief Financial Officer
Rachel Valencia, Clerk
SPECIAL MEETING (4:00 PM)

1. CALL TO ORDER

2. ROLL CALL

3. PRESENTATIONS NONE

4. APPROVAL OF MINUTES

4.1 September 9, 2025 Finance Committee Meeting Minutes

5. DISCUSSION ITEMS

5.1 Proposed Amendment No. 1 to the Development Agreement with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan) RECOMMENDED ACTION

1. Review the proposed Amendment No. 1 for the existing Development Agreement (2018277) between the City of Menifee and BLC Fleming, LLC and Lennar, LLC dated June 3, 2020 for the Legado development and recommend submittal to the City Council for approval.

5.2 Bond Premium Reimbursement with Lennar Homes for Community Facilities District No. 20223, Legado, IA1
RECOMMENDED ACTION

1. Discuss the proposed bond premium reimbursement for Community Facilities District No. 20223, Improvement Area 1, and recommend presenting it to the City Council for consideration.

5.3 Annual Update on Community Facilities District Bond Premiums RECOMMENDED ACTION

1. Receive annual report with updated details on Community Facility District (CFD) bond premiums.

6. ADJOURN
Decorum Policy Notes
The Committee anticipates and encourages public participation at its meetings, both on agenda items and during the public comments period. Please turn your cell phones off, refrain from talking in the audience or outbursts that may be disruptive. We encourage participation and ask for a mutual respect for the proceedings.

Staff Reports
Materials related to an item on this agenda, including those submitted to the Committee after distribution of the agenda packet, are available for public inspection by contacting the City Clerk Department, at (951) 6726777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours.

Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 672 6777, or by coming into City Hall located at 29844 Haun Road, Menifee, CA, 92586 during normal business hours. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

Affidavit of the Posting
I, Rachel Valencia, do hereby certify, under penalty of perjury, that the Tuesday, October 14, 2025 special Finance Committee meeting agenda was posted at least 24 hours prior to the meeting in the following locations per Cal. Gov.

Code, § 54954.2, subd. (a)(1): Menifee City Hall, 29844 Haun Road, Kay Ceniceros Community Center, 29995 Evans Road, and the City of Menifee website.

Special Finance Committee Meeting
October 14, 2025

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1. CALL TO ORDER

2. ROLL CALL

3. PRESENTATIONS NONE

4. APPROVAL OF MINUTES

4.1 September 9, 2025 Finance Committee Meeting Minutes

5. DISCUSSION ITEMS

5.1 Proposed Amendment No. 1 to the Development Agreement with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan) RECOMMENDED ACTION

5.2 Bond Premium Reimbursement with Lennar Homes for Community Facilities District No. 20223, Legado, IA1
RECOMMENDED ACTION

1. Discuss the proposed bond premium reimbursement for Community Facilities District No. 20223, Improvement Area 1, and recommend presenting it to the City Council for consideration.

5.3 Annual Update on Community Facilities District Bond Premiums RECOMMENDED ACTION

1. Receive annual report with updated details on Community Facility District (CFD) bond premiums.

Code, § 54954.2, subd. (a)(1): Menifee City Hall, 29844 Haun Road, Kay Ceniceros Community Center, 29995 Evans Road, and the City of Menifee website.

Special Finance Committee Meeting
October 14, 2025

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City Council Chambers
29844 Haun Road
Menifee, CA 92586

Ricky Estrada, Mayor
Dean Deines, District 4

MINUTES
Finance Committee
Regular Meeting Minutes

Tuesday, September 09, 2025
4:00 PM Regular Meeting

Travis Hickey, Chief Financial
Officer
Rachel Valencia, Clerk

REGULAR MEETING (4:00 PM)

1. CALL TO ORDER

Mayor Estrada called the meeting to order at 4:00 PM.

Staff requested to change the order of items presented on the agenda and the Finance Committee approved.

2. ROLL CALL

Present: Ricky Estrada, Dean Deines

Absent: None

3. PRESENTATIONS
There were no presentations.

4. PUBLIC COMMENTS (NONAGENDA ITEMS)

There were no public comments.

5. APPROVAL OF MINUTES

The following set of minutes were approved unanimously (2-0) with no modifications.

5.1 July 8, 2025 Finance Committee Meeting Minutes

6. DISCUSSION ITEMS

6.5 City of Menifee Annual Cash & Investment Overview
Per the Committee’s approval of the agenda modification, item 6.5 was presented first.

Chief Financial Officer Travis Hickey introduced the item. Consultant Alaynè Marie Samson with Chandler Asset Management and Finance Manager Ann- Marie Etienne provided a presentation.

Item: 4.1
Item Page Number: 1
Menifee Finance Committee October 14, 2025 Page 3 of 258

The Committee asked general questions and Mayor Estrada suggested revisiting how often the Committee evaluates which investment advisors the City consults with.

The Committee unanimously approved the recommendation.

ACTION

1. Received and filed presentation on City of Menifee’s Annual Cash & Investment Overview for the July 1, 2024 to June 30, 2025 period.

6.1 Formation of Community Facilities District 2025-6 (Coastline)

Chief Financial Officer Travis Hickey introduced the item. Financial Analyst Lauri Lockwood, Shane Spicer from Spicer Consult ing Group and Jim Zimmerman from the Zimmerman Group provided a presentation. Councilmember Deines expressed concern over the amount of homes and location of the proposed development.

The Committee unanimously approved the recommended action.

ACTION

1. Reviewed the proposed Community Facilities District 2025-6 to finance certain costs of public improvements for the development of 45 single-family homes located at the northwest corner of Menifee Road and Coastline Avenue, and recommended submittal to the City Council for consideration.

6.2 Public Safety Services Community Facilities District (CFD)

Chief Financial Officer Hickey introduced the item. Deputy Finance Director Margarita Cornejo and Shane Spicer from Spicer Consulting Group provided a presentation.

The Committee asked general questions and staff provided clarification. Councilmember Deines expressed concern with inequity and emphasized the importance of communicating with residents if the City were to move forward with the proposed CFD.

The Committee unanimously approved the recommended action.

ACTION

1. Recommended that staff forward the fiscal impact analysis related to a potential public safety services CFD to the City Council for consideration.

6.3 Purchasing and Contracting Administrative Manual Update Chief Financial Officer Travis Hickey introduced the item. Finance Manager Amir Zaki provided a presentation. Councilmember Deines suggested changing the name of one of the processes referenced in the manual.

The Committee unanimously approved the recommended action.

ACTION

1. Received and filed update on Purchasing and Contracting Administrative Manual (Administrative Policy AD-35).

Item: 4.1
Item Page Number: 2
Menifee Finance Committee October 14, 2025 Page 4 of 258

6.4 Consideration to Establish Section 115 Trust
Chief Financial Officer Travis Hickey introduced the item and provided a presentation.

Councilmember Deines inquired about the potential risks involved with the discussed funds and made some suggestions regarding one- time monies and comparing investment policies. Mayor Estrada had general questions about allotment and suggested adjusting the policy to give the City Council more flexibility before setting a percentage.

The Committee unanimously approved the recommendation.

ACTION

1. Reviewed and provided input on consideration of establishing a Section 115 Trust.

7. STAFF COMMENTS
There were no staff comments.

8. COMMITTEE MEMBER UPDATES AND COMMENTS

There were no reports on Committee activities.

9. FUTURE AGENDA ITEMS

There were no future agenda item requests.

10. ADJOURNMENT
The meeting adjourned 5:55 PM.

Rachel Valencia, Administrative Assistant
Item: 4.1
Item Page Number: 3
Menifee Finance Committee October 14, 2025 Page 5 of 258

CITY OF MENIFEE
SUBJECT: Proposed Amendment No. 1 to the Development Agreement with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan)
MEETING DATE: October 14, 2025
TO: Finance Committee
PREPARED BY: Margarita Cornejo, Deputy Finance Director REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Review the proposed Amendment No. 1 for the existing Development Agreement (2018-277) between the City of Menifee and BLC Fleming, LLC and Lennar, LLC dated June 3, 2020 for the Legado development and recommend submittal to the City Council for approval.

DISCUSSION
The City of Menifee and BLC Fleming, LLC entered into a Development Agreement (DA) for the Legado project on June 3, 2020. Since then, Lennar LLC, has acquired Phase 1, and is in the process of acquiring Phase 2 of the project and subsequently is the successor-in-interest to the rights and obligations of BLC Fleming, LLC as it relates to these phases and the DA.

As of September 2025, construction activity for the 1,022 single family lot project as well as various landscape and park improvements in well underway in the northern portion of the project. Lennar has been actively processing the park and paseo plans, in addition to processing and constructing various road and infrastructure improvements. The DA as approved in 2020 established a maximum developer contribution for the cost of the parks. Any costs beyond the established maximum contributions will require either a city contribution or scaling back of the respective improvements. Since 2020 construction costs, including supplies, materials and labor have exponentially increased reflecting sustained elevated inflation. The associated park and paseo improvements of Tracts 37408 and 37409 were listed at an aggregate cost of $3 million in the original DA and are now estimated at $5.9 million based on current construction costs, resulting in revised costs exceeding the maximum contribution by $2.9 million.

Item: 5.1
Item Page Number: 1
Menifee Finance Committee October 14, 2025 Page 6 of 258

City of Menifee Staff Report
Proposed Amendment No. 1 to the DA with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan)
October 14, 2025

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Working collaboratively with the developer, Lennar, staff has identified a multi-faceted funding solution involving various components to help bridge the existing gap between the park construction costs and the maximum developer contribution within the adopted DA while maintaining the amenities desired by the community and the developer. The proposed funding solution incorporates various elements, including but not limited to: Community Facilities District (CFD) bond premium use of the Legado Phase I project, Quimby & Park Fees reimbursements, maintenance period and phased point of connection turnover, bond release credits and the DA amendments listed as follows:
Add a definition for Lennar Phase 1 (Section 1.1.58 Definitions) Extend the Development Impact Fee Freeze for lots within Lennar’s Phase 1 from 2027 to 2029, which includes:
Tracts 37408-1 (Lots 1-73)
Tracts 37408-2 (Lots 1-49)
Tracts 37408-3 (Lots 1-115)
Tracts 37408-4 (Lots 1-42)
Tract 37409-1 (Lots 1-86)
Tract 37409-2 (Lots 1-67)
Tract 37409-3 (Lots 1-59)
Lennar’s Phase 1 includes 491 lots. It is anticipated that of the 491 lots, only 81 homes would fall outside of the existing Development Impact Fee (DIF) freeze, resulting in an estimated cost savings of $44,064. The cost savings would be applied to the cost of the park and paseo improvements. (Section 5.1 Development Fees)
Extend the Timing for Completion of the West Park and Paseo from before the 140 th Certificate of Occupancy to the 200th Certificate of Occupancy in Tract TR37408. (Section

6.2.2 Tentative Tract Map No. 37408 and Section 6.2.3 Tentative Tract Map No. 37409) Move up the Timing for Completion of the East Park and Paseo from the 140th Certificate of Occupancy to the 95th Certificate of Occupancy in Tract 34709. (Section 6.2.2 Tentative Tract Map No. 37408 and Section 6.2.3 Tentative Tract Map No. 37409)  Reduce the required contingency for Park Cost Estimates to 5% from 15%. Reduction in the contingency amount is anticipated to reduce the park construction bid estimates by $469,844. The cost savings would be applied to the cost of the park and paseo improvements. (Section 6.2.2 Tentative Tract Map No. 37408 and Section 6.2.3 Tentative Tract Map No. 37409)
Update language to reflect bonds and acceptance of Parks and Points of Connection/Right of Way Maintenance timing to occur after 90 day maintenance period but before the 1 year maintenance period required by Menifee Municipal Code. Moving the acceptance timing up would result in an estimated savings of $345,139 for Lennar. The cost savings would Item: 5.1
Item Page Number: 2
Menifee Finance Committee October 14, 2025 Page 7 of 258

City of Menifee Staff Report
Proposed Amendment No. 1 to the DA with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan)
October 14, 2025

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be applied to the cost of the park and paseo improvements. (Section 3.12 Bonds and Acceptance of Parks and Points of Connection/Right of Way Maintenance) Update language to confirm Lennar agrees to bear all costs of design, planning, and construction of the 37409 Park Improvements in a manner consistent with the Plot Plan conceptual designs (as modified to exclude the bathroom facility and comply with all applicable building and fire codes) without any additional reimbursements or contributions from the City. This would result in an estimated savings of $237,000 for Lennar. The cost savings would be applied to the cost of the park and paseo improvements. (Section 6.2.2 Tentative Tract Map No. 37408 and Section 6.2.3 Tentative Tract Map No. 37409) Update language of DA adding additional indemnification language for the City and/or CFD 2022-3 regarding the applicability of prevailing or non-prevailing wages. It is Lennar’s intent to not utilize public funds for the construction of the East Park & Paseo improvements. These improvements will be bid out by Lennar separately and at non- prevailing wage. This would result in an estimated savings of $763,498 for Lennar. The cost savings would be applied to the cost of the park and paseo improvements. (Section

9.1.2 Prevailing Wage Indemnity and Notice of Labor Code Section 1781) Lennar is “construction-ready”, with the permits in hand and a contractor secured, and can begin work on the TR37408 West Park and Paseo immediately upon approval of the DA amendment. This amendment would provide additional time to complete the TR37408 West Park and Paseo but accelerates the delivery of the TR37409 East Park and Paseo.

The start of construction on the TR34708 West Park and Paseo improvements were delayed due to increased construction costs as well as joint efforts by the City and developer to explore ways to align costs with the DA.

Upon review and recommendation by the Finance Committee, the proposed Amendment No. 1 would be presented for City Council consideration.

FISCAL IMPACT
The proposed DA adjustments included within the proposed Amendment No. 1 represent a reduction in DIF fee revenue collection in the amount $44,064 with the extension of the DIF fee freeze, as well as cost savings of $469,844 to Lennar resulting from the reduction of the required contingency from 15% to 5%. These cost savings help offset the existing funding gap for the Tracts 37408 and 37409 paseo and park improvements. Additionally, the update in the timing of maintenance acceptance would result in an estimated savings of $345,139 and the update on the 37048 Park Improvements plot plan conceptual designs would result in an estimated savings of $237,000 to Lennar, the bidding of the East Park and paseo improvements with no public funds would result in an estimated savings of $763,498; all savings which would be passed towards the completion of the park and paseo improvements.

Item: 5.1
Item Page Number: 3
Menifee Finance Committee October 14, 2025 Page 8 of 258

City of Menifee Staff Report
Proposed Amendment No. 1 to the DA with BLC Fleming and Lennar, LLC for the Legado project (Legado Specific Plan)
October 14, 2025

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ATTACHMENTS

1. Proposed Amendment No.1 to DA (Redline)

2. Partial Assignment and Assumption of DA

3. Executed DA (Original)

4. Legado DA Amendment Presentation
Item: 5.1
Item Page Number: 4
Menifee Finance Committee October 14, 2025 Page 9 of 258

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Menifee
29844 Haun Road
Menifee, California 92586
Attn: City Clerk
AMENDMENT NO. 1 TO THE DEVELOPMENT AGREEMENT

BY AND BETWEEN

CITY OF MENIFEE
AND

BLC FLEMING LLC, AND LENNAR HOMES OF CALIFORNIA, LLC,

REGARDING THE LEGADO SPECIFIC PLAN PROJECT
This Amendment No. 1 to the Development Agreement (hereinafter “Agreement”) by and between the CITY OF MENIFEE (hereinafter “CITY”'), a municipal corporation of the State of California, and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company, who is successor-in-interest to BLC FLEMING LLC, a Delaware limited liability company (“D EVELOPER”) for a portion of this Agreement is entered into on the ___ day of _________, 2025 (“EFFECTIVE DATE”) is made with reference to the following facts and objectives:

RECITALS
A. On or about June 3, 2020, the City and BLC Fleming, LLC entered into that certain Development Agreement By and Between the City of Menifee and BLC Fleming, LLC regarding the Legado Specific Plan Project (“Original DA”).

B. On or about March 8, 2024, Lennar Homes of California, LLC (“Developer”) became the successor in interest to the rights and obligations of certain portion of BLC Fleming, LLC under the Original DA.

C. The Developer has encountered delays outside of its control in relation to the parks and paseos construction costs that have delayed the parks and paseos construction as previously contemplated in the Original Development DA and the park construction costs have increased from the maximum developer contribution identified in the Development Agreement Original DA. The City desires to accommodate the Developer’s request to facilitate the continued successful development of the Project and provision of park and paseo amenities consistent with the vision of the Specific Plan, and therefore, the parties now desire to amend the Original DA as set forth is this first amendment:

Item: 5.1
Item Page Number: 5
Menifee Finance Committee October 14, 2025 Page 10 of 258

In consideration of the foregoing and pursuant to Section 3.5 of the Development Agreement, the Development Agreement is hereby further amended as follows:

AGREEMENT

1. Use of Capitalized Terms. Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning assigned to such terms in the Original DA.

2. “Agreement” References. Unless the context requires otherwise, refences to the “Agreement” or the “Development Agreement” in this Amendment shall mean and refer to the Original DA.

3. Revision to Section 1.1. Definitions of the Development Agreement is amended to add 1.1.58:

1.1.58 “Lennar Phase 1” means the development of the following lots: Tracts 37408-1 (Lots 1-73); Tracts 37408-2 (Lots 1-49); Tracts 37408-3 (Lots 1-115); Tracts 37408-4 (Lots 1-42); Tract 37409-1 (Lots 1-86); Tract 37409-2 (Lots 1-67); and Tract 37409-3 (Lots 1-59).

4. Revision to Section 5.1 of the Development Agreement is amended to read in its entirety as follows:

5.1 Development Fees. The current Development Fees applicable to the Project are in the amount set forth in Exhibit E, DEVELOPER agrees that all Development Approvals and Subsequent Development Approvals that do not require an amendment to this Agreement under Section 3.5 shall be subject to the Development Fees. DEVELOPER and CITY further agree that the Development Fees (shown on and subject to adjustments as allowed in Exhibit E) shall remain fixed for a period of seven (7) years from the Effective Date, except for lots located within Lennar Phase 1. If the CITY incorporates automatic periodic increases of the Development Fees applicable to all CITY development projects, following the seven (7) year fixed period, the Project will be subject to only 50% of such accrued periodic increases for a three (3) year period whether the periodic increase occurred within the initial seven (7) year fixed period or after, except within Lennar Phase 1. Lots within Lennar Phase 1 are subject to the Development Fees applicable to the fixed amounts shown in Exhibit E for a period of ten (10) years following the Effective Date. Any Development Fees that are due ten (10) or more years following the Effective Date shall be subject to the full Development Fees in effect at the time due.

