LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT...

72

Transcript of LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT...

Page 1: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,
Page 2: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

1

LEASE DISPOSITION AND DEVELOPMENT AGREEMENT

This Lease Disposition and Development Agreement (“Agreement”) is entered into as of

the Effective Date listed on the title page of this Agreement by and between the CITY OF OAKLAND, an independent municipal corporation (“City of Oakland” ( for ease of reference in the body of this Agreement only, “City”), and OMSS, LLC, a California limited liability company (the “Developer”), (each individually referred to as “Party” and collectively referred to as the “Parties”).

For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the City and the Developer agree as follows:

A. In 2003, in order to enable local economic redevelopment and job creation and ease the economic hardship on the local community caused by the base closure per Section 2903 of Title XXIX of Public Law 101-510, the U.S. Department of the Army (“Army”) transferred via No-Cost Economic Development Conveyance (“EDC”) certain real property (the “EDC Property”) located in the City to the Oakland Base Reuse Authority (“OBRA”), a joint powers authority composed of the City and the former Redevelopment City of the City of Oakland (“Agency”) under the California Joint Exercise of Powers Act as set forth in Title 1, Division 7, Chapter 5, Article 1 of the Government Code of the State of California (Government Code § 6470 et seq.) through that certain EDC Memorandum of Agreement between the Army and OBRA dated September 27, 2002 (“EDC MOA”) and by that certain Quitclaim Deed for No-Cost Economic Development Conveyance Parcel (“Army EDC Deed”), recorded August 8, 2003, as Document No. 2003-466370 in the Official Records of Alameda County (“Official Records”). Immediately thereafter, OBRA transferred portions of the EDC Property to the Port of Oakland (“Port”), such that the Port now owns approximately 241 acres of the EDC Property (the “Port Development Area”) and OBRA retained approximately 170 acres of the EDC Property (the “Gateway Development Area”).

B. Pursuant to the Oakland Army Base Title Settlement and Exchange Agreement dated June 30, 2006 by and between the State of California, acting by and through the State Lands Commission (“SLC”), the City, the Port, OBRA and the Agency (“Exchange Agreement”), there was an exchange of public trust lands such that the public trust was terminated on all of the EDC Property then owned by OBRA (see State of California Patent and Trust Termination recorded in the Official Records on August 7, 2006, as Document No. 2006-301853), except on one, approximately 16.7-acre parcel conveyed from the SLC to the Agency by State of California Patent and Trust Termination recorded in the Official Records on August 7, 2006, as Document No. 2006-301850 (“Parcel E”). Parcel E was transferred to the Agency pursuant to the Exchange Agreement.

C. Also in 2006 and 2007, the portions of the EDC Property owned by OBRA that were not subject to the public trust were conveyed by OBRA to the Agency by the following Quitclaim Deeds recorded in the Official Records on September 19, 2006 as Documents

Page 3: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

2

Numbers 2006-354006 and 2006-354007 and on May 17, 2007 as Document Number 2007-190760.

D. On March 3, 2011, the Agency and the City entered into a Purchase and Sale Agreement, approved by City Council Ordinance No. 83254 C.M.S. and Agency Resolution No. 2011-0025 C.M.S. (the “Agency-City PSA”), whereby the Agency agreed to sell and convey, inter alia, the Agency-owned portions of the EDC Property, excepting Parcel E, to the City under its own auspices, and the City agreed to accept assignment of all agreements related to such property (the “EDC Property Agreements”). The EDC Property Agreements include, but are not necessarily limited to, the agreements set forth in Attachments 12A, 12B and 13.

E. On June 29, 2011, the California Legislature passed, and Governor Jerry Brown signed, Assembly Bill 1x26, and on June 27, 2012, the Governor also signed Assembly Bill 1484, which amended Assembly Bill 1x26, which require the dissolution of all redevelopment agencies (collectively, “AB 26”).

F. On January 10, 2012, the City Council passed Resolution No. 83679 C.M.S., electing to serve as the successor to the Agency (“Successor Agency”) pursuant to AB 26.

G. On January 31, 2012, the City closed escrow under the Agency-City PSA and took title to the Agency-owned portions of the EDC Property (excluding Parcel E) pursuant to the grant deed recorded January 31, 2012 as Document No. 2012-30757 in the Official Records and assumed all of the Agency’s rights and obligations under the EDC Property Agreements with respect to such property.

H. The EDC Property is also subject to the terms and conditions of that certain Consent Agreement between the City and the Department of Toxic Substances Control (“DTSC”), dated September 27, 2002, as revised on May 19, 2003 and amended on May 2, 2005 and September 8, 2008 (“Consent Agreement”).

I. To guide redevelopment of the EDC Property, the City adopted the Oakland Army Base Area Redevelopment Plan in 2000, as most recently amended and restated March 21, 2006 per City Ordinance No. 12734 C.M.S., and adopted the Base Reuse Plan in 2002 and amended by City Council Resolution No. 83930 C.M.S. on June 19, 2012, which plans affect and control the development of the EDC Property.

J. In addition, the San Francisco Bay Conservation and Development Commission (“BCDC”) requires the City to maintain 15 acres of the Gateway Development Area for ancillary maritime support (“AMS”) uses. AMS is a category of industry that includes trucking and other uses, such as trade and logistics, and warehousing that support maritime operations. BCDC designated a 15-acre parcel in the East Gateway Area of the Gateway Development Area as a Port Priority Use Area for the purpose of fulfilling the requirement. BCDC consent is necessary to move the designation of the AMS uses to AMS Site (hereinafter defined).

K. On June 22, 2007, the City issued a request for proposals (“RFP”) seeking proposals for a project to be located on the 15-acre parcel in the East Gateway Area. The City’s goals

Page 4: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

3

for the project included: (1) retention and creation of high quality jobs in trucking, logistics, and/or other related sectors; (2) support for the modernization and expansion of the Port of Oakland; and (3) relocation of existing trucking uses out of residential areas to improve the quality of life for West Oakland residents.

L. The City received seven proposals in response to the RFP, including one from the Developer to develop a multi-use AMS facility in the East Gateway Area (the “Developer’s Proposal”). After a review and interview process, the City determined that the Developer’s proposal was the most responsive and would satisfy: (1) BCDC objectives for the Gateway Development Area, and (2) the City’s objectives set forth in Recital K above, and the City selected the Developer to negotiate with regarding the development of the AMS facility.

M. The City and Developer entered into an Exclusive Negotiating Agreement (“ENA”) on November 7, 2007, a first amendment thereto on August 8, 2008, extending the term of the ENA to February 28, 2009, and a second amendment thereto on February 28, 2009 extending the ENA term to the earlier of: (1) February 28, 2011; or (2) the resolution of a lawsuit brought by East Bay Municipal Utility District (EBMUD) against the City regarding the City’s certification of a Supplemental Environmental Impact Report (“SEIR”) and adoption of an Addendum for the former Oakland Army Base, specifically with respect to the use of a 15-inch sewer line (the “CEQA Litigation”). Collectively, the ENA, together with its amendments, shall collectively be referred to as the OMSS ENA.

N. During the OMSS ENA period, City staff and Developer evaluated the design and financial feasibility of a proposed AMS project, which would include tractor and trailer parking, container storage, office space, fueling stations, project-serving retail including a food court, and truck maintenance (the “Initial Project”) on the 15-acre parcel in the East Gateway Area (“East Gateway Parcel”). City staff and Developer arrived at a general agreement on terms for the development of the Initial Project in the East Gateway which City staff intended to present to the City of Oakland City Council for its approval, in its sole and absolute discretion.

O. In 2008, the City issued a request for qualifications to identify potential master development teams for redevelopment of certain portions of the Gateway Development Area, generally consisting of the West Gateway, Central Gateway, and East Gateway exclusive of the 15 acres designated for AMS uses, and selected Prologis, L.P. (“Prologis”) (then named AMB Property, L.P.), and CCIG Oakland Global, LLC (“CCIG”) (successor-in-interest to California Capital Group) to negotiate with regarding development on portions of the Gateway Development Area. Prologis and CCIG are the joint venture members of Prologis CCIG Oakland Global, LLC, the entity that would become the master developer of the above-described property (“Master Developer”).

P. The City and Prologis/CCIG entered into an Exclusive Negotiating Agreement on January 22, 2010, and executed a first amendment thereto on August 10, 2010, a second amendment thereto on April 11, 2011, and a third amendment thereto on May 28, 2012. The City/Prologis/CCIG Exclusive Negotiating Agreement, along with its amendments, shall collectively be referred to herein as the “Master Developer ENA.”

Page 5: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

4

Q. Pursuant to the Master Developer ENA, CCIG agreed to prepare a master plan for the projects under consideration by the City and the Port in the EDC Property, including the development contemplated by the Developer and related public improvements, which resulted in the preparation of that certain Oakland Army Base Master Plan Design Set, dated April 2, 2012, prepared by Architecture Dimensions Master Design Team (“Master Plan”).

R. On March 23, 2009, the Superior Court of California ordered the City to set aside its certification of those portions of the SEIR and Addendum specific to the sewer line, which prevented development of the Gateway Development Area, including development of the project proposed by Developer, and on February 28, 2011, the OMSS ENA expired. However, the Parties continued discussions on a nonexclusive basis for an alternative site that resulted in the negotiation and execution of this Agreement.

S. The Master Plan, among other things, identifies the public infrastructure the City currently intends to undertake for the EDC Property pursuant to the Master Developer LDDA. Such public infrastructure includes the public improvements necessary for development of the Project (hereinafter defined) that are summarized for the purposes of this Agreement in Attachment 3, Scope of Development for the OMSS Public Improvements (“OMSS Public Improvements”).

T. The Master Plan also identifies for AMS uses an approximately seventeen (17)-acre portion of the EDC Property located within the North Gateway and Central Gateway of the Gateway Development Area near the intersection of Maritime Street and West Grand Avenue, as described in Attachment 1 and attached hereto (the “AMS Site”). The notices, use restrictions and restrictive covenants set forth in the EDC Property Agreements also apply to the AMS Site.

U. The City desires to ground lease to Developer the approximately seventeen (17)-acre AMS Site, hereinafter referred to as the “Lease Property” or “Project Site” for the same uses as the Initial Project, but relocated to the Project Site (the “Project”). The Lease Property is being leased for purposes of developing the AMS Site, as defined in the Scope of Development attached as Attachment 4, and operating the Project as provided in the Ground Lease. The Lease Property consists of approximately 15 acres owned in fee by the City and approximately 2 acres (“Easement Area”) to which the City owns easement rights (“Easement Rights”). That portion of the Lease Property that consists of the City’s interests in the Easement Rights is subject to the terms and conditions of: (1) the Quitclaim Deed from the Federal Highway Administration (FHWA) in favor of the State of California, Department of Transportation (CalTrans), dated February 11, 2002, and recorded on February 13, 2002, in Official Records as Document No. 2002-072863 (FHWA Deed), a copy of which is attached hereto as Attachment 20; and (2) the Easement granted by CalTrans to OBRA, dated April 22, 2005, and recorded on April 29, 2005, in Official Records as Document No. 2005-171016 (the “CalTrans Easement”), a copy of which is attached hereto as Attachment 19.

V. City and Developer desire to provide community benefits through this Agreement and have negotiated a plan that commits to, among other things, creating jobs and training

Page 6: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

5

opportunities for the local community. To that end, the plan includes negotiated employment policies and procedures specific to the Project. The policies related to Private Improvements construction and operations jobs create obligations that otherwise would not be applicable through the City’s social justice policies. The other community benefits provided in the plan include funding, implementation of the City’s social justice policies, adoption of environmental and green development measures, and other important community benefits. The community benefits (“Community Benefits”) are as set forth in Article IV.

W. The City has found that the Project will implement the goals and objectives of the Oakland Army Base Area Redevelopment Plan and the Reuse Plan.

X. The City has conducted all required hearings on the Project and has by City Council Resolution No. 83930 C.M.S. adopted on June 19, 2012 fully analyzed all potentially significant environmental effects in compliance with the CEQA and the CEQA Guidelines, as more fully described in the 2002 Oakland Army Base Redevelopment Plan Environmental Impact Report (“EIR”) and the 2012 Oakland Army Base Project Initial Study/Addendum (“EIR Addendum”).

Y. City staff brought the proposed real estate terms of the LDDA and Ground Lease before the City Council, and on December 3, 2013, by way of Ordinance 13201 C.M.S., the City Council authorized staff to negotiate and execute an LDDA and Ground Lease with OMSS in accordance with the terms set forth in the Ordinance. The City Council, by Ordinance No. 13250 C.M.S., amended the terms of Ordinance 13201 to modify certain terms regarding a guaranty and an exclusive right to sell fuel to trucks. The actions contemplated in this Agreement are authorized by City Ordinance No. 13201 C.M.S., and City Ordinance No. 13250 C.M.S. (collectively “Ordinance”).

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and mutual obligations contained in this Agreement, and in reliance on the Developer’s representations and warranties set forth herein, the City and Developer agree as follows:

ARTICLE I

GENERAL

1.1 Effective Date and Term.

1.1.1 Effective Date. This Agreement shall become effective as of the last to occur of the following (the “Effective Date”): (1) the Ordinance is effective, (2) each of the Parties has duly executed and delivered this Agreement to the other Party, (3) the Memorandum of LDDA has been recorded in the Official Records pursuant to Section 1.5. The Effective Date will be inserted by the City on the cover page of this Agreement; provided, however, no failure to do so by the City shall in anyway invalidate this Agreement. The Title Company shall be instructed by the Parties, and in accordance with those instructions shall, (i) insert the Effective Date in the appropriate place in the Memorandum of LDDA and (ii) to record the Memorandum of LDDA in accordance with Section 1.5.

Page 7: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

6

1.1.2 Term. The term of this Agreement (the “Term”) shall be from the Effective Date until the Close of Escrow on the Ground Lease, unless this Agreement is earlier terminated in accordance with its provisions. Upon termination of this Agreement, the Parties agree to promptly execute and record a memorandum of termination in form reasonably acceptable to the Parties.

1.2 Definitions.

Initially capitalized terms used in this Agreement are defined in ARTICLE XIV or have the meanings given them when first defined.

1.3 Relationship of Agreement to the Ground Lease.

This Agreement addresses, among other matters, the delivery of the Property to Developer under the Ground Lease (Attachment 5), the scope of Developer's obligations to design and construct the Private Improvements (Attachment 4) and obtain project approvals hereunder, the Schedule of Performance (Attachment 6) and the Completion Guaranty (Attachment 7) for those obligations, Developer's compliance with specified City programs, the scope of the City’s obligations for the OMSS Public Improvements and any pre-closing environmental remediation, and the financing for construction of the Project by Developer. If the conditions for the Close of Escrow, as set forth in ARTICLE VIII of this Agreement are satisfied, then the City will lease the Lease Property to Developer, and Developer will lease the Lease Property from the City under the Ground Lease.

This Agreement and the Ground Lease establish the rights and obligations of the Parties. The Ground Lease and this Agreement will both govern the rights and obligations of the Parties until the Certificate of Completion has been issued under Section 9.21. In the event of any inconsistency between this Agreement and the Ground Lease before issuance of the Certificate of Completion, this Agreement will control as to issues of development and construction, and the Ground Lease will control as to issues of payment of Rent and the Parties' rights and obligations as landlord and tenant under the Ground Lease. From and after the issuance of the Certificate of Completion, the Ground Lease shall exclusively govern the rights and obligations of the Parties with respect to the Lease Property, except where this Agreement explicitly provides that certain provisions shall survive the termination hereof. If at the time the Certificate of Completion is issued, there exist any Deferred Items, Developer shall be responsible under the Ground Lease for completing such Deferred Items in a timely manner and in accordance with Section 9.21(b) of this Agreement. Within thirty (30) days of the City's determination that Developer has completed the Deferred Items, the City shall provide Developer with written acknowledgment of Developer's compliance with its obligations to complete such Deferred Items.

1.4 Security Deposit.

1.4.1 Amount and Form. Developer’s obligations under this Agreement shall be secured by a FIFTY THOUSAND DOLLARS ($50,000) cash security deposit (the “Security Deposit”), which shall be deposited into an escrow account (“Escrow”) with the Title Company (“Escrow Agent”) as follows: (i) TEN THOUSAND DOLLARS ($10,000) on execution of this Agreement; and (ii) FORTY THOUSAND DOLLARS ($40,000) within thirty (30) days of

Page 8: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

7

Developer’s receipt of the six (6) months’ Notice of Completion referenced in Section 3.4. Concurrently with Developer's payment of any portion of the Security Deposit into Escrow, the Parties shall execute, deliver and cause the Escrow Agent to countersign, the Escrow Agreement containing escrow instructions in substantially the form approved by both Parties. The Parties acknowledge and agree that any unapplied Security Deposit shall be credited against the security deposit required under the Ground Lease.

1.4.2 Disbursement of the Security Deposit Upon Termination/Expiration. If this Agreement terminates or expires prior to the Close of Escrow, the Security Deposit shall be disbursed as follows: (i) if this Agreement is terminated due to Developer’s default hereunder (after application of the applicable notice and cure periods), the provisions of Section 12.2 shall apply; and (ii) in all other events, the Security Deposit shall be returned to Developer.

1.5 Recordation of Memorandum of LDDA.

Concurrently with the execution and delivery of this Agreement, the Parties shall: (a) execute and cause to be notarized the Memorandum of Lease Disposition and Development Agreement in the form attached hereto as Attachment 8 (“Memorandum of LDDA”); and (b) deliver the Memorandum of LDDA to the Title Company for recordation in the Official Records by the City within the time set for on the Schedule of Performance.

ARTICLE II

THIRD PARTY COORDINATION; BILLBOARD EASEMENTS

2.1 Cooperation by the Parties.

The Parties acknowledge that the Project requires a number of discretionary approvals and agreements with non-City governmental entities and other third parties which have a material effect on Project feasibility, the Schedule of Performance, and the implementation of this Agreement. Therefore, the Parties agree to communicate regularly and to cooperate in good faith to implement the Project and this Agreement. The Parties’ obligation to cooperate in good faith shall include, but not be limited to, meeting and conferring as necessary, joint invitations to and attendance at meetings, copies of correspondence, execution of the mutually agreeable forms of the agreements provided in Section 2.2, below, and execution of mutually acceptable applications as owner and applicant where necessary and appropriate to implement the Project and this Agreement.

2.2 Third Parties Agreements, Approvals and Permits.

Page 9: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

8

City shall reasonably cooperate with Developer in its pursuit of third party permits and approvals related to the Project; provided that City shall not be required to expend any out-of-pocket costs except for reasonable amounts of staff time. Developer, at its option, shall have the right to communicate directly with CalTrans or FHWA regarding the City conditions to close escrow under Section 8.3.19, provided that Developer shall keep the City informed about the status of such communications.

2.3 Billboard Access Agreement.

City has previously executed a Billboard Franchise and Lease Agreement between the City and the Master Developer, dated October 23, 2012, and consented to a Billboard Sublease Agreement between the Master Developer and Foster Interstate Media, Inc., dated October 23, 2012 (collectively “Billboard Agreements”), copies of which have been made available to the Developer. The Billboard Agreements allow construction and operation of certain billboard advertising structures on the EDC Property, including one (1) billboard site located outside the boundaries of, but surrounded by, the Lease Property (the “Billboard Site”). The Billboard Agreements also designate “Access Areas” across which the billboard operators will have access to the structures, including an Access Area across the Lease Property for various purposes described in the Billboard Agreements. By no later than the close of escrow, the City will have recorded against the Lease Property an agreement (which may be in the form of an easement agreement or similar agreement) providing access to the Billboard Site for the purposes described in the Billboard Agreements (“Billboard Access Agreement”). Developer shall have the right to approve the Billboard Access Agreement under Section 8.5.12 as a condition to its obligation to close escrow. If the Developer approves or waives its condition regarding the Billboard Access Agreement and the parties proceed to close escrow, the Billboard Access Agreement shall be a Permitted Exception under Section 8.10 hereof.

