City Council and Authorities Concurrent
December 8, 2022

This document is exempt from payment of a
recordmg fee pursuant to California
Government Code Section 27383

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Santa Clara
City Clerk's Office
1500 Warburton Avenue
Santa Clara, CA 95050

CITY CLERK FILE COPY
Recorder's Stamp

DISPOSITION AND DEVELOPMENT AGREEMENT
(CITY PLACE SANTA CLARA)
by and between

THE CITY OF SANTA CLARA,
a public body, corporate and politic, of the State of California and

RELATED SANTA CLARA, LLC,
a Delaware limited liability company

TABLE OF CONTENTS
Page

1. THE PROJECT ............................................................................................................... 3

1.1 Overview ................................................................................................................ 3

1.2 Property .................................................................................................................. 3

1.3 hnprovements ........................................................................................................ 4

1.4 Project Development Generally ...................................................... ; ...................... 4

1.5 Master Developer's Role Generally ....................................................................... 4

1.6 Phase Development Generally ............................................................................... 5

1. 7 Schedule of Perfonnance ....................................................................................... 6

1.8 Development Agreement ....................................................................................... 6

2. TERM ................................................................................................................................ 6

3. PROJECT PHASING ...................................................................................................... 6

3.1 Phasing Plan .................................................................................. : ........................ 6

3.2 Sequence of Development ..................................................................................... 6

4. EXERCISE OF PHASE OPTION ................................................................................. 7

4.1 Phase Option Notice .............................................................................................. 7

4.2 Partial Phases ......................................................................................................... 8

4.3 Special Procedures for BMX Track ....................................................................... 9

4.4 City Approval Process ........................................................................................... 9

4.5 Designation of Phase Developer .......................................................................... 10

4.6 Effect of Failure of Master Developer to Exercise Phase Option ........................ 10

4.7 Requested Change Notice Procedure ................................................................... 10

4.8 Special Procedures for Phase 2A ......................................................................... 11

5. DEVELOPMENT AREA PLANS ................................................................................ 14

5.1 Submittal ofDAP Application ............................................................................. 14

5.2 Effect of Failure of Developer to submit DAP Application ................................ 14

5.3 Development Obligations .................................................................................... 15

5.4 Satisfaction of Multi-Phase Development Obligations ........................................ 19

5.5 Parking and Access .............................................................................................. 20

6. GROUND LEASES ....................................................................................................... 20

6.1 Form of Ground Leases ....................................................................................... 20

6.2 Conditions Precedent to Execution of Ground Leases ........................................ 23 -1-

TABLE OF CONTENTS
(continued)
Page

6.3 Ground Leases for Partial Phases ........................................................................ 26

6.4 Memorandum of Ground Lease and Revised Phasing Plan ................................. 27

6.5 Effect of Failure of Master Developer to Take Down a Phase ............................ 27

6.6 ConcUf)'ent Events ................................................................................................ 27

7. FAILURE TO MEET PHASE OUTSIDE DATES .................................................... 27

7.1 Notice of Intent to Terminate ............................................................................... 27

7.2 Offer of Development Opportunity ..................................................................... 28

8. PERMITS TO ENTER .................................................................................................. 30

9. CONSTRUCTION OBLIGATIONS ........................................................................... 30

9.1 Timing for Commencement and Completion of Certain Improvements ............. 30

9.2 Compliance with Standards ................................................................................. 32

9.3 Conditions to Commencement of Improvements ................................................ 32

9.4 Conditions for Benefit of City ............................................................................. 33

9.5 Phase Developer Efforts to Satisfy City Conditions ............................................ 34

9.6 Effect of Failure of Condition .............................................................................. 34

10. DETERMINATION OF ALLOWED SQUARE FOOTAGE ................................... 34

10.1 Calculation of Allowed Square Footage .............................................................. 34 10 .2 Partial Phases ....................................................................................................... 3 5

11. ISSUANCE OF AUTHORIZATIONS ......................................................................... 36

11.1 Generally .............................................................................................................. 36

11.2 Compli~nce with Laws ........................................................................................ 36

11.3 Additional Costs or Fees ...................................................................................... 36

12. CERTIFICATES OF COMPLETION ........................................................................ 36

12.1 Generally .............................................................................................................. 36

12.2 Effect · of Certificate of Completion on Master Developer and the applicable Phase Developer ................................................................................. 37

12.3 Effect of Certificate of Completion on Any Person ............................................. 37

12.4 City Cooperation Regarding Certain Certificates of Completion ........................ 37

12.5 City Refusal to Issue a Certificate of Completion ............................................... 38

12.6 Use of Public Improvements Before Certificate of Completion .......................... 38 -ii-

TABLE OF CONTENTS
(continued)
Page

12.7 Acceptance of Public Improvements ................................................................... 38

12.8 Certain Certificates of Completion ...................................................................... 38

12.9 Arbitration ............................................................................................................ 38

13. CONDITION OF TITLE .............................................................................................. 38 13 .1 Condition of Title ................................................................................................. 3 8

13.2 City Obligations ............................................................................................ : ...... 40 13 .3 New Exception Prohibition .................................................................................. 40

13.4 Post-Closing Boundary Adjustments ................................................................... 4 I

13.5 Title Clearance ..................................................................................................... 41

14. LANDFILL OBLIGATIONS ....................................................................................... 42

14.1 Landfill Operation and Management Agreement ................................................ 42

14.2 Apportionment of Costs ....................................................................................... 42

14.3 lnde1nnification .............................................................................................. ...... 42

15. PROJECT DEVELOPMENT AND MAINTENANCE RESPONSIBILITIES ....... 43 J 5. I Construction Obligations ..................................................................................... 43 15 .2 Maintenance, Repair, and Replacement Obligations; Public Services ................ 43

15.3 Station Area ......................................................................................................... 45

16. PREMIUM COSTS AND SHARED INFRASTRUCTURE COSTS ........................ 46

16.1 Premium Costs ..................................................................................................... 46

16.2 Shared Infrastructure Costs .................................................................................. 47

16.3 Documentation of Premium Costs and Shared Infrastructure Costs ................... 47

16.4 Survival ................................................................................................................ 48

17. PROPERTY CONDITION ........................................................................................... 48

17.I Asis ..................................................................................................................... 48

17.2 Hazardous Substance Indemnification ................................................................. 50 17 .3 Damage and Destruction ...................................................................................... 5 I

18. COMPLIANCE WITH PLANS AND POLICIES ...................................................... 51

18.1 Compliance with Plans and Obligations .............................................................. 51

18.2 Relocation Assistance .......................................................................................... 51

18.3 Compliance with CEQA Mitigation Measures .................................................... 52 -iii-

TABLE OF CONTENTS
(continued)
Page

18.4 Restrictions on Competition ................................................................................ 52

18.5 Survival ................................................................................................................ 52

19. INSURANCE .................................................................................................................. 52 19 .1 Required Insurance .............................................................................................. 5 2

20. DISPUTE RESOLUTION ............................................................................................. 52

20.1 Arbitration Matters ............................................................................................... 52

20.2 Good Faith Meet and Confer Requirement.. ........................................................ 53

20.3 Dispute Resolution Procedures ............................................................................ 53

21. EVENT OF DEFAULT; REJVIEDIES ......................................................................... 56

21.1 General ................................................................................................................. 56

21.2 Particular Breaches by the Parties ........................................................................ 56

21.3 Remedies .............................................................................................................. 60

21.4 Termination .......................................................................................................... 61

21.5 Conflicting Law; Developer's Right to Terminate .............................................. 62

21.6 Rights and Remedies Cumulative ........................................................................ 62

21.7 No hnplied Waiver .............................................................................................. 62

22. ASSIGNMENT ............................................................................................................... 62

22.1 Limitations on Master Developer's Right to Transfer ......................................... 62

22.2 Phase Assignments ............................................................................................... 63

22.3 Consent Transfers Defined .................................................................................. 63

22.4 Conditions Precedent to Consent Transfers ......................................................... 64

22.5 Procedures for Consent Transfer ......................................................................... 65

22.6 Permitted Transfers and Procedure ...................................................................... 66

22.7 Release ................................................................................................................. 68

22.8 Rights of Phase Developers ................................................................................. 68

22.9 Liability for Default ............................................................................................. 68

23. FINANCING; RIGHTS OF MORTGAGEES ............................................................ 68

23.1 Right to Mortgage; Conditions ............................................................................ 68

23.2 Notice of Mortgages ............................................................................................ 69

23.3 Mortgagee Right to Notices ................................................................................. 69 -lV-

TABLE OF CONTENTS
(continued)
Page

23.4 Mortgagee Right to Cure ..................................................................................... 70

23.5 Obligation to Construct After Foreclosure .......................................................... 71

23.6 Restrictions on City During Mortgagee Cure Period ........................................... 71

23.7 Foreclosure Not a Default .................................................................................... 71

23.8 Limitation on Liability of Mortgagee .................................................................. 71

23.9 More Than One Mortgagee .................................................................................. 72 23 .10 Bankruptcy ........................................................................................................... 72

23.11 New Agreement ................................................................................................... 72

23.12 Additional Mortgagee Protections ....................................................................... 73 23 .13 Rights of Phase Developers ................................................................................. 73

24. FORCE MAJEURE; EXCUSABLE DELAY; EXTENSION OF TIMES OF PERFORMANCE .......................................................................................................... 74

24.1 Force Majeure and Excusable Delay ................................................................... 74

24.2 Period of Excusable Delay or Force Majeure ...................................................... 75

24.3 Limitations ........................................................................................................... 75

25. REPRESENTATIONS AND WARRANTIES ............................................................ 76

25.l Developer's Representations ............................................................................... 76 25 .2 City's Representations ......................................................................................... 77

26. PAYMENT OF CITY COSTS ...................................................................................... 78

26.1 Payment of City Costs and Administrative Fees ................................................. 78

27. DEVELOPER INDEMNIFICATION ......................................................................... 78

27.1 General Developer Indemnification ..................................................................... 78

27.2 Other Remedies .................................................................................................... 79

27.3 Defense of Claims ................................................................................................ 79

27.4 Limitations of Liability ........................................................................................ 79

28. ADEQUATE SECURITY ............................................................................................. 80

28. l Certain Definitions ............................................................................................... 80

28.2 Requirement for Adequate Security for Public Improvements ............................ 80

28.3 Requirement for Adequate Security for Secured Phase Improvements ............... 80

28.4 Substitution of Adequate Security ....................................................................... 81 -v-

TABLE OF CONTENTS
(continued)
Page

28.5 Reduction, Return and Release ............................................................... ~ ............ 81

28.6 Enforcement of the Phase Security ...................................................................... 81

29. MISCELLANEOUS PROVISIONS ............................................................................. 82 29 .1 Entire Agreement; Amendment.. ......................................................................... 82 29 .2 Waiver .................................................................................................................. 82

29.3 Captions and Table of Contents ........................................................................... 82

29.4 Extensions of Time .............................................................................................. 82 29 .5 Interpretation ........................................................................................................ 82

29.6 More than One Person ............................................................................... i ......... 83

29. 7 Time of Performance ........................................................................................... 83

29.8 No Third Party Beneficiaries ............................................................................... 84 29 .9 No Brokers ........................................................................................................... 84

29.10 Governing Law .................................................................................................... 84

29.11 Successors and Assigns ........................................................................................ 84

29.12 Relationship of the Parties ................................................................................... 84 29 .13 Construction ......................................................................................................... 84

29.14 Incorporation of Exhibits ..................................................................................... 84 29 .15 Further Assurances ............................................................................................... 84

29.16 Numbers ............................................................................................................... 84

29.17 No Gift or Dedication .......................................................................................... 85

29.18 Correction of Technical Errors ..................... · ....................................................... 85

29.19 Severability .......................................................................................................... 85

29.20 Legal Representation ........................................................................................... 85

29.21 Counterparts ................................................... : ..................................................... 85 29 .22 Survival ................................................................................................................ 86

29.23 Estoppel Certificates ............................................................................................ 86

29.24 Approvals ............................................................................................................. 87

29.25 Recordation .......................................................................................................... 87

29.26 Nondiscrimination ................................................................................................ 87

29.27 Successors and Assigns; No Third-Party Beneficiary ......................................... 88 -vi-

TABLE OF CONTENTS
(continued)
Page

29.28 ENA; Tenn Sheet; Supplements .......................................................................... 88

29.29 Plans on Record with City ................................................................................... 88

29.30 Notice of Termination .......................................................................................... 89

29.31 Extensions of Time .............................................................................................. 89

29.32 Attorneys' Fees .................................................................................................... 89

29.33 Notices ................................................................................................................. 90

29.34 Limitations on Disclosure .................................................................................... 91

29.35 Fees and Sales Taxes ........................................................................................... 91

29.36 Wages and Working Conditions .......................................................................... 92 29 .3 7 Hiring Efforts ....................................................................................................... 92 -vii-

LIST OF EXHIBITS
Exhibits highlighted in grey will be attached to this Agreement upon agreement of the parties in accordance with tenns of this Agreement.

Exhibit A
Definitions
Exhibit B-1
Legal Description of the Landfill Parcel
Exhibit B::-2 "- - - - -- -
---.-Legal Description: ofthe '.Afrsp·ace Parccls ·- - - ' - - . - .
" --
Exhibit B-3
Legal Description of the Tasman Parcel
Exhibit B-4
Map of Project Site
Exhibit C
Mitigation Monitoring and Reporting
Program (MMRP)
ExhibitD
Pro_ject Approvals
Exhibit E
Phasing Plan
Exhibit F
Schedule of Performance - General
)j:xhibit F-1 - -- - - -- - -- -· . - - -
- Form of Phase Schedule of Performance
Exhibit G-1
Form of Ground Lease - Phase 11
Exhibit G-2
Form of Ground Lease - Phases 2-i
Exhibit H
Minimum Requirements for CC&Rs
Exhibit I
Form of Financing Plan
Exhibit J
Form of Permit to Enter
Exhibit K
Form of Certificate of Completion
Exhibit L --·
· Permitted Exceptions - -
Exhibit M
Landfill Operation and Management Term
Sheet
1 As of the Reference Date.
-viii-
Exhibit N
Definition ~f Premium Costs
Exhibit 0
List of Pre-Approved Arbiters
ExhibitP
Form of Assignment, Assumption and
Release A~reement
Exhibit Q
Form of City Completion Guaranty
Exhibit R
Addresses for Notices
Exhibit S
Form of Architect's Certificate
Exhibit T
Form of Engineer's Certificate
Exhibit U
Provisions Relating to ConStruction Sales
and Use Tax Allocations
-ix-

DISPOSITION AND DEVELOPMENT AGREEMENT
(CITY PLACE SANTA CLARA)
This DISPOSITION AND DEVELOPMENT AGREEMENT (CITY PLACE SANT A CLARA) (including all Exhibits and as amended from time to time, this "Agreement"), dated for reference purposes only as of August 12, 2016 (the "Reference Date"), is made by and between Related Santa Clara, LLC, a Delaware limited liability company ("Master Developer"), and the City of Santa Clara, a chartered municipal corporation ("City").