5. Revisions to Section 6.2.2 Tentative Tract Map No. 37408 Neighborhood Park and Paseo Legado West Improvements (c) and (d) of the Development Agreement is are amended to read in its entirety as follows:
c) Review of Bid. Prior to entering into a construction contract for the 37408 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER'S 37408 Park Selected Contract which, when combined with a fifteen five percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the 37408 Park and the Paseo Legado West Item: 5.1
Item Page Number: 6
Menifee Finance Committee October 14, 2025 Page 11 of 258

Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37408 Park Selected Contract to approve or reject the 37408 Park Selected Contract through the delivery of the 37408 Park Contract Notice. CITY's acceptance or rejection of the 37408 Park Selected Contract shall be based on (i) commercially reasonable considerations that are consistent with CITY's historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or (ii) concern that the costs of the 37408 Park Improvements will exceed DEVELOPER's obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY 37408 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37408 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37408 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37408 Park Selected Contract and any revised bid, then DEVELOPER may either shall make further modifications to address CITY's concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY's concerns and DEVELO:PER's responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER's demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER's sole obligation related to the 37408 Park shall be to assign the 37408 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER's cost in preparing the 37408 Park Construction Drawings. CITY' s failure to provide DEVELOPER a 37408 Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY's approval of the 37408 Park Selected Contract, so long as concurrent with DEVELOPER's delivery of the proposed 37408 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows: "IMPORTANT, DELIVERY OF THIS

CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.2(c) OF THE LEGADO DEVELOPMENT AGREEMENT.

SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE CONTRACT". For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37408 Park Improvements) toward the 37408 Park Improvements. Further, DEVELOPER agrees to bear all costs of design, planning, and construction of the 37408 Park Improvements in a manner consistent with the Plot Plan conceptual designs (as modified to exclude the bathroom facility and comply with all applicable building and fire codes) without any additional reimbursements or contributions from the CITY.

DEVELOPER further agrees that payment of applicable Development Fees subject to credits for DEVELOPER’s cost in preparing the 37408 Park Construction Drawings does not meet DEVELOPER’s obligations under this Agreement or meet the conditions of approval associated with this Agreement.
(d) Completion of Improvement. The 37408 Park Improvements shall be Item: 5.1
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Menifee Finance Committee October 14, 2025 Page 12 of 258

completed prior to the issuance of the certificate of occupancy for the 140th 200th Project dwelling unit in Planning Areas 1, 2, 3, and 4 of Tentative Tract Map No. 37408 (or final inspection if no certificates of occupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, "completed" means the 37408 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37408 Park Improvements. City's unreasonable delay in making an approval or inspection related to the 37408 Park Improvements shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.

6. Revisions to Section 6.2.3 Tentative Tract Map (No. 37409) Neighborhood Park and Paseo Legado East Improvements (c) and (d) of the Development Agreement is are amended to read in its entirety as follows:
(c) Review of Bid. Prior to entering into a construction contract for the 37409 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER'S 37409 Park Selected Contract, which, when combined with a fifteen five percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the 37409 Park and the Paseo Legado East Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37409 Park Selected Contract to approve or reject the 37409 Park Selected Contract through the delivery of the 37408 Park Contract Notice. CITY's acceptance or rejection of the 37409 Park Selected Contract shall be based on (i) commercially reasonable considerations that are consistent with CITY's historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or (ii) concern that the costs of the 37409 Park Improvements will exceed DEVELOPER's obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY refuses to accept the 37409 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37409 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37409 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37409 Park Selected Contract and any revised bid, then DEVELOPER may either shall make further modifications to address CITY's concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY's concerns and DEVELOPER's responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER's demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER's sole obligation related to the 37409 Park shall be to assign the 37409 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER's cost in preparing the 37409 Park Construction Drawings. CITY' s failure to provide DEVELOPER a 37409 Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY's approval of the 37409 Park Selected Contract, so long as concurrent with DEVELOPER's delivery Item: 5.1
Item Page Number: 8
Menifee Finance Committee October 14, 2025 Page 13 of 258

of the proposed 37409 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows:
"IMPORTANT, DELIVERY OF THIS CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.3(c) OF THE LEGADO DEVELOPMENT AGREEMENT. SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER. CITY WILL BE DEEMED TO HAVE APPROVED THE CONTRACT". For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37409 Park Improvements) toward the 37409 Park Improvements. Further, DEVELOPER agrees to bear all costs of design, planning, and construction of the 37409 Park Improvements in a manner consistent with the Plot Plan conceptual designs (as modified to exclude the bathroom facility and comply with all applicable building and fire codes) without any additional reimbursements or contributions from the CITY. DEVELOPER further agrees that payment of applicable Development Fees subject to credits for DEVELOPER’s cost in preparing the 37409 Park Construction Drawings does not meet DEVELOPER’s obligations under this Agreement or meet the conditions of approval associated with this Agreement.
(d) Completion of Improvements. The 37409 Park Improvements shall be completed prior to the issuance of the certificate of occupancy for the 140 th 95th Project dwelling unit in Planning Areas 8, 9, 10, and 11 of Tentative Tract Map No. 37409 (or final inspection if no certificates of occupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, "completed" means the 37409 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37409 Park Improvements. CITY's unreasonable delay in making an approval or inspection related to the 37409 Park shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.

7. Section 9.1.3 Prevailing Wage Increases to Developer’s Financial Obligations to Complete Park and Paseos as Contemplated in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409 is added to the Development Agreement as follows:

Section 9.1.3 Prevailing Wage Increases to Developer’s Financial Obligations to Complete Park and Paseos as Contemplated in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409. In additional DEVELOPER’S indemnification responsibilities under Section 9.1 of this Agreement, DEVELOPER understands and agrees that any costs to planning and constructing the park and paseos required under Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409 may surpass DEVELOPER’S original contribution maximum as contemplated under this Agreement. Moreover, should DEVELOPER’S compliance with any state or federal law, including, but not limited to, Labor Code Section 1781 regarding prevailing wage, require additional payments or expenditures by DEVELOPER to complete the parks and paseos required under Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409, DEVELOPER agrees to bear the full cost of performance without any contribution from the City or changes to the Item: 5.1
Item Page Number: 9
Menifee Finance Committee October 14, 2025 Page 14 of 258

conceptual park and paseos plan outlined in Tentative Tract Map No. 37408 and Tentative Tract Map No. 37409.

8. Section 3.12 Bonds and Acceptance of Parks and Points of Connection/Rights of Way Maintenance is added to the Development Agreement to read in its entirety as follows:

Section 3.12 Bonds and Acceptance of Parks and Points of Connection/Right of Way Maintenance. The City Manager or his/her designee shall be authorized to review, amend, and approve any and all bonds or instruments necessary to allow DEVELOPER to transfer maintenance responsibility of the 37408 Park Improvements and the 37409 Park Improvements as well as any Points of Connection to the CITY after the 90-day maintenance and landscape establishment period but before the one-year warranty period required by the Menifee Municipal Code.

9. Section 9.1.1 General Indemnity of the Development agreement is amended to read in its entirety as follows:

Section 9.1.1 General Indemnity. DEVELOPER agrees to indemnify, protect, defend, and hold harmless the CITY Parties as well as Community Facilities District 2022-3 (“CFD 2022-3”) from and against any and all Claims which may arise, directly or indirectly, from the acts, omissions, or operations of DEVELOPER or DEVELOPER's agents, contractors, subcontractors, agents, or employees pursuant to this Agreement, but excluding any loss resulting solely from the intentional or active negligence of the CITY Parties or CFD 2022-

03. Notwithstanding the foregoing, (i) CITY and CFD 2022-03 shall have the right to select and retain counsel to defend any such action or actions and DEVELOPER shall pay the cost thereof; provided, however, that the Parties and CFD 2022-03 agree to attempt in good faith to coordinate and/or consolidate their defense of any Claim that is subject to the indemnification provisions of this Section; and (ii) this indemnity obligation shall not apply to any Claim for which DEVELOPER has provided a separate indemnity to the CITY and/or CFD 2022-03 by way of a separate instrument mutually accepted by the Parties and CFD 2022-03.

10. Section 9.1.2 Prevailing Wage Indemnity and Notice to Developer of Labor Code Section 1781 of the Development Agreement is amended to read in its entirety as follows:

9.1.2 Prevailing Wage Indemnity and Notice to Developer of Labor Code Section 1781. In connection with, but without limiting, the indemnification obligations set forth in Section 9 .1.1, DEVELOPER hereby expressly acknowledges and agrees that the CITY and CFD 2022-03 is are not by this Agreement affirmatively representing, and has have not previously affirmatively represented, to the DEVELOPER or any contractor(s) of DEVELOPER for any construction on or development on or adjacent to the Property, in writing or otherwise, in a call for bids or any agreement or otherwise, that any work to be undertaken on the Property, as may be referred to in this Agreement or construed under this Agreement, including, but not limited to, Tentative Tract Map No. 37408 Neighborhood Park and Paseo Legado West Improvements, Tentative Tract Map (No. 37409) Neighborhood Park and Paseo Legado East Improvements, and those improvements receiving reimbursements or funding from CFD 2022-3, is not a "public work," as defined in Section 1720 of the Labor Code, or under any similar existing or hereinafter enacted law or regulation. The Parties agree that, in connection with the Development and construction (as defined by Applicable Law) of the Project, including, without limitation, any and all Item: 5.1
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public works (as defined by Applicable Law), DEVELOPER shall bear all risks of payment or non-payment of prevailing wages under California law and/or federal law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. With respect to the foregoing, DEVELOPER shall be solely responsible, expressly or impliedly and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, and labor laws and standards, and CITY and CFD 2022-3 makes no representation, either legally and/or financially, as to the applicability or non-applicability of any federal, state and local laws to the construction of the Project as it may be amended pursuant hereto or otherwise.

Without limiting the foregoing, DEVELOPER shall indemnify, protect, defend and hold harmless the CITY Parties and CFD 2022-3, with counsel reasonably acceptable to CITY and CFD 2022-3, from and against "increased costs" as defined in California Labor Code Section 1781 (including CITY's reasonable attorneys' fees, cost and litigation costs, and fees of expert witnesses) in connection with the Development or construction (as defined by Applicable Law) of or on the Property, that results or arises in any way from (1) noncompliance by DEVELOPER of the requirement, if and to the extent applicable, to pay federal or state prevailing wages and hire apprentices, or (2) failure by DEVELOPER to provide any required disclosure or identification as required by California Labor Code Sections l 720 et seq. including without limitation specifically Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive the expiration or earlier termination of this Agreement.

11. Cooperation: Further Acts. Each party agrees to provide reasonable assistance to the other and cooperate to carry out the intent and fulfill the provisions of this Amendment. Each of the parties shall promptly execute and deliver all documents and perform all acts necessary to carry out the matters contemplated by this Amendment.

12. Integration; Interpretation; Recordation. The Original DA and this Amendment reflect the complete understanding of the parties with respect to the subject matter thereof. To the extent this Amendment conflicts with the Original DA, or any prior interpretation thereof, this Amendment supersedes the Original DA and any prior interpretations thereof. In all other respects, the parties hereto re-affirm and ratify all other provisions of the Original DA. This First Amendment shall be duly recorded following its full execution.

13. Counterparts. This First Amendment may be executed in counterparts, each of which shall be deemed an original, and all such counterparts, when taken together, shall constitute one agreement.

14. Authority. The person or persons executing this First Amendment ton behalf of the City and Developer warrant and represent that they have the authority to execute this First Amendment and the authority to bind the City and Developer, as applicable, to the performance of their respective obligations hereunder
IN WITNESS WHEREOF, the City and the Developer have signed this First Amendment, by and through the signatures of their authorized representative as of the day and year first hereinabove written.

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CITY OF MENIFEE, LENNAR HOMES OF CALIFORNIA, LLC
a California municipal corporation a California Limited Liability Corporation By:__________________________ By:_______________________________ Mayor
ATTEST:
_______________________________
City Clerk
APPROVED AS TO FORM:
_______________________________
Jeffrey Melching, Esq.

Rutan & Tucker, LLP
City Attorney
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PLEASE RECORD AND WHEN RECORDED
RETURN TO:

CITY OF MENIFEE 29844 Haun Road
Menifee, CA 92586
Attn: City Attorney

LEGADO

DEVELOPMENT AGREEMENT
This Development Agreement (hereinafter “Agreement”) is entered into on ______, 2020, by and between the CITY OF MENIFEE (hereinafter “CITY”), a municipal corporation of the State of California, and BLC FLEMING LLC, a Delaware limited liability company (hereinafter “DEVELOPER”).

RECITALS
A. DEVELOPER owns all of the real property described on Exhibit A and depicted on Exhibit B, consisting of approximately 331 acres of land area located in the City of Menifee, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit A (“Property”).

B. The Planning and Zoning approvals for the Project on the Property obtained prior to the Effective Date of this Agreement (collectively, the “Development Approvals”) include but are not limited to the following:
i. Legado Specific Plan (No. 2017 -187) ( “Specific Plan ”). Establishes a specific land use plan, designation of planning areas, development standards, architectural design guidelines and landscape design guidelines for development of a maximum of 1,061 dwelli ng units and up to 225,000 square feet of freeway -oriented commercial uses, with twenty -two (22) Planning Areas, 12.9 acres of community park, 7.9 acres of linear and pocket parks, and additional features and amenities on the Property, adopted by the City Council of the City of Menifee ( “City Council ”) on ________________ and provides the required contents of a Development Plan in compliance with Government Code section 65865.2. ii. Change of Zone (No. 2017-188). Changes the zoning classification on the Property from “Fleming Ranch Specific Plan Zone ” to “Legado Specific Item: 5.1
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2 Plan Zone” to reflect the adopted Specific Plan and its allowed uses and development standards, adopted by City Council on _______________. iii. Tentative Tract Map (No. 37408). Proposes a subdivision of approximately 149.6 gross acres into 475 single-family residential lots and __ lots for open space, park, landscape, monumentation, drainage, and storm drain purposes with single-family residential lots with minimum lot sizes (depending on Specific Plan Planning Area) of between 5,000 square feet and 7,000 square feet, approved by City Council on _________________.
iv. Tentative Tract Map (No. 37409). Proposes a subdivision of approximately 159.1 gross acres into 547 single-family residential lots and __ lots for park, landscape, monumentation, drainage, and storm drain purposes, with single- family residential lots with minimum lot sizes (depending on Specific Plan Planning Area) of 5,000 square feet and 7,000 square feet, approved by City Council on _________________.
v. Tentative Tract Map (No. 37391). Proposes a large -lot subdivision of the Property’s approximately 331.01 gross acres into twenty-six (26) parcels for park, commercial, roadway, and financing purposes, including one

12.9 acre community park approved by City Council on ______________. vi. Environmental Impact Report. The Environmental Impact Report (State Clearinghouse No. 2009091118), which was prepared pursuant to CEQA, was certified with findings by the City Council on ___________, by Resolution No. _________ (the “EIR”).

Development consistent with all of the Development Approvals is hereinafter referred to as the “Project.”
B. Government Code Sections 65864 et seq. (“Development Agreement Law ”) authorize CITY to enter into binding development agreements with persons having a legal or equitable interest in real property for the development of such property, all for the purpose of strengthening the public planning process, encouraging private participation and comprehensive planning, and reducing the economic costs of such development. DEVELOPER and CITY have agreed to enter into this Development Agreement in order to memorialize and secure the respective expectations of the CITY and DEVELOPER.

C. The City Council has found that this Agreement is in the best public interest of the CITY and its residents. adopting this Agreement constitutes a present exercise of the CITY’s police power, and that the Project is consistent with the goals and policies of the CITY ’s General Plan and imposes appropriate standards and requirements with respect to the Development of the Property in order to maintain the overall quality of life and of the environment within the CITY.

Among other things, this Agreement mandates the construction of improvments valued at Twenty Two Million Nine Hundred Eighty-Four Thousand Six Hundred Forty-Four Dollars ($22,984,644) more than the City could otherwise require of the Project.

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3 D. Prior to its approval of this Agreement, CITY considered the environmental impacts of the Project and completed its environmental review of the Project.

E. On May 13, 2020, the Planning Commission of CITY held a public hearing on the DEVELOPER’s application for approval of this Agreement, made certain findings and determinations with respect thereto, and adopted Planning Commission Resolution No. ________, which recommended to the City Council that this Agreement be approved.

F. On __________, the City Council held a public hearing on the DEVELOPER ’S application for approval of this Agre ement, considered the recommendations of the Planning Commission, and found that this Agreement is consistent with CITY ’s General Plan. On ___________, the City Council introduced Ordinance No. _________, approving this Development Agreement for first reading. On __________, the City Council approved Ordinance No. _________, which takes effect as of _______________.

COVENANTS
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS AND EXHIBITS.

1.1 Definitions. This Agreement uses a number of terms having specific meanings, as defined below. These specially defi ned terms are distinguished by having the initial letter capitalized, or all letters capitalized, when used in the Agreement. The defined terms include the following:

1.1.1 “37408 Park Construction Drawings” means construction drawings for the 37408 Park Improvements submitted in accordance with all applicable City requirements for such drawings.

1.1.2 “37408 Park Contract Notice ” means the notice delivered by CITY to DEVELOPER indicating the CITY’s acceptance or rejection of DEVELOPER’s preferred 37408 Selected Contract.

1.1.3 “37408 Park Plot Plan ” means the plot plan for the 37408 Park Improvements submitted to the CITY in accordance and in compliance with CITY ’s Municipal Code.

1.1.4 “37408 Park Selected Contract” means DEVELOPER’s selected contractor bid for construc tion of the 37408 Park Improvements Center pursuant to the 37408 Construction Drawings.

1.1.5 “37409 Park Construction Drawings” means construction drawings for the 37409 Park Improvements submitted in accordance with all applicable City requirements for such drawings.

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4 1.1.6 “37409 Park Contract Notice ” means the notice delivered by CITY to DEVELOPER indicating the CITY’s acceptance or rejection of DEVELOPER’s preferred 37409 Park Selected Contract.

1.1.7 “37409 Park Improvements ” means the neighborhood park and Paseo Legado East Park Improvements as set forth in Tentative Tract Map No. 37409.

1.1.8 “37409 Park Plot Plan ” means the plot plan for the 37409 Park Improvements submitted to the CITY in accordance and in compliance with CITY ’s Municipal Code.

1.1.9 “37409 Park Selected Contract” means DEVELOPER’s selected contractor bid for construction of the 37408 Park Improvements Center pursuant to the 37409 Construction Drawings.

1.1.10 “37408 Park Improvements ” means the neighborhood park and Paseo Legado West Park Improvements as set forth in Tentative Tract Map No. 37408.