ARTICLE III

DEVELOPMENT OF THE PUBLIC IMPROVEMENTS

3.1 Scope of the City’s Construction Obligation.

To facilitate the Project, City is required to cause construction of the OMSS Public Improvements as specifically set forth in Attachment 3 “Scope of Development for the OMSS Public Improvements.”

3.2 Funding of OMSS Public Improvements.

Except for its obligations under the SCA/MMRP set forth in Attachments 15A and 15B, any monetary obligations under the Special District, and subject to the terms of Section 7.3.4, below, the Parties agree that Developer shall not be required to contribute any funds for the Completion of the OMSS Public Improvements. Developer’s obligation for “Fair Share” in Attachment 15B shall be a Fair Share Contribution to the cost of standard conditions and/or mitigations. The Developer shall pay its Fair Share Contribution at the earlier of: (i) the date specified in Attachment 15A or 15B, or (ii) if not specified, prior to the issuance of a Certificate

Page 10: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

9

of Occupancy or its equivalent. Developer’s Fair Share Contribution for Transportation-Related standard conditions and/or mitigations shall be based on the following formula

Fair Share Transportation Formula (use am and pm peaks): Project Generated Traffic/[Future Baseline + Project] – Existing = Fair Share %

Illustrative Example: Existing traffic is 200 am peak trips Project generates 100 am peak trips in 2035 2035 traffic w/ project is 400 am peak trips Thus, 100/200 (400-200) = 50% is Project’s Fair Share for am peak trips

Developer’s obligation to pay its Fair Share Contribution shall survive any termination of this Agreement.

3.3 Scheduling.

Within thirty (30) days of the Effective Date, the City shall provide Developer with a schedule for the Completion of the OMSS Public Improvements (“OMSS Public Improvements Schedule”), as set forth in the schedule of performance for the Project (“Schedule of Performance”) attached hereto as Attachment 6. The City can modify the OMSS Public Improvements Schedule reasonably and in good faith to reflect then-current progress and/or delay in delivery of the overall public infrastructure for the EDC Property under the Master Developer LDDA, or delay in the OMSS Public Improvements, including completion of Remediation Obligations per Article VII, below. Consistent with Section 2.1, the City shall provide Developer with periodic updates on the status of the OMSS Public Improvements construction including, at Developer’s request, a reasonable number of periodic meetings to discuss such status. In the event of a significant anticipated delay, the City and Developer shall meet and confer to discuss efforts to minimize the delay to the schedule for delivery of the Lease Property.

3.4 Notices of Completion.

Subject to Article VII, below, the City shall provide the Developer with a written notice of the anticipated Completion of the OMSS Public Improvements (“Notice of Completion of OMSS Public Improvements”) at the following times: (a) least six (6) months prior to Completion, (b) ninety (90) days prior to Completion and (c) thirty (30) days prior to Completion. As used in this Section 3.4, the term “Completion” shall mean that the OMSS Public Improvements have been constructed pursuant to the plans and specifications approved by the City.

3.5 Formation of Special District.

The City intends to form a Special District on the Gateway Development Area, including the Lease Property, that shall be responsible for maintaining, operating, repairing, and replacing that portion of the OMSS Public Improvements to be owned and/or otherwise maintained by the City. Developer acknowledges that: (1) by this Agreement, the City has notified Developer of its intent to create the Special District; (2) by executing the Ground Lease on Close of Escrow, it

Page 11: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

10

will have agreed to pay any special taxes, assessments, or other fees imposed by the Special District on Developer’s interest as Tenant under the Ground Lease (collectively “CFD Assessments”); and (3) the CFD Assessments will be levied on a pro-rata basis based on acreage; provided that the City retains the right to adopt a different basis for any CDF Assessment if Developer significantly changes the Project configuration.

ARTICLE IV

COMMUNITY BENEFITS

4.1 Community Benefits Requirements.

As part of the consideration for the rights received under this Agreement, the Developer hereby agrees to comply with the community benefits requirements as described in this Article IV.

4.2 Construction Jobs Policy.

Developer shall include the Construction Jobs Policy, attached as Attachment 9A, as a material term of all contracts under which Private Improvements (as that term is defined in the Construction Jobs Policy) may occur, and shall itself comply with terms of the Construction Jobs Policy.

4.3 Operations Jobs Policy.

Developer shall ensure that any contract under which an On-Site Job (as defined in the Operations Jobs Policy, attached as Attachment 9B) may be performed includes the Operations Jobs Policy as a material term of the contract in question, and shall itself comply with the Operations Jobs Policy.

4.4 West Oakland Community Fund.

4.4.1 Contribution. On Close of Escrow, the Developer shall pay a contribution of $16,000 per net developable acre to the West Oakland Community Fund.

4.4.2 Additional Funding. Developer shall commit a portion of revenues to the West Oakland Community Fund, on the terms set forth in the Ground Lease

4.5 Resource Center Funding.

Developer shall commit a portion of revenues to the West Oakland Job Resource Center, on the terms set forth in the Ground Lease. 4.6 Environmental.

Page 12: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

11

4.6.1 Developer shall make a good faith effort to show conformance with the applicable sections of the City’s Energy Climate Action Plan, as adopted December 4, 2012.

4.6.2 Developer shall comply with CEQA Standard Conditions of Approval and Mitigation Monitoring and Reporting Program, attached as Attachment 15A. Such measures include those set forth in the City Council Areas of Agreement, including measures to address noise limits, dust control, hazardous materials removal, storm water plan, use of permeable pavers where feasible, use deconstruction rather than demolition where possible, prepare a GHG Reduction Plan and maximize the use of green energy (solar, wind, other) where possible, further water conservation through use of rain barrels and gray water technology where possible, ensure that truck-related construction routes are directed away from residents, provide public or private transit connection for construction workers (connecting to BART and at least two West Oakland locations), and provide public notification of project status (updated at least monthly and posted online and at the West Oakland Public Library). More feasible and/or cost effective measures may be considered by the Parties so long as those measures meet CEQA requirements and do not themselves cause any potentially significant effect on the environment, as determined by the City.

4.7 Equal Benefits Ordinance.

Developer shall comply, and require all employers within the Project to comply, with responsibilities of “Contractors” as described in the City Equal Benefits Ordinance (Council Ordinance No. 12394, 12/18/01), except where such application would be inconsistent with the terms or conditions of a grant or a contract with an agency of the United States or the State of California. 4.8 Award of Service Contracts and Supply Contracts.

When Developer awards a contract for services to be performed on the Project Site, or supplies to be delivered to the Project Site, each in amount of at least $75,000, Developer shall make good faith efforts to award the contract to a Local Business Enterprise, Small Local Business Enterprise, or Very Small Local Business Enterprise, certified as such by the City pursuant to its Local and Small Local Business Enterprise (L/SLBE) Program. For purposes of this section, good faith efforts include:

(1) at least two weeks before award of the contract in question, providing notification of the contracting opportunity, and the procedure for bidding on the contract, to the City’s Contract Compliance office, or other outreach resource as directed by the City;

(2) at least two weeks before award of the contract in question, advertising the opportunity to bid in a local publication designated by the City;

(3) where feasible, breaking down the contract into smaller contracts where doing so would not increase the total cost of the contract by more than 10%; and

(4) promptly providing certified local businesses with complete information about the prospective contract and bidding procedures.

Within five days after the award of any contract covered by this section, Developer shall provide to the City’s Contract Compliance office the following information: the name, address, and

Page 13: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

12

telephone number of the business to whom the contract was awarded, whether that business is a certified local business, and the projected dollar amount of the contract. Requirements of this Section 4.8 shall not apply to award of contracts for which Developer reasonably believes that application of this section will interfere with a pressing business interest related to timing of contract award or safety of goods or persons. 4.9 Implementation Through Relevant Contracts.

Where this Article IV requires the Developer to impose responsibilities on entities that are not parties to this Agreement, Developer shall ensure that relevant contracts: (i) impose such responsibilities on such entities; (ii) require such entities to impose such responsibilities on subcontractors or other parties involved in the Project pursuant to the contract in question; (iii) require all entities with such responsibilities to provide to the City upon request any information necessary to determine compliance with such responsibilities.

ARTICLE V

OAKLAND ARMY BASE ENVIRONMENTAL REVIEW FUNDING

The City, through its predecessor in interest, the City contemplated the redevelopment of a portion of the former OARB, including (inter alia) the City's remediation of Hazardous Materials, development of the public infrastructure, and the construction and operation of projects by the Master Developer, the Developer and other approved uses. The public infrastructure and private developments constitute the “Army Base Project.” To effectuate the Army Base Project, the City Council adopted the 2012 Oakland Army Base Project Initial Study/Addendum, the “Environmental Document”. 5.1 Funding of Environmental Document Preparation Costs.

Upon execution of this Agreement, Developer shall pay its fair share of Environmental Document Preparation Costs that the Parties agree is $21,962.76.

5.2 Future Environmental Review

Subject to Section 5.1 hereof, Developer shall not be responsible for any future CEQA work required by its Project unless supplemental CEQA review is required by law.

ARTICLE VI

ARTICLE VII

ARTICLE VIII INDEMNITY

8.1 Developer Indemnity Regarding City Approvals.

Page 14: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

13

To the maximum extent permitted by law, Developer shall defend (with counsel acceptable to the City), indemnify, and hold harmless the City, the Oakland City Council, the Oakland Planning Commission, the Oakland Redevelopment Successor Agency, and their respective agents, officers, employees and volunteers (hereafter collectively called “City Parties”) from any liability, damages, claim, judgment, loss (direct or indirect) action, causes of action, or proceeding (including legal costs, attorneys’ fees, expert witnesses or consultant fees, City Attorneys or staff time, expenses or costs) (Collectively called “Action”) against the City to attack, set aside, void or annul this Agreement or any City approvals approved concurrently herewith or any subsequent approval or the implementation of the same. The City may elect, in its sole discretion, to participate in the defense of said Action and Developer shall reimburse the City for its reasonable legal costs and attorneys’ fees.

Within ten (10) calendar days of the filing of any Action as specified in the preceding paragraph, Developer shall execute a Joint Defense Letter Agreement with the City, acceptable to the Office of the City Attorney, which memorializes the above obligations. These obligations and the Joint Defense Letter of Agreement shall survive termination, extinguishment, or invalidation of the City approval or any subsequent approval requested by Developer. Failure to timely execute the Letter Agreement does not relieve the Developer of any obligations contained in this Section or other requirements or Conditions of Approval for the Project that may be imposed by the City.

ARTICLE IX

REMEDIATION

9.1 City’s Disclosure.

The City hereby makes the following disclosures to the Developer:

9.1.1 Presence of Hazardous Materials. Hazardous Materials exist in soil and groundwater at, on and under portions of the Lease Property and in buildings currently existing on the Lease Property. The City has provided Developer with a reference index of environmental assessment reports pertaining to the Gateway Development Area, the current version of which is attached as Attachment 10. The City shall continue to make available to the Developer for review and copying complete copies of all listed documents at the City’s document repository of OARB environmental reports located at 250 Frank Ogawa Plaza, 3rd Floor, Dimond Room, Oakland, California. The City shall make access available at all reasonable times through the last day before Close of Escrow. The City shall promptly update Attachment 10 upon written request from Developer. In addition, if the City becomes aware of any material information relating to environmental conditions at, on, under or emanating from the Lease Property, including, without limitation, the presence of Hazardous Materials, the City shall so inform Developer and provide Developer with a copy of such information no later than ten (10) business days following the City’s discovery of the information. The Port may have additional documents pertaining to the Gateway Development Area that are not identified in Attachment 10.

Page 15: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

14

9.1.2 HSC 25359.7 Notice of Release. This Agreement, which has been executed pursuant to a public ordinance, was properly circulated in accordance with applicable Laws and City procedures and does not become effective until at least thirty (30) days after the first reading at a properly noticed meeting of the City Council. This Agreement provides the thirty (30) day written notice that there has been a release of hazardous materials on or beneath the Lease Property pursuant to Health and Safety Code section 25359.7, as required in the Covenant, defined in Section 7.1.3.2, below.

9.1.3 Environmental Remediation Requirements. As noted in Recital A, the EDC Property was transferred to the City through the City’s predecessor in interest, OBRA, from the Army in 2003 pursuant to the EDC MOA. The EDC MOA required the City to complete environmental services (including investigation, remediation and related document preparation activities) for the EDC Property as set forth in the Environmental Services Cooperative Agreement dated May 16, 2003 (“ESCA”). Pursuant to the ESCA, the City, through its predecessor in interest, OBRA, contractually assumed the Army’s remediation responsibilities (except in limited circumstances specifically identified in the ESCA) and agreed to remediate the EDC Property so that the Army could obtain its CERCLA covenant certifying completion of remediation, as required by federal law. In the ESCA, the City committed to complete the environmental response activities set forth in the DTSC Consent Agreement described in Recital H, and the associated Remedial Action Plan (“RAP”) and Risk Management Plan (“RMP”), each dated September 27, 2002, with the RAP amended on July 29, 2004 and December 2006 (collectively, the “RAP/RMP”), in order to achieve regulatory closure. The agreement by the City to assume remediation obligations was endorsed by Governor Gray Davis in the Governor’s August 6, 2003 approval of the Army’s Finding of Suitability for Early Transfer (“FOSET”). To approve the FOSET and meet the terms of the Consent Agreement, the City established a separate account (the “Remediation Fund”), which was jointly established with the Port and set aside eleven million and four hundred thousand ($11,400,000) for the sole purpose of paying for remediation costs on the EDC Property. As of June 30, 2014, the City and the Port have expended approximately $7, 610,000 from the Remediation Fund. Finally, the EDC Property is also subject to the Regional Water Quality Control Board Order No. R2-2004-0086 dated November 5, 2004 (“RWQCB Order”).

9.1.3.1 City/Port ARMOA. Because the City and Port each own portions of the EDC Property, the City and Port contractually allocated responsibility for cleanup of the EDC Property pursuant to the terms of that certain Amended and Restated Memorandum of Agreement dated February 27, 2008 (“City/Port ARMOA”), which agreement requires the City and Port to coordinate on (a) all remediation work plans and schedules under the Consent Agreement and RAP/RMP, and (b) payments to and from the Remediation Fund. The City and the Port are reimbursed from the Remediation Fund on a first-come-first-serve basis for qualified invoices for Remediation.

9.1.3.2 The Consent Agreement, RAP/RMP, RWQCB Order, Covenant and Army EDC Deed. The Consent Agreement, RAP/RMP and RWQCB Order contain controlling environmental requirements and standards for Remediation of Hazardous Materials at the EDC Property and are included as Attachments 11A, B and C, respectively. The Consent Agreement specifically sets forth the scope and schedule of work to be completed to remediate environmental hazards on the EDC Property. The RAP and RMP identify the priority

Page 16: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

15

remediation sites (“RAP Sites”) at the former Oakland Army Base and establish the cleanup goals for the entire EDC Property. The RMP sets forth the risk management protocols and the procedures for addressing environmental conditions at the EDC Property, including the presence and potential presence of Hazardous Materials, as they are identified. The RWQCB Order specifies the cleanup requirements for petroleum impacted soil and groundwater on the EDC Property. The Consent Agreement includes a Covenant to Restrict Use of the Property (“Covenant”), which prohibits certain sensitive land uses, requires notice of a release of Hazardous Materials to future owners or lessees of the land, requires an annual certification be submitted to DTSC attesting to compliance with the Covenant and reserves DTSC’s right of access to the EDC Property. The Army EDC Deed, described in Recital A, also incorporates the Covenant, requires that the City provide written notice to the Army of any noncompliance with the Covenant and requires that the Army be provided with a right of access to the EDC Property for purposes of environmental investigation, remediation or other corrective action, if and to the extent required. For purposes of this Agreement, DTSC, the RWQCB and the Army are collectively referred to as the “Resource Agencies” and the documents identified in this section, together with any other requirements of the applicable Hazardous Materials Laws, are collectively referred to as the “Environmental Remediation Requirements.”

9.1.4 Notice of Restrictions in the Covenant and EDC Deed. The Covenant required by DTSC as part of the Consent Agreement provides that all of the environmental restrictions set forth in the Covenant shall be included in any transfer of the EDC Property or any interest therein. The Covenant is provided in full in Attachment 12A. Further, the Army EDC Deed provides that all of the environmental protection provisions of the Army EDC Deed shall be included either verbatim or by reference into any transfer of the EDC Property or any interest therein. The Army EDC Deed is provided in full in Attachment 12B. Required notices and copies of the Covenant and Army EDC Deed shall also be provided in all relevant agreements flowing from this Agreement, including the Ground Lease and any subsequent subleases. Developer covenants that it will include or reference the Covenant and Army EDC Deed in each of its future leases and/or subleases.

9.2 Pre-Close of Escrow City Responsibility for Environmental Remediation.

With respect to the Lease Property, the City shall be responsible (except to the extent Developer or its contractors or employees cause or contribute to such a condition) for Remediation obligations at the Lease Property as set forth below ("Pre-Closing Remediation Obligations"); except that the City shall not be responsible for Remediation obligations retained by the Army pursuant to the EDC MOA and the ESCA (collectively, “Army Retained Conditions”). All Pre-Closing Remediation Obligations shall be conducted in accordance with the Environmental Remediation Requirements and the coordination procedures and limitations set forth in Section 7.3.

9.2.1 RAP Sites. The City shall be responsible for all Hazardous Materials and Remediation at RAP Sites. The City has completed all required work plans and received Remediation Certification Letters for RAP Sites on the Lease Property.

9.2.2 OMSS Public Improvements. The City shall be responsible for all demolition and Hazardous Materials and Remediation identified during, required by or otherwise associated

Page 17: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

16

with, construction and/or completion of the OMSS Public Improvements, including conditions identified during environmental investigation(s) conducted in advance of or as part of the OMSS Public Improvements and Remediation required during the course of the construction thereof.

9.2.3 Pre-Closing Inspection Items. Developer may, at its discretion, its own cost and in accordance with the requirements and procedures in this section, conduct environmental testing on portions of the Lease Property proposed for Private Improvements subsurface utilities or foundations to confirm the presence or absence of additional conditions that may require Remediation pursuant to the RAP/RMP (“Pre-Closing Environmental Inspection”). Subject to the procedures in Section 7.2.3.7 and limitation in Section 7.3.4, below, the City shall be responsible for all such Hazardous Materials and Remediation found during such Pre-Closing Environmental Inspection.

9.2.3.1 Developer shall perform such work at its own cost and expense pursuant to the Right of Entry attached to this Agreement as Attachment 14 and in accordance with the coordination procedures set forth in Section 7.3, below.

9.2.3.2 Within one hundred and twenty (120) days following the Effective Date, the City shall provide the City's plan for grading the Lease Property, as determined by the City in setting the OMSS Public Improvements Schedule under Section 3.3.

9.2.3.3 Within thirty (30) days following the Parties’ review of the OMSS Public Improvements Schedule and grading plan for the Lease Property, the Parties shall meet and confer in good faith to determine if Developer desires to proceed with the Pre-Closing Environmental Inspection and agree upon a written schedule for such work. The schedule developed pursuant to this section shall be modified as consistent with the modifications to the OMSS Public Improvements Schedule. It is the intent of the Parties that Developer’s Pre-Closing Environmental Inspection relates to the then-current OMSS Public Improvements Schedule, as follows.

9.2.3.4 No less than ninety (90) days prior to the date identified in the then-current OMSS Public Improvements Schedule for commencement of the grading for the Lease Property, Developer shall provide the City with written notice of its intent to perform the Pre-Closing Environmental Inspection along with a work plan that includes the planned scope and schedule for the inspection for the City's approval. The City shall promptly (within 3 business days) send copies of the plan to the Port and shall within five (5) business days after receiving comments from the Port pursuant to the City/Port ARMOA, review and comment on the proposed inspection work plan, which approval shall not be unreasonably conditioned, withheld or delayed. If the City does not conditionally approve or provide comments to the Developer within the foregoing five-day period, the City shall be deemed to have conditionally approved the planned inspection. Once conditionally approved by the City, such work plan shall then be subject to DTSC and/or RWQCB approval, as appropriate, in accordance with the coordination procedures in Section 7.3.