RECITALS
Master Developer and City enter into this Agreement with reference to the following facts and circumstances:

A. Capitalized terms used herein are defined or referenced in Exhibit A of this Agreement.

B. City owns a fee interest in the real property generally located in the North of Bayshore Area in Santa Clara, California, consisting of approximately two hundred and thirty (230) acres shown on the Phasing Plan (the "City Landfill Parcels"). Subsequent to the Reference Date, Master Developer will seek approval of a tentative subdivision map (the "Tentative Map") and a first phased final map (the "First Final Map") that will subdivide the City Landfill Parcels to create two sets of vertical parcels: (i) one parcel (the "Landfill Parcel") which, in general, constitutes City's fee interest in the Landfill and (ii) multiple parcels· comprising the "Airspace Parcels," which constitute City's fee interest in the airspace parcels above the Landfill Parcels. The legal description of the City Landfill Parcels is provided as Exhibit B-1. Upon the recordation of the First Final Map, the legal description of the Landfill Parcel and the outer boundaries of the Airspace Parcels will be appended to this Agreement as Exhibit B-2 in accordance with Section 3 hereof.

C. City also owns a fee interest in the real property generally located immediately south of the City Landfill Parcels and north of Tasman Drive on the east and west sides of Centennial Boulevard (APNs 104-03-038 and-039) and a portion of another parcel (104-03-036) located immediately northward of those other parcels, consisting of approximately 9.48 acres (the "Tasman Parcels"). The legal description of the Tasman Parcels is in Exhibit B-3. The City Landfill Parcels and the Tasman Parcels are collectively referred to herein as the "Project Site" as shown on Exhibit B-4 attached hereto. The portions of the Airspace Parcels and the Tasman Parcels that will be ground leased to Master Developer in accordance with this Agreement are collectively referred to herein as the "Development Parcels".

D. City and Master Developer entered into that certain (I) Exclusive Negotiation Rights Agreement in April 2013 for development of the City Landfill Parcels (the "ENA"), and (2) Term Sheet dated as of February 11, 2014 (City Council Resolution No. 14-8112) (the "Term Sheet"). City and Master Developer entered into a Term Sheet Supplement dated as of July 1, 2014 (City Council Resolution No. 14-8157) and a Term Sheet Supplement No. 2 dated as ofJune 16, 2015 (City Council Resolution No. 15-8245). 1 E. On June 26, 2012, the City and the Montana Property Group ("MPG") entered into (1) an Exclusive Negotiating Rights Agreement, as subsequently extended and amended, and (2) a Term Sheet dated as of February 11, 2014, for the development of the Tasman Parcels.

Subsequently, Master Developer entered into a joint venture agreement with MPG to jointly develop the Tasman Parcels concurrently with the City Landfill Parcels, as reflected in a Term Sheet Supplement between the City and MPG, dated June 16, 2015. Under such Term Sheet Supplement, the City and MPG agreed that the site planning efforts and negotiations for the Tasman Parcels would be included as part of the site planning efforts and negotiations for the City Landfill Parcels, which understanding is reflected in the terms of this Agreement.

F. The City has analyzed potential environmental impacts of the Project and identified mitigation measures in the Environmental Impact Report for the City Place Santa Clara Project (the "Project EIR") and Mitigation Monitoring and Reporting Program attached hereto as Exhibit C (the "Project MMRP"), in accordance with the requirements of CEQA. On June 28, 2016, the City Council adopted Resolution No. 16-8337, certifying the Project EIR in accordance with the requirements of CEQA, which attached CEQA Findings and the MMRP.

G. Concurrently with certification of the Project EIR, the City Council (i) adopted amendments to its General Plan, including an amendment to create a new "Urban Center Entertainment District" General Plan classification for the Project Site, an amendment to the Climate Action Plan setting forth vehicle trip reduction targets for the new classification and an amendment revising city-wide limitations on office development, and (ii) rezoned the Project Site to PD-MC and adopted the Master Community Plan for the Project (such Master Community Plan, together with the Master Community Plan Supplement, the "Master Community Plan" or "MCP"), including an Infrastructure Master Plan (the "Infrastructure Master Plan" or "IMP"), in accordance with the requirements of CEQA.

H. The MCP includes an "Enhanced Open Space" variant ("EOS Variant") for the Project, in which most of one of the parcels (APN 104-01-102) would be retained as a public park, and the development previously planned for that parcel would be redistributed to the other parcels in the development. This DDA contemplates the development of the EOS Variant in which the public park is represented by Phase 2A. As a public benefit to the Project, this DDA contemplates development of the EOS Variant by providing special procedures for Phase 2A, which will be reserved for park, recreation and open space uses that are complementary to, and do not unreasonably interfere with, the City Center Phases.

I. City has determined that the development and use of the Project Site under this Agreement are included within the scope of the Project EIR in that the potential environmental impacts of the development and use of the Project Site under this Agreement and the MCP are addressed in the Project EIR.

J. Concurrently with the actions listed above, the City Council took other actions consistent with the Project, including approving this Agreement, and the Development Agreement, together with other approvals (the "Project Approvals"). The Project Approvals are listed on Exhibit D hereto.
2 K. The principal objective of the Project Approvals is to create a new mixed-use development on the Project Site that is anchored by a "city center," consistent with the elements shown in the Phasing Plan attached hereto as Exhibit E and permitted under the Master · Community Plan (such development, the "Project"). This objective is intended to be achieved through the ground lease by City to Phase Developers, from time to time, of the Development Parcels, and the construction and operation by Phase Developers of the Improvements.

AGREEMENT
NOW, THEREFORE, in reliance on the foregoing and in consideration of the mutual covenants, agreements and · conditions set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Parties hereby agree as follows:

1.- The Project. This Article 1 is intended to serve as an overview of the rights and obligations of the Parties with respect to the Project. To the extent that any provision in this Article 1 conflicts with a provision elsewhere in this Agreement, the provision that is elsewhere shall control.

1.1 Overview. This Agreement contemplates development of the Project, which will entail Developer entering into ground leases of the Development Parcels from the City on a phased basis for the purposes of: (i) constructing Infrastructure to support the Project, such as roads, utilities and geotechnical improvements required for development on the Landfill (e.g. a structural slab on which other Improvements will be constructed); (ii) constructing and improving certain public parks and open spaces; and (iii) constructing and operating Buildings within each ground lease premises, all in accordance with the Project Approvals, Subsequent Project Approvals and the Schedule of Performance to the extent applicable, as more particularly described in this Agreement.

1.2 Property.

1.2.1 Subdivision. Master Developer intends to submit to the City an application for the Tentative Map in accordance with CSCC Chapter 17 .05 (Subdivisions), as may be amended from time to time, in order to create the Airspace Parcels and the Landfill Parcels. The Airspace Parcels as shown on the Tentative Map will consist of those Development Parcels that are congruent with the footprint of the City Landfill Parcels but located above the top of the fill layer of the landfill cap, as more particularly described in the Landfill Operation and Management Term Sheet attached hereto as Exhibit M (the "Landfill O&M Term Sheet"), but excluding any public streets. Within thirty (30) days after recordation of the First Final Map creating the Airspace Parcels, the Parties shall prepare an Exhibit B-2 that will be appended to this Agreement and become a part thereof that shall set forth the legal description of the Landfill Parcel and the Airspace Parcels. Each Phase of development will be conveyed to the Phase Developer by reference to a subsequent phased Final Map or a metes and bounds description that in either case is consistent with the corresponding Airspace Parcel as shown on the Tentative Map; provided, however, that if the Phase is conveyed by a metes and bounds description, the applicable Phase Developer will be required to record a phased Final Map covering the applicable Phase prior to Commencement of Infrastructure within the applicable Phase. Each 3 Ground Lease requires the parties to process a boundary adjustment through a lot line adjustment or other legal process upon Completion of the applicable Infrastructure in order to finally determine the boundaries of the applicable Airspace Parcel that is subject to the Ground Lease.

The Parties anticipate that each Final Map will identify the Building parcels that are anticipated to be divided into and operated as separate condominium projects.

1.2.2 Property Subject to this Agreement. The property that is the subject of this Agreement consists of the (i) Landfill Parcel (described in Exhibit B-2 to be attached hereto) that will continue to be owned and controlled by the City, subject to various rights granted to Developer for infrastructure, support facilities, utilities and other penetrations, installations, equipment and/or improvements from the Airspace Parcels into (or through) the Landfill Parcel as necessary to develop the Project contemplated under the Project Documents; (ii) the Tasman Parcels, as described in Exhibit B-3 attached hereto that will be ground leased to Developer in Phase I of the Project; and (iii) the Airspace Parcels (described in Exhibit B-2 to be attached hereto), some or all of which will be conveyed to Developer in accordance with this Agreement.

1.3 Improvements. The Project will be developed consistent with the Phasing .

Plan (as may be amended from time to time), the Project Documents and the Project Approvals and Subsequent Project Approvals, including, without limitation, the MCP, the IMP, and the DAPs that are Approved with respect to each Phase. Developer shall have the right and,- with regard to certain Improvements identified in this Agreement and upon the satisfaction of certain conditions set forth in this Agreement, the obligation, to construct the Improvements in accordance with the Project Documents. Unless otherwise specifically provided herein, all references to building square footages in this Agreement shall be deemed to refer to Gross Square Footages.

1.4 Project Development Generally. The Project will be constructed in up to eight Phases, as illustrated in the Phasing Plan attached hereto as Exhibit E, including the Phases numbered 1 through 7 and Phase 2A. Phases 1, 2 and 3, collectively, are designated in the Master Community Plan as "City Center Mixed Use" (sometimes referred to herein as the "City Center Phases"). The Phases depicted in the Phasing Plan are conceptual, and as appropriate, Phases 1 through 7 may be consolidated or otherwise modified through the Phase Option process described in Article 4.

1.5 Master Developer's Role Generally. Master Developer shall be the master developer for the Project, coordinating the development of the Project in cooperation with City, Phase Developers and others as more fully provided herein. Either Master Developer or an assignee of Master Developer pursuant to a "Permitted Transfer," as described in Section

22.6. l(b) shall have the obligation to serve as the Phase Developer for Phase 1 and 2, as shown on the Phasing Plan attached hereto as Exhibit E. Subject to its timely Take Down of Phases 1, 2 and 2A, Master Developer, on behalf of itself or an Affiliate, retains the exclusive option to Take Down Phases 3 through 7 as the Phase Developer thereof in accordance with the terms of this Agreement; provided, however, that the failure of Master Developer to Take Down any Phase other than Phases 1, 2 and 2A shall not affect its option to Take Down future Phases. In addition to Master Developer's other rights and obligations under this Agreement, Master Developer remains obligated to City for the payment of all Financial Obligations hereunder. 4 1.6 Phase Development Generally. The procedure for developing each Phase shall generally be as follows, as described in more detail in the following sections of this Agreement:

1.6.1 Phase Option Notice Approval. Master Developer shall exercise each Phase Option by submitting to City a Phase Option Notice for the applicable Phase ( or portion thereof), in accordance with the terms of Article 4 hereof. Once each Phase Option Notice is Approved by City, Master Developer (or an approved Transferee) shall be deemed to be the "Phase Developer" of that Phase.

I .6.2 Assignment. Subject to the terms of this Agreement, Master Developer shall have the right in certain circumstances to Assign its rights and obligations to other Persons. In the event that the Assignment is a Consent Transfer and is Approved by City, then Master Developer, the Transferee, and City will enter into an AA&R for the applicable rights and obligations to be assigned.

1.6.3 DAP Approval. Following City's Approval of the Phase Option Notice, the Phase Developer shall submit to City an application for a Development Area Plan (each, a "DAP") for the applicable Phase (or portion thereof), in accordance with Article 5 hereof.

1.6.4 Ground Lease Execution. Following City's Approval of the DAP(s) for the applicable Phase ( or portion thereof) and satisfaction of all other terms and conditions discussed in Section 6.2, City and the Phase Developer shall enter into a Ground Lease for that Phase (or portion thereof), in accordance with Article 6 hereof. The Phase Developer shall be deemed to have Taken Down each Phase ( or portion thereof) upon the effective date of the applicable Ground Lease.

1.6.5 Construction of Phase hnprovements. Upon the effective date of the Ground Lease for a Phase, the Phase Developer shall thereupon have the obligation to Commence construction of, and diligently pursue to Completion, the Infrastructure set forth in the applicable DAP and shall have the right (subject to certain terms and conditions) to construct the other hnprovements shown in the DAP, all in accordance with the terms of this Agreement.

In addition, the Phase Developer shall (1) have the obligation to construct the Minimum Initial Buildings and Minimum Retail Buildings among Phases 1, 2 and 3, as more particularly described in Sections 5.3.2 and 5.3.4, and (2) use best efforts to construct and/or deliver the Additional Initial Buildings, Additional Retail Buildings and Major Department Stores among Phases 1, 2 and 3, as more particularly described in Sections 5.3.3, 5.3.5, 5.3.6, and 5.3 .7.

1.6.6 Certificate of Completion. Once the Initial Improvements for the applicable Phase ( or portion thereof) are Complete, City shall issue a Certificate of Completion for such Initial Improvements in accordance with Article 12 hereof.

1.6.7 Post-Completion. Upon issuance of the Certificate of Completion for the Initial Improvements for a particular Phase, the applicable Phase Developer will thereafter use and operate the Phase in accordance with the applicable Ground Lease and any terms of this Agreement that survive the termination of this Agreement. 5 1. 7 Schedule of Performance. The Schedule of Performance attached hereto as Exhibit F sets forth the Outside Dates for several actions contemplated by this Agreement, including (but not limited to): (i) the exercise of the Phase Option for each Phase or Partial Phase; (ii) the submittal of a Substantially Complete DAP application for each Phase or Partial Phase; (iii) the Take Down of each Phase, and (iv) the Commencement of the Infrastructure with respect to each Phase, as any of the foregoing Outside Dates may be extended by Excusable Delay, where applicable. Master Developer (and any applicable Phase Developer) shall also be required to comply with Phase Schedules of Performance for the Minimum Initial Buildings and Minimum Retail Buildings in accordance with Section 9.1.2 of this Agreement, as any of the foregoing Outside Dates therein may be extended by Excusable Delay, where applicable.

1. 8 Development Agreement. Concurrently herewith, City and Master Developer have executed and delivered the Development Agreement, which confirms the vesting of the Project Approvals and applicable City laws and fees and sets forth the City's commitment regarding staffing devoted to the Project.

2. Term. The term of this Agreement (the "Term") shall commence upon the Effective Date and, except with respect to those terms that expressly survive the termination of this Agreement, shall terminate, unless earlier terminated as provided below, upon the issuance of a Certificate of Completion for all of the Initial Improvements with respect to the last Phase Taken Down pursuant to the Schedule of Performance. However, on the date that a Certificate of Completion for all Initial Improvements with respect to a Phase has been issued, the obligations of the Phase Developer under this Agreement with respect to such Phase shall automatically and conclusively terminate, subject to the sections that survive pursuant to Section

29.22 of this Agreement.

3. Project Phasing.

3.1 Phasing Plan. The development of the Project will take place over a total of up to eight (8) Phases, each of which is conceptually illustrated on the Phasing Plan attached hereto as Exhibit E. The Phasing Plan illustrates on a conceptual level the size, and order of the Phases, given City's and Master Developer's best estimates of the conditions forecast for the expected development period; however, this Agreement anticipates that other than Phases 1, 2 and 2A, the subsequent Phases as shown on the Phasing Plan may be reconfigured, re~ordered and/or developed in partial Phases, subject to the provisions of Article 4 hereof.