1.1.11 “Actual Costs of Construction ” means the sum of (i) hard and soft out -of- pocket costs paid to Unaffiliated third parties (including, without limitation, land use planning and engineering costs, land acquisition costs, construction and management costs, and permit and construction fees); (ii) general conditions costs (to the extent not included in section “(i)” above, not to exceed five percent (5%) of hard costs ); and (iii) an internal DEVELOPER project administration fee of up to three percent (3%) of the hard and soft costs set forth in (i) above to compensate DEVELOPER for performance of contract administration, bidding, accounting, design oversight , and project management. For the avoidance of d oubt, the categories of costs set forth in clauses “(i)”, “(ii)”, and “(iii)” in the precedent sentence are mutually exclusive, and no cost in one category may be included in any other category. Actual Costs of Construction shall be evidenced by DEVELOPER’s submission of paid invoices or other documentation reasonably acceptable to City. Except as provided in clause (iii) above, internal project management and administrative costs and expenses paid to affiliates of DEVELOPER, if any, shall not be counted for purposes of the fee credit calculation.

1.1.12 “Agreement” means this Development Agreement.

1.1.13 “Affiliate” means a person or entity that, directly or indirectly controls the DEVELOPER, is controlled by the DEVELOPER, or is, with the DEVELOPER, under common control of another person or entity. Indicia of control include, without limitation, interlocking manage ment or ownership; identity of interests among family members; shared facilities and equipment; common use of employees; and use of substantially the same management, ownership or principals as the DEVELOPER.

1.1.14 “Applicable Law” means all federal, state, and local laws and regulations applicable to the Project as of the Effective Date.

1.1.15 “Assessment District” means City of Menifee Community Facilities District No. 2017-1 (Maintenance Services).

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5 1.1.16 “City Council” means the City Council of the CITY.

1.1.17 “CITY Parties” means the CITY, City Council, CITY officers, employees, attorneys and agents.

1.1.18 “Claim” means any claim, loss, cost, damage, expense, liability, lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees, Legal Costs, and expenses and investigation costs of whatever kind or nature), and any judgment caused or initiated by a third party. Without limiting the foregoing, “Claims” include any matter that results or arises in any way from any of the following: ( 1) the noncompliance by DEVELOPER or its contractor with any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages and hire apprentices); (2) the implementation of Labor Code Section 1781 and/or any other similar law or regulation; and/or (3) failure by DEVELOPER to provide any required disclosure or identification as required by Labor Code Section 1781, as the same may be amended from time to time, or any other similar law or regulation.

1.1.19 “Community Center Construction Drawings” means construction drawings for the Community Center submitted in accordance with all applicable CITY requirements for such drawings.

1.1.20 “Community Center Contract Notice” means the notice delivered by CITY to DEVELOPER indicating the CITY ’s acceptance or rejection of DEVELOPER ’s preferred Community Center Selected Contract.

1.1.21 “Community Center Selected Contract ” means DEVELOPER ’s selected contractor bid for construction of the Community Center pursuant to the Community Center Construction Drawings.

1.1.22 “Community Park” means the 12.9 acre community park approved by the City Council within Lot 18 of Tentative Tract Map No. 37391 and as further identified and conceptually designed as a part of Tentative Tract Map No. 37408, w hich shall be constructed in accordance with Section 6.2.

1.1.23 “Community Park Plot Plan ” means the plot plan(s) for the Community Park submitted to the CITY in accordance and in compliance with CITY’s Municipal Code.

1.1.24 “Community Park Construction Drawings ” means construction drawings for the Community Park, excepting and excluding for the Community Center.

1.1.25 “Community Park Contract Notice” means the notice delivered by CITY to DEVELOPER indicating the CITY’s acceptance or rejection of DEVELOPER’s preferred Community Park Selected Contract.

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6 1.1.26 “Community Park Selected Contract ” means DEVELOPER ’s selected contractor bid for construction of the Community Park pursuant to the Community Park Construction Drawings.

1.1.27 “Costs” means quantifiable expenses of any kind, including without limitation the allocated value of staff time, amounts expended for consultant and/or legal services, acquisition expenses, and allocated overhead.

1.1.28 “Default” means the failure to perform any material duty or obligation set forth in this Agreement or to comply in good faith with the terms of this Agreement.

1.1.29 “DEVELOPER” means BLC FLEMING LLC, a Delaware limited liability company and its successors in interest to all or any part of the Property.

1.1.30 “Development” means the improvement of the Property for the purposes of completing the structures, improvements and facilities comprising the Project including, but not limited to: grading; the construction of infrastructure and public facilities related to the Project whether located within or outside the Property; the construction of buildings and structures; and the installation of landscaping and park facilities and improvements. “Development” also includes the maintenance, repair, reconstruction or redevelopment of any building, structure, impro vement, landscaping or facility after the construction and completion thereof.

1.1.31 “Development Approvals” means all permits, licenses, consents, rights and privileges, and other actions subject to approval or issuance by CITY in connection with Development of the Property issued by CITY on or before the Effective Date, including but not limited to:
(a) Specific plans and specific plan amendments;
(b) Zoning and rezoning;
(c) Tentative and final subdivision and parcel maps;
(d) Variances, conditional use permits, master plans, public use permits and plot plans; and
(e) Grading, improvement and building permits.

1.1.32 “Development Fees” means the monetary consideration charged by CITY in connection with a development project for the purpose of defraying all or a portion of the cost of m itigating the impacts of the project and development of the public facilities related to development of the project. Development Fees shall not include : (i) CITY’s normal fees for processing, environmental assessment/review, tentative tracts/parcel map review, plan checking, site review, site approval, administrative review, building permit (plumbing, mechanical, electrical, building), inspection, and similar fees imposed to recover CITY’s Costs associated with processing, review, and inspection of applica tions, Item: 5.1
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7 plans, specifications, etc., and/or (ii) fees and charges levied by any other public agency, utility, district, or joint powers authority, whether or not such fees are collected by CITY.

1.1.33 “Development Plan ” means the plan for Development of the Prope rty, including without limitation, the Development Approvals, planning and zoning standards, regulations, applicable conditions of approval, and criteria for the Development of the Property, contained in and consistent with Exhibit C. “Development Plan” also includes the Mitigation Measures identified in Exhibit D.

1.1.34 “Development Requirement” means any requirement of CITY in connection with or pursuant to any Development Approval for the dedication of land, the construction or improvement of public facilities, the payment of fees (including Development Fees) or assessments in order to lessen, offset, mitigate or compensate for the impacts of Development on the environment, or the advancement of the public interest.

1.1.35 “Effective Date” means the date that is the later of: (i) the date that the ordinance approving this Agreement becomes effective; or (ii) the date that this Agreement is executed by DEVELOPER.

1.1.36 “Excess Contributions ” means the estimated community and area -wide infrastructure and park benefits as set forth in column G of Exhibit F -1, column I of Exhibit F-2, and column I of Exhibit F-3, to the extent they exceed the Development Requirements the CITY could otherwise impose on the Project.

1.1.37 “Fair Share Fee” means the pro rata dollar amount and estimated fair share percent responsibility of the Project for the Offsite Improvements set forth in Exhibit H.

1.1.38 “Individual Unit Owner” means any owner in fee of a dwelling unit other than DEVELOPER or a successor in interest of DEVELOPER to all or a portion of the Project as provided in Section 2.3.

1.1.39 “Land Use Regulations ” means all ordinances, resolutions, codes, rules, regulations, CITY adopted plans (including, but not limited to, trail plans and park master plans) and official policies of CITY adopted and effective on or before the Effective Date governing Development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the Development of the Property. “Land Use Regulations” does not include any CITY ordinance, resolution, code, rule, regulation or official policy, governing:
(a) the conduct of businesses, professions, and occupations; (b) taxes and assessments (excluding land -secured special taxes and assessments);
(c) the control and abatement of nuisances;
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8 (d) the granting of encroachment permits and the conveyance of rights and interests which provide for the use of or the entry upon public property; (e) the exercise of the power of eminent domain; and
(f) the amount of processing fees or development impact fees.

1.1.40 “Legal Costs” means for any Person, all actual and reasonable costs and expenses such Person incurs in any legal proceeding (or other matter for which such Person is entitled to be reimbursed for its Legal Costs), including reasonable attorneys’ fees, court costs and e xpenses, including in or as a result of any: (a) bankruptcy proceeding; (b) litigation between the Parties; (c) negotiating or documenting any agreement with a third party requested by the other Party; (d) requirement or request that such Person or its employees act as a witness in any proceeding regarding this Agreement or the other Party; and (e) review or approval that the other Party requests of such Person. All references to Legal Costs shall include the salaries, benefits and costs of in -house or co ntract general counsel to CITY or DEVELOPER, respectively, and the lawyers employed in the office of such general counsel who provide legal services regarding a particular matter, adjusted to or billed at an hourly rate and multiplied by the time spent on such matter rounded to increments of one-tenth of an hour, in addition to Legal Costs of outside counsel retained by CITY or DEVELOPER, respectively, for such matter.

1.1.41 “Mitigation Measures” means those requirements imposed on the Project contained in Exhibit D.

1.1.42 “Mortgagee” means a mortgagee of a mortgage, a beneficiary under a deed of trust or any other security -device, a lender or each of their respective successors and assigns.

1.1.43 “Offsite Improvements” means those improvements to be developed outside of the Property, as set forth on Exhibit H.

1.1.44 “Party” and “Parties” mean and refer to CITY and/or DEVELOPER, as context dictates, and their respective successors, assigns, and Affiliates.

1.1.45 “Park Obligation ” means all park dedications, in -lieu fees, new Development Fees, Development Fee increases/escalations, or other facility requirements of any type related to CITY park construction, improvement, and payment obligations that are not otherwise specifically set forth in the conditions of approval containe d in the Development Approvals (including, without limitation, obligations to post security for park construction obligations).

1.1.46 “Person” means any association, corporation, government, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind.

1.1.47 “Project” means the Development of the Property consistent with the Development Plan.

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9 1.1.48 “Property” means the real property described in Exhibit A and shown on Exhibit B to this Agreement.

1.1.49 “Quimby Act” means Government Code section 66477 et seq.

1.1.50 “Reservation of Authority ” means the rights and authority excepted from the assurances and rights provided to DEVELOPER under this Agreement and reserved to CITY.

1.1.51 “Reimbursable Projects” means the public improvements identified on Exhibit F , which shall be subject to the reimbursem ent agreements described in Section 5.2.

1.1.52 “Reimbursement Agreement ” means an agreement(s) between CITY and DEVELOPER to repay DEVELOPER from a defined set of revenue sources for the reimbursable portion of the Reimbursable Projects , as specified in Exhibit F and Section 5.2.

1.1.53 “Subsequent Development Approvals ” means all permits, licenses, consents, rights and privileges, and other actions subject to approval or issuance by CITY in connection with Development of the Property issued b y CITY subsequent to the Effective Date.

1.1.54 “Subsequent Land Use Regulations ” means all ordinances , codes, rules, regulations, CITY adopted plans (including, but not limited to, trail plans and park master plans) and official policies of CITY adopted and effective after the Effective Date of this Agreement governing Development and use of the Property, including, without limitation, the permitted use of the Property, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement, and construction standards and specifications applicable to the Development of the Property; provided, however, that “Subsequent Land Use Regulations ” do not include any CITY ordinance, resolution, code, rule, regulation or official policy, governing: (a) the conduct of business, professions, and occupations; (b) taxes and assessments (excluding land-secured special taxes and assessments) ; (c) the control and abatement of nuisances; (d) the granting of encroachment permits and the conveyance of rights and interests which provide for the use of or entry upon public property; (e) the exercise of the power of eminent domain; and (f) the amount of processing fees or development impact fees.

1.1.55 “Term” means the period of time from the Effective Date until the expiration of this Agreement as provided in subsection 2.4, or earlier term ination as provided in Section 8.

1.1.56 “Transfer” means sell, assign, or transfer.

1.1.57 “Unaffiliated” means and refers to a person or entity that is not an Affiliate.

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10 1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:

Exhibit A Legal Description of the Property.

Exhibit B Map showing Property and its location.

Exhibit C Development Plan
Exhibit D Mitigation Measures
Exhibit E Development Impact Fees
Exhibit F Estimated Excess Contributions
Exhibit G Assumption Agreement
Exhibit H Off Site Improvements and Fair Share Fees

2. GENERAL PROVISIONS.

2.1 Binding Effect of Agreement . From and following the Effective Date, Development of the Project and CITY actions on applications for Subsequent Development Approvals respecting the Development of the Project shall be subject to the terms and provisions of this Agreement.

2.2 Assignment.

2.2.1 Release of Transferring DEVELOPER . Upon the Transfer in whole or in part, of DEVELOPER ’s right and interest to all or any portion of the Property, DEVELOPER may, at least thirty (30) days prior to completion of the Transfer, apply to CITY for a release from its obligations hereunder with respect to the portion of the Property so Transferred. CITY shall approve the partial or full release if: (i) DEVELOPER is not in Default of this Agreement at the time of the request for release, or provides adequate assurances to CITY that it will cure any Default prior to the Transfer, ( ii) with respect to the Transfer of any lot that has not been fully improved, the transferee executes and delivers to CITY a written assumption agreement in substance and form which is approved by CITY’s Attorney, which approval shall not be unreasonably denied, and in which: (A) the name and address of the transferee is set forth ; (B) the transferee expressly assumes the obligations of DEVELOPER under this Agreement as to the portion of the Property transferred; (C) the transferee provides commercially reasonable assurances of its performance of the obligati ons of the DEVELOPER that transferee proposes to assume ; and (D) the assumption agreement adequately allocates to the transferee (or justifies the non-allocation) credits, reimbursements, or other benefits provided to DEVELOPER under this Agreement that relate to the portion of the Property transferred. A written assumption agreement substantially in the form of Exhibit G , augmented with the assurances of performance and allocations of credits, reimbursement rights, and other benefits, as detailed in claus es (ii)(C) and (ii)(D) of the preceding sentence, shall be deemed pre - Item: 5.1
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11 approved by the CITY ’s Attorney. Failure to obtain CITY approval of a written assumption agreement hereunder shall not negate, modify or otherwise affect the liability under this Agreem ent of any transferee or future owner of any portion of the Property.

DEVELOPER shall remain responsible for all obligations set forth in the Agreement that are not subject to an assignment approved by the CITY in accordance with this paragraph.

2.3 Term.

2.3.1 Term. The term of this Agreement ( “Term”) shall commence on the Effective Date and shall continue thereafter for a period of fifteen (15) years ( “Original Term”), unless this Agreement is terminated, modified, or extended by circumstances set forth in thi s Agreement or by mutual written consent of the Parties. The Term shall be automatically extended for a five (5) year period ( “First Extension ”) if DEVELOPER obtains certificates of occupancy for 500 Project dwelling units prior to the expiration of the Original Term. The Term shall be further automatically extended by an additional five (5) year period ( “Second Extension”) if DEVELOPER obtains certificates of occupancy for at least a cumulative total of 750 Project dwelling units prior the expiration of the First Extension. The Term may be extended beyond the lapsing of the Second Extension if the DEVELOPER and CITY, in their respective sole and absolute discretion, so agree in writing; provided, however, that the total Term shall not exceed twenty -five (25) years except for the extensions of time due to Force Majeure Delays contemplated by Section 11.11.

2.3.2 Where a shorter term is not mandated by Applicable Law, the term of any and all discretionary Development Approvals and discretionary Subsequent Development Approvals shall automatically be extended for the longer of the Term of this Agreement or the term otherwise applicable to such discretionary Development Approvals or discretionary Subsequent Development Approvals. For the avoidance of doubt, the following categories of Development Approvals and Subsequent Development Approvals shall be deemed “not discretionary” for purposes of this section: grading permits, building permits, improvement pe rmits, landscape permits , wall and fence plans, and signage permits and programs.

3. DEVELOPMENT OF THE PROPERTY.

3.1 Rights to Develop . Subject to the terms of this Agreement, DEVELOPER shall have a vested right to develop the Project in accordance with, and to the extent of, the Development Plan. Development of the Project is hereby vested specifically with the Property, and that DEVELOPER retains the right to apportion development rights between itself and any subsequent DEVELOPER, upon the Transfer of any portion of the Property, so long as such apportionment is, prior to becoming effective, approved by CITY in writing in accordance wit h Section 2, and consistent with the Development Plan and the Land Use Regulations.

3.2 Effect of Agreement on Land Use Regulations . Except as otherwise provided under the terms of this Agreement, the rules, regulations and official policies governing permitted Item: 5.1
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12 uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction standards and specifications applicable to Development of the Property, shall be those contained in the Development Plan and the Land Use Regulations.

3.3 Subsequent Development Approvals. CITY shall accept for processing, review and action all applications for Subsequent Development Approvals necessary and appropriate for implementation of the Project, and such applications shall be processed in the normal manner for processing such matters, for all or a portion of the Property at DEVELOPER’s option. The CITY further agrees that, unless otherwise requested by DEVELOPER or as authorized by t his Agreement, it shall not, absent a violation of Applicable Law by DEVELOPER, amend or rescind any Subsequent Development Approvals respecting the Property after such approvals have been granted by the CITY. All Subsequent Development Approvals that are necessary and appropriate for implementation of the Project shall be deemed incorporated herein and vested as of the effective date of such approvals and shall be governed by the terms and conditions of this Agreement; provided, however, that requests for Subequent Development Approvals (including, without limitation , General Plan amendments, zone changes, specific plan amendments, or variances) that increase the overall intensity or density of Development or otherwise cause a substantial modification of t he Development Plan shall not be deemed incorporated herein and vested as of the the effective date of such approvals, but shall instead require an amendment to this Agreement in accordance with Applicable Law and Section 3.5.

3.4 Timing of Development. The Parties acknowledge that DEVELOPER cannot at this time predict when or the rate at which phases of the Property will be developed. Such decisions depend upon numerous factors which are not within the control of DEVELOPER, such as market orientation and demand, interest rates, absorption, completion and other similar factors.

Since the California Supreme Court held in Pardee Construction Co. v. City of Camarillo (1984) 37 Cal. 3d 465, that the failure of the parties therein to provide for the timing of Deve lopment resulted in a later -adopted initiative restricting the timing of Development to prevail over such parties’ agreement, it is the parties’ intent to cure that deficiency by acknowledging and providing that DEVELOPER shall have the right to develop the Property in such order and at such rate and at such times as DEVELOPER deems appropriate within the exercise of its subjective business judgment. Nothing in this section is intended to alter the standard durational limits of any applicable permits issued to DEVELOPER.