9.2.3.5 In the event that Developer elects to perform an inspection, Developer shall use its best efforts to complete Pre-closing Environmental Inspection, including all sampling activities, within thirty (30) days following the date of the City’s and the Resource

Page 18: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

17

Agencies' approval of the Developer’s work plan. The City shall have the right to attend and observe Developer’s inspection and to take independent samples or obtain split samples, at the City’s discretion and cost, with respect to all sampling performed by Developer. In event that Developer fails to commence the inspection within sixty (60) days following the City’s written approval of the work plan, Developer shall be deemed to have waived its right to conduct such inspection. Once the Lease Property has been inspected or the sixty (60)-day period has passed, Developer shall not have the right to conduct further subsurface inspections on the Lease Property prior to Closing.

9.2.3.6 No later than fifteen (15) days following the date of Developer’s and City’s receipt of the sampling results from the inspection, the City and Developer shall exchange all sampling data relating to the inspection and shall promptly meet and confer to determine whether conditions at and beneath the investigation location exceed the standards in the approved RAP/RMP and require Remediation (or further Remediation) pursuant to the RAP/RMP.

9.2.3.7 In the event that the Pre-Closing Environmental Inspection reveals conditions that require Remediation pursuant to the RAP/RMP, then the City shall obtain the cost estimate to complete such Remediation. The City shall provide copies of the cost estimates and an accounting of the remaining monies in the Remediation Fund to the Developer. If the Parties determine that the Remediation Fund is unlikely to retain sufficient funds for Remediation, the Parties agree to meet and confer within thirty (30) days to attempt to resolve the funding gap. If the parties are unable to agree on a plan to resolve the funding gap the Developer may, within thirty (30) days thereafter, either terminate this Agreement or elect to continue Remediation at its own cost, in accordance with the coordination requirements of Section 7.3 and on the conditions set forth in Section 7.3.4. After this thirty-day period, either Party may terminate. If Developer elects to continue Remediation at its own cost pursuant to the terms of this Section 7.2.3.7, and subject to Section 7.3.4, Developer may select its own remediation contractor to perform the Remediation.

9.3 Pre-Close of Escrow; City and Developer Coordination.

The following requirements shall apply to each of the City’s pre-Close of Escrow obligations set forth in Section 7.2 above:

9.3.1 Coordination. The City shall complete all remaining Pre-Closing Remediation Obligations for the Lease Property pursuant to one or more work plans reviewed and approved by DTSC and/or RWQCB, if applicable under the Environmental Remediation Requirements. In the event any Army Retained Conditions are encountered on the Lease Property prior to Close of Escrow, the City shall work diligently with the Army to obtain closure of any Army Retained Conditions. The Parties intend that the City shall be the lead with the all Resource Agencies for all Pre-Closing Remediation Obligations.

9.3.2 Communications. As soon as reasonably practicable, the City shall provide the Developer with copies of all correspondence (including all electronic correspondence), documents, notices, plans and reports directed to or received from (a) the City, (b) DTSC, (c) the

Page 19: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

18

RWQCB and/or (d) any other Resource Agency, relating to the Remediation of the Lease Property.

9.3.3 Remediation Standard. Remediation shall be completed consistent with the Environmental Remediation Requirements.

9.3.4 City Funding. The City has committed to spend up to the sum of the funds available to the City from the Remediation Fund. The Parties acknowledge that the Remediation Fund may be accessed by the City or the Port for Remediation anywhere on the EDC Property. The Parties further acknowledge that, under the terms of the ARMOA, once all the monies in the Remediation Fund have been spent, neither the City nor the Port is obligated to continue to provide monies to the Remediation Fund. Finally, the Parties acknowledge that the City is not representing or guaranteeing the availability of monies from the Remediation Fund for Pre-Closing Remediation Obligations. In the event that the Remediation Fund is insufficient to fund all of the City’s pre-Close of Escrow obligations as identified in Section 7.2, then, unless otherwise agreed to through Section 7.2.3.7, above, the Developer may elect to fund the remaining costs to remediate the other Pre-Closing Remediation Obligations. As conditions to exercising its option to remediate: (1) City must approve the Developer’s financing (which must be in at least the amount of the estimated costs of completing the remediation) and which must be in the form of: (A) a cash deposit into the Remediation Fund (in a segregated sub-fund to be used only for Developer’s Project; any unused Developer-funded remediation costs shall be returned to Developer after receipt of a Remediation Certification Letter (or its equivalent) from the applicable regulatory authority.), (B) a letter of credit from a major bank or similar financial institution registered to and doing business in the United States, or (C) a guaranty from an entity registered and doing business in the United States with assets of at least the projected full costs of the remediation; and (2) City has the reasonable right to approve Developer’s proposed remediation contractor. If the Developer elects to proceed with remediation under this Section 7.3.4: (1) the Developer’s remediation work plan shall be subject to DTSC and/or RWQCB approval, as appropriate, in accordance with the coordination procedures in Section 7.3; and (2) the City shall remain the lead contact for all communications with DTSC, the RWQCB and/or any other Resource Agency.

9.3.5 If Developer elects not to fund the remaining remediation, either party may elect to terminate this Agreement.

ARTICLE X

DISPOSITION OF THE LEASE PROPERTY THROUGH ESCROW

10.1 Agreement to Ground Lease the Lease Property; Limitation on Cross-Default.

Subject to the terms, covenants and conditions of this Agreement, the City agrees to lease the Lease Property to the Developer for the development of the Project, all in accordance with the terms and conditions set forth in this Agreement. The Close of Escrow shall occur after the satisfaction (or written waiver, where applicable) of the applicable conditions precedent, within

Page 20: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

19

the time periods specified in the Schedule of Performance, and pursuant to the provisions of this Agreement.

Notwithstanding any term or provision set forth in this Agreement to the contrary, Developer’s right to Close Escrow on the Ground Lease shall be cross defaulted, but only as limited below in this Section 8.1, with the Developer’s obligations under the lease between the City, as Landlord, and a related entity to the Developer, Oakland Maritime Support Services, Inc. (“OMSS, Inc.”), as Tenant, dated August 26, 2013, for approximately 5 acres of land located at 2240 Wake Avenue, Oakland, CA (“Existing Lease”). If OMSS, Inc., as Tenant under the Existing Lease, commits an uncured default thereunder, but only as it relates to a failure to pay rent or other monetary obligation, such event shall automatically be deemed a non-curable default under this Agreement with respect to the Close of Escrow on the Ground Lease and, without limiting any other rights or remedies of the City under this Agreement, shall automatically terminate any and all Developer's right to Close Escrow at any time on the Ground Lease. City shall not have any cross-default rights with respect to any alleged or actual non-monetary default under the Existing Lease.

10.2 Developer’s Covenants Prior to Close of Escrow.

(a) Developer shall apply for construction permits and shall deliver to City the Construction Documents for construction of the Project pursuant to the provisions of Section 9.6. Developer shall provide City with evidence of adequate financing for the development of the Lease Property. In this regard, no later than the date specified in the Schedule of Performance for Developer's submission of evidence of financing:

(A) Developer shall submit in form reasonably satisfactory to City for its review and approval a projected budget of total development costs for the Lease Property and the Private Improvements (the “Development Budget”) in accordance with the Final Construction Documents and the Scope of Development. The Development Budget shall include, but not be limited to, line items for all pre-development costs, financing costs, marketing costs, construction costs, all expenses for permits and fees, all architectural and engineering costs, all costs of capital and hard construction costs, furniture, fixture and equipment costs, and costs of all tenant improvements for any tenants of Developer. Within fifteen (15) Business Days after Developer's submission of these documents, City shall notify Developer in writing of the City's reasonable approval or disapproval (including in the case of disapproval the reasons for disapproval) of the evidence of financing, provided that at least thirty (30) days prior to the date of such request for approval, the City shall have received Design Development Documents in sufficient detail to allow the City to obtain a cost estimator's report if the City, in its sole discretion and at its sole cost and expense, determines to obtain such a report.

(B) Developer shall submit in form reasonably satisfactory to City for its approval a statement and appropriate supporting documentation showing sources and uses of funds and sufficient to demonstrate that Developer has or will have adequate funds to complete the Private Improvements in accordance with the Development Budget, and such funds have been spent for uses described in the Development Budget or

Page 21: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

20

are committed and available for that purpose; and further provided that such documentation shall include, without limitation, a pro forma and a current 20-year cash flow schedule.

(b) Developer shall submit in form reasonably satisfactory to City, Developer's formation and organizational documents including a certificate of good standing from the California Secretary of State.

(c) Developer shall apply for and diligently pursue: (1) the issuance of all permits and other required governmental regulatory approvals allowing construction and development of the Project to completion (the “Governmental Approvals”), and (2) the incorporation of all applicable mitigation measures including, without limitation, mitigation measures 4.4-5, as more particularly described on Page 7 of the Standard Conditions of Approval and Mitigation Monitoring and Reporting Program prepared for the EIR Addendum adopted by the City Council on June 19, 2012, dated October 15, 2012, and further revised by the City Council on July 16, 2013, as set forth in Attachment 15A hereto (“SCA/MMRP”). Developer shall be solely responsible for all costs of securing the Governmental Approvals and implementing the applicable SCA/MMRPs allocated to Developer on Attachment 15B (“Developer SCA/MMRPs”). Developer shall diligently take all reasonable steps necessary to obtain all necessary Governmental Approvals to commence construction of the Project not later than the date specified in the Schedule of Performance. Copies of all Governmental Approvals shall be submitted to the City immediately upon receipt by Developer.

(d) Payment and Performance Bonds. The following bonding levels shall be required. Not less than fifteen (15) days prior to the date for commencement of construction of the Private Improvements, as specified in the Schedule of Performance, Developer shall submit to the City for its review and approval:

(A) A performance bond in an amount not less than one hundred percent (100%) of the cost of construction of the Project, as security for the faithful performance of such construction; and

(B) A labor and material payment bond in an amount not less than one hundred percent (100%) of the cost of construction of the Project, as security for payment to persons performing labor and furnishing materials in connection with such construction.

The performance bond and labor and materials payment bonds (together referred to herein as the “Construction Bonds”) shall be issued by a licensed surety (with sufficient strength and rating as determined by the City in its reasonable discretion) shall name the City as co-obligee or assignee, and shall be in a form reasonably satisfactory to the City.

(e) Developer shall enter into a contract or contracts for the construction of the Project with a licensed and reputable general building contractor (“Construction Contract”). Developer shall use best efforts to cause the Construction Contract to provide for the Lease Property to be constructed for a fixed and specified guaranteed maximum amount pursuant to the approved Final Construction Documents. Not later than the date set forth for this

Page 22: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

21

action in the Schedule of Performance, Developer shall submit to the City for its review and reasonable approval: (1) prior to execution, a draft of the proposed final Construction Contract; and (2) prior to or together with the proposed final Construction Contract, a detailed cost breakdown budget for the construction and development, and a construction cash flow (drawdown) projection. The City's review and reasonable approval shall be limited to the following: to determine that (1) the cost of developing the Project has been clearly fixed and determined; (2) no major changes to the development of the Project will be made without prior consent of the City, and (3) all of the terms and conditions required to be included in the Construction Contract by funding sources for the development of the Project have been included. Nothing in this Section 8.2(e) shall exempt Developer from complying with any City reporting requirements regarding contractors or subcontractors working on the Project.

10.3 Conditions to the City’s Obligation to Close of Escrow.

The following shall be conditions precedent to the City’s obligation to lease the Lease Property and Close Escrow for the Ground Lease, and to deliver the Lease Property to the Developer. City’s obligations under this Agreement and Close of Escrow with respect to the Lease Property are subject to the satisfaction (or timely written waiver, where applicable) of the following conditions precedent prior to the expiration of the applicable time period:

10.3.1 No Developer Defaults. Developer shall have performed in all material respects all obligations under this Agreement required to be performed on its part before the Close of Escrow, and there shall not exist any Event of Default or Unmatured Event of Default on the Developer’s part under this Agreement , and all of the Developer’s representations and warranties made in Article XII of this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing Date. At Closing, the Developer shall deliver to the City a certificate to confirm the accuracy of such representations and warranties in all material respects. With respect to the Existing Lease, Developer shall have paid all rent or other monetary obligations required to be paid on its part, and there shall not exist any default or unmatured default on the Developer’s part under the Existing Lease with respect to rent or other monetary obligations.

10.3.2 OMSS Public Improvements. The City shall have Completed the OMSS Public Improvements applicable to the Lease Property pursuant to Section 3.1 as outlined in Attachment 3 and the Schedule of Performance (or the Developer shall have waived its condition precedent regarding the Completion of the OMSS Public Improvements pursuant to Section 8.5.3 with respect to Pre-Closing Remediation Obligations).

10.3.3 Developer Authority. The Developer shall have submitted into Escrow all documents required by Section 8.9.2.2, and such other evidence of authority to enter into this Agreement, the Ground Lease, the Guaranty, and any other documents required to be executed under this Agreement, as the City and the Title Company may reasonably require.

Page 23: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

22

10.3.4 No Litigation; Challenges. Except for the pending case of “From the Roots Up, Inc., et al. vs. City of Oakland, et al. (2013), filed in the Alameda County Superior Court as Case No. RG13704222 (unless a court has issued in that case an order or judgment in favor of the plaintiff), at the time for the Close of Escrow there shall not be any litigation or administrative challenges pending concerning (A) this Agreement, (B) the City’s approval of this Agreement, (C) the Ground Lease, or (D) any Regulatory Approval required for development, construction, use or occupancy of the Project (including the EIR Addendum or any environmental review for such Regulatory Approval) as it relates to the Lease Property.

10.3.5 Remediation of Hazardous Materials. With respect to the Lease Property, the City (or, at its election, the Developer, under Section 7.2.3.7 or 7.3.4) shall, subject to the limitation in Section 7.3.4, have completed all Pre-Closing Remediation Obligations (Section 7.2 matters) with respect to the Lease Property, as evidenced by the City’s receipt of a Remediation Certification Letter (or its equivalent) from DTSC or the RWQCB, as applicable.

10.3.6 Subdivision. The Lease Property shall be a separate legal parcel pursuant to the Subdivision Map Act (neither City nor Developer may waive this condition). Currently the Lease Property is subject to an easement in favor of BNSF (or its successor) railroad company. Before Closing on this transaction, City may elect to carve out that specific parcel which is subject to the easement from the Lease Property. If City so elects, the parties agree to substitute a new legal description for the Lease Property reflecting the carve out; the parties agree to substitute the new legal description for the Lease Property on Attachment 1 and in the Ground Lease

10.3.7 TCIF Funding. If required as a source of financing to complete the OMSS Public Improvements, TCIF grant funds shall have actually been paid to the City.

10.3.8 Insurance Policies. Developer shall have furnished duplicate originals of insurance policies as required by Section 9.20.

10.3.9 Regulatory Approvals. Developer shall have obtained and provided the City with copies of all regulatory approvals required for construction of the Project to commence and to continue without significant interruption, in accordance with the Schedule of Performance.

10.3.10 Schedule of Performance. Developer has met all the requirements of the Schedule of Performance for which Developer is responsible, as amended from time to time pursuant to Section 13.1.2, including, but not limited to, obtaining City’s approval of the Construction Documents.

10.3.11 Guaranty. The Guarantor approved by the City pursuant to Section 8.8.1.2 has executed and delivered to the City the Guaranty attached hereto as Attachment 7.

10.3.12 Bonds. Developer has provided evidence that it has obtained the Construction Bonds referred to in Section 8.2(d).

10.3.13 Taxes. Developer must have a current and in-good-standing City business license, and must be current in its business and parking tax obligations to the City.

Page 24: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

23

10.3.14 Existing Lease Termination. OMSS shall have caused Oakland Maritime Support Services, Inc., to execute the Lease Termination Agreement in the form attached hereto as Attachment 21, terminating the Existing Lease and releasing any and all claims against the City with respect to the Existing Lease.

10.3.15 Funding Agreements. The City and the Master Developer shall have resolved to the City’s satisfaction any issues regarding potential funding shortfalls for the development of the OMSS Public Improvements, pursuant to the Master Developer LDDA, including Section 2.3 thereof.

10.3.16 BCDC Approval. The City shall have obtained BCDC’s approval to relocate the AMS Site from the East Gateway to the Project Site.

10.3.17 Construction Contract. The City shall have approved the Construction Contract under Section 8.2(e).

10.3.18 Billboard Easement. The Billboard Access Agreement shall have been executed and recorded, as described in Section 2.3.

10.3.19 Consents of CalTrans and FHWA. The City has obtained the written consents to the construction of the Public and Private Improvements, the Ground Lease, and any other required consent to the Project from: (1) CalTrans under the CalTrans Easement; and (2) FHWA under the FHWA Deed.

10.3.20 Developer Conditions re Remediation Costs. If Developer elects to fund remediation costs under Section 7.3.4, Developer shall have satisfied all the conditions to its election to proceed thereunder.

10.4 Satisfaction of the City’s Conditions.

The conditions precedent set forth in Section 8.3 above are intended solely for the benefit of the City. Subject to Force Majeure, if any such condition precedent is not satisfied on or before the required date specified therefor in this Agreement or in the Schedule of Performance:

10.4.1 The City shall have the right in its sole discretion either to waive in writing the condition precedent in question (except with respect to the condition set forth related to Subdivision) and proceed with the Close of Escrow with respect to the Lease Property or, in the alternative, to terminate this Agreement with respect to the Lease Property by written notice to the Developer. In addition, the date for the Close of Escrow may be extended, at the City’s option for a reasonable period of time, not to exceed thirty (30) days, specified by the City in a written notice to the Developer to allow such conditions precedent to be satisfied, subject to the City’s further right to terminate this Agreement upon the expiration of the period of any such extension if all such conditions precedent have not been satisfied within such extended period. If the failure of a condition precedent is caused by Developer’s default, the provisions of Section 12.1(b) shall apply. In all other events, the Security Deposit shall be returned to Developer and, except as expressly set forth herein, neither Party shall have any further rights or obligations under this Agreement.

Page 25: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

24

10.4.2 If the City elects to waive the satisfaction of any particular matter set forth in Section 8.3 as a condition precedent to its obligation to Close Escrow, such waiver shall not be a complete waiver of the matter except as it relates to the City’s consent to the Close of Escrow for the Lease Property.

10.5 Conditions to the Developer’s Obligation to Close Escrow.

Developer’s obligations under this Agreement and Close of Escrow with respect to the Lease Property are subject to the satisfaction (or timely written waiver, where applicable) of the following conditions precedent prior to the expiration of the applicable time period:

10.5.1 Third Party Approvals. The City shall have obtained the written consents to the construction of the Public and Private Improvements, the Ground Lease, and any other required consent to the Project from: (1) CalTrans under the CalTrans Easement; and (2) FHWA under the FHWA Deed.

10.5.2 Existing Leases. Subject to Section 15.1(c), the City shall have terminated all leases, license agreements or other agreements permitting a third party to occupy the Lease Property, and the tenants thereunder shall have vacated the Lease Property.

10.5.3 OMSS Public Improvements. The City shall have Completed the OMSS Public Improvements pursuant to the Schedule of Performance (or the Developer shall have waived its condition precedent regarding the Completion of the OMSS Public Improvements with respect to Pre-Closing Remediation Obligations pursuant to Section 8.5.3).

10.5.4 Title Insurance. The Title Company shall be irrevocably committed (upon payment of the applicable premium) to issue the Title Policy for the Lease Property pursuant to the provisions of Section 8.10.

10.5.5 Remediation of Hazardous Materials. The City shall have completed all Pre-Closing Remediation Obligations (Section 7.2 matters) with respect to the Lease Property, as evidenced by the City’s receipt of a Remediation Certification Letter (or its equivalent) from DTSC or the RWQCB, as applicable, subject to the limitations of Section 7.2.3.7 and Section 7.3.4.

10.5.6 No Litigation; Challenges. Except for the pending case of “From the Roots Up, Inc., et al. vs. City of Oakland, et al. (2013), filed in the Alameda County Superior Court as Case No. RG13704222 (unless a court has issued in that case an order or judgment in favor of the plaintiff), at the time for the Close of Escrow there shall not be any litigation or administrative challenges pending concerning (A) this Agreement, (B) the City’s approval of this Agreement, (C) the Ground Lease, or (D) any Regulatory Approval required for development, construction, use or occupancy of the Project (including the EIR Addendum or any environmental review for such Regulatory Approval) as it relates to the Lease Property.