Notwithstanding the foregoing, Master Developer's rights and obligations with respect to Phase 2A shall be as set forth in Section 4.8 below.

3.2 Sequence of Development. Subject to Section 4.7 below, City hereby grants to Master Developer the exclusive option to elect to develop each Phase (such option for each Phase being referred to herein as a "Phase Option").

3.2.1 Phases 1, 2 and 2A. Master Developer (acting as Phase Developer) shall exercise Phase Options for, and shall Take Down, Phase 1, Phase 2 and Phase 2A in accordance with the Schedule of Performance and all other applicable terms and conditions of this Agreement. Failure to Take Down Phase 1, Phase 2 and/or Phase 2A in 6 accordance with this Agreement shall constitute an Event of Default pursuant to Section

21.2.l(b).

3.2.2 All Subsequent Phases. Subject to the fulfillment of its obligations under Section 3.2.1 above for Phases 1, 2 and 2A, Master Developer shall have the right, but not the obligation, to exercise Phase Options for, and to Take Down, Phases 3 through

7. The Take Down of the remainder of the Phases and subsequent development of each Phase may occur in any sequence or order Master Developer chooses, including concurrently, subject to compliance with the provisions of this Agreement.

4. Exercise of Phase Option.

4.1 Phase Option Notice. The Parties intend that each Phase shall allow for planning oflarge mixed-use areas or neighborhoods within the Project Site. Accordingly, from time to time, Master Developer shall submit to City written notice that it intends to exercise a Phase Option for a Phase ( each, a "Phase Option Notice") prior to the Outside Date to Take Down the applicable Phase, as set forth in the Schedule of Performance.

4.1.1 Each Phase Option Notice shall include the following information ( collectively, the "Phasing Information"):
(a) The proposed geographic boundaries of the Phase,
consistent with the Phasing Criteria outlined in Section 4.1.2, below, including, at a conceptual plan level, the proposed public street and open space network and any other community facility parcels on which public improvements will be constructed but ownership will remain in the City; (b) A revised conceptual Phasing Plan ·that shows the
boundaries and anticipated order of development of all remaining Phases of development in the context of the proposed Phase boundaries, plus the boundaries of all Phases that have already been Taken Down ( depending on the size of the applicable Phase, the number of subsequent Phases may be consolidated or reduced in size), subject to the requirement that all portions of the Project Site except for the retention pond, public streets, and (if elected by City pursuant to Section 15.3) all or part of the Station Area, must be shown as part of a Phase; (c)
pursuant to Section 4.2.3 hereof).

A revised Allowed Square Footage Table (if required
( d) A textual description of the conceptual scope of
development for the Phase, which shall include: (i) the anticipated types and amounts of uses; (ii) maximum anticipated development density; and (iii) the amount and timing of Infrastructure anticipated to be constructed as part of the Phase; and (iv) a general overview of the parking and loading facilities anticipated to be provided as part of the Phase. With the exception of Phases 1 and 2, to the extent that Master Developer has not yet determined the conceptual scope of development for the Phase, Master Developer shall have the option of so stating in the Phase Option Notice, in which case Master Developer shall be deemed to have complied with this Section 4.1.l(d).
7 (e) An updated Best Efforts Report in accordance with Section 5.3.7(a) below).

4.1.2 Phasing Criteria. The parties acknowledge and agree that many factors, including, but not limited to, general economic conditions, the local housing market, capital markets, general market acceptability, the adequacy of municipal services, and local tax burdens, will determine the rate at which various product types within the Project can be developed and absorbed. Therefore, with the exception of Phases I, 2 and 2A, the boundaries and order of development for each Phase shall be established by Master Developer in connection with its exercise of each Phase Option, so long as any change in Phase boundaries meets the following criteria (collectively, the "Phasing Criteria"): (j) all Phase boundaries depicted in the Phasing Plan remain consistent overall with the Phase boundaries for the EOS Variant as shown in the MCP, provided, however, that with the exception of Phases 1, 2 and 2A, each designated Phase is not required to be consistent with the conceptual phasing descriptions set forth in Section 2.3 of the MCP; (ii) any proposed changes to the Phasing Plan shall not change the dates set forth in the Schedule of Performance (unless extended as permitted hereunder for Excusable Delay); and (iii) no Phase shall be reconfigured such that more than twenty percent (20%) of its land area is reallocated to another Phase or Phases and further provided that Phase 2A shall not be reconfigured without the prior written consent of City, in its sole discretion.

4.2 Partial Phases. Upon Master Developer's election, Master Developer shall have the option to submit a Phase Option Notice in accordance with Section 4.1 above for less than all of the land within the boundaries of a particular Phase ( as applicable, a "Partial Phase"), except for Phase 2A, for which Master Developer shall not have a Partial Phase option and which shall governed by the provisions of Section 4.8, below.

4.2.1 Partial Phase Criteria. In addition to the requirement that the overall Phase meet the Phasing Criteria set forth in Section 4.1.2, above, any such proposed Partial Phase must meet the following criteria (the "Partial Phase Criteria"), except to the extent otherwise Approved by the City Manager:
(a) The total acreage of such Partial Phase shall be no less than twenty (20) acres; and
(b) City shall have determined that any remaining portion of the Phase, as shown in the Phasing Plan proposed as part of the applicable Phase Option Notice, constitutes a developable area.

4.2.2 Nomenclature. The first Partial Phase within a Phase shall be referred to in the Phasing Plan and known as "[Phase Number]-A," the second Partial Phase shall be referred to in the Phasing Plan and known as "[Phase Number]-B, " and so forth.

4.2.3 Modifications to Allowed Square Footage Table. If any Phase Option Notice is delivered to City for a Partial Phase after the date upon which City and Master Developer have conclusively determined the Allowed Square Footage Table pursuant to Article lQ, below, then concurrently with the Phase Option Notice, Master Developer shall deliver to City a modified Allowed Square Footage Table in accordance with Section 10.2, below. City 8 and Master Developer shall work together to finalize the modified Allowed Square Footage Table in accordance with the Approval procedure outlined in Section 10.1, below.

4.2.4 Timing. The failure to meet a Phase Outside Date (as such tenn is defined in Article 7, below) for any portion of a Phase shall be governed by Article 7, below; provided, however, that submittal of a Phase Option Notice for the first Partial Phase in Phases 4 through 7 shall adjust the Phase number and Phase Outside Date for all future Phases.

By way of example only, and not limitation, if Phase 6 were partially Taken Down prior to any portion of Phase 5 being taken down, then Phase 6 would become Phase 5 for the purposes of this Agreement, and the Phase Outside Dates formerly applicable to Phase 5 would apply to the Phase 6 boundaries instead; however, if Phase 5 were partially Taken Down and subsequently Phase 6 were partially Taken Down, then the Phase Outside Dates applicable to Phase 5 would apply to the property within the boundaries of Phase 5, and the Phase Outside Dates applicable to Phase 6 would apply to the property within the boundaries of Phase 6.

4.2.5 Partial Phases for City Center Phases. The City Center Phases may be Taken Down as Partial Phases subject to the foregoing Partial Phase Criteria, provided, however, that a Partial Phase Take Down any of such City Center Phases shall not adjust the Phase numbers or the Phase Outside Dates for those Phases and the Base Rent for a Partial Phase within such Phases shall be calculated in accordance with Section 6.3.3 hereof.

4.2.6 Terminology. For the purposes of this Agreement, any use of the tenn "Phase" shall be deemed to mean one or more Partial Phases, as the context requires.

4.3 Special Procedures for BMX Track.

4.3.1 Phase Option Notice Timing. In order to provide the City with adequate advance notice to discontinue the BMX Track located on Parcel 1 and deliver the applicable Phase free of all tenants in accordance with Section 13.2.1, for any Phase or Partial Phase on which the BMX Track is located and operational, Developer shall provide a Phase Option Notice no earlier than the date on which the BMX track has been relocated or . discontinued or the second (2nd) anniversary of the Effective Date, whichever is earlier, and no later than eighteen (18) months prior to the Outside Date for Take Down of Such Phase or Partial Phase.

4.3.2 Good Faith Efforts to Relocate. Commencing upon the Effective Date and ending upon the first (1st) anniversary of the Effective Date, Master Developer and City shall work together in good faith to determine a site to which the BMX track may feasibly be relocated. If Master Developer and City ·are unable to identify such a site prior to the first (1st) anniversary of the Effective Date, then until the second (2nd) anniversary of the Effective Date, Master Developer and City shall continue work together in good faith to determine a site to which the BMX track may feasibly be relocated.

4.4 City Approval Process. Subject to the conditions precedent set forth in Section 4.1 and (if applicable) Section 4.2, above, within thirty (30) days of receiving a complete Phase Option Notice, City shall review such information and documentation and render a decision regarding its Approval of the Phase Option Notice. If City objects in writing within 9 such thirty (30) day period, City shall include a reasonably detailed description of its reasons for objecting, and Master Developer shall have the opportunity to revise and re-submit the Phase Option Notice, which shall again be subject to the City Approval process set forth in this Section

4.4. If Master Developer disagrees with the statements or requests made in City's objection letter, Master Developer shall have the right (but not the obligation) to submit the dispute to arbitration as an Expedited Arbitration Matter in accordance with Article 20 hereof. If City fails to render a decision regarding its Approval of the Phase Option Notice within the thirty day period, then the Phase Option Notice shall be deemed approved upon satisfaction of the further notice procedures set forth in Section 29.33.4 hereof.

4.5 Designation of Phase Developer. Master Developer shall have the right, simultaneously with its submittal of a Phase Option Notice, to submit a proposal (the "Phase Developer Designation") to designate another Person as the Phase Developer for the Phase ( or Partial Phase) in question in accordance with the provisions set fo1th in Article 22 hereof, and shall notify City whether the Phase Developer Designation is a Pennitted Transfer or will require a Consent Transfer. ·

4.5.l If the Phase Developer Designation would require a Consent Transfer pursuant to Article 22 and if City disapproves of the proposed Phase Developer in accordance with the terms and provisions thereof, then, except to the extent that Master Developer elects to dispute such disapproval in accordance with the dispute resolution provisions of Article 20 hereof, Master Developer shall at its option, exercisable within ten ( l 0) days after its receipt of City's disapproval, notify City in writing of Master Developer's election to:
(i) become the Phase Developer for such Phase (or Partial Phase); (ii) designate another Person as the Phase Developer for such Phase (or Partial Phase); or (iii) elect to rescind its exercise of the Phase Option in question. If Master Developer does not elect an option in clause (i) or clause (ii) above within such ten (I 0) day period, Master Developer shall be deemed to have elected the option in clause (iii). If Master Developer elects the option in clause (ii) above, then such a designation shall again be a proposed assignment and processed in accordance with the terms of this Section 4.5. This process shall repeat itself until the earliest to occur of the following: (a) Master Developer elects to become the Phase Developer for such Phase (or Partial Phase); (b) City approves the proposed Assignment; and (c) Master Developer is deemed to have rescinded its exercise of the Phase Option in question.

4.6 Effect of Failure of Master Developer to Exercise Phase Option. Except with respect to Phases 1, 2 and 2A, if Master Developer fails to submit a Substantially Complete Phase Option Notice to City for any portion of a Phase by the applicable Outside Date (as it may be extended by Excusable Delay, if applicable), such failure shall not constitute a default hereunder by Master Developer but City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the terms of Article 7 hereof.

4.7 Requested Change Notice Procedure. The Parties acknowledge that Project development will take place over many years and that the circumstances affecting such development may change during that period. If Master Developer reasonably determines that the development of any Phase in accordance with this Agreement other than Phases I, 2 and 2A has become commercially infeasible for reasons other than the financial condition of Master Developer, then before the applicable Outside Date for Developer's submittal of any Phase Option Notice (as may be extended for Excusable Delay), Master Developer may notify City that Master Developer is willing to exercise the Phase Option and proceed with the applicable Phase only if City agrees to specified changes to the requirements of this Agreement to make the proposed development commercially feasible (the "Requested Change Notice"). The Requested Change Notice shall include a detailed description of all the terms and conditions of this Agreement that Master Developer proposes to change and the reasons why Master Developer believes that development of the applicable Phase is infeasible without the proposed changes. If Master Developer submits a Requested Change Notice and there is no uncured Material Breach by Master Developer, then all dates in the Schedule of Performance relating to that Phase shall be tolled, the City shall not terminate all or any part of this Agreement relating to that Phase and Master Developer shall retain all of its rights to· exercise the Phase Options until the Parties have negotiated proposed changes to this Agreement for a period of not less than ninety (90) days, subject to any extensions agreed to by Master Developer and City (each in its sole discretion). If City staff and Master Developer are able to agree to changes, then they shall promptly prepare a proposed amendment to this Agreement, including an extension of the Schedule of Performance permitting Master Developer a reasonable time to submit any required applications for amendments to the Project Approvals for review and consideration by the City Council. Any such changes shall be subject to the Approval of City in its sole and absolute discretion, following, if required, additional environmental analysis and review. If City staff and Master Developer are unable to agree on the changes to this Agreement within the time period set forth above, or if the City Council to the extent required does not Approve the proposed changes to this Agreement, then City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase ( or portion thereof) in accordance with the terms of Article 7 hereof.