3.5 Changes and Amendments . The Parties acknowledge that Development of the Project will likely require Subsequent Development Approvals, and that in connection therewith DEVELOPER may determine that changes are appropriate and desirable in the existing Development Approvals or Devel opment Plan. In the event DEVELOPER finds that such a change is appropriate or desirable, DEVELOPER may apply, in writing, for an amendment to prior Development Approvals or the Development Plan to effectuate such change, and CITY shall process and act on such application notwithstanding anything in this Agreement that may be to the contrary. CITY shall have no obligation to grant any such application for a Subsequent Development Approval by DEVELOPER (including, without limitation , General Plan amendments, zone changes, specific plan amendments, or variances) that increases the overall intensity or density of Development or , in the sole and absolute discretion of the CITY ’s City Manager, otherwise causes a substantial modification of the Development Plan , and CITY shall Item: 5.1
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13 not approve any such application for substantial modifications unless accompanied by an amendment to this Agreement processed in accordance with Applicable Law. Except as provided in the preceding sentence, if approved in a form to which D EVELOPER and CITY have both, in their respective sole and absolute discretion, consented in writing, any application effectuating a change in the Development Approvals or Development Plan shall be incorporated herein and any resulting modifications to the Exhibits to this Agreement, shall be administratively appended to this Agreement for tracking purposes, and a notice thereof shall be recorded in the Official Records of the County of Riverside.

3.6 Reservation of Authority.

3.6.1 Limitations, Reservations and Exce ptions. Notwithstanding any other provision of this Agreement, the following Subsequent Land Use Regulations shall apply to the Development of the Property:
(a) Processing fees and charges of every kind and nature imposed by CITY to cover the estimated actual Costs to CITY of processing applications for Development Approvals, or Subsequent Development Approvals, or for monitoring compliance with any Development Approvals or Subsequent Development Approvals granted or issued.
(b) Procedural regulati ons relating to hearing bodies, petitions, applications, notices, findings, records, hearing, reports, recommendations, appeals and any other matter of procedure.
(c) Changes adopted by the International Conference of Building Officials as part of the then mos t current versions of the Uniform Building Code, Uniform Fire Code, Uniform Plumbing Code, Uniform Mechanical Code, Uniform Solar Energy Code, Uniform Swimming Pool, Spa and Hot Tub Code, Uniform Housing Code, Uniform Administrative Code, or National Electrical Code, and also adopted by CITY as Subsequent Land Use Regulations.
(d) Regulations imposed by the CITY which may be in conflict with the Development Plan but which are reasonably necessary to protect the public health or safety. To the extent reasonable and feasible, any such regulations shall be applied and construed consistent with Section 3.6.2 below so as to provide DEVELOPER with the rights and assurances provided under this Agreement. (e) Regulations imposed by the CITY which are not in conflict with the Development Plan and this Agreement.
(f) Regulations which are in conflict with the Development Plan provided DEVELOPER and CITY have given written consent to the application of such regulations to Development of Property.
(g) Laws and regulations imposed by F ederal, State, regional, or other governmental authorities, or imposed directly by the CITY as necessary to comply with Federal, State, regional or other governmental authorities’ regulations, which Item: 5.1
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14 CITY is required to enforce against the Property or the D evelopment of the Property.

For purposes of this Section 3.6 and Section 3.2 the word “conflict” means any CITY - imposed modification that: (a) changes the permitted uses of the Property, the density and intensity of use (including , but not limited to , floor area ratios of buildings and the maximum number of units), or the maximum height and size of proposed buildings in a manner that is not consistent with the vested Land Use Regulations , the Development Approvals, and/or the vested Subsequent Development Approvals; (b) imposes new or additional requirements, or changes existing requirements, for reservation or dedication of land for public purposes or requirements for infrastructure, public improvements, or public utilities that are not otherwise provided for pursuant to the vested Land Use Regulations, the Development Approvals, and/or vested Subsequent Development Approvals; (c) changes conditions upon Development of the Property other than as permitted by Section

3.6.1, the vested Land Use Regulations, t he Development Approvals, and the vested Subsequent Development Approvals; (d) expressly limits the timing, phasing, or rate of Development of the Property in a manner that is not consistent with the vested Land Use Regulations, the Development Approvals , and/or the vested Subsequent Development Approvals; (e) limits the location of building sites, grading, or other improvements on the Property in a manner that is not consistent with the vested Land Use Regulations , the Development Approvals , and/or the ves ted Subsequent Development Approvals ; (f) unreasonably limits or controls the ability to obtain public utilities, services, or facilities in a manner that is not consistent with the vested Land Use Regulations , the Development Approvals, and/or the vested Subsequent Development Approvals (provided, however, nothing herein shall be deemed to exempt the Project or the Property from any water use rationing requirements that may be imposed from time to time in the future or be construed as a reservation of any existing sanitary sewer or potable water capacity); (g) requires, or removes the requirement for, the issuance of additional permits or approvals by CITY (except to the extent otherwise authorized by this section) other than those required by Land Use Reg ulations, the Development Approvals, and the vested Subsequent Development Approvals; (h) changes or removes the permitted Development Fees or adds new Development Fees, except as permitted in this Agreement; (i) establishes, enacts, increases, or imposes against the Project or the Property any special taxes or assessments other than those specifically permitted by this Agreement; (j) imposes against the Project any Development Requirement not specifically authorized by then-Applicable Law or the vested Land Use Regulations or vested Subsequent Development Approvals (including this Agreement); (k) unreasonably limits the processing or procuring of applications and approvals of Subsequent Development Approvals; or (l) changes, as against the Project , any obligations regarding affordable housing not specifically required by the Development Approvals (except to the extent otherwise necessary to comply with a mandate or law imposed by another governmental authority).

3.6.2 Future Discretion of CITY . This Agreement sha ll not prevent CITY, in acting on Subsequent Development Approvals, from applying Subsequent Land Use Regulations which do not conflict with the Development Plan, nor shall this Agreement prevent CITY from denying or conditionally approving any Subsequent Development Approval on the basis of the existing Land Use Regulations or any Subsequent Land Use Item: 5.1
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15 Regulation not in conflict with the Development Plan so long as the conditions imposed on Subsequent Development Approvals do not impose Development Requirements beyond those included in the Development Approvals; provided, however, that consistent with Section 3.5, nothing in this Section 3.6 shall in any way require that CITY grant any Subsequent Development Approval (including, without limitation, General Plan amendments, zone changes, specific plan amendments, or variances) that modifies the overall intensity or density of Development or otherwise is, in the sole and absolute discretion of the CITY , a substantial modification of the Development Plan. Such Subsequent Development Approvals may be approved, denied, or conditioned in any manner deemed appropriate by the CITY and consistent with then Applicable Laws, and shall not be limited in any way by the provisions of this Agreement.

3.6.3 Modification or Suspension by State or Federal Law. In the event that State or Federal laws or regulations, enacted after the Effective Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of th is Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations, and this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provision impractical to enforce.

3.6.4 Taxes, Assessments and Fees. This Agreement shall not prevent the CITY from enacting, levying or imposing any new or increased tax, assessment or fee.

3.7 Regulation by Other Public Agencies . It is acknowledged by the Parties that other public agencies not subject to control by CITY possess authority to regulate aspects of the Development of the Property, and this Agreement does not limit the authority of such other public agencies.

3.8 Compliance with Government Code Section 66473.7 . As mandated by Government Code Section 65867.5, a ny tentative map prepared for the subdivision(s) included within the Project will comply with Government Code Section 66473.7.

3.9 Vesting Tentative Maps. If any tentative or final subdivision map, or tentative or final parcel map, heretofore or hereafter approved in connection with Development of the Property, is a vesting map under the Subdivision Map Act (Government Code Section 66410, et seq.), and if this Agreement is determined by a final judgment to be invalid or unenforceable insofar as it grants a vested right to develop to DEVELOPER, then and to that extent the rights and protection afforded DEVELOPER under the laws and ordinances applicable to vesting maps shall supersede the provisions of this Agreement. Except as set forth immediately above, Development of the Property shall occur only as provided in this Agreement, and the provisions in this Agreement shall be controlling over any conflicting provision of law or ordinance concerning vesting maps.

3.10 Provision of Real Property Interests by CITY . In any instance where DEVELOPER is required by a condition on the a Project tentative subdivision map to construct any public improvement on land not owned by DEVELOPER, CITY shall first have acquired the necessary real property interests to allow DEVELOPER to construct such public improvements.

Item: 5.1
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16 Costs associated with such acquisition or condemnation proceedings, if any, shall be DEVELOPER’s responsibility.

3.11 Cooperation in Completing Development Plan. CITY agrees to cooperate with DEVELOPER, at no cost to CITY, as necessary for the successful completion of the Development Plan and fulfillment of Development Requirements, including, without limitation, accomplishment of each and every one of the Mitigation Measures, and all other requirements or conditions that may be imposed on the Development by other public agencies.

4. REVIEW FOR COMPLIANCE.

4.1 Periodic Review . During the Term, the City Counci l or, at CITY ’s election CITY’s City Manager, shall review this Agreement annually during May of each year following the Effective Date of this Agreement, in order to ascertain the good faith compliance by DEVELOPER with the terms of the Agreement. As par t of that review, DEVELOPER shall submit an annual monitoring review statement describing its actions in compliance with this Agreement, in a form acceptable to the CITY’s City Manager, by April 10. The statement shall be accompanied by an annual review and administration fee sufficient to defray the estimated costs of review and administration of the Agreement during the succeeding year. The amount of the annual review and administration fee shall be set by resolution of the City Council . CITY shall not hold an Annual Review unless it provides DEVELOPER at least thirty (30) days written notice of such Annual Review.

4.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. DEVELOPER shall cooperate with the CITY in the conduct of such special reviews.

4.3 Procedure. In connection with any periodic or special review, each Party shall have a reasonable opportunity to assert matters which it believes have not been undertaken in accordance with the Agreement, to explain the basis for such assertion, and to receive from the other Party a justification of its position on such matters. If on the basis of the Parties’ review of any terms of the Agreement, either Party concludes that the other Party has not complied in good faith with the terms of the Agreement, then such Party may issue a written “Notice of Non - Compliance” specifying the grounds therefor and all facts demonstrating such non -compliance.

The Party receiving a Notice of Non-Compliance shall have thirty (30) days to respond in writing to said Notice. If a Notice of Non-Compliance is contested, the Parties shall have up to sixty (60) days to arrive at a mutually acceptable resolution of the matters occasioning the Notice. In the event that the Parties are not able to arrive at a mutually acceptable resolution of the matter(s) by the end of the sixty (60) day period, the Party alleging the non-compliance may thereupon pursue the remedies provided in Section 8.

4.4 Certificate of Agreement Compliance . If, at the conclusion of a Periodic or Special Review, DEVELOPER is found to be in compliance with this Agreement, CITY shall, upon request by DEVELOPER, issue a Certificate of Agreement Compliance ( “Certificate”) to DEVELOPER stating that after the most recent Periodic or Special Review and based upon the information known or made known to the CITY’s City Manager and City Council that (1) this Agreement remains in effect and (2) DEVELOPER is in compliance. The Certificate shall be in Item: 5.1
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17 recordable form, shall contain information necessary to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated date of comme ncement of the next Periodic Review.

DEVELOPER may record the Certificate with the County Recorder. Additionally, DEVELOPER may at any time request from the CITY a Certificate stating, in addition to the foregoing, which obligations under this Agreement have been fully satisfied with respect to the Property, or any lot or parcel within the Property.

5. FEES.

5.1 Development Fees. The current Development Fees applicable to the Project are in the amount set forth in Exhibit E. DEVELOPER agrees that all Development Approvals and Subsequent Development Approvals that do not require an amendment to this Agreement under Section 3.5 shall be subject to the Development Fees. DEVELOPER and CITY further agree that the Development Fees (shown on and subject to adjustments as allowed in Exhibit E) shall remain fixed for a period of seven (7) years from the Effective Date. If the CITY incorporates automatic periodic increases of the Development Fees applicable to all CITY development projects, following the seven (7) year fixed period, the Project will be subject to only 50% of such accrued periodic increases for a three (3) year period whethe r the periodic increase occurred within the initial seven (7) year fixed period or after. Any Development Fees that are due ten (10) or more years following the Effective Date shall be subject to the full Development Fees in effect at the time due.

5.2 Credits and Reimbursements.

5.2.1 Credits. DEVELOPER shall be entitled to full Development Fee credits for all Project dwelling units for the Development Fees identified in in column D of Exhibit F- 1, in column F of Exhibit F-2, and column F of Exhibit F-3 so long as, prior to obtaining and utilizing such Development Fee credits, DEVELOPER provides adequate sureties for the facilities associated with each respective Development Fee credit (e.g., a transportation fee credit would be available to the extent adequate sureties for the transportation facilities identified on Exhibit F-1 have been provided). The currently estimated total Development Fee credits are identified in column D of Exhibit F-1, in column F of Exhibit F-2, and column F of Exhibit F-3. Available Development Fee credits shall survive the expiration or earlier termination of this Agreement but shall be applicable only to Development of the Project on the Property.

5.2.2 Reimbursements for Circulation and Storm Drain Facilities .

DEVELOPER shall be entitled to reimbursements of Development Fees paid by third parties and otherwise eligible for use on the facilities listed in Exhibit F, in accordance with the formulas set forth in columns E and F of Exhibit F-1 (for each circulation facility listed therein), and in columns G and H of Exhibit F-2 (for each storm drain facility listed therein). The current estimate of such reimbursements are also set forth in columns E and F of Exhibit F-1 (for each circulation facility listed therein), and in column s G and H of Exhibit F-2 (for each storm drain facility listed therein). CITY and DEVELOPER shall enter into one or more Reimbursement Agreements for the circulation facilities listed on Exhibit F -1 and Exhibit F -2 within one (1) year after the Effective Date; provided, Item: 5.1
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18 however, that the effective date of each Reimbursement Agreement shall be the date of CITY’s acceptance of the circulation or storm drainage facility that is the subject of the Reimbursement Agreement. The Reimbursement Agreements shall in clude terms that :
(i) recognize that DEVELOPER has under Section 5.2.1 obtained specific impact fee credits described in column D of Exhibit F-1 on the appropriate row for each facility, and in column F of Exhibit F -2 on the appropriate row for each facility ; (ii) establish a mechanism for DEVELOPER to obtain , for a period of ten (10) years following the effective date of each Reimbursement Agreem ent, reimbursements from CITY up to the dollar amounts contemplated in columns E and F of Exhibit F -1 (for each circulation facility listed therein), and in columns G and H of Exhibit F-2 (for each storm drain facility listed therein) with such reimburseme nts coming solely from the Development Fees collected by the CITY and otherwise eligible for expenditure of the subject circulation and drainage facilities; and (iii) establish procedures for the partial release and release of any sureties for the facilities.

5.2.3 Reimbursements for Park Facilities . CITY and DEVELOPER shall enter into Reimbursement Agreements for each of the park facilities listed on Exhibit F-3 within one (1) year after the Effective Date; provided, however, that the effective date of each Reimbursement Agreement shall be the date of the public opening of the park that is the subject of the Reimbursement Agreement. The Reimbursement Agreements shall include terms that: (i) give DEVELOPER the specific impact fee credits for the parks described in column F of Exhibit F -3 on the appropriate row for each park facility ; (ii) establish a mechanism for DEVELOPER to obtain , for a period of ten (10) years following the effective date of each Reimbursement Agreement, reimbursements from CITY for Excess Contributions associated with each park described in Exhibit F-3 up to the cumulative dollar amount in column G of Exhibit F-3 (as adjusted in accordance with footnote 4 of Exhibit F-3 and Exhibit F-4), with such reimbursements coming solely from the following sources: (A) transfer from CITY to DEVELOPER of the Development Fees for parks (if any) paid after the Effective Date by development in an area to be designated by the Parties in the Reimbusement Agreement and that are eligible for expenditure o n each park described in Exhibit F-3; and (B) for the Community Park and Community Center Park Facilities listed on Exhibit F-3, transfer from CITY to DEVELOPER of twenty percent (20%) of CITY’S lease revenues associated with the Community Park and the Community Center, respectively; and (iii) establish procedures for the partial release and release of any sureties for the facilities.

5.2.4 Limitation on Total Credits and Reimbursements. For each of the facilities listed in Exhibit F, the total credits and reimbursements shall not exceed the dollar amount of the Actual Cost of Construction of such improvement.

5.2.5 Interpretation and Precedence . This Section 5.2 shall be deemed an application for such credits and reimbursements if such credits and reimbursements require an application under the CITY ’s Municipal Code. Further, this Section 5.2 shall control over any contrary provisions applicable to D evelopment Fee credits and reimbursements in the CITY’s Municipal Code.

Item: 5.1
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19 5.2.6 Assumption of Risk. DEVELOPER agrees to assume the risk that the Actual Costs of Construction incurred in connection with the construction, installation and/or dedication of each of the improvements listed on Exhibit F-1, Exhibit F-2, and Exhibit F-3 will exceed the identified “Project Cost” for each such improvement , subject to the design and cost control protocols set forth in Section 6.2.

5.3 Public Benefit. DEVELOPER shall, subject to this Agreement, construct or cause the construction of all of the community and area-wide infrastructure and park benefits as set forth in Exhibit F, even though those benefits exceed the Development Requirements the CITY could otherwise impose on the Project. CITY and DEVELOPER agree that this Agreement serves as a contractual mechanism through which the CITY can facilitate construction of such facilities.

DEVELOPER’s Excess Contributions toward the improvements set forth in Exhibit F are estimated to exceed the dollar value of the Development Requirements the CITY could otherwise impose on the Project without this Agreement by Twenty Two Million Nine Hundred Eighty-Four Thousand Six Hundred Forty-Four Dollars ($22,984,644).

5.4 Other Fees and Charges. After the ten (10) year period described in Section 5.1, this Agreement shall not limit or restrict CITY’s authority to impose new area-wide fees, charges, assessments, or taxes for the Development of the Property or to increase any existing fees, charges, assessments, or taxes, and nothing set forth herein is intended or shall be construed to limit or restrict whatever right the DEVELOPER might otherwise have to challenge any fee, charge, assessment, or tax either not set forth in this Agreeme nt or not in effect as of the Effective Date.

DEVELOPER shall timely pay all applicable fees, charges, assessments, and special and general taxes validly imposed in accordance with the Constitution and laws of the State of California, including without limitation school impact fees in accordance with Government Code §§ 65995, et seq.

5.5 Fair Share Offsite Improvement Fees. Vesting Tentative Tract Map No. 37408 and Vesting Tentative Tract Map No. 37409 Public Works/Engineering Condition of Approval 88 states in part that upon “the issuance of each building permit the developer/property owner shall pay a pro rata amount of the total fair share cost for Offsite Improvements for all development phases of VTTM 37408 and VTTM 37409. The exact pro rata cost is to be determined prior to the first building permit in VTTM 37408 or VTTM 37409.” The Offsite Improvements subject to such pro rata amount and estimated fair share percent responsibility of the Project, and the estimated cost of each Offsite Improvement is set forth Exhibit H. The Parties agree that the Fair Share Fees will be based on a per dwelling unit basis. The current estimate of the total fair share contribution of the Project to the Offsite Improvements is Four Million Six Hundred Four Thousand Two Hundred Eighty Dollars ($4,604,280), which would equal a Fair Share Fee of Four Thousand Five Hundred Five Dollars and S eventeen Cents ( $4,505.17) per unit based on one thousand twenty-two (1,022) dwelling units. The Parties acknowledge that this is only an estimate and the actual Fair Share Fee may be higher or lower than Four Thousand Five Hundred Five Dollars and Sevent een Cents ($4,505.17) per unit . CITY shall within a reasonable time after receipt of a request from DEVELOPER and at no cost to CITY, provide DEVELOPER an estimate of the Fair Share Fees prior to the approval of the first small lot subdivision map for the Project.