10.5.7 No Moratorium. No governmental or quasi-governmental City or authority, including, without limitation, the City of Oakland, shall have imposed a moratorium on the issuance of building permits or certificates of occupancy, and no utility serving the Lease Property shall have issued a moratorium on the provision of services.

Page 26: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

25

10.5.8 Subdivision. Subject to revision regarding the BNSF easement described in Section 8.3.6, the Lease Property shall have been created as a separate legal parcel pursuant to the provisions of the Subdivision Map Act. This condition may not be waived.

10.5.9 City Representations and Warranties. All representations and warranties of the City contained in this Agreement shall be true and correct in all material respects on the Effective Date and at all times through the Close of Escrow with the same effect as though such representations and warranties were made at and as of the Close of Escrow.

10.5.10 City Covenants. The City shall have performed and satisfied all material agreements and covenants required hereby to be performed by the City prior to Close of Escrow.

10.5.11 City Authority. The City shall have submitted into Escrow all documents required by Section 8.9.2.1 as the Developer and the Title Company may reasonably require.

8.5.12 Developer approval of Billboard Access Agreement. Developer shall have approved the form of Billboard Access Agreement. 10.6 Satisfaction of Developer’s Conditions; Concurrent Closing Obligation.

The conditions precedent set forth in Section 8.5 above are intended solely for the benefit of Developer. Subject to Force Majeure, if any such condition precedent is not satisfied on or before the required completion date specified therefor in this Agreement or in the Schedule of Performance:

10.6.1 Developer shall have the right in its sole discretion either to waive in writing the condition precedent in question and proceed with the Close of Escrow with respect to the Lease Property (except with respect to the condition set forth in Section 8.3.6 (Subdivision)) or, in the alternative, to terminate this Agreement with respect to the Lease Property by written notice to the City. If the Developer elects to terminate this Agreement under this Section and is not otherwise in default, the Security Deposit shall be returned to Developer and except as expressly set forth herein, neither Party shall have any further rights or obligations under this Agreement.

10.6.2 If the Developer elects to waive the satisfaction of any particular matter set forth in Section 8.5 as a condition precedent to its obligation to Close Escrow, such waiver shall not be a complete waiver of the matter except as it relates to the Developer’s consent to the Close of Escrow for the Lease Property.

10.6.3 Notwithstanding any term or provision set forth in this Agreement to the contrary, in the event that the conditions precedent to Developer’s obligation to Close Escrow on the Ground Lease have been satisfied or, where applicable, waived by Developer in writing prior to the Close of Escrow, Developer shall Close Escrow on the Ground Lease. Developer’s failure to satisfy the obligation set forth in the immediately preceding sentence shall be deemed (after the expiration of any applicable cure periods) a default of this Agreement.

10.7 Closing Dates.

Page 27: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

26

10.7.1 Closing Date. The Close of Escrow for the Lease Property shall occur within three (3) months after the later to occur of: (a) the date the conditions precedent to the Developer’s obligations to Close Escrow on the Lease Property have been satisfied or, where applicable, waived in writing by Developer; and (b) the date that Developer receives written notice from the City that all of the applicable conditions precedent to such Closing shall have been satisfied (or, when applicable, waived in writing by the applicable Party)(the “Closing Date”).

10.7.2 Outside Closing Date. The Parties desire to establish an outside date by which all of the conditions precedent to the Parties’ obligations to effectuate the Close of Escrow shall have been satisfied or (where applicable) waived and the Close of Escrow of the Lease Property shall have occurred (the “Outside Closing Date”). The Parties shall establish such Outside Closing Date concurrent with the approval of the OMSS Public Improvements Schedule pursuant to Section 3.4 such that it occurs on the date for the Completion of the OMSS Public Improvements plus some reasonable amount of time to allow for unexpected delays, not to exceed six (6) months. The Parties shall memorialize the agreed upon Outside Closing Date pursuant to a written amendment to this Agreement, which amendment shall be deemed minor pursuant to Section 13.11. Notwithstanding the allowance for unexpected delays, to the extent that the Outside Closing Date relies on the performance of third parties that may delay the OMSS Public Improvements Schedule: (1) the Parties shall meet and confer to discuss strategies to minimize delay caused by third parties; and (2) the Schedule of Performance shall be extended by an equal number of days as the aforementioned delay and the Outside Closing Date shall be extended accordingly, but in any event no more than six (6) additional months. In the event that all applicable conditions precedent to the Close of Escrow have not been satisfied (or, when applicable, waived in writing) prior to the Outside Closing Date (as may be amended), this Agreement shall terminate, and thereafter, except as expressly set forth herein, neither Party shall have any further obligations under this Agreement. Further, provided that Developer is not in default as of the date of such termination, the Security Deposit shall be returned to the Developer.

10.8 Escrow.

10.8.1 Opening of Escrow; Confirmation of Guarantor for Ground Lease. Within five (5) Business Days after Developer's receipt of the applicable ninety (90) day Notice of Completion of the OMSS Public Improvements pursuant to Section 3.4:

10.8.1.1 Escrow. Developer shall open an escrow for the conveyance of the Lease Property through the Ground Lease (“Escrow”) with the local office of such title company as the Developer may select and the City may find reasonably satisfactory (“Title Company”).

10.8.1.2 Guarantor. Developer shall provide to the City, a written request (“Guarantor Request”) for approval of one or more entity(ies) identified therein, that may include but are not limited to Oakland Maritime Support Services, Inc., that Developer proposes to provide the Completion Guaranty (the “Proposed Guarantor”). The Guarantor Request shall (a) identify the Proposed Guarantor, (b) shall confirm such entity is registered and qualified to transact business in California, and provides a good standing certificate and appropriate

Page 28: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

27

resolution or other evidence that it has authority to execute the Completion Guaranty, and (c) include reasonable and customary written evidence from one or more bona fide financial institutions registered and qualified to do business in the United States, substantiating that the Proposed Guarantor has on hand at least 35% of the Development Budget in cash or cash equivalent assets (the “Guarantor Approved Cash Level”) encumbered in an equity account. If the Proposed Guarantor is Oakland Maritime Support Services, Inc., the City’s approval shall be limited to complying with subsections (b) and (c) above. The City shall not unreasonably withhold, delay or condition its approval of any Proposed Guarantor that satisfies the foregoing conditions. The City shall provide Developer with written notice of the City’s approval or disapproval of the Proposed Guarantor(s) within fifteen (15) calendar days after receipt of the Guarantor Request. Any disapproval by the City shall state with specificity the basis for such disapproval. In the event of a disapproval, Developer shall have the right to submit a supplement to the Guarantor Request, or a new Guarantor Request, responding to the City’s basis for disapproval.

10.8.1.3 Joint Escrow Instructions. No later than ten (10) days prior to the Close of Escrow, the Parties shall prepare joint escrow instructions as necessary and consistent with this Agreement, and deliver such escrow instructions to the Title Company.

10.9 Close of Escrow.

10.9.1 Close of Escrow. As used herein, the terms “Close of Escrow” or “Close Escrow” mean the date on which all of the following shall have occurred: (a) the execution and delivery of the Ground Lease by both Parties; (b) the City’s delivery of possession of the Lease Property to Developer; (c) the issuance of the Title Policy; and (d) the recordation of the Memorandum of Ground Lease in the Official Records. With respect to the Lease Property, provided that the conditions precedent set forth in Section 8.3 and Section 8.5 have been satisfied or expressly waived (as permitted) by the benefitted Party in accordance with this Agreement, the City and the Developer shall instruct the Title Company to complete the Close of Escrow, as set forth below.

10.9.2 Steps to Close Escrow. The Close of Escrow for the Lease Property shall be completed as follows:

10.9.2.1 On or before the Close of Escrow, the City shall execute and acknowledge, as necessary, and deposit into Escrow with the Title Company the following: (1) two counterpart originals of the applicable Ground Lease; (2) one original counterpart Memorandum of Ground Lease in recordable form, (3) a copy of any ordinance of the City authorizing the execution and delivery of the Ground Lease and any other evidence of authority as the Developer or the Title Company may reasonably require; (4) a certificate, duly executed by the City, confirming that all of the City’s representations and warranties set forth in Section 11.2 are true and correct in all material respects as of the Closing Date; (5) the City’s executed and acknowledged counterpart of such instrument necessary to remove the Memorandum of LDDA from title to the Ground Lease; and (6) all costs of Escrow to be paid by the City per Section 8.9.3.

Page 29: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

28

10.9.2.2 On or before the Close of Escrow, the Developer shall execute and acknowledge, as necessary, and deposit into Escrow with the Title Company the following: (1) two counterpart originals of the Ground Lease and one original counterpart Memorandum of Ground Lease in recordable form; (2) a certificate, duly executed by Developer, confirming that all of Developer’s representations and warranties set forth in Section 11.1 are true and correct in all material respects as of the Closing Date; (3) such resolutions of the Developer and its constituent members authorizing the execution and delivery of the Ground Lease and any other evidence of authority as the City or the Title Company may reasonably require; (4) the insurance certificates required under this Agreement or the Ground Lease; (5) the Security Deposit required under the Ground Lease; (6) the West Oakland Community Fund payment required under Section 4.4; (7) Developer’s executed and acknowledged counterpart of such instrument necessary to remove the Memorandum of LDDA from title to the Ground Lease; (8) the Guaranty attached hereto as Attachment 7, and any guarantee as required under the Ground Lease, along with any evidence of authority as the City may reasonably require; (9) the Environmental Document Preparation Costs payable by Developer under Section 5.1; (10) the cost of the Title Policy; and (11) all costs of Escrow to be paid by Developer per Section 8.9.3.

10.9.2.3 The City and the Developer shall instruct the Title Company to consummate the Escrow as provided in this Article VIII. Upon the Close of Escrow, the Memorandum of Ground Lease shall be recorded.

10.9.2.4 The Title Company shall issue the Title Policy to the Developer.

10.9.2.5 The Title Company shall deliver to each Party the counterpart copies of each agreement referred to in this Section 8.9.2 signed by the other Party, and any other documents held for the account of such Party. The Title Company shall disburse to the City the Security Deposit with any interest accrued thereon.

10.9.3 Costs of Escrow. Subject to Section 8.11.1, the Parties shall pay all costs related to the Close of Escrow including, but not limited to escrow fees, recording fees, and transfer taxes, if any, per the custom and practice in the County of Alameda.

10.9.4 Waiver of Pre-Delivery Conditions. Unless the Parties otherwise expressly agree in writing at the time of delivery of the Lease Property, all pre-delivery conditions of the Parties shall, upon delivery of the Lease Property, be deemed waived by the Party benefited by such condition.

10.10 Condition of Title to the Lease Property.

10.10.1 Permitted Title Exceptions. The Lease Property shall be delivered to Developer through the Close of Escrow subject only to the following matters (the “Permitted Title Exceptions”):

10.10.1.1 Non delinquent taxes and assessments, a lien not yet due and payable;

10.10.1.2 The applicable exceptions identified on Attachment 16 as “Approved Exceptions;”

Page 30: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

29

10.10.1.3 Any new exceptions (A) required by the express terms of this Agreement, or (B) caused by the actions of Developer or any of its agents, employees, affiliates, representatives, contractors, subcontractors or consultants;

10.10.1.4 The standard printed exceptions set forth on a CLTA standard owner’s policy of title insurance (or on an ALTA extended owner’s policy of title insurance, if obtained by Developer); and

10.10.1.5 The Billboard Access Agreement

10.10.2 Title Defect. If at the time scheduled for Close of Escrow any (i) possession by others, (ii) rights of possession other than those of the Developer, or (iii) lien, encumbrance, covenant, assessment, agreement, easement, lease or other matter which is not a Permitted Title Exception encumbers the Lease Property (“Title Defect”), the City will have up to thirty (30) days after the date scheduled for Close of Escrow to remove all such Title Defects. The Close of Escrow shall be extended to the date that is seven (7) Business Days after the earlier to occur of the date all such Title Defects are removed or the expiration of the thirty (30) day period (“Extended Closing Date”). If the Title Defect can be removed by bonding or the payment of a liquidated sum of money and the City has not so bonded or made such payment within the thirty (30) day period, Developer shall have the right but not the obligation to cause a bond to be issued. The City shall not intentionally alter the condition of title to the Lease Property existing as of the date of this Agreement except for the documents and transactions expressly contemplated hereunder.

10.10.3 The Developer’s Remedies with Respect to Uncured Title Defects. If at the date specified as the Extended Closing Date, unless the Parties mutually agree in writing to extend such date, a Title Defect still exists, the Developer may by written notice to the City either (i) terminate this Agreement or (ii) Close Escrow on the Lease Property; provided, however, that if the Title Defect is the result of a breach of City’s covenant under the last sentence of Section 8.10.2 hereof, Developer may seek specific performance. If the Developer elects to Close Escrow, the Title Defect will be deemed waived. If the Developer does not elect to Close Escrow and fails to terminate this Agreement within seven (7) days after the date specified for the Extended Close of Escrow, or any extension provided above, the City may terminate this Agreement upon three (3) Business Days written notice to the Developer. If the Agreement is terminated under this Section 8.10.3, the Security Deposit shall be returned to Developer and the Parties shall thereafter have not further rights or obligations under this Agreement.

10.11 Title Policy.

10.11.1 Title Policy to be Issued at the Close of Escrow. The joint escrow instructions will provide that concurrently with Close of Escrow for the Lease Property, the Title Company will issue and deliver to the Developer, a C.L.T.A. or A.L.T.A. extended coverage leasehold owner’s title insurance policy for the Lease Property, with such coinsurance or reinsurance as the Developer may reasonably request, in an amount designated by the Developer, insuring that the leasehold estate in the Lease Property is vested in the Developer subject only to the Permitted

Page 31: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

30

Title Exceptions, and with such endorsements as may be reasonably requested by the Developer, all at the sole cost and expense of the Developer (“Title Policy”); and

10.11.2 Surveys. The City shall make available to the Developer all surveys and engineering studies prepared for the subdivision of the Gateway Development Area and pertaining to the Lease Property. Developer shall be responsible for securing any and all additional surveys and engineering studies for the Lease Property at its sole cost and expense, as needed for the Title Policy required under this Agreement or as otherwise required to consummate the transactions contemplated by this Agreement. The Developer shall promptly provide the City with complete and accurate copies of all such final surveys and engineering studies.

10.12 Taxes and Assessments.

Developer understands that this Agreement or the Ground Lease may constitute a possessory interest and that interest may be subject to property taxation. If for any reason imposed, ad valorem taxes and assessments levied, assessed or imposed as a result of the execution of this Agreement or the Ground Lease, including but not limited to, possessory interest taxes, shall be the sole responsibility of the Developer.

10.13 Lease Property As Is Risk of Loss.

10.13.1 Acceptance of Lease Property in “As Is With All Faults” Condition; Risk of Loss. With the exception of the City’s obligation to construct the OMSS Public Improvements, including the Pre-Closing Remediation Obligations under Section 7.2, as limited by Section 7.3.4, and the Permitted Title Exceptions, the Developer agrees to accept the Lease Property in its “As-Is With All Faults” condition existing on the date of Close of Escrow (“As-Is With All Faults Condition”); provided that there is no material change in the physical condition of the Lease Property caused by an event outside the control of the Developer or its agents between the Effective Date of this Agreement and the date of Close of Escrow that would materially adversely interfere with the development, construction, use or occupancy of the Project for its intended uses ("Material Change"), in which event the Developer shall be entitled to terminate this Agreement, by written notice to City (which right may be exercised, at the Developer's sole discretion, with respect to the Lease Property, but such right to terminate shall only apply to the extent the Lease Property is affected by such Material Change; and provided further that the City will not under any circumstances be liable to the Developer for any monetary damages related to a Material Change. The Developer's sole remedy shall be limited to termination as set forth in this Section 8.13.1 and the return of the Security Deposit pursuant to Section 1.4.2. The Developer acknowledges that it has been afforded a full opportunity to inspect all of the public records of the City and the Lease Property relating to the Developer’s proposed use of the Lease Property, including As-Built Drawings of the Completed OMSS Public Improvements. The City makes no representations or warranties as to the accuracy or completeness of any matters in such records. The Developer shall perform a diligent and thorough inspection and investigation of the Lease Property, either independently or through its experts, including, but not limited to the quality and nature, adequacy and physical condition of the Lease Property, geotechnical and environmental condition of the Lease Property including, without limitation, presence of lead, asbestos, other Hazardous Materials, any groundwater contamination, soils, the suitability of the

Page 32: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

31

OMSS Public Improvements for the Project, zoning, land use regulations, historic preservation laws, and other Laws governing the use of or construction on the Lease Property, and all other matters of material significance affecting the Lease Property and its development, use, operation, and enjoyment under this Agreement or the Ground Lease.

10.13.2 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR THE CITY’S EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN THE GROUND LEASE, THE DEVELOPER AGREES THAT THE LEASE PROPERTY IS BEING DELIVERED BY THE CITY AND ACCEPTED BY THE DEVELOPER IN ITS AS-IS WITH ALL FAULTS CONDITION AS DEFINED IN SECTION 8.13.1. THE DEVELOPER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT NEITHER THE CITY, NOR ANY EMPLOYEE, OFFICER, COMMISSIONER, REPRESENTATIVE, OR OTHER AGENT OF THE CITY HAS MADE, AND THERE IS HEREBY DISCLAIMED, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND, WITH RESPECT TO THE CONDITION OF THE LEASE PROPERTY, THE SUITABILITY OR FITNESS OF THE LEASE PROPERTY OR APPURTENANCES TO THE LEASE PROPERTY FOR THE DEVELOPMENT, USE, OR OPERATION OF THE PROJECT, ANY COMPLIANCE WITH LAWS OR APPLICABLE LAND USE OR ZONING REGULATIONS, ANY MATTER AFFECTING THE USE, VALUE, OCCUPANCY OR ENJOYMENT OF THE LEASE PROPERTY, OR ANY OTHER MATTER WHATSOEVER PERTAINING TO THE LEASE PROPERTY OR THE PROJECT.

Developer Initials: _______________

10.14 Release Concerning the Physical Condition of the Lease Property.

Except for the City’s express representations, warranties and covenants set forth in the Ground Lease with respect to the physical condition of the Lease Property, as part of its agreement to accept the Lease Property in its As-Is With All Faults Condition as defined in Section 8.13.1, the Developer on behalf of itself and its successors and assigns, shall be deemed to waive any right to recover from, and forever release, acquit and discharge the City, and its employees, officers, commissioners, representatives, or other agents of and from any and all Losses, whether direct or indirect, known or unknown, foreseen or unforeseen, that the Developer may now have or that may arise of or in any way be connected with (i) the physical, geotechnical or environmental condition of the Lease Property, including, without limitation, any Hazardous Materials in, on, under, the Lease Property (including, but not limited to, soils and groundwater conditions), and (ii) any Laws applicable to such conditions (including, without limitation, Hazardous Materials Laws), but excluding any claims, demands, or causes of action Developer may now or hereafter have against third party claims related to the condition of the Lease Property or any Laws applicable thereto that arose during or relate to the period prior to the Close of Escrow.

In connection with the foregoing release, the Developer acknowledges that it is familiar with Section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE

Page 33: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

32

TIME OF EXECUTING THE RELEASE WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

Developer Initials: _______________

By initialing above, the Developer expressly agrees that the release contemplated by this Section includes unknown claims. Accordingly, the Developer hereby waives the benefits of Civil Code § 1542, and benefits under any other statute or common-law principle of similar effect, in connection with the releases contained in this Section. Notwithstanding anything to the contrary in this Agreement, the foregoing release shall survive any termination of this Agreement.