4.8 Special Procedures for Phase 2A. The MCP identifies the EOS Variant for the parcel shown on the Phasing Plan as Phase 2A ("Phase 2A"). As a public benefit to the Project, the Parties have agreed to proceed with the EOS Variant in which Phase 2A will be reserved for park, recreation and open space uses that are complementary to, and do not unreasonably interfere with, the City Center Phases. In order to implement the EOS Variant in connection with the rest of the Project, Phase 2A shall be subject to the following provisions, notwithstanding anything to the contrary in this Agreement, including this Article 4:

4.8.1 Developer Rights and Obligations.
(a) Master Developer or a Phase Developer permitted
hereunder shall Take Down Phase 2A in accordance with the Schedule of Performance and at the rent set forth in Section 6.1.8 hereof.
(b) The form of Ground Lease for Phase 2A shall be
modified to reflect the following terms:
(i) The permitted uses shall be limited to interim uses that will not unreasonably interfere with the City's ability to implement the EOS Variant upon the Ground Lease termination. By example and without limitation, permitted uses shall include construction staging, temporary special events and surface parking. In addition, Phase Developer shall have 11 the right to regrade and lower the contours of Phase 2A and to export and use clean topsoil from Phase 2A for use as needed within Parcel 4 (as shown on the Phasing Plan) or elsewhere within the Project Site.
(ii) As a condition to the effectiveness of the Phase 2A Ground Lease, unless otherwise approved in connection with the Phase 2 DAP, Master Developer shall have entered into an agreement on terms reasonably satisfactory to the City governing Master Developer's obligation to provide an access road to Parcel 3 from Parcel 4 (the "Parcel 3 Access Road"), including schedule, scope of development and procedures for City approval and acceptance. Without limiting the foregoing, the improvements to be constructed under the agreement shall be consistent with the requirements of the MCP and IMP, including, without limitation, the Parcel 3 Access Road improvements described in the MCP Enhanced Open Space "EOS" Variant, and shall require Substantial Completion of the Parcel 3 Access Road no later than the effective date of the Phase 2A Lease Termination Notice (defined below). (iii) The Phase Developer shall return the Phase 2A premises to City in accordance with the requirements of the Ground Lease (including construction of the Parcel 3 Access Road); provided, however, that if Developer exports topsoil from Phase 2A, then it shall return the Phase 2A premises to the City in a rough-graded condition. (c) Upon (30) thirty days' prior written notice by the
Phase Developer to the City (the "Phase 2A Lease Termination Notice"), City and the Phase Developer shall execute a Ground Lease termination agreement in recordable form that will terminate the Phase 2A Ground Lease as of the date for termination identified in the Termination Notice, but in no event later than twenty-four (24) months after the effective date of the Phase 2A Ground Lease, subject to Section 4.8.1 (d) below.
( d) It is the intent of the Parties that the Base Rent payable under the Phase 2A Ground Lease as of the termination date will be re-allocated to the Base Rent payable under one or more Ground Lease(s) then in effect (as determined by Developer in its sole discretion to be identified in the Termination Notice). Therefore, in no event shall the termination of the Phase 2A Ground Lease become effective without the City and the applicable Phase Developer(s) entering into a concurrent amendment(s) to the Ground Lease(s) identified in the Phase 2A Lease Termination Notice that adjusts the Base Rent thereunder to fully account for the Base Rent payable to the City under the Phase 2A Ground Lease as of the termination date. In the event Developer wishes to again reallocate the Base Rent originally payable under the Phase 2A Ground Lease to future Ground Leases upon their effectiveness, City shall accommodate such request through appropriate documentation as necessary to implement the increase or decrease in Base Rent as applicable, subject to the agreement of the tenant under the applicable Ground Lease.
(e) Master Developer shall pay to the City up to Five
Million Dollars ($5,000,000) for the design and construction of the City Place Park, as described in the MCP (the "City Place Park"), of which Five Hundred Thousand Dollars ($500,000) may be used by the City for planning and design work for the initial concept design (the "City Place Park Design Contribution"), with the remaining amount to be used for construction of the Phase 2A park (the "City Place Park Construction Contribution"). City shall include its 12 anticipated City Place Park planning and design costs in its Semi~Annual Budget .and Master Developer shall advance funds for the City Place Park Design Contribution in accordance with the procedures for payment of City Costs set forth in Section 26 up to the maximum amount payable of Five Hundred Thousand Dollars ($500,000). Master Developer shall pay to City the City Place Park Construction Contribution within thirty (30) days after request by City, but in no event earlier than the City's Commencement of the City Place Park improvements. City shall use the City Place Park Construction Contribution solely for Hard Costs for construction of the City Place Park and shall provide Master Developer with quarterly invoices showing its expenditure of the City Place Park Construction Contribution up to the maximum amount. (f) Upon termination of the Phase 2A Lease, Master
Developer shall have no further liability or obligations with respect thereto except for its funding commitment under Section 4.8.l(e) above.

4.8.2 City Rights and Obligations.
(a) Upon termination of the Phase 2A Lease, City will be solely responsible for the development, maintenance and operation of City Place Park. In connection therewith, City hereby agrees to Indemnify Master Developer, each Phase Developer, and their respective Mezzanine Lenders and Mortgagees, if any, and each officer, director, Affiliate, direct or indirect interest holder, manager, trustee, contractor, agent or representative of any of the same (collectively, "Indemnified Parties") from and against any and all loss, cost, liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses (including engineers', architects' and attorneys' fees and charges) asserted against or incurred by any Indemnified Party related to the development, use, operation or maintenance of Phase 2A from and after the tennination of the Phase 2A Lease except to the extent that such failure is caused by the breach of this Agreement by Master Developer, any Phase Developer, or any tenant or occupant of a Phase, or any negligence or misconduct by any Indemnified Party or any tenant or occupant of a Phase. The terms of this Section 4.8.2 shall survive the termination of this Agreement and shall survive as to each Phase of the Project Taken Down by a Developer through the expiration of the applicable Ground Lease for that Phase. (b) City, in consultation with Master Developer, shall
diligently undertake the planning and design work for the City Place Park in an expeditious manner and will use best efforts to obtain on or before the effective date of the Phase 2A Termination Notice all required local regulatory approvals (including completion of environmental review to the extent required and approval by the Planning Commission and/or the City Council) necessary to Commence construction of City Place Park improvements. (c) City shall be responsible for a community engagement process related to the development of City Park pursuant to this Section 4.8.2. (d) Upon termination of the Phase 2A Lease, City shall
restrict the use of City Place Park to park, passive and participatory recreation (such as athletic fields) and open space uses, which may include special events, fairs and festivals. Without limiting the foregoing, City shall not develop or permit the development of the City Place Park under a lease or otherwise for any residential, commercial or industrial use ( other than ancillary 13 
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Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the tenns of Article 7 hereof.

5.3 Development Obligations. The following development obligations (collectively, the "Development Obligations") shall be included in the DAP(s) for the relevant Phases (or Partial Phases), and shall be implemented and funded by Master Developer. Each DAP shall indicate which specific Improvements are intended to fulfill each of the Development Obligations. Master Developer shall have the right to allocate the Development Obligations to the applicable Phase Developers; however, Master Developer shall remain jointly and severally liable for any failure to meet the Development Obligations in accordance with the timing and terms set forth in Section 9 .1 hereof.

5.3.l Relocation of Fire Station. Development of the Project will necessitate the relocation of the existing Fire Station 10, located at 5111 Stars and Stripes Drive (the "Fire Station"). This relocation may entail a move first to a temporary fire station location (the "Temporary Station Site") and then to a new permanent fire station location (the "Final Station Site"), or it may entail a move directly to the Final Station Site. Neither the Temporary Station Site nor the Final Station Site have been conclusively selected as of the Reference Date.

The process for review and approval of the Temporary Station Site and Final Station Site shall be as follows:
(a) Temporary Station Site Improvements.
(i) The DAP Application for Phase 1 shall include the
following information related to the temporary Fire Station: (i) the location of the Temporary Station Site, which may be on land provided by a Developer Party, City, or a third party that is not on the Project Site; and (ii) a conceptual design and construction schedule for the temporary fire station (together, the "Temporary Station Site Improvements") (if applicable). (ii) Master Developer shall Complete the Temporary Station Site Improvements Approved in accordance with the Phase DAP no later than the first Certificate of Occupancy for any Building within Phase 1; however, the City may require completion of the Temporary Station Site Improvements earlier than such date if City reasonably determines that construction of Infrastructure and/or Buildings within Phase I could interfere with access to, and/or operations of, the existing Fire Station.
(b) Final Station Site Improvements.
(i) As a condition to Commencement of Infrastructure within Phase 2, Developer shall have obtained City Council Approval of the conceptual design, location, and construction schedule for the final station (together, the "Final Station Site Improvements").
(ii) Subject to the terms of Section 5.3.l(b)(iii), below, Master Developer shall Complete the Final Station Site Improvements no later than the issuance of the first Certificate of Occupancy for any Building within Phase 2. 15 (iii) City and Master Developer may, by mutual agreement, elect to have the City construct the Final Station Site Improvements itself in lieu of Master Developer. Such election shall be made, if at all, through a separate construction funding agreement mutually agreeable to both Parties that must be executed prior to Developer's Commencement ofinfrastructure within Phase 2. If City undertakes the construction of the Final Station Site Improvements in accordance with this Section 5.3. l(b)(iii), (A) Master Developer shall not be subject to the timing requirements set forth in Section 5.3.l(b)(ii), above, and (B) in no event shall City withhold a Certificate of Occupancy for any Building within Phase 2 on the sole basis that the Final Station Site Improvements are not yet Complete. ( c) Scope of Improvements and Security. The Temporary
Station Site Improvements and the Final Station Site Improvements shall be of a size and design suitable to meet the City's needs for the time frame in question. The Final Station Site Improvements shall include a minimum of three (3) truck bays. The Temporary Station Site Improvements and Final Station Site Improvements shall be considered part of the Secured Public Improvements or Secured Phase Improvements for the Phase in which they are required to be constructed. As such, construction of the Temporary Station Site Improvements and Final Station Site Improvements must be secured by Adequate Security pursuant to Article 28 hereof.

5.3.2 Minimum Initial Buildings. The "Minimum Initial
Buildings" shall consist of the following: (i) not less than six hundred thousand (600,000) square feet of office, hotel and/or Retail Buildings in Phase 1, which shall include a minimum of a three hundred (300) key (or larger) hotel other than an extended stay hotel and fifty thousand (50,000) square feet of Retail uses; (ii) not less than seven hundred thousand (700,000) square feet of Buildings in Phase 2, consisting of (x) five hundred thousand (500,000) square feet of Retail, and (y) two hundred thousand (200,000) square feet of office and/or a three hundred (300) key (or larger) hotel; and (iii) not less than two hundred (200) residential units in the aggregate in Phases l and 2 (the "Minimum Residential Buildings"). The Minimum Initial Buildings may be submitted in one or more DAPs within Phases 1 and 2 and may be constructed over time, so long as all of the Minimum Initial Buildings are Completed by the Outside Dates therefor set forth in the applicable Phase Schedule of Performance, in accordance with Article 9 hereof (as such Outside Dates may be extended for Excusable Delay).

5.3.3 Additional Initial Buildings. In addition to the Minimum Initial Buildings, the Master Developer shall use best efforts to build an additional two hundred thousand (200,000) square feet of office, Retail and/or residential Buildings in Phase I, and shall use best efforts to build an additional two hundred and thirty thousand (230,000) square feet of office, Retail and/or residential Buildings in Phase 2 (collectively, the "Additional Initial Buildings"). The Additional Initial Buildings may be included in one or more DAPs within Phases l and 2, as applicable, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.

5.3.4 Minimum Retail Buildings. The "Minimum Retail
Buildings" shall consist of the following: (i) not less than fifty thousand (50,000) square feet of Retail Buildings in Phase 1; and (ii) not less than seven hundred and fifty thousand (750,000) square feet of Retail Buildings in the aggregate in Phases 2 and 3. The total square feet of the Minimum Initial Buildings and Additional Initial Buildings intended for such Retail uses within 16 the applicable City Center Phase(s) sha11 be included in any calculation of Minimum Retail Buildings. The Minimum Retail Buildings may be included in one or more DAPs within each of the City Center Phases and may be constructed over time, so long as all of the Minimum Retail Buildings are Completed by the Outside Date therefor set forth in the applicable Phase Schedule of Performance, in accordance with Article 9 hereof (as such Outside Dates may be extended for Force Majeure).

5.3.5 Additional Retail Buildings. Developer shall use best efforts to build an aggregate of one million five hundred thousand (1,500,000) square feet of Retail, within Phases 2 and 3 ( collectively, the "Additional Retail Buildings"). The total square footage of the Minimum Retail Buildings within Phases 2 and 3 shall be included in any calculation of the Additional Retail Buildings. The Additional Retail Buildings may be included in one or more DAPs within Phases 2 and 3, as applica.ble, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.

5.3.6 Department Stores. Without limiting the foregoing provisions regarding the Minimum Retail Buildings and Additional Retail Buildings, Developers shall use best efforts to Complete and ensure the opening of two (2) to three (3) department stores of one hundred thousand (100,000) gross square feet or larger with middle to high price points in terms of caliber of merchandise (each, a "Major Department Store"), at least two (2) of which would be stores that are not presently located within the City, unless otherwise reasonably approved by City. Examples of the contemplated caliber of "Major Department Stores" include Nordstrom and Neiman Marcus. The Major Department Stores may be included in one or more DAPs within each of Phase 1, Phase 2, and/or Phase 3, may be constructed over time and shall be subject to the best efforts provisions set forth in Section 5.3.7 below.

5.3.7 Best Efforts for Additional Buildings and Additional Retail Buildings. For purposes of Sections 5.3.3, 5.3.5, and 5.3.6 hereof, "best efforts" shall mean the following:
(a) Required Efforts. The applicable Phase Developer
shall engage in diligent marketing efforts reasonably designed to identify and obtain creditworthy tenants at market rates sufficient to justify the construction of the Additional Buildings, Additional Retail Buildings, or Major Department Stores, as applicable. On the earlier of (i) the date that is sixty (60) days after the Effective Date of this Agreement or (ii) the submission of a Phase Option Notice for any Phase, Master Developer sha11 submit to the City Manager a report that describes the efforts undertaken by Master Developer and each applicable Phase Developer to achieve the development of the Additional 'Buildings, Additional Retail Buildings, or Major Department Stores within Phase I, Phase 2 and Phase 3, as applicable (the "Best Efforts Report"). Master Developer shall subsequently submit an updated Best Efforts Report to the City Manager according to the following schedule: (a) every six (6) months after submission of the first Best Efforts Report; (b) as part of the submission of a Phase Option Notice for Phase I, Phase 2, and/or Phase 3; (c) as part of the submission of a DAP for Phase 1, Phase 2, and/or Phase 3; and (d) as part of any request to implement an Alternate Leasing Plan (as described in Section 5.3.7{b) below). The Best Efforts Report shall include a description of the leasing plan for the applicable Phase, marketing and leasing outreach efforts designed to identify and obtain tenants as necessary to justify the construction and/or tenanting of the Additional Buildings, 17 Additional Retail Buildings, or Major Department Stores, a description of the success or failure of such efforts and a list of brokers engaged to market the property, if any, recognizing that the majority of Master Developer's leasing efforts may be conducted in-house. Master Developer's obligation to submit updated Best Efforts Reports shall continue until Master Developer has either achieved the development of the Additional Buildings, Additional Retail Buildings, and Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, or has obtained relief from all or a portion of such requirement, as described in Section 5.3. 7(b) below. (b) Alternate Leasing Plan/Relief from Best Efforts. The Parties recognize that, despite best efforts, many factors could contribute to Developer's failure to achieve some or all of the Additional Buildings, Additional Retail Buildings, or Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, including a lack of market demand, financial infeasibility based on construction and entitlement costs (including availability of labor and materials), prevailing market rents and the availability of financing at commercially reasonable terms. If, any time after Take Down for the applicable Phase, Developer reasonably determines that despite its best efforts, it will be unable to achieve some or all of the Additional Buildings, Additional Retail Buildings, or Major Department Stores within Phase 1, Phase 2 and Phase 3, as applicable, and that an alternative leasing plan would enable the Phase Developer to feasibly develop the Development Parcels with other uses that may not satisfy, in part or in full, the achievement of the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores (the "Alternate Leasing Plan"), Developer may pursue an Alternate Leasing Plan and be relieved of the obligation to undertake best efforts for all or a portion of the Additional Buildings, Additional Retail Buildings, or Major Department Stores for the applicable Phase in accordance with the process set forth in this Section 5.3.7(b). In order to be relieved of the best effotts obligation, Developer shall first submit to the City a written request that it be relieved of all or a portion of its best efforts obligations, which request will include the following: (i) a written request as to the nature and scope of the requested relief, including the applicable Phase(s) and square footage of improvements; (ii) a copy of its Alternate Leasing Plan for the applicable Phase(s); and (iii) an updated Best Efforts Report covering a minimum period of twenty-four (24) months (starting with the April 2013 execution of the ENA) that will include a description of factors that have contributed to Developer's inability to develop the applicable Additional Buildings, Additional Retail Buildings, or Major Department Stores for which it seeks relief. Such factors may include market studies showing a lack of demand, pro formas, case histories describing negotiations with major tenants and the reasons that such tenants were unable or unwilling to lease the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores, the availability of financing at commercially reasonable terms and/or costs of construction (including availability of labor and materials). Upon receipt, City and Developer shall meet and confer in good faith for a period of up to ninety (90) days to review and discuss the updated Best Efforts Report and the Alternate Leasing Plan. The parties' rights and obligations during such ninety (90) day period shall be as follows:
(i) Within the first forty-five (45) days of the ninety (90) day period, the City Manager shall present an informational report to the City Council concerning the Master Developer's Best Efforts Report, Alternate Leasing Plan, and request for relief pursuant to this Section 5.3.7(b). The Master Developer shall be invited to participate in the presentation, and the City Council will be invited to provide feedback on the request. 18 (ii) During the ninety (90) day meet and confer period, City shall have the right to suggest additional marketing efforts or revisions to the Alternate Leasing Plan, to which Developer shall be obligated to respond in good faith by (a) taking any specific steps requested by City, including but not limited to contacting certain potential tenants, and (b) reasonably exploring any other options suggested by City. Notwithstanding the foregoing, however, the updated Best Efforts Report and Alternate Leasing Plan shall not be subject to City approval, nor shall Developer be obligated to adopt or institute changes thereto proposed by the City.
(iii) Prior to the expiration of the ninety (90) day period, so long as Developer has complied with the substantive and procedural requirements set forth in this Section 5.3.7(b), the City Manager shall issue a letter relieving Developer of the applicable best efforts requirement.