The Fair Share Fee shall be paid at the time of issuance of building permits for each dwelling unit of the Project. Fair Share Fees shall be held in a restricted account and only used for the Item: 5.1
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20 improvements in Exhibit H. The Fair Share Fees shall be subject to the management and reporting requirement in the Mitigation Fee Act (Section 66000 et seq. of the Government Code). The City shall recalculate the Fair Share Fee every year following the calculation of the initial Fair Share Fee, which shall occur prior to issuance of the first building permit for Tentative Tract Map No. 37408 or Tentative Tract Map No. 37409. Each adjustment to the Fair Share Fee shall take into account such factors such as the actual cost of construction of the completed Offsite Improvements, the remaining building permits to be issued for the Project, whether an Offsite Improvement was constructed by another project as a condition of approval, whether any Offsite Improvements were included into a capital improvement program , and other factors that justify an adjustment to the Project’s fair share contribution to an Offsite Improvement, and impose such fees on building permits issued after the date the fee is recalculated. Within ninety (90) days after the completion of all of the Offsite Improvements described in Exhibit H, the CITY shall refund DEVELOPER the unexpended portion of the collected Fair Share Fees.

6. CONSTRUCTION OF PARK AND RECREATION IMPROVEMENTS.

6.1 Notwithstanding anything in this Agreement or the Applicable Law to the contrary, completion of the park and recreation improvements described in this Section 6 shall be the fu ll and complete satisfaction of the DEVELOPER ’s Park Obligation related to provision of neighborhood and/or community parks pursuant to CITY’s Municipal Code, the Quimby Act, and this Agreement. DEVELOPER is obligated, based on the CITY ’s formula for loca l park dedication, to provide 16.8 acres of unimproved neighborhood parks. DEVELOPER will be providing 20.8 acres of dedicated land for the Community Park, linear parks, and pocket parks, resulting in an excess dedication of 4 acres. DEVELOPER has offered such excess dedication as an Excess Contribution. The Parties agree that the unreimbursed costs of DEVELOPER ’s improvements to the 12.9 acre Community Park will exceed the Park Obligation of the Project and therefore the DEVELOPER shall receive a full and complete credit for the Park Obligation of the Project.

6.2 In full and complete satisfaction of DEVELOPER ’s Park Obligation, DEVELOPER shall do all of the following subject to the credits and reimbursements described in Section 5.2:

6.2.1 Timing and Scope of Tentative Tract Map (No. 37408) Community Park Improvements.
(a) Plot Plan . Prior to 250th certificate of occupancy for a Project dwelling unit (or final inspection if no certificates of occupancies are issued for dwelling units), DEVELOPER shall prepare an d obtain approval from CITY of Community Park Plot Plans consistent with the design and improvements set forth in the Specific Plan and Tentative Tract Map No. 37408 , which shall include the location of the Community Center and/or accommodate the location of the Community Center. City ’s approval of the Community Park Plot Plans shall not be unreasonably withheld, conditioned, or delayed.
(b) Community Park Construction Drawings. DEVELOPER shall rely on the Community Park Plot Plans to prepare and obtain app roval from CITY of Item: 5.1
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21 the Community Park Construction Drawings prior to 300th certificate of occupancy for a Project dwelling unit (or final inspection if no certificates of occupancies are issued for dwelling units) . The Community Park Construction Drawings shall substantially conform to the design elements of the Community Park Plot Plan; no substantial deviation from the design elements of the Community Park Plot Plan shall be permitted unless mutually agreed upon by CITY and DEVELOPER . The Community Park Construction Drawings shall be subject to CITY’s timely review and approval; such approval shall not be unreasonably withheld, conditioned or delayed.
(c) Review of Community Park Bid . Prior to entering into a construction contract for the Community Park, DEVELOPER shall deliver to CITY DEVELOPER’s preferred contractor for the Community Park Selected Contract which, when combined with a fifteen percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the Community Park in Exhibit F -3 (as adjusted in the manner required by Exhibit F -4). CITY shall have fifteen (15) days from the delivery of the Community Park Selected Contract to provide the Community Park Contract Notice, which will indicate, in its reasonable discretion, CITY ’s acceptance or rejection of the Community Park Selected Contract. CITY ’s acceptance or rejection of the bid shall be based on ( i) commercially reasonable considerations that are consistent with CITY ’s historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or ( ii) concern that the costs of the park will exceed DEVELOPER ’s obligations under this Agreement, thereby resulting in a pote ntial financial exposure to the CITY. If CITY rejects the Community Park Selected Contract, it shall identify reasonable requested changes in such contract in the Community Park Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the Community Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised Community Park Selected Contract and any revised bid, then DEVELOPER may either make further modifications to address CITY’s concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY ’s concerns and DEVELOPER ’s responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER’s demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER’s sole obligation related to the Community Park shall be to assign the Community Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER ’s cost in preparing the Community Park Construction Drawings. CITY’s failure to provide DEVELOPER a Community Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY ’s approval of the Community Park Selected Contract, so long as concurrent with DEVELOPER ’s delivery of the proposed Item: 5.1
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22 Community Park Selected Contract ( and any revisions thereto) to CITY , DEVELOPER include a cover letter that states in the first paragraph as follows:
“IMPORTANT, DELIVERY OF THIS CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.1( c) OF THE LEGADO DEVELOPMENT AGREEMENT. SPECIFICALLY, IF CITY FAILS

TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE CONTRACT.” For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the Community Park) toward the Community Park.
(d) Completion of Community Park. The Community Park, except for the Community Center, shall be completed prior to the issuance of the certificate of occupancy for the 500th Project dwelling unit (or final inspection if no certificates of occupancies are issued for dwelling units). For purposes of this subsection, “completed” means the Community Park shall be open to the public after passing all required inspections and completing a 90 -day maintenance and landscape establishment period. CITY shall promptly grant all required approva ls and conduct all necessary inspections related to the Community Park. CITY’s unreasonable delay in making an approval or inspection related to the Community Park shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy. (e) Community Center Construction Drawings . DEVELOPER shall rely on the Community Park Plot Plan to prepare and obtain approval from CITY of the Community Center Construction Drawings prior to 600 th certificate of occupancy for a Project dwelling unit (or final inspection if no certificates of occupancies are issued for dwelling units) . The Community Center Construction Drawings shall substantially conform to the design elements of the Community Park Plot Plan; no substantial deviation from the design elements of the Community Park Plot Plan shall be permitted unless mutually agreed upon by CITY and DEVELOPER. CITY’s approval of the Community Center Construction Drawings shall be subject to CITY’s timely review and approval; such approval shall not be unreasonably withheld, conditioned or delayed.
(f) Review of Community Center Bid . Prior to entering into a construction contract for the Community Center, DEVELOPER shall deliver to CITY DEVELOPER ’s selected contractor for the Community Center Selected Contract, which, when combined with a fifteen percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the Community Center in Exhibit F-3 (as adjusted in the manner required by Exhibit F-4). CITY shall have fifteen (15) days from the delivery of the Community Center Selected Contract to provide the Community Center Contract Notice, which will indicate, in its reasonable discretion, CITY ’s acceptance or rejection of the Community Center Selected Contract. CITY ’s acceptance or rejection of the bid sh all be based on ( i) commercially reasonable Item: 5.1
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23 considerations that are consistent with CITY ’s historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or ( ii) concern that the costs of the Community Center will exce ed DEVELOPER’s obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY rejects the Community Center Selected Contract, it shall identify reasonable requested changes in such contract in the Community Center Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the Community Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised Community Center Selected Contract and any revised bid, then DEVELOPER may either make further modifications to address CITY’s concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY ’s concerns and DEVELOPER ’s responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER’s demand for a review. If CITY refuses to accept and implement the conclusions and reco mmendations of the neutral third party, DEVELOPER ’s sole obligation related to the Community Center shall be to assign the Community Center Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER’s cost in preparing the Community Center Construction Drawings. CITY ’s failure to provide DEVELOPER a Community Center Contract Notice within fifteen (15) days of delivery shall be deemed CITY ’s approval of the Community Center Selected Contract, so long as concurr ent with DEVELOPER ’s delivery of the proposed Community Center Selected Contract (and any revisions thereto) to CITY, DEVELOPER includes a cover letter that states in the first paragraph as follows: “IMPORTANT, DELIVERY OF THIS CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2.1( f) OF THE LEGADO DEVELOPMENT AGREEMENT. SPECIFICALLY, IF CITY

FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE C ONTRACT”. For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the Community Center) toward the Community Center.
(g) Completion of Community Center. The Community Center shall be completed prior to the issuance of the certificate of occupancy for the 750th Project dwelling unit (or final inspection if no certificates of occupancies are issued for dwelling units). For purposes of thi s subsection, “completed” means the Community Center shall be open to the public after passing all required inspections.

CITY shall promptly grant all required approvals and conduct all necessary inspections related to the Community Center. City’s unreasonable delay in making an approval or inspection related to the Community Center shall not serve as a basis Item: 5.1
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24 for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.

6.2.2 Tentative Tract Map No. 37408 Neighborhood Park and Paseo Legado West Improvements.
(a) Plot Plan. Prior to the issuance of the first certificate of occupancy for a Project dwelling unit in Planning Areas 1, 2, 3, or 4 of Tentative Tract Map No. 37408 (or final inspec tion if no certificates of occupancies are issued for dwelling units), DEVELOPER shall prepare and obtain approval from CITY of 37408 Park Plot Plans for the 37408 Park Improvements consistent with the design and improvements set forth in the Specific Plan , Tentative Tract Map No. 37408, and associated landscape plans. City’s approval of the 37408 Park Plot Plans shall not be unreasonably withheld, conditioned, or delayed.
(b) Construction Drawings. DEVELOPER shall rely on the 37408 Park Plot Plan to prepare and obtain approval from CITY of the 37408 Park Construction Drawings prior to 70th certificate of occupancy for a Project dwelling unit in Planning Areas 1, 2, 3, and 4 of Tentative Tract Map No. 37408 (or final inspection if no certificates of oc cupancies are issued for dwelling units) . The 37408 Park Construction Drawings shall substantially conform to the design elements of the 37408 Park Plot Plan; no substantial deviation from the design elements of the 37408 Park Plot Plan shall be permitted unless mutually agreed upon by CITY and DEVELOPER. The 37408 Park Construction Drawings shall be subject to CITY’s timely review and approval ; such approval shall not be unreasonably withheld, conditioned or delayed.
(c) Review of Bid. Prior to entering into a construction contract for the 37408 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER ’S 37408 Park Selected Contract which, when combined with a fifteen percent (15%) contingency and all other categories of Actual Costs of Construct ion, shall not exceed the amount specified as the Project Cost for the 37408 Park and the Paseo Legado West Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37408 Park Selected Contract to approve or reject the 37408 Park Selected Contract through the delivery of the 37408 Park Contract Notice. CITY’s acceptance or rejection of the 37408 Park Selected Contract shall be based on ( i) commercially reasonable considerations that are consistent with CITY’s historic practi ces and/or facts or concerns disclosed upon a reasonable review of the bid documents, or ( ii) concern that the costs of the 37408 Park Improvements will exceed DEVELOPER ’s obligations under this Agreement, thereby resulting in a potential financial exposur e to the CITY. If CITY 37408 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37408 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cos t as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37408 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (1 5) Item: 5.1
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25 days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37408 Park Selected Contract and any revised bid, then DEVELOPER may either make further modifications to address CITY’s concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Parties, that will perform an expedited evaluation of the CITY ’s concerns and DEVELOPER ’s responses thereto; said expedited review shall be com pleted within sixty (60) days of DEVELOPER ’s demand for a review. If CITY refuses to accept and implement the conclusions and recommendations of the neutral third party, DEVELOPER’s sole obligation related to the 37408 Park shall be to assign the 37408 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER’s cost in preparing the 37408 Park Construction Drawings. CITY’s failure to provide DEVELOPER a 37408 Park Contract Notice within fifteen (15) day s of delivery shall be deemed CITY’s approval of the 37408 Park Selected Contract, so long as concurrent with DEVELOPER ’s delivery of the proposed 37408 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows: “IMPORTANT, DELIVERY OF THIS

CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC OBLIGATION IN SECTION 6.2. 2(c) OF THE LEGADO DEVELOPMENT AGREEMENT.

SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CON TRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS

LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE
CONTRACT”. For the avoidance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37408 Park Improvements) toward the 37408 Park Improvements.
(d) Completion of Improvements. The 37408 Park Improvements shall be completed prior to the issuance of the certificate of occupancy for the 140th Project dwelling unit in Planning Areas 1, 2, 3, and 4 of Tentative Tract Map No. 37408 (or final inspection if no certifi cates of occupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, “completed” means the 37408 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37408 Park Improvements. City’s unreasonable delay in making an approval or inspection related to the 37408 Park Improvements shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.

6.2.3 Tentative Tract Map (No. 37409) Neighborhood Park and Paseo Legado East Improvements
(a) Plot Plan. Prior to the issuance of the first certificate of occupancy for a Project dwelling unit in Planning Areas 8, 9, 10, or 11 of Tentative Tract Map Item: 5.1
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26 No. 37409 (or final inspection if no certificates of occupancies are issued for dwelling units), DEVELOPER shall prepare and obtain approval from CITY of 37409 Park Plot Plans for the 37409 Park Improvements consistent with the design and improvements set forth in the Specific Plan Tentative Tract Map No. 37409 and associated landscape plans. City’s approval of the 37409 Park Plot Plans shall not be unreasonably withheld, conditioned, or delayed.
(b) Construction Drawings. DEVELOPER shall rely on the 37409 Park Plot Plan to prepare and obtain approval from CITY of the 37409 Park Construction Drawings prior to 70th certificate of occupancy for a Project dwelling unit in Planning Areas 8, 9, 10, or 11 of Tentative Tract Map No. 37409 (or final inspection if no certificates of occupancies are issued for dwelling units) . The 37409 Park Construction Drawings shall substantially conform to the design elements of the 37409 Park Plot Plan; no substantial deviation from the design elements of the 37409 Park Plot Plan shall be permitted unless mutually agreed upon by CITY and DEVELOPER. The 34709 Park Construction Drawings shall be subject to CITY’s timely review and approval ; such approval shall not be unreasonably with held, conditioned or delayed.
(c) Review of Bid. Prior to entering into a construction contract for the 37409 Park Improvements, DEVELOPER shall deliver to CITY DEVELOPER ’S 37409 Park Selected Contract, which, when combined with a fifteen percent (15%) contingency and all other categories of Actual Costs of Construction, shall not exceed the amount specified as the Project Cost for the 37409 Park and the Paseo Legado East Improvements in Exhibit F-3. CITY shall have fifteen (15) days from the delivery of the 37409 Park Selected Contract to approve or reject the 37409 Park Selected Contract through the delivery of the 37408 Park Contract Notice .

CITY’s acceptance or rejection of the 37409 Park Selected Contract shall be based on ( i) commercially reasonable considerations that are consistent with CITY ’s historic practices and/or facts or concerns disclosed upon a reasonable review of the bid documents, or ( ii) concern that the costs of the 37409 Park Imp rovements will exceed DEVELOPER’s obligations under this Agreement, thereby resulting in a potential financial exposure to the CITY. If CITY refuses to accept the 37409 Park Selected Contract, it shall identify reasonable requested changes in such contract in the 37409 Contract Notice (including, without limitations, requests to modify or value engineer park features to reduce the overall cost as necessary to remove any financial exposure of CITY) and DEVELOPER shall make reasonable efforts to obtain a revised bid that addresses the issues identified in the 37409 Park Contract Notice and submit the same to the CITY. CITY shall have fifteen (15) days from the delivery of the revised bid to approve or reject the revised bid in its reasonable discretion. If CITY rejects the revised 37409 Park Selected Contract and any revised bid, then DEVELOPER may either make further modifications to address CITY’s concerns, or may demand the engagement of a neutral third party, selected upon the mutual agreement of the Par ties, that will perform an expedited evaluation of the CITY ’s concerns and DEVELOPER ’s responses thereto; said expedited review shall be completed within sixty (60) days of DEVELOPER ’s demand for a review. If CITY refuses to accept and implement the conclusions and Item: 5.1
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27 recommendations of the neutral third party, DEVELOPER’s sole obligation related to the 37409 Park shall be to assign the 37409 Park Construction Drawings to CITY and to pay applicable Development Fee fees subject to credits for DEVELOPER’s cost in preparing the 37409 Park Construction Drawings. CITY’s failure to provide DEVELOPER a 37409 Park Contract Notice within fifteen (15) days of delivery shall be deemed CITY’s approval of the 37409 Park Selected Contract, so long as concurrent with DEVELO PER’s delivery of the proposed 37409 Park Selected Contract (and any revisions thereto) to CITY DEVELOPER includes a cover letter that states in the first paragraph as follows: “IMPORTANT, DELIVERY OF THIS

CONTRACT FOR CITY REVIEW IS SUBJECT TO SPECIFIC O BLIGATION IN SECTION 6.2. 3(c) OF THE LEGADO DEVELOPMENT AGREEMENT.

SPECIFICALLY, IF CITY FAILS TO EITHER APPROVE OR REJECT THE ATTACHED CONTRACT WITHIN 15 DAYS OF THE RECEIPT OF THIS

LETTER, CITY WILL BE DEEMED TO HAVE APPROVED THE
CONTRACT”. For the avo idance of doubt, nothing in this Section shall require that the CITY contribute any general funds or other funds (except as specified in the Reimbursement Agreement for the 37409 Park Improvements) toward the 37409 Park Improvements.
(d) Completion of Improvements. The 37409 Park Improvements shall be completed prior to the issuance of the certificate of occupancy for the 140th Project dwelling unit in Planning Areas 8, 9, 10, and 11 of Tentative Tract Map No. 37409 (or final inspection if no certificates of o ccupancies are issued for dwelling units) unless the Director of Public Works approves a later completion date to address construction compatibility and safety issues related to occupied residences. For purposes of this subsection, “completed” means the 3 7409 Park Improvements shall be open to the public after passing all required inspections and completing a 90-day maintenance and landscape establishment period. CITY shall promptly grant all required approvals and conduct all necessary inspections related to the 37409 Park Improvements. CITY’s unreasonable delay in making an approval or inspection related to the 37409 Park shall not serve as a basis for CITY in delaying the filing or recordation of any Project final map, issuing a building permit, or issuing a certificate of occupancy.