ARTICLE XI

DEVELOPMENT OF THE PROPERTY

11.1 Developer's Construction Obligations.

Developer shall construct or cause to be constructed the Private Improvements within the times and in the manner set forth in this Article and as more particularly set forth in the Schedule of Performance and the Scope of Development, including the Construction Documents, as either may be amended from time to time in accordance with this Agreement or the Ground Lease. All construction with respect to the Project shall be accomplished expeditiously, diligently, within the timeframes set forth within the Schedule of Performance and in accordance with good construction and engineering practices and applicable laws. Without limiting the provisions of Attachment 15A hereof (SCA/MMRP), Developer shall undertake commercially reasonable measures to minimize damage, disruption or inconvenience, caused by such work and make adequate provision for the safety and convenience of all persons affected by such work. Developer, while performing any construction with respect to the Project, shall undertake commercially reasonable measures in accordance with good construction practices to minimize the risk of injury or damage to adjoining portions of the Property and any improvements thereon and the surrounding property, and to members of the public, caused by or resulting from the performance of such construction. In order to protect the City's proprietary interest in prompt completion of construction, Developer shall use commercially reasonable efforts, prior to commencement of construction, to enter into a project labor agreement with the Building & Construction Trades Council of Alameda County and its affiliated unions. Such project labor agreement shall require such unions (i) to refrain from work stoppages on project construction, and (ii) to take steps to facilitate compliance contractor compliance with the Construction Jobs Policy, including priority referral of Local Residents (as defined in the Construction Jobs Policy) and permitting contractors to employ Local Residents referred by the Jobs Center (as defined in the Construction Jobs Policy) as described in the Construction Jobs Policy.

11.2 Costs of Development.

Except for the City’s completion at its cost of the OMSS Public Improvements, including the Pre-Closing Remediation Obligations in Section 7.2 as limited by Section 7.3.4, Developer shall bear all of the costs of developing the Project and construction of all Private Improvements,

Page 34: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

33

whether onsite or offsite, including, without limitation, the cost of connections to existing utility lines in adjacent rights-of-way, all site preparation work necessary for construction of the Private Improvements, hazardous materials remediation, disabled access, tenant improvements, grading and all structure and substructure work, and public access improvements.

11.3 The Construction Documents.

(a) Definition of Construction Documents. The Construction Documents consist of:

(i) “Project Design Guidelines,” which shall mean renderings and descriptions of project design features, and “Schematic Drawings”, which shall mean a site plan, plans for each level, all elevations, two or more sections, an outline specification, summary statistics, such as preliminary area analysis, a preliminary construction cost estimate, and illustrative materials (renderings, models, or drawing needed to adequately present the project).

(i) “Design Development Documents,” which shall mean drawings and plans in sufficient detail and completeness to show that the Private Improvements and the construction thereof shall comply with the Project Requirements (as defined in Section 9.4), and which shall generally include without limitation:

A. Site plan(s) at 1”=60' - 0” scale showing the buildings, streets, walks and other open spaces. All land uses shall be designated. All Site development details, bounding streets and points of vehicular and pedestrian access shall be shown;

B. Building Plans at 1” = 60'-0” scale and elevations at 1”=20'-0” scale;

C. Building sections showing typical cross-sections at 1”=60'-0” scale;

D. Floor plans;

E. Outline specifications for materials and finishes, and construction methods;

F. Exterior signage plans;

G. Site and exterior lighting plans;

H. Roof plans showing all mechanical and other equipment;

(ii) “Final Construction Documents,” which shall mean plans and specifications required under applicable building codes to be submitted with an application for a building permit and upon which Developer and its general contractor will rely to construct the Private Improvements, and which shall

Page 35: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

34

include, but not necessarily be limited to, final architectural drawings, landscaping plans and specifications, final elevations, building plans, final specifications, plans for streets, a detailed breakdown of the costs of construction, and a schedule for construction of the Project.

(b) Exclusion. As used in this Agreement, “Construction Documents” do not mean any contracts between Developer and any contractor, subcontractor, architect, engineer or consultant.

11.4 Compliance with Construction Documents.

Developer shall construct all of the Private Improvements in compliance with those elements of the Construction Documents for which the City's approval is required under Sections 9.7 and 9.9 in compliance with all applicable Laws, including without limitation, disabled access laws, and in accordance with Section 8.2. In addition, Construction Documents shall conform to and be in substantial compliance with applicable requirements of (i) this Agreement; (ii) the SCA/MMRP required to be performed by Developer pursuant to any environmental review required for this Agreement; (iii) Regulatory Approvals; and (iv) the design approved by the City pursuant to the Design Development Documents review process. All such requirements are sometimes referred to collectively as the “Project Requirements.”

11.5 Preparation of Construction Documents by a Licensed Architect.

(a) Preparation by Licensed Architect. The Construction Documents shall be prepared by or signed by an architect (or architects) duly licensed to practice architecture in and by the State of California. A California-licensed architect shall coordinate the work of any associated design professionals, including engineers and landscape architects.

(b) Inspection. A California-licensed architect shall review all construction of the Private Improvements and shall provide an Architect’s Certificate in the form of Attachment 17 (the “Architect’s Certificate”).

(c) Certification by Structural Engineer. A California-licensed structural engineer shall prepare and stamp the final structural plans and certify the sufficiency of structural support elements, including, but not limited to, the existing and proposed foundations to support the Private Improvements.

11.6 Submission of Construction Documents.

Developer shall prepare and submit the Schematic Drawings, the Design Development Documents and the Final Construction Documents to the City for review and approval as provided in Section 9.7, within the time periods specified in the Schedule of Performance, subject to Force Majeure.

11.7 Scope of Developer's Submissions of Construction Documents.

The following provisions apply to all stages of Developer's submission of Construction Documents. Each of the Construction Document stages is intended to constitute a further

Page 36: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

35

development and refinement from the previous stage. The elements of the Design Development Documents requiring the City's approval shall be in substantial conformance with the Schematic Drawings and the Scope of Development, and shall incorporate conditions, modifications and changes reasonably required by the City under Section 9.8 and as required as a condition of Regulatory Approvals as approved by the City. Design Development Documents shall be in sufficient detail and completeness to show that the Private Improvements and the construction of the Private Improvements will be in compliance with the Project Requirements and matters previously approved. The Final Construction Documents requiring the City's approval under Section 9.8 shall: (i) conform to the approved Design Development Documents; and (ii) include all drawings, specifications and documents necessary for the Private Improvements to be constructed and completed in accordance with this Agreement.

11.8 Scope of the City's Review of Developer's Construction Documents.

(a) Scope of Review. The City’s review and approval of the Construction Documents under this Agreement shall address conformity with the Project Requirements and architectural appearance and esthetics.

(b) Effect of Review. The City's review and approval or disapproval of the Construction Documents shall be carried out in good faith and within its reasonable discretion. Except for changes required to conform the Construction Documents to the Project Requirements, changes proposed by the City shall not result in a material modification of the Project Budget. The City shall not disapprove or require changes subsequently in, or in a manner which is inconsistent with, matters which it has approved previously.

11.9 Changes in Final Construction Documents

(a) Approval of Changes in Required Elements. Material changes may not be made in any City-approved Construction Documents as to elements requiring the City’s approval as provided in this Article (“Required Elements”) without the City’s express written approval in its reasonable discretion; provided, however, if certain materials approved by the City are not available for construction, the Developer may substitute materials which are the architectural and environmental equivalent or superior as to esthetic appearance, quality, color, design and texture, as approved by the City in its reasonable discretion.

(b) Response. Approval of all changes in any Required Element shall be requested in writing by the Developer. City shall respond to the Developer within fifteen (15) days of receipt of such request.

11.10 Conflict Between Project Requirements and Other Governmental Requirements.

(a) Approval by the City. The City shall not withhold any approval required under this Agreement of elements of the Construction Documents or changes in the Construction Documents required by any other governmental body with jurisdiction if all of the following have occurred:

(i) The City receives written notice of the required change;

Page 37: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

36

(ii) The City is afforded a reasonable opportunity to discuss such element or change with the governmental body having jurisdiction of and requiring such element or change and with Developer's architect; and

(iii) Developer's architect cooperates fully with the City and with the governmental body having jurisdiction in seeking any reasonable modifications of such requirement, or reasonable design modifications desired by the City, of the Private Improvements, or some combination of such modifications, all to the end that a design solution reasonably satisfactory to the City and Developer may be achieved despite the imposition of such requirement, and without unreasonably delaying the Project.

(b) Best Efforts to Attempt to Resolve Disputes. Developer and City recognize that the foregoing kind of conflict may arise at any stage in the preparation of the initial Construction Documents, but that it is more likely to arise after the time of the preparation of the Final Construction Documents, and may arise in connection with the issuance of construction permits. Accordingly, time may be of the essence when such a conflict arises. Both Parties agree to use their respective best efforts to reach a solution expeditiously that is mutually satisfactory to Developer and the City.

11.11 Construction Document Review Procedures.

(a) Method of City Action/Prior Approvals; Power to Approve Construction Documents. The City shall approve, disapprove, or approve conditionally the Construction Documents, in writing, within thirty (30) days after submittal, so long as the applicable Construction Documents are properly submitted in accordance with the Schedule of Performance. If the City deems the Construction Documents incomplete, the City shall notify Developer of such fact within twenty-one (21) days after submission and shall indicate which portions of the Construction Documents it deems to be incomplete. The City Administrator, the Assistant City Administrator, or any person designated in writing to act as a designee under this Agreement, shall have the power to review, approve, disapprove, or conditionally approve Construction Documents on behalf of the City under this Section 9.11 without the requirement of obtaining approval of the City at a public meeting.

(b) Timing of City Disapproval/Conditional Approval and Developer Resubmission. If the City disapproves the Construction Documents in whole or in part, the City, in the written disapproval shall state the reason or reasons in reasonably sufficient detail and may recommend changes and make other recommendations that will cause the City to approve the Construction Documents. If the City conditionally approves the Construction Documents in whole or in part, the conditions shall be stated in writing and a reasonable time shall be stated for satisfying the conditions. Developer shall make a resubmittal as expeditiously as possible. Developer may continue making resubmissions until the approval of the submissions or the later of (i) the time specified in any conditional approval, or (ii) the last date for delivery of the Lease Property in the Schedule of Performance, as either may be extended by the City, or otherwise pursuant to this Agreement. Failure to have a submission approved by such last date will permit termination of this Agreement by the City on thirty (30) days' written notice to Developer, unless Developer cures such failure within such thirty-day period.

Page 38: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

37

11.12 Progress Meetings/Consultation/Reports.

During the preparation of Construction Documents, City staff and Developer agree to hold periodic progress meetings, as appropriate considering Developer's Construction Document progress, to coordinate the preparation of, submission to, and review of, Construction Documents by the City. City staff and Developer agree to communicate and consult informally as frequently as is reasonably necessary to ensure that the formal submittal of any Construction Documents to the City can receive prompt and speedy consideration.

During construction, upon City’s request, Developer shall submit written progress reports to the City in such detail as may be reasonably required by the City.

11.13 Construction Schedule.

Developer shall use its best efforts to commence, prosecute and complete all construction and development within the time specified in the Schedule of Performance or within such extensions of time as the City may reasonably grant in writing, or as otherwise permitted by this Agreement.

11.14 Governmental Permits.

Developer has the sole responsibility for obtaining at its sole cost and expense all necessary permits for the Private Improvements and shall make application for such permits directly to the applicable regulatory City. Developer shall submit a complete application for a Building Permit to the City by the date set forth therefor in the Schedule of Performance for submission of Construction Documents. Upon any such submission Developer shall prosecute the application diligently to issuance.

11.15 City Rights of Access.

Provided that the City shall give reasonable prior written notice to Developer (except in the case of emergency), the City and its agents shall have a continuing right of access to the Lease Property to the extent necessary to exercise its rights under this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Private Improvements; provided that after delivery of the Lease Property, the City shall Indemnify and hold harmless Developer for losses resulting from the City's access to the Property, as provided for in the Ground Lease. The City shall promptly deliver to Developer a copy of any written reports prepared by the City with respect to the Property under any such inspection, subject to withholding documents otherwise privileged or confidential. The City disclaims any warranties, representations, and statements made in any such reports, will have no liability or responsibility with respect to any such warranties, representations, and statements, and will not be estopped from taking any action (including, but not limited to, later claiming that the construction of the Private Improvements is defective, unauthorized or incomplete) nor be required to take any action as a result of any such inspection.

Nothing in this Section 9.15 shall affect the City's right to enter upon the Lease Property pursuant to its regulatory authority.

Page 39: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

38

11.16 Construction Signs and Barriers.

Developer shall provide appropriate construction barriers and construction signs, and post the signs on the Lease Property during the period of construction. The size, design and location of such signs and the composition and appearance of any non-movable construction barriers shall be submitted to the City for approval before installation, which approval may not be unreasonably withheld, but which shall in any event include the title of the project, and the names and titles of the Mayor, members of the Oakland City Council and the City, Developer, contractor and Developer consultants.

11.17 Damage and Destruction.

If at any time after the Close of Escrow a fire or other casualty damages or destroys the Lease Property or Private Improvements, or any portion of the Property or Private Improvements, the obligations of the Parties shall be governed by the Ground Lease. If any such casualty occurs during the term of this Agreement, before the Close of Escrow, the obligations of the Parties shall be governed by Section 8.13.1of this Agreement.

11.18 Historic Objects.

In the event that Developer discovers any objects or conditions of historic or archeological significance in connection with any excavation or ground disturbance at the Property, the Parties shall proceed in accordance with the Developer SCA/MMRPs.

11.19 Compliance with Laws.

(a) Compliance with Laws and Other Requirements. Developer, at its sole cost and expense, shall comply at all times throughout the term of this Agreement with:

(i) All Laws;

(ii) All of the Developer SCA/MMRPs pursuant to any environmental review for the Project that place requirements on Developer;

(iii) All requirements of policies of insurance, which may be applicable to the Lease Property, the Project, the Private Improvements or Developer’s personal property; and

(iv) All other applicable Project Requirements.

(b) Right to Contest. Developer may reasonably and in good faith contest the validity of any laws or the application of any laws at Developer's cost and expense through appropriate proceedings.

(c) Amendments to This Agreement. Developer and City agree to mutually consider, but without legal obligation to agree to, reasonable requests for amendments to this Agreement which may be made by either of the Parties, their assignees or transferees, lending institutions, or financial consultants to the City, provided such requests are consistent with this

Page 40: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

39

Agreement and would not substantially alter the basic terms included herein, and are consistent with applicable law, including the California Environmental Quality Act.

(d) Regulatory Approvals. Developer understands that its Construction of the Private Improvements and development of the Project will require approval, authorization or permits by governmental agencies with appropriate jurisdiction (“Regulatory Approvals”). Developer shall be solely responsible for obtaining any such Regulatory Approvals. The City shall use reasonable efforts to streamline and simplify Developer’s receipt of Regulatory Approvals, and shall cooperate with Developer in its efforts to obtain such Regulatory Approvals, provided that (1) the City shall not be required to incur any out-of-pocket costs; and (2) nothing in this Section 9.19(d) shall otherwise limit City’s own approval rights under this Agreement or pursuant to its regulatory powers.

The City shall not delegate to any third parties the exercise of its regulatory powers under this Agreement or the Ground Lease; examples of such powers that the City will not delegate are: issuance of building permits or other City regulatory planning approvals, and issuance of a certificate of occupancy.

11.20 Insurance Requirements.

(a) Before Delivery. Before Close of Escrow, Developer shall procure and maintain general liability insurance as required by any License to Enter, and otherwise upon the terms provided in the Ground Lease (notwithstanding that the Ground Lease itself is not yet in effect) and in accordance with the CalTrans Easement and the FHWA Deed.

(b) After Delivery. From and after Close of Escrow, Developer's requirement to maintain insurance under this Agreement will be as set forth in the Ground Lease.

(c) Indemnification. Nothing in this Agreement, any License to Enter, the Ground Lease, the CalTrans Easement, or the FHWA Deed regarding insurance requirements shall limit in any way any indemnification requirements under any such agreements.

(d) Evidence of Insurance. Developer shall promptly provide City with evidence of such insurance either by, at City’s option, copies of the actual insurance policies or certificates of insurance in form acceptable to City.

11.21 Certificate of Completion.

(a) Issuance Process.

(i) Before issuance by the City of a Certificate of Completion for the Project and except as permitted by this Agreement, Developer may not occupy or use the Private Improvements, or any portion thereof, except for construction purposes.

(ii) The City’s issuance of any Certificate of Completion does not relieve Developer or any other Person from any and all requirements and conditions of any regulatory approval of any City (including the City) to occupancy of any

Page 41: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

40

Private Improvement. Developer shall comply with all such requirements or conditions separately.

(b) Condition to Approval. If there remain uncompleted (i) customary punch list items or (ii) landscaping (to the extent (i) and (ii) are subject to the City's approval), (collectively, “Deferred Items”), the City may reasonably condition the issuance of the Certificate of Completion upon reasonable security or assurances in amount, form and substance reasonably satisfactory to the City that all the Deferred Items will be completed in a diligent and timely fashion as specified in Certificate of Completion. It shall also be a condition to approval that CalTrans and, if necessary, the FHWA, has approved the final construction pursuant to the terms of the CalTrans Easement and the FHWA Deed, respectively.

(c) Definition of Completed. For purposes of the City's issuance of a Certificate of Completion in accordance with the provisions of Section, “Completed” means completion by Developer of all aspects of the Private Improvements for which the City's approval is required in accordance with the approved Construction Documents, or the provision of security satisfactory to the City for Deferred Items under Section 9.21(b), and the issuance of the applicable Certificate of Occupancy (together with completion of all Private Improvements) which are required for occupancy of the Project under the conditions of any Regulatory Approvals needed for development of the Project.

(d) Specific Approvals Controlling. With respect to the City's determination of whether or not the Private Improvements are Completed for purposes of this Agreement, in the event of any inconsistencies between (i) the Final Construction Documents as approved by the City, or (ii) any specific City approvals of required submissions, and the Developer SCA/MMRPs (to the extent applicable to the Construction of the Private Improvements), the City-approved Final Construction Documents or approved submissions, as applicable, will govern.

11.22 Form and Effect of Certificate.

(a) Form of Certificate. The Certificate of Completion, Attachment 18, will be in a form that permits it to be recorded in the Official Records. For purposes of this Agreement, the Certificate of Completion will be a conclusive determination of Completion of the Private Improvements (except for the completion of Deferred Items) and of the right to occupy all of the Private Improvements in accordance with the terms of the Ground Lease.

(b) Effect. The Certificate of Completion is not a notice of completion as referred to in Section 3093 of California Civil Code, and is not in lieu of a Certificate of Occupancy to be issued by the City in its regulatory capacity, which is separately required for occupancy.

11.23 Delay in Issuing or Failure to Issue.

If the City unreasonably delays furnishing or refuses or fails to furnish a Certificate of Completion, the City shall promptly provide Developer with a written statement specifying the reasons the City delayed, refused, or failed to furnish the Certificate and identify the items Developer shall complete or requirements it shall satisfy to obtain a Certificate of Completion.

Page 42: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

41

ARTICLE XII

ASSIGNMENT AND TRANSFER

12.1 Developer as Party is Material Consideration.

Developer and City acknowledge and agree that identity of Developer, and of any transferee of any right or interest in this Agreement, and the grant of the rights under this Agreement involves the exercise of broad proprietary discretion by City in promoting the development, leasing, occupancy and operation of the Lease Property and other purposes of this Agreement. Developer agrees that its particular business capabilities, financial capacity, reputation, and business philosophy were a material inducement to City for entering into this Agreement.

12.2 Consent of City.

Except as otherwise expressly permitted in this Section 10.3, Developer, its permitted successors and permitted assigns shall not (i) suffer or permit any Significant Change to occur, or (ii) assign, sell, lien, encumber, or otherwise transfer all or any part of Developer’s interest in and to this Agreement, in whole or part, either voluntarily or by operation of law (either or both (i) and (ii) above, a “Transfer”), without the prior written consent of the City pursuant to action of the City Council at a duly noticed meeting, in its sole and absolute discretion, as set forth herein and the satisfaction, or written waiver thereof by City (pursuant to action of the City Council at a duly noticed meeting), in its sole and absolute discretion, of all conditions precedent set forth in this ARTICLE X.