Nothing herein shall relieve Developer of its obligation to obtain the approvals specified in the DAP Procedures for the Alternate Leasing Plan (which shall be processed in accordance with the DAP Procedures and not withheld for failure to include the Additional Initial Buildings, Additional Retail Buildings, or Major Department Stores) or any amendment to the MCP to the extent required (which may be given or withheld by City in its sole discretion). ( c) The issuance of a Certificate of Occupancy for any portion of the Additional Initial Buildings or Additional Retail Buildings, or the opening for business of the Major Department Stores shall satisfy the best efforts requirements under Sections 5.3.3, 5.3.5, and/or 5.3.6 hereof, as applicable, as to those improvements.

5.4 Satisfaction of Multi-Phase Development Obligations.

5.4.1 Because the Minimum Residential Buildings can be satisfied between Phases 1 and 2, the DAP for Phase 1 shall indicate whether or not such Development Obligation will be met by Improvements constructed as part of Phase 1 or if all or a portion of such Development Obligation will be deferred to Phase 2 (which will include verification that residential uses will be petmitted by environmental regulatory plans to be constructed on Phase 2 and that Developer deems the conditions of such residential development on Phase 2 consistent with environmental regulatory plans to be feasible). If all or a portion of the Development Obligation will be deferred to Phase 2, then the DAP for Phase 2 shall demonstrate how such Development Obligation will be satisfied within Phase 2.

5.4.2 For all other Development Obligations that can be satisfied between two (2) or more of the City Center Phases (i.e., the Minimum Retail Buildings, the best efforts requirements for the Additional Retail Buildings, and the best efforts requirements for Major Department Stores), the DAP for Phase 2 shall indicate whether or not all of each such Development Obligation will be met by Improvements constructed as part of Phase 2, or if part of such Development Obligation will be deferred to Phase 3. If some of the Development Obligation will be deferred to Phase 3, then the DAP for Phase 2 shall also include a preliminary construction schedule that shall demonstrate how such Development Obligation will be satisfied between Phase 2 and Phase 3.
19 5.4.3 The DAP for Phase 3 shall indicate how any Development Obligations that may be allocated to Phase 3 will be met with construction of City Center Phase 3, to the extent that such Development Obligations have not been previously satisfied by the inclusion of Improvements within the DAPs for Phases 1 and/or 2, as applicable.

5.4.4 If any portion of the Development Obligations allocable between the Phases is deferred to Phase 3 pursuant to Section 5.4.2, above, but Phase 3 is not Taken Down by the applicable Outside Date set forth in the Schedule of Performance, then such Development Obligations shall be re-allocated to Phase 2, and the Phase Developer for Phase 2 shall take all necessary actions to ensure that such Development Obligations are Completed in accordance with a revised Phase Schedule of Performance Approved by the City in accordance with Section 9. l .2(a).
5 .5 Parking and Access. Parking and access generally shall be governed by the DAPs and the Master CC&Rs. In addition, Master Developer, Phase Developers and City will cooperate and manage portions of the Tasman Parcel, Airspace Parcels and City Landfill Parcels so that approximately three thousand (3,000) parking spaces ("Non-NFL Event Parking Spaces") will be available to serve non-NFL events at Levi's Stadium. Concurrently with the first DAP application, to be updated concurrently with each subsequent DAP application, Master Developer and City will work cooperatively on preparing a Parking Management Plan (the "Parking Management Plan") that will show how the Non-NFL Event Parking Spaces will be accommodated on all remaining City-owned property within the Project, and, if all of the Non-NFL Event Parking Spaces cannot be accommodated on City-owned property (e.g., as future Phases are Taken Down and City-owned property is reduced), within the non-reserved retail parking developed for any Phases. The Parking Management Plan, which shall survive the termination of this Agreement, will incorporate the following underlying principles: (1) NonNFL Event Parking Spaces will be prioritized on City-owned property that has not been Taken Down; (2) City will take reasonable measures at its sole cost and expense to locate the Non-NFL Event Parking Spaces on property not then Ground Leased to Developer at the time in question, including any paving, striping, operation and management that City deems to be necessary in its sole discretion; and (3) Non-NFL Event Parking Spaces that are proposed on Development Parcels that are subject to a Ground Lease will be available on a first-come, first-serve basis within non-reserved retail parking developed for the applicable Phase.

6. Ground Leases. Following satisfaction of the conditions set forth in Section 6.2 hereof, and prior to the applicable Outside Date set forth in the Schedule of Performance (as such Outside Date may be extended due to Excusable Delay, if applicable), City and the applicable Phase Developer shall enter into a Ground Lease for a Phase. A Phase Developer shall be deemed to have Taken Down the Development Parcel(s) within a Phase upon the effective date of the Ground Lease for the applicable Phase.

6.1 Form of Ground Leases . The form of Ground Lease to be executed for Phase 1 shall be the form attached hereto as Exhibit G-1, and the form of Ground Lease to be executed for Phases 2 through 7 (as depicted in the Phasing Plan as of the Reference Date) shall be the form attached hereto as Exhibit G-2, in each case modified or supplemented as follows:
20 6.1.1 The Phase Developer shall be inserted into the caption to the Ground Lease and as a signatory, in each case as "Tenant" thereunder, and the proper Phase shall be identified in all places where the term is used.

6.1.2 The dates of all documents referred to in the Ground Lease shall be inserted and any other minor, administrative changes shall be made, as appropriate.

6.1.3 The Commencement Date and Expiration Date (as defined in the Ground Lease) shall be updated, as applicable, and consistent with the dates directed in the forms of Ground Lease attached as Exhibit G-1 and Exhibit G-2.

6.1.4 For Phases 2 through 1; the legal description of and reference to the Development Parcel(s) (or portions thereof) encompassing the Phase in question shall be inserted where required.

6.1.5 For Phase 2A, the Ground Lease shall reflect the terms described in Section 4.8 hereof.

6.1.6 The definition of Project Documents shall be amended to reflect any other additional project documents pertaining to the development and use of the Phase that were entered into after the Reference Date and were Approved by City and Master Developer or any amendments to existing Project Documents.

6.1.7 The definitions and other provisions of Article 3 of the Ground . Lease that require revision to reflect dates as directed in the form of Ground Lease attached as Exhibit G-1 and Exhibit G-2 shall be updated to reflect the applicable dates as so directed.

6.1.8 For Phases 2 through 7, subject to the terms of Section 6.1.9, below, the initial annual "Base Rent" for each Ground Lease shall be inserted into Article 3 thereof, and shall be, for each applicable Phase, as shown in the Phasing Plan for the Project as of the Reference Date (such original Phase boundaries being referred to herein as the "Original Phase Boundaries"):

Phase 2 - One Million Five Hundred Thousand Dollars ($1,500,000); Phase 2A - Seven Hundred Fifty Thousand Dollars ($750,000); Phase 3 - Five Hundred Thousand Dollars ($500,000);
Phase 4- Seven Hundred Fifty Thousand Dollars ($750,000); Phase 5 - Seven Hundred Fifty Thousand Dollars ($750,000); Phase 6 - Eight Hundred Seventy-Five Thousand Dollars ($875,000); and Phase 7 - Eight Hundred Seventy-Five Thousand Dollars ($875,000). 21 6.1.9 Notwithstanding the Base Rent amounts provided in Section

6.1.8, above, the following modifications shall be made to the initial annual Base Rent for a particular Phase:
(a) If the Phasing Plan has been altered such that the gross square footage of the overall Phase has changed, then the initial annual Base Rent for the Phase in question shall be determined by multiplying the Base Rent for the applicable Phase as set forth in Section 6.1.8 by a fraction, the numerator of which is the gross square footage of the altered footprint of the Phase (calculated based upon the Final Tract Map for the Phase) and the denominator of which shall be the gross square feet of the original footprint of the Phase, as shown in the Phasing Plan for the Project as of the Reference Date. (b) Notwithstanding the terms· of Section 6. l.9(a). above, if the altered Phase encompasses portions of more than one (1) Phase pursuant to the Original Phase Boundaries, then the initial annual Base Rent for the altered Phase shall be calculated separately for each portion of the altered Phase that is located within different Original Phase Boundaries, based on the Base Rent for the Original Phase Boundaries in question as set forth in Section 6.1.8.
(c) No reallocation of square footages of Buildings
pursuant to a DAP shall result in a change in the amount of Base Rent due under the Ground Lease for the Phase in question.
(d) To the extent that the Phase Option for any of Phases 3 through 7 has not been exercised within ten (10) years after the execution and delivery of a Ground Lease for Phase 2, then the initial annual Base Rent for each such Phase shall increase at the rate of three percent (3%) per annum from the end of such period until the date that the Phase Option is exercised with respect to such Phase.

6.1.10 The construction obligations described in Article 9 of this Agreement shall be incorporated into the Ground Leases as specified therein to the extent applicable.

6.1.11 The Ground Lease for each Phase shall reserve easements as necessary for public utilities and rights of way.

6.1.12 Except for the Phase 2A Ground Lease, the Ground Lease for each Phase shall require the Phase Developer to construct the applicable Infrastructure and open space facilities approved in connection with the applicable Phase DAP application in accordance with the MCP and IMP. Notwithstanding the foregoing, the Parties recognize that the City Center North Neighborhood Park is included with Phase 2A for which no DAP application will be submitted. Therefore, if the Phase 3 DAP Application (or the Phase 2 DAP Application if required for compliance with CSCC Chapter 17.35, as it may be amended from time to time) does not include the relevant information required under the DAP Procedures pertaining to the City Center North Neighborhood Park (as described in the MCP), Developer shall include the proposed terms for an agreement regarding the timing and procedures for approval and 22 development of the City Center North Neighborhood Park, which agreement shall be a condition of approval to the applicable DAP Applicatfon.

6.1.13 If the approved Phase would allow the development of fractional interest units, the Ground Lease must include a mechanism establishing a transient occupancy in-lieu fee running with the land, payable in the same manner and subject to the same tenns and conditions as the City's Tax on Transient Occupancy of Hotel Rooms (CSCC Chapter

3.25 (as it may be amended from time to time)).

6.1.14 The Ground Lease shall set forth all of the Mitigation Measures set forth in the Project MMRP that are applicable to the Phase in question, and obligate the Phase Developer to perform, or cause to be performed, all such Mitigation Measures.

6.1.15 The Landfill related costs described in Section 12.2 of the Ground Lease attached as Exhibit G-2 and allocated to such Phase shall be finalized.

6.1.16 If the approved Phase would allow for the development of Retail uses other than restaurants, the Ground Lease for such Phase shall require the Tenant thereunder to use commercially reasonable efforts to (i) focus on mid-to-high level price points, and (ii) include either national stores or local enterprise that have a demonstrated track record of providing unique and high quality merchandise and service.

6.1.17 If the approved Phase would allow for the development of Retail uses, the Ground Lease for such Phase shall require the Tenant thereunder to prepare a leasing plan that will be finalized after consultation with (but not approval by) the City. The leasing plan will be updated every two (2) years, or more frequently as reasonably determined by the Tenant, and will contemplate a variety of brands and merchandise in order to appeal to a wide demographic of customers.

6.1.18 If the approved Phase contains all or any part of the Station Area, the Ground Lease for such Phase shall provide that the Tenant thereunder shall reconvey that part of the Station Area to City upon City's request, in accordance with the terms of Section

15.3, with no corresponding reduction in Base Rent.

6.1.19 Such other matters as are Approved by both Master Developer and the City Manager.

Conditions Precedent to Execution of Ground Leases.

6.2.1 Phase Developer Conditions to Execution of Ground Leases.

The following are conditions precedent to the execution and delivery of a Ground Lease by a Phase Developer with respect to a particular Phase (or Partial Phase), to the extent not waived by such Phase Developer by notice to City:
(a) City shall have performed in all material respects all obligations under this Agreement and the Development Agreement that relate to the Phase in question and are required to be performed by City on or before the date of execution of such Ground Lease;
23 (b) Prior to execution of the Ground Lease for the. first Phase to be Taken Down, City and Master Developer shall have executed a Landfill Operation and Management Agreement in accordance with Section 14.1, below; (c) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have agreed upon the form of Master Conditions, Covenants and Restrictions (the "Master CC&Rs") that shall contain at a minimum, the provisions set forth in Exhibit H attached hereto, and such form shall have been recorded against the title of the City Landfill Parcels, the Airspace Parcels, and the Tasman Parcels prior to or concurrently with the delivery of the Ground Lease for the first Phase to be Taken Down; (d) In accordance with Article 13, below, the
Title Company shall be irrevocably committed to issue to the Phase Developer a CL TA leasehold title insurance policy (or at the Phase Developer's option an ALTA leasehold title insurance policy), with such endorsements, reinsurance and direct access agreements as the Phase Developer shall reasonably designate and the Title Company shall accept; provided, however, that the applicable Phase Developer shall have used commercially reasonable efforts to secure such insurance policy. The title policy will be in an amount reasonably designated by the Phase Developer and acceptable to the Title Company, and will insure that leasehold title to the property at issue and all appurtenant easements are vested in the Phase Developer, subject only to the Permitted Exceptions. If the Phase Developer elects to obtain an ALTA leasehold policy, such Phase Developer shall be responsible for securing any and all surveys, engineering studies and other documents required to obtain an ALTA leasehold policy in sufficient time to permit execution of the Ground Lease as required by this Agreement. A title insurance policy complying with this paragraph (d) is referred to herein as the "Phase Title Policy"; (e) Except for Phase 2A, the applicable Phase Developer shall have obtained all requisite Authorizations necessary to Commence construction of the Infrastructure for the applicable Phase in accordance with the terms of this Agreement and the applicable Schedule of Performance, and such Authorizations shall have become final, binding and non-appealable; and
(f) In the event there are tenants or other occupants
lawfully occupying any portion of the Phase who are entitled by Applicable Law (including, to the extent applicable, the California Relocation Act (sections 7260 et seq. of the California Government Code)) to relocation assistance, such tenants or other occupants shall have been relocated in accordance with the terms of Section 18 .2 hereof.