7. FINANCING FOR PUBLIC IMPROVEMENTS AND SERVICES.

7.1 [RESERVED]

7.2 Formation of Infrastructure, Business Improvement, and/or Maintenance Assessment District(s). CITY may request that DEVELOPER agree to annex the Property int o the Assessment District. DEVELOPER, on behalf of itself and its successors in interest, hereby irrevocably consents to the annexation of the Property into the Assessment District and waives any and all right of protest or objection with respect to such annexation. DEVELOPER agrees to cooperate with CITY and take all necessary action to accomplish the annexation of the Property into the Assessment District, for the purposes of funding maintenance services for the Project.

DEVELOPER agrees to cooperate i n the imposition of assessments related to the Assessment District, including without limitation, if required by CITY, the submission of a ballot to CITY by Item: 5.1
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28 DEVELOPER (or its successors in interest) in favor of the annexation into the Assessment District and the levying of such assessments so long as the impact of such assessments does not fall disproportionately on the Property as compared to the benefits accruing to the Property . Nothing herein shall be construed as a commitment by CITY to annex the Prop erty into the Assessment District or as a limitation on CITY’s legislative discretion with respect thereto. DEVELOPER has agreed to the financing provisions set forth in this Section 7.2 and to perform the obligations hereunder in exchange for the conside ration and benefits provided to DEVELOPER by CITY under this Agreement, including without limitation the vested right to develop the Property in accordance with Section 3.1.

7.3 Covenant Regarding Assessment District . For avoidance of doubt, the Parties agree that this Agreement includes and constitutes a covenant not to contest the annexation into the Assessment District as set forth in Paragraph 7.2. The covenant shall be binding upon successive owners of the Property, or any portion thereof, and shall also be binding upon any and all homeowners associations that have covenants, conditions, and restrictions governing the use of the Property.

8. DEFAULT AND REMEDIES.

8.1 Specific Performance Available . The Parties acknowledge that money damages and remedies at law generally are inadequate and specific performance is a particularly appropriate remedy for the enforcement of this Agreement and should be available to DEVELOPER and CITY because the size, nature and scope of the Project, make it impractical or impossible to restore the Property to its natural condition once implementation of this Agreement has begun. After such implementation, DEVELOPER and/or CITY may be foreclosed from other choices they may have had to utilize or condition the uses of the Property or p ortions thereof. DEVELOPER and CITY have invested significant time and resources in performing extensive planning and processing for the Project and in negotiating and 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, such that it would be extremely difficult to determine the sum of money which would adequately compensate DEVELOPER and/or CITY for such efforts. The Parties therefore agree that specific performance shall be the sole remedy available for a breach of this Agreement.

8.2 Money Damages Unavailable. DEVELOPER and CITY shall not be entitled to any monetary compensation, whether characterized as money damages or injunctive or other relief compelling the payment of money, including attorney fees, from the other Party by reason of, arising out of, based upon, or relating to (a) the interpretation, enforcement, performance, or breach of any provision of this Agreement, or (b) the respective rights or duties of any of the Parties under the Development Approvals, the Subsequent Development Approvals, any Development Requirement, the Land Use Regulations, or the Subsequent Land Use Regulations.

Notwithstanding the foreg oing, CITY may recover from DEVELOPER any fees owed under or pursuant to this Agreement; and DEVELOPER may recover from CITY the right to exercise any credits and the right to receive any reimbursements under or pursuant to this Agreement.

Item: 5.1
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29 8.3 Termination of Agreement.

8.3.1 Termination of Agreement for Default of DEVELOPER . CITY in its discretion may terminate this Agreement for any failure of Default by DEVELOPER; provided, however, CITY may terminate this Agreement pursuant to this Section only after following the procedure set forth in Section 4.3 and thereafter providing written notice to DEVELOPER of the Default setting forth the nature of the Default and the actions, if any, required by DEVELOPER to cure such Default and, where the Default can be cured, DEVELOPER has failed to take such actions and cure such Default within thirty (30) days after the effective date of such notice or, in the event that such Default cannot be cured within such thirty (30) day period but can be cured within a longer time, as reas onably determined by the CITY in its sole discretion, DEVELOPER has failed to commence the actions necessary to cure such Default within such thirty (30) day period and to diligently proceed to complete such actions and cure such Default.

8.3.2 Termination of Agreement for Default of CITY . DEVELOPER in its discretion may terminate this Agreement for any Default by CITY; provided, however, DEVELOPER may terminate this Agreement pursuant to this Section only after providing written notice by DEVELOPER to the CITY of the Default setting forth the nature of the Default and the actions, if any, required by CITY to cure such Default and, where the Default can be cured, the failure of CITY to cure such Default within thirty (30) days after the effective date of such notice or, in the event that such Default cannot be cured within such thirty (30) day period, the failure of CITY to commence to cure such Default within such thirty (30) day period and to diligently proceed to complete such actions and to cu re such Default.

8.3.3 Rights and Duties Following Termination . Upon the termination of this Agreement, no Party shall have any further right or obligation hereunder except with respect to (i) any obligations to have been performed prior to said termination, or (ii) any Default in the performance of the provisions of this Agreement which has occurred prior to said termination.

9. INDEMNIFICATION AND THIRD PARTY LITIGATION.

9.1 Indemnities by Developer.

9.1.1 General Indemnity. DEVELOPER agrees to indemnify, protect, defend, and hold harmless the CITY Parties from and against any and all Claims which may arise, directly or indirectly, from the acts, omissions, or operations of DEVELOPER or DEVELOPER’s agents, contractors, subcontractors, agents, or employees pursuant to this Agreement, but excluding any loss resulting solely from the intentional or active negligence of the CITY Parties. Notwithstanding the foregoing, ( i) CITY shall have the right to select and retain counsel t o defend any such action or actions and DEVELOPER shall pay the cost thereof; provided, however, that the Parties agree to attempt in good faith to coordinate and/or consolidate their defense of any Claim that is subject to the indemnification provisions of this Section; and (ii) this indemnity obligation shall not apply Item: 5.1
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30 to any Claim for which DEVELOPER has provided a separate indemnity to the CITY by way of a separate instrument mutually accepted by the Parties.

9.1.2 Prevailing Wage Indemnity and Notice to Developer of Labor Code Section 1781. In connection with, but without limiting, the indemnification obligations set forth in Section 9.1.1, DEVELOPER hereby expressly acknowledges and agrees that the CITY is not by this Agreement affirmatively representing, a nd has not previously affirmatively represented, to the DEVELOPER or any contractor(s) of DEVELOPER for any construction on or development on or adjacent to the Property, in writing or otherwise, in a call for bids or any agreement or otherwise, that any w ork to be undertaken on the Property, as may be referred to in this Agreement or construed under this Agreement, is not a “public work,” as defined in Section 1720 of the Labor Code, or under any similar existing or hereinafter enacted law or regulation. The Parties agree that, in connection with the Development and construction (as defined by Applicable Law) of the Project, including, without limitation, any and all public works (as defined by Applicable Law), DEVELOPER shall bear all risks of payment or non-payment of prevailing wages under California law and/or federal law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. With respect to the foregoing, DEVELOPER shall be sol ely responsible, expressly or impliedly and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, and labor laws and standards, and CITY makes no r epresentation, either legally and/or financially, as to the applicability or non-applicability of any federal, state and local laws to the construction of the Project as it may be amended pursuant hereto or otherwise.

Without limiting the foregoing, DEVELOPER shall indemnify, protect, defend and hold harmless the CITY Parties, with counsel reasonably acceptable to CITY, from and against “increased costs ” as defined in California Labor Code Section 1781 (including CITY ’s reasonable attorneys ’ fees, court and litigation costs, and fees of expert witnesses) in connection with the Development or construction (as defined by Applicable Law) of or on the Property, that results or arises in any way from (1) noncompliance by DEVE LOPER of the requirement, if and to the extent applicable, to pay federal or state prevailing wages and hire apprentices, or (2) failure by DEVELOPER to provide any required disclosure or identification as required by California Labor Code Sections 1720 et seq. including without limitation specifically Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive the expiration or earlier termination of this Agreement.

9.2 Indemnification Procedures. Wherever this Agreeme nt requires DEVELOPER to indemnify any CITY Party:

9.2.1 Prompt Notice. CITY shall promptly notify DEVELOPER in writing of any Claim.

9.2.2 Cooperation. CITY shall reasonably cooperate with DEVELOPER ’s defense, provided DEVELOPER reimburses CITY ’s actual reasonable out of pocket expenses (including Legal Costs) of such cooperation.

Item: 5.1
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31 9.2.3 Settlement. Any settlement shall require the prior written consent of both CITY and DEVELOPER, which consent shall not be unreasonably withheld if the settlement is objectively financially reasonable. If CITY refuses to authorize a settlement that is objectively financially reasonable, it shall be responsible for Costs and damages of the Claim that are in excess of those incurred through the date of the CITY ’s rejection of the proposal, plus the amount of the proposal.

9.2.4 CITY Cooperation. CITY shall reasonably cooperate with DEVELOPER’s defense, provided DEVELOPER reimburses CITY for its actual reasonable out of pocket expenses (including Legal Costs) of such cooperation.

9.2.5 Insurance Proceeds. DEVELOPER’s obligations shall be reduced by net insurance proceeds CITY actually receives for the matter giving rise to indemnification.

9.3 Third Party Litigation. CITY shall promptly notify DEVELOPER of any Claim against CITY and/or any CITY Party, and/o r any other administrative or judicial action to challenge, set aside, void, annul, limit or restrict the approval and continued implementation and enforcement of this Agreement. DEVELOPER agrees to reimburse the CITY for its reasonable Legal Costs incurred in connection with the defense of the Claim and to fully defend and indemnify CITY for all costs of defense and/or judgment obtained in any such action or proceeding. CITY and DEVELOPER agree to cooperate in the defense of such action(s).

9.4 Challenge to Enforceability of Specific Obligations . The Parties have determined in good faith that each of the provisions of this Agreement are valid and enforceable.

Notwithstanding, if a court of competent jurisdiction finds invalid or unenforceable any provision of this Agreement purporting to supersede or otherwise render ineffectual any federal, state, or local law or regulation in existence as of the Effective Date, DEVELOPER shall perform its obligations under such law or regulation as it existed on the Effect ive Date, or as otherwise specifically directed by a court of competent jurisdiction.

10. MORTGAGEE PROTECTION.

The Parties hereto agree that this Agreement shall not prevent or limit DEVELOPER from encumbering the Property or any portion thereof or any imp rovement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property. CITY acknowledges that the lenders providing such financing may require certain Agreement interpretations and modifications and agree s upon request, from time to time, to meet with DEVELOPER and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. Subject to compliance with Applicable Laws, CITY will not unreasonably withhold its consent to any such requested interpretation or modification provided CITY determines such interpretation or modification is consistent with the intent and purposes of this Agreement. Any Mortgagee of the Property shall be entitled to the fol lowing rights and privileges:
(a) Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for value, unless otherwise required by law.

Item: 5.1
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32 (b) The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part thereof, which Mortgagee has submitted a request in writing to the CITY in the manner specified herein for giving notices, shall be entitled to receive written notificatio n from CITY of any Default by DEVELOPER in the performance of DEVELOPER’s obligations under this Agreement. (c) If CITY timely receives a request from a Mortgagee requesting a copy of any notice of Default given to DEVELOPER under the terms of this Agreement, CITY shall make a good faith effort to provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of Default to DEVELOPER. The Mortgagee shall have the right, but not the obligation, to cure the Default during the remaining cure period allowed such Party under this Agreement.
(d) Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Property, or pa rt thereof, subject to the terms of this Agreement. However, no Mortgagee (including one who acquires title or possession to the Property, or any portion thereof, by foreclosure, trustee ’s sale, deed in lieu of foreclosure, lease termination, eviction or otherwise) shall have any obligation to construct or complete construction of improvements, or to guarantee such construction or completion; provided, however, that a Mortgagee shall not be entitled to develop the Property or receive any benefit provided u nder this Agreement unless it first agrees in writing to fully comply with this Agreement and the Development Plan.

11. MISCELLANEOUS PROVISIONS.

11.1 Option to Terminate Due to Litigation . If a lawsuit is filed challenging the Development Approvals or the ordinan ce approving this Agreement within the time periods for the filing of such lawsuits under the California Environmental Quality Act (Public Resources Code section 21000 et seq.) or the State Planning and Zoning Law (Government Code section 65000 et seq.), then the Parties shall meet and confer concerning the potential impact of the lawsuit on this Agreement and the Development of the Project. Within thirty (30) days of such meeting, if DEVELOPER determines that such litigation may have an unacceptable adver se impact on the Project or its rights under this Agreement, DEVELOPER may in its discretion terminate this Agreement by sending CITY a written notice of such termination, and the Parties shall be relieved of any further obligations to this Agreement, to t he extent that such obligations have not been performed or have been incurred prior to such termination. DEVELOPER acknowledges and agrees that if this Agreement is terminated, other than by court order, CITY shall have the option to restore the General Plan, the Specific Plan, and zoning to the condition that existed prior to the adoption of the Development Approvals or ordinance approving this Agreement. In no event, however, shall DEVELOPER bring or cause to bring a lawsuit in any court against CITY to invalidate any provision in this Agreement that would result in the ability of DEVELOPER to keep the Development Approvals without having to comply with the terms and conditions of this Agreement.

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33 11.2 Recordation of Agreement . This Agreement shall be recorde d with the County Recorder by the City Clerk within the period required by Section 65868.5 of the Government Code.

Amendments approved by the Parties, and any termination, shall be similarly recorded.

11.3 Entire Agreement . This Agreement sets forth and contains the entire understanding and agreement of the Parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement.

11.4 Estoppel Certificate. Any Party hereunder may, at any time, deliver written notice to any other Party requesting such Party to certify in writing that, to the best knowledge of the certifying Party, (i) this Agreement is in full force and effect and a binding obligation of the Party; (ii) this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments; and (iii) the requesting Party is not in Default in the performance of its obligations set forth in this Agreement or, if in Default, to describe therein the nature and amount of any such Defaults. A Party receiving a request hereunder shall execute and return such Certificate within thirty (30) days following the receipt thereof. Any third party including a Mortgagee shall be entitled to rely on the Certificate.

11.5 Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, unless and to the extent the rights and obligations of any Party has been materially altered or abridged by such holding.

11.6 Interpretation and Governing Law . This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California.

Any dispute between CITY and DEVELOPER over this Agreement shall be filed, and tried, in the Superior Court of the County of Riverside. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting Party or in favor of CITY shall not be employed in interpreting this Agreement, each of the Parties having been represented by counsel in the negotiation and preparation hereof.

11.7 Section Headings . All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

11.8 Singular and Plural. As used herein, the singular of any word includes the plural.

11.9 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.

11.10 Waiver. Failure of a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon the Default of the other Party, shall not constitute a waiver of such Party ’s right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter.

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34 11.11 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit for the Parties and their successors and assigns. No other Person shall have any right of action based upon any provision of this Agreement.

11.12 Force Majeure . Subject to the limitations set forth below, the Term of this Agreement and the time within which any Party shall be required to perform an y act under this Agreement shall be extended by a period of time equal to the number of days during which performance of such act is delayed unavoidably and beyond the reasonable control of the Party seeking the delay by: strikes; acts of God; unusually severe weather, but only to the extent that such weather or its effects (including, without limitation, dry out time) result in delays that cumulatively exceed twenty (20) days for any winter season occurring after commencement of construction of the Projec t; failure or inability to secure materials or labor in a commercially reasonable manner by reason of a new priority or new regulations or order of any governmental or regulatory body; changes in local, state, or federal laws or regulations that render per formance commercially infeasible; any development moratorium or any action of other public agencies that regulate land use, development, or the provision of services and that unreasonably prevents, prohibits, or delays construction of the Project due to ci rcumstances beyond DEVELOPER ’s control, including without limitation any extension authorized by Government Code Section 66463.5(d); enemy action; civil disturbances; wars; terrorist acts; fire; unavoidable casualties; referenda; or mediation, arbitration, litigation, or other administrative or judicial proceeding commenced by a third party and involving the Development Approvals or Subsequent Development Approvals or this Agreement (each a “Force Majeure Delay”). An extension of time shall be for the peri od of the enforced delay and shall commence to run from the time of the commencement of the cause, if written notice by the Party claiming such extension is sent to the other Parties within thirty (30) days of the commencement of the cause. If written not ice is sent after such thirty (30) day period, then the extension shall commence to run no sooner than thirty (30) days prior to the giving of such notice. The cumulative extensions of time for Force Majeure Delays for individual performance obligations h ereunder shall not exceed five (5) years, and the cumulative extensions of the expiration of this Agreement as a result of Force Majeure Delays shall not exceed two (2) years, unless otherwise agreed to in writing in accordance with Section

11.12. 11.13 Extension of Time Limits . The time limits set forth in this Agreement may be extended by mutual consent in writing of the Parties without amendment to this Agreement.

Except as otherwise specified in this Agreement, each Party may agree or refuse to agree to an y extension of time in its sole and absolute discretion.

11.14 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party.

11.15 Successors in Interest. As provided in Section 65868.5 of the Government Code, and except as otherwise provided in this Agreement, all of the terms, provisions, covenants and obligations contained in this Agreement shall be binding upon, and inure to the benefit of, CITY and DEVELOPER, and their respective successors and assigns. In no event shall this Agreement impose obligations on Individual Unit Owners. From and after the date that certificates of occupancy have been issued (or a final inspection is completed when no certificate of occupancy Item: 5.1
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35 is required) for all buildings and improvements to be constructed on a parcel within the Project (or with respect to a single -family dwelling unit on a single -family residential lot), such parcel shall not be burdened with the obligations of DEVELOPER under this Agreement.

11.16 Counterparts. This Agreement may be executed by the Parties in counterparts, which counterparts shall be construed together and have the same effect as if each of the Parties had executed the same instrument.

11.17 Jurisdiction and Venue . Any action at law or in equity aris ing under this Agreement or brought by any Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Riverside, State of California, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.

11.18 Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the Development o f the Project is a private Development, that neither Party is acting as the agent of the 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. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between CITY and DEVELOPER is that of a government entity regulating the Development of private property and the owner of such property.

11.19 Further Actions and Instruments . Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.

Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be rea sonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement.

11.20 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by CITY of its power of eminent domain.

11.21 Amendments in Writing/Cooperation . This Agreement may be amended only by written consent of both Parties specifically approving the amendment and in accordance with the Government Code provisions for the amendment of Development Agreements. The Parties shall cooperate in good faith with respect to any amendment proposed in order to clarify the intent and application of this Agreement, and shall treat any such proposal on its own merits, and not as a basis for the introduction of unrelated matters.