12.3 Permitted Transfers.

The Parties acknowledge and agree that this Agreement authorizes a Developer Affiliate as a “Permitted Transfer”.

12.4 Conditions Precedent to Transfer.

Any Transfer that the City, in its sole and absolute discretion, has agreed to is subject to the satisfaction in full of all of the following conditions precedent and covenants of Developer, or the written waiver thereof by the City (which waiver shall be in the City’s sole and absolute discretion), each of which is hereby agreed to be reasonable in light of the material nature of the identity of the Developer hereunder:

12.4.1 Developer provides the City with at least ninety (90) days’ prior written notice of the proposed Transfer;

12.4.2 Except for a Permitted Transfer pursuant to Section 10.3, the City determines, in its reasonable judgment, that the proposed transferee (i) has the financial capacity to implement the Project as contemplated hereunder and otherwise to perform all of Developer’s obligations under this Agreement that are applicable to the interest subject of the Transfer; and has sufficient experience in the operation, use and maintenance of projects of a type and size comparable to the Project.

Page 43: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

42

12.4.3 Any proposed transferee, by instrument in writing in a form approved by the City for itself and its successors and assigns, and expressly for the benefit of City, must expressly assume all of the obligations of Developer under this Agreement and any other agreements or documents entered into by and between City and Developer relating to the Project, or the portion of the Project subject to the proposed Transfer.

12.4.4 There shall be no uncured Event of Default or Unmatured Event of Default on the part of Developer under this Agreement.

12.4.5 The proposed transferee has demonstrated to City’s reasonable satisfaction that the proposed transferee is subject to the jurisdiction of the courts of the State of California.

12.4.6 Developer deposits sufficient funds to reimburse City for its reasonable legal expenses, including the expenses of the City Attorney’s Office or outside counsel, to review the proposed Transfer.

12.4.7 Developer has delivered to City such other information and documents relating

to the proposed transferee’s business, experience and finances as City may reasonably request.

12.4.8 Nothing in this Section 10.4 shall affect or modify the City’s rights under Section 10.2 to withhold its consent to any Transfer in its sole and absolute discretion.

12.5 Delivery of Executed Assignment.

Except for a Permitted Transfer under Section 10.3, no assignment of any interest in this Agreement made with City’s consent, in its sole and absolute discretion, will be effective unless and until there has been delivered to City, within thirty (30) days after Developer entered into such assignment, an executed counterpart of such assignment containing an agreement executed by Developer and the transferee, wherein and whereby such transferee assumes performance of all of the obligations on the assignor’s part to be performed under this Agreement. The form of such instrument of assignment shall be subject to City Attorney and City Administrator’s approval, which approval shall not be unreasonably withheld, delayed or conditioned.

12.6 No Release of Developer’s Liability or Waiver by Virtue of Consent.

Unless otherwise expressly agreed to the City in the form of an instrument of assignment, the consent by the City to any Transfer and any Transfer hereunder shall not, nor shall such consent or Transfer in any way be construed to, (a) relieve or release Developer from any liability or obligation arising at any time out of or with regard to the performance of any covenants or obligations to be performed by Developer at any time hereunder, or (b) relieve any transferee of Developer from its obligation to obtain the express consent in writing of the City, in its sole and absolute discretion, to any further Transfer.

12.7 Effect of Prohibited Transfer.

Page 44: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

43

Any Transfer made in violation of the provisions of this Article X shall be null and void ab initio and of no force and effect.

ARTICLE XIII

REPRESENTATIONS AND WARRANTIES

13.1 Developer Representations and Warranties.

The Developer represents and warrants as follows, as of the Effective Date and as of the Close of Escrow of the Lease Property, and such representations and warranties shall survive termination of this Agreement:

13.1.1 Valid Existence; Good Standing. The Developer is a limited liability company duly organized and validly existing under the laws of the State of California and registered to do business in the State of California. The Developer has all requisite power and authority to own its property and conduct its business as presently conducted. The Developer has made all filings and is in good standing in the State of California.

13.1.2 Authority. The Developer has all requisite power and authority to execute and deliver this Agreement and the agreements contemplated by this Agreement and to carry out and perform all of the terms and covenants of this Agreement and the agreements contemplated by this Agreement.

13.1.3 No Limitation on Ability to Perform. Neither the Developer’s organizational documents, nor the organizational documents of any of its members, nor any other agreement or Law in any way prohibit, limits or otherwise affects the right or power of the Developer to enter into and perform all of the terms and covenants of this Agreement. Neither the Developer nor any of its members are party to or bound by any contract, agreement, indenture, trust agreement, note, obligation or other instrument that could prohibit, limit or otherwise affect the same. No consent, authorization or approval of, or other action by, and no notice to or filing with, any governmental authority, regulatory body or any other Person is required for the due execution, delivery and performance by the Developer of this Agreement or any of the terms and covenants contained in this Agreement. There are no pending or threatened suits or proceedings or undischarged judgments affecting the Developer or any of its members before any court, governmental City, or arbitrator which might materially adversely affect the enforceability of this Agreement or the business, operations, assets or condition of the Developer.

13.1.4 Valid Execution. The Developer’s execution and delivery of this Agreement and the agreements contemplated hereby have been duly and validly authorized by all necessary action and in full compliance with all applicable laws. This Agreement will be a legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms, subject to the application of bankruptcy and insolvency laws, and for the possible unavailability of specific performance which is dependent on the exercise of judicial discretion. The Developer has provided to the City a written resolution of the Developer authorizing the execution of this Agreement and the agreements contemplated by this Agreement.

Page 45: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

44

13.1.5 Defaults. The execution, delivery and performance of this Agreement (i) do not and will not violate or result in a violation of, contravene or conflict with, or constitute a default under (A) any agreement, document or instrument to which the Developer or any member is a party or by which the Developer’s assets or any member’s assets may be bound or affected, or (B) any law, statute, ordinance, regulation, or (C) the Articles of Organization or the Operating Agreement of the Developer, and (ii) do not and will not result in the creation or imposition of any lien or other encumbrance upon the assets of the Developer or its members.

13.1.6 Meeting Financial Obligations. The Developer is meeting its current liabilities as they mature, including, without limitation, the City’s business tax requirements and compliance with collection and payment of the City’s parking tax requirements; no federal or state tax liens have been filed against it; and the Developer is not in default or claimed default under any agreement for borrowed money.

13.1.7 No Undisclosed Disputes with City. The Developer, including its members and officers, are not in, and are not aware of, any pending disputes that they may have with the City.

13.1.8 Ongoing Obligation. The Developer shall notify the City within ten (10) days of a material change in any representation or warranty under this Section 11.1.

13.2 City Representations and Warranties.

The City hereby represents and warrants as follows, as of the Effective Date and at all times to Close of Escrow for the Lease Property, such representations and warranties shall not survive Close of Escrow or termination of this Agreement, except as such representations and warranties are expressly provided for in the applicable Ground Lease:

13.2.1 Authority. The City has all requisite right, power and authority to enter into this Agreement and the documents and transactions contemplated herein and to carry out the obligations of this Agreement and the documents and transactions contemplated herein. The City has taken all necessary or appropriate actions, steps and company and other proceedings to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement and the Ground Lease. This Agreement is a legal, valid and binding obligation of the City, enforceable against it in accordance with its terms. The representations and warranties of the City in the preceding sentence of this Section 11.2.1 are subject to and qualified by the effect of: (a) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors’ rights generally; and (b) the fact that equitable remedies, including rights of specific performance and injunction, may only be granted in the discretion of a court.

13.2.2 Litigation; Condemnation: Except for: (a) the pending case of “From the Roots Up, Inc., et al. vs. City of Oakland, et al. (2013), filed in the Alameda County Superior Court as Case No. RG13704222; and (b) a Title VI Civil Rights complaint filed on or about May 9, 2014, with Federal agencies by the West Oakland Environmental Indicators Project regarding the former Oakland Army Base and other lands, to the best of the City’s knowledge, except for those matters first arising after the Parties execution of this Agreement and disclosed in writing by the City to the Developer promptly upon obtaining knowledge of same, the City has received no

Page 46: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

45

written notice regarding any, and to the best of the City’s knowledge there are no, actions, proceedings, litigation, administrative challenges or governmental investigations or condemnation actions either pending or threatened against the Lease Property.

13.2.3 Knowledge. As used in Section 11.2, “to the best of the City’s knowledge” means the actual knowledge (and not imputed or constructive knowledge) of the City Administrator and the City's project manager (as designated by the City pursuant to Section 5.2 of the Property Management Agreement), without any requirement of inquiry or investigation on their part.

13.3 Limitations re City.

13.3.1 Developer knowledge. In the event that, prior to Close of Escrow, the Developer has current actual knowledge that any one of the City’s representations and warranties is materially inaccurate, the Developer (as its sole and exclusive remedy for same) shall have the right to terminate this Agreement by written notice to the City of such election prior to the Closing. If, notwithstanding the Developer’s current actual knowledge of a materially inaccurate representation or warranty, the Developer closes Escrow on the Ground Lease of the Lease Property, the Developer shall be deemed to have waived any claim arising out of such material inaccuracy as to such Ground Lease. If the Developer elects to terminate this Agreement pursuant to this Section, the provisions of Article XII shall apply. As used in this Section 11.3.1, the current actual knowledge of Developer means the current actual (and not imputed or constructive knowledge) of William Aboudi, and OMSS’s Project Manager, Jai Jennifer, and/or the successors to their respective positions or capacities in Developer or in any constituent party to Developer.

13.3.2 Developer Acts or Omissions. Notwithstanding any provision of this Agreement to the contrary, the City shall have no liability for a breach of the representations or warranties set forth in Section 11.2 caused by or resulting from any act or omission of Developer.

13.3.3 General Limitations. The Parties further agree that (a) City’s representations and warranties in this Agreement and in any documents executed by City under this Agreement with respect to the Lease Property or Project will survive for one (1) year after the Close of Escrow; and (b) if Developer fails to provide written notice to City of any breach of such warranties or representations within one (1) year after the Close of Escrow, Developer will be deemed to have waived all claims for breach of representations or warranties with respect to the Lease Property or Project. Developer’s sole remedy will be termination of this Agreement under Section 12.5, and waiver of any further claims against the City. In no event will City be liable for any monetary damages to Developer for such breach of warranties or representations.

ARTICLE XIV

DEFAULTS, REMEDIES AND TERMINATION

14.1 Before Delivery.

Page 47: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

46

(a) Without limiting City’s rights under Section 12.1(b), if Escrow is not in condition to close at the time established for Close of Escrow under this Agreement due to an Event of Default (following applicable cure periods), the Party who is not responsible for the Event of Default and which has performed fully or tendered performance of the acts to be performed by it before the Close of Escrow, or whose performance has been excused, may terminate this Agreement by written notice and demand the return of its money, papers, or documents deposited in Escrow.

If any Event of Default has occurred as to which all Parties have responsibility, or if Escrow is not in a condition to close as a result of causes not attributable to any party, the Title Company will be instructed to notify each party thereof, and to return all documents and funds deposited with it to the respective parties thirty (30) days after such notice, unless within such thirty (30)-day period, all Parties shall have performed fully all their obligations with respect to Close of Escrow, in which case the Title Company will be instructed to carry out its instructions without regard to such thirty (30)-day delay. If performance of an obligation by either Party is reasonably possible, but cannot be achieved within such thirty (30) day period, and the Party has commenced such cure within the thirty (30) day period and prosecutes such cure with diligence and dispatch to completion within a reasonable period thereafter, then Close of Escrow shall proceed as set forth hereunder and in the Escrow instructions; provided, however, that in no event shall the foregoing cure periods extend beyond the date specified in the Schedule of Performance for Close of Escrow, subject to force majeure.

(b) City Remedies Prior to Closing for Developer’s Default. If there shall be an Event of Default by Developer whereby Developer defaults in its obligation to Close Escrow and the provisions of Section 12.1(a) above do not apply, City shall have the right, after the expiration of any applicable cure period, to retain the Security Deposit, with accrued interest, as full, agreed and liquidated damages, and City’s retention of the Security Deposit shall be the City’s sole remedy with respect to such Developer default.

THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT IN THE EVENT OF A DEFAULT BY DEVELOPER ONLY IN ITS OBLIGATION TO CLOSE ESCROW AND THE PROVISIONS OF SECTION 12.1(A) ABOVE DO NOT APPLY, CITY’S ACTUAL DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN, THAT THE AMOUNT OF THE SECURITY DEPOSIT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES, AND THAT SUCH AMOUNT IS NOT UNREASONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME THIS AGREEMENT WAS MADE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (1) CITY WILL INCUR ADMINISTRATIVE COSTS IN THE NEGOTIATION AND REVIEW OF THIS AGREEMENT AND OTHER DOCUMENTS RELATING TO THIS TRANSACTION; (2) CERTAIN COSTS AND OTHER DAMAGES IN AN AMOUNT SUBSTANTIALLY IN EXCESS OF THE SECURITY DEPOSIT MAY BE INCURRED BY CITY IF THE LEASE OF THE PROPERTY CONTEMPLATED HEREBY IS NOT COMPLETED; AND (3) CITY IS ENTERING INTO THIS AGREEMENT WITH DEVELOPER IN RELIANCE UPON DEVELOPER’S COMMITMENT TO LEASE THE LEASE PROPERTY FROM CITY. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275

Page 48: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

47

OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO CITY PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED AND SHALL NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY DEVELOPER’S INDEMNITY OR RESTORATION OBLIGATIONS SET FORTH IN THIS AGREEMENT, IN THE EVENT AND TO THE EXTENT THAT THE AGGREGATE OF CITY’S DAMAGES UNDER SUCH SECTIONS MAY EXCEED THE AMOUNT OF THE DEPOSIT.

CITY’S INITIALS: ____ DEVELOPER’S INITIALS: ____

(c) Non-Liability of Developer Members, Partners, Shareholders, Directors, Officials and Employees. No member, officer, partner, agent, shareholder or other beneficial owner, directors or employees of Developer or successor-in-interest of any of them will be personally liable to the City, or any successor-in-interest of the City, in an Event of Default by Developer or for any amount which may become due to the City or any successor-in-interest or on any obligations imposed upon Developer under the terms of this Agreement; provided, however, that this provision shall not limit in any respect the liability of Developer, or the Guarantor.

14.2 Events of Default - Developer.

Each of the following constitutes an Event of Default by Developer:

(a) If, subject to Force Majeure, Developer fails to commence promptly, or after commencement fails to prosecute diligently to Completion, the Construction of the Private Improvements under the Scope of Development on or before the required commencement and completion dates (as applicable) set forth in the Schedule of Performance, or abandons or substantially suspends Construction for more than thirty (30) consecutive days, and, from and after such thirty (30) days period, such failure, abandonment or suspension continues:

(i) for thirty (30) days from the day of written notice from the City as to failure to commence Construction; or

(ii) for sixty (60) days from the date of written notice from the City as to abandonment, suspension or a failure to complete Construction of the Private Improvements in accordance with Article IX, except for Deferred Items, if any; provided, however, that in no event shall the foregoing cure periods extend beyond the outside time period applicable to the event of Force Majeure;

(b) If Developer fails to pay any amount required to be paid under this Agreement when due and such failure continues for fourteen (14) days following written notice from the City to Developer;

(c) If Developer does not accept delivery of the Lease Property under this Agreement within the times set forth in this Agreement, provided that all pre-delivery conditions to Developer's obligation to accept delivery of the Lease Property have been satisfied, and such failure continues for a period of fourteen (14) days after written notice from the City;

Page 49: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

48

(d) If, subject to Force Majeure, Developer fails to submit any one or more Construction Documents as are required to be submitted within the times provided in this Agreement and the Schedule of Performance, and Developer does not cure such default within (i) thirty (30) days after the date of written demand by the City to Developer specifying the item(s) missing or due; or (ii) if such cure cannot reasonably be completed within such thirty (30) day period, Developer commences such cure within such thirty (30) day period and prosecutes such cure with diligence and dispatch to completion within a reasonable period thereafter; provided however that in no event shall the foregoing cure periods extend beyond the outside time period applicable to the event of Force Majeure;

(e) If, subject to Force Majeure, Developer commits a material Event of Default: (i) of the Existing Lease; OR (ii) after delivery of the Lease Property, under the Ground Lease, as Event of Default is defined in the Ground Lease;

(f) If Developer, any Person controlling Developer, or the Guarantor files a petition for relief, or an order for relief as entered against Developer, such Person, or the Guarantor, in any case under applicable bankruptcy or insolvency law, or any comparable law that is now or hereafter may be in effect, whether for liquidation or reorganization, which petition or order if filed against Developer, such Person, or Guarantor is not dismissed or stayed within one hundred twenty (120) days, or if the Guaranty is rejected or deemed rejected (in whole or in part) by the debtor in such case;

(g) If a writ of execution is levied on this Agreement which is not released within sixty (60) days, or a receiver, trustee or custodian is appointed to take custody of all or any material parts of the property of Developer, which appointment is not dismissed within one hundred twenty (120) days;

(h) If Developer makes a general assignment for the benefit of creditors;

(i) If Developer fails to maintain the insurance required pursuant to Section 9.20, or fails to deliver certificates or policies as required pursuant to Section 9.20, and such failure continues for ten (10) business days following written notice from the City to Developer; and

(j) If, subject to Force Majeure, without limiting any other provisions of this Section, Developer violates any other covenant, or fails to perform any other obligation to be performed by Developer under this Agreement (including, but not limited to, any Developer SCA/MMRPs) or fails to use its commercially reasonable efforts to obtain all Regulatory Approvals required to be obtained under this Agreement within the time frames set forth in the Schedule of Performance, the Ground Lease, or the Schedule of Performance at the time such performance is due, within the time for any cure or expiration of any grace period specified therefor in this Agreement, or if no time is specified, within thirty (30) days after written notice from the City specifying the nature of such violation or failure, or, if such cure cannot reasonably be completed within such thirty (30) day period, if Developer does not within such thirty (30) day period commence such cure, or having so commenced, does not prosecute such cure with diligence and dispatch to completion within a reasonable time thereafter; provided, however, that in no event shall the foregoing cure periods extend beyond the outside time period applicable to the event of Force Majeure.

Page 50: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

49

14.3 Remedies of City After Close of Escrow.

Upon the occurrence of an uncured Event of Default by Developer after Close of Escrow, the City has the remedies set forth below, which remedies are cumulative and not mutually exclusive:

(a) Termination. The City may terminate this Agreement upon sixty (60) days written notice to Developer.

(b) Specific Performance. The City may institute an action for specific performance.

(c) Other Remedies. The City shall be entitled to all other remedies permitted by law or at equity or under this Agreement.

(d) Additional Remedies of the City. The remedies provided for in this Agreement are in addition to and not in limitation of other remedies including but not limited to, those provided in the Ground Lease.

(e) Non-Liability of Developer Members, Partners, Shareholders, Directors, Officials and Employees. No member, officer, partner, agent, shareholder or other beneficial owner, directors or employees of Developer or successor-in-interest of any of them will be personally liable to the City, or any successor-in-interest of the City, in an Event of Default by Developer or for any amount which may become due to the City or any successor-in-interest or on any obligations imposed upon Developer under the terms of this Agreement; provided, however, that this provision shall not limit in any respect the liability of Developer, or the Guarantor.

14.4 Events of Default – City.

Each of following constitutes an Event of Default by the City:

(a) If, subject to Force Majeure, the conditions to the City's obligation to Close Escrow have been satisfied, or waived in writing by the City, and the City fails to deliver the Lease Property to Developer on or before the date specified for Delivery of the Property in the Schedule of Performance, and such failure continues for a period of thirty (30) days after written notice from Developer.

(b) If, subject to Force Majeure, without limiting any other provisions of this Section, the City violates any other covenant, or fails to perform any other obligation to be performed by it under this Agreement, within the time for any cure or expiration of any grace period specified therefor in this Agreement, or if no time is specified, within thirty (30) days after written notice from Developer specifying the nature of such violation or failure, or, if such violation or failure cannot reasonably be cured within such thirty (30) day period, if the City does not within such thirty (30) day period promptly commence such cure, or having so commenced, does not prosecute such cure with diligence and dispatch to completion within a reasonable time thereafter; provided, however, that in no event shall the foregoing cure periods extend beyond the outside time period applicable to the Force Majeure.