6.2.2 City Conditions to Execution of Ground Leases. The following are conditions precedent to the execution and delivery of a Ground Lease by City with respect to a particular Phase ( or Pattial Phase), to the extent not waived by City by notice to the applicable Phase Developer:
(a) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have executed a Landfill Operation and Management Agreement in accordance with Section 14.1, below; 24 (b) Prior to execution of the Ground Lease for Phase 1, the City Council shall have Approved all required documentation related to the relocation of the existing Fire Station, pursuant to Section 5 .3 .1 hereof; ( c) Prior to execution of the Ground Lease for the first Phase to be Taken Down, City and Master Developer shall have agreed upon the form of the Master CC&Rs that shall contain at a minimum, the provisions set forth in Exhibit H attached · hereto, and such form shall have been recorded against the title of the City Landfill Parcels, the Airspace Parcels, and the Tasman Parcels prior to or concurrently with the delivery of the Ground Lease for the first Phase to be Taken Down. The Master CC&Rs shall name City as a third party beneficiary with respect to the provisions thereof benefitting City; ( d) Except for Phase 2A, City shall have approved a DAP that encompasses all of the area to be Taken Down pursuant to the Ground Lease, in accordance with the terms of this Agreement;
(e) A Tentative Subdivision Map shall have been
Approved that includes the applicable Phase in accordance with City's Subdivision Code; (f) Except for Phase 2A and further subject to Section

29.34 (Limitations on Disclosure), the Phase Developer shall have provided to City for informational purposes an updated Financing Plan for the applicable Phase. (g) Except for Phase 2A, the Phase Developer shall have provided to City an anticipated construction schedule for all Improvements depicted in the DAP(s) for such Phase, including any Improvements that are intended to meet those Development Obligations set forth in Sections 5.3.2, and 5.3.4. If the Phase subject to this Section 6.2.2 is Phase 2 or Phase 3, the construction schedule shall also include any updates to the allocation of Development Obligations previously provided pursuant to Section 5.4 hereof. (h) Master Developer and the Phase Developer shall have. performed in all material respects all other obligations under this Agreement (including all Exhibits) that relate to the Phase in question and are required to be performed by Master Developer and the applicable Phase Developer on or before the date of execution of the Ground Lease for such Phase, including paying the Annual Landfill Costs and all City Costs then due and owing from Master Developer to City;
(i) Phase Developer shall have furnished to City
certificates of insurance or duplicate originals of insurance policies as and to the extent required under the Ground Lease; and
(i) In the event there are tenants or other occupants
lawfully occupying any portion of the Phase who are entitled by Applicable Law (including, to the extent applicable, the California Relocation Act (sections 7260 et seq. of the California Government Code)), to relocation assistance, such tenants or other occupants shall have been relocated in accordance with the terms of Section 18.2 hereof. 25 6.3 Ground Leases for Partial Phases. Master Developer shall have the option to Take Down one or more Partial Phases instead of a full Phase, so long as the conditions set forth in Section 4.2.1 and Section 6.2 are met or waived by the applicable Party with respect to such Partial Phase.

6.3 .1 Subsequent Partial Phases. To the extent that the conditions set forth in Section 6.2 are later met or waived by the applicable Party with respect to another Partial Phase within the same Phase by the applicable Outside Date (as such date may be extended for Excusable Delay, if applicable), then City and the applicable Phase Developer shall enter into a Ground Lease for the subsequent Partial Phase. The Phase Developer shall be deemed to have Taken Down such Partial Phase upon the effective date of the Ground Lease for the applicable Partial Phase.

6.3 .2 Initial Base Rent for Partial Phases. Notwithstanding the provisions of Sections 6.l.9(a) and 6.1.9(6), above, the initial annual Base Rent for any Partial Phase other than the City Center Phases shall be determined by multiplying the Base Rent for the applicable Phase as set forth in Section 6.1.8 (as increased, if applicable, pursuant to Section

6.l.9(d) hereof) by a fraction, the numerator of which is the gross square feet of the land area of the Partial Phase and the denominator of which shall be the gross square feet of the land area of the Phase, as shown in the Phasing Plan for the Project as of the Reference Date.

Notwithstanding the foregoing, however, if the altered Phase encompasses portions of more than one Phase pursuant to the Original Phase Boundaries, then the initial annual Base Rent for the altered Phase shall be calculated separately for each portion of the altered Phase that is located within different Original Phase Boundaries, based on the Base Rent for the Original Phase Boundaries in question as set forth in Section 6.1.8.

6.3.3 Initial Base Rent for Partial Phases within City Center Phases.

If Master Developer delivers a Phase Option Notice for a Partial Phase within one of the City Center Phases, the Base Rent for the first Partial Phase with such Phase shall be as set forth in Section 3 .1.2 of the form of Ground Lease attached hereto as Exhibit G-1 for Phase 1 and as set forth in Section 6.1.8 hereof for City Center Phases 2 and 3 without adjustment (in each case, the "Initial Phase Base Rent"). Notwithstanding the foregoing, at Master Developer's request, the Base Rent payable under each Ground Lease for a Partial Phase within the City Center Phases may be adjusted after the initial Ground Lease within that Phase to allocate Base Rent proportionally among the Pattial Phases with that Phase, so long as the total amount of Base Rent attributable to the Phase is never less than the Initial Phase Base Rent at any time from and after the first Take Down of the Partial Phase (as such Initial Phase Base Rent may be increased over time in accordance with Section 6. l .9(d) hereof). For example, if Master Developer exercises its Phase Option for fifty percent (50%) of the land area of Phase 1 as a Partial Phase, the Base Rent under the initial Ground Lease will be one million, five hundred thousand dollars ($1,500,000), as required in Section 6.1.8. When Master Developer exercises its Phase Option for the remaining Partial Phase within Phase 1, Article 3 of the first Partial Phase Ground Lease will amend the Base Rent to seven hundred fifty thousand dollars ($750,000) (subject to agreement by the first Phase Developer) and the Base Rent for the second Partial Phase Ground Lease pursuant to Article 3 will be set at $750,000.
26 6.4 Memorandum of Ground Lease and Revised Phasing Plan. Upon the execution and delivery by City and the Phase Developer of the Ground Lease for a Phase, City shall execute and deliver (i) a Memorandum of Ground Lease in recordable form in substantially the form attached to the Ground Lease, and (ii) a revised Phasing Plan which shall set forth the updated Phasing Plan that reflects the boundaries of the Phase then being Taken Down. Within five (5) Business Days after execution of the Ground Lease, Master Developer shall record the Memorandum of Ground Lease in the Official Records and shall deliver to City original copies of the fully-executed Ground Lease and Memorandum of Ground Lease. The revised Phasing Plan shall be subject to Section 29.29 hereof (Plans on Record with City).

6.5 , Effect of Failure of Master Developer to Take Down a Phase. Except with respect to Phases 1, 2 and 2A, if Master Developer fails to Take Down any portion of a Phase by the applicable Outside Date (as it may be extended by Excusable Delay, if applicable), such failure shall not constitute a default hereunder by Master Developer but City may submit to Master Developer a Phase Termination Notice and terminate Master Developer's rights with respect to the applicable Phase (or portion thereof) in accordance with the terms of Article 7 hereof.

6.6 Concurrent Events. Concurrently with the execution of each Ground Lease, City, Master Developer, and the applicable Phase Developer, as applicable, shall take the following actions:

6.6.1 The applicable Phase Developer or Master Developer shall cause the Final Map for the Phase to be recorded in the Official Records; and

6.6.2 The applicable Phase Developer and Master Developer shall cause the Master CC&Rs to become applicable to the Phase by causing to be recorded against such Phase an annexation in the form required under the Master CC&Rs, with such changes thereto as Master Developer, the Phase Developer and City shall mutually Approve.

7. Failure to Meet Phase Outside Dates.
7 .1 Notice of Intent to Terminate. The Schedule of Performance attached as Exhibit F hereto ·sets forth the Outside Dates for certain events over the life of the Project, including: (i) submission of Phase Option Notices for each Phase; (ii) submission of a Substantially Complete DAP for each Phase; and (iii) Taking Down each Phase (these three Outside Dates together shall be referred to herein as the "Phase Outside Dates"). Except with respect to Phases 1, 2 and 2A, if Developer fails to meet any Phase Outside Date (as it may be extended by Excusable Delay, if applicable) for all or any portion of a Phase, such failure shall not constitute a default hereunder by Developer, but City may notify Developer that City intends to terminate Developer's rights with respect to the portion of the applicable Phase for which Developer has not met the Outside Date in question, based on the Phase boundaries depicted in the Phasing Plan then in effect (the "Phase Termination Notice"). If Developer does not respond to such Phase Termination Notice by (i) submitting the Phase Option Notice, (ii) submitting the applicable DAP, or (iii) Taking Down the applicable Phase, as applicable, within forty-five (45) days after receipt of such notice, City may set a date for a public meeting on such termination and notify Developer of the meeting date, after which City may, with the Approval 27 of the City Council following the public meeting (and subject to Section 7 .2.8, below), terminate Developer's rights with respect to the portion of applicable Phase that is the subject of the Termination Notice. Upon any such termination, Developer's rights and obligations under this Agreement for the affected real property shall, subject to Section 7.2.8, below, terminate and City shall have the right to record a Notice of Termination as set forth in Section 29.30. No such termination shall affect Developer's rights with respect to any Phase or Partial Phase for which Developer has complied with the applicable Outside Dates under any Phase Option already exercised or its rights to exercise any future Phase Option not yet exercised. In the event of such termination, Developer shall have no further obligation to install Infrastructure required for such Phase(s) (or Partial Phase(s)) as may be necessary to support the other Phases or Partial Phases within the Project, as set forth in the IMP and MCP, except to the extent expressly assumed by Master Developer pursuant to a cost reimbursement agreement entered into between Master Developer and City or a Person other than Master Developer or an Affiliate of Master Developer (a "Third Party") that is offered the applicable Phase as part of a Development Opportunity in accordance with Section 7.2.8, below, each in their sole discretion. In the event of such termination, the Base Rent adjustment in the 45th Project Lease Year, as calculated in Section 3 .3 .2(b) and 3 .3 .3 of the form of Ground Lease, shall be adjusted so that the thirty million dollars ($30,000,000) set forth in those sections shall be thirty million dollars ($30,000,000) multiplied by a fraction, the numerator of which is the gross square footage of the footprint of Phases 2 through 7 less the gross square footage of the footprint of any of Phases 2 through 7 that have been terminated (as such gross square footage is calculated based upon the Final Map for each Phase), and the denominator of which will be the gross square footage of all Phases 2 through 7 (calculated based upon the Final Map for each Phase).
7 .2 Offer of Development Opportunity. If City exercises its termination rights as set forth in Section 7 .1, above, City may in its sole discretion offer the development opportunity that was terminated (the "Development Opportunity") to other qualified developers under a request for proposals or other process determined by City in its sole discretion, subject to the following:

7.2.1 The boundaries of the land subject to the Development Opportunity shall be as identified on the conceptual Phasing Plan then in effect. 7 .2.2 Except as expressly provided under Section 7 .2.4 and Section

7.2.5 hereof, City may require that the Development Opportunity conform to the material requirements of this Agreement with respect to the applicable real property or may make such changes to the Development Opportunity as City determines are appropriate under the circumstances.
7 .2.3 If City offers the Development Opportunity to others following termination under Section 7. I, City must do so as pa11 of an open and competitive process and, so long as Master Developer is not in Material Breach, Master Developer shall have the right to participate in the competitive process.

7.2.4 In formulating the Development Opportunity, City will not permit uses that are incompatible with Developer's development rights under any portion of this Agreement that has not been terminated.
28 7.2.5 The acceptance by a Third Party of the Development Opportunity shall be documented by the execution of a Development Opportunity Lease that, among other things, shall require the Third Party to: (i) conform to the requirements of the MCP (as may be amended from time to time); (ii) be obligated to pay its fair share of Annual Landfill Costs to be determined by a formula in which the total Annual Landfill Costs payment is multiplied by a fraction, the numerator of which is the gross square footage of the footprint of the Phase (calculated based upon the Final Map for the Phase) and the denominator of which shall be the gross square feet of the Landfill Parcel as described on Exhibit B-1; (iii) undertake, at its sole cost and expense, the obligations and costs to construct, maintain, repair, and service elements of the Phase that are allocated to the Developer in Article 15 hereof; (iv) comply at its sole costs and expense with all Mitigation Measures attributable to the Phase that are the responsibility of Tenant under the Ground Lease or Developer, including, without limitation, funding and improvement obligations under the Multimodal Improvement Plan in accordance with the Development Agreement; and (v) execute and deliver such documents as are reasonably required in order for (a) such Phase to be subject to the Master CC&Rs and the Landfill Operation and Management Agreement; and (b) such Person to be obligated to provide Master Developer (and any Phase Developer as applicable) with such rights of access as may be reasonably required to fulfill Master Developer's (and any Phase Developer's) remaining obligations under this Agreement, the Landfill Operation and Management Agreement, and any applicable Ground Lease, such as Developer's obligation to construct the Initial Improvements and any Infrastructure and to allow Master Developer or any Phase Developer to access their property prior to Completion and acceptance of public rights-of-way.

7.2.6 Master Developer and any applicable Phase Developers shall execute and deliver any easements, Master CC&R amendments, or other such documents that are reasonably required in order for the Third Party to develop the applicable property in accordance with the terms of the Development Opportunity Lease offered by the City, so long as such development is not incompatible with the development rights of Master Developer and such Phase Developer(s) under this Agreement and any applicable Ground Leases. Neither Master Developer nor any applicable Phase Developers shall object to any amendments to the MCP so long as such amendments are not incompatible with the development rights of Master Developer and such Phase Developer(s) under this Agreement and any applicable Ground Leases. The terms of this Section 7.2.6 shall survive the expiration or earlier termination of this Agreement.

7.2.7 So long as City offers the Development Opportunity under an open and competitive process that is consistent with the terms of this Article 7, Developer shall have no right to challenge, limit or contest City's process or the offering of the Development Opportunity to others as set forth in this Article 7.

7.2.8 Upon any termination under this Article 7: (i) the termination shall be without any cost reimbursement or other obligation to Developer; and (ii) City shall release Developer from all obligations that relate to the tenninated portions of this Agreement, but excluding any Indemnities, Financial Obligations, or other obligations that survive termination.
29 7.2.9 All references to "Master Developer" in this Article 7 shall be deemed to include all Affiliates of Master Developer, if applicable, but shall not include Third Parties.