11.22 Authority to Execute. The Person or Persons executing this Agreement on behalf of DEVELOPER warrants and represents that he/they have the authority to execute this Agreement on behalf of his/their corporation, partnership or business entity and warrants and represents that he/they has/have the authority to bind DEVELOPER to the performance of its obligations hereunder.

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36 IN WITNESS WHEREOF, the Parties hereto have executed this A greement on the day and year first set forth above.

CITY: CITY OF MENIFEE
By
Mayor
ATTEST:

By
City Clerk

APPROVED AS TO FORM:

By
City Attorney
(SEAL)

DEVELOPER: BLC FLEMING LLC, a
Delaware limited liability
company.

By
Title
By
Title
[ALL SIGNATURES SHALL BE NOTARIZED. EXECUTION ON BEHALF OF ANY CORPORATION SHALL BE BY TWO CORPORATE OFFICERS.]

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EXHIBIT A
Legal Description of the Property

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EXHIBIT B
Map Showing Property and its Location

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EXHIBIT C
Development Plan

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Exhibit C
Development Plan
The Development Plan under the Agreement is the plan for the Development 1 of the Property, as set forth in and regulated by the Development Approvals, planning and zoning standards, regulations, applicable conditions of approval, and criteria for the Development of the Property, all as contained in the following:
2 1. The Menifee General Plan

2. Legado Specific Plan (No. 2017-187), which establishes a specific land use plan, designation of planning areas, development standards, architectural design guidelines and landscape design guidelines for development of a maximum of 1,061 dwelling units and up to 225,000 square feet of freeway-oriented commercial uses, with twenty-two (22) Planning Areas, 12.9 acres of community park, 7.9 acres of linear and pocket parks, and additional features and amenities on the Property

3. Title 9, Planning and Zoning, of the Menifee Municipal Code, as amended by Change of Zone No. 2017-188, which changes the zoning classification on the Property from “Fleming Ranch Specific Plan Zone” to “Legado Specific Plan Zone” to reflect the adopted Legado Specific Plan.

4. Menifee Municipal Code Chapter 8.26, Grading Regulations

5. Title 7, Subdivisions, of the Menifee Municipal Code

6. The Design Guidelines of the City of Menifee, adopted by the Menifee City Council on April 15, 2020.

7. Tentative Tract Map No. 37408, which proposes a subdivision of approximately 149.6 gross acres into 475 single-family residential lots and __ lots for open space, park, landscape, monumentation, drainage, and storm drain purposes with single- family residential lots with minimum lot sizes (depending on Specific Plan Planning Area) of between 5,000 square feet and 7,000 square feet.

8. Tentative Tract Map No. 37409, which proposes a subdivision of approximately 159.1 gross acres into 547 single-family residential lots and __ lots for park, landscape, monumentation, drainage, and storm drain purposes, with single-family

1 All capitalized terms used in this Exhibit C shall have the meaning assigned to those terms in the Legado Development Agreement, to which this Exhibit C is attached. 2 Under Section 3.2 of the Agreement, except as otherwise provided in the Agreement, those portions of the items listed on Exhibit C that govern permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction standards and specifications applicable to Development of the Property, shall govern the Development of the Property.

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residential lots with minimum lot sizes (depending on Specific Plan Planning Area) of 5,000 square feet and 7,000 square feet.

9. Tentative Tract Map No. 37391. Proposes a large-lot subdivision of the Property’s approximately 331.01 gross acres into twenty-six (26) parcels for park, commercial, roadway, and financing purposes, including one 12.9 acre community park.

10. The Mitigation Measures identified in Exhibit D.

11. All other ordinances, resolutions, codes, rules, regulations, CITY adopted plans (including, but not limited to, trail plans and park master plans) and official policies of CITY adopted and effective on or before the Effective Date governing Development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the Development of the Property.

12. Variances, conditional use permits, master plans, public use permits, and plot plans that constitute Subsequent Development Approvals.

COMPLETE COPIES OF THE DEVELOPMENT PLAN ARE ON FILE
WITH THE CITY CLERK.

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EXHIBIT D
Mitigation Measures

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916/031858-0003
15029240.1 a05/03/20 EXHIBIT E – Page 1

EXHIBIT E
Development Impact Fees

Item: 5.1
Item Page Number: 204
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916/031858-0003
15029240.1 a05/03/20 EXHIBIT E – Page 2
“Exhibit E” Development Impact Fees 20203

Land Use Law
Enf.

Fire Circulation Storm
Drainage
Animal
Shelter
General
Govt.

Public
Use
Facilities
Parks –
Land
Acqn.

Parks
–
Imp.

Master
Planning
And
Nexus
Analyses
Library
Facilities
Total –
Maximum
Justified
Residential Fee
Per Dwelling Unit
Single Family
Unit
$
231 $ 614 $ 4,670 $ 1,036 $ 148 $ 1,021 $ 154 $ 215 $ 661 $ 23 $ 66 $8,839 Multi-Family
Unit
$
169 $ 452 $ 3,261 $ 570 $ 109 $ 752 $ 113 $ 159 $ 487 $ 17 $ 48 $ 6,137 Senior/
Assisted Living $ 89 $ 239 $ 1,802 $ 570 $ 57 $ 398 $ 59 $ 84 $ 257 $ 9 $ 26 $ 3,590 Nonresidential Fee
Per 1,000 Sq. Ft.

Commercial /
Retail $ 58 $
428 $ 7,736 $ 735 $ 123 $ 262 $ 0 $ 0 $ 0 $ 5 $ 0 $ 9,347 Commercial /
Service / Office $ 77 $
560 $ 5,946 $ 259 $ 160 $ 342 $ 0 $ 0 $ 0 $ 6 $ 0 $ 7,350 Industrial /
Business Park $ 29 $
208 $ 3,941 $ 425 $ 59 $ 127 $ 0 $ 0 $ 0 $ 2 $ 0 $ 4,791

3 This exhibit represents the DIF fee schedule in effect for all use categories; however, the Project subject to the Development Agreement only includes single family residential uses.

Item: 5.1
Item Page Number: 205
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916/031858-0003
15029240.1 a05/03/20 EXHIBIT F – Page 1

EXHIBIT F
Estimated Excess Contributions

Item: 5.1
Item Page Number: 206
Menifee Finance Committee October 14, 2025 Page 211 of 258

LEGADO - VTTM 37408 & 37409
Circulation Facilities - Calculation of Developer Excess Contributions in Development Agreement Segment/Intersection From : To Project Cost 1,6 Subtotal Project CostA - Total Project Cost
B - Percent
Allocated to
DIF 1
C - Circulation
DIF Allocation
(A x B)
D - Project
Residential
Circulation DIF
Credit 4
E - Other Project
Residential
Circulation DIF
Reimbursed (C - D)7
F - Other Project
Nonresidential
DIF Reimbursed 5
G - Developer Excess
Contributions
(A - D - E - F)
Encanto Drive 2 Hotel to Rouse Rd. $1,305,500
Rouse Road Encanto Dr. to Myles Ct. $549,275
Rouse Road Myles Ct. to Dawson Rd. $1,955,000
Rouse Road Dawson Rd. to Antelope Rd. $1,731,375
Antelope Road 3 Chambers Ave. to Rouse Rd. $1,306,300
Chambers Avenue Encanto Dr. to School $1,715,625
Chambers Avenue School to Sherman Rd. $549,875
Chambers Avenue Sherman Rd. to Chatham Ln. $1,249,700
Chambers Avenue Chatham Ln. to Antelope Rd. $726,750
Sherman Road Chambers Ave. to Rouse Rd. $3,196,750
Encanto Dr./Rouse Rd. N/A $350,000
Encanto Dr./Chambers Ave.N/A $350,000
Sherman Rd./Rouse Rd. N/A $350,000
Sherman Rd./Chambers Ave.N/A $350,000
Reimbursable Circulation Facilities Project Total (D + E + F) Notes:

1. From City of Menifee Development Impact Fee Study Update (DIFSU)Table 5.3: Traffic Project List & Table 5.4: Traffic Signal Project List

2. Based on 45% of construction cost due to shorter segment length than what is included in DIFSU Table 5.3.

3. Based on 26% of construction cost due to half width construction and shorter segment length than what is included in DIFSU Table 5.3.

4. Based on DIFSU Circulation Facilities Impact Fee of $4,670 per Single Family Dwelling x 1,022 Units, Nonresidential Fees were not included. Actual credit will be determined by then applicable fees and total number of project dwelling units

5. Based on DIFSU Circulation Facilities Impact Fee of $7,736 per 1,000sf x 225,000sf. Actual reimbursement will equal non-residential specific plan area fees collected by City during reimbursement period.

6. Developer shall bear any costs of improvements in excess of the amounts shown in this exhibit.

7. Total reimbursement will be capped by the difference between then applicable Circulation DIF Allocation and actual credit provided under D. Reimbursement will be funded by fees collected city-wide during reimbursement period.

8. Unless specifically defined in the Project’s Conditions of Approval, construction of the following facilities shall be completed as follows:
 Traffic Signals at Sherman/Chambers and Sherman/Rouse – completed as part of Development Phase 2 as defined in the approved Traffic Impact Analysis  Offsite Encanto Improvement from Hotel to south of PA18 – completed as part of Infrastructure Phase 3, as defined and illustrated in Figure 3-15 of the Legado Specific Plan $7,293,497
Exhibit F-1
$8,392,653$780,157 $1,740,600
$14,286,150
$1,400,000
$4,772,740$15,686,150 35.40% $5,552,897
Item: 5.1
Item Page Number: 207
Menifee Finance Committee October 14, 2025 Page 212 of 258

LEGADO - VTTM 37408 & 37409
Storm Drain Facilities - Calculation of Developer Excess Contributions in Development Agreement Drainage Facility A - Project Cost 1,7 B - Percentage of Public Benefit 2
C - Public Benefit
Project Cost (A x B)
D - Total Public
Benefit Cost
E - Drainage
Facilities DIF
Allocation 3
F - Project
Residential
Drainage DIF
Credit 4
G - Other Project
Drainage DIF
Reimbursed -
Residential5
H - Other Project
Drainage DIF
Reimbursed -
Nonresidential 6
I - Developer Excess
Contributions
(D - F - G - H)
PA-19 Drainage Basin $4,944,150 55% $2,719,283
Rouse Road Diversion $403,793 75% $302,845
East Chambers Ave. Storm Drain$1,219,095 75% $914,321
PA-21 Drainage Basin $1,822,425 55% $1,002,334
Rancho La Vita Diversion $240,375 75% $180,281
West Chambers Ave. Storm Drain$2,251,500 60% $1,350,900 Encanto Dr. Storm Drain $3,367,350 85% $2,862,248
Reimbursable Storm Drain Facilities Project Total (F + G + H) Notes:

1. From K&A Cost Estimates dated Jan. 23, 2020

2. From City of Menifee e-mail on Jan. 28, 2020

3. From City of Menifee Development Impact Fee Study Update (DIFSU)Table 6.3: Total Cost of Facilities to Serve New Development - Encanto Drive Benefit Area

4. Based on DIFSU Storm Drain Facilities Impact Fee for Encanto Drive Benefit Area of $1,036 per Single Family Dwelling x 1,022 Units, Commercial Fees were not included

5. Based on DIFSU Table 6.2: Storm Drain Facilities Equivalent Dwelling Units - Encanto Drive Benefit Area Residential Growth EDU Residential Projected Growth = 1,309 EDU
Legado Residential = 1,022 EDU
Residential Remaining = 287 EDU x $1,036/EDU = $297,332

6. Based on DIFSU Table 6.2: Storm Drain Facilities Equivalent Dwelling Units - Encanto Drive Benefit Area NonResidential Growth EDU Nonresidential Projected Growth = 1,336 EDU x $1,036/EDU = $1,384,096

7. Developer shall bear any costs of improvements in excess of the amounts shown in this exhibit.

8. Unless specifically defined in the Project’s Conditions of Approval, construction of the following facilities shall be completed as follows:
 Rouse Road Diversion – completed as part of Infrastructure Phase 1, as defined and illustrated in Figure 3-15 of the Legado Specific Plan  Rancho La Vita Diversion – completed as part of Infrastructure Phase 2, as defined and illustrated in Figure 3-15 of the Legado Specific Plan  Storm Drain diversion facilities along Chambers and Encanto Drive – completed as part of Infrastructure Phases 2 and 3 as illustrated in Figure 3-15 of the Legado Specific Plan Exhibit F-2
$2,740,220
$1,058,792$9,332,211 $2,686,337 $6,591,991 $297,332 $1,384,096 Item: 5.1
Item Page Number: 208
Menifee Finance Committee October 14, 2025 Page 213 of 258

LEGADO - VTTM 37408 & 37409
Park Facilities - Calculation of Developer Excess Contributions in Development Agreement Park Facility B - Percentage of
Public Benefit
C - Public Benefit
Project Cost (A x B)
D - Total Public
Benefit Cost
E - Park
Improvements DIF
Allocation 2
F - Park DIF
Credit 3,6,7
G - Park DIF & Lease
Revenue Reimbursed
(D - F - H)4
H - Developer Excess
Contributions8
Tr. 37408 Neighborhood Park $700,000 100% $700,000
Tr. 37408 Community Park $5,000,0001 100% $5,000,000
Tr. 37408 Community Center $3,000,0001 100% $3,000,000
Tr. 37408 & 37409 Paseo Legado$1,500,000 100% $1,500,000 Tr. 37409 Neighborhood Park $800,000 100% $800,000
Reimbursable Park Facilities Project Total (F + G)
Notes:

1. Based on negotiated costs with City subject to CPI for Tr. 37408 Community Park and Tr. 37408 Community Center per Exhibit F-4

2. Based on discussions with City the DIF Allocation is not applicable

3. Based on Park and Recreation Facilities Impact Fee for Park Improvements of $661 per Single Family Dwelling x 1,022 Units

4. Reimbursement calculated assuming $100,193 for lease revenue in addition to $661 per Single Family Dwelling x 3,365 Units. These figures are hypothetical only. Actual lease revenue and development impact fees may vary.

Reimbursement will be funded by park fees collected from areas to be designated by the Parties in the reimbursement agreement and by Community Park & Community Center lease revenue collected during reimbursement period.

5. Project Costs are inclusive of a 15% contingency and reflect not-to-exceed values as described in Section 6.2 of the Development Agreement

6. Quimby Fee satisfied by Developer donation of land to City for future park improvements

7. DIF Credit shall be determined separately for each park facility project

8. Subject to CPI per Exhibit F-4
$8,000,000$2,324,458
Exhibit F-3
A - Project Cost 5
$3,000,000
$675,542$11,000,000 N/A
Item: 5.1
Item Page Number: 209
Menifee Finance Committee October 14, 2025 Page 214 of 258

LEGADO - VTTM 37408 & 37409
Park Facilities - Consumer Price Index (CPI) Increase
Maximum Cost for Neighborhood Parks & Paseos:3,000,000$ Developer Excess Contribution to Exhibit F-3 Facilities:8,000,000$ Annual CPI After Year 3 - Not to Exceed 1.5% or less than 0%120,000$ CPI Maximum Cost for Community Park & Community Center:8,000,000$ 8,120,000$ Year 4 Max Annual CPI After Year 3 - Not to Exceed 1.5% or less than 0%120,000$ CPI 121,800$ CPI 8,120,000$ Year4 Max 8,241,800$ Year 5 Max
121,800$ CPI 123,627$ CPI
8,241,800$ Year5 Max 8,365,427$ Year 6 Max
123,627$ CPI 125,481$ CPI
8,365,427$ Year6 Max 8,490,908$ Year 7 Max
125,481$ CPI Year 7 and beyond - reduce CPI Not to Exceed 1% or less than 0%84,909$ CPI 8,490,908$ Year7 Max 8,575,817$ Year 8 Max
Year 7 and beyond - reduce CPI Not to Exceed 1% or less than 0%84,909$ CPI 85,758$ CPI 8,575,817$ Year8 Max 8,661,576$ Year 9 Max
85,758$ CPI 86,616$ CPI
8,661,576$ Year9 Max 8,748,191$ Year 10 Max
86,616$ CPI 87,482$ CPI
8,748,191$ Year10 Max 8,835,673$ Year 11 Max
87,482$ CPI 88,357$ CPI
8,835,673$ Year11 Max 8,924,030$ Year 12 Max
88,357$ CPI 89,240$ CPI
8,924,030$ Year12 Max 9,013,270$ Year 13 Max
89,240$ CPI 90,133$ CPI
9,013,270$ Year13 Max 9,103,403$ Year 14 Max
90,133$ CPI 91,034$ CPI
9,103,403$ Year14 Max CAP of CPI - Year 159,194,437$ Year 15 Max 91,034$ CPI
CAP of CPI - Year 159,194,437$ Year15 Max
Exhibit F-4
Project Cost Developer Excess Contribution to Exhibit F-3 Facilities (Exhibit F-3 Column A) (Exhibit F-3 Column H)
Item: 5.1
Item Page Number: 210
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916/031858-0003
15029240.1 a05/03/20 EXHIBIT G – Page 1

EXHIBIT G
Assumption Agreement

Item: 5.1
Item Page Number: 211
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916/031858-0003
15029240.1 a05/03/20 EXHIBIT G – Page 2

RECORDING REQUESTED BY
AND WHEN RECORDED, RETURN TO:

CITY OF MENIFEE
29844 Haun Road
Menifee, CA 92586
Attn: City Attorney

(Space Above This Line For Recorder’s Use)
[PARTIAL] ASSIGNMENT AND ASSUMPTION

OF DEVELOPMENT AGREEMENT

This [PARTIAL] ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT (“[Partial] Assignment”) is entered into as of _________________, 20__ (the “Effective Date”), by and between _____________________________________ (“Assignor”), and ___________________________ (“Assignee”).

RECITALS
A. BLC Fleming LLC, a Delaware limited liability company (“Original Developer” [or “Assignor”]), and the City of Menifee, a municipal corporation (“City”) entered into that certain “Legado Development Agreement”, dated _____________, and recorded on ________________, as Document No. ___________________ of Official Records, Riverside County (the “Development Agreement” or the “DA”), pursuant to which Original Developer agreed to develop certain property more particularly described in the Development Agreement subject to certain conditions and obligations set forth in the Development Agreement.

B. Assignor is [the owner of or Original Developer’s successor-in-interest to] the property more particularly described on Exhibit A attached hereto (the “Assignor Land”), which is [all or a portion] of the property subject to the Development Agreement] C. Assignee is purchasing [all or a portion] of the Assignor Land, as more particularly described on Exhibit B attached here to (the “Property”), from Assignor, in accordance with the terms of that certain [Purchase and Sale Agreement Description] (the “Purchase Agreement”).

D. Pursuant to the terms of the Purchase Agreement, Assignor agreed to assign and Assignee agreed to assume certain rights, interests and obligations and other terms and conditions under the Development Agreement, as such right, interests and obligations relate to the Property.