Page 51: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

50

(d) If, subject to Force Majeure, after Delivery of the Lease Property, the City commits a material Event of Default under the Ground Lease, as Event of Default is defined in the Ground Lease.

14.5 Remedies of Developer.

Upon the occurrence of an uncured Event of Default by the City, Developer has the exclusive remedies set forth below, which remedies are cumulative and not mutually exclusive:

(a) Termination. Developer may terminate this Agreement upon sixty (60) days written notice to the City, provided, however, that Developer may only terminate if the Event of Default would materially adversely affect Developer’s ability to complete the Private Improvements in accordance with the Schedule of Performance and the provisions of this Agreement. An Event of Default which: (1) increases Developer’s cost of construction or operation by more than five percent (5%) of the Development Budget, (2) delays the construction of the Project by more than sixty (60) days, (3) results in loss of more than five percent (5%) of funds committed to the Project under the financing plan approved by the City under Section 8.2(a), or (4) jeopardizes the economic viability of the Project, shall constitute a material adverse effect under this Section 12.5(a).

(b) Specific Performance. Developer may institute an action for specific performance.

(c) Damages. The City shall not be liable for any damages caused by an Event of Default, except for the recovery of Attorney Fees and Costs under Section 13.14.

(d) Other Remedies of Developer. Subject to the limitations in Sections 12.5(a) through (c) hereof, Developer is entitled to all other remedies permitted by law or equity or under this Agreement or, after Close of Escrow, in the Ground Lease.

(e) Non-Liability of City or City Commissioners, Officials and Employees. No member, commissioner, official, agent or employee of the City will be personally liable to Developer or any successor-in-interest of Developer, in an Event of Default by the City or for any amount which may become due to Developer or any successor-in-interest or on any obligations under the terms of this Agreement.

14.6 Cumulative Remedies.

Subject to the limitations in Section 12.5, and except with respect to any rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties to this Agreement, whether provided by law, in equity or by this Agreement, are cumulative, and not in derogation of other rights and remedies found in this Agreement and, after Delivery of the Lease Property, in the Ground Lease. The exercise by any Party of any one or more of such remedies will not preclude the exercise by it, at the same or a different time, of any other such remedies for the same default or breach or any of its remedies of any other default or breach by the other Parties. The waiver of any provision or term of this Agreement shall not be deemed a waiver of any other provision or term of this Agreement. The mere passage of time, or

Page 52: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

51

failure to act upon a default, shall not be deemed as a waiver of any provision or term of this Agreement.

14.7 Return of Property; Plans and Data.

(a) Return of Property. If this Agreement terminates after Delivery due to an Event of Default by Developer, Developer shall, at its sole expense, return the Lease Property to the City in a safe condition, and unless otherwise requested by the City, shall remove all loose building materials and debris present at those areas resulting from Developer's construction activities.

(b) Plans and Data. If the City terminates this Agreement pursuant to the terms of this Agreement following an Event of Default by Developer or otherwise has the right to complete or cause a third party such as the Guarantor to complete the Private Improvements, or if Developer terminates this Agreement prior to Close of Escrow for any reason other than City’s Event of Default , Developer shall assign, unless prohibited by Law, and deliver to the City, copies of any and all reports in Developer's possession regarding the Project, and any Construction Documents in the possession of Developer redacting therefrom any confidential information regarding the business of Developer or its affiliates unrelated to the Project, or to the extent Developer can obtain them after using best efforts (without any material expenditure of funds, unless City agrees to reimburse Developer for any such material expenditure of funds), prepared for Developer for the development of the Project, within sixty (60) days after the City's written demand. The City may use such reports and the Construction Documents for any purpose whatsoever relating to the Project, without cost or liability therefor to Developer or any other Person; provided, however, the City shall release Developer and also shall release Developer's contractor, architect, engineer and other consultants from any losses arising out of the City's use of such reports or Construction Documents except to the extent such contractor, architect, engineer or other consultant is retained by the City to complete construction. Notwithstanding the foregoing, if Guarantor is obligated to complete the Private Improvements pursuant to the Guaranty, Guarantor shall have the right to all such Construction Documents and other reports, subject to this Section 12.7(b) if Guarantor commits an Event of Default covered by its Guaranty. Developer shall include in all contracts and authorizations for services pertaining to the planning and design of the Private Improvements an express agreement by the Person performing such services that the City may use such reports or Construction Documents as provided in this Section 12.7(b) without compensation or payment from the City, unless sums are due under such reports or Constructions Documents, in the event such reports or Construction Documents are delivered to the City under the provisions of this Section. The City's and Developer's obligations under this Section 12.7 shall survive the termination of this Agreement.

ARTICLE XV

GENERAL PROVISIONS

15.1 Force Majeure – Extension of Time of Performance.

Page 53: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

52

15.1.1 Effect of Force Majeure. Subject to Sections 13.1.2, 13.1.3, and 13.1.4, below, neither the City, the Developer, nor any successor-in-interest to either (the “Delayed Party”, as applicable) will be considered in breach or in default of any obligation or satisfaction of a condition to an obligation of another Party which is provided for in this Agreement, including, without limitation, the Schedule of Performance, but excluding any provision for the payment of money, if an event of Force Majeure has occurred and such event of Force Majeure actually causes a delay by the Delayed Party in meeting an obligation or satisfaction of a condition to an obligation of another Party under this Agreement. Subject to the provisions of Sections 13.1.2, 13.1.3, and 13.1.4 below, the time fixed for performance of any obligation under this Agreement shall be extended for the duration of the event of Force Majeure that causes or results in a delay or inability by the Delayed Party to meet an obligation or satisfy a condition to an obligation of another Party under this Agreement.

15.1.2 Definition of Force Majeure. “Force Majeure” means events that cause or result in enforced delays in the Delayed Party’s performance of its obligations under this Agreement, or in the satisfaction of a condition to another Party’s performance under this Agreement (other than the obligations or conditions relating to the payment of money), due primarily to causes beyond the Delayed Party’s control, including, but not restricted to acts of God or of a public enemy; fires, floods, tidal waves, epidemics, quarantine restrictions, freight embargoes, earthquakes, unusually severe weather, acts of local civil disorder, delays of contractors or subcontractors due to any of these causes; archeological finds on the Lease Property; discovery of the presence or habitat of a threatened, candidate or endangered species protected by the Federal Endangered Species Act or the California Endangered Species Act; strikes, and substantial interruption of work because of labor disputes; inability to obtain materials or reasonably acceptable substitute materials (provided that the Developer has ordered such materials on a timely basis and the acts or omissions of the Developer are not otherwise at fault for such inability to obtain materials); unlawful detainer actions or other administrative appeals, litigation or arbitration relating to the relocation of tenants or elimination of the rights or interests of third parties, if any, from the Lease Property; delay in the issuance of any City or other governmental permits or approvals beyond customary processing times for a project of similar magnitude and complexity, and delay in the completion of the OMSS Public Improvements beyond reasonably and customary delays (not to exceed six (6) months) to the construction schedule for the OMSS Public Improvement, provided that: the Developer timely sought such permits or approvals and diligently responds to any requests for further information or submittals; any voluntary or involuntary proceeding in bankruptcy or any debtor-relief laws (“Bankruptcy”) by the City, or any Litigation Force Majeure. In the event of the occurrence of any such enforced delay, the time or times for performance of the obligations of the Developer or the City will be extended for the period of the delay; provided, however, within thirty (30) days after the beginning of any such delay, the Delayed Party shall have first notified the other Parties in writing of the cause or causes of such delay and claimed an extension for the reasonably estimated period of the enforced delay. Notwithstanding anything to the contrary in this Section 13.1.2, the condition of the market, lack of credit or financing (unless such lack is itself a result of some other event of Force Majeure) shall not be considered to be a matter beyond the Developer’s control and therefore no event caused by a lack of such financing or credit in and of itself shall be considered to be an event of Force Majeure for purposes of this Agreement.

Page 54: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

53

15.1.3 Definition of Litigation Force Majeure. “Litigation Force Majeure” means any action or proceeding before any court, tribunal, arbitration or other judicial, adjudicative or legislation-making body, including any administrative appeal, brought by a third party, who is not an Affiliate or related to Developer, which (i) seeks to challenge the validity of any action taken by the City in connection with the Project, including the City’s approval, execution and delivery of this Agreement, the Ground Lease, and its performance thereunder, including any challenge under the California Environmental Quality Act, the performance of any action required or permitted to be performed by the City hereunder, or any findings upon which any of the foregoing are predicated, or (ii) seeks to challenge the validity of any other Regulatory Approval.

15.1.4 Limitation. Provided the Parties are proceeding diligently and prosecuting all matters within their respective control with diligence, if one or more Force Majeure events cause(s) an aggregate delay of the Delayed Party's performance hereunder, a total of twenty-four (24) months, at any time thereafter, the other Party may terminate the Agreement by giving thirty (30) days’ notice to the Delayed Party. In the event of a termination pursuant to this Section 13.1, the Security Deposit shall be returned to Developer and, except as expressly set forth herein, neither Party shall have any further rights or obligations under this Agreement.

15.2 Notices and Approvals.

15.2.1 Manner of Delivery. Except as otherwise expressly provided for in this Agreement, all notices, demands, approvals, consents and other formal communications between the City and the Developer required or permitted under this Agreement shall be in writing and shall be deemed given and effective (i) upon the date of receipt if given by personal delivery on a business day before 5:00 p.m. local time (or the next business day if delivered personally after 5:00 p.m. or on a day that is not a business day), or (ii) three (3) Business Days after deposit with the U.S. Postal Service for delivery by United States Registered or Certified Mail, First Class postage pre-paid, to the City or the Developer at their respective addresses for notice designated herein. For the Parties’ convenience, copies of the notices may be given by email to the addresses set forth below for Party; however, no Party may give official or binding notice by email.

15.2.2 Requests for Approval. In order for a request for any approval or other determination by the City or the City required under the terms of this Agreement to be effective, it shall be clearly marked “Request for Approval” and state (or be accompanied by a cover letter stating) substantially the following:

15.2.2.1 the Section of this Agreement under which the request is made and the action or response required;

15.2.2.2 if applicable under the terms of this Agreement, the period of time as stated in this Agreement within which the recipient of the notice shall respond; and

15.2.2.3 if applicable under the terms of this Agreement, that the failure to object to the notice within the stated time period will be deemed to be the equivalent of the

Page 55: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

54

recipient’s approval of or consent to the request for approval which is the subject matter of the notice.

In the event that a request for approval states a period of time for approval which is less than the time period provided for in this Agreement for such approval, the time period stated in this Agreement shall be the controlling time period.

In no event shall a recipient’s approval of or consent to the subject matter of a notice be deemed to have been given by its failure to object to such notice if such notice (or the accompanying cover letter) does not comply with the requirements of this Section.

15.2.3 Addresses for Notices. All notices shall be properly addressed and delivered to the Parties at the addresses set forth below or at such other addresses as either Party may designate by written notice given the manner provided in herein.

To the City: City of Oakland 1 Frank H. Ogawa Plaza Oakland, CA 94612 Attn: City Administrator Facsimile: (510) 238-2223

And with a copy to: Office of the City Attorney 1 Frank H. Ogawa Plaza, 6th Floor Oakland, CA 94612 Attn: City Attorney Facsimile: (510) 238-6500

To the Developer: OMSS, LLC 11 Burma Road [2240 Wake Avenue???] Oakland, CA 94607 Attn: William L. Aboudi, President email: [email protected]

With a copy to: Ronald Chauvel, Esq. Chauvel & Glatt, LLP 66 Bovet Road, Suite 280 San Mateo, CA 94402 Email: [email protected] Facsimile: (650) 573-9689

With a copy to: Jai Jennifer

121 Embarcadero West, Suite 2305 Oakland, CA 94607 Email: [email protected]

Page 56: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

55

15.3 Conflict of Interest.

No member, director, official or employee of the City may have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects her or his personal interest or the interest of any corporation, partnership or association in which she or he is interested directly or indirectly.

15.4 Covenant of Non-Discrimination.

The Developer expressly covenants and agrees for itself, its successors and assigns and all persons claiming under or through it, that as to the Lease Property and any Private Improvements constructed or to be constructed thereon, or any part thereof, or alterations or changes thereto, and in addition to any other term, covenant and condition of this Agreement, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, sexual orientation, gender, disability, marital status, domestic partner status, Acquired Immune Deficiency Syndrome or HIV status, religion, age, national origin or ancestry by the Developer or any occupant or user of the Lease Property in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the Lease Property, or any part thereof, and the Developer itself (and any Person claiming under or through it) shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of the Lease Property or any part thereof nor shall Developer or any occupant or user of the Lease Property or any part thereof or any transferee, successor, assign or holder of any interest in the Lease Property or any part thereof or any person or entity claiming under or through such transferee, successor, assign or holder, establish or permit any such practice or practices of discrimination or segregation, including, without limitation, with respect to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, vendees or others of the Lease Property or any part thereof. The Developer shall ensure that language substantially similar to the above is incorporated into all leases, rental agreements and grant deeds for the Project.

Any transferee, successor, assign, or holder of any interest in this Agreement or the Lease Property, or any occupant or user thereof, whether by contract, lease, rental, sublease, license, deed or mortgage or otherwise, and whether or not any written instrument or oral agreement contains the foregoing prohibitions against discrimination, will be bound hereby and shall not violate in whole or in part, directly or indirectly, these nondiscrimination requirements.

15.5 Time of Performance.

15.5.1 Expiration. All performance dates (including cure dates) expire at 5:00 p.m., California time, on the performance or cure date.

15.5.2 Weekends and Holidays. A performance date which falls on a Saturday, Sunday or holiday is deemed extended to the next working day.

Page 57: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

56

15.5.3 Days for Performance. All periods for performance specified in this Agreement in terms of days shall be calendar days and not Business Days, unless otherwise expressly provided in this Agreement.

15.5.4 Time of the Essence. Time is of the essence with respect to each required completion date in the Schedule of Performance, subject to the provisions of Section 13.1 relating to Force Majeure.

15.5.5 Interpretation of Agreement.

15.5.5.1 Attachments. Whenever an Attachment is referenced, it means an Attachment to this Agreement unless otherwise specifically identified. All such Attachments are incorporated in this Agreement by reference.

15.5.5.2 Captions. Whenever a Section, Article or paragraph is referenced, it refers to this Agreement unless otherwise specifically identified. The captions preceding the articles and sections of this Agreement and in the table of contents have been inserted for convenience of reference only. Such captions shall not define or limit the scope or intent of any provisions of this Agreement.

15.5.5.3 Words of Inclusion. The use of the term “including,” “such as” or words of similar import when following any general term, statement or matter shall not be construed to limit such term, statement or matter to the specific items or matters, whether or not language of non-limitation is used with reference thereto. Rather, such terms shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such statement, term or matter.

15.5.5.4 No Presumption Against Drafter. This Agreement has been negotiated at arm’s length and between Persons sophisticated and knowledgeable in the matters dealt with herein. In addition, each Party has been represented by experienced and knowledgeable legal counsel. Accordingly, this Agreement shall be interpreted to achieve the intents and purposes of the Parties, without any presumption against the Party responsible for drafting any part of this Agreement (including, but not limited to California Civil Code Section 1654).

15.5.5.5 Costs and Expenses. The Party on which any obligations imposed in this Agreement shall be solely responsible for paying all costs and expenses incurred in the performance of such obligation, unless the provision imposing such obligation specifically provides to the contrary.

15.5.5.6 Agreement References. Wherever references made to any provision, term or matter “in this Agreement,” “herein” or “hereof” or words of similar import, the reference shall be deemed to refer to any and all provisions of this Agreement reasonably related thereto in the context of such reference, unless such reference refers solely to a specific numbered or lettered Article, Section or Paragraph of this Agreement or any subdivision of this Agreement.

Page 58: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

57

15.5.5.7 City Approvals. Subject to Section 10.2, and unless this Agreement otherwise expressly provides, or unless required by any Law, all approvals, consents or determinations to be made by or on behalf of the City under this Agreement shall be made by the City Administrator, and the Developer shall be entitled to rely conclusively upon the authority of the City Administrator to bind the City to such approvals, consents and determinations as are made by the City Administrator and delivered to the Developer in writing.

15.6 Successors and Assigns.

This Agreement is binding upon and will inure to the benefit of the successors and assigns of the City and the Developer, subject to the limitations on assignments set forth in ARTICLE X. Where the term Developer or City is used in this Agreement, it means and includes each Party’s respective successors and assigns.

15.7 No Third Party Beneficiaries.

This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns. No other person shall have or acquire any right or action based upon any provisions of this Agreement.

15.8 Real Estate Commissions.

The Developer and the City each represents that it engaged no broker, agent or finder in connection with this transaction. In the event any broker, agent or finder makes a claim, the Party to whom such claim is made agrees to indemnify the other Party from any Losses arising out of such a claim.

15.9 Counterparts.

This Agreement may be executed in counterparts, each of which is deemed to be an original, and all such counterparts constitute one in the same instrument.

15.10 Entire Agreement.

This Agreement (including the Attachments) constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all negotiations or previous agreements between the Parties with respect to all or any part of the terms and conditions mentioned or incidental to this Agreement. No parole evidence of any prior or other agreement shall be permitted to contradict or vary the terms of this Agreement.

15.11 Amendment.

Neither this Agreement nor any of its terms may be terminated, amended or modified except by a written instrument executed by the Parties. The City Administrator shall be authorized, in consultation with the Oakland City Attorney, to determine, on a case by case basis, at his or her discretion, if a requested amendment is minor in nature, and may be authorized by the City Administrator or is major in nature and must be authorized by the City Council. Without limiting the foregoing, any proposed amendment to the following are deemed major in nature

Page 59: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

58

and must be authorized by the City Council in its sole and absolute discretion: (A) the Outside Closing Date, (B) Article X; or (C) the Community Benefits or any amendment that would affect the Community Benefits.

15.12 Applicable Law; Jurisdiction; Venue.

The applicable laws of the State of California shall govern the validity, construction and the effect of this Agreement. The City and the Developer both consent to exclusive personal and subject matter jurisdiction in the Superior Court of the State of California.

15.13 Further Assurances.

The Parties agree to execute and acknowledge such other and further documents as the Parties may deem necessary or reasonably required to express the intent of the Parties or otherwise effectuate the terms of this Agreement.

15.14 Attorneys’ Fees.

Each Party shall bear its own costs in the preparation and execution of this Agreement. If any Party fails to perform any of its respective obligations under this Agreement or if any dispute arises between the Parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the Party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other Party on account of such default or in enforcing or establishing its rights under this Agreement, including, without limitation, court costs and reasonable Attorneys’ Fees and Costs incurred in any action or arbitration commenced pursuant to this Agreement. Any such Attorneys’ Fees and Costs incurred by any Party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such Attorneys’ Fees and Costs obligation is intended to be severed from the other provisions of this Agreement and to survive and not be merged into such judgment.

15.15 Relationship of Parties.

The subject of this Agreement is a private development with no Party acting as the agent of the other Party in any respect and none of the provisions of this Agreement shall be deemed to render the City a partner in the Developer’s business, or joint venture or member in any joint enterprise with the Developer.

15.16 Severability.

If any provision of this Agreement where its application to any person or circumstance, is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Agreement or the application of such provision to any other Person or circumstance, and the remaining portions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so modified by and in response to such invalidation would be grossly inequitable under all of the circumstances, or would frustrate the fundamental purposes of this Agreement.

Page 60: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

59

15.17 Inspection of Books and Records.

The City and its agents have the right within five (5) Business Days after prior written notice to the Developer at all reasonable times and from time to time to inspect the books and records of the Developer in a location in Oakland during regular business hours pertaining to the Developer’s compliance with its obligations under this Agreement. Nothing in this Section 13.17 shall affect the City’s or the City’s rights under other provisions of this Agreement or the Ground Lease.