8. Permits to Enter.

For any Infrastructure to be constructed by Master Developer or a Phase Developer pursuant to the DAP for the applicable Phase that is located on land owned by the City that has not been conveyed to Master Developer or the applicable Phase Developer by Ground Lease or easement, City shall enter into a permit to enter with the applicable Phase Developer, substantially in the form attached hereto as Exhibit J (each, a "Permit to Enter").

The Permit to Enter shall become effective no earlier than the effective date of the applicable Ground Lease, unless such requirement is waived by City in its sole discretion. If there is any disagreement between City and the applicable Phase Developer as to the terms of any such easement or Permit to Enter, such matter shall be submitted to dispute resolution in accordance with the terms of Article 20 hereof.

9. Construction Obligations.

9.1 Timing for Commencement and Completion of Certain Improvements.

9.1.1 Commencement and Prosecution oflnfrastructure. Following the Take Down of a Phase, the applicable Phase Developer shall (i) Commence all Infrastructure for such Phase on or before the applicable Outside Date therefor as set forth in the Schedule of Performance (subject to Excusable Delay), as relevant, and (ii) use commercially reasonable efforts to prosecute such Infrastructure to Completion in accordance with this Article 9 (subject to delays due to Force Majeure). Failure to fulfill either of these requirements with respect to any Phase shall constitute a Material Breach of this Agreement under the terms of Section 21.2.5.

9.1.2 Additional Timing Obligations With Respect to Phases 1, 2, and 3. Master Developer and the applicable Phase Developers have the following additional timing obligations with respect to the City Center Phases:
(a) Approval of Phase Schedules of Performance. No
later than ninety (90) days prior to Commencement of the Improvements for Phase 1, Phase 2, and Phase 3, Master Developer or the applicable Phase Developer shall submit to City for City's reasonable Approval a schedule of performance for that particular Phase (each, a "Phase Schedule of Performance"), in the form of Exhibit F-1 which shall set forth specific Outside Dates for the satisfaction of the Development Obligations set forth in Sections 5.3.2 and 5.3.4 that are applicable to that Phase (including, if necessary, obligations related to the Temporary Station Site Improvements and/or the Final Station Site Improvements). If City objects in writing within thirty (30) days after receiving such revised Phase Schedule of Performance, City shall include a reasonably detailed description of its reasons for objecting, and Master Developer or the applicable Phase Developer shall have the opportunity to revise and re-submit the relevant Phase Schedule of Performance, which shall again be subject to the City Approval process set forth in this Section 9. l .2(a). If City fails to render a decision regarding its Approval of the Phase Schedule of Performance within thirty (30) days, then the revised Schedule of 30 Performance shall be deemed approved upon satisfaction of the further notice procedures set forth in Section 29.33.4 hereof. If Master Developer or the applicable Phase Developer disagrees with the statements or requests made in City's objection letter, Master Developer and/or the applicable Phase Developer shall have the right (but not the obligation) to submit the dispute to arbitration as an Expedited Arbitration Matter in accordance with Article 20 hereof.

Upon mutual Approval of the Phase Schedule of Performance for Phase 1, Phase 2, or Phase 3, the form document attached hereto as Exhibit F-1 shall be replaced with the Approved Phase Schedule of Performance.
(b) Completion of Minimum Initial Buildings and
Minimum Retail Buildings. Following the Take Down of Phase 1, Phase 2, or Phase 3, as applicable, the applicable Phase Developer shall (i) prosecute the Minimum Initial Buildings and Minimum Retail Buildings to Completion on or before the applicable Outside Date in accordance with this Article 9 (subject to delays due to Excusable Delay (if triggered prior to Commencement of Construction) or Force Majeure (if triggered after Commencement of Construction)); and (ii) comply with the requirements of Section 5.3.7 hereof (Best Efforts for Additional Buildings and Additional Retail Buildings) to the extent applicable. (c) Failure to Meet Outside Dates in Phase Schedule of
Performance.
(i) If the Phase Developer foresees that it will not meet one or more Outside Dates set forth in a Phase Schedule of Performance for Completion of the Minimum Initial Buildings and Minimum Retail Buildings, it may request in writing an extension of the applicable Outside Date(s). City shall Approve a reasonable extension of the applicable Outside Date(s) so long as the Phase Developer (a) demonstrates to City's reasonable satisfaction that the Phase Developer is diligently pursuing tenants for and/or construction of the Minimum Initial Buildings and Minimum Retail Buildings in question, and (b) provides to City a revised construction schedule detailing how and when construction of the Development Obligations will be completed. The City Manager may Approve up to a one (1) year extension of the applicable Outside Date(s); any extension (or aggregate of extensions) of the applicable Outside Date(s) by more than one (1) year must be approved by the City Council. For the purposes of this Section 9.l.2(c), the term "diligently pursuing" shall not necessarily mean that each of the relevant Improvements must be under construction, but shall require the Phase Developer to demonstrate to City's reasonable satisfaction that the Phase Developer is making good faith efforts to Commence and Complete such Improvements. (ii) If the Phase Developer fails to meet its obligations under the relevant Phase Schedule of Performance, subject to Excusable Delay or Force Majeure, if applicable pursuant to Section 9. l.2(b)(i), and cannot demonstrate to City's reasonable satisfaction that (a) it is diligently pursuing construction of the Minimum Initial Buildings and Minimum Retail Buildings (as relevant), and/or (b) it is complying with the requirements of Section 5.3.7 hereof (Best Efforts for Additional Buildings and Additional Retail Buildings) to the extent applicable, then such failure shall constitute a Material Breach of this Agreement under the terms of Section 21.2.5.
31 (iii) Any disputes with respect to this Section 9 .1.2( c) shall be submitted as an Expedited Arbitration Matter pursuant to A11icle 20.

9.1.3 Prosecution of All Other Improvements to Completion. To the extent that a Phase Developer Commences construction of any other Improvements within each Phase other than the Initial Improvements, the applicable Phase Developer shall use commercially reasonable efforts to prosecute such Improvements to Completion in accordance with this Article 9.

9.1.4 Construction Covenants under CC&Rs. Without limiting Section 9.1.3, the Master CC&Rs will include a covenant requiring the construction of all buildings to be prosecuted di1igently and continuously, and further requiring the owner of any work of construction that is left in an unfinished state for more than one hundred and twenty (120) consecutive days or a total of one hundred and eighty (I 80) days to take reasonable measures to protect public health and safety, protect the building structure from the elements and screen unsightly elements from view (such as fencing, painting or attractive screens or coverings) (the "Construction Covenant"). The City shall be a named third party beneficiary of the Construction Covenant. The Master CC&Rs shall provide the master association thereunder with a right of entry to enforce the Construction Covenant and a right to impose special assessments to recover any costs expended in connection with the enforcement thereof.

9.2 Compliance with Standards. In Completing the applicable Improvements, (i) the Phase Developer shall comply with all applicable requirements of the Project Documents (including all Exhibits), and (ii) all such Improvements shall be Completed in a good and workman-like manner, without material defects, in accordance with all applicable Authorizations.

9.3 Conditions to Commencement of Improvements. Before a Phase Developer may Commence any Improvements within a Phase, the following conditions precedent shall be satisfied with respect to such Improvements:
9 .3 .1 To the extent not obtained prior to delivery of the Ground Lease, Phase Developer shall have obtained all Authorizations necessary to Commence such Improvements, including City approval of demolition, grading, and. improvement plans in accordance with the applicable tentative map conditions of approval and, to the extent required under the Subdivision Code for any proposed Infrastructure, providing any subdivision improvement bonds required thereunder;

9.3.2 Subject to Section 29.34 hereof (Limitations on Disclosure), Developer shall have provided to City at least ninety (90) days before Commencement of the Improvements, and City shall have Approved, a detailed financing plan (the "Detailed Financing Plan") that conforms to the allocation of financial responsibilities set forth in Article 15 hereof and includes the following information: (a) a proforma only to the City's economic consultant in an industry-standard form as reasonably agreed by the City's economic consultant that includes in reasonable detail sources, uses, and revenue projections for horizontal and vertical improvements within the applicable Phase by product type; (b) a description of the sources of funds that Developer intends to fund with equity along with information on the 32 identity and experience of equity partners and a general description of the deal structure and relationship between the equity partners and Developer; ( c) bona fide commitments for the fmancing of that portion of the budget that Developer intends to borrow; (d) the amount, sources and anticipated timing of funding that Developer intends to fund through public financing vehicles, including but not limited to CFDs, provided, however, that any such public financing shall not involve the City's general fund; (e) a detailed description of the establishment and timing of public funding mechanisms (such as maintenance CFDs or association dues) for the Developer's project development as well as Developer's maintenance responsibilities for public improvements and public services as set forth in Article 15 hereof; and (f) a detailed description of the establishment and timing of privately funded mechanisms (such as association dues) for Developer's obligations for ongoing maintenance of private improvements to be maintained by Developer or the master association in accordance with the standards set forth in the Master CC&Rs, Infrastructure Master Plan, and MCP. Approval by City of the Detailed Financing Plan shall not constitute final agreement by City as to the establishment of any public financing mechanism identified therein that requires City processes and approval, which shall be separately undertaken and subject to City's discretion.

9.3.3 The Phase Developer shall have complied with all provisions within this Agreement (including Exhibits) that pertain to the Improvements in question;

9.3.4 To the extent that such Improvements are to be located outside of the boundaries of the applicable Phase and are not otherwise contemplated within the scope of the rights over City property granted under the applicable Ground Lease and Master CC&Rs, prior to commencing such Improvements, Phase Developer shall have obtained all approvals necessary in order for such Improvements to lawfully encroach on the property located outside of the boundaries of the applicable Phase and shall have entered into a Permit to Enter with City and/or made such arrangements with any other owners of such property as are necessary to Commence and Complete the same;

9.3.5 Prior to Commencement of Construction of the applicable work of Secured Public Improvements, the Phase Developer shall have provided the City with Adequate Security for the Secured Public Improvements in accordance with the requirements of Cal. Government Code Section 66499 et seq. and CSCC Section 17.05.660 and the applicable Public Improvement Agreement (collectively, the "SMA Security Requirements");

9.3.6 Prior to Commencement of Construction of the applicable work of Secured Phase Improvements, the Phase Developer shall have provided the City with Adequate Security for the Secured Phase Improvements in accordance with the requirements of Article 28; and

9.3.7 Phase Developer shall have fully complied with any requirements of the Subdivision Map Act.

9.4 Conditions for Benefit of City. The conditions set forth in Section 9.3 are solely for the benefit of City and may be waived only by City (except that the requirement to comply with the nonwaivable portions of the Subdivision Map Act shall not be waivable).

Provided that Phase Developer has not committed a Material Breach that remains uncured 33 beyond any applicable cure period, City shall take such actions as are reasonably required of City under the MCP and this Agreement to review, consider and grant Developer's request for necessary Approvals to satisfy the above conditions. If any of the conditions are not timely satisfied, they may be waived by the City Manager or City may extend the time for satisfaction of the conditions, as Approved by the City°Manager in his or her sole discretion (except that any requirement to comply with nonwaivable portions of the Subdivision Map Act shall not be waivable). Notwithstanding the foregoing, the scope of City's approval rights with respect to the Detailed Financing Plan shall be limited to adherence to the form of the development and construction budget (such as categories of uses), compliance of the commitment letters with the Agreement requirements and the commercial reasonableness of the proposed financing sources (including debt, equity and public financing) available or reasonably foreseeable at the time of submittal.

9.5 Phase Developer Efforts to Satisfy City Conditions. Except as otherwise set forth in Article 7 hereof (Failure to Meet Phase Outside Dates), provided that City has not committed a Material Breach with respect to the Phase (or Partial Phase) in question that remains uncured beyond any applicable cure period, Phase Developer shall use its diligent and reasonable efforts, and otherwise take such actions as are required under this Agreement to cause the conditions set forth in Section 9.3 to be satisfied in sufficient time to enable Phase Developer to meet the Outside Dates set forth in the Schedule of Performance.

9.6 Effect of Failure of Condition. The Parties expressly acknowledge and agree that a failure of a condition in Section 9.3 for one Phase shall not be deemed the failure of such a condition for any other Phase, nor shall such failure relieve a Phase Developer or City of an obligation that arose before the failure of such condition. The failure of such a condition shall not, in and of itself, be an Event of Default; provided, however, that the failure of Phase Developer to meet any Outside Date set forth in the applicable Schedule of Performance or Phase Schedule of Performance (if any) due to its failure to meet a condition in Section 9.3 shall be governed by the provisions of Section 9.1.1 or Section 9.l.2(c), as relevant. The failure of City to act upon an Application as and when required under the MCP shall not be a Material Breach but shall give rise to an Excusable Delay.

10. Determination of Allowed Square Footage. The form of Ground Lease for Phases 2 through 7 attached hereto as Exhibit G-2 includes the concept of Allowed Square Footage, which shall be determined in accordance with this Article 10. The calculation of Allowed Square Footage in accordance with this Article only applies to Phases 2 through 7 (and specifically excludes Phase 1 and Phase 2A). Accordingly, references in this Article IO to a "Phase" or "Partial Phase" refer only to Phases 2 through 7 (and any Partial Phases thereof) and exclude Phase 1 and Phase 2A.

10.1 Calculation of Allowed Square Footage. Promptly following the later of (i) Completion of all Infrastructure depicted in the approved DAP(s) for all of Phase 3, and (ii) the date that at least fifty percent (50%) of all Buildings depicted within the approved DAP(s) for all of Phase 3 are constructed and open for business, Master Developer shall prepare and deliver to City an analysis of the Building square footage in each Phase that sets forth the maximum total amount of Gross Square Footage for Buildings that can be constructed within each Phase based on the reasonably anticipated maximum amount of square footage for each Phase or Partial 34 Phase, taking into account the total density and mix of uses permitted under the MCP and the economic viability of constructing, leasing and operating the same in light of site constraints, but not based upon market viability (referred to in total as the "Allowed Square Footage"). Based on the foregoing and in such analysis, Master Developer shall propose a table showing the Allowed Square Footage for each Phase (the "Allowed Square Footage Table"), which shall in no event show for Phase 2 less than the square footage for the Minimum Initial Buildings required in Phase 2, and for Phase 2 and Phase 3 together, less than the aggregate Gross Square Footage for the Minimum Retail Buildings minus the gross square footage allocated to Minimum Retail Buildings within Phase 1. Within sixty (60) days after its receipt of the Allowed Square Footage Table, City shall (i) Approve such Allowed Square Footage Table, in which case the Allowed Square Footage for all Phases shall be as set forth in Master Developer's analysis, or (ii) disapprove the Allowed Square Footage Table, in which case City shall within such sixty (60)-day period so notify Master Developer and explain the reasons for its disapproval and its proposal for the Allowed Square Footage Table. If City fails to render a decision regarding its Approval of the Allowed Square Footage Table within sixty (60) days, then the Allowed Square Footage Table shall be deemed approved upon satisfaction of the further notice procedures set forth in Section 29.33 .4 hereof. If City disapproves the Allowed Square Footage Table, Master Developer may submit the matter as an Expedited Arbitration Matter as provided in Article 20, provided, however, that the scope of the Arbiter's review shall be the consistency of the Master Developer's proposed Allowed Square Footage Table with the requirements of this Section 10.1, taking into account the fact that Phases may have future development potential in addition to that shown in the applicable DAP(s). The Allowed Square Footage Table, as finally determined under this Article 10, shall be memorialized in an amendment to the Memorandum of Ground Lease in recordable form signed by both Parties and recorded against title to the applicable Phase. Such amendment ( as revised from time to time pursuant to Section 10.2. below) shall cite this Article 10 and shall be binding upon City and each Phase Developer in respect of the Allowed Square Footage in the Phase in question for purposes of determining Base Rent in the 45th and 70th Lease Years (as such terms are used in the Ground Lease shown in Exhibit G2) under Section 3 of the Ground Leases.