E. The purpose of this [Partial] Assignment is to set forth the terms and provisions agreed upon between Assignor and Assignee with respect to the assignment of certain rights and interests and the delegation of certain duties and obligations of Assignor under the Development Agreement, as such rights, interests, duties and obligations relate to the Property.

Item: 5.1
Item Page Number: 212
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916/031858-0003
15029240.1 a05/03/20 EXHIBIT G – Page 3

AGREEMENT
NOW, THEREFORE, Assignor and Assignee agree as follows:

1. Assignment. Assignor hereby assigns, conveys and transfers to Assignee all rights and interests of Assignor, as the “Developer”, under the Development Agreement to the extent such rights and interests relate to the Property, and Assignee hereby accepts such assignment. [Notwithstanding the foregoing, Assignor shall retain (i) any and all rights under the Development Agreement necessary to perform the Retained Obligations, defined below; and (ii) those specific retained rights set forth on Exhibit C attached hereto (the “Retained Rights”).]

2. Assumption of Obligations. [Except with respect to those specific retained burdens and obligations of Assignor set forth on Exhibit C attached hereto (the “Retained Obligations”),] Assignee hereby assumes all of Assignor’s duties and obligations under the Development Agreement accruing after the date hereof, to the extent such obligations relate to the Property, regardless of whether the obligations originate in the Development Agreement itself or documents executed in connection therewith as a means to effectuate the intent of those provisions, including, without limitation: (a) any indemnity obligations, to the extent applicable to the Property or to Assignee by reason of its ownership of the Property, (b) any obligation to follow and be bound by all applicable rules, regulations and policies, (c) any obligation to pay any fees, assessments or exactions as may be imposed by the Development Agreement, and (d) any obligations arising under the Development Agreement by reason of a default of Assignee under the Development Agreement (with respect to any obligations assumed by Assignee hereunder). Assignee agrees to provide City commercially reasonable assurances of its performance of its obligations under the Development Agreement. [Notwithstanding anything to the contrary in this Partial Assignment, Assignee acknowledges that the Development Agreement runs with the land, therefore nothing in this Partial Assignment shall be construed to excuse Assignee from general compliance with the Development Agreement’s prohibitions, default and cure provisions, and other standard provisions to the extent applicable to the Property.]

3. Development Agreement Transfer Provision. Assignor and Assignee understand and agree that this Agreement is required to comply with Section 2.2 of the Development Agreement.

4. Indemnity. Assignee agrees to indemnify, defend and hold harmless Assignor, its affiliated entities and persons, and their respective members, managers, partners, officers, directors, shareholders, employees and agents from any claims, demands, losses, liability, damages, causes of action, costs or expenses (including reasonable attorneys’ fees) made against or suffered by Assignor with regard to any failure by Assignee to perform any term or condition of the Development Agreement, to the extent such term or condition relates to the Property, from and after the date hereof, and Assignor shall indemnify, defend and hold harmless Assignee, its affiliated entities and persons, and their respective members, managers, partners, officers, directors, shareholders, employees and agents from any claims, demands, losses, liability, damages, causes of action, costs or expenses (including reasonable attorneys’ fees) made against Item: 5.1
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or suffered by Assignee with regard to any failure by Assignor to perform any term or condition of the Development Agreement, as it relates to the Property, before the date hereof.

5. Miscellaneous.

5.1. Interpretation; Governing Law. This [Partial] Assignment shall be construed according to its fair meaning and as prepared by both parties hereto. This [Partial] Assignment shall be construed in accordance with and governed by the laws of the State of California.

5.2. Attorneys’ and Other Fees. In the event of any dispute between the parties hereto or institution of any action or proceeding to interpret or enforce the provisions of this [Partial] Assignment, or arising out of the subject matter of this [Partial] Assignment or the transaction contemplated hereby, the prevailing party shall be entitled to recover from the losing party all of its costs and expenses incurred, including court costs and reasonable attorney’s fees and expert witness fees.

5.3. Authority. Each of the parties hereto represents and warrants to the other that the person or persons executing this [Partial] Assignment on behalf of such party is or are authorized to execute and deliver this [Partial] Assignment and that this [Partial] Assignment shall be binding upon such party.

5.4. Further Assurances. Assignor and Assignee each agree to do such further acts and things and to execute and deliver such additional agreements and instruments as the other may reasonably request to consummate, evidence, confirm or more fully implement the agreements of the parties as contained herein.

5.5. Execution in Counterparts. This [Partial] Assignment may be executed in several counterparts, and all originals so executed shall constitute one agreement between the parties hereto.

5.6. Conflict. Nothing in this [Partial] Assignment is intended to modify or amend the respective obligations of Assignor and Assignee under the Purchase Agreement between Assignor and Assignee which gave rise to this [Partial] Assignment and, in the event of any conflict between this [Partial] Assignment and the Purchase Agreement, as between Assignor and Assignee the provisions of the Purchase Agreement shall supersede and control over this Partial Assignment.

5.7. Recordation. The parties hereby authorize this [Partial] Assignment to be recorded in the records of Riverside County upon the date hereof.

5.8. Successors and Assigns. This [Partial] Assignment shall be binding upon and inure to the benefit of the respective su ccessors, assigns, personal representatives, heirs and legatees of Assignor and Assignee.

5.9. Notice. All notices to Assignee under the Development Agreement should be addressed as follows:

Item: 5.1
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_____________________
_____________________
_____________________
_____________________
Attn: _____________________

With a copy to:

_____________________
_____________________
_____________________
Attn: _____________________
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this [Partial] Assignment as of the date set forth below its name below.

“ASSIGNOR”

_____________________,
a _____________________

By: ___________________________________
Date: ___________________________________

“ASSIGNEE”
_____________________,
a _____________________

By: ___________________________________
Date: ___________________________________

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A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

STATE OF CALIFORNIA )
) ss:

COUNTY OF ) On ____________,20__ before me, _____________________________________________ (insert name and title of the officer),
personally appeared , who 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.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: _______________________________________
[Seal]

Item: 5.1
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A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

STATE OF CALIFORNIA )
) ss:

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: _______________________________________
[Seal]

Item: 5.1
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EXHIBIT “A”
TO [PARTIAL] ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT

LEGAL DESCRIPTION OF THE ASSIGNOR LAND
[TO BE INSERTED]

Item: 5.1
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EXHIBIT “B”
TO [PARTIAL] ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT

LEGAL DESCRIPTION OF THE PROPERTY
[TO BE INSERTED]

Item: 5.1
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EXHIBIT “C”
TO [PARTIAL] ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT

RETAINED RIGHTS AND OBLIGATIONS
[TO BE INSERTED]

Item: 5.1
Item Page Number: 221
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EXHIBIT H
Off Site Improvements and Fair Share Fees

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Item: 5.1
Item Page Number: 229
Menifee Finance Committee October 14, 2025 Page 234 of 258

Item: 5.1
Item Page Number: 230
Menifee Finance Committee October 14, 2025 Page 235 of 258

Development Agreement
Amendment No. 1 for Legado
Specific Plan
Finance Committee
October 14, 2025
City of Menifee Community Development Department
City of Menifee Finance Department
Item: 5.1
Item Page Number: 231
Menifee Finance Committee October 14, 2025 Page 236 of 258

Phase 1 Parks & Paseos
1 Item: 5.1
Item Page Number: 232
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• By purchasing Phase 1, Lennar assumed all responsibilities of the DA • Maximum developer contribution of $3 million
• Construction of the parks and paseos was delayed for 5 years • A bid review was conducted by a 3rd party and the cost was determined to be $5.8 million, creating a $2.8 million variance
• Fiscal opportunities were identified to close this variance gap • The parks and amenities will be delivered as designed within the Specific Plan
Purpose of the Amendment
2 Item: 5.1
Item Page Number: 233
Menifee Finance Committee October 14, 2025 Page 238 of 258

Cost Estimates
3 • Construction costs have significantly increased since adoption of the DA due to inflation Improvement DA Exhibit F-3
Cost
Lennar
Estimate
Amount over
F-3 Cost
TR37408
Neighborhood Park
West
$700,000 $1,715,166 $1,015,166
TR37408 Paseo Park
West $750,000 $1,416,741 $666,741
TR37409
Neighborhood Park
East
$750,000 $832,087 $82,087
TR37409 Paseo Park
East $800,000 $1,917,681 $1,117,681
Total $3,000,000 $5,881,675 $2,881,675

Item: 5.1
Item Page Number: 234
Menifee Finance Committee October 14, 2025 Page 239 of 258

Proposed Provisions
4 ITEM DA SAVINGS REDUCTION REMAINING
Original Variance - $2,881,676
DIF Freeze Extension ($44,064) $2,837,612
Non-Prevailing Wage for
East Park & Paseo ($763,498) $2,074,114
Phased POC Landscape
Turnover ($345,139) $1,728,975
East Park Restroom
Removal ($237,000) $1,491,975
Contingency Reduction from
15% to 5% ($469,844) $1,022,131

FINANCE COMMITTEE ACTIONS
CFD Bond Premium
Reduction ($219,477) $802,654

ADDITIONAL FISCAL PROVISIONS
Quimby & Park DIF from
Heritage Village TR38346 ($731,025) $71,629
Bond Releases ($50,000) $21,629
New Variance (shortfall) - $21,629

Item: 5.1
Item Page Number: 235
Menifee Finance Committee October 14, 2025 Page 240 of 258

• Proposed amendment provisions for Legado Phase 1
• Extend the DIF freeze for all lots within Phase 1 (491 total) • 81 lots currently fall outside the DIF freeze
• Removal of restroom building from TR 37409 East Park
• Reduces ongoing maintenance costs; park’s intended function is unaffected • Reduce Park Cost Estimate contingency from 15% to 5%
• Adjust thresholds for park & paseo completion
• TR 37408 West Park & Paseo extended from the 140th Certificate of Occupancy to the 200th Certificate of Occupancy
• TR 37409 East Park & Paseo moved up from the 140th Certificate of Occupancy to the 95th Certificate of Occupancy
DA Amendment No. 1
5 Item: 5.1
Item Page Number: 236
Menifee Finance Committee October 14, 2025 Page 241 of 258

• Additional amendment provisions
• Include a definition of “Lennar Phase 1”
• Prepare a Reimbursement Agreement for the Community Facilities District (CFD) Bond premiums
• Prepare a Quimby Agreement for Quimby fee reallocation from Heritage Village TR 38346
• Acceptant of Points of Connection/Right-of-Way (landscape areas) after the 90-day maintenance period
• Expedite bond exoneration efforts for previously completed tracts DA Amendment No. 1
6 Item: 5.1
Item Page Number: 237
Menifee Finance Committee October 14, 2025 Page 242 of 258

Recommendation
• Review the proposed Bond Premium Reimbursement agreement between the City and Lennar for CFD No. 2022-3, Improvement Area 1, and recommend to the City Council for consideration.
7 Item: 5.1
Item Page Number: 238
Menifee Finance Committee October 14, 2025 Page 243 of 258

Questions?
Thank You.

Item: 5.1
Item Page Number: 239
Menifee Finance Committee October 14, 2025 Page 244 of 258

CITY OF MENIFEE
SUBJECT: Bond Premium Reimbursement with Lennar Homes for Community Facilities District No. 2022-3, Legado, IA1
MEETING DATE: October 14, 2025
TO: Finance Committee
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Discuss the proposed bond premium reimbursement for Community Facilities District No. 2022-3, Improvement Area 1, and recommend presenting it to the City Council for consideration.

DISCUSSION
In June 2020, BLC Fleming entered into a Development Agreement (the DA) with the City of Menifee in relation to the 331-acre Legado property located northwest of Antelope Road and Chambers Avenue and south of Rouse Road. As part of that agreement, the developer was conditioned to construct certain neighborhood parks and paseos. Because the anticipated cost of constructing the parks and paseos was expected to exceed what the developer was required to pay, the parties agreed to enter into a reimbursement agreement wherein the City would use Development Impact Fees (DIF) collected from nearby properties to reimburse the developer for the excess costs.

Two years later, BLC Fleming worked with the City to form a Community Facilities District (CFD or CFD 2022-3) to issue bonds to finance public facilities required for the 1,022 homes planned within the residential development.

As a condition of using bond proceeds to finance project-related DIF, the Developer agreed to pay 20% premium to the City on all DIF amounts funded with such proceeds. The Legado development ultimately was divided into three separate improvement areas (IAs) or phases, known as IA1, IA2, and IA3, each of which has an associated City premium.

Item: 5.2
Item Page Number: 1
Menifee Finance Committee October 14, 2025 Page 245 of 258

City of Menifee Staff Report
Bond Premium Reimbursement Agreement for CFD 2022-3, Legado October 14, 2025

Page 2 of 2 ends

3 0
0 7
Last year, BLC Fleming entered into a contract to sell the project to Lennar Homes in three separate transactions corresponding to the three separate improvement areas. Lennar Homes has closed on the land in IA1 and is under contract to purchase IA2 and IA3. When Lennar purchased IA1 it assumed all responsibilities assigned to the developer for that area, including the requirement to construct the parks and paseos.

At this point, the estimated cost to build the parks and paseos has nearly doubled, rising from an estimated $3 million to nearly $5.9 million. The City and the developer now are working to amend the Development Agreement to address the resulting $2.9 million funding gap associated with the construction of the parks and paseos. Additionally, to assist in closing that funding gap, the City is proposing to allow the developer to be reimbursed from the CFD bond proceeds an additional $219,477, which is the amount of the IA1 bond premium. The developer would adhere to all standard reimbursement processes and could only be reimbursed for eligible facilities. The City premium is intended to be used for projects in the general area of the development that provide a specific benefit to residents of the development, and allocating the premium to go toward eligible CFD improvements would meet that goal. The reimbursement to the developer would not be made until after bonds are issued for IA1.

If the committee recommends moving forward with directing the use of the CFD bond premium from IA1, a separate agreement delineating the CFD premium reimbursement would be presented for City Council consideration. Alternatively, the CFD documents could be amended to waive the premium, allowing for more CFD bond proceeds to be available to Lennar for reimbursement.

FISCAL IMPACT
The $219,477 would come from CFD bond premium proceeds associated with CFD No. 2022-3 IA1. These funds are restricted for use on public improvements that directly benefit the development area. The reimbursement will not impact the City’s General Fund and will only be issued after bonds have been sold.

ATTACHMENTS
None.

Item: 5.2
Item Page Number: 2
Menifee Finance Committee October 14, 2025 Page 246 of 258

CITY OF MENIFEE

SUBJECT: Annual Update on Community Facilities District Bond Premiums
MEETING DATE: October 14, 2025
TO: Finance Committee
PREPARED BY: Lauri Lockwood, Financial Analyst
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------

RECOMMENDED ACTION

1. Receive annual report with updated details on Community Facility District (CFD) bond premiums.

DISCUSSION

In 1982, the Mello-Roos Community Facilities Act of 1982 (Government Code §53311- 53368.3) was enacted to provide an alternative method for financing needed public improvements and services. The Act allows any county, city, special district, school district or joint powers authority to establish CFDs to fund infrastructure and services. CFDs are typically formed in undeveloped areas to support the construction of essential infrastructure and/or the provision of services for new development.

Roughly six years ago, the City Council decided to allow developers to issue bonds to finance public facilities within CFDs. At that time, the City Council also amended the “City’s Special Assessment and Community Facilities District Goals and Policy,” and clarified, among other things, which costs could be funded with bond proceeds.

As part of that policy, the City established a provision for collecting an additional fee – referred to as the City Premium – when developers use bond proceeds to pay City fees. According to the policy, “when it is determined by the City that fees are to be financed, the City may collect a premium in connection with the total fees to be financed. Such premium shall not exceed twenty percent (20%) of the total fees to be financed. The City may use the premium to finance public facilities and improvements directly benefiting and identified by the City as the most necessary to serve the specific needs of the portion of the City in which the CFD will be located.”

Item: 5.3
Item Page Number: 1
Menifee Finance Committee October 14, 2025 Page 247 of 258

City of Menifee Staff Report
Annual Update on Community Facility District Related Bond Premiums October 14, 2025

Page 2 of 3 ends

Shortly after the closing date of a bond issuance, City staff submits a disbursement request to claim the amount of the City Premium and that amount is set aside for capital projects. During the development and review of the City’s five-year Capital Improvement Program (CIP), staff regularly evaluates opportunities to allocate these funds to high-priority projects.

The City closed on its first CFD bonds for CFD 2019- 1 (Meadow Run) and CFD 2020-1 (McCall Mesa) on January 26, 2022. Since then, seven additional CFDs have issued bonds to finance public facilities. To date, the City has collected $3,700,895 in bond premiums, as summarized in Table 1, and has allocated nearly $2.8 million toward projects. The remainder is expected to be formally allocated during the mid-year budget presentation.

TABLE 1 - City of Menifee CFD Bond Premiums Received
Item: 5.3
Item Page Number: 2
Menifee Finance Committee October 14, 2025 Page 248 of 258

City of Menifee Staff Report
Annual Update on Community Facility District Related Bond Premiums October 14, 2025

Page 3 of 3 ends

Looking forward, seven other CFDs have been formed and are authorized for 13 bond issuances (some CFDs include multiple improvement areas, resulting in multiple bond issuances and premiums). Three more CFDs are expected to be formed after public hearings currently scheduled for a City Council meeting early next year. The exact amount of City Premiums associated with these 16 future issuances will be determined closer to the respective bond issuances.

This report serves as the Finance Committee’s annual update on bond premiums collected after CFD bond issuances.

FISCAL IMPACT

This is a receive and file staff report. There is no fiscal impact associated with the recommended actions.

ATTACHMENTS

1. Project Location Maps

Item: 5.3
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Item: 5.3
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_________________________________________________________________________________________________________ Menifee CFD No. 2021-2 – Sumac Ridge by Meritage Homes (Menifee, CA) Kitty Siino & Associates, Inc. Page iv

Item: 5.3
Item Page Number: 8
Menifee Finance Committee October 14, 2025 Page 254 of 258

Item: 5.3
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Menifee Finance Committee October 14, 2025 Page 255 of 258

Item: 5.3
Item Page Number: 10
Menifee Finance Committee October 14, 2025 Page 256 of 258

MENIFEE RD

HOLLAND RD

MENIFEE RD

NEWPORT RD
BRIGGS
RD

DOMENIGONI
PKWY

LA PIEDRA RD
^_

EVANSRD

GARBANI RD

NEWPORT RD

MURRIETARD

MENIFEE
RD

BRADLEY RD

AUDIE MURPHY RD

MCCALL BLVD

PALOMA WAY

PACKARD ST

RIDGEMOOR RD

BALDY PEAK DR BRADLEY
RD
§¨¦215
CFD NO. 2023-1
(ROCKPORT RANCH)

PROJECT MAP
Item: 5.3
Item Page Number: 11
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Item: 5.3
Item Page Number: 12
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Finance CommitteeOctober 14, 2025

Finance Committee
October 14, 2025