15.18 Uses.

The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to all or any portion of the Lease Property, that the Developer, such successors and assignees shall devote the Lease Property to the uses specified in the Scope of Development and the Ground Lease. In the event of any conflict, prior to the Close of Escrow, the Scope of Development shall control the uses permitted on the Lease Property and after Close of Escrow, the Ground Lease shall control the uses permitted on the Lease Property.

15.19 Dispute Disclosure.

Developer, including its Affiliates, officers, and its contractors on the Project, shall disclose to the City pending disputes with the City. Developer agrees (and shall require its Affiliates, officers, and contractors on the Project to agree) to disclose any pending disputes to the City. In the event Developer learns of a dispute after the execution of this Agreement, the Developer shall, within five (5) days of such knowledge, notify the City of the nature of the dispute and request a copy of the City’s form for such disclosure and shall resubmit such form within five (5) days of receipt from the City. If the Developer fails to timely disclose a dispute under this Section 13.19, the City may terminate this Agreement.

15.20 Permitted Contracts.

The City, the Master Developer, and the East Bay Municipal Utility District executed a Memorandum of Agreement, dated July 19, 2012 (“EBMUD MOA”), a copy of which is attached as Attachment 22, that impacts construction of the OMSS Public Improvements and the Lease Property. Developer has read the provisions thereof and acknowledges its application to the construction and operation of the OMSS Public Improvements and the Lease Property.

ARTICLE XVI

DEFINITIONS

For purposes of this Agreement initially capitalized terms shall have the meanings ascribed to them in the Sections where they are used or in this Article. To the extent there is any inconsistency, the meaning first ascribed to them in the Sections where the terms are used shall control.

AB 26 as defined in Recital E.

Page 61: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

60

Action as defined in Section 6.1.

Affiliate means any Person directly or indirectly Controlling, Controlled by or under Common Control with another Person.

Agents means, when used with reference to any Party to this Agreement or any other Person, the members, officers, directors, commissioners, employees, agents and contractors of such Party or other Person, and their respective heirs, legal representatives, successors and assigns.

Agency as defined in Recital A.

Agency-City PSA as defined in Recital D.

Agreement means this Lease Disposition and Development Agreement, as it may be amended in accordance with its terms.

AMS Site as defined in Recital T

Ancillary Maritime Uses as defined on the Scope of Development for Private Improvements attached as Attachment 4.

Approved Construction Drawings as defined in Section 3.4.

Approved Exceptions as set forth on Attachment 15.

Army as defined in Recital A.

Army Base Development as defined in Article V.

Army EDC Deed means that certain quitclaim deed from the Army for the EDC Property as described in Recital A.

Army Retained Conditions as defined in Section 7.2.

As-Is With All Faults Condition as defined in Section 8.13.1.

Attorneys’ Fees and Costs means reasonable attorneys’ fees (including fees from attorneys in the Office of the City Attorney of Oakland), costs, expenses and disbursements, including, but not limited to, expert witness fees and costs, travel time and associated costs, transcript preparation fees and costs, document copying, exhibit preparation, courier, postage, facsimile, long-distance and communications expenses, court costs and other reasonable costs and fees associated with any other legal, administrative or alternative dispute resolution proceeding, including such fees and costs associated with execution upon any judgment or order, and costs on appeal.

Bankruptcy as defined in Section 13.1.2.

BCDC means the Bay Area Development and Conservation Commission.

Page 62: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

61

Benefitted Projects as defined in Section 3.2.

Billboard as defined in Section 2.3.

Billboard Agreements as defined in Section 2.3.

Billboard Access Agreement as defined in Section 2.3.

Business Day means any day that is neither a Saturday, a Sunday, nor a day observed as a holiday by either the City or the State of California or the United States government.

CalTrans as defined in Recital U.

CalTrans Easement as defined in Recital U.

CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (also commonly known as the “Superfund” law), as amended, (42 U.S.C. Section 9601 et seq.).

CEQA means the California Environmental Quality Act.

City as defined in the introductory paragraph.

City Administrator means the City Administrator of City or his or her designee.

City of Oakland as defined in the introductory paragraph.

City Parties as defined in Section 6.1.

Close of Escrow or Close Escrow as defined in Section 8.9.1.

Closing Date as defined in Section 8.7.1.

Commence Construction or Commencement of Construction as defined in the Ground Lease.

Community Benefits as defined in Recital V.

Completion or Completed is defined in Section 3.4 as to the OMSS Public Improvements, and in Section 9.21(c) regarding completion of the Project.

Consent Agreement as defined in Recital H.

Construction as defined in the Ground Lease.

Construction Bonds as defined in Section 8.2(d).

Construction Contract as defined in Section 8.2(e).

Page 63: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

62

Construction Documents as defined in Section 9.3.

Control, Controlled by, Controlling, or Common Control means (1) the ownership (direct or indirect) by one Person of more than fifty percent (50%) of the profits, capital, or equity interest of another Person; or (2) the power to direct the affairs or management of another Person, whether by contract, other governing documents or operation of Law or otherwise, and Controlled and Controlling have correlative meanings. Common Control means that two Persons are both Controlled by the same other Person.

Covenant means the land use covenant restricting the use of the EDC Property, as described in Section 7.1.3.2.

Deferred Items as defined in Section 9.21(b).

Delayed Party as defined in Section 13.1.

Delivery as defined in Section 12.4(a).

Design Development Documents as defined in Section 9.3(a)(i).

Developer means OMSS, LLC, a California limited liability company, or any successor permitted under this Agreement.

Developer Affiliate means an entity that controls, is controlled by, or is under common control with the Developer.

Developer SCA/MMRPs as defined in Section 8.2(c).

Development Budget as defined in Section 8.2(a)(A).

DTSC means the State of California, Environmental Protection City, Department of Toxic Substances Control, and any successor governmental authority of DTSC.

Easement Area as defined in Recital U.

Easement Rights as defined in Recital U.

EBMUD MOA as defined in Section 13.20.

EDC as defined in Recital A.

EDC MOA as defined in Recital A and set forth in Attachment 13.

EDC Property as defined in Recital A.

EDC Property Agreements as defined in Recital D.

Effective Date as defined in Section 1.1.1.

Page 64: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

63

EIR as defined in Recital X.

EIR Addendum as defined in Recital X.

Environmental Document as defined in Article V.

Environmental Document Preparation Costs as defined in Section 5.1.

Environmental Remediation Requirements as defined in Section 7.1.3.

ESCA as defined in Section 7.1.3.

Escrow as defined in Section 8.8.

Events of Default as defined in Section 12.2 and Section 12.4.

Exchange Agreement as defined in Recital B.

Existing Lease as defined in Section 8.1.

Extended Closing Date as defined in Section 8.10.2.

Fair Share Contribution as defined in Section 3.2.

FHWA as defined in Recital U.

FHWA Deed as defined in Recital U.

Final Construction Documents as defined in Section 9.3(a)(iii).

Force Majeure as defined in Section 13.1.2.

FOSET as defined in Section 7.1.3.

Gateway Development Area as defined in Recital A.

Governmental Approvals as defined in Section 8.2(c).

Ground Lease as provided in Attachment 5.

Guaranty as attached hereto as Attachment 7

Guarantor as defined in Section 8.8.1.2.

Guarantor Request as defined in Section 8.8.1.2.

Hazardous Material means any material that, because of its quantity, concentration or physical or chemical characteristics, is deemed by any federal, state or local governmental authority to pose a present or potential hazard to human health or safety or to the environment.

Page 65: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

64

Hazardous Material includes, without limitation, any material or substance defined as a “hazardous substance,” or “pollutant” or “contaminant” under CERCLA or under Section 25281 or Section 25316 of the California Health & Safety Code; any “hazardous waste” as defined in Section 25117 or listed under Section 25140 of the California Health & Safety Code; any asbestos and asbestos containing materials whether or not such materials are part of a structure, or are naturally occurring substances on, in or about the Lease Property and petroleum, including crude oil or any fraction, and natural gas or natural gas liquids.

Hazardous Material Laws means any present or future federal, state or local Laws relating to Hazardous Material (including, without limitation, its Handling, transportation or Release) or to human health and safety, industrial hygiene or environmental conditions in, on, under or about the Lease Property, including, without limitation, soil, air, air quality, water, water quality and groundwater conditions.

Indemnified Parties means either the City or the Developer, to the extent that either is making a claim pursuant to an indemnity provision under this Agreement including, but not limited to, and to the extent applicable, all of the City’s or the Developer’s or any Developer Affiliate’s boards, commissions, departments, agencies or other subdivisions, including, without limitation, all of the Agents of the City or the Developer, and their respective heirs, legal representatives, successors and assigns, and each of them.

Indemnify means indemnify, protect, defend and hold harmless.

Indemnifying Party means the City or the Developer, to the extent that any Party is obliged to indemnify the other Parties pursuant to an indemnity provision under this Agreement.

Initial Improvements as defined in the Ground Lease.

Initial Project as defined in Recital N.

Laws means all present and future applicable laws, ordinances, rules, regulations, permits, authorizations, orders and requirements, whether or not in the contemplation of the Parties, which may affect or be applicable to the Lease Property or any part of the Lease Property (including, without limitation, any subsurface area, use of the Lease Property and the buildings and improvements on or affixed to the Lease Property), or the use of the Lease Property including, without limitation, all consents or approvals required to be obtained from, and all rules and regulations of, and all building and zoning laws of all federal, state, county and municipal governments, the departments, bureaus, agencies or commissions thereof, authorities, board of officers, any national or local board of fire underwriters, or any body or bodies exercising similar functions, having or acquiring jurisdiction of the Lease Property, and similarly the phrase Law shall be construed to mean the same as the above in the singular as well as the plural.

Lease Property as defined in Recital U.

License to Enter as defined in Section 15.1(a).

Litigation Force Majeure as defined in Section 13.1.3.

Page 66: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

65

Loss or Losses means any and all claims, demands, losses, liabilities, damages (excluding foreseeable and unforeseeable consequential damages), liens, obligations, interest, injuries, penalties, fines, lawsuits and other proceedings, judgments and awards and out of pocket costs and expenses (including, without limitation, reasonable Attorney’s Fees and Costs, and consultants’ fees and costs, and consultants’ fees and costs, and court costs) of whatever kind or nature, known or unknown, contingent or otherwise.

Loss or Losses when used with reference to indemnification means any and all claims, demands, losses, liabilities, damages (excluding consequential damages), liens, obligations, interest, injuries, penalties, fines, lawsuits and other proceedings, judgments and awards and costs and expenses, (including, without limitation, reasonable attorneys’ fees and costs and consultants’ fees and costs) of whatever kind or nature, known or unknown, contingent or otherwise.

Master Developer as defined in Recital O.

Master Developer LDDA means the Lease Disposition and Development Agreement, dated October 23, 2012, between the City and the Master Developer and any amendments thereto.

Master Plan as defined in Recital Q.

Material Change as defined in Section 8.13.1.

Memorandum of Ground Lease as defined in the Ground Lease.

Memorandum of LDDA as defined in Section 1.5.

Notice of Completion of OMSS Public Improvements as defined in Section 3.4.

OBRA as defined in Recital A.

Official Records as defined in Recital A.

OMSS Public Improvements as defined in Recital S.

OMSS Public Improvements Schedule as defined in Section 3.3.

ORSA as defined in the introductory paragraph.

Outside Closing Date as defined in Section 8.7.2.

Parcel E as defined in Recital B.

Parties mean the City and Developer, as Parties to this Agreement.

Party means the City or Developer, as a Party to this Agreement.

Permitted Title Exceptions as defined in Section 8.10.1.

Page 67: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

66

Permitted Transfers as defined in Section 10.3.

Person means any individual, partnership, corporation (including, but not limited to, any business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity or association, the United States, or a federal, state or political subdivision thereof.

Pre-Closing Environmental Inspection as defined in Section 7.2.4.

Pre-Closing Remediation Obligations as defined in Section 7.2.

Port as defined in Recital A.

Port Development Area as defined in Recital A.

Private Improvements as defined in Recital U and as set forth in the Scope of Development for Private Improvements in Attachment 4.

Project as defined in Recital U.

Project Design Guidelines as defined in Section 9.3(a)(i).

Project Requirements as defined in Section 9.4.

Project Site as defined in Recital U.

Proposed Guarantor as defined in Section 8.8.1.2.

RAP as defined in Section 7.1.3.

RAP Sites as defined in Section 7.1.3.2.

RAP/RMP means that certain Remedial Action Plan/Risk Management Plan for the EDC Property described in Section 7.1.3.

Regulatory Approvals as defined in Section 9.19(d).

Release when used with respect to Hazardous Material means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous Material in, on, under or about the Lease Property or any portion thereof.

Remediate or Remediation when used with reference to Hazardous Materials means any activities undertaken to investigate, clean up, remove, transport, dispose, contain, treat, stabilize, monitor or otherwise control Hazardous Materials located in, on, under or about the Lease Property or which have been, are being, or threaten to be Released into the environment. Remediation includes, without limitation, those actions included within the definition of “remedy” or “remedial action” in California Health and Safety Code Section 25322 and “remove” or “removal” in California Health and Safety Code Section 25323.

Page 68: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

67

Remediation Certification Letter means a written determination from an applicable Resource Agency that remediation is complete and no further action is required with respect to environmental conditions, or a specific environmental condition, at the property. Such Remediation Certification Letter may include ongoing restrictions, adherence to a soil management plan governing future excavation, monitoring, or reporting.

Remediation Fund as defined in Section 7.1.3.

Rent as defined in the Ground Lease.

Required Element as defined in Section 9.9(a).

Resource Agencies as defined in Section 7.1.3.2.

RMP as defined in Section 7.1.3.

RWQCB means the San Francisco Bay Regional Water Quality Control Board.

RWQCB Order as defined in Section 7.1.3.

SCA/MMRP are attached as Attachment 15A.

Schedule of Performance as attached hereto as Attachment 6.

Schematic Drawings as defined in Section 9.3(a)(i).

Scope of Development for Private Improvements are as set forth in Attachment 4.

Scope of Development for OMSS Public Improvements are as set forth in Attachment 3.

Security Deposit as defined in Section 1.4.1.

Significant Change means (a) any dissolution, merger, consolidation or other reorganization, or any issuance or transfer of beneficial interests in Developer, directly or indirectly, in one or more transactions, that results in a change in the identity of the Persons Controlling Developer, or (b) the sale of fifty percent (50%) or more of Developer’s assets, capital or profits, or the assets, capital or profits of any Person Controlling Developer other than a sale to an Affiliate.

Site Map as set forth on Attachment 1.

SLC as defined in Recital B.

Special District means any community facilities district formed pursuant to the Mello-Roos Community Facilities Act of 1982 (California Government Code sections 53311 et seq.) or otherwise, special assessment district, facilities assessment district, landscaping and lighting district, and any other infrastructure financing or infrastructure maintenance financing district or

Page 69: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

68

device established at any time upon the approval of City with respect to all or any portion of the Project.

State means the State of California.

Subsequent Approval as defined in Section 6.1.

TCIF is the Trade Corridors Improvement Fund (“TCIF”) grant monies under the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 for infrastructure improvements to serve the EDC Property under a Grant Agreement between the City and the State of California, dated May 7, 2013.

Term as defined in Section 1.1.2.

Title Company as defined in Section 8.8.1.1.

Title Defect as defined in Section 8.10.2.

Title Policy as defined in Section 8.11.1.

Transfer as defined in Section 10.2.

Unmatured Event of Default means any Event of Default that, with the giving of notice of the passage of time, or both, would constitute an Event of Default under this Agreement.

West Oakland Community Fund, as established by Agency Resolution 2006-005 C.M.S., dated July 18, 2006

ARTICLE XVII

ACCESS BY DEVELOPER UPON LEASE PROPERTY

17.1 License to Enter Before Close of Escrow.

This Section will govern the right of access to and entry by Developer and its agents upon that portion of the Property then owned or controlled by the City before Close of Escrow.

(a) Right of Access. From time to time and at all reasonable times, Developer shall have the right of access to and entry upon, under and around the Lease Property for the purpose of performing investigations, collections of data and tests as reasonably deemed necessary by Developer to carry out its obligations under this Agreement, including, without limitation, performing visual surveys and inspections, performing site mobilization (such as placement on-site of construction trailers and stockpiling of supplies that do not contain Hazardous Materials, on locations approved by the City), and other planning activities; provided, however, Developer shall first obtain a License from the City substantially in the form of Attachment 14 (the “License to Enter”) which License to Enter, to the extent reasonably feasible, shall encompass multiple entries. The City shall not unreasonably refuse to grant such License to Enter, or delay its issuance.

Page 70: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

69

(b) Certain Activities Prohibited Prior to Close of Escrow. Developer may not perform any demolition, excavation, or construction work before Close of Escrow.

(c) No Interference. In making any entry upon the Lease Property authorized in accordance with the foregoing, unless Developer obtains City’s consent in its sole and absolute discretion, Developer shall not materially interfere with or obstruct: (1) the permitted, lawful use of the Lease Property by the City, its property managers, agents, tenants, or the tenants' invitees, or their conduct of normal business operations thereon including, without limitation, the occupancy of a portion of the Lease Property for parking operated by: (a) Douglas Parking; and (b) CalTrans for Bay Bridge pedestrian/bike pathway users (both (a) and (b) to be terminated by the City before Close of Escrow as a condition to Closing per Section 8.5.2); or (2) City’s construction of the public infrastructure for the EDC Property as set forth in the Master Developer LDDA, the OMSS Public Improvements or environmental remediation with respect to the EDC Property, including the Lease Property. Without limiting the foregoing, Developer acknowledges and consents to the use of the Lease Property before Close of Escrow by the Master Developer, the City’s Property Manager, or their contractor(s) and subcontractor(s) for: (1) a materials handling and crushing facility, (2) construction staging and laydown purposes; and (3) implementation of fill and surcharging.

17.2 Issuance of License to Enter.

Subject to Section 15.1(c), following the issuance of a License to Enter, Developer may undertake additional activities related to reasonable investigation and inspection of the Lease Property from time to time before delivery of the Lease Property under all of the terms and conditions of the License to Enter first issued to Developer upon obtaining the City's prior written approval, not to be unreasonably withheld or delayed. Such additional activities will be for a period of time which reasonably will permit Developer to undertake the activity for which access and entry is authorized. Provided all the conditions to issuance contained in the License to Enter are met, the City agrees to approve or disapprove any such requests for consent to such additional activities not more than five (5) business days after request by Developer. If approved, City will secure access to the area of Developer's entry on the Property within a reasonable period of time from the date of Developer’s request for access. The City may require the contractor performing the work under the License to Enter to be a co-permittee

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly appointed representatives as of the date first above written.

Signature pages to follow

Page 71: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,
Page 72: LEASE DISPOSITION AND DEVELOPMENT AGREEMENT Parties …€¦ · LEASE DISPOSITION AND DEVELOPMENT AGREEMENT . ... Quitclaim Deeds recorded in the Official Records on September 19,

71

ATTACHMENTS TO LDDA

Attachment 1 Site Map Attachment 2 Legal Description of Lease Property Attachment 3 Scope of Development for OMSS Public Improvements Attachment 4 Scope of Development for Private Improvements Attachment 5 Ground Lease Form Attachment 6 Schedule of Performance Attachment 7 Completion Guaranty Attachment 8 Memorandum of LDDA Attachment 9A Construction Jobs Policy Attachment 9B Operations Jobs Policy Attachment 10 Environmental Assessment Reports Attachment 11A Consent Agreement with DTSC Attachment 11B RAP/RMP Attachment 11C RWQCB Order Attachment 12A Covenant to Restrict Use of Property Attachment 12B Army EDC Deed Attachment 13 EDC MOA Attachment 14 Due Diligence Right of Entry Attachment 15A SCA/MMRP Attachment 15B SCA/MMRP Cost Allocation Attachment 16 Approved Title Exceptions Attachment 17 Architect’s Certificate Attachment 18 Certificate of Completion Attachment 19 CalTrans Easement Attachment 20 FHWA Deed Attachment 21 Lease Termination Agreement Attachment 22 EBMUD MOU