10.2 Partial Phases.

I 0.2.1 Before Memorialization of AHowed Square Footage Table. If any Partial Phases have been incorporated into the Phasing Plan for the Project prior to the date that the Allowed Square Footage Table has been memorialized pursuant to Section 10. l, above, then the Allowed Square Footage Table shall allocate Allowed Square Footages between such Partial Phases.

10.2.2 After Memorialization of Allowed Square Footage Table. If any Partial Phases are incorporated into the Phasing Plan for the Project after the date that the Allowed Square Footage Table has been memorialized, then Developer shall submit to City as part of the Phase Option Notice for such Partial Phase a revised Allowed Square Footage Table, which shall show the Allowed Square Footage as a number to be determined by multiplying the Allowed Square Footage for the overall Phase by a fraction, the numerator of which is the total Allowed Square Footage for Partial Phase and the denominator of which shall be the total Allowed Square Footage for the total Phase (each as determined as of the date such Allowed Square Footage was established pursuant to Section 10.1, above). The revised Allowed Square 35 Footage Table shall be subject to the same review and Approval process as set forth in Section

10.1, above, for the original Allowed Square Footage Table.

11. Issuance of Authorizations.

11.1 Generally. Each Phase Developer must obtain from City or any other . Governmental Authority having jurisdiction over all or a portion of the applicable Phase all permits, approvals, entitlements, agreements, permits to enter, utility services, subdivision maps (including under the City's Subdivision Code), Building Permits or other authorization(s) required under Applicable Law for the work it is required to perform under this Agreement and as may be necessary or desirable to effectuate and implement such work (each, an "Authorization"). Authorizations required for the Project from City shall be consistent with the Applicable Regulations and the Development Agreement. City will reasonably cooperate with Phase Developer on request in obtaining these Authorizations, including executing any such Authorizations to the extent City is required to execute the same as co-applicant or co-permittee, or as otherwise Approved by City Manager, so long as such Authorizations are consistent with this Agreement and all applicable Administrative Fees are paid as and when due. City and each Phase Developer will not agree to the imposition of any conditions or restrictions in connection with obtaining any such Authorization if the same would create any obligations on City's part not otherwise contemplated under this Agreement, without the Approval of City, which may be given or withheld in City's sole discretion.

11.2 Compliance with Laws. Master Developer and each Phase Developer shall be solely responsible for ensuring that the design and construction of the Improvements within the Phase for which it is responsible comply with any and all Applicable Laws and conditions or restrictions imposed by any City agency or other Governmental Authority in connection with any Authorization, whether such conditions are to be performed on the Project Site or require the construction of Improvements or other actions off the Project Site. Any fines, penalties or corrective actions imposed as a result of the failure of Master Developer or a Phase Developer to comply with the terms and conditions of any such Authorization shall be paid or otherwise discharged by the Master Developer or the applicable Phase Developer, and (i) City shall have no liability, monetary or otherwise, for such fines and penalties, and (ii) such fines or penalties shall not constitute Premium Costs. Master Developer or any Phase Developer shall have the right to appeal or contest the applicability of any law or the conditions imposed by any Authorization in any manner permitted by Applicable Law.

11.3 Additional Costs or Fees. Notwithstanding anything to the contrary above, City shall have no obligation to execute any application for any Authorization that would impose costs or fees on City not otherwise permitted by the Project Approvals unless the applicant arranges a reimbursement arrangement Approved by City.

12. Certificates of Completion.

12. l Generally. When a Phase Developer reasonably believes that it has Completed the Infrastructure component approved pursuant to a DAP for a Phase, or a portion thereof, the Phase Developer may request the Engineer to issue an Engineer's Certificate verifying that the specified Infrastructure, or a portion thereof, has been completed. When the 36 applicable Phase Developer reasonably believes that it has Substantially Completed the Required Buildings or the Additional Buildings or a portion of any of the foregoing, the applicable Phase Developer may request the Architect to issue an Architect's Certificate verifying that the specified Required Buildings or Additional Buildings have been Substantially Completed. Upon issuance, such Phase Developer shall deliver to City the Engineer's Certificate or the Architect's Certificate, as applicable. Within thirty (30) days after City's receipt of any such Engineer's Certificate or Architect's Certificate, as applicable, City shall either issue to Phase Developer a Certificate of Completion substantially in the form of Exhibit K for the applicable Initial Improvements or comply with Section 12.5. Upon issuance of a Certificate of Completion for all of the Initial Improvements of a particular Phase (and City's approval or deemed approval of a Best Efforts Report with respect to any Additional Buildings that are not constructed within the Phase), and except as otherwise specified by this Agreement, this Agreement will terminate with respect to such Phase, and the applicable Phase Developer will thereafter use and operate the Phase in accordance with the applicable Ground Lease, except as provided in those provisions of this Agreement that survive termination hereof.

12.2 Effect of Certificate of Completion on Master Developer and the applicable Phase Developer. For purposes of this Agreement, the issuance of a Certificate of Completion shall be a conclusive determination of the Completion of the applicable Initial Improvements in accordance with this Agreement, including without limitation with respect to the obligations to Complete the applicable Initial Improvements in accordance with Section 9 .1 hereof, however, such determination shall not impair City's right to Indemnity under Article 27 or City's right to require correction of any defects in accordance with City's Subdivision Code.

Master Developer or a Phase Developer shall record the Certificate of Completion in the Official Records within forty-five (45) days following receipt thereof.

12.3 Effect of Certificate of Completion on Any Person. Following recordation of the Certificate of Completion, any Person then owning or later purchasing, leasing or otherwise acquiring any interest in the applicable Phase shall not, solely by virtue of such ownership, purchase, lease, or acquisition, or by virtue of such Person's actual or constructive knowledge of the contents of this Agreement, incur any obligation or liability under this Agreement for the Completion of Improvements with respect to which the Certificate of Completion was recorded; provided, that such Person shall be subject to any Agreement to which it is a party, obligations ofrecord and any other applicable Project Approvals. City's issuance of any Certificate of Completion shall not relieve Master Developer, Phase Developer or any other Person from any applicable building, fire or other construction code requirement, conditions to occupancy of any Improvement, or other Applicable Laws.

12.4 City Cooperation Regarding Certain Certificates of Completion. The Parties acknowledge and agree that City will forward all Engineer's Certificates for Public Improvements and the results of any inspection thereof to City's Department of Public Works for its review and potential acceptance of such PubHc Improvements in accordance with City's Subdivision Code and any applicable subdivision improvement agreement entered into by Master Developer or Phase Developer and the City. City shall use commercially reasonable efforts to cause the Department of Public Works to expeditiously review and the City Council to accept such Public Improvements. The Parties acknowledge and agree that City will forward all Architect's Certificates for other Buildings and the results of any inspection thereof to the 37 Building Department for its review in accordance with applicable City Authorizations. City will use commercially reasonable efforts to cause the Building Department to expeditiously review and Approve such other Buildings.

12.5 City Refusal to Issue a Certificate of Completion. If City refuses or fails to issue a Certificate of Completion in a timely manner under Section 12.1, then City shall promptly provide to the applicable Phase Developer a written statement setting forth the basis for such refusal or failure and the reasonable acts or measures that must be taken by the Phase Developer to obtain a Certificate of Completion. Thereafter, upon Completion of such reasonable acts or measures, as certified by the Engineer or the Architect, as applicable, City shall issue the Certificate of Completion to the applicable Phase Developer.

12.6 Use of Public Improvements Before Certificate of Completion. The Parties acknowledge and agree that a Phase Developer shall not be obligated to allow use of any Public Improvements by any Person, including City, any City agencies, any other Governmental Authority or any third parties, before the acceptance of such Public Improvements by City and the issuance of a Certificate of Completion for such Public Improvements by City.

12.7 Acceptance of Public Improvements. Except as may otherwise be specified in the Infrastructure Plan, all Public Improvements will be dedicated as public improvements for their intended purpose to the City by the applicable Phase Developer. Upon the issuance of a Certificate of Completion for any Public Improvements, City will accept the subject Public Improvements offered for dedication in accordance with City's Subdivision Code and any applicable facilities acquisitions agreement or other similar agreement entered into in connection with the formation of a community facilities district or other public financing vehicle.

12.8 Certain Certificates of Completion. City shall have the right to withhold a Certificate of Completion if the following conditions have not been met (as applicable):

12.8.1 For Public Improvements, on receipt of a certificate of completion from the City Engineer with respect to such Public Improvements delivered in accordance with any applicable subdivision improvement agreement; and

12.8.2 For Buildings, a temporary Certificate of Occupancy.

12.9 Arbitration. Any disputes arising under this Article 12 relating to the issuance or non-issuance of Certificates of Completion .shall be subject to the arbitration provisions of Article 20 hereof.

13. Condition of Title.

13.1 Condition of Title.

13. l.l Prior to the Effective Date, Master Developer caused the Title Company to deliver to City and Master Developer a preliminary title report (the "Preliminary Title Report") for the Project Site, together with copies of all documents relating to title exceptions shown in the title reports.
38 13.1.2 Attached as Exhibit L is a copy of the Preliminary Title Report, marked to show those title exceptions to which Master Developer objects (together, the "Disapproved Exceptions") and those title exceptions to which Master Developer has no objection (together, the "Initially Approved Exceptions").

13.1.3 Promptly after the Effective Date, City and Master Developer shall meet and confer in good faith to determine how to address each of the Disapproved Exceptions.
13 .1.4 Within sixty ( 60) days after the Effective Date, City shall give Master Developer written notice (the "City Title Notice") either stating that the City agrees to remove all of the Disapproved Exceptions from title pursuant to the terms of Section 13.2.1, or identifying which of those Disapproved Exceptions City is unwilling or unable after reasonable and good faith efforts to have eliminated from title (as so identified, the "Retained Exceptions"). If City fails to provide the City Title Notice to Master Developer within such sixty (60) day period, then Master Developer may simultaneously submit a request to the City Manager, the Director of Planning, and the City Attorney at the addresses set forth in Exhibit R attached hereto (or such substitute address as may be provided by City from time to time) by delivery in the manner specified in Sections 29.33.l(a) or (hl, which request shall be labelled prominently: "Request for City Title Notice: Deemed Approval Matter." If City fails to respond to the subsequent request within fifteen (15) days following the date when given (as determined under Section 29.33.2(a), then City shall be deemed to have agreed to remove all of the Disapproved Exceptions from title pursuant to the terms of Section 13.2.1.

13.1.5 If City has identified any Retained Exceptions in the City Title Notice, Master Developer shall have fifteen (15) days from receipt of the City Title Notice to notify City in writing that either (1) Master Developer is willing to continue with the Project, subject to the Retained Exceptions, or (2) Master Developer elects to terminate this Agreement and the Development Agreement. Failure of Master Developer to take either one of the actions described in clause (1) or (2) in the previous sentence which failure is not cured within ten (10) days after a second written notice from City shall be deemed to be Master Developer's election to take the action described in clause (1). If Master Developer elects to terminate this Agreement and the Development Agreement, then this Agreement and the Development Agreement shall automatically be deemed to be null and void, and City and Master Developer shall have no further obligations or rights to one another under this Agreement or the Development Agreement.
13 .1.6 lf City does not identify any Retained Exceptions in the City Title Notice to Master Developer, or Master Developer elects to continue with the Project subject to the Retained Exceptions, then the current Exhibit L to this Agreement shall automatically be deemed to be replaced by a new Exhibit L, which shall consist of a copy of the Preliminary Title Report, marked to show that Master Developer has "approved" the Initially Approved Exceptions and the Retained Exceptions, subject to Section 13.5 hereof (Title Clearance).

13. I . 7 The "Permitted Exceptions" are ( i) those exceptions that are marked as "approved" on the replacement Exhibit L pursuant to Section 13.1.6, (ii) exceptions created by or with the written consent of Master Developer, (iii) exceptions for 39 the easements and rights of entry granted to Master Developer and Phase Developers under this Agreement and (iv) exceptions for the Project Documents and any amendments thereto; provided, that there shall be no Permitted Exception for any violation of a Project Document related to the Landfill. Once a Phase Developer has been designated, no further exceptions shall be Permitted Exceptions with respect to such Phase Developer's Phase without the Approval of such Phase Developer.

13.2 City Obligations.

13.2.l Removal of Non-Permitted Exceptions. Except as set forth in Section 13.3, below, City shall be obligated hereunder to convey the leasehold interest in the applicable Airspace Parcel subject only to the Permitted Exceptions and free of all tenants, leases, and occupants. If any exceptions to title to any Phase are not Permitted Exceptions, City sha11 cause the removal of such exceptions prior to execution and delivery of the applicable Ground Lease or otherwise cause the Title Company not to show such exceptions in the Phase Title Policy, and any such delay shall be an event of Excusable Delay applicable to all times for performance by Master Developer or the applicable Phase Developer under this Agreement, including the extension of the Outside Dates for the Take Down of the applicable Phase. City's efforts with respect to the removal of exceptions pursuant to this Section 13.2 shall be at City's sole cost and expense, except as otherwise specified in this Agreement.

13.2.2 Removal of Permitted Exceptions. The Parties acknowledge that the Permitted Exceptions include various easements and agreements in favor of the City and PG&E relating to public streets and various public utilities, including gas, oil, sewer, water and electrical (collectively, the "Street and Utility Easements"), the presence of which could adversely affect or delay the Commencement or the Completion of the Initial Improvements of a particular Phase. However, in the absence of an approved DAP Application and Final Map, the Parties are unable to identify all Permitted Exceptions that might interfere with the development of the Project. Therefore, in connection with each Final Map and DAP Application, the Parties will work cooperatively to identify those Street and Utility Easements that should be abandoned, removed, relocated, amended or otherwise modified to permit the construction of the Initial lmprovements within the Phase (collectively, the "Easement Actions"). To the extent that the Easement Actions will require action by the City, such as a quiet title action or City Council action to abandon, vacate or relocate (temporarily or permanently) the applicable Street and Utility Easement, City shall, at Developer's sole cost and expense, take all such reasonable measures to implement the required Easement Actions.

13.3 New Exception Prohibition. City agrees that it shall not voluntarily permit or cause to be created during the period between the Reference Date and the execution and delivery of the Ground Lease for a Phase any exceptions to title to that Phase other than the Permitted Exceptions (the "City's Title Covenant"). If, during the period between the Reference Date and the execution and delivery of the Ground Lease for any Phase, any new exceptions to title arise for such Phase, then the applicable Phase Developer may object to such new exception by notice to City given within ten (10) Business Days after Phase Developer receives written notice from the Title Company of the new exception. If the applicable Phase Developer fails to object within such period, then the new exception will be deemed to be a Permitted Exception. If the Phase Developer does object, then City may elect in City's sole and